Dc Market Overview

Primary Competitors: Art, Foreign, and Independent Programming AFI Silver Cinema and Cultural Center Opened: April 11, 2003 Location: Downtown Silver Spring, similar accessibility to that of BRC. Managed: As a non-profit organization by the American Film Institute. Funded primarily by the taxpayers of Montgomery County, MD. Notable: ABC on (beer); metro accessible. Silver Spring is currently experiencing a county-funded “renaissance” similar to what happened in Bethesda approximately five years ago. The AFI Silver is seen as one of the anchors of this re-birth. The AFI SilverDocs Festival, co-sponsored by the Discovery Channel, is currently the only one of its breadth and scope (annually, typically in June) and provides the venue with unique programming and networking opportunities for its staff and bookers. Link to Washington Post profile (includes current programming and article published upon opening): http://www.washingtonpost.com/ac2/wp dyn? node=entertainment/profile&id=1082083&typeId=1&type=keyword Discussion: While AFI is a non-profit organization, the resources it can devote and its unique place in film preservation/restoration are direct competition to Landmark’s niche market. While its programming is often too eclectic and obscure to draw considerable numbers (recent programming includes a Hammer Films and Ozu retrospectives), Landmark has recently encountered competition from AFI in booking certain titles. The main house features opulent seats with a fully restored and working organ. The raked seating style features enough leg room that a tall man can fully extend his legs in front of himself and leave enough room for someone to pass in front of him. The décor is a throwback to vintage Hollywood, stylishly updated for a modern feel. Many feel as if the main house is the finest place to see a film in DC. All theatres are fully equipped for digital sound and projection and even have live broadcast capabilities on-screen. The programming department is very experienced and has strong ties to the film community in Hollywood. The management team is somewhat weak, youngish and lured away from the Charles Cinema in Baltimore. Management is no doubt hindered by the low salaries paid by a non-profit. As a result, floor staff leave something to be desired and overall presentation can suffer. Concessions are lacking, with very few boxed candies offered. There are some heated pretzels, but the popcorn is pre-popped and kept in warmers. The planners built space for a sit-down/café-style eatery, but this is not used to full potential. Beer (on tap: Sam Adams, Red Hook, Miller) is provided through the county in a very unique and archaic

arrangement mired in red tape, the theatre has to wait until it runs out of product and then requisition the county. They can then wait days until kegs are delivered. As a result, the taps are often dry when a big opening occurs because management isn’t able to get product in a timely manner.

Loew’s Georgetown 14 Opened: January 2003 Location: Georgetown. Not accessible by public transportation. Parking is extremely difficult, but Georgetown and the Waterfront (which abuts the theatre) probably have the most “entertainment” foot-traffic in the city. Managed: Experienced Loew’s management team. Notable: The Loew’s Georgetown 14 has been able to pull a nifty trick, running art fare side-by-side with big, Hollywood films. Their grosses in both milieus have not suffered for this dual approach, in fact, this is the one site that consistently meets or exceeds BRC’s per screen take when we play Day/Date against them. Titles that Landmark would normally open (such as The Battle of Shaker Heights) in this market have often opened at this cinema (and other Loew’s screens in town) instead; although the opening of the E Street Cinema may have reduced the impact of that issue. (Film Dept. can provide more info. as appropriate.) Discussion: An extremely well run cinema, the Loew’s 14 sets the bar high for its competition. Despite extremely high volume, presentation is excellent, the concession stand and overall facility is very clean, and staff is friendly. Full stadium seating and sound capabilities can be found in every theatre. Concessions extremely well displayed and visible, two areas with approximately six POS each and tall display cases well stocked with all boxed candy that literally cannot be missed. Concessions also offer small pizzas, nachos, and other “munchables.” Box Office has up to 10 POS that can function concurrently plus four more stand alone ticketing kiosks. Many “big” Hollywood press screenings (Lord of the Rings) and premieres are held here.

