Kenn Lowy took over the Brooklyn Heights Cinema in 2011 after its previous owner was indicted in a financial scandal. Despite a successful three-year stint, the building was recently sold to a new developer, who has no plans to keep the theater intact. The cinema’s infrastructure, including its chairs and new digital projectors, now sits in storage, and the clock is ticking for Lowy to find it a new home. We sat down with Lowy at a cafe in Brooklyn Heights, where he had much to say about his crash course in the film industry, which also served as a primer on fraudulent real estate deals, landmarking, rising rents and local zoning.
Brooklyn Brief: Tell us about yourself and your background.
Kenn Lowy: Well, let’s see. I’m like a man of many things. I’m a musician — a singer/songwriter — and made a living in my 20s and early 30s as a musician, but also as a journalist. I wrote for Rolling Stone Press, doing research, and then writing reviews for the record guide, and then worked at a couple of other magazines, mostly music magazines. There was a magazine called Trouser Press, a fantastic little publication. It was kind of like the punk new wave version of Rolling Stone before Rolling Stone had kind of discovered it. Really small magazine, around the late ’70s to early ’80s. That was a great place.
I was basically in my mid-20s when music and writing started slowing down a bit. So I started getting into computers. By the time I was in my late 20s, I was doing all types of work with Apple computers. I was using it for my music and I knew it well, and there weren’t a lot of people doing that. So I kind of got on the ground floor. By the time I was in my 30s, I was mostly doing that to pay the bills. I still played music, and still released a couple of CDs here or there, but the industry was changing so much. It was really hard for a singer/songwriter to make a living. I ultimately ended up working for Wired magazine, essentially running their New York IT department. Then I did not-for-profit computer stuff for a while.
BB: How did you get involved with the Brooklyn Heights Cinema?
KL: About four years ago, there were stories in all the local Brooklyn papers about how the owner of the Brooklyn Heights Cinema had been indicted for wire fraud. And I had been going to that cinema since my late teens. My family moved here from Philadelphia when I was 16. We lived in Cobble Hill. At that time, the only movie theater in this part of Brooklyn was the Brooklyn Heights Cinema. BAM didn’t have a cinema yet, the Cobble Hill cinema wasn’t here yet. So that’s where I had gone to see movies. And it was a real funky place. You could get an espresso, a latte or a cappuccino. We even had egg creams. The architecture is kind of crazy, too.
After the stories came out, I waited around a week or so, and went there to talk to the manager, who frankly I didn’t even really know. I asked what was going to happen to the theater. It had come close to closing many times. She said, “Well, we don’t really know what’s going to happen.” Then she said, half-jokingly, “Do you want to buy it?” And I said, “Yea…maybe?” Which was completely ridiculous, because I had no money. I was doing computer consulting, and I was making a living, but never putting a huge amount of money away. I was scraping by, and didn’t have any serious money to buy a theater.
But four days later, we were sitting around a table talking about a sale. And I was just scheming in my head, like, “Okay, so if I cash in this IRA and max out these credit cards, could I do this?”
We went back and forth with numbers, and I looked over the owner’s “books,” which actually didn’t exist, which is probably partially why he ended up in jail, trying to piece the relevant figures together. I mean, the former owner was such a crook, it was just shocking. Which was weird, because the guy was this millionaire who had slowly made his way in the cinema business, slowly buying more and more theaters.
But it seems he over-extended himself around the time of the recession, and also “skimmed” the amount of tickets he reported as being sold at his theaters, and eventually got caught by distributors, who take a portion of the ticket sales, and had to pay them a lot of money.
BB: What were the terms on which you purchased the cinema?
KL: When we were negotiating, the cinema owner had already sold some other theaters, and had drastically lost income. We negotiated for nine months, and towards the end, the landlord was going to throw him out for non-payment of rent. Con-Ed had a shut-off notice, and he owed distributors money and couldn’t get new films. He was literally about 3-4 weeks from closing.
So for ten dollars, I bought the theater, plus a lot of his debt, and gave him a guarantee that I would pay him some additional money if the lease was renewed, because the lease only had one year on it at that point. And the landlord was unwilling to grant me a new lease. The landlord was totally honest with me; he said, “Listen. There’s a chance I might want to develop it, so before you get into this, you should know, there’s only one year left, I may renew a lease with you, or I may not.”
I got the theater for a much smaller amount of money relative to what a theater would cost, but I also got a theater that was heavily in debt, that wasn’t making money, and that couldn’t get new films. So there were a massive amount of problems.
BB: How did things go once you became the new owner?
