Art owner lays down the deal

Like any self-respecting fans of the motion picture, C-U Blogfidential would love to believe the Art Theater will project quality cinema forever and a day, entertaining and engaging our community with its choice programming. Yet, once again, difficult financial decisions lie ahead for the Art as addressed by operator Sanford Hess on Sunday, August 14, at the century-old movie house in downtown Champaign. We did not attend the presentation, “The State of the Art,” but reprint Hess’ own abbreviated summary (with permission) of what he believes is necessary for the Art to remain open and viable in the 21st century, as issued through the Art’s Mailing List on Wednesday, August 17. We’ve only changed a bit of punctuation because we’re nitpicky that way.

~ Jason Pankoke

“The State of the Art”
August 14, 2011 – Summary

The Art Theater, Inc., is the entity that runs the theater. It owns the projection and concessions equipment – everything that’s not attached to the building – and leases the space. Sanford Hess runs the corporation.

The Art Theater, Inc., does make a small amount of money on a month-by-month basis, and our monthly performance continues to improve, both in increasing revenue and in lowering operating costs. However, the business does not make enough money to pay back its debt to Hess and it is only able to make a profit because he performs about 20 hours of unpaid work each week operating the business.

The other major factor in this discussion is the film industry’s conversion to digital from 35mm prints. This change is imminent and will probably be complete in the next two years. In order for the Art Theater to continue to show films, we must purchase a DCI compliant digital projector and the associated hardware and software. This is approximately a $70,000 purchase.

So, the Art Theater, Inc., must take on a lot more debt in order to continue running as we do now. After analyzing this, Hess determined that staying in business as we are now is not for him. Both financially and personally, it’s too much of a drain. When Hess’ lease period ends in December 2012, it is unlikely he will continue with the next three-year period.

After some research and thinking, Hess decided the best solution to keep the Art going is as a Cooperative or Co-op. A Co-op is an association of persons who jointly operate an enterprise via a board of directors. Fortunately, we have a tremendously successful Co-op here in town, the Common Ground Food Co-op.

As envisioned, anyone in the community will be able to buy a membership in the Art Theater Cooperative. The money raised from the members will purchase equipment and pay off debt, allowing the theater to continue operating based on its monthly revenue. Of course, you don’t have to be a member to come see movies but members will receive some benefits at the theater.

If the Co-op can pay down debt, it can afford to hire a manger who will assume the responsibilities that Hess does now. (Hess will still be an active participant in the Cooperative and will help with the transition.) If the theater can continue to earn enough revenue to cover its costs, it can continue in operation as an asset to the community.

Over the next few months, you will hear more about the Art Theater Cooperative. The next step will be to form a board that can start making some decisions, such as the price for membership and what benefits it entails. A business plan will be written to start filling in the details.

If you want to participate or offer support, please contact us via this new e-mail: art [dot] theater [dot] coop [at] gmail [dot] com.

~ Sanford Hess

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