Loss of theater could effect businesses

SANTA CRUZ >> The alleged closing of the Regal 9 Cinema in downtown Santa Cruz could have more of an impact to the city than a more limited option of where to see a new movie.

The Regal 9 theater has not been operational since Oct. 9, when it temporarily closed its doors over COVID-19 concerns. Last week, the theater was reported to be closed for good by other news sources, but has yet to be confirmed by the owner.

Santa Cruz Economic Development Director Bonnie Lipscomb was not able to confirm the closing of the Regal 9 Cinema, as she has not been able to get in contact with the owner over the matter. The Sentinel has not received confirmation of the decision yet either after reaching out to Regal Cinemas owner.

However, Lipscomb did say that the city has received some interest in the venue, which could indicate the availability of the space. She also highlighted the impacts that the disappearance of the theater downtown could have on surrounding businesses.

“Any theater is a real anchor for the downtown. The loss of the Regal 9, we will feel that without a doubt,” Lipscomb said. “A theater is a draw to downtown. The impact is big.”

Movie theaters bolster the economy around them, according to Lipscomb. People will go downtown to go see a movie at the theater, then decide to shop at the surrounding stores or at a nearby restaurant before or after their movie. It is beneficial to the surrounding businesses.

While the possible loss of the theater will be a financial hit to the downtown sector, it isn’t one that comes as a surprise to business experts in the area. Theaters had already been on the decline in recent years, and the pandemic only exacerbated the issue.

“Even pre-pandemic, theaters and their role have been changing because of the influence of Netflix and Amazon Prime,” Lipscomb said.

The increase of streaming services and their ability to stream new and original content has been a direct competition for movie theaters. That being said, movie theaters don’t just sell a one-time viewing of a movie, they sell the experience of going to the movie theater. That all began to

change in recent history.

Movie theaters began offering more than just soda and popcorn. In order to create a more elegant movie going experience, they started to introduce dinner style meals and alcohol.

“Part of what was making theaters more viable was changing that business model. Things that changed the experience,” Lipscomb said. “You’re going for a movie but you’re also going for a dinner and movie at the theater.”

However, that change in model appears to have not been a match for a global pandemic in Regal 9’s case. Not all movie theaters are in serious trouble, though. The Del Mar Theater, which is also in downtown Santa Cruz, is expected to make it through to the other side, Lipscomb said.

The loss of the Regal 9 doesn’t necessarily spell doom for the downtown sector either. Another entertainment business could take the place of the theater. A similar thing happened in June of 2019 when the DNA Comedy Lab filled the vacancy left by the Regal Cinema Riverfront Twin theater.

Lipscomb also said the city has begun brainstorming ideas for the use of vacant spaces downtown. The city is looking into launching a vacant storefront program. It would run under the concept of master leasing.

The idea is the city will take on the responsibility of searching for lessors for the storefronts rather than the property owners. The city would rent out the space and attempt to sublet it to businesses. This concept allows the city to incentivize the businesses to apply for the storefronts by offering a reduced rate.

“We’re just now talking through the details,” Lipscomb said. “We don’t have an agreement with any of the property owners, yet.”

However, the city hopes to get the program off the ground within the next month, she said.

As for the location of the Regal 9, the city is trying not to speculate too much until they can talk to the owner about the state of the theater.

“We have received a couple of interesting inquiries, don’t want to get too far ahead of ourselves,” Lipscomb said.