Wednesday, March 23, 2011

Rent Hike Threatens Light House

There's a worrying report in yesterday's Irish Times about a landlord and tenant dispute which is threatening the Light House Cinema with closure. The report does not refer to the potentially serious consequences for IFCO were the Light House forced to close.

In 2009 IFCO moved to Smithfield from its own premises in Harcourt Terrace which it had occupied for 64 years. Those premises and the adjacent Garda Station were the subject of a property exchange by the State for the provision of 215 affordable housing units in the greater Dublin area. The Harcourt Terrace premises have still not been transferred to the developer, however, and are now the subject of a claim against the State amounting to €39m.

Having to move, and faced with the cost of having to build its own new screening facilities, IFCO arranged to lease cinema space from the Light House and it made sense then to lease its new office space nearby.

It may be that IFCO's payment for the use of Light House screening facilities is the revenue pressure point being squeezed by the landlord's insistence on doubling the rent to €200,000 per annum in May 2010.

In the case of the Kino Cinema in Cork the rent paid for use of its facilities by UCC was a critical factor to the cinema's survival for some time. If IFCO's hire of Light House screening facilities is crucial to the cinema's ongoing viability then the thinking about the provision of 'cultural' cinema facilities needs to be re-examined with a view to the running costs of such outlets and the need for regular programme support in the absence of other income.

Update: Thursday March 24 - from the Light House
This coming week’s main event isn’t a film at all. Most of you know by now that our landlord, John Flynn, has presented a petition for the winding up of Light House Cinema to the High Court, which will be heard by the Court on Monday next week. We’ve been overwhelmed by the expressions of support which we have received from patrons, which we really appreciate. We are hopeful that a settlement with the landlord will prove possible, which will ensure that we can stay. In the meantime, it’s business as usual.


Anonymous said...

An interesting question is which arts organisations will have their budgets cut this year, or which projects will be dropped, in order to bail out the Light House.

There has been no critical assessment of the Cultural Cinema project to date and your point about re-examining it is well made.

If the State in its wisdom (and there was never any public consultation about it) does wish to commit to this scale of "cultural cinema" provision (a problematic term / concept in itself), then it is extremely foolish to assume that substantial, ongoing, revenue support is somehow going to be unnecessary.

irish film portal said...

On your first point, I hope the Light House can win this particular battle and that the question of a 'bail out' will not arise. Frankly I doubt there is any money anywhere for that. The cinema was set up as an independent commercial operation which means, I imagine, that it's not been established to become grant dependent.

That said, the reality is that the state has invested nearly €2m in the project and Dublin City Council made cultural use a condition of planning permission for the development of which it is a part.

It seems improbable that so much public money could have been invested in the project and there to be no recourse in the event of the business ceasing to be a going concern. The fact that the rent could be arbitrarily doubled after only two years' occupancy is equally odd.

The whole 'Cultural Cinema' project has been problematic from the outset. The semantic issue (ALL cinema is cultural) is irritating but it also exposes a deeper fault line, similar to that which willfully separates, for instance, literature from popular fiction, or high 'Art' from 'popular culture'.

If there is a need to foster more programming diversity in cinema then there hasn't really been a deep engagement (with audiences) with how that might be achieved. A prescription was devised and there's been little examination to see if it's working.

The situation is a little like that in the mid-1980s when the first purpose built arts centres were springing up in the country - everyone agreed they were a good idea but after the capital outlay had been spent there was no provision or funding for overhead and programme costs.

The Light House came back after a 12-year hiatus to a very, very different Dublin city. Real estate costs had gone through the roof, the IFI had become fully established, Cineworld and the Screen are also in the same niche market - often with the same films, and it is located in a part of the city which has yet to fulfill the promise of its regeneration.

Perhaps the landlord believes he can make more money from the cinema space if it were converted to car parking? Perhaps he believes he can do this provided he lets other, currently empty space for cultural use, thereby fulfilling his planning obligation?

Meanwhile he seems to have the legal gounds to put the cinema, and the state's investment, on the rack. It shouldn't have come to this.

irish film portal said...

A post script to demonstrate the changing and challenging reality of exhibition at this end of the market.

