Mel Blumenthal

It’s only been two short weeks, and our predictions concerning the future of the Isis Theatre unfortunately appear to be on the mark.

Los Angeles-based Metropolitan Theatres has now confirmed that at the end of August they’ll walk away from their operational theater sublease which has been in place for the past 14 years. What’s not yet clear is whether and how they plan to make Aspen Film and the city whole on over $300,000 in accumulated rent and common-area costs that have piled up over the past year.

Based on significant ongoing changes in the film exhibition business — which are limiting historic theater exclusive exhibition rights to first-run films, compounded by the pandemic-induced reluctance of moviegoers to return to a shared theater environment — it’s unlikely under the percentage-based lease extension offered by the city that Metropolitan will generate anywhere near what is needed to compensate Aspen Film and the city before Metropolitan departs at the end of summer.

That leaves Aspen Film, which stands between the city and Metropolitan holding the bag. Under the terms of its master lease from the city, which is the actual owner of the theater complex, Aspen Film’s financial resources won’t support its obligation to meet past or future financial obligations to the city without the rent and common area payments from Metropolitan — that were intended to underpin the arrangement between the city and Aspen Film.

For many years following the city’s grant of a master lease to Aspen Film, all the theater rental and common-area costs, as well as the city’s acquisition costs, were covered by Aspen Film’s sublease to Metropolitan. Up until this past year, these payments exceeded the amounts Aspen Film owed to the city, and thus there were always substantial dollars left over to augment Aspen Film’s annual operational budgets.

Although most people assume Aspen Film covers its annual budget needs from the revenues it derives from the various festivals and special fundraising events it produces each year, that’s not the case.

In recent years, the organization’s festivals and special events — except for Shortsfest — have generally only broken even and in some cases generated losses.

Fortunately, the revenues it received from ­Metropolitan, along with significant revenues received in the form of submission fees charged to roughly 3,000 short-film producers each year — and, to a lesser degree, miscellaneous grants and charitable contributions — the nonprofit organization has been able to stay financially afloat.

Consider the current revolution in the film exhibition business, along with the proliferation of many new streaming platforms that offer access to films in the comfort and safety of one’s home and at a cheaper cost, couple with the loss of Isis revenues, and the future of Aspen Film and the theater business in general appear a lot more precarious than ever.

A couple of years ago, Aspen Film had the opportunity to protect its financial future by selling its Isis Theatre interests to Mark Hunt, who bought the Isis building’s two adjoining retail stores along with the rooftop workforce housing units. Hunt’s initial offer — which was seven figures and would have provided financial security for Aspen Film well into the future — was summarily rejected by the organization.

Although I imagine Hunt would have petitioned the city to allow him to convert the ground-floor theater into another retail store, in exchange he likely would have agreed to protect the three lower-level theaters as commercial film venues which would have been beneficial to both the city and Aspen Film.

With the departure of Metropolitan, the future of first-run film exhibition in Aspen is in serious jeopardy. As discussed in my prior column on this topic, due to the deteriorating economics in the film exhibition business, it’s not likely any other established film exhibitor will be willing to take on the substantially greater-than-standard industry theater rental and operational costs of doing business in Aspen.

Is there a way out for the city to once again save the Isis without burdening taxpayers?

Due to his ownership of the rest of the Isis building and his control over the common-area costs, Mark Hunt is probably the best-positioned candidate to take over ownership of the Isis and make a more favorable financial deal with Metropolitan — or some other operator — to keep at least the three lower-level theaters alive.

Hopefully, he’s still waiting in the wings, although his offer may not be as generous as the offer he originally made to Aspen Film when the outlook for the theater business was rosier than it is today.

Short of Mark Hunt coming to the rescue or one or more financial angels like Boogie — who put up a six-figure contribution to cover Aspen Film’s initial payment obligation to the city back in 2007 — the taxpayers will likely have to continue covering the theater’s financial and operational costs as long as the city retains ownership of the Isis.

For those of us who favor watching films on the big screen in a shared environment munching on a big bag of hot-buttered popcorn, hopefully saving the Isis without burdening taxpayers, will once again become a city priority.

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