KL: There were many ups and downs, with some successful stretches, and other tumultuous periods. The first month or so, a huge amount of money had to go out the door. I financed it through selling almost all my IRAs, maxed out all my credit cards, and that was the only way to do it. I thought, “You know what, it’s a once-in-a-lifetime opportunity.” I drew up a business plan that was looked over by many people, and seemed sound.
What I didn’t realize was that you have to have a lot of great movies. You can’t have one mediocre movie and one good movie. If you have one great movie, you can have one decent movie. But if you don’t have the great movies, then you’re just losing money. An example of a great movie is an indie blockbuster, like “Twelve Years a Slave,” or a Wes Anderson film. And it really helps if you’re the only theater in the area that’s playing it.
We showed a lot of what I thought were terrific indie movies, but they were esoteric, and didn’t have a marketing budget. They were relying on word-of-mouth, and it could only go so far. On the plus side, I was talked out of some other “big” movies by my buyer, who cautioned they would bomb, and he was almost always right.
For the first four months, I lost a massive amount of money. Then it actually turned around, and I was getting great films. Christmas season was good, and for the next year-and-a-half I made money. We turned a profit for the theater, which might have been the first time that happened in a decade. But for the following year-and-a-half, it was tough. This year was particularly bad.
BB: The building went through several iterations of plans to expand, or be torn down and replaced. Can you tell me about those plans and your involvement with them?
KL: First, the old cinema owner wanted to build two more floors and have two more theaters. Which was a complete joke, because he hadn’t even consulted with the landlord, for one, but also, he wasn’t making enough money at the cinema to begin with. Plus, the Court Street cinema was going to have whatever additional movies he planned on getting. He even took money from a few investors, but never did anything with the plans, and failed to pay them back. That led to his downfall.
Once I took over, the landlord had two versions of a plan for a five-story apartment building where a cinema would be on the first floor. It would be four stories of apartment rentals, not these luxury condos everyone is complaining about. The building is not landmarked, but it’s in a historic district, so any changes need the approval of the Landmarks Preservation Commission (LPC). And the LPC turned down the plans, twice.
The sad thing is that these two plans for buildings were really nice, contextual with the neighborhood and would have allowed a cinema to stay at the location. But the Brooklyn Heights Association (BHA) had a lot to do with the plans never being voted upon, which was akin to them being turned down. They felt the building had historical significance, and they fought tooth and nail against any changes. The local community board supported us, and some of the local politicians supported us, but others didn’t, not wanting to go against the BHA. The BHA represents a very small contingent of Brooklyn Heights residents, but has a very strong sway.
BB: What was your experience when the property was ultimately sold?
KL: I continued on a month-to-month basis well after my one-year lease ended, but after the two alteration plans were rejected, my landlord put the place up for sale. I couldn’t really begrudge the guy, but I doubted anyone would buy it. The landlord was asking for $7.5 million, which I thought was too high. But I was wrong. It took some time, but the property did eventually sell to a developer, who had no plans for a cinema to remain.
I was still paying $5,500 a month in rent, but this past summer I was told by the landlord I needed to get out. That date moved from July to August, which helped, but in the meantime, I was looking like crazy for a new place.
BB: You were recently quoted about the now astronomical rents in Brooklyn, noting that you would have to operate a “meth lab” in order to satisfy the asking prices of other landlords you consulted with.
KL: I was negotiating at one point for the reBar space, but the landlord there is nuts. The entire reBar space is 8,000 square feet, for which the former tenant, Jason Stevens (who is now in jail) was paying $17,000 a month. The landlord now wants $50,000 a month for the entire space. I had to negotiate for him to even consider renting just part of the space to me. He still wanted $11,000 a month for a 2,000 square-foot partial space. I explained how I would lose money even if I sold out every single show, but he wasn’t hearing it. At that asking price, the place will sit empty for a long time.
There were two other places. There was Galapagos Art Space, a great space also in DUMBO, and we had this Indiegogo [crowdfunding] campaign, so I’ve got the digital equipment, but their terms didn’t make sense for me. They wanted $2,500 up front to rent the space each night, plus fifty percent from all ticket sales. I told them, “You understand my distributor takes 50 percent from my sales already, right?” Then there was Pioneer Works, in Red Hook. It’s a really cool spot, but the acoustics there were unworkable for showing films.
BB: Where do things stand now?
KL: The theater’s equipment is now in storage. I’ve got everything: the sound system, most of the seats, the digital projector. But I’m still looking for a new space. I need a big location, with good foot traffic, but with a landlord who isn’t only seeing dollar signs, but has an interest in providing the community with a venue for culture. I’m doing everything I can to keep going.