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Douglas Theatres to be sold for $40.5 million

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BY MATT OLBERDING / Lincoln Journal Star

Wednesday, Mar 26, 2008 - 08:17:12 pm CDT

The name Douglas Theatres has been synonymous with movies in Lincoln for more than 50 years.

But that’s going to change next month.

Marcus Corp. of Milwaukee announced Wednesday it has agreed to acquire most of Douglas’ assets for $40.5 million. The sale is expected to close next month.

Story Photo
The Grand Theatre (LJS file)
Theaters owned by Douglas to be acquired by Marcus

Omaha:

* 20 Grand

* Village Pointe

* Twin Creek (Bellevue)



Lincoln:

* East Park

* Edgewood

* Grand

* SouthPointe

The sale includes the Grand, East Park, Edgewood and Southpointe theaters in Lincoln, as well as Omaha theaters the 20 Grand and Village Pointe, and the Twin Creek theaters in Bellevue.

The seven theaters have 83 screens combined. Douglas has about 500 full- and part-time employees.

Douglas will continue to operate the Cinema Center Theatre in Omaha for an undetermined length of time, and will also close, but continue to own, the Cinema 9 property in Omaha.

The deal also includes an agreement by Marcus to buy an additional site for the development of a theater near Cabela’s in La Vista for about $4.4 million, and an option to buy another undeveloped site on North 27th Street in Lincoln.

In a news release,  Stephen H. Marcus, chairman and chief executive officer of The Marcus Corp., said the purchase of Douglas made sense for his company.

“Douglas Theatres’ high-quality facilities and excellent locations are comparable to Marcus Theatres in our current six-state region, making this a great fit for our company,” he said.

Marcus, a publicly traded company, operates 595 screens in  Wisconsin, Illinois, Minnesota, Ohio, North Dakota and Iowa, making it the seventh-largest company in the nation.

Douglas is the 42nd-largest theater company in the country.

John Decker, Douglas’ chief financial officer, said the company’s relatively small size was one of the reasons for the sale.

It’s becoming harder and harder for a small company like Douglas to compete with large chains like Marcus that can operate hundreds of theaters with a small staff, he said.

Also, Decker said Russell Brehm, who co-founded the company, was looking at options for estate planning.

In a news release, Brehm said he expected Marcus to carry on the “the tradition of excellence” Douglas has established.

“Marcus Theatres will serve our communities with the many resources available to a larger company and will provide the same dedication to our customers and associates that has been a hallmark of Douglas for over 55 years,” Brehm said. 

Carlo Petrick, a Marcus spokesman, said theatergoers will see only minor changes, and those will occur gradually.

Marcus won’t keep members of Douglas’ top management, but Decker said he understood it would retain workers.

Marcus’ human resources department will work those details out, Petrick said.

Decker said he, Brehm, CEO and President David Livingston and Vice President Debby Brehm will also continue a real estate venture called Center Associates LLC, in addition to continuing to run the one theater in Omaha.

Its first order of business will be to develop the Cinema 9 property at 120th and Q streets in Omaha into an office park.

In Lincoln, the company owns land near 84th and O and the downtown building at 201 N. 13th that is Douglas’ corporate headquarters.

It also owns land on North 27th Street that Marcus has the option to buy.

Reach Matt Olberding at 473-2647 or molberding@journalstar.com.


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So Now What? wrote on March 26, 2008 4:36 pm:
" So will the city now get out of bed with this theatre company and allow people in North Lincoln to finally get a movie theatre? Douglas monopolized the Lincoln market saying that you should protect local business. As soon as they had what they wanted and drove out all potential competitors, they sellout! "

 Kevin wrote on March 26, 2008 4:46 pm:
" I hope we still get the popcorn talking on a cell phone before every movie. "

 miffed wrote on March 26, 2008 5:05 pm:
" So did we get out money's worths out of the process? Didn't the city finance that monster downtown? Now it will be in the hands of an operator that has no track record with the city. A company dosn't get that big by bucking trends and the nationwide trend is still megaplexes in outlying areas. "

 Truth Decay wrote on March 26, 2008 5:33 pm:
" Quick... find a way to blame this on the Democrats on the city council. "

 ??? wrote on March 26, 2008 6:05 pm:
" What will happen to the Grand? will it be torn down or will they rename it all? "

 Jim wrote on March 26, 2008 7:43 pm:
" miffed: you are correct...megaplexes are commonplace, and personally, I hope with a new company we will finally get a megaplex, and have it be waaaay out of downtown...where I can go and park in the mega parking lot and have a mega short line for my mega movies!! Welcome to the 21st century "

