Movie theater to undergo $8.5 million renovation

Remodeling to include recliner seats and bar

By: Nick Mordowanec | Fraser - Clinton Township Chronicle | Published June 30, 2015


CLINTON TOWNSHIP — Get your popcorn ready because a local cinema is trying to bring big crowds back to the movies.

Clinton Township’s Board of Trustees recently approved an $8.5 million remodeling of AMC Star Gratiot 21, located in the Regional Shopping Center at 35705 South Gratiot Avenue.

On June 15, the board also approved a liquor license for a bar area that will serve alcoholic beverages inside the theater, which opened in 1990.

Frank Lewis, director of food, alcohol and beverages for AMC, said at that evening’s board meeting that the landlord, Kamin Realty, will front $4 million toward the project, while AMC will cover the other $4.5 million.

While Lewis admitted it would be quicker to complete the remodel all at once, that approach would result in a loss of revenue. Some guests may find a temporary theater to attend while the AMC Star Gratiot 21 is closed, and they may never return to their original theater again.

Thus, this specific remodel will be completed in phases as a means of retaining revenue. It is a 4-5 month process that aims to be completed by Christmas, which is often the biggest time of year for moviegoers.

As technology has brought upon a new culture of how people attain entertainment in the digital age — including HDTVs, smartphones, Netflix and Red Box — theaters nationally have seen a 4-5 percent decline per year in movie attendance.

“The theater business peaked about the mid-90s, and that’s the point where we had all these megaplexes where there was more demand for the movie-going experience than there were seats available,” Lewis said. “So, how we maximized revenue was to build big, giant theaters, tight seats and pack people in.

“Part of our strategy was that as attendance shrank and shrank, it got to a point where we would walk away from the building.”

Lewis talked about turning the trend around, whereas the theater business lost control of the market and dissolved into the hands of the viewers who had more options. He also acknowledged the expensive price of a movie ticket, which is accumulated by a deal between theaters and Hollywood.

For example, theaters pay Hollywood film studios approximately 52-55 percent of each ticket sold — and for bigger movies, studios may take an even bigger cut because more people go to see blockbusters.

With six dollars of every $10 ticket going to studios, an increase in ticket prices occurred years ago in an attempt for theaters to stay profitable and maintain a solid revenue stream.

That brings in the alcohol factor to theaters.

Surveys show that 70 percent of moviegoers are 21 and older, Lewis said, and the goal is to get the older market to spend more money on different products, such as alcoholic beverages.

Lewis said alcohol is about creating an adult amenity to get them off their couches and into theater seats. Ten percent of guests consume alcohol, and 1.1 drinks are consumed per such guests. When you add in recliners and reserved seating, it’s a total 7.5 percent revenue increase.

AMC adheres to strict industry standards, including: only ticketed guests may drink at the theater, and the bar area is not intended to be a hangout area; everyone on the staff undergoes training on the number of drinks per person (two), dealing with intoxicated guests and making sure no more than two drinks are served; and employees who do not follow protocol will be terminated immediately due to the company’s zero-tolerance policy.

AMC has maintained a 97.5 percent approval standard of success, Lewis said.

“Our goal is to never put anyone under the age of 21 in contact with alcohol,” he said.

He compared the upcoming renovations to that of AMC Star John R, in Madison Heights, and how its 2013 changes have brought in additional revenue and more guests.

AMC remodels 35-40 theaters per year. In addition to the renovated John R cinema, Lewis said similarly-remodeled theaters in Cleveland and Chicago have brought in great amounts of revenue. In regard to Chicago Ridge 6, there has been a 58-percent increase in guest traffic and ticket revenue has increased by 81 percent.

The Gratiot renovations include luxury recliners; sound and sight improvements; and food, beverage and restroom upgrades.

It will also include a near-double staff increase, adding 25 employees to the current staff of 35.

Construction is expected to start later this summer.