A River Ran Through It
The rumor Justin Bieber is buying the South Coast Cinemas building is older than Sam Goldstein. These rumors also say the theater’s asking price is $15 million, with another $6 million required to restore all the deferred maintenance. In other words, over $20 million for a new operation. The theater is one of the largest vacant commercial spaces in town.
Both the urban economist, hired by the city, and an economic analysis, commissioned by this column, agree that Laguna Beach’s downtown has commercial property surplus to current needs. Only some of it is vacant. Where they differ is what to do about this situation.
The urban economist recommends filling the vacant commercial spaces through stimulating retail demand by drawing increased visitor traffic downtown. Another solution could be to reduce the amount of vacant commercial space downtown by repurposing some space to more relevant uses.
The vacant theater is an example of a situation where this approach could be suitable. The village economist reached out to broker specialists in the movie theater business to determine the going price for movie theaters. Their answer was $2 million to $3 million for nice theaters that are open and operating.
To purchase and restore the South Coast Theater could cost ten times that amount. That may never happen. Property becomes surplus to needs because of obsolescence. Laguna’s theater is a perfect example of this. Streaming video economically devastated movie theaters. At the projected costs, even live music with a liquor license wouldn’t fare much better.
One beneficial use for this white elephant could be a parking structure. The outside concrete box is already there. The highway facade could be saved and rented out to shops, just like the Lido Isle parking structure council member Peter Blake likes to point out.
My consultation with an architectural firm that designs car dealerships and garages, suggests the cost for building a parking garage inside the existing theater’s shell could be $150 per square foot for the ground floor and $80 per square foot for upper floors. The use of two elevators, rather than space hogging ramps, adds half a million dollars.
By using the condemnation process, to meet the public need for increased parking, the city should pay a price closer to the real market value. Not the fantasy, sell-it-to-a-pop-star price currently rumored. Laguna could have a nice garage right by Main Beach for a reasonable cost, rather than a vacant theater rotting forever.
J.J. Gasparotti moved to Laguna Beach with his family when he was 11 years old. He has loved it ever since.