Phoenix Theatres aims to buy Beacon Cinema by early December

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PITTSFIELD — Phoenix Theatres owner Cory Jacobson made his first purchase Thursday for the Beacon Cinema: an auto-playing baby grand piano.

He'll place it in the front window area of the North Street business, he said, as a symbol that going to the movies these days is about ambiance and fun. His company plans to close on the property Dec. 10.

After a conference call Thursday with Beacon owner Richard Stanley, Jacobson said the next two weeks will be a matter of paperwork before Phoenix can take over.

"We are generally in agreement on everything that needs to happen, so we're in good shape," he said of the call with Stanley.

Residents heatedly debated a City Council measure that forgave the cinema's $2.55 million debt with the city and cleared the way for new ownership, but that all came to a close Tuesday, with an 8-2 vote from the council.

Council President Peter Marchetti recused himself from the vote because his role at Pittsfield Cooperative Bank poses a conflict of interest.

Councilor At Large Melissa Mazzeo and Ward 2 Councilor Kevin Morandi voted against forgiveness.

City money for the cinema came in the form of $1.5 million from the Economic Development Fund. Two additional grants were funneled through the city in order to support the project: $50,000 in Community Development Block Grant money and a $1 million grant from the state. Under the proposal, state and federal grants used for the project are to be immediately forgiven.

Mazzeo asked for more skin in the game, and Morandi doubted whether the cinema industry could ever be successful, in light of at-home entertainment technology.

To that point, Jacobson said he remembered sitting at a boardroom table in 1979 and hearing "there's a new invention called the VCR," and that it would mean death for cinema. But just like people with kitchens still go out to eat, he said people still go to cinemas for the experience.

Phoenix plans to keep the name and the character, Phoenix leaders said, and to spruce it up.

That'll go a long way, Jacobson said, because right now "it feels like a business that's just limping along."

Morandi also pointed to the current owners' struggle to fill commercial space in the building's upper floors. Jacobson said he plans to put money into the building in short order and address deferred maintenance. He said dysfunctional amenities in the upper floors work against the goal of retaining tenants.

When the first signs of financial trouble arrived at Berkshire Bank's doorsteps two year ago, the bank commissioned an analysis by Phoenix Theatres, which its leaders say was one of the first companies in the country to install reclining cinema seats.

They said they saw the writing on the wall during that analysis and since then, during their Monday meetings, have reviewed box office sales for the Berkshires market each week.

Jacobson said he plans to lower ticket prices soon after closing on the property "so the customers are immediately saving money."

"We don't want moviegoing to be an event," he said, like a concert or a baseball game. "Our goal is to increase moviegoing."

Meantime, he said the company leans increasingly on concessions for profits.

When it comes to running a successful small theater, Jacobson said, there's no secret, but rather a perfect compilation of ingredients. He said the main elements include booking the right movies in the right number of theaters, beefing up concession stand offerings, keeping the theater clean and keeping ticket prices low.

He said he also plans to double the staff and extend the hours.

Downtown past and future

The conversation about the Beacon has been tinged with questions about how the city ended up in this position and whether it was the right move in the first place to support the downtown cinema.

The consensus was that there was no way the city was going to see its $2.55 million either way — the city is last on a list of creditors involved in the $21 million project — but the path that got the city there was harder to swallow.

"We obviously are looking at a problem," Mazzeo said of the private-public entanglement. "I don't want to make these mistakes again."

Mazzeo and Ward 4 Councilor Chris Connell asked for amendments that would forgive less money or would require the cinema to pitch in to the city's Economic Development Fund, but Mayor Linda Tyer said she'd rather see the new ownership put its money into the downtown business, and declined to make the adjustments Mazzeo and Connell asked for.

Tyer said that when she sat down with owners of the Beacon and Phoenix, they wanted the loan forgiven outright. Instead, she said she pushed for a phased approach that would forgive the cinema's debt over a 10-year period, but only if the doors stay open for 10 years.

Braden Alan, chief financial officer for Phoenix, said taking on the forgivable $1.5 million in debt was an easy decision, because the company is so confident its in Pittsfield for the long haul and the debt will be erased.

"We're out here to win," Jacobson said.

Most councilors thought that the $1.5 million in city money used toward the project was comparable to other economic development awards through the General Electric Co. Economic Development Fund, and that it wrought a decade's worth of downtown growth — with more to come.

"We'd rather not be here," Councilor At Large Earl Persip said of the forgiveness package, but the cinema bolsters other downtown businesses and "we have to think about them."

One surprise element elicited gasps from councilors, who discovered during the Tuesday meeting that Phoenix will be paying Stanley for the cinema's new seats over the next six years. Last year, Stanley spent more than $570,000 installing luxury seating in the seating.

But city booster and Stanley attorney Michael MacDonald said Stanley still loses $1.3 million in this deal. It would be more cost-effective for foreclosure to continue, he said, and to that point, Phoenix owners agreed.

Alan said Phoenix could buy the property in foreclosure for about $150,000, versus the $644,000 they're paying. Still, Jacobson said foreclosures generate chaos, and there's value in avoiding chaos in the name of continuity and in generating confidence for the cinema's new leadership.

MacDonald said Stanley didn't take on the massive redevelopment project enthusiastically. He did it because downtown advocates like MacDonald, who was then part of Downtown Pittsfield Inc., asked him three times. The community needed something to light the way for downtown's redevelopment, he said.

And that's exactly what it did, Community Development Director Deanna Ruffer said. She said downtown property values grew 21.5 percent since the Beacon came to town.

The project was first conceived by Downtown Pittsfield Inc. in 1999. Stanley then agreed to develop the cinema four years later. The final design was completed in 2004.

Restaurants like the Marketplace Cafe and Flavours of Malaysia moved downtown to capitalize on the cinema crowd in 2009, and more downtown redevelopment projects followed.

Tyer wasn't in her current office at the time the decade-old funds were awarded, but she said she stands by the support.

"This was the right decision then, and it's still the right decision now," she said.

Amanda Drane can be contacted at adrane@berkshireeagle.com, @amandadrane on Twitter, and 413-496-6296.


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