 KP wrote on March 26, 2008 7:51 pm:
" Estate planning?! I'm sure the Democrats helped fill
the pockets of the Douglas owners. Just like they will
help fill the pockets of the 2015 vision. Oh yeah folks,
we paid for it, and we ain't done yet!!! "

 Big Picture wrote on March 26, 2008 8:06 pm:
" Another gift from TIF. The city TIF financed the building the Grand for 8,000,000.00.The city paid 1,000,000.00 to demolish two other downtown theaters so that the Douglas company can then sell them less than three years from this project's start to finnish.
At the time this Seng project was "sold" to the public it was to be the cornerstone of the billion dollar "P" street redevelopement plan.
It is now clear that it was nothing more than a way for the taxpayers of this city to fund Douglas theaters exit from the theater business in Lincoln. Did we get (taxpayers) our monies worth? Of course we also TIF financed the rehab of the Miller & Paine buiilding so that the Campbell family could sell it and leave downtown with their pockets full of cash while the taxpayers will pay for the next 20 years.
So let's review....two long time downtown business enities use taxpayer money to make thier businesses attractive enough to sell.Then they pull out of downtown and the city continues to beat this dead horse called downtown and it's financed by us? Why would any private business locate dowtown when the old money is pulling out and why should taxpayers continue to dump boat loads of money into this sink hole called downtown???
For truth decay:A quick look at the composition of the city councils over the last 20 years shows DEMOCRAT majorities. The previous three mayors have been DEMOCRATS....so I wonder why this shouldn't be placed on the DEMOCRATS door. As with democrats at almost every level the truth is decayed. "

 Thank God wrote on March 26, 2008 8:08 pm:
" Hey I'm just glad to be done with Douglas, maybe this new guy will be somewhat intelligent and bring back a starship type of place I miss the starship so much! The State is cool but only because I'm of age most of my friends can't even go. SO MARCUS PLEASE BRING BACK THE SECOND RUN THEATER!!! "

 now what? wrote on March 26, 2008 10:14 pm:
" don't look for a second run theatre. haven't found one in any of their towns listed on their website. North should finally get a theatre. also, let's do away with the 6 screen restriction. Lincoln may be the only city in the country with such a policy. Legal?? "

 Scott wrote on March 26, 2008 10:55 pm:
" TIF didn't BUILD the Grand, TIF financed the public improvements around the Grand. Not that I supported the construction of that monstrosity, but don't blame this on TIF. "

 CS wrote on March 26, 2008 11:18 pm:
" For the last (hopefully) time. Douglas has NOTHING to do with the 'monopolization' of theaters in Lincoln. The city council theater policy has been on the books for 15 years. 15 years-let that sink in, please. The monopoly is not anyones' making except those of you that continue to vote, or not vote for the city council members and their policies. As far as TIF and all that goes, well, i'm sure the city was involved somewhere in that as well, since they provided the money for the Grand to be built in the first place. If there was a loophole in that, well, once again, who is to blame there? "

 CS wrote on March 26, 2008 11:23 pm:
" The State theater is not surviving on the money brought in from your underage friends. If a 2nd run theater the size of the Starship was going to succeed, it would have. Douglas didn't even own the Starship for the last year of it's life-the City did.Complainers in Lincoln need to actually read the minutes of what goes on at City Council meetings instead of just blaming whomever happens to have a name attached to their door. I think the ethical thing would have been for Douglas to stay put after the bonds were issued-but I can't blame them, as a business, for making this decision if the agreement they signed with the City allows them to do it. "

 Mr Mardock wrote on March 26, 2008 11:25 pm:
" I'd like to clear up some misconstrued ideas about Douglas Theatre Company.

Indeed, north Lincoln has always wanted a movie theater, and Douglas has always recognized that fact. However, Douglas has also been a proponent for Mayor Seng's downtown improvement plans. It was because Douglas spent $16,000,000 into developing the Grand that no financing was available to establish another theater project in the city.

Also, Douglas never "monopolized" the market. The downtown policy, as established by the Lincoln City Council, prohibited megaplexes outside of the downtown area. Douglas, without objection, willingly followed the plans to reinvigorate the downtown area. It was the desire of Douglas to expand beyond smaller theaters like Southpointe and Edgewood, but they were still prohibited from doing so because of the restrictions on megaplexes.