The new Ken Loach film Route Irish, opened at the Light House and the IFI last Friday, the 18th. It played a total of 15 shows, six at the Light House and nine at the IFI.

The total gross from the two cinemas amounted to about €2,000. That equates to approximately 230 tickets between the two venues, or an average of 15 tickets per screening.

The same film was also available to watch in Ireland on Sky Box Office or to download from two VoD platforms as of the same date.

Denis said...

I wonder if the landlord feels a more commercial cinema operation, rather than a car park, might be viable in the location?

On the one hand, there's a lot of competition nearby from Cineworld, but on the other, Smithfield is well served by the Luas, and the closure of UCI Tallaght leaves a large population for whom the existing Light House is possibly the most accessible cinema in town. Add that to the local population and the sizeable volume of daytime passing traffic due to the proximity of the courts, and it's not hard to imagine that the existing cinema might fare better, from a numbers point of view, from being less 'arthousey'.

While I'm not au fait with the planning conditions, perhaps the Light House could still fulfill its cultural obligations within a more diverse, and more commercially oriented, programming mix, a la Cineworld? Under such a scenario, IFCO could still theoretically have access as required.

Granted that is not the original vision of the operators, who are to be credited for what they've achieved so far, but if needs must, etc...

Having said all that, here we go again with ridiculous "upwards only" rent review issues. But then again, I suspect the landlord feels there's a bit of wiggle room here, as it would be financially suicidal, surely, to let any kind of tenant walk away in the current climate -- unless a client with deeper pockets is waiting in the wings.

irish film portal said...

Denis, you make a number of good points.

I would be amazed if the Stae's investment in the premises - for the purpose for which it was intended - was not protected in some way.

There is a possibility that the Light House promoters would have given certain undertakings both as to the nature of their intended programming and to the effect that the subsidised set-up costs would not be used to compete unfairly with existing commercial enterprises. By which I mean that the State is not in the business of subsidising competition for blockbuster audiences.

That said, there is a grey area at this end of the market, exemplified by The King's Speech (one of the most successful films of the year, so far) and True Grit. And the equally subsidised IFI has been treading into similar programming territory.

All of this is against a background of falling rates of cinema-going in Dublin and the other competing cinemas - except perhaps Cineworld which has economies of scale - do not face rent demands.

I can't imagine what the landlord's motives may be except to say that - between IFCO and the monies invested by the Arts Council, the Film Board and the Department of Arts, Heritage and Gaeltacht Affairs - he has the country over a barrel.

Anonymous said...

It's also now emerging - from several unconnected sources - that the rent has not been arbitrarily doubled at all, but that the increase was part of the original lease agreement - i.e. a reduced rent was granted for a fixed term which was then to increase upon expiry of that term.

This should have been explored or at least referred to in The Irish Times report, but so heavily politicised is reporting in this area (one is not allowed critique the Irish arts scene at all, except when moaning about Arts Council cuts) that disinterested neutral observers are not getting the full picture.

Again, the clear problem here is the failure to acknowledge that ongoing revenue support was clearly needed from the outset of the venture.

And, it should not be forgotten that the Light House project obtained Cultural Cinema Consortium funds that were specifically meant to be allocated for projects outside Dublin. Dublin was excluded presumably due to the prior existence of the IFI, Screen Cinema and Cineworld.

irish film portal said...

It could be that the discount was given because the development hadn't fully come to fruition when they moved in. I see - from Donald Clarke's blog - that the Light House is maintaining there are issues relating to the development as a whole. That could include relevant matters such as footfall in the area and levels of occupancy not having reached targets. Problems like these have, for example, been the subject of disputes between tenants and landlords in shopping centres.

I don't believe there was any failure in the initial report in the Irish Times (business section) - it merely follows up on the bare facts of the landlord's petition.

There is, I will agree, a tendency not to report the arts with the same objective rigour as is often applied to other parts of Irish life. It so happens I did propose an article on the status of the 'Cultural Cinema' project last July but my email was not responded to.

A cinema would have to sell in the region of 40,000 tickets a year just to cover €200,000 rent. Then there's salaries, light and heat and other overheads to be met.