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Home My WebLink About20012223.tiff RESOLUTION RE: THE BOARD OF EQUALIZATION, 2001, WELD COUNTY, COLORADO - DENY PETITIONER'S APPEAL AND AFFIRM ASSESSOR'S VALUE PETITION OF: CARMIKE CINEMAS INC PO BOX 391 COLUMBUS GA 31994 DESCRIPTION OF PROPERTY: ACCOUNT#: R0179189 PARCEL#:095913400038 - GR 17567-L PT SE4 13 5 66 (STEPHENS 1ST ANNX)COMM SE COR OF SEC N89D43'W 1772.4' N01 D39'E 127.94' TO N LINE OF HWY 34 BYPASS N01 D39'E 40' TO N LINE OF 28TH ST BEING TRUE POB N01 D39'E 500' TO S LINE OF 27TH ST S88D20'E 370.26' S01O39'W 500' TO N LINE OF WHEREAS, the Board of County Commissioners of Weld County, Colorado, convened as the Board of Equalization for the purpose of adjusting, equalizing, raising or lowering the assessment and valuation of real and personal property within Weld County, fixed and made by the County Assessor for the year 2001, and WHEREAS, said petition has been heard before the County Assessor and due Notice of Determination thereon has been given to the taxpayer(s), and WHEREAS, the taxpayer(s) presented a petition of appeal of the County Assessor's valuation for the year 2001, claiming that the property described in such petition was assessed too high, as more specifically stated in said petition, and WHEREAS, said petitioner not being present or represented, and WHEREAS, the Board has made its findings on the evidence, testimony and remonstrances and is now fully informed. NOW,THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld County, acting as the Weld County Board of Equalization, that the evidence presented at the hearing clearly supported the value placed upon the Petitioner's property,after review by the Weld County Assessor. Such evidence indicated the value was reasonable, equitable, and derived according to the methodologies, percentages, figures and formulas dictated to the Weld County Assessor by law. The assessment and valuation of the Weld County Assessor shall be, and hereby is, affirmed as follows: C 12001-2223 PC : �lS, AS0049 RE: BOE- CARMIKE CINEMAS INC Page 2 ACTUAL VALUE AS DETERMINED BY ASSESSOR Land $ 493,927 Improvements OR Personal Property 842,973 TOTAL $ 1,336,900 BE IT FURTHER RESOLVED that a denial of a petition, in whole or in part, by the Board of Equalization may be appealed by selecting one of the following three options; however, said appeal must be filed within 30 days of the denial: 1. Board of Assessment Appeals: You have the right to appeal the County Board of Equalization's(CBOE's)decision to the Board of Assessment Appeals (BAA). Such hearing is the final hearing at which testimony, exhibits, or any other evidence may be introduced. If the decision of the BAA is further appealed to the Court of Appeals, only the record created at the BAA hearing shall be the basis for the Court's decision. No new evidence can be introduced at the Court of Appeals. (Section 39-8-108(10), CRS) Appeals to the BAA must be made on forms furnished by the BAA, and should be mailed or delivered within thirty (30) days of denial by the CBOE to: Board of Assessment Appeals 1313 Sherman Street, Room 523 Denver, CO 80203 Phone: 866-5880 OR 2. District Court: You have the right to appeal the CBOE's decision to the District Court of the county wherein your property is located. New testimony, exhibits or any other evidence may be introduced at the District Court hearing. For filing requirements, please contact your attorney or the Clerk of the District Court. Further appeal of the District Court's decision is made to the Court of Appeals fora review of the record. (Section 39-8-108(1), CRS) OR 3. Binding Arbitration: You have the right to submit your case to arbitration. If you choose this option the arbitrator's decision is final and your right to appeal your current valuation ends. (Section 39-8-108.5, CRS) 2001-2223 AS0049 RE: BOE- CARMIKE CINEMAS INC Page 3 Selecting the Arbitrator: In order to pursue arbitration, you must notify the CBOE of your intent. You and the CBOE select an arbitrator from the official list of qualified people. If you cannot agree on an arbitrator, the District Court of the county in which the property is located will make the selection. Arbitration Hearing Procedure: Arbitration hearings are held within sixty days from the date the arbitrator is selected. Both you and the CBOE are entitled to participate. The hearings are informal. The arbitrator has the authority to issue subpoenas for witnesses, books, records,documents and other evidence. He also has the power to administer oaths, and all questions of law and fact shall be determined by him. The arbitration hearing may be confidential and closed to the public, upon mutual agreement. The arbitrator's written decision must be delivered to both parties personally or by registered mail within ten (10) days of the hearing. Such decision is final and not subject to review. Fees and Expenses: The arbitrator's fees and expenses are agreed upon by you and the CBOE. In the case of residential real property, such fees and expenses cannot exceed $150.00 per case. The arbitrator's fees and expenses, not including counsel fees, are to be paid as provided in the decision. The above and foregoing Resolution was, on motion duly made and seconded,adopted by the following vote on the 2nd day of August, A.D., 2001. BOARD OF OUNTY COMMISSIONERS �� WELD C NTY, COLORADO ATTEST: I� telex v 2f,�Ch ir JI M. J� it Weld County Clerk to the Board Glenn Vaad, ro- BY: Deputy Clerk to the Bo d6i L -u� 1 C1 4TPIlia Jerke APPROVED AS TO RM. O l vid . Lon In istant Cou Attomey "c Robert D. asden 2001-2223 AS0049 o7i1tT. •16.2001 p, 5:54PM JOSEPH C SctisotE COMPANYDR NO.605 P.2/61 -.; • '' " • ' ': - OFFItj6Of COUNTY ASSFAson NO1IC8 OF nBNirz )400NORni mit pit a 1 ' , •.- cR�lj f,co 50631 • T�567�A- ET SE4 13 5 66 '� ' "" • r; BEfI131.dS 1ST • ANN1C) COMM 3E COR PHONE(970)353414$.En.3630 l ..S SEC.N89D4.3'.W 1772 .4 NOJ.n39. 8. • . 127.94' TO N. LINE•,OF MIX - - BYPASS NO'1n39'•E •40! TO N LINK. OF �i._t._ 28TH ST BEING TRUE FOB-NO 1D39'E • � .. r a i e'5• ADO OWNER: CARMIICF CINEMAS INC • • 4alo CARMIXE cniEMA3• ' INC • °LOGCCgg•LL •09591340003 P O BOX 391 • ACCOONT RS179189 YEAR 2001 COLUMBUS, GA 31994 - The appraised value&property N based on the approprlaiF consideration of the approaches to value rcquireO$,iri 'flit*s$esor ha'dearrnincd din- yawproperty should be included in dtc following eategory(ies): Commercial property is valued by ,considering the cost,_ market•, and income approaches. • ; If your concern is theameunt of your property tax,Neal taxing,authorities(county.eiky,fire protcctien;and ptliar special districn)4old bddgei, bearings in the felL Please refer to your tax bill or ask your Assessor fora listing of these districts,and plan to attend these bit dget'hcnhl r. The assessor has earefully=diedall available in£ornapon,giving penicular action to the specifics included on your prate$and has determined the valuetian(s)asupwd to your propcww. The reasons for this deoerminmiun of valpSare as follows: .. Your request• fo review was -reSived after• t] e statutory deadlie. The assessor' s staff will review your property file later this yeas 'as time and resources permit. In the future tp ke p. all 'of the appeal rights open to you please request a review of your valuation during the .Mmes printed on your natic bf valuation. _I — -- - • - �-, — P O 'S ASSESSOR'S VALUATION PROPERTY CLASSIFICATION . ESTIMATE • OF VALUE' - ACTUAL VA.LUS ACTUAL VALUE PRIOR TO REVIEW AFTER REVIEW COMMERCIAL 1336900. . 1336900 • • TOTALS S S. 1336900 n S-2336900' APPEAL DEADLINES:REAL PROPERTY-JULY 16.PERSONAL PROPERTY-JULY'20. If you disagree with the Assessor's daisies.you have the right to appeal to the County Board of Equalization for farther consideration,39.1- IO6(ixa),C.R.S. Please Os the heck of this film for detailed ielermatien en filing your appeal. 07/16/2001 ' Posta`Fax Note 7671 Dale To y aale T Q DATE 'Mang 4 PrpPE a 2001-2223 07/1J1.L.16.2001 F. 5:54PM JOSEPH C SANSONE COMPFWYOR NO.605 P.3/62 Form It-20147199 • ADDITIONAL INFORMATION ON REVERSE SIDE • • YOU HAVE THE RIGIITTO APPEAL THE ASSESSOR'S DECISION The County Board of Equalization will sit to hear appeals beginning July 2 and contumuag tbroµgh&et,fq teb1 Oiunperty(lawns and buildings)and personal property(furnishings,machinery, and equipment)39-8-1(*sad 39=8- , ]fyon chooPsee to ap t Assessor's decision,mail or deliver one copy of this coin leafed form to the Co Board of Equal To preserve your right to your appeal must be POST CED OR DEI1'�E D ON OR BEFORE JULY 16 FOR REAL PROPERTY, JULY 20 FOR PERSONAL PROPERTY. - WELD COUNTY BOARD OF EQUALIZATION . • 915 10th Street,P.O.Box 758 Greeley,Colorado 80632 Telephone(970)3564000 Ext.4225 OTII!ICATM OlF You will notified of e time and place set for the hearing of your appeal. COUNTY BOARD QP EQUAJJZATIO. S pE'Y'ERMINATION: - The County Board ofEqualization must .. ; , a decision on your appeal and mail you a detertt)inati0n within five business days of that decision. The County Board must conclude its bearings and render decisions by August 6. Tg�dYE1 GHTS FOR FLIRTHEYLAP E ;• • 1�you are not satuhed wim the County Board of c yualtzation's decision you must file within thirty days of the • County Board of Equalization's written decision with ONE of the following: Board of Assessment Appeals(BAA): - • Contact the BAA at 1313 Sheunan,.Room.315,Denver,Colorado 80203, (303)806.5880., District Court 9th Avenue and 9th Stmet,. Greeley;Colorado 806?Box C Telephone(970)356.4000,Ext 4520 - • Arbitration: • ••• I WELD•COUNTY BOARD•OF EQUALIZATION - 915 10th Street,P.O.Box 758 • . Greeley•Colatado 80632 " • Telephone(9''0)356-4000,Ext.4225 If you do net receive a detcrtairlatkon from the County Board ofEqualization,you must file an'appeal with the Board of AssessmentAppeals by September 12. . • TO PRESER'VT YOUR APPEAL RIGti S,YOU MUST PROVE YOU HAVE FLLE1)A TIMELY APPEAL;THEREFORE,WE RECOMMEND ALL CORRESPONDENCE BE MAILED WITH PROOF OF MAILING, In the space below,please explain why you disagree with the Assessor's valuation. 114 ACCQRDANCE WITH 39- 8-106 C.R.S.,'YOU MUST STATE O1JR•OPINIONOF VALUE IN TERMS OP A SPECIFIC DOLLAR • AMOUNT. Atrach additirmal docaments as. y. • S�ce A r4 c 4 e D., •' • r , � : _ • 7 (510/ • SIUNAL -ut 1 1 acwex LAIC JUL.16.2001 5:55PM JOSEPH C SANSONE COMPANY NO.605 P.4/6 JOSEPH C.SANSONE CO. Business Tax Solutions July 16, 2001 Clerk to the Board Office Weld County, Colorado 1400 N. 17'"Ave Greeley, CO 80631 Ladies and Gentlemen: I am enclosing some in.ormation that I think will help define our position on the valuation of the theater in your area. The movie business has evolved from the nickelodeons of the industry's infancy and the large, single-screen, and multi-level movie palaces of the 1920s and 30s to the megaplex'theater complexes and entertainment centers of the late 1990's. Movie exhibition has become a multi-billion dollar industry. In 1999 money spent on movie admissions was estimated at about $7 billion while the concession revenue typically avenged approximately 30% of total revenue (about 1/3 of admission revenue). While we are looking at a national average, we have found that in most cases locally this runs true to form. The number of movie screens in the US have fluctuated wildly in the last two years with the building of large megaplex theaters and the closing of older and smaller theaters. At the same time, there is fierce competition in many cities and fears of overdevelopment. Discount movie houses are quickly becoming outdated. Their admission numbers have rapidly declined in recent years due to: • The advent of product-hungry megaplexes. • The increased value of mall space. • The ever-shrinking interval between first-run play dates and video release. In a recent conversation with Charles Nicks, CPO of Wehrenberg Theaters, he had some very interesting and insightful comments about his company's decision on closing unprofitable theaters in their chain. lie said, "Theaters are single use properties today since the cost to retrofit would be greater than the cost to build new. A new theater 1 A megaplex is defined as a thearer that contains 14 or more screens. A multiplex con airs 2 to 13 screens. JU_.16.2001 5:55PM JOSEPH C SANSONE COMPANY NO.Ef05 P.5/6 147 16,2001 JOSEPH C.SANSONE CO. Business Doc Sotutlers today will have up to 12 layers of drywall with insulation between each layer. They will always be an odd number of layers with different number of sheets on .opposing walls. This is to eliminate the 'harmonizing' effect on the structure due to the sound vibration?. Comparable sales of individual theaters are limited in today's market. Most transactions involve chains of properties, the bulk of which are located in smaller cities and may involve economies of scale that would positively affect the acquisition price,. On a typical basis, successful theater operations are not sold unless there are unusual circumstances such as an estate situation, management breakup, or termination of a lease. Sometimes a major operator will sell a theater in a market where the theater chain has few other properties and that particular location cannot be operated efficiently. This is commonly a problem with the smaller theaters in small market areas. As I told you in our first conversation, I would like you and your board to consider the information I am enclosing and consider the problems effecting the movie industry today. While the exhibitors are trying to restructure their business, there ere rocky roads ahead as the movie house chains try to come out of bankruptcy protection and stabilize their operations. We have,based on the owners opinion from appeals from all over the county, i oncluded a value of $570,000 on a unit value of $113,435 per screen. We will be forwarding a package to you immediately. Thank you for your help in this matter. S. OCLriLR Clary E. Senior Real Estate Analyst Joseph C. Sansone Comps? 