Continental Cinemas owners explain surcharge plan

Published 3:05 am Friday, May 12, 2017

Continental Cinemas owner Chase Taylor told Troy councilmembers Tuesday that a surcharge assessed by the city on tickets would allow him to keep ticket prices down.

“Right now I’m raising up prices one dollar,” Taylor said. “If this (surcharge) doesn’t happen, I’ll have to look at raising the prices more to cover.”

Taylor explained to the council that about 60 percent of his ticket sales go to the movie studios in California. This surcharge would allow the theater to keep the entire dollar, which Taylor said could bring in $60,000 a year in extra revenue for the theater.

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That won’t be enough to cover the theater’s planned $4.25 million expansion into an entertainment complex with both theaters and a bowling alley – Taylor said $60,000 wouldn’t cover even one mortgage payment – but it would help the theater with financing. “We’re still working on securing the funding,” Taylor said. “The city’s decision could affect that …  It means a lot to these financial institutions to see that kind of buy-in from the city.”

Mayor Jason Reeves explained his thoughts on creating the surcharge as an incentive for the expansion similar to other incentives offered to bring businesses into the local community.

“The overwhelming majority of this cost will be born by the owners,” Reeves said, adding the city should explore “a way to incentivize this in some kind of way, to push this over the top.

“This is a state of the art entertainment complex … I think you’ve got to grow or you die. I think you’ve got to offer something new or something better. I’m certainly interested in seeing it be built and people having more entertainment options in the City of Troy.”

Reeves said the surcharge would benefit the city and the voluntary nature of the surcharge allows residents to make a decision on whether to pay it.

“To Mr. Taylor’s point, by doing a rebate they’re keeping a larger share so instead of the prices going up and the money not staying in town, the price goes up but the money stays in town. Instead of having to raise ticket prices $3 more to get the same effect as a $1 surcharge,” Reeves said. “When someone goes to the movies they’re making a decision to go to Troy. If they’re a dollar higher, that’s a decision the citizen will have to make: ‘Do I wan to pay this extra dollar or drive 45 miles?’”

Another thing Reeves clarified during the meeting is that Greenville’s 2007 ordinance is merely a model and not the exact route the city would take in creating a surcharge for the theater. The Greenville model, which created a $1 surcharge for a limited time period and eventually returned a portion of the revenue to the city, was created to help bring a movie theater to the city.

“I’m not proposing we do exactly what Greenville did,” Reeves said. “I think we should look at that and listen to the Taylors and then find a way to uniquely foster this development.”

One major difference Reeves said is that the city would only support a surcharge if the city does not profit from it.

Taylor told the council that a $1 surcharge would keep his theater’s prices right in line with the national average.

“Other ticket prices are in the $12 range,” Taylor said. “We’re dead on the average of the United States. With other theaters that have done this, I’m used to seeing ticket prices in the $15 range because of what you’re offering. In some bigger markets like Montgomery you’ll have a price war where some theaters like AMC will lower their prices, but Montgomery’s got a lot of people so they can sort of play that game.”

Reeves said he would try to have an ordinance ready by the next council meeting on May 23 at City Hall. The executive committee will meet upstairs at 4 p.m. and the council will convene in the Council Chambers at 5 p.m.