The Starship's close was not a willful sale by Douglas. The "P" Street project was a part of the city's plan to invigorate downtown. It must be recognized, that had Douglas not allowed the sale to occur, the city would have used eminent domain to remove the Starship and the Douglas 3 building as well. The company had to make a financial decision, not an emotional one. I too, loved the Starship. I grew up with the Starship. But you can’t blame Douglas for trying to run a profitable business.

By the way, Douglas did not, "sellout". The company had been receiving offers from larger companies for 20 years. Also, this offer was Not the highest bidding offer. Markus is a company very similar to Douglas. The owners of both companies share many of the same insights. Douglas was hoping to find an operator that would hold the same values as the founding family.

We must remember that Douglas gave out over $1,000,000 every year in gifts, popcorn, and free movies to area schools, nonprofit groups, and charities like the Make-a-Wish foundation. Douglas has Always been a community-minded company. This is a group of people who have run a business for the community to benefit from. This is a company that supported the City Council in their efforts to improve downtown. This was a company that wanted to be a part of the Nebraskan community because there are no better people than Nebraskans. I believe that we live in one of the greatest states, and that our people are some of the best. Why is it so hard to believe the owners of Douglas felt the same way?

Just some food for thought.

"

 hollister wrote on March 26, 2008 11:43 pm:
" Thank God, you are so right. It seems like the remainder of the big empty Hi Vee at 48th & Leighton would be a neat location for the Starship 9.1. "

 Anonymous wrote on March 27, 2008 12:03 am:
" dangg... i am really going to miss douglas theatres :( "

 I've known for a while wrote on March 27, 2008 3:36 am:
" I think you all will be surprised with Marcus. They seem to actually care about its customers. They have cool things like "$2 Tuesdays" ($2 drinks and $2 popcorn), "Early Bird AM" (Friday-Sunday any show before 11 is $5 admission), "Spotlight movie night" (randomly picks a movie, and each wednesday the admission is $5 no matter the time of day), and also "Dinner and a movie" (where you can get free movie tickets by visiting a restaurant, or discounted items at restaurants by bringing in your ticket stub).

Appealing or not, this is definately a good change. "

 db wrote on March 27, 2008 7:27 am:
" a theatre up north would be nice. "

 Debt of Gratitude wrote on March 27, 2008 7:32 am:
" Douglas Theatres and the Brehm family have been great supporters of the Lincoln community for decades, and we owe them a debt of gratitude. They went downtown when nobody else would. Their use of TIF financing was no different than anybody else who uses it. And I doubt that the Grand is going anywhere. This guy in Milwaukee just paid a boatload for it. "

 yeah wrote on March 27, 2008 8:01 am:
" The arragant blood suckers are out of here. Now wait it's not over yet! The new guys may want TIFF to remodel!!
Shouldn't Douglas pay the City some back?
It doesn't change the law that no new theater can be built by other than Douglas "

 ar wrote on March 27, 2008 8:09 am:
" maybe north lincoln will get a theatre now????? "

 TIF misunderstanding wrote on March 27, 2008 8:31 am:
" Hey, Big Picture, you have a very distorted understanding of TIF. Taxpayers don't finance any TIF projects. TIF funds come directly from property taxes on the property being rehabed. Therefore only the owner of the property is responsible. Taxpayers have nothing to do with it. "

 George wrote on March 27, 2008 8:52 am:
" Want to know how the rich get richer? They get the government to give them something for free. Then they turn around and sell it for millions. "

 Kathe wrote on March 27, 2008 9:12 am:
" WOW - I sure hope the new owners aren't cost concerned and planning on streamlining jobs. Don't think Lincoln can afford to have more people lose their job. "

 DR wrote on March 27, 2008 9:46 am:
" Taxpayers do pay for TIF. That increased property taxes, instead of going into the same chanels as all other property taxes, goes back to pay off the debt for infrastructure on that property. So taxpayers are forgoing the future tax revenues, and thus we are paying something for it. "

 mitchy_v wrote on March 27, 2008 11:17 am:
" Sweet, I am looking forward to $10 buckets of popcorn. "

 ex employee wrote on March 27, 2008 11:22 am:
" they may have been great for the community but try working for them....i was a Douglas theatre employee for almost 7 years. Nickle raises and double shifts was all we got. i hope this new company comes in a treats the part time (high school kids) with more respect! "

 Goodbye Douglas wrote on March 27, 2008 12:35 pm:
" There is no law that says no other companies other than Douglas can build theatres in Lincoln. It has been a policy of the city council not to