With the increasing concerns about safety after dark, home delivery systems are accounting for a larger share of the viewing public, both in pay-per-view cable and satellite broadcasting. The Direct-TV digital broadcast on a recently manufactured high resolution TV set can, at the very least, be described as stunning. It is something to behold.
With the increased choices, there is less motivation to "go out to a movie" except for young people on a "date." This puts the whole movie theater arena in question: at a time when the number of screens should have plateaued, the number is increasing. The marketplace is being distorted by city subsidies.
An example of this can be seen in the Hemet - San Jacinto Valley that has had four well-attended screens for many years. Last December Krikorian Premiere Theaters opened a 12 screen complex in Hemet on subsidized Redevelopment land, followed in May by Metropolitan Theaters’ 12 screen complex in the adjoining town of San Jacinto, also on Redevelopment land. The two communities now have 28 poorly-attended screens. The reason is that theater planners look for 10,000 population per screen. There are about 123,000 people living in the Hemet-San Jacinto Valley, which would make about 12 to 14 a profitable number of screens. With 28 screens, the valley is somewhat over- supplied. Because of the Redevelopment subsidy (the writedown on the land) the marketplace was not operating properly.
Another instance where the marketplace is not functioning is in Norwalk, where AMC is going to build a 20 screen complex on 80,000 sq. ft. of land. Now at least in this case, the City is going to retain ownership of the land and lease it to AMC for 60 years at $27,000 a year.
In leasing real estate, one way to determine rent is to figure percentage return on value. In this case they have the land pegged at $4.22 a square foot. A fair return, today in the 8 percent range, figures out to the $27,000 rental. The give-away here is that the land is worth at least $15 a square foot and probably $20 where it is located because the county is providing the parking structure. Now just think what that land is going to be worth 50 years from now, or even 30 years from now—still paying $27,000 annually.
Redevelopment’s diversion of property tax dollars away from other agencies has become one of the major problems. The Norwalk schools are desperately short of funds today, to say nothing of the future. This will be another Redevelopment project taking another bite out of education.
I suppose if the kids cannot read and/or write, they can always go to a movie or stay at home and watch one on cable.