The Avalon Opened: Originally, 1923. Closed by Loew’s as part of Chapter 11 re-organization, 2001. Location: Chevy Chase. Not metro-accessible. Managed: Community activist group organized and reopened the cinema under 501c3 non-profit status (led by Board of Directors) in April, 2003. Paul Sanchez, President of P&G Theatres, has been contracted to run operations of the re-opened cinema. Executive Director: Jill Bernstein. Notable: National Historic Registry, 1996. From Cultural TourismDC: During the years, the Avalon has been a first-run venue and has hosted several Washington premiers. Until its unfortunate closing in March of 2001, it was Washington's oldest continuously operating movie theatre. With the reopening of the theatre close to 80 years after its original opening, the Avalon enters a new stage as a non-profit community theatre showcasing first-run movies along with independent films, documentaries, educational programs, and community events. The Avalon Theatre Project, responsible for the restoration of the building, an art modern structure with neo-classical elements and Adamesque ornament. It was designed in the Classical Revival style by noted local architects Upman and Adams. The Avalon Theatre Project's goal has been to create a new Avalon Theatre serving the community in all the old ways and many new ones. The Project is now offering the Washington community a revitalized theater with programming that includes outstanding independent, foreign, and documentary films, classics and the best commercial films. The Avalon Theatre is a site for film festivals, puppeteers, music, live theater, and shows for children. The Project seeks to return the Avalon to life as a vibrant and viable movie house, one that serves the needs and interests of the Chevy Chase community and greater Washington. The Avalon Theatre Project Inc. (ATP) is a 501(c)(3) tax deductible, non-profit that has served as catalyst/broker in bringing together a contracted theater operator, an ice cream vendor, and non-profit community organizations. Community non-profit organizations can arrange to rent the building when not needed for movie exhibition.

Visions Cinema Bistro Lounge Closed by Cineplex Odeon in 1998. Re-opened as Visions in 2000. Location: DuPont Circle/Adams Morgan. Metro-accessible. Owned and Managed: By Andrew Frank Published in 2000:

When Landmark opened the BRC in 2002, Visions, which had established itself as the art house in DC, knew it was in trouble. The additional opening of the E Street Cinema seems to have sealed Visions fate. While Visions has adapted well to the added competition, focusing heavily on private events and catered affairs, it can no longer program desirable art house fare. A favorite among the local press because it is the only true independent cinema in the city (programming is done by Andrew Mencher, who is on-staff in-house), Visions continues to keep its doors open through house-rentals and its bar & food service. (The bistro offers exceptionally tasty dishes and Visions has an outdoor café where many of the city’s “beautiful people” congregate to listen to DJs spin chill house/ambient, seen and be seen, and take in the city on warm summer nights). Visions supplements this income with many “viewing events,” such as airing “Sex and The City” and “The Bachelor.” Visions future in the marketplace remains unclear and it may be a primary target for acquisition. Loews Cineplex Odeon Shirlington 7 Opened: 1987 Location: Shirlington, VA (Arlington County) Notable: One of the first chains to try art-house programming, with success, outside of the city.

Government Projects funded by Civic Municipalities All ongoing by the DC Government: http://planning.dc.gov/planning/cwp/view,a,1285,q,571098,planningNav,|32341|.asp Anacostia Waterfront Initiative, $8 billion On July 14, 2004, the DC Public Council approved $8 billion to redevelop the Anacostia Waterfront District, located in the notoriously rundown district of South-East Washington DC. Mayor Anthony William’s Administration, who former Landmark CEO negotiated terms with for the opening of the E Street Cinema in conjunction with the city’s redevelopment of the Downtown Convention Center area, has had success with similar redevelopment initiatives. In response, a multi-disciplinary task force (Anacostia Waterfront Initiative; AWI) has been formed and redevelopment is being implemented in stages. AWI would offer the same opportunities (lucrative market in some years--estimated anywhere between five and 15 depending on the development process) and challenges (potentially soft numbers until residential housing is completed, area historically high in crime, restrictive floor staff hiring practices if offset by city financing) as we’ve experienced with E Street. For full details, visit: http://planning.dc.gov/planning/cwp/view,a,1285,q,571105,planningNav_GID,1708,plann ingNav,|32341|.asp

