Council locks in new operator for CBD cinema complex

An extra two cinemas will be added to take the total number in the CBD movie complex to eight

The Ipswich CBD cinemas complex. Birch, Carroll and Coyle chose not to renew its lease for the site in 2019 after 50 years operating in the city.

IPSWICH City Council has locked in an operator for its CBD cinema complex, which it says is integral to the success of its redeveloped city centre.

At council’s special meeting on Thursday afternoon, a motion was moved for CEO David Farmer to finalise the terms of the lease for the site formerly filled by Birch, Carroll and Coyle.

BCC chose not to renew its lease and closed in May last year due to a significant decline in patronage after 50 years of operating in Ipswich.

An extra two cinemas will be added to take the total number in the complex to eight as part of the $33.6 million allocated to the ‘venue, eats and metro B’ precinct.

This section of the Nicholas Street Precinct is expected to open late next year.

Mr Farmer will now enter into the lease with the nominated cinema operator.

As to exactly who that is and what the terms of the lease are were not revealed with any further details deemed commercial in confidence.

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The name of the operator will be announced once the lease is finalised.

About 20 minutes of discussion was had by councillors behind closed doors before they voted to endorse the commercial terms of the proposed lease.

Councillors Jacob Madsen and Andrew Fechner were out of the room due to conflicts of interest.

The rest of the councillors voted in favour of the motion to finalise lease negotiations, apart from veteran Division 1 councillor Sheila Ireland.

In a report to council by general manager for co-ordination and performance Sean Madigan, securing a cinema operator as anchor tenant was deemed “critical” to the success of the precinct.

“In February 2020 a heads of agreement was signed with the cinema operator,” the report noted.

“Over the last six months, council has been in negotiations with the cinema operator named in the confidential attachment.

“The terms of the lease have been independently reviewed by Colliers who have indicated that the terms are consistent with the current cinema market and the overall retail market at present, given the pressures placed on the sector as a result of the COVID-19 pandemic.”

The report noted there is a “significant risk” to the activation and leasing strategy for the Nicholas Street Precinct if the council does not secure a cinema operator as its key anchor tenant.

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“Entering into the lease agreement on the terms outlined in the confidential attachments to this report will create positive momentum for the overall leasing in the precinct and progress council’s stated objective of creating an activated, vibrant city heart,” the report noted.

“The COVID-19 pandemic creates a risk for the cinema industry as a whole with the absence of blockbuster film releases and limitations on patrons due to social distancing regulations.

“If approved by council, the cinema will not commence operations until late 2021 and it is anticipated that by this time the impact of COVID-19 on the cinema industry is not as significant.

“Securing a cinema operator as the key anchor tenant has always been critical to the success of the precinct, based on expert review by consultants including KPMG.

“This is a significant milestone in the development of the Nicholas Street precinct and will be the catalyst for securing other tenants in the precinct.”

The CEO of nearby Limelight Cinemas, which has operated out of Riverlink Shopping Centre for seven years, said a new cinema in the CBD would cripple his business.

Ross Entwistle said a study commissioned by Limelight shows neither cinema sites, which are two kilometres apart, would be sustainable if the one in the city centre is up and running again.

“The outcomes for the attendance rates in the proposed CBD cinemas would only be very marginally ahead of the numbers being achieved by the former BCC cinemas which were closed because the rate of business was simply unsustainable,” he said last month.

“To our own business it saw a 30 per cent decline in attendance which would be catastrophic for us.”

Read more stories by Lachlan McIvor here.

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