Rent concession for Lake Haven cinema

turnover were initially introduced at the height of the COVID-19 restrictions to meet Council’s obligations as a commercial landlord under COVID regulations.

This was in order to provide the operator with more time to return the cinema complex to self-sustaining commercial viability.

But as the movie industry worldwide continues to face challenges, with the consumer attraction of movies only gradually recovering, many cinemas are closing up shop or are being radically remodelled to accommodate changing viewer preferences, the report said.

“In the case of the cinema complex at Lake Haven, the community implications of a potential closure need to be taken into account, as a significant part of the purpose for establishing the cinema in the first place was to improve the spread of positive opportunities for both daytime and night-time social gatherings in the local area,” it said.

“For the next 12 months, maintaining the viability of the cinema’s operations is considered highly desirable, provided that some level of commerciality can be maintained.

“Metro Cinemas is in an unusual situation.

“Other Council tenants have generally been able to return some level of normality whilst the cinema industry remains heavily burdened by COVID-19 and remain one of the worst affected businesses.

“From January 2019 to

December 2021, 81 cinema complexes closed in Australia representing 15 per cent of total cinema complexes.

“The major Australian cinema groups are considering their options by selling assets and closing non-performing sites.” The report said challenges film studios screening movies on their streaming services rather than cinema; and the non-return to cinema of Generation Z, the largest cinema audience pre-COVID.

Council previously resolved to offer a purely turnover based rental to Metro Cinemas Lake

The percentage of turnover that applies to the rent has varied over time between 15 per cent and 20 per cent.

“Council staff have had a series of meetings and correspondence with the operator of Metro Cinemas Lake Haven about both the immediate and medium-term prospects of the cinema complex,” the report said.

“It is evident from those meeting that, for the cinema to remain financially viable in the short term d rental is essential and that (in the absence of incentives such as NSW government entertainment vouchers) the maximum level of turnover rent that can be sustained is 18 per cent.”

Council will monitor gross turnover over the next 12 months to see if viability improves and further discussions will be held with the operator in relation to its proposed strategy to improve financial viability.

Council will also look at longer-term options to improve the commerciality of the