The Village at Shirlingon, Phase II Developers: Arlington County VA and Federal Realty Trust Note: involvement in this project would be direct entry into a market firmly held by one of our primary competitors, Loew’s Shirlington 7. The Village of Shirlington , Phase II project is a public-private partnership between Federal Realty Investment Trust (property manager of Landmark’s Bethesda Row Cinema) and Arlington County to complete the redevelopment of the former Best Store retail shopping center site into a modern, mixed-use "urban village" and urban entertainment center. The intent is to take maximum advantage of the existing arts and entertainment presence in the Village and strengthen and "theme" the Village through the addition of cultural/ entertainment retail and civic components. From July 2004 project status update: The Village at Shirlington Library, Theater and Plaza – Arlington County approved in June 2002 a site plan for the new library and theater to be constructed adjacent to a new public plaza at the extension of S. 28th Street. The 15,293 square foot library and the 39,103 square foot theater were part of the Village at Shirlington PDSP approved in October 2000. The public plaza will be approximately 10,500 feet and will incorporate planters, seating, water features and special pavement designs. The County Board approved the Lease Agreement with Signature Theater in July 2003 that will allow construction to begin by May 2004. The library is scheduled to open in early 2006. Project overview: http://arlingtonvirginiausa.com/default.cfm/sec/2/sub/36/sub2/136.cfm Note: Arlington County continues to grow at an explosive rate. In addition to the aforementioned project, the county is invested in building high-rise, multi-use residential housing units that will provide ripe targets for new cinema construction or existing redevelopment. The entire county is underserved in regards to art-house programming. Arlington Economic Development Update (July, 2004): http://www.arlingtonvirginiausa.com/default.cfm/sec/2/sub/11.cfm Rockville Town Center, Phase II - $352 million (approx) PUBLIC INVESTORS: City of Rockville, Montgomery County, State of Maryland, federal government PRIVATE INVESTORS: RD Rockville, LLC; Federal Realty Investment Trust; FoulgerPratt Note: The region’s demographics include the highest concentration of college- and postcollege educated individuals in the country, and one of the highest per-household incomes in the country. This desirably market is spread widely across and outside DC proper, urban sprawl is more prevalent in the metro region than similar East Coast cities. Landmark’s traditional audience--affluent, educated, somewhat liberal--may often live far outside DC proper. This may be a good market to experiment with smaller, suburban

houses (possible three- to four-screens, a model the Shirlington 7 and Fairfax Cinema Arts have proven can work for arthouse programming). The Regal Rockville Center 13 is one of the anchors of this project. Landmark’s BRC theatre has not lost any business to the Regal Bethesda 10 and, in fact, the Regal’s Bethesda 10 location may foster a symbiotic exhibition relationship that benefits both sites. Project overview: http://www.rockvillemd.gov/towncenter/index.html

Relevant US Census Bureau Demographic Data (Includes Median Household Income, Education Levels, Growth Rates, etc.) City of Alexandria, VA http://quickfacts.census.gov/qfd/states/51/51510.html Arlington County, VA http://quickfacts.census.gov/qfd/states/51/51013.html Fairfax County, VA http://quickfacts.census.gov/qfd/states/51/51059.html Loudoun County, VA http://quickfacts.census.gov/qfd/states/51/51107.html Washington, DC http://quickfacts.census.gov/qfd/states/11000.html Montgomery County, MD http://quickfacts.census.gov/qfd/states/24/24031.html Prince George County, MD http://quickfacts.census.gov/qfd/states/24/24033.html

DC as a Test Market for Small/Digital Productions While DC isn’t as well known as LA, New York, or Chicago for its local production scene, there is considerable opportunity here. The 48 Hour Film Project started in DC and had 60 teams enter the 2004 competition (more than any other city, hosted by the AFI Silver Cinema). Additionally, there is a large “professionally non-fiction” production community here, anchored both by Discovery Communications, the many houses that serve its content, PBS, and the ever-present political community. Currently, Visions Cinema Bistro Lounge hosts a monthly local-screening night, and the Old Town Alexandria Theater have experimented with the same. The AFI Silver, Visions Bistro Lounge, and Old Town Theater cater to screening local films, but as of yet, there is neither enough interest nor product to make a regular diet of it. Should Landmark be interested in purely DC screenings, the E Street Cinema would be the natural choice. 2929 Entertainment is correct in its thinking as to where the exhibition marketplace is headed, something apparent to existing Landmark management even at the local level. Management fully encourages implementation of digital projection capabilities, the ability to screen local filmmakers (for higher profit margins and bigger houses brought about by grassroots marketing the filmmakers would undertake), and the implementation of digital projection on as many screens as possible once it’s fiscally sound and/or cost barrier entries/equipment expenses decrease. As a test market for the DTS projector, BRC management found it extremely simple to use and comparable to film quality.

Possible Acquisition: Renovation Targets

Note: Involvement with either of the two following, the first currently operated as a “warehouse” discounted jeweler, the second as a CVS pharmacy, would be entry in direct competition in the market currently dominated by the Loew’s Georgetown 14 (six blocks and five blocks away, respectively). Both sites have a historical exhibition tradition and the DC film community mourned their respective closings. Discussion of The Biograph alludes to Landmark’s earliest considerations of the DC market and the subsequent opening of the E Street Cinema.

Note: Involvement with this site, a former Janus theatre and one of the primary “art houses” in DC until Visions and Landmark came into the market, would be entry into direct competition with the DuPont 5 (located two blocks away) and Visions (three blocks away).

Note: the following is a particularly strong possibility, Adams Morgan is a ripe neighborhood for this type of programming. Entry here would be direct competition with Visions Bistro Lounge (approximately four blocks away).