18040 Edison Avenue• St. Louis,Missouri 63005 Phone: (636) 5372700 Ibll Free: (800) 394-0140 Pax: (636) 537-2307 E.mall: lessales@lcsoo.ipom www.losco.com HEADQUARTERS; St. Louis,Missouri Eugormoi OrvecE:Brussels, Belgium Atlanta• Boston• Chicago • Minneapolis AL.16.2001 5:5.i'N JOSEPH C SANSONE COMPANY NO.605 P.1/6 JOSEPH C.SANSONE CO. Businerr Tax Solutions FACSIMILE TRANSMISSION To: Ck, -K / e 3arat 6 �c FROM: ()^ik y Age;GL. COMPANY: k 4//Cet.�D 0.rd DATE: 7//c FAX NUMBER: 910 — 3 5a1 -©a Ya PHONE NUMBER:p 34 63 9-c 06 .Y/e5 6 The following is a transmittal of page(s)(including this cover sheet). Please forward to the individual noted above as soon as possible. Any difficulties or questions should be directed to the sender listed above at(6361537-2700 or WO) 394-0140. The FAX number at Joseph C. Sansone Company in St, Louis/s (636) 537-2307. NOTE: THE INFORMATION CONTAINED IN THIS FACSIMILE TRANSMISSION IS LEGALLY PRIVILEGED AND CONFIDENTIAL INFORMATION INTENDED SOLELY FOR THE USE OF THE INDIVIDUAL OR ENTITY NAMED ABOVE. IF THE READER OF THE TRANSMISSION IS NOT THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS TRANSMISSION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS TRANSMISSION IN ERROR, PLEASE IMMEDIATELY NOTIFY US BY TELEPHONE (TOLL FREE) AT 800.394-0140 AND RETURN THE ORIGINAL TRANSMISSION TO US AT THE ADDRESS ABOVE VIA U.S. MAIL. THANK YOU. COMMENTS: • 18040 Edison Avenue • St.Louis,Missouri 63005 Phone: (696) 537-2700 'Ml Free: (800) 394-0140 Fax; (036) 537-2307 E-mail: jcasales@jcsc0.com www.jcsco.00m HMIQUARtERS: St. Louis, Missouri EUROPEAN Oecics: Brussels, Belgium Atlanta• Boston • Chicago • Minneapolis JUL.16.2001 5:56PM JOSEPH C SANSONE COhPANY NO.605 P.6/6 JOSEPH C.SANSONE CO. .Burins Tax Solutions AGENT AUTHORIZATION TO: Gped-2 at_ Q 1u-waf Assessor's Office and the Assessment Review Agency DATE: 6A t/Zoom e'42I,A,C e;,,ea44 srt. 't So65 ;d;421" , hereby authorizes and appoint§ Joseph C. Sansone Company to act as agent with full authority to handle all matters) relating to ad valorem tax matters. This includes but is not limited to filing of property tax declarations or other documents with you or the Assessment Appeals Board, examining any records In your office which I have a right to examine, appearing before any assessment officer or board and discussing assessments and resolving disputes with you concerning the assessment on property for which I am responsible for the property taxes. This agency shall terminate when all matters relating to the 2000 and 2001 assessments are resolved. TAXPAYER NAME .4_4.k. 4 AUTHORI SIGNATURE PRINT NAME OF SIGNER ZX l,.'efG > f� 012,q 12000 TITLE DATE Weld County STANLEY F. SESSIONS COUNTY ASSESSOR MICHAEL SAMPSON, CHIEF APPRAISER ASSESSOR'S VALUE REPORT OF COMMERCIAL PROPERTY FOR County Board of Equalization CARMIKE CINEMAS INC PETITIONER vs. WELD COUNTY ASSESSOR'S OFFICE RESPONDENT Parcel Number: 0959-13-4-00-038 Schedule Number: R0179189 Log Number: 4010 Date: 08/03/01 Time: 9:30 Board: CBOE PREPARED BY STAN JANTZ ?gnature Date Signature Date ASSESSOR'S OFFICE STAFF APPRAISER CBOE_COMM_010998 Page I SALIENT FACTS AND CONCLUSIONS Purpose of Appraisal To determine Market Value as of 1/1/2000 based on an appraisal date of 6/30/98. Property Rights Appraised Unencumbered fee simple interest. Location 2495 28 ST GREELEY Land Area 185,130 Square Feet Zoning GRE C-H Property Type Commercial Theatre — Motion Year Built 1990 Quality Average Class Masonry Number of Stories 1 Improvement Sq. Ft. 18,506 Value Indications: Land 493,927.00 Cost Approach 1,868,790.00 Market Approach 1,480,000.00 Income Approach 1,386,000.00 Assessor's Value 1 ,336,900.00 CBCE_COMM 010998 2 Page 2 SUBJECT PHOTOGRAPHS • • • SUBJECT PROPERTY FRONT VIEW ep 3 'tg FPr a` t s SUBJECT PROPERTY REAR VIEW 3 COMPARABLE LAND SALES Sales Date Sales Price Area Price/ Grantee of In SF Zoning SF Land Sale Carmike Cinemas Assessors 2495 28th Street Value 185, 130 C-H $2 . 67 Greeley, CO $493, 927 1 Texas Roadhouse 2451 28th Street 01/99 $420, 426 86, 686 C-H $4 . 85 Greeley, CO 2 Johnny Carino' s 2473 28th Street 07/00 $535, 000 98, 439 C-H $5 .43 Greeley, CO 3 Branscum Dennis 29th St & 27th Ave 03/99 $266, 900 44, 480 C-H $6 . 00 Greeley, CO 4 Branscum Dennis 29th St & 27th Ave 05/00 $300, 000 69 , 174 C-H $4 . 34 • Greeley, CO NOTE; The average for all four land sales is $5 . 15 per square foot . 4 _�- -- 34 34 _ 34 H COMPARABLE 3TH iiiLAND SALE MAP v t2TH E� m 1 STRE RD I `y '0 I ..®■.�.■., �3T 14T w� '_', 14 CH _z ��m ■.�� 3" w g w R' R IV Ca • • � SvR �.RD o �Q in t�415TH x �m e ■ c O 15T N .T.ry 16TH =• < ® + ,•7j oora•O e•Ieal lener -. ''' ' A N 6TH.. ♦ AV 6 E eR��,� k 017T y 9� A■� *M.n v' w �� ■■■7T O T I m ¢ 9 l T TH - REET LN m == 9T S R. < .•o ' '9 •�r■• Co• 3 Cot •nw�11 �l e z GLE IR� S CR• F•RD . 3 RED' — _i 1., R. _ • m L.N 49 - ...�ere 'ar� = O 19TH H co 19TH STR ,\i m 0 LAWS a -I ro ., D o N 20TH m EL • L 2 = = 20T RE RD z o VI ' STRE' •D c -1 EC 21 T c West Greenley N it, I 'o CO gP 21- ST- ET RDm \ z G. — _ _ 1 SU:JECT / C0M' •2 = _ , �� Nr I � �,c COMP #1 'F 2N• D 3P• Q 22No „s E'� ,�`� NORTH H __ �. a N ' �.�Q' Q = 23RD STREET R z O by _� -. T®� Q 22 H o j 24TH S ? RRD V\S' _ wco al xi 13 I- t 11:1 m W25TH �� =�I 5Ti B m m c o 7T o m 3 x 5 4 8 - 34 -� RD t 34 . S _ w Greele ca m 30TH I 30TH z _ )TH STREET RD 1- 5 [ENVER I I1N SO H -I N�I/ L 1 COMP #4 � T zi 32ND . �1 31ST .11)--/'COMP #3 w m m m irl .RD .j / Il W Q 34TH o P 3A 0 31 c co 5TH S 6r - 8-ET N. 1Ze tl 35T L L 37TH - T. 2 37T r C C- 8T L 85 iS G. -cm• 9T = o y m mei Valli = )r 40TH 'T ET 5] 1S 42ND 41ST STR- RD O )N D cRcc 5 lest°'"" Ev -1998 D1Lo A USA I I o.0 1 1 ,PQO l _ COST APPROACH SUMMARY The Assessor is currently using Marshall and Swift cost tables for the cost approach of commercial properties in Weld County, which has been approved by the Division of Property Taxation to be utilized by Colorado Assessors. The structure has been classified properly utilizing the Marshall and Swift Valuation service and an appropriate value assigned. A land value has likewise been established through the utilization of vacant land sales of comparable properties. Improvement Value 1,374,863.00 Land Value 493,927.00 TOTAL VALUE BY THE COST APPROACH 1,868,790.00 6 MARKET SALES Grantor/Grantee Date Sales Price Building Size Price/SF of YOC Building Sale Carmike Cinemas Assessor' s 2495 28th Street Value 18 , 506 $72 .24 Greeley, CO $1, 336, 900 YOC 1990 1 Bittersweet 4 3760 W 10th St 06/97 $1, 080, 000 11, 728 $92. 09 YOC 1985 Greeley, CO 2 Cooper Twin Theater 2333 W 28th St 12/95 $879, 000 10, 470 $83 . 95 YOC 1970 Greeley, CO 3 Carmike 10 Cinemas 3636 Manhattan 10/96 $2 , 464, 700 32 , 640 $75 . 51 Ft. Collins, CO YOC 1995 NOTE; The average for all three market sales is $83 . 85 per square foot . MARKET CALCULATIONS Subject square feet 18, 506 at $80 . 00 per square foot 1, 480 , 480 SUBJECT VALUE ESTIMATED BY THE MARKET APPROACHES $1,480, 000 7 INCONT APPROACH THEATER LEASES Name Terms Building Rental Rate Size Per Sq. Ft. Bittersweet 4 20 Years 11, 728 $9 . 00 NNN 3760 w. 10th Street Greeley, Co INCOME CAPITALIZATION Subject square feet 18, 506 at $9 . 00 per sq ft $166, 554 Less vacancy & collection loss 5% $8, 328 Effective income $158, 226 Less management & reserves 8% $12 , 658 Net operating income $145, 568 Capitalization rate 10.5% Income value $1,386,361 SUBJECT VALUE ESTIMATED BY THE INCOME APPROACH; $1,386,000 8 VALUE INDICATION COST APPROACH $1, 868,790 MARKET APPROACH $1,480, 000 INCOME APPROACH $1, 386, 000 ASSESSOR' S VALUE $1, 336, 900 9 1 JOSEPH C.SANSONE CO _1 u: 26 Business Tax Solutions AEC August 2, 2001 Board of Equalization Weld County 1400 N. 17th Ave Greeley, CO 80631 Dear Board Members: I am sending another package and a more detailed letter of explanation. We have been retained by Carmike Theaters to consult with them about their tax position on each of their theaters. As I have informed you previously, the movie industry is in the worst business position in their history. Seven of the top ten movie exhibitors are in Chapter 11 bankruptcy and many of the small local exhibitors have also filed and are in financial difficulty. The major problems seem to be smaller theaters being tied to leases that were set up between the early 80's and 1998-99 when the business climate was much different. Today these leases make the smaller theaters unprofitable and economically unfeasible. At the same time that this is happening, the trend is to build megaplexes with new amenities to capture market share. Food courts, sit down restaurants, video arcades, nightclubs and digital movie and sound delivery have become what the movie customer can expect. This is what the competition is forcing with video, cable and dish TV businesses driving this competition. It is our contention that because the movie business is in such a crisis, there are very few buyers of theater properties. This is borne out by a lack of sales of this type of property. The sales we have found have be for properties shut down or ready to be shut down and sold for much less than what would have been market value just a few years ago. For this reason, we find the market approach to value useless in most cases. Because of the high rate of bankruptcy, the theater chains have tried to renegotiate their leases and if not successful, close the doors and walk away from unprofitable leases. This has affected the income approach by making the leases of bankrupt chains highly speculative and unreliable due to movie exhibitors being able to walk away from their leases at their discretion. The income approach is very unreliable under the present circumstances. The cost approach, the third method of value of real property, can indicate what the improvements would cost to build at today's rates, however, unless there are willing buyers other than speculators with the corporate raider mentality, there is little value in knowing the cost to build a property. The new properties being built are mandated by the competition and under normal business practice should not be built. PC : lksC .C, cp,,) August 2, 2001 JOSEPH C.SANSONE CO. Business Tax Solutions Although the experts are predicting a market turn around, no one can tell when or how soon this will take place. Because the buildings that house movie theaters are so specialized in how they are built, the cost of converting to another use would cost more than the cost of tearing it down and building an improvement for a designed use. In their business plan, Carmike would like to be one of the largest providers of movies to small or mid-sized communities in this country. They are trying to retain as many of their 350 theaters as possible while still being profitable. This will be difficult under the present conditions, but not hopeless. The adjustments to their business today will have a great impact on the future survival of their industry. Thank y .ecroxp Gary . all Senior Real Estate Analyst Joseph C. Sansone Co. 18040 Edison Avenue • St. Louis, Missouri 63005 Phone: (636) 537-2700 Toll Free: (800) 394-0140 Fax: (636) 537-2307 E-mail: jcssales@jcsco.com www.jcsco.com HEADQUARTERS: St. Louis, Missouri EUROPEAN OFFICE: Brussels, Belgium Atlanta • Boston • Chicago • Minneapolis 4Z,11AMI PER SL.reeen° ✓clot erf ,S_ f Sere-et) fe..