Madison Art Cinemas owner Arnold Gorlick said Friday afternoon he has signed a letter of intent with Davis Realty Co., the owner of the building where the theater is house, to stay for twenty more years.
"We've agreed," he said. "We've signed a letter of agreement and intent for twenty years."
Gorlick said the negotiations with Davis Realty were complex because Gorlick had to take into account the need for his theater to move from 35 mm projection technology to digital projection technology.
Gorlick said movie theaters in North America are now more than 50 percent digital. By the end of 2015, 35 mm will be used in only 17 percent of theaters worldwide, according to this article from IHS.
Another article, from the StarTribune, says this is the most significant change affecting theaters since the 1930's:
The film industry is in the process of completing its most significant change since the 1930s, when "talkies" replaced silent films. In about a year's time, every theater across the nation must convert to digital cinema -- gutting current infrastructure and replacing it with expensive new technology. The demand comes from film studios, such as Warner Bros. and Paramount, which will save billions in production and shipping costs by putting their movies on lightweight computer hard drives instead of on heavy, physical film prints. According to the National Association of Theater Owners, many independent theaters are "in a pinch" as they scramble to finance such a complex project. Digital cinema requires computer servers, software management systems, and 3D screens for 3D entertainment. And, of course, digital cinema demands digital projectors that cost around $75,000 each.
Gorlick estimates that the cost of converting the theater in Madison to digital technology will be between $125,000 and $150,000. He said the deal he struck with Davis Realty, working with Jerry Davis, will allow him to move ahead with the transition to digital technology sooner rather than later. He said movie theaters that agree to make the transition by April 30 can take advantage of certain incentives being offered.
He said the transition will require new equipment, new wiring, air conditioning in the screening booths, restructuring of the screening booths and other changes.
He said he would not have been able to afford to make the transition without the reasonable terms offered by Davis Realty.
Jerry Davis, who worked with Gorlick to come up with an arrangement that would work for Davis Realty and Madison Art Cinemas, said Saturday he too was thrilled the cinemas would be staying.
"We have always regarded the Madison Art Cinemas as one of Madison's crown jewels, and Arnold as one of our town's business stars," Davis said. "Over the last year we've been exploring ways to support the Arts Cinema in every way we can, from helping with the transition to state-of-the-art projectors to making green energy improvements to this building as we have in others. We're thrilled that as a result, the lights on the Madison Arts Cinema marquis will be on for a very long time to come."
Gorlick was ebullient Friday, and excitedly delivered the news to some of his fellow tenants in the Davis Realty building. Asiye Kay, who recently opened up her new shop next to the theater, said she too was thrilled. Kay said she had been contemplating making a commitment towards expanding her business in that location, but that she was waiting to hear whether Gorlick and Madison Art Cinemas would be staying. She said the good news from Gorlick was just what she was waiting to hear.
"I wouldn't have gone forward knowing there wouldn't be a movie theater," she said, adding that Gorlick is not only a good friend, but a business mentor as well.
Other business owners in the downtown retail and restaurant district have often said that the theater, and the clientele it draws from more than a 35 mile radius, is critically important to the health of the downtown. People who decide to come for a movie often come early to shop and dine downtown. In addition, it is a sort of community center where people in town can often count on running into a neighbor or friend. The theater also hosts community and fundraising events that provide support to local students, and other causes.
Gorlick has been running Madison Art Cinemas in the Davis Realty building since 1999. But the space itself has an even longer history in the business, according to the Madison Art Cinemas website:
The Madison Theatre opened in 1912 originally as a single screen theatre. Hoyts Theatres (the Australian based chain) purchased the theatre from its local owner-operator. They twinned the theatre in 1977. At some point in the buildings history, it served as a meeting hall and gymnasium as well. Beneath the sloped wooden floor (painted in Brazilian green) is a basketball court. ... Hoyts closed the theatre as a mainstream Hollywood theatre on April 30, 1998. The current owner, Arnold Gorlick, signed the lease in January 1999 and with the devoted work of Largo Construction Co. of greater Philadelphia (owned and operated by Tony Cimino). The theatre re-opened as the Madison Art Cinemas on May 21, 1999.
The theater specializes in first-run independent art and upscale movies, both foreign and domestic. In addition to showing movies throughout the week, Madison Art Cinemas also hosts movie events where cinephiles can discuss advance screenings of first run films. Madison Art Cinemas also hosts the Key Sunday Cinema Club.
Gorlick said he is thrilled to be staying in downtown Madison working alongside other business owners, including Cafe Allegre Executive Chef/Owner Silvio Suppa, Asiye Kay, and, for the time being, RJ Julia owner Roxanne Coady, who is in the process of selling her business. He said he's also happy to be working with his landlord, Jerry Davis of Davis Realty.
"Without the terms we agreed to, this would not have been possible," he said.