Arts & Entertainment and Economic Development

Loeks says movie theater is good for downtown

Celebration! Cinema CEO says making money is not the project’s only objective.

April 29, 2016
| By Pat Evans |
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(As seen on WZZM TV 13) After nearly four years, J.D. Loeks is happy with where his Studio C! downtown movie theater stands.

When the prospect of Loeks Theatres building a movie theater behind Van Andel Arena first arose in the spring of 2012, the project was just that — a movie theater. Now the project is in its “27th iteration of conceptual design” and has cleared its first major hurdle with approval from the Downtown Development Authority.

“The overall trajectory has taken this to something that’s way more exciting for the community and everyone involved,” Loeks said. “Yeah, maybe we could have a theater today if we stuck with the original plan and did something way less interesting, but that wasn’t the project we were trying to do in the first place.”

Led by Loeks Theatres and 616 Development, Studio C! is a two-phase, $140 million development anchored by a nine-screen movie theater.

The first phase of the project is $100 million and, besides the movie theater, also features a 900-space parking garage, 38,000 square feet of retail space, 187 residential units and a public piazza.

If all goes according to plan, construction would begin in early 2017.

The second phase would be a $40 million residential tower with an additional 150 units.

The main hurdles that remain include state participation, state and federal permits and favorable construction bidding. The project has been vetted both by Downtown Grand Rapids Inc. and Loeks to make sure it’s feasible and sustainable in all respects.

“(Loeks) needed confidence to pull the trigger on this major investment; it’s their brand,” said Kris Larson, DGRI president and CEO.

“There was so much that went into all parties making sure it made sense. It has to work. If it doesn’t work, we all fail.”

If the project hadn’t been approved last month by the DDA, Larson said the community and board members might have moved on, following the April 30 expiration of the most recent property option.

“Never underestimate the power of a deadline,” Larson said. “I didn’t have a lot of confidence I could go back and ask for another option. If, after four years, we weren’t ready to go, perhaps we needed to go back to the drawing board to see if there was another investment team interested in the project.”

Loeks first proposed the idea of a downtown movie theater before Larson was in his current position with Downtown Grand Rapids. As Larson settled in, the South Arena Visioning plan began to reveal how the city would handle the disposition of public assets such as the Area 5 parking lot, which was the original site proposed for the theater. The current proposed site is on a combined piece of land using Areas 4 and 5 behind the arena.

Combined with Arena Place, total investment in the South Arena District nears $200 million since 2012, with three parcels remaining, including a potential mixed-use garage in the lot directly behind Van Andel Arena.

“I felt strongly that if we were to sell land, we need to know what we’re selling land for,” Larson said. “Under what conditions would the DDA sell land? What are the priorities? In those conversations, we really began to understand and have a better sense of what really could be.

“What came from it looked a lot like their project.”

Following the South Arena Visioning, the project was still approximately two years from its final iteration. Larson acknowledged much of the past two years has been spent on development of Arena Place and the challenge of daytime parking that has arisen.

One of Larson’s biggest challenges was conveying the certainty that the movie theater project would still happen and giving business owners confidence the area would change for the better.

Loeks stayed involved in community meetings regarding the area, especially when it came to parking, but for part of the last year, the development simmered on the back burner.

Loeks kept the project fairly quiet as he sought development partners whom he trusted and were in the same frame of mind to help create a community-changing project.

He said listening to the South Arena Visioning suggestions and speaking with other community developers has led to a project that is nearly 10 times the original size.

616 Development was first contacted in the summer of 2015 and it quickly became apparent the company’s values and past projects align with the community-centric ideals of the downtown theater, Loeks said.

Loeks said the project was always intended to be more of a community asset than one to make his company money, as a movie theater is one of the top five amenities residents want to see in a downtown. He suspects the company’s suburban Celebration! Cinema theaters will provide somewhat of a flotation device, financially, but the downtown theater will add to the vibrancy of Grand Rapids and will drive overall growth in the community and his company.

“In some ways, it’s like a piece of art. You didn’t know exactly what it wants to be, but you have a notion of what you want to do,” Loeks said. “The other thing to understand from our perspective is we know we make more money out in the suburbs. We go downtown Grand Rapids because this is our hometown and we believe a strong community needs a strong urban core. When you’re in it for community development reasons in the first place, you might as well do it right.”

Following conversations with other developers, it was obvious to Loeks the development should include a residential component to help bring the 10,000-person “critical mass” downtown that could create a tipping point for more amenities to be viable there. Larson said one of the next steps will be to focus on soft-goods retailers, which often cluster together in a new area.

Studio C! is expected to bring nearly 250,000 people to downtown that wouldn’t otherwise come. An early study by DGRI suggests the development would have an economic impact of $369 million in its first 10 years.

“That’s awesome when you put it in context to Van Andel Arena,” Larson said. “Van Andel has been an amazing catalytic investment for our community. Within a year, 16 bars and restaurants had opened around it. What does the theater do to continue to change and evolve the downtown?”

Despite the theater’s parking garage providing 300 more spaces than the current surface lots, where all the new visitors will park remains a hot topic. Larson pointed out the theater will have parking spots for various times of the day when different users need it.

He said there could be a crunch when there is an event at Van Andel Arena and a major movie is playing in the theaters, but recent parking changes can add supply and change consumer behavior.

Without parking, Loeks said, a movie theater in downtown isn’t viable, so an extra step has to be taken to make the parking affordable for movie goers.

Loeks said a parking validation program is likely, but no solution is perfect.

“The only question is, how do you sell it to a community that can’t understand the validation program?” Loeks said. “People have their biases. Ask five different people what they want from parking, and you get 20 different answers. You want to be respectful of that, and at some point you need to make some compromises to get to the bigger picture that ultimately has very little to do with parking.”

Larson said many residents want to see a city similar to what Grand Rapids was in the 1940s and 1950s, when downtown boasted plenty of retail and entertainment options.

“We’ve had a fabulous run the last three or four years, with probably between three-quarters of a billion and $1 billion in new investment,” Larson said. “It’s a game of chess, a really long game of chess.”

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