Conversation with

Whether he talked about market research or working with a city’s bureaucracy, overcoming residents’ uneasiness about alcohol or the pressures of entrepreneurship, Paul had no hesitation providing his thoughts for publication. Only once or twice did I sense a slight uneasiness during our hour-long conversation. What came through is a man who is comfortable with this latest attempt to implement a concept which has already proven successful in four other municipalities.

When Glantz told me, “I’m done lobbying. The development will have to stand on its own,” I couldn’t help but think of Martin Luther’s, “Here I stand. I can do no other.” His tone was not one of arrogance but one of accepting reality.

As usual in these coffee conversations, I didn’t ask a lot of questions. Instead, I named two topics I wanted Paul to address:  (1) Market research (how he determines which cities to work in) and (2) How Royal Oak compares with other cities in terms of process, permits, and the like.

Glantz compares movie houses to supermarkets. He characterizes both as “neighborhood retail.”  They should be reasonably accessible, without long drives to reach them, for example. So, Emagine looks for “underserved” communities. The term can mean anything from having no theater to having one, even with several screens, which hasn’t been maintained well. This approach has so far proved viable in Birch Run since 1997, Novi (2002), Canton (2004), and Woodhaven (2009).

Using demographics software, Emagine determined that without attempting to compete with the existing art theater in Royal Oak, his development can draw on 500,000 guests per year. “Some never go the movies, we know, but industry history shows that we can expect, on average, 4-plus visits per person per year.” Realistically, he also sets geographic limits. He doesn’t consider the population north of Thirteen Mile as prospects, because “they are likely to go to Birmingham.”

A Royal Oak bonus, Glantz says, is that “The young set does drive longer distances to come downtown, so they became additional prospects for us.”

Paul addresses the alcohol issue head-on. “First, you must recognize that for us it is enlightened self-interest to ensure that alcohol-related problems are neither frequent nor serious.” So, the theater and bowling alley venues are handled differently. There is a 2-drink maximum at the theater. “We serve large drinks (for example, 24 and 32 oz. beers) in the theatres to discourage folks from getting up from their seats and diminishing the movie-going experience for others.  There is no absolute limit on the number of drinks in the bowling center, where the drinks are of a more traditional size, and where the entire mood and activity levels are different than sitting in a theater.  However, we vigilantly refrain from over-serving patrons, serving minors, or serving any obviously-intoxicated guest.”

Another disincentive to overdrinking: “Our pricing will be higher than in a typical watering hole.” Glantz says that 5-10% of revenues would come from alcohol sales. That seems low and led me to ask why the lack of a liquor license would be a deal-breaker, especially since he acknowledges that “serving alcohol is a privilege not a right.”

Here, Paul talked money. He anticipates that his development will pay $360,000 a year in annual property taxes. “That’s roughly $1,000 a day. I know there are people who say that the city gets only a portion of that, with the rest going to schools and the like, but not being able to serve alcohol would make going ahead with the development economically infeasible.  We need the incremental revenue from bar sales to allow our business model to succeed.  Specifically, we need the additional revenue to undertake the extra effort we put into making our venues the cleanest and best run in the market.”

Talking money in another context, the entrepreneur recalled using $45,000 in credit card debt and a $75,000 bank loan to get his start in the business: a 1-screen theatre in Clarkston, MI. He admits going through one or two “near-death” financial experiences since he got serious about the business about 13 years ago. With the aid of a couple of “angel investors” and an SBA loan, he built his first new theatre in 1997.

As this is being written, Emagine still has to work through a Public Hearing at the 09 September Liquor Control Committee meeting, followed by consideration of the LCC’s recommendation to CITCOM’s 14 September meeting. The hope is that the company’s request for a liquor license will be seen as separate from the controversial proposed moratorium which will appear on the November ballot.

Glantz says that as far back as the 1970s there have been movie houses in Michigan which serve alcohol. The Dearborn theatre on Michigan Avenue in Dearborn, the LaParisian in Garden City, and the Quo Vadis in Westland all served alcohol in the ‘70s.  Even the Fox Theatre, which occasionally shows films, has a liquor license.  He sees alcohol service as an amenity, one of several small things which add uniqueness to the customers’ experience.  He also relished in describing the joy associated with building and operating entertainment venues that exemplify his own personal tastes.  Humorously, he mentioned there are “no doors on our restrooms.” The reason? “Some people don’t wash their hands after using the facility. With no door, you don’t have to worry about touching a handle that might not be clean.”

About the hoops which developers must go through, Glantz maintains that cities are pretty much alike in terms of ordinances, permits, and protocol. Royal Oak, though, is the first one where he has encountered the separate step of an appearance before a liquor control committee before addressing the city’s legislative body.

I sensed a certain apprehension about what might be coming down the pike in Royal Oak when he mentioned another city which, late in the day, told him he would have to pay for new pole-lights at $20,000 per light. Emagine countered that his company would install the lights. The city lowered the cost. Paul and I exchanged horror stories about municipalities adding substantially to the cost of a development with unexpected demands for this or that – after a project has started. My notes show that at some time during our conversation, Glantz mentioned that Emagine is not asking the city for tax abatement.

To those Royal Oak citizens and officials who may be anti-development, anti-alcohol, or simply believe that as a developer, he is not be trusted, Glantz suggests that they check with officials, citizens, police from the other cities where Emagine theaters are operating. The movies on Eleven Mile will be “Hollywood movies, family movies.  He characterizes such films as “popular entertainment” in contrast to the Main’s “art and specialty” films.

Back in his philosophical mode, he concludes, Alcohol or not, “We are just lowly retailers. You won’t typically find us rubbing elbows with Hollywood celebrities.”  He declares that “We see Royal Oak as wonderful community in which to build our flagship entertainment venue.  However, if the community chooses not to embrace us, we’ll certainly understand and we’ll part on friendly terms.” All that being noted, Glantz goes on to note that “At this juncture, we are highly optimistic that the citizens of Royal Oak see value in welcoming us to the community.” – Sep 2009

Paul Glantz is a serial entrepreneur focused on finance, insurance, real estate development, and cinematic exhibition. In his day job, he serves as President & CEO of Proctor Financial, Inc., a specialty insurance broker serving over 1,600 financial institutions nationwide. 

His avocation, though, is the entertainment industry where he serves as Founder/Chairman of Emagine Entertainment, Inc.

In that capacity, he has overseen the development and operation of 4 theatres that generate over $20 million in annual revenue and serve over 2.0 million guests per year.  Considered an expert in the cinematic exhibition industry, Mr. Glantz has been quoted in numerous publications, including, Film Journal International, The New York Times, and The International Herald Tribune.

In January, 2006, Mr. Glantz’s theatre chain became the first in the nation to convert all of its 46 screens to high-definition digital imagery, dramatically improving theatrical picture quality and eliminating the need for 35 millimeter film.

He is currently focused on a new development slated for Downtown Royal Oak, MI that will include 10 movie screens and a 16-lane boutique bowling center.

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