Saturday, June 14, 2003

Imax theater at Levee closes

Projector payments never made

By John Byczkowski
The Cincinnati Enquirer

The U.S. Bank Imax Theatre at Newport on the Levee was shut down indefinitely Friday afternoon. Owners blamed poor business and a lack of blockbuster movies, but the Imax Corp. said the owners are two years behind in lease payments on the theater's $2 million projector.

Both Toronto-based Imax Corp. and Ronald Roberts, owner of the Newport theater, are working to find new operators for the theater. The 456-seat theater is for sale, with an asking price of $5 million. About 20 employees lost their jobs at the theater.

"There's a number of issues around traffic counts through the Levee in total, (and) there are issues around being able to show the large commercial shows," said Laurie Malone, a business consultant hired by Roberts to review the operation. "The business model as it exists today just does not work."

She said the theater needs an upgrade to handle longer-length commercial movies, such as The Matrix: Reloaded, and that would boost traffic.

Malone would not elaborate on the amount of customer traffic at the Levee, a $210 million restaurant, retail and entertainment complex that opened on the Newport riverfront in the fall of 2001. "We don't have enough traffic to sustain the business as it is today. So we're temporarily closing, retooling and looking at various options," she said.

"We're talking to potential buyers, talking to potential investors, talking to a number of folks about what the options might be."

Imax Corp., which leases its technology to Imax theater operators around the world, tells a slightly different story. "The theater operators have not made any payments to us, pursuant to their lease agreement, since they opened in 2001," the company said in a statement.

Jackson Myers, spokesman for the company, said the Newport theater needs an upgrade to show longer films, but, "We just can't give them this technology for free when they haven't paid a cent" on the lease. He said the closing of the theater represented a failure of a business relationship, not of the Imax concept.

The owners last week advertised the theater for sale in the eastern edition of The Wall Street Journal, Malone said.

"I hope to be talking to investors and buyers all next week, so we can get something done and get this thing reopened," she said.

Officers of Steiner & Associates, owners of Newport on the Levee, issued a statement saying they're confident the theater will reopen.

Jeff Ruby, who owns the Tropicana restaurant at the Levee, said he's sorry to see the Imax theater close, but he didn't think it would have a big impact on the rest of the complex. "We're extremely busy on weekends. We could be busier at lunch, but I'm pleased with the turnout we're getting at night," he said. "I'm pleased with the way things are going."

Imax theaters show large-format movies on huge screens. The movies are shot on 70 mm film stock, compared to 35 mm for standard movies, so the images are sharp even when projected on screens eight stories tall.

The first Imax theaters were built in museums in the 1970s and 1980s, and the films typically had science or nature themes. Those movies don't draw as well in newer commercial Imax theaters, so Imax Corp. has been trying to develop more commercial fare for those theaters. The company said it now has more than 200 "traditional" films available for its theaters.

Kavir Dhar, a securities analyst who follows Imax Corp. for Jefferies & Co. in New York, said Imax recognizes it needs more commercial content. The company has developed Imax DMR technology, which reformats 35 mm movies for projection on the big Imax screens. "The seeds have been sown," Dhar said, but they've yet to bear fruit for the company.

Cincinnati's other Imax theater, the Robert D. Lindner Family Omnimax Theater at the Cincinnati Museum Center, remains viable, said museum president Doug McDonald. The Omnimax movie format, also a product of the Imax Corp., projects movies on a huge domed screen that nearly surrounds the audience.

McDonald said traffic at the Queensgate theater fell 40 percent following the civil unrest in April 2001, and has recovered only about 7 percentage points of that.

Another Imax theater owned by Roberts, in Gatlinburg, Tenn., filed for Chapter 7 bankruptcy in May. It had been closed for two years, after having been open 27 days. Roberts closed it because it failed to line up a name sponsor.

In Newport, a U.S. Bank branch inside the Imax theater's lobby will remain open for business.


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