#erJ'. lieiI174 III ta�c vale _ / t /, o�4 r7^ # /a� a/d 2000-2001 Carmike Theater Appeals l/,,` GY Meat) t t/;6ph./ae #iq ) ADJ Bldg. County Theater ADJ Bldg. Square Only ADJ L&B Proposed Adjusted ADJ Land ADJ Bldg. Value for 1999 2000 Location Number Year Built K Screens value/Screen Footage $/Sq.FI. $/Sq.Ft. FMV Value Value Value Year Notes Attendance Attendance TX-Angelina County 07-8717 1969 2 $83,150.00 10,660 15.60 15.60 166,300 166,300 0 166,300 2001 V.FA IL-Collinsville 40-5260 1972 4 $54,750.00 11,500 19.04 34.92 916,515 401,606 182,606 219,000 2000 Appealed To Stale KY-Hopkins County 07-4237 1973 4 $119,200.00 15,893 30.00 35.57 604,600 565,300 88,500 476,800 2001 NC-Cleveland County 21-6515 1974 4 $108,356.00 10,567 40.26 61.57 787,295 650,604 225,180 425,424 2001 VA-City of Salem 30-5250 1976 8 $108,512.50 29,671 29.26 49.69 1,618,500 1,474,400 606,300 868,100 2001 Mt 1989 NC-Onslow County 20-6625 1976 3 $121,839.33 12,368 29.55 46.79 606,655 578,654 213,136 365,518 2001 Built 76/Ranovated 1983 NC-Beaufort County 20-8670 1976 7 $129,110.86 20,182 44.78 44.78 1,134,852 903,776 0 903.776 2001 1997 addition and renov. NC-Iredell County 20-6710 1977 4 $118,642.50 15 817 30.00 53.49 1,006,430 846,040 371,470 474,570 2001 NC-Caldwetl County 20-6695 1977 2 $156,900.00 10,446 30.04 30.04 377,200 313,800 0 313,800 2001 Renovated 1995 GA-Ben Hill County 07-0540 1977 2 $95,561.00 8,004 23.88 29.51 236,200 236,200 45,078 191,122 2001 Feld),Assesssed FL-Polk County 07-3267 1977 3 $8,333.33 12,965 1.93 24.00 653,820 311,200 286,200 25,000 2000 Closed theater TX-Angelina County 07-8709 1978 4 $57,057.50 12,540 18.20 18.20 228,230 228,230 0 228,230 2001 WFA OK-Pottawatomie Co. 15-9756 1978 8 $98,768.25 31,254 25.28 t: 815,130 815,130 25,000 790,130 2001 Fairly Assesssed OK-Carter County 15-9103 1979 5 $129,048.40 18,400 35.07 822,192 803,800 158,558 645,242 2001 TX-Hunt County 07-8592 1980 4 $85,222.50 13,962 24.42 54.24 931,020 757,290 416,400 340,890 2001 - _ TN-Bellevue 8 07-2769 193 IlEll $181,650.00 27,002 53.82 89.44 2,415 000 2,415,000 961.800 1,453,200 2001 appeal further-pl stadium seat _— SC-York County 22-7820 1982 $79,457.14 22,466 24.76 45.32 1,356,000 1,018,200 462,000 556,200 2001 NC-Cleveland County 30-6519 1982 4 $139,387.75 16,500 33.79 53.92 1,167,821 889,608 332.057 557,551 2001 KY-Warren County 07-4056 1982 6 $108,566.67 21,138 30.25 65.97 1,676,500 1,394,400 755,000 639,400 2001 Slope Floor NC-New Hanover County 21.6535 1983 fl $103,968.83 19,716 31.64 78.79 1,825,570 1,553,513 929,700 623,813 2001 _ SC-Aiken County 25-7835 1984 $120,566.67 16,598 21.79 32.39 911,896 537,596 175,896 361,700 2001 1994 addition(dosed) NC-New Hanover County 21-6920 1984 $106,716.25 13,966 30.56 30.56 500,843 426,865 0 426,865 2001 OK-Payne County 15-9863 1985 1 $111,457.80 31,000 35.95 46.42 1,438,950 1,438,950 1,114,578 2001 Fairy Assesssed OK-Kay County, 15-9665 1985 $80,750.75 15,840 20.39 27.61 437,303 437,303 114,300 323,003 2001 Fairly Assesased NC-Davidson County 21-6470 1985 $99,493.75 22,256 35.76 59.72 1,518,270 1,329,120 533,170 795,950 2001 FL-Orange County 07-3469 1985 $184,043.50 32,466 45.35 56.24 1,994,730 1,825,748 353,400 1,472,348 2000 OK-Muskogee County 15-9624 1986 $121,911.00 20,462 35.75 44.36 907,796 907,796 176,330 731,466 2001 Fairly Assume GA-Baldwin County 07-0831 1987 $101,933.33 18,008 33.97 36.97 665,618 665,618 54,018 611,600 2001 Slope Finer FL-Hillsborough County 07-3482 1988 $143,814.25 35,726 32.20 55.56 2.561,030 1,985.002 834,488 1,150,514 2000 NC-Onslow County 20-6628 1989 $162,273.29 26,144 43.45 62.45 1,748,942 1,632,668 496,755 1,135,913 2001 VA-Albemade County 07-5023 1990 $116,600.00 20,643 33.89 62.06 1,281,200 1,281,200 581,600 699,600 2001 Fairy Asseassed NC-Onslow County 20-6630 1990 $136,973.33 20,002 41.09 67.06 1,341,293 1,341,293 519,453 821,840 2001 Built'e3lRehab 1996(eyb'go) GA-Bulloch County 07-9010 1991 $73,700.00 26,330 25.19 42.93 1,130,400 1,130,400 467,100 663,300 2001 Fairly Asseassed SC-Lexington County 07-7423 1991 1 _ $80,654.29 35,888 31.48 65.63 2,776,020 2,355,160 1,226,000 1,129,160 2001 Expanded 1996 t• 226,749 TN-Knox County 07-2467 1993 1 $198,620.00 30,956 64.16 84.30 2921,000 2,609,500 623,300 1,986,200 2001 LAF appealfurther-retm mad SC-Spartanburg County 07-7689 1993 $132,082.86 22,734 40.67 60.23 1,662,680 1,369,180 444,600 924,580 2001 SC-Spartanburg County 07-7678 1993 $135,991.43 22,734 41.87 53.88 1,475,450 1,224,940 273,000 951,940 2001 NC-Wake County 07-6140 1993 na na na na 2,057,943 1,002,352 1,002,352 0 2001 Vacant landa paving NC-Wake County 07-6140 1993 1 $170,368.79 45,823 52.05 76.40 4161,600 3,500,860 1,115,697 2,385,163 2001 Built 1993w11997 addition NC-Forsyth County 07-6367 1993 1 $157,886.70 32,824 48.10 100.41 4,104,500 3,295,900 1,717,033 1578,867 2001 286,006 270,016 TN-Davidson County 07-2728 1995 0 $217,570.00 44,910 48.45 93.43 5,473,500 4,196,000 2.020,300 2,175,700 2001 611:83 Retro Stadium 99 __ TN-Blount County 30-2483 1995 , $137,933.33 37,766 43.83 56.45 2,131,800 2,131,800 476,600 1655,200 2001 Bll'e3 Rew Stadium'99 KY-Fayette County 07-4205 1995 10 $160,000.00 32,740 48.87 88.58 3,301,500 2,900,000 1,300,000 1.600,000 2001 FL-Escambia County 07-3068 1995 10 $137,294.00 31,457 43.64 56.08 1,952,260 1,764,240 391,300 1,372 940 2000 M 377,427 FL-Bay County 07-3012 1995 10 $137,197.20 31,338 43.78 63.91 2,568,043 2,002,722 630,750 1,371,972 2000 314,320 271,050 TN-Wynnsong 10 07-2795 1995 10 $251,280.00 31,147 80.68 107.01 3,333,000 3,333,000 820,200 2,512,800 2001 Appeal further-pi stadium seat NC-Forsyth County 07-6378 1996 12 $182,198.83 54,238 35.89 103.48 7,053,700 5,612,600 3,666,214 1,946,386 2001 Appeal Further Land IsHl9h 533,954 NC-New Hanover County 07-6334 1997 16 $118,520.00 38,852 48.81 2,544,320 2,544,320 648,000 1,896,320 2001 WFA-0dglnal Full Stadium 434,537 557,293 NC-Wake County 19-6180 1999 15 $237,212.00 59,108 60.20 4,841,457 4,841457 1,283,277 3,558,180 2001 WFA-Oipnal Full Stadium 573,775 545,031 TN-Williamson County 07-2367 1999 20 $616,735.00 141,908 86.92 130.47 20,370,100 18,515000 6,180,300 12,334,700 2001 Mega-Plea aria L MEGAPLEX were either uncer construction or The mar:et expansion had the s,-nptoms LOCH projected to 'be constructed and o a class,c over-building cycle MANIA WANES completed locally during the year. I) Ov�erlyw abundant bu dacha capitlogy al design In just three short years. the Twin Cities 3) Shifting population growth trends quick backdrop: As 1998 drew toga movie screen inventory' had ballooned in the summer of 200 cram In se• the Twin Cities had absorbed 108 by nearly 60% stee slowly e ao development developingc w ctrl ;cretins. or a 42% increase in the Cs ails opt} of theater screens in one year. Tennessee-based Regal Cinemas, put Ala' several projects on hold and announced 1999. "megaplex mania mr a new construction slowdown. continued •=, :abated as an additional 1+i screens ___ _ Next.Loew's Cinepiex,one of the nations largest and oldest cheater operators. PROPOSED/PLANNED THEATERS :Gathers rce Real Estate announced that they were losing money and in financial trouble. MINNEAPOLIS/ST. PAUL METROPOLITAN AREA PROPOSED OPERATOR LOCATION OF SCREENS Confronted by burgeoning debt, weak box office receipts, flat profits, and a Crown Theater Block E/0owntown Mpls 17 slowing national economy,in Minnesota Eden Prairie Center/Eden Prairie 18 and across the nation, the mega-theater AMC Theaters C building bubble burst. Some of the Mega-Star Cinemas ArbordakeMMapdinale Grove 16 industry's biggest chains filed for Mega-Star Cinemas Southdale Mall/Edina bankruptcy in rapid succession. MID-SIZE MARKET RANKINGS Coinciding with the bankruptcy filing announcements, came the I 99 PERSONS/ 2000 PERSONS/ inevitable closings of older, obsolete, CITY SCREEN CITY SCREEN poorly located, marginal, and unperforming theaters. 1.Dallas 8,511 1.Dallas 6,676 2.Atlanta 8,717 2.Phoenix 6,773 So,at the end of the day,are we overbuilt 3.Denver 9,209 3.Mpls/St. Paul 7,221 in theaters or not? Officials a; the 4.Mpls/St. Paul 10,780 4.Atlanta 7,365 National Association of Theater Owners 5.Cleveland 11,135 5.Denver 7,578 in Hollywood believe that nationally we 6.San Diego 12,270 6.Seattle 8,726 have CO see a 30% reduction in screens 77.San Diego 9,313 before the theater owners will see a profit 8.Seattle 12,965 g again. On the local scene, we are seeing 13,776 8.Cleveland 9,442 g.Shoeni a marked slowdown in new construction 9.Phoenix 15,069 9.St. Louis 9,537 r 10.Boston 10,239 and we will see more older, smaller 10.Baltimore 21,475 sow= caw.ran Rai sin MC ROCAS Rated Almanac. cheaters go dark in the coming year. o Colliers Towle Rawl Estate THEATER CLOSINGS MINNEAPOLIS/ST.PAUL METROPOLITAN AREA- 1998-2000 SCREENS DATE CLOSED OPERATOR LOCATION 5 November 1998 Mann Theaters Signal Hills Mall/West St. Paul 4 April 1999 - Mann Theaters Galtier Plaza/SL Paul March 1999 Lowe's Cineplex Skyway Theater/Downtown Minneapolis 64 October 1999 4 United Artists Eden Prairie Center/Eden Prairie September 1999 United Artists Burnsville Center I/Burnsville October 2000 United Amsts Brookdale Square/Brooklyn Center •8 October 2000 Maplewood Mall/Maplewood- 4 G • Ueneral r l rtists P October 2000 .. General Cinema Interchange Office Park/St. Louis Park 5 September 2000 Carmike Cinemas Springbrook 4/Coon Rapids 5 September 2000 Carmike Cinemas Forest Lake $ BIZ . r_ I ( , , : Stru : a ing Wehrenberg is' nation's oldest family-run • chain of movie theaters • Fred and Gertrude Wehrenberg Theatres Wehrenberg set up a screen crtater 5airtt Louis, at 1953 Cherokee Street in Missouri and Illinois 1906. • Arnold 14 Cine 1912 Richardson Road BY JOE WILLIAMS • Clarkson 6 Cine Post-Dispatch Film Critic One Mile South of Chesterfield Mall • Des Peres 14 Cine . Manchester Road at 1-270 Before multiplexes, before drive- • Eureka 6 Cine ins and even before talkies, Weh- renberg was in the movie business. Founded in 1906,. the Des Peres- • Halls Ferry 14 Cine • based circuit is the oldest family- North Halls Ferry Road at 1-270 run theater chain in the nation. • Jamestown 14 Cine A The 'chain traces its roots to 209 Jamestown Mall, Florissant I! Cherokee - Street That's where • Kenrick 8 Cine • - • - .--Fred and Gertrude Wehrenberg 7505 Watson Road !' operated a combination grocery, • Mid Rivers 14 Cine / butcher shop and saloon. When a 1-70 and Mid Rivers Mall Road. • F salesman convinced the couple that is North Twin Drive-In moving pictures were the latest 9425 Lewis&Clark ' craze, the Wehrenbergs rented the • O'Fallon 15 Cine - adjoining space at 1953 Cherokee, 1-64 and Lincoln Trail . east of Jefferson Boulevard.That's 1- Ronnies 20 Cine ' where they installed a screen,' a South Lindbergh and Baptist Church projector, I piano and 99 kitchen chairs (thus avoiding the special 1i- Road - - cense for theaters with 100 or more . • St. Charles 18 Cine seats). Admission to the theater Highway 94 at Pralle . was 5 cents. Fred worked the pro— ■ St.Clair'10 Cine • jector.and Gertrude provided the. • 1-64 and Illinois 159 music to accompany the short, WestportTwin Cine - —�• *- lent films. Between movies, pa- 1-270 and Page • - • _ •. tons.,could go next door for beer Springfield,Mo. anda.buffet •Campbell Cine.. • Within a year, the Wehrenbergs 4005 South Avenue . opened the Airdome on.Jefferson; . • . - O • Mo °" where movies were screened Yea. � • Osage Village Cine ' round beneath a canvas tent tit •was the beginning of a family love Factory Outlet e.Viillage nrdea' Mo. • affair with outdoor movies that West 14• Cine .. • • continues today, as Wehrenberg • Cape - • operates the last rem—Ai inO drive- Route K at Interstate 55 in theater in St. Louis'county, the . Pr'sccttAriz. North Twzn in Jennings-) • -'•Frontier Village Cine. . .... .__._- • In 1910, Fred and Gertrude 1771 East Highway 69 .opened another theater on Chero- <; :: :.•_ ..; kee,called the Best. ' ' built grand movie palaces,'Weh the talkie era, Wehrenberg renberg specialized •in smaller competed with numerous local and neighborhood-theaters-on streetcar national •-theater, circuits. While lines:-The biggest was the Cinder-• chains:like Fox, Loews.and;RK0 elle at Cherokee and Iowa,but per • STLOUIS POST-DISPATCH SATURDAY, JANUARY 27, 2001 a y �o m...+ ty u y r s �-+'ter.r• �.r� j� ' S,�ia... „?s' {�. �...q, Fi:Y 3c y #aw.iir 3s .*q ..,< ✓�i .asr -'Hoe S p, �. rs rr k + 4 ry KAREN ELSHOUt POST-DISPATCH 'tom �®(. President and Co-Chief Executive ' T�r et Ronald P. Krueger II (above) sits - — below animation cels Friday in his �h'S - f" - ... / office as he answers questions -v •aa --�.., j;.. - -+^ about Wehrenberg Inc.'s �.- ` '' ; /�I bankruptcy filing: The chain was —o. -. ' _. .' `� -- i - aF founded in 1906 by Fred . - Y. ) <. Q. - r - ? I Wehrenberg (near right) and his " w = ', ^-_• . 'C • tea :; wife, Gertrude. Ira* 0..i._„,--,,_r..;-:. "' - baps the most novel was the Melba, `*: �� _ "',R at Gravois -and Grand, -which .. - showed movies indoors in the day • r r+ -w '' time and outdoors at night. _ "y ":'^�� r... _ Paul Krueger,the son-in-law of r the Wehrenbergs, inherited the " x"F„-Cc Z 1' family business,and when Krueger ;;;;,..._---.,,,;:..„....;,.-..`:_4:' - .. h 7 died in 1.963, his son Ronald, then �. • `'` :. ° - 23,-took over. Ronald Krueger.got -- .. _.. -- • his start in the business at age,8, some theaters.Today,the Wehren-•. erraeld 4,'the•Keller 8, the . when he worked as the engineer of berg, chain has more than 200 bergh 8 and the Northwest Plaza 9 the kiddie railroad at the old Ron- screens in three 'states, including, as well as the Shady Oak, one:of Die's Drive-In,which was named in 165 in.the St Louis area.Like other. the area's last_remaining single- his honor. As a teen-ager, he man- circuits across the.county, Weh-- screen theaters. age the Iamily's 66 Paris-in The=: renberg has invested heavily• in ' : The elder Krueger ackn dowledges • •ater on Watson Road: - : "megaplexes,"which feature steep- that the business-ig undergoing a Ronald Krueger guided the fur ly. banked "stadium seating, sur- more dramatic transition than' it - through-•a:.peridd-of. tremendous round sound, .and double-digit did in the 19S0s, when neighbor- growth as the company acquired screen totals. • 'hood theaters closed because-of the local holdings of the General In May 2000, the-. company competition with TV.Buff he is op-..._-... Cinema and.Mann'rhairia,with the- opened the largest cineplex in the .timisdc that the firm will emerge eters in Missouri, Illinois and Ari- St Louis area, the Ronnies. 20, on: stronger'after reorganization, with __:' \ zones- ..•. - -: . 'the Lindbergh Boulevard site of the an increased emphasis on the high- -- While Krueger-is still the presi- drive-in ' where the elder Ron tech accouterments reof� the of the parent company, his Krueger- once worked' Although t son, Ronald P. Krueger Jr., now the Ronnie's 20 is a popular hang- mier provider of motors pi cnu ,en- runs the rhain's day-to-day opera- out for local teen-agers, older and tertainment in theme be st' mill he dons. Under his watch, the circuit smaller Webrenberg facilities have said 'The popes has modernized, with•Web-based suffered,-and in the past year the 'the sodas will be 'cold, and we'll ticket sales and reserved seating at company has shuttered the Chest- still have the best pictures.".. Wehrenberg Inc., the oldest fam- ilyowned movie theater chain in the country, filed for Chapter 11 bankruptcy Friday. Through the filing, the company hopes to reject lracrs at some of its closed theaters and renegotiate the rent at ones that are still open. • I . But it's business as usual as the company goes through reorganiza- I ton,said Ronald Krueger II, presi- 7 dent and co-chief executive of! .Wehrenberg. The company's 800 f employees won't be affected by the j bankruptcy, he said. Wehrenberg 1 owns 13 movie theaters with 165 screens in the St.Louis area. Wehrenberg's theaters also will continue accepting gift certificates, 4 thanks to an order issued Friday afternoon by U.S. Bankruptcy Judge Thomas Banta. In addition, Banta approved some procedural motions, according to Clayton bankruptcy lawyer Norman Press- man_ His firm, Goldstein & Press- ! man, is representing some . . Wehrenberg companies that did • not file bankruptcy. . .In the filing, Wehrenberg listed. total assets of$6.56 million, and to- 7 tal debt,of$9.45 million. Gross in- for bankruptcy fall into two catego- come totaled- $61.3 million last ries: those that are trying to rene- ' year. Wehrenberg's top creditors gotiate or reject their current 1 • consist mostly of movie companies leRcPs and those that expanded too and Wehrenberg's landlords. fast and accumulated too much rf debt. Krueger said the bankruptcy doesn't mean the end of Wehren- •In.Webrenberg's case, it's likely berg. "The company is not for ' that overestimating of ticket sales sale," he said. Instead, the bank- at megaplexes led to Webrenberg's i ruptcy will allow Wehrenberg to overestimating the rent it could get its finances in order after a dif- pay, said Barry Schain, president • ficult year. "Our day-to-day bust- of entertainment industry consul ness is sound,"he said. ._ tants Wabash Associates, based in . woes come as • Chicago."It took four years to real- Wehrenberg's megaplexes are changing the mov- thein what the realistic revenues for ie theater industry, as smaller the- megaplexes were," aphe said. aters are being sacrificed for AMC built the first megaplex.in bigger ones. It's all part of a cycle, 1995. . - rmod' .In addition to the megaplex - Neighborhood .movie theaters building boom, many theaters na shut down in the. '40s and early tionwide were closed due to a con- • 1 'SOs .when�ars'became a staple fluence •� of.' factors, such as ' j item for most famr7ies., .Krueger . declining audiences and subpar said.Higher gas prices and the ris- movies. ing cost of real estate in the.'60s - Wehrenberg has' closed five• , and 70s meant the gradual end-of 4 drive ia •s . movie theaters,totaling 30 screens, . in the St'Louis area since August- The Des Peres-based company v Earlier this.•week, the company p joins 10 other movie-theater chains withdrew from the.market in-Flag- i across the country,that have-filed -staff;•Ariz.,when it closed two the- '- l for banlauptcy. Other chains that aters; the theaters had a total of . 4 haven't filed for bankruptcy, such el five erects The:Satdefield 6 eine. as Kansas City-based AMC Enter- in Springfield, Mo., also dosed on tainment Inc., have reported love. •Jan 7. It's the rent at these eight is recent quarters and have said theaters that Wehrenberg is trying they will also be.closing a number' to reject. -. . of their movie theaters. . - .` . .. •::.t. .,.! ..: ... <-,7. : •-:Wehrenberg's one.at West Port. i Theater chains' that have' filed:''Plaza, which has two'screens,also:: • ■ Management says the chain will not be sold and day-to-day business is sound. will close in the next few weeks, keep those locations open," Krueg- Krueger said. er said. "But if the deal's not made, BY CHERN YEH KW0K the deal's not made." - OfC the Post-Dispatch E KW A lawsuit w in St. Louis County Krueger said Wehrenberg also Court shows the type of lease that g i Wehrenberg is attempting to reject won't be building the Galaxy 21 I. Cine in Chesterfield Valley. In- motion to reject certain theater On Jan. 5, SKW II Real Estate stead, the site will be sold. Krueger lees would probably be heard on Limited Partnership filed a suit said the company already has "one Feb.6. against Wehrenberg, seeking more outstanding offer." Bankruptcy law allows a debtor than $1.2 million in rent and other There's still a need for a movie to cancel leases and limits the costs, including that of terminating theater in the Chesterfield area, amount of money the landlord can the lease. SKW owns the property Krueger said, though he isn't plan- collect Landlords are allowed to for the former Lindbergh 8 Cine, sing one in the near future. "Fi- collect between one and three which WehrenbergNo operated until nancing has dried up for movie years' rent, even if the lease had its closure in November. SKW t- theaters, and we don't see that much longer to run. listed as a creditor in the bankrupt- changing for a year-plus,"he said cl'filing. "If Wehrenberg gets rid of its As for theater improvements, unprofitable locations and pays a ��" For that property, Wehrenberg Krueger said the St. Clair 10 the- unp unp o a sum to the l p ysda paid about$43,000 a month in rent ater could be retrofitted with stadi- rea, . it can pay these claims in full for a lease that ran through 2007. um seating.The costs of converting over a certain number of years;' A federal Securities and Ex- the seats would be between$50,000 pressman said. and$150,000,he said change Coenberg n filing also Krueger • ssaid, "Our plan,if shows Wehrenberg paid Cleveland- Barta, the bankruptcy judge, has proved by the court, is to pay 100 ap- based Developers Diversified Real- set the bankruptcy hearings to con- cents on-the dollar." ty Corp. about $47,500 per month tine on Wednesday. The hearings in rent for the Keller 8 Cine. That will be on some other procedural Wehrenberg Inc. is a subsidiary tine shuttered in November,but its ' matters,Pressman said . of Fred Wehrenberg Circuit of rental agreement extends to 2003. • Pressman also said that at Fri- Theatres Inc.and operates the par- Krueger day's hearing, Wehrenberg lawyer ant company's 17 movie theaters, how much in leases the company is declined to comment on Rebecca Case told Judge Barta. with 200 screens- paying. that the rage probably would be In addition to the St. Louis area, finished by August Case is with Wehrenberg has movie theaters in Wehrenberg also is trying to re- the law firm Stone, Layton and Cape Girardeau, Osage Beach, and -" "3 negotiate the rent at the James- Gershrnan- Springfield, Mo.; and in Prescott, town 14, the Arnold 14 and the Krueger • . -. said the case probably Ariz i Mid-Rivers 14,Krueger said. If ne- would take about six to eight • gotiations are unsuccessful with months. ' _ David Moldsus of the Post-Dis- the landlords, the theaters could . . .. patch staff contributed information close..'It.is out every intention to . Pressman said Wehrenberg's ' for this story. ' ' ' `• . ` • - . . .Wehrenberg's-future is not all in company's hands . The SL Louis area has.only two BY CHERN YEH KWOK Chapter. 11 banlmrptcY, major theater chains.— Wehren- . . • of the Pons-Dispatch - said. ... berg and AMC Entertainment Inc - ,. ' But under bankruptcy laws, On1Y three other.metropolitan mar- • creditors can submit a different re its is the United States — MU- Although the Krueger.familY has organization plan; in Edwards'-''rvened. •Waukee,-Phoenix and Las Vegas— no chainlof movie theaters :!1 t.dea?- :- to sell the Whether the wards,basedein Cali-In 't " �L- srchirago sazd Irrycotripar'r� has lion ultimately.could depend on the'...forma, will now be broken up or ., sine- .New York has. drag.I os As- banlauptcy; 'court and Wehrea- .sold as a whole has yet to be dead- �x.11 berg's creditors.said Barry Schain, - by the bankruptcy judge,Scharr - • '- ^* "^`^ said _ .:' Movie- theater ccmpaniea at president of a r�_ent Indus have been buying.mstead of selling try consultant W"-abash Associates .. ..If.Wehrenberg's case. ends up In'a similar case;Edwards The: - like Edwards', Webrenberg would'-ai'e-Century•'Theflt at_.a.,__ Ra- ater Circuit Inc., which- filed for bean attractive pur'chas'e due to its . fael,. Calif-. and-National Amuse- bankruptcy last August,'.,did not ., position.in.the SL Louis.market,-' ment . Lac. ... .Dedham Mass... 'c.- Schaursaid :j1e:;e;'r. ''r- t I want•.to be sold'when,it-filed!for -Schainsaid — SATURDAY, 2 JANUARY 7, 201 0 _ __-- -- - s for bankruptcy; , Wehrenberg_file BIz9 - s the shoi s says will go on y Wehrenberg's top 20 creditors • • 20th Century Fax,film rent: $860,623.80 • Paramount Pictures, film rent: . . $524,374.69 • Miramax Films, film rent: $326,887.12 ■ Buena Vista Distribution, film rent: $246,943.11 - ■ USA Films, film rent: $192,214.86 7 • S.K.W. II c/o Colliers Turley Martin, theater rent: $187,358.88 ■ Developers Diversified Realty Corp., theater rent: $148,856.08 • Northwest Plaza, theater rent: • $135.378.68 a.Pepsi-Cola General Bottlers Inc., trade debt: $128,719.08 ■ Sony Pictures, film rent: • $93,179.08 • Universal Film Exchange,film rent: $92,343.45 -,} 1 • Simon Property Group LP, theater rent: $87,089.01. ■ General Cinema Theatres, theater • - :.. . ... _ - .rent and real estate taxes: $76269.73 • Druco, theater rent: $55,329.75 Green _tree Village,theater rent!: •; $53,462.20 ■ New Line Cinema,film rent: $43,441.69 I • Giace Investment Co.,theater rent:- $36,104.95 • St. Louis Post-Dispatch;trade debt: • $33,784.94 ■ Ic_e-USA Corp.:trade debt: $33,228.19 ■ Sony Classics,film rent: • $32,632.58 • s:' a fl } }...rd _ - - - ; - fl�E rfgR'S Y,rQ �4. . _l !� 7 Y KAREN ELSHOIST/P0ST.0ISPATCH Angela Bauer of Ballwin enters the Des Peres Cine Friday with her four children— (from left).Emily, 7; /1 Luke, 2; Andrea, 3; and Rachel, 5 —to see "The Emperor's New Groove."The eine is owned by Wehrenberg Inc.,which has filed for Chapter 11 bankruptcy protection- • Variety.com Page 1 of 5 LOG IN: - .11Fltwr•! �`�" M I Mw. W H 0 •�� LSAI _ z1 *sews Columns Reviews People Spotlight Charts I er - VarietyExtra DBE Reviews/Credits Showbiz Calendar Front Page Home Page • ' it' `;:tt5:i"4. M'7z P " t. ` FILM."-NEWS :. .. : :1 • Global 8.O. Chart "AJ� Updated: 3/7/01 a' Academy Central '"'�""'• Pitch Me Contest BUCKS UP, TIX DIP AFM 2001 Grosses hit record despite admissions drop PO The Front Row VPage By CARL DIORIO Variety Store LAS VEGAS -- Domestic movie admissions fell 3% last year, even Classifieds as grosses hit an all-time high thanks to boosted ticket prices. LA 411 Directories Slanguage Dict. But in dishing those stats Tuesday, Motion Picture Assn. of America chief Jack Valenti hastened to note a 25%uptick in admissions in Handheld Access 2001 so far compared with the same period last year. Free News Ticker d And the silver-tongued Valenti, in his annual ShoWest address to Fir: exhibs here, suggested moviegoing enthusiasm remains high among Ti Site Index the American public. Dig About Variety Subscription "We have proven ourselves resistant to the furious daily challenges re mounted against us by other media," Valenti told 3,000-plus exhibs. "We are still robust and hardy." Acn lifilpresents The average American sees five pics a year--more than moviegoers lrath;rt f ('rntrat in any other country --and among those viewing a dozen or more unct aool films annually, some 32%were older than 40, according to MPAA stats. L. er aerviee "The core of our business is still sturdy," Valenti said. "Movie attendance is not confined to the young." . ,. en r, 1 T J cnnnnnnv...,.1.-..,t— 1 R.Arf;rh4TA_11177g4RR0 3/7/01 Variety.com Page 2 of 5 Update your Variety preferences Admissions in 2000 were 1.42 billion, down from 1999 by some 44 erntai million admissions. Other stats showed Hollywood studios released 18% fewer films last year-- at 84 -- while spending 8% more to make and market individual pics. The average negative cost on studio pics released in 2000 climbed to $54.8 million from $51.5 million a year earlier. Prints and advertising added an average $27.3 million, up from $24.5 million in 1999, Valenti said. Turning his sights to regulatory matters, Valenti noted a recent Federal Trade Commission inquiry into movie industry ratings, and said a recent MPAA poll showed 81% of parents with children under 13 found the ratings "very useful" to "fairly useful." A separate, FTC- commissioned survey found 80% of parents were "satisfied" with the current rating system. "The FTC survey also judged that a majority of theaters were indeed enforcing the voluntary movie rating system," Valenti said. "I counted this to be a profoundly significant and publicly beneficial finding. "The best-kept secret of our industry is that exhibition and distribution are the only enterprises in America that voluntarily turn away revenues in order to redeem the pledges we have made to parents," he said. "No other American industry can make that statement." Tough enforcement John Fithian, president of the National Assn. of Theater Owners, echoed the praise for exhibs' ratings enforcement. "I received several phone calls in anticipation of ratings enforcement problems with the release of'Hannibal,' " Fithian said. "I'm proud to report that we had no significant problems. The most successful release of an R-rated film in history was coupled with the most successful ratings enforcement ever." The NATO prexy noted the prospect for further government scrutiny of ratings enforcement and advised: "We must remain vigilant. Train your staff; review your trailers. Post the ratings information in your lobbies and on your Web sites. Check IDs." n . , LJ , , ,-r7nnoon 1/7/01 Variety.com Page 3 of 5 Fewer 'R's Fithian also lauded a recent rise in family-friendly moviemaking in Hollywood. Seven of the nine major studios made fewer R-rated films last year, Fithian said. Just under 40% of all major releases last year received an R-rating, compared to 58% in 1999. Today's Film News: Fithian acknowledged the 800-pound gorilla in exhibs' collective living room • 'Frasier couched at NBC for 3 by predicting the industry will emerge Years • Surprise as Prix pacts from a fiscal crisis of historic with NATPE proportions stronger than ever. With 10 • 'Trial' run may end theater chains having filed for recent • canal 4 toppers run from bribe charge bankruptcy reorganizations and several . 1Cablers hook original circuits seeing a change in ownership series to rerun engine as a result, "indeed, a long year it has Inside Move: ABC pick ups Duos been," Fithian mused. • :7 t Discovering Asia's tyro filmmakers • SES7ABC locks in early for But he argued that the spate of 'Pearl ''A.l.' multiplex building of recent years, • lifiug Vet Cable TV set to shake off new comoetish which some say led to the current • Col TriStar Intl.TV ups Childs financial woes, was not to blame. "These improvements were necessary All current news... to preserve exhibition's preeminent status as the first and best movie entertainment experience." Too many dinosaurs The problem, Fithian said,was exhibs' inability to shutter older, money-losing properties quickly enough.Bankruptcy reorganizations are helping to address the issue, and a peak of about 38,000 domestic screens last summer was cut to 36,379 by year's end, according to NATO stats. "By my estimate, we're shrinking by about 200 screens a month now, on average," Fithian said. "That count will continue to shrink in the short term, as it must. With new, exciting complexes and reduced overall screen count, exhibition companies will grow healthy again." Cautionary note But if Fithian welcomed the influx of new investment that's entered exhibition via bankruptcy reorganization,the CEO of a circuit feted at ..,,. . , I !nnnrvnn P. 1 9.A 3/7/01 Variety.com Page 4 of 5 ShoWest this year seemed to take a swipe at the new players. Referring perhaps to entertainment entrepreneur Philip Anschutz, who recently took over United Artist Theatres and is eyeing a couple of other chains, Raymond Syufy, chief of Century Theatres, cautioned: "Great theater circuits are not built overnight; they are not built by acquisitions, nor are they built by size and leveraging costs." Rather, exhib success comes from slow, steady growth and good management of operations "theater by theater," Syufy said. San Rafael, Calif-based Century has been among the industry's healthier circuits of late, and Syufy and circuit prexy Joseph Syufy have been named ShoWesters of the year. Grazer keynote Imagine Entertainment co-topper Brian Grazer also offered keynote remarks supporting the notion that the public's appetite for moviegoing is constant through good times and bad, as evidenced by 19 pics grossing more than$100 million amid a record $7.7 billion in U.S. box office last year. "Over the past 20 years that I've been coming here, skeptics and pundits have said that films are getting worse, exhibition is getting worse, and the business is either changing or contracting," Grazer said. Like Valenti, the effervescent producer offered a list of historic and current challenges to the theatrical experience by everything from broadcast TV and cable to DVD and the Internet. "(But) people absolutely love movies," Grazer enthused. "Yes, the price of a ticket has gone up, but thanks to you people, the comfort and the overall experience of seeing movies has been heightened so that it's well worth it." To be exact, average ticket prices rose 320, or 6%, to $5.40 last year. Since 1990,tickets have become 28%more costly. • • !LA., ......9U -TA-4,000vllR'ci,hrat=-1 Artic leld=1 117794880 3/7/01 NATOIStatisticsiTop 10 Circuits Page 1 of 2 4 I I National Association of Theatre Owners About Conventions Publications Statistics Training Tapes Statistics Top 10 Circuits (as of June 1,2000) 1. Regal Cinemas, Inc. 7132 Commercial Park Drive Knoxville, TN 37918 Main: (865) 922-1123 Fax: (865) 922-3188 Screens: 4449 Sites: 424 2. Carmike Cinemas 1301 First Avenue Columbus, GA 31901 Main: (706) 576-3400 Fax: (706) 576-2717 Screens: 2821 Sites: 447 3. AMC Entertainment Inc. 106 W. 14th Street, Ste. 2000 P.O. Box 219615; (zip: 64121-9615) Kansas City, MO 64105 Main: (816) 221-4000 Fax: (816)480-4617 Screens: 2736 Sites: 197 4. Loews Cineplex Entertainment. Corp. 711 Fifth Avenue New York, NY 10022-3109 Main: (212) 833-6200 Screens: 2726 Sites: 359 5. Cinemark USA, Inc. 3900 Dallas Parkway Suite 500 Plano, TX 75093 Main: (972)665-1000 Fax: (972)665-1004 Screens: 2227 Sites: 192 6-10>>> n.n/ct,tictirerirrnitc htcn 4/6/01 NATOIStatistics(Top 10 Circuits Page 1 of 2 INational Association at Theatre Owners • About Conventions Publications Statistics Training Tapes Statistics Top 10 Circuits (as of June 1,2000) «<1-5 6. United Artists Theatre Company 9110 East Nichols Avenue, Ste. 200 Englewood,CO 80110-3405 Main: (303) 792-3600 Fax: (303) 790-8907 Screens: 1858 Sites: 257 7. National Amusements, Inc. 200 Elm Street Dedham, MA 02026 Main:(781) 461-1600 Screens: 1076 Sites: 107 8. General Cinema Theatres 1280 Boylston Street Chestnut Hill, MA 02467 Main: (617) 264-8000 Fax: (617) 277-9012 Screens: 1060 Sites: 133 9. Hoots Cinemas Corporation One Exeter Plaza Boston, MA 02116 Main: (617)646-5700 Fax: (617) 375-0039 Screens: 967 Sites: 113 10. Famous Players. Inc. 146 Bloor Street W Toronto, Ontario MSS 1P3 Canada Main: (416) 969-7800 Fax: (416)964-3924 Screens: 868 Sites: 108 • • e/A/nt • postnet.com I News I Wehrenberg Theatres files for bankruptcy Page 1 of 3 s., pas C0m m Get the power Of . =,. .►a..I .. paw. platinum. Newr ' Good afternoon, St. Louis I Friday,January 26, 2001 omm-- a tom Sections I A&E I Business I Communities I News I Shopping I Sports i Help I Mme.pstnet.com �7tt a Path I Home Home » News >Front Page Index I Archives I Calendar I Classifieds I Contact I Extras I Forums I Guides I News Links I Register! Search I Site Mao I Special Reports I Today's Post I Weather I Wires I Yellow Pages In News Posted: F,id:n.Jo floors 36. 30111 _ Your quote Editorial E-mail this Story to a friend In the Editorial Page Forum Education Wehrenberg Theatres files for "If my tax dollars Headlines bankruptcy are going to a Health -nY failing school (yk!! H N SVEP,ESESG r system, there is no nu Science E7 w3THEATR,ES(` -' reason for me not Imagine St. amnu•nru[•ede£'si ¢tn' • to be able to Wehrenberg Theatres, { spend outs which operates 150 my money to send P-D Columnists movie screens in the St. my children to Current features Louis area, has filed for schools where they will learn." News of the reorganization under Chapter 11 of federal bankruptcy Respond here Weird law. Obituaries News forums AP Wire The filing was made this morning in U.S. Bankruptcy • Ask Conan Court in St. Louis. In a statement, the company said it • Ask the Help Desk II{. Lottery has enough cash on hand without additional borrowing to • Bill McClellan Mo. Lottery continue serving its customers and paying its employees • Chalkboard TINA and vendors in a timely manner. Ronald P. Krueger, • Current Affairs i,'/eatherbird chairman and co-chief executive of the St. Louis-based • Editorial Page • Faith Forum Ann Landers firm, said movie patrons will not be affected by the filing. . Going Places Ashcroft • Greg Freeman "Wehrenberg will continue to show the latest and most . MediaCheck Census 2000 popular movies in state-of-the-art theatre • Voice Your Choice Dear Abby environments," Krueger said. "We intend to remain the Election 2000 community's provider of motion picture entertainment stressed Out excellence, but we must reorganize our finances in order Stadium to do so. This means focusing our investments on Local businesses • Apparel Disabilities modern theatres and limiting our losses on older, smaller •Au o • Schools Guide theatres that simply have not been attracting guests." • Community Search section • Computers- In its filing, Wehrenberg said it wanted to reject leases of Internet I eight theatres it has closed, including five in St. Louis, . Di i — two in Flagstaff, Ariz., and one in Springfield, Mo. Entertainment Advanced Search • Health -- General Wehrenberg said it would file its reorganization plan • Home & Real- shortly. "We anticipate that we will pay our creditors in Estate • Hotels &Travel full," Krueger said. "The only change is that payment • Insurance 'N, periods will be extended." • Money &Law • Shoos & Services The cinema industry is suffering from a nationwide glut • Sports & of screens. Several other chains -- including United Recreation Artists Theatre Co., Carmike Cinemas, Edwards Cinemas, General Cinemas, Mann Theatres and Resort Theatres -- t«-../I......... ....,,tnat rn,.,/n„ctnpt/ctnriee ncf/Home/137806D98B2F38?8862569E0005B2A30?.. 1/26/01 ' postnet.com I News ; Wehrenberg Theatres files for bankruptcy Page 2 of 3 TODAY'S have filed for bankruptcy since 1999. ST MIS PEST•ClSFATDI Wehrenberg has closed five theater complexes here last CLASSIFIEDS year -- the Shady Oak, tiA Chesterfield 4, Keller 8, Lindbergh 8 and Northwest 9. Rival AMC Entertainment Inc. has iELLOVi closed two, the Regency Square 8 and the PAGES Northwest Square 10. AMC, based in Kansas City, said Thursday that it plans to close 300 Featured advertiser screens in the next four years. EMIERGOLF Wehrenberg, based in Des Peres, was founded east norasininnet �--� in 1906. It has about 60 percent of the St. Louis cinema market, according to ACNielsen EDI. It employs 800 people in Missouri, Illinois Faglizi - and Arizona. 4 lib (All postnet.com sections... 4 . ; Too of the paae I Back to postnet.com nome E-mail the News editor I About the News section I Toolbox postnet.com's Privacy Policy Subscribe to the Post-Dispatch E-mail this URL to a friend I Advertising information POSTNET® is a registered trademark used under license from PostNet International Franchise Corporation. I postnet.net @ 2001 St. Louis Post-Dispatch, postnet.com ifir-fieSections I A&E I Business I Communities I News I Shopping I Sports I Help I Ily COm postnet.com Path I Home » News Index I Archives I Calendar I Classifieds I Contact I Extras I Forums I Guides I News Links I Register I Search I Site Mao I Special Reports I Today's Post I Weather I Wires I Yellow Pages a Get the power of ► a �Qw- platinum. k. L.._./1..,.,,... ..nr...Pt rnm/nnctnpt/ctnries nsf/Home/137806D98B2F3828862569E0005B2A30?.. 1/26/01 AMC Theatres - Investor Relations Press Releases Page 1 of 2 : -• Show Times - About AMC Investor Relations What in the world have we been up to? Career Opportunities Index of Press Releases Community Relations AMC International Richard J. King January 2 Senior Vice President, Corporate Communications Theatres AMC Entertainment Inc. Movie Information (816) 221-4000 Comment Box AMC Entertainment Inc. reports record third-quarter revenues, adjusted KANSAS CITY, MO—AMC Entertainment Inc., one of the world's leading theatrical exhi today reported revenues of$305 million for the third quarter of fiscal year 2001, ended D 1r Those revenues, up 7 percent from $285 million in the same quarter a year ago, represe zjirj6l . _ Company record for third-quarter revenues. r`, rii ri•rj=* Adjusted EBITDA(as defined in the attached Financial Data Summary) for the third quart million, an 18 percent increase over Adjusted EBITDA of$30 million for the third quarter I '-" Adjusted EBITDA also represents a Company record for the third quarter. For the quarter, AMC posted a net loss of$8.2 million (35 cents per share), compared to quarter loss of$8.9 million (38 cents per share). "We are extremely pleased to report record third quarter Adjusted EBITDA, despite a cha environment that has severely impacted many of our competitors," said Peter Brown, cha executive officer. "This quarters performance demonstrates that when good film product great assets—AMC's industry-leading portfolio of high-performance theatres— solid re For the first three quarters of fiscal 2001, AMC posted revenues of$927 million, an incre from the$905 million in revenues for the same period last year. Adjusted EBITDA for the $105 million, down 3.5 percent from$109 million in the year-ago period. For the fiscal year to date, AMC reported a net loss of$31.5 million ($1.34 per share), co of$26.1 million ($1.11 per share) in the same period last year. Current year results inclu impairment loss of$.10 per share and prior year results include a restructuring charge of and a charge for the cumulative effect of an accounting change of$.25 per share. Highlights of the third quarter include: • 67 percent of the AMC circuit now consists of megaplex screens. • AMC continues to dominate the industry rankings of top-performing theatres, with of the Top 50 theatres in North America. • G&A expense was$4.9 million lower than in the year-ago quarter. G&A expense a of revenues was 2.6 percent versus 4.5 percent in the year-ago quarter. • AMC continued to enhance the overall quality of its theatre portfolio by closing fou theatres with 23 screens. AMC Entertainment Inc. is a leader in the theatrical exhibition industry. Through its circuit nr Al nn t...,t 1/26/01 AMC Theatres - Investor Relations I Press Releases Page 2 of 2 Theatres, the Company operates 181 theatres with 2,774 screens in the United States, C Kong, Japan, Portugal, Spain and France. Its Common Stock trades on the American St under the symbol AEN. The Company, headquartered in Kansas City, Mo., has a Web sit www.amctheatres.com. Investors will have the opportunity to listen to the quarterly earnings conference call and supporting slide presentation at 8 a.m. CST on Thursday, Jan. 25, 2001, through the We www.amctheatres.com or the Web site www.vcall.com. Any forward-looking statements contained in this release, which reflect management's best judgment based on factors involve risks and uncertainties.Actual results could differ materially from those anticipated in the forwasrbking state as a result of a number of factors,including bubot limited to the Company's ability to enter into various financing prog other companies, demographic changes, changes in economic climate, increase in demand for ma/estate, constructio changes in operating requirements, the ability to achieve planned openings or closings of theatres and screens, chang zoning and tax laws, the performance of films licensed by the Company and other risks and uncertainties. FINANCIAL SUMMARY ##### Index of Press Releases Home I About AMC I Career Opportunitie$Community Relations AMC International I Theatres)Movie Information I Comment Box Copyright O2000 AMC Entertainment Inc. Technology Statement-Web site designed byVML Interactive • The Standard: And Now, Our Digital Presentation Page 1 of 3 STANDAR Ate `°CQ ex_ -9 °.� ; June 29. 2001 • NEWS &ANALYSIS THE INDUSTRY STANDARD MAGAZINE ?4 Headlines 4E. Money & Markets And Now, Our Digital Presentation ~� Tech &Telecom continued Media & Marketing Metrics &Stats Policy &Politics Careers One factor that may come into play in RELATED CONTENT Lifestyle Anschutz's Hollywood dealings: his ties Companies (3) Opinion to conservative causes. His family International foundation has backed right-leaning Printer-friendly version SEARCH groups such as Morality in Media, and he Email to a friend Gret: has fought hard against gay rights in his Write the author: home state of Colorado. His movie • Laura Rich advanced search production company clearly plans to take SERVICES a G-rated path. "We are committed to subscribe to The Company Index making high-quality movies that send a Industry Standard Newsletters positive message and are commercial, Research Store entertaining and suitable for all age Conferences groups," read a statement released last month by Crusader Wireless My Account Entertainment. PRINT EDITION Such fare may not have the widest commercial appeal, but Read the Magazine Anschutz's digital theater push makes economic sense. Although it's expensive to install digital projectors in movie . E theaters - about $150,000 per screen - a revamped distribution ISSUES system would cut delivery costs, give theater owners more flexibility and improve the quality of the pictures audiences see USIA tipARD , on the screen. • Te1eCOM Digital distribution, moreover, beats today's system, which 4 4101^�vIn hasn't changed much in 30 years. Studios ship 35 mm prints to theaters around the country. Each print costs about $1,500. } q '+ For a picture sent into wide release - as many as 3,000 theaters - the cost of prints can total $4.5 million. CLICK HERE»Y• With digital distribution, theaters would be able to receive movies - and potentially other content - over high-speed cable lines, via satellite or on disc. That would give exhibitors the ability to quickly switch movies, adjust schedules and adapt to audience demands. Theaters without digital capabilities would be at a competitive disadvantage. At the moment, the industry is in no position to make the huge capital investment needed to convert movie theaters for digital projection. Indeed, there's an oversupply of movie screens, a legacy of a mid-1990s building boom exemplified by AMC Entertainment (AEN), which built the world's largest multiplex in the Chicago suburb of•Warrenville - 30 screens complete with wide seats, an espresso bar and three restaurants. Other theaters scrambled to keep up. htt.,•/hvww thestandard.com/article/0,1902,21852,00.html?body_page=2 6/29/01 The Standard: And Now, Our Digital Presentation Page 2 of 3 Now they are staggering under tremendous debt. In the last year, four chains filed for bankruptcy. In January, Loews Brag • Cineplex, the nation's second-largest theater chain, said it NET would shut about 675 of its nearly 3,000 screens. Over the next three years, AMC (which is not in bankruptcy) expects to close as many as 548 screens out of 2,790. If the switch to digital happens, theater owners don't want to foot the entire bill as they have done each time they've needed to upgrade their sound systems. After all, theater owners argue, the studios stand to save as much as $800 million a year by slashing duplication, transportation and security costs. The question is whether Anschutz and his fellow theater owners can make Hollywood play ball. Meanwhile, the studios have been experimenting with ways to deliver digital copies of movies. Last fall, Miramax used Boeing Satellite Systems' Cinema Connexion to beam a copy of Bounce to an AMC theater in New York's Times Square. The idea was to test the system and gauge consumer reaction to the digital picture, says Mark Gill, president of Miramax/LA. The system worked, and Gill claims moviegoers preferred the digital projection over the celluloid version. Even so, Miramax won't be switching to an all-digital plan anytime soon. And citing antitrust concerns, Gill doesn't expect studios will foot the bill for the conversion. "A studio consortium won't get past the Justice Department," he says, in reference to an idea within the industry that to retain control over digital distribution the studios would create their own system. "But since when could you get seven studios to agree on anything?" And that may be just the opening Anschutz needs. PREY I Paae 1 1 Page 2 MENTIONED COMPANIES • • Los Angeles Kings (dossier) • Regal Cinemas, Inc. (dossier) • AMC Entertainment Inc. (AEN) ADVERTISEMENT FEATURED LINKS Visit www.Office.com. The #1 online business resource center. NextCard Visa APRs as low'as 0.00% Intro! Click NOW to apply Sprint Video Conferencing:Save UD To 4Q% On Eauipment Save time and $$$. Enroll in Hertz' Business Account Program iom 'i RS? OO hrml?hnrly nave=? 6/29/01 Movie theater industry hopes to stage comeback Page 1 of 3 ØBLSIN wwnThe Llailycamoracom Movie theater industry hopes to Careers- News iarse` - sperms = stage comeback ' Homes ne Rentals By Claudia Eller and Ralph Frammolino Los Angeles Times GoShopBouidec Tech •tus . ir• •mfiei• �`� hl.ney Wire LAS VEGAS—Industry leaders at last week's annual ShoWest Science 5 cinema convention were trumpeting the idea that the worst is BEGIN Opinion ;: for the beleagured movie theater industry. YOUR Livings Arts HOLIDAY An influx of new investors, a recent upturn in movie attendance AT Entertainment< and a declining screen count bode well for the nation's exhibitors. �megoakin hardware Recreation; ,=_< Bankruptcy protection has enabled a number of major theater circuits to begin the process of resuscitating their businesses. 7jnt, HealthlFitness Food < But others in the theater ranks caution against a false euphoria. clicks community shop. Weather r" ` = � "I think there's been a bit of a false sense of optimism in the last several weeks," said Kurt C. Hall, president and CEO of United Site Contents-.c Artists Theater Co., which last August became one of the first of MOVING? \Search ,< nearly a dozen theater chains to file for Chapter 11 bankruptcy -• protection over the past year and Friday became the first to emerge. 4Il wkro.com Hall warns that exhibitors aren't out of the woods yet. Search by ticker Laekin symbol, abbreviation or company name "Business has been very good," he acknowledged. "But I think we *imp Lhave to be cautious at this point in time." r Ticker Hall also cautioned that possible strikes by Hollywood writers and umaillf Abrv. actors could cripple any nascent recovery for theater owners. Contract talks between the writers and the studios broke off two r company weeks ago. 'Quick Quote At least 10 theater circuits are still scrambling to reorganize their businesses and shrink their crippling debt load. Christopher Dixon, a Wall Street media analyst at WBS Warburg, shares Hall's caution. "Before we turn the corner, three things have to happen," Dixon said. "More theaters have to close. Capital structures have to improve by replacing debt with equity. And theaters have to decide how to migrate to digital delivery." Dixon predicts it will take at least another 15 months"just to get a clearer picture of what the exhibition industry will look like over the next 10 years." John Fithian, head of the National Association of Theater Owner's, and Jack Valenti, president of the Motion Picture 3.rrn.//..n_f1f hn,nldernewc rnm/husiness/17bthea.html 6/29/01 Movie theater industry hopes to stage comeback Page 2 of 3 Association of America, used the Las Vegas gathering of thousands of exhibitors this week to paint an upbeat picture. "The recovery has begun," said Fithian. "The last four and a half, five months for us have been phenomenal." There's no question that holiday blockbusters like "The Grinch Who Stole Christmas," "Cast Away" and "What Women Want" helped drive 2000 to a record year with $7.7 billion in box-office revenues. And Fithian and Valenti are jubliant over the recent bump in admissions and box-office revenues for the first six weeks of this year thanks to such hits as"The Wedding Planner," "Save The Last Dance" and "Hannibal," not to mention the promise of a strong lineup of films in the months ahead. But, admissions have been relatively flat for the past several years, dipping 3 percent from 1.46 billion in 1999 to 1.42 billion in 2000. And, while there was record boxoffice in 2000, it was also a year in which the theater business suffered its worst economic thrashing ever with 11 circuits—including UA, Carmike Loews Cineplex, General Cinema and Edwards Theaters — running for bankruptcy cover. The bankrupt circuits represent more than half the country's more than 36,000 screens. That's not to say that there aren't a number of healthy and profitable chains out there from some mom-and- pop theaters to larger circuits like Viacom Inc. parent National Amusements, headquartered just outside Boston, and Century Theaters, of San Rafael, Ca. "Bankruptcy is a bitter pill," said Raymond Syufy, CEO of Century. "People have started to take their medicine so the cure has to be on the way." Doug Cooper, part owner of Raleigh, North Carolina-based Rialto Theaters, which operates 12 screens in four theaters, said while the downturn "has effected us some, since we're a small outfit, we don't have a lot of vice presidents—that's what saved us." Two weeks ago, United Artists became the first theater chain to rise from the ashes, thanks to a rescue plan led by Denver billionaire Philip Anschutz. Anschutz is poised to become the largest theater operator in the country as he also tries to wrest control of financially strapped Regal Cinemas—the nation's largest circuit with 4,000 screens —and Edwards Theaters. Many expect Regal to be the next circuit to file for bankruptcy protection. Anschutz isn't the only bottom fisher looking to scoop up distressed theater assets. Others include Canadian businessman u., . ..hn„l/dPn,PtVC rnm/husinrss/12bthea.html 6/29/01 Movie theater industry hopes to stage comeback Page 3 of 3 Gerald Schwartz and an investment firm headed by entrepreneur Gary VMnnick, head of fiber optics giant Global Crossing, who have joined up in a bid for Loews Cineplex. The idea is that the troubled theaters will emerge from bankruptcy leaner and fitter with clean balance sheets. The theater business is in dire straits today because of a historic building spree of state-of-the-art megaplexes that strained the financial resources of even the largest circuits. The nation's screen count peaked in the middle of last year with 38,000 screens, up from 27,000 screens in 1995. New complexes—offering such creature comforts as stadium seating—have rendered many of the older theaters obsolete. Over the past year, troubled circuits have been shutting down their non-performing theaters and extricating themselves from expensive leases in shopping malls. March 12, 2001 E-mail this story to a friend I Printer-friendly version Copyright 2001 The Daily Camera.All rights reserved.Any copying, redistribution,or retransmission of any of the contents of this service without the express written consent of The Daily Camera is expressly prohibited.Users of this site are subject to our User Agreement You may also read our Privacy PolicyComments?Questions? Suggestions?Email us at webmaster(Wthedailycamera.com.Click here to contact Daily Camera staff. • .,„ html 6/29/01 The Standard: And Now, Our Digital Presentation Page 1 of 3 Lu STANDAR ' A F2. _hit,ok :gr. gOItit. „ . June 29. 29u_ NEWS &ANALYSIS THE INDUSTRY STANDARD MAGAZINE Headlines la w Money &Markets And Now, Our Digital Presentation Tech &Telecom 8y Laura Rich Media & Marketing -slue D .te Fez 12 2001 Metrics &Stats Policy &Politics Philip Anschutz made his fortune in oil, railroads and Careers real estate. Now he's poised to push movie exhibition Lifestyle into the wired age. Opinion International SEARCH a LOS ANGELES - RELATED CONTENT r: sts y a Going to the movies advanced search - t;. ? •• Companies (3) - s ain't cheap. In cities SERVICES N.- 3°1 like Los Angeles and Printer-friendly version Company Index a. ° New York, tickets Newsletters , ' m Email to a friend i.,`•_;-, , can run as high as Research Store I Write the author: �; " •n $10 apiece. • Laura Rich Wireless Conferences 1. y ' 4e Nationwide, prices My Account y 'f .0 climbed 35 cents last Subscribe to The PRINT EDITION CONTROOL ALMOST 2Oxo, year to $5.35 (and Industry Standard THE NRT!ON'S SCREENS that doesn't include Read the Magazine the $3.25 you pay for a medium soda). Nevertheless, theater owners are facing 4 F ' E E hard times. In fact, most of the major chains are in ISSUES bankruptcy. Which explains why buying movie theaters turns out to be pretty affordable right now. ISTANDARB' Telecom And that's just the way Philip Anschutz likes it. The conservative Denver billionaire made his fortune by picking up 5aelt�wn businesses at fire-sale prices and turning them around. He did it first by buying undervalued, untapped oil fields in Wyoming . in the 1960s. In the 1980s he acquired the Southern Pacific CLICK .',- HERE J>, Railroad, made it profitable and then used its extensive rights- of-way to lay fiber-optic cables for his upstart telco Qwest Communications. In the process, the rarely interviewed Anschutz, 61, worked his way up to No. 6 on the Forbes 400, right behind investor Warren Buffet and Intel (INTC)'s Gordon Moore. Anschutz's net worth is estimated at $18 billion. Now he is after theater chains. Like a 1980s style corporate raider, he quietly bought up the debt of the bankrupt United Artists Theatres last year, seizing control of the 1,623-screen chain Jan. 22; his maneuver brought him a 60 percent interest -N. for $65 million. Now he's poised to get major stakes in two other financially shaky theater chains: Regal Cinemas (dossier) - the largest in.the United States with 4,395 screens - and Edwards Cinemas, which has 712 screens. If he succeeds, Anschutz will lay claim to about 19 percent of the nation's 37,185 screens - more than anyone else in the country. ht-rni/www thestandard com/article/0,1902,21852,00.html 6/29/01 • The Standard: And Now, Our Digital Presentation Page 2 of 3 But there may be more to Anschutz's shopping spree than an inability to resist rock-bottom prices. He appears to be building Brag . the first digital theater empire. With UA, Regal and Edwards NET he's got the venues. With Qwest he's got the pipes. And he even has the content: Anschutz recently launched his own family-friendly production company, Crusader Entertainment. He also owns the Los Angeles Kings (dossier) hockey team and a stake in the Staples Center, home arena to the Kings as I well as the NBA's Lakers and Clippers. But what Anschutz really needs is the kind of entertainment that will fill his nationwide M chain of theaters. That's where Hollywood comes in. But will an old-economy industrialist be the force that finally pushes the entertainment industry into the digital era? While Anschutz won't discuss his plans publicly, those who have dealt with him and his companies will. "Phil Anschutz has a bug up his butt about this and is convinced he's going to - blaze the trail," says Jonathan Taplin, president and CEO of Intertainer, which distributes movies over digital cable lines. • VIEW POP UP CHART Page 1 I Page 2 I NEXT MENTIONED COMPANIES • Los Angeles Kings (dossier) • Regal Cinemas, Inc. (dossier) • AMC Entertainment Inc. (AEN) • ADVERTISEMENT FEATURED LINKS Visit www.Office.com. The #1 online business resource center. NextCard Visa APRs as low es 0.00% Intro! Click NOW to apply Sprint Video Conferencing: Save Uo To 40% On Equipment Save time and $$$. Enroll in Hertz' Business Account Program hrtn•/limy v theetanrinrd cnm/article/0 1907 21852.00.html 6/29/01 Business: Theater chains shelve small sites Page 1 of 4 t4letersburg 2imn ON LINE BUSINESS c- 'f t• { 'c ! T R D DRSil „ t Calendars . Classifieds Forums Sports Weather Yellow Pages Home El. Print trail star Ffl. . ...T. ='� Stocks _7�1 a-.nail this story the 'U - p NEWS rl; ,- z � • wars „ - News Theater chains shelve small sites ; F.u ,; '� Sections l,. 1J9, R P ' Action aIV W4. �I Arts & After a buildup of megaplex models, the Entertainment companies must shed the older facilities *wt Business that are Citrus County Columnists '' Floridian By MARK ALBRIGHT f` Hernando County © St. Petersburg Times, published May 24, 2000 Obituaries From the wire Opinion • Economy Grows Pasco County at 1.2 Percent Rate State LAS VEGAS -- Coming-soon to a theater near you: the • Microsoft Says Tampa Say wrecker's ball. No Structural World & Nation Change That's the forecast from executives of the nation's • GE Says Offer Featured Doesn't Make areas biggest movie theater chains. They say their megaplex Sense AP The Wire building binge of the past few years is making thousands • Kmart to Phase Alive! of older, smaller theaters obsolete. Out Ammunition Area Guide Sale A-Z Index Classifieds In the past five years,theater operators nationally have • Dow Up 29; Comics & added 13,000 new screens. Most are in super-sized Nasdaq Climbs 45 Games complexes that have 16 to 30 screens and are equipped Employment with stadium seating, state-of-the-art sound systems and Health other creature comforts. The biggest movie theater ti�) Forums buildup since the invention of the talkies has brought the hearmemrti Lottery Movies nation's total count of screens to a bloated 38,000. Talk Now • Police Report Real Estate Now it's time to pay the piper, real estate executives of Audio Chat Sports the theater chains warned in a session here at the annual Stocks 1 ' convent weather ion of the International Council of Shopping y» r: � What's New Centers. . l.� tl fir; , ,..Ty. �'!1 L Weekly Older, smaller theaters -- those built in the 1970s, 1980s -la-LI "-'.- Sections dlbitalGl and even the early 1990s --are putting a big drag on ty.COlTI Home & earnings of many theater operators. Theater buildings Garden g Perspective are not easy to recycle for other uses, especially those Taste with a sloped floor, so many will be sold and leveled. Tech Times Travel "Every major theater operator today is faced with Weekend hrin•u,,,,,,,,, cnt;mpc rnm/Newc/052400/Business/Theater chains shelve.shtml 6/29/01 Business: Theater chains shelve small sites Page 2 of 4 getting rid of their older theaters," said Kent Thompson, Other vice president of real estate for Regal Theaters, based in Sections Knoxville, Tenn. "Our biggest problem of the next few Buccaneers College years is going to be disposing of our residual Football properties." Devil Rays Lightning In the Tampa Bay area, it's a trend as easy to spot as a Ongoing Stories movie marquee. Photo Reprints Photo Review Four megaplexes, each with up to 24 screens, have Seniority opened in the past six years. This year and next, three Web Specials new entertainment complexes -- Bay Walk in St. Ybor City Petersburg and Centro Ybor and Garrison Seaport in Tampa -- will be anchored by new megaplexes with 18 to 24 screens. Also under construction are megaplexes at Market Info WestShore Plaza in Tampa and Pinellas ParkSide in Advertise with Pinellas Park. the Times At the same time, older cinemas are starting to shut Contact Us down. The 12-screen Movies at Pinellas Park, built in All Departments the early 1980s, will be torn down and replaced by a Wal-Mart superstore. "Operators are closing old theaters as quickly as they are opening new ones," said John Fithian,president of the National Theater Owners Association. He predicted bankruptcy for some of the big chains. United Artists, the nation's sixth-largest theater operator with 2,018 screens, last month warned that it may have to file for bankruptcy protection in an effort to restructure the company. Many theater operators borrowed too deeply to buy up rivals in recent years while building the huge new theaters. So why did the movie chains go on their megaplex building binge?Big theaters need a minimum of 12 screens to capture all the movie-going potential in a neighborhood because there are six big movie studios with two new films on the circuit at any time. Added screens make it possible to show the big hits in several theaters at staggered times, moving larger crowds past the ticket window. The theaters themselves are about the same size as usual, with 2,500 to 5,000 seats total. The megaplexes also proved irresistible to the theater chains because shopping center and mall developers have in•effect subsidized them with big rent breaks. The h r •ib, u cnrimvc rnmiNewc/057400Busing5s/Theater chains shelve.shtml 6/29/01 Business: Theater chains shelve small sites Page 3 of 4 developers are counting on the new theaters to draw a weekend and evening crowd that can support restaurants, bars and other forms of retailing. In the past, malls provided such rent breaks mostly to large department stores that served as "anchor" tenants. Theater owners, who make virtually all their profits at the concession stand, have taken on too much debt to build more megaplexes on their own. "We have to depend on the shopping center or mall developer," said Dick Stilley, vice president of real estate for Kansas City-based AMC Theaters. "Otherwise, we'd have to get into our candy money, which would be like building new theaters on a credit card." The new theaters are bigger drawing cards, so many movie-goers drive past older theaters to get to the newer ones. In addition to the comfy seats, those built by Fort Lauderdale-based Muvico Theaters Inc. have liquor bars, child care centers and old-fashioned balconies. The sloped floors are not the only impediment to recycling older movie houses. The walls on many can't be rearranged for different tenants because the interior block walls that separate the theaters support the roof. A few of the smaller theaters will survive as art film houses or$1 movie outlets, and those in rural areas don't face an immediate threat from megaplexes. Nor have minority neighborhoods in urban areas shared fully in the movie building boom. One exception has been the highly publicized Magic Johnson Theaters, flashy new megaplexes in densely populated black neighborhoods built in partnerships between Loews/Cineplex and investors gathered by the former NBA star. "Those theaters have not been an overwhelming success yet," said Terry Jackson, vice president of real estate for Loews/Cineplex. "We have not been able to get the same return on our investment as we have with theaters in other areas. But we still see this as a tremendous opportunity." Information from Times wires was used in this report. „ • , „ nr Inc-)nnn/D„c ..,..olTl.unlo• rl.-„nc chPlva cHtml 6/29/01 Variety: BIG THEATERS DON'T MEAN BIG PROFITS.(movie theater chains are findir.. Page 1 of 2 - score Location: All Locations t5 ..�yI . j Q M .w`. r.Gol;. -. Futur Keyword: a. FIND articles HOME - HELP all magazines -E Ftnd-t Search g for View publications: by Subiect I by Name: A-Z Search Tips Terms related to this article: Motion picture theaters Finance Variety /��/e [fit Web site Search this Magazine Page: 1 Print this article I Email this article BIG THEATERS DON'T MEAN BIG PROFITS.(movie theater chains are finding that large theaters are not generating anticipated profits)(Brief Article) Sponsors Author/s: Jill Goldsmith Issue: August 16, 1999 Movie theater chains nowadays face a perplexing, or just call it a plexing, problem: You can't build big theaters and big profits at the same time. As many big players plow more cash into new megaplexes than they're getting back in return, their stocks are in the doghouse and their public debt appears increasingly risky. 'They're spending too much money on new theaters that are generating lower returns on invested capital," Jeff Logsdon of the Seidler Cos says. Any-Name-Here • And the scary thing is, many chains are racking up losses at a time of record box office revenue and sky-high ticket prices — now$9.50 a pop in some markets. 'These are the best possible conditions,"Logsdon says. Things may not stay so GO rosy, especially since most Hollywood studios are looking to make fewer films each year. VERI • So it was no surprise Aug. 13 when ratings agency Standard & Poor's put Regal VERI If Cinemas' corporate credit and debt ratings on CreditWatch with, as goes the parlance, "negative implications." alhazon.co SAVE U That came a few days after Moody's Investor Services downgraded debt of both p�,gpo 0 Regal and United Artists Theater Co. • 6BOOKS nom, `R The agencies cited rapid expansion and heavy borrowing. ,• i r_c nr..r-77/1; ;7S/G557QSQQ/nl/nrtirleihtml 6/29/01 • Variety: BIG THEATERS DON'T MEAN BIG PROFITS.(movie theater chains are findir.. Page 2 of 2 Why not stop building? Well, exhibitors feel compelled by intense competition to Make lov• upgrade and expand -- and they may be right. The answer is fewer owners. happen_ Wall Street and industry players predict a wave of mergers, with healthy groups • . like Loews Cineplex Entertainment of New York or Southern California'sEdwards Theaters Circuit likely buyers. The trouble is price. To paraphrase a few exhib execs, no one wants someone else's yucky old theaters unless they're dirt cheap. COPYRIGHT 1999 Cahners Publishing Company COPYRIGHT 2000 Gale Group Page: 1 Print this article I Email this article Terms related to this article: Motion picture theaters Finance About Us I Advertise With Us Contact Us I Help GALS Created in partnership with 6r GROUP _ _ Location: All Locations Keyword: I _ '� a • • r __ __t c n1. 1211/11 ;7S/SSS7RSQQ/nl(nrtir•lP ;html 6/29/01 1 JOSEPH C.SANSONE CO Business Tax Solutions July 16, 2001 Stan Jantz Weld County Assessor 1400 N. 17th Ave Greeley, CO 80631 Dear Board Members: I am enclosing some information that I think will help define our position on the valuation of the theater in your area. The movie business has evolved from the nickelodeons of the industry's infancy and the large, single-screen, and multi-level movie palaces of the 1920s and 30s to the megaplex' theater complexes and entertainment centers of the late 1990's. Movie exhibition has become a multi-billion dollar industry. In 1999 money spent on movie admissions was estimated at about $7 billion while the concession revenue typically avenged approximately 30% of total revenue (about 1/3 of admission revenue). While we are looking at a national average, we have found that in most cases locally this runs true to form. The number of movie screens in the US have fluctuated wildly in the last two years with the building of large megaplex theaters and the closing of older and smaller theaters. At the same time, there is fierce competition in many cities and fears of overdevelopment. Discount movie houses are quickly becoming outdated. Their admission numbers have rapidly declined in recent years due to: • The advent of product-hungry megaplexes. • The increased value of mall space. • The ever-shrinking interval between first-run play dates and video release. In a recent conversation with Charles Nicks, CFO of Wehrenberg Theaters, he had some very interesting and insightful comments about his company's decision on closing unprofitable theaters in their chain. He said, "Theaters are single use properties today since the cost to retrofit would be greater than the cost to build new. A new theater ' A megaplex is defined as a theater that contains 14 or more screens. A multiplex contains 2 to 13 screens. - August 2,2001 JOSEPH C.SANSONE CO. Business Tax Solutions today will have up to 12 layers of drywall with insulation between each layer. They will always be an odd number of layers with different number of sheets on opposing walls. This is to eliminate the `harmonizing' effect on the structure due to the sound vibrations". Comparable sales of individual theaters are limited in today's market. Most transactions involve chains of properties, the bulk of which are located in smaller cities and may involve economies of scale that would positively affect the acquisition price. On a typical basis, successful theater operations are not sold unless there are unusual circumstances such as an estate situation, management breakup, or termination of a lease. Sometimes a major operator will sell a theater in a market where the theater chain has few other properties and that particular location cannot be operated efficiently. This is commonly a problem with the smaller theaters in small market areas. As indicated in this appeal, I would like you and your board to consider the information I am enclosing and consider the problems effecting the movie industry today. While the exhibitors are trying to restructure their business, there are rocky roads ahead as the movie house chains try to come out of bankruptcy protection and stabilize their operations. This is not a business problem of one company, but a problem that is industry wide. Thank you for your consideration in this matter. Sincer , Gary E Ha Senior Re Estate Analyst Joseph C. Sansone Company 18040 Edison Avenue • St. Louis, Missouri 63005 Phone: (636) 537-2700 Toll Free: (800) 394-0140 Fax: (636) 537-2307 E-mail: jcssales@jcsco.com www.jcsco.com HEADQUARTERS: St. Louis, Missouri EUROPEAN OFFICE: Brussels, Belgium Atlanta • Boston • Chicago • Minneapolis May 25,2001 Sent Via Facsimile Weld County Assessor's Office 1400 N. 17th Avenue Greeley,CO 80631 RE: Carmike Cinemas, Inc ID#0959913400038 Please consider this a formal protest of the 2001 valuation for the above-referenced real estate schedule number. The Joseph C. Sansone Company is an authorized agent of Carmike Cinemas, Inc.& Subsidiaries as stated in the enclosed agent Authorization form. We are requesting that the assessed value be reduced to a combined total of$232,000. Further documentation will be forthcoming. Currently the assessed value for the parcel is$387,700. The Joseph C. Sansone Company is performing consulting services as an advocate for the property owner. If you have any questions,please call me at(800)394-0140. Sincerely, Gary E. Hall Senior Real Estate Analyst • Not All Projections Bad for Overgrown Theater Chains Page 4 of 4 and have to protect our downside in a mature market." * * * Too Many Theaters Moviegoing has failed to keep up with the frenzied building of movie theaters across the nation. To survive, exhibitors are forced to close older, unprofitable theaters and increasingly run for bankruptcy cover. Since 1980, U.S. movie ticket sales have increased only 43% ... Ticket sales in billions 1980: 1.02 billion tickets sold 1999: 1.47 billion tickets sold * * * . . . while the number of screens in the country has more than doubled. 1980: 17,675 U.S. screens 1999: 37,185 U.S. screens Sources: National Assn. of Theater Owners, Motion Picture Assn. of America Search the archives of the Los Angeles Times for similar stories about: Motion Picture Theaters, Bankruptcy, Trends, Business Closings, Statistics. You will not be charged to look for stories, only to retrieve one. News Business Sports politics Travel Commentary entertainment Marketplace Snooping Copyright©2001 Los Angeles Times music,ms.iks,LR. LQ¢g.homes.cars. For information about reprinting this article,go to N.restaurants rentals.classifieds http://www.lats.com/riohts/recister.htm �•a TIlE GRAMIADIO SCHOOL Complete your Bachelor's degree at Pepperdine • Int;rnac rnm/hucinecS/columns/thebiz/20000908/t000084351.html 6/29/01 A kt`i CLERK TO THE BOARD PHONE (970)356 4000 EXT 4217 FAX: (303)352-0242 ige WEBSITE: www.co.weld.co.us 91510TH STREET P.O. BOX 758 GREELEY, C0L0RAD0 80632 COLORADO July 19, 2001 CARMIKE CINEMAS INC P O BOX 391 COLUMBUS GA 31994 Parcel No.: 095913400038 Account No.: R0179189 Dear Petitioner(s): The Weld County Board of Equalization has set a date of August 3, 2001, at or about the hour of 9:30 AM,to hold a hearing on your valuation for assessment. This hearing will be held at the Weld County Centennial Center, First Floor Hearing Room, 915 10th Street, Greeley, Colorado. You have a right to attend this hearing and present evidence in support of your petition. The Weld County Assessor or his designee will be present. The Board will make its decision on the basis of the record made at the aforementioned hearing, as well as your petition, so it would be in your interest to have a representative present. If you plan to be represented by an agent or an attomey at your hearing, prior to the hearing you shall provide, in writing to the Clerk to the Board's Office, an authorization for the agent or attorney to represent you. If you do not choose to attend this hearing, a decision will still be made by the Board by the close of business on August 6,2001, and mailed to you on or before August 10, 2001. Because of the volume of cases before the Board of Equalization, all cases shall be limited to 15 minutes. Also due to volume, cases cannot be rescheduled. It is imperative that you provide evidence to support your position. This may include evidence that similar homes in your area are valued less than yours or you are being assessed on improvements you do not have. Please note: The fact that your valuation has increased cannot be your sole basis of appeal. Without documented evidence as indicated above, the Board will have no choice but to deny your appeal. At least two(2)working days prior to your hearing the Assessor will have available,at your request, the data supporting his valuation of your property. CARMIKE CINEMAS INC - R0179189 Page 2 Please advise me if you decide not to keep your appointment as scheduled. If you need any additional information, please call me at your convenience. Very truly yours, BOARD OF EQUALIZATION Lino, Donald D. Warden, Clerk to the Board BY: ( ,ilat--'ctJ' Carol A. Harding, Deputy cc: Stanley Sessions, Assessor JOSEPH C. SANSONE CO GARY HALL 18040 EDISON AVENUE ST LOUIS MO 63005 BOE SUMMARY SHEET Account Number: R0179189 Parcel Number: 095913400038 CARMIKE CINEMAS INC P O BOX 391 HEARING DATE: August 3, 2001, AT 9:30 AM HEARING ATTENDED? (Yip NAME: AGENT NAME: GARY HALL JOSEPH C SANSONE CO 18040 EDISON AVE ST LOUIS MO 63005 APPRAISER NAME: SGJ DECISION ACTUAL VALUATION ORIGINAL SET BY BOARD Land $493,927 $ Improvements OR Personal Property 842,973 Total Actual Value $ 1,336,900 $ COMMENTS: MOTION BY TO SECONDED BY f 1 Geile -- fir N) Jerke -- e,N) Failed to prove appropriate value Long •'* No comparables given Masden --�(7N) N._t Assessor'S value upheld Vaad - fi N) Other: RESOLUTION NO. Hello