Classic Cinemas, the company that operates more than a dozen movie houses in northeast Illinois, including the North Riverside Luxury 6 at North Riverside Park Mall, has agreed in principle to take over operations and renovate the LaGrange Theater, 80 S. LaGrange Road, into a first-run movie house.
LaGrange Theater owners John Rot and Dan Chopp, a Brookfield-based commercial real estate broker, pitched the deal to the LaGrange Village Board at its Sept. 27 meeting, and while there may be some details to iron out, trustees appeared receptive, according to the Chicago Tribune.
According to Rot’s written proposal to LaGrange officials, Classic Cinemas would invest about $1 million to remodel the theater and turn it into a first-run cinema. The LaGrange Theater has been a second-run house under Rot, who through a corporation named Seamus Knolls LLC bought the property in 2004 for $1.5 million.
The LaGrange Theater has been shut down since March 16, 2020, when the governor ordered movie theaters closed due to the COVID-19 pandemic. However, the LaGrange remains closed even though movie theaters have been allowed to reopen.
Rot’s proposal made the argument that second-run movie houses were doomed, illustrating the point through annual ticket sales, which dropped steadily from 204,746 in 20011 to 123,613 in 2019.
“Given the streaming services available in-home, there is no longer a sub-run market in the industry,” Rot wrote. “It is imperative to get the [LaGrange Theater] to first-run status.”
Classic Cinemas CEO Chris Johnson said he’s gotten to know Rot over the years through trade associations, adding the two had kicked around the idea of Classic Cinemas taking over operations of the LaGrange Theater even prior to the pandemic.
“It seemed to be a good fit,” said Johnson in a phone interview with the Landmark. “We’re community-oriented and have the same vision. With LaGrange, you’re talking about a community with a bustling downtown and a historic theater. We think we’d do right by the town and the theater.”
Before that can happen, however, the village of LaGrange will have to agree to a number of conditions, among them removing a $1 million lien the village has on the property.
The lien is the result of a 2009 deal between the owners of the theater building and the village, which provided a $1 million loan in the form tax increment financing funds to help fund an almost $1.9 million renovation completed in 2010.
It was a no-interest loan and was subject to repayment under certain conditions, one of which was the theater ceasing operations for more than 30 days. While the pandemic likely would have satisfied language allowing for acts of God, the theater has remained closed even though it is allowed to reopen.
The lien also includes a façade easement, purchased with those TIF funds, which calls for the preservation of the theater’s terra cotta façade, marquee, ticket office, portico, theater entrance and window display.
To make that lien forgiveness more palatable to village officials, Rot and Chopp rolled out a revenue-sharing arrangement based on revenue benchmarks tied to rent payments.
In that scheme, any rent receipts above $200,000 would be split 50-50 annually between the building ownership and village for the 10-year period of the lease.
“There is no financial windfall or proverbial pot of gold to be had here,” Rot wrote in his proposal to elected officials and village management. “While we do hope that this does lead to successful, vibrant operation from Classic Cinemas, the risk that is involved with this level of investment on their part, is significant.”
In addition to removing the $1 million financial liability, any lease deal with Classic Cinemas would depend on them being able to replace the existing marquee with an LED message board.
The proposed 10-year lease would also be dependent on the village granting Classic Cinemas a liquor license and permitting the modification of the interior to increase the number of screens from four to five. The theaters would all have heated reclining seating, similar to the seating in North Riverside.
LaGrange trustees made no decisions on Sept. 27, but trustees and Village President Mark Kuchler appeared open to exploring it as a way to bring Classic Cinemas to town, according to the Tribune, which quoted Kuchler as saying, “Everybody can agree that we want Classic Cinemas to come here.”
The LaGrange Village Board meets again on Oct. 12.
Johnson expressed optimism that a deal is possible.
“I’m new to LaGrange, but as an observer it seems to me there’s the will to have a resolution one way or the other in short order,” Johnson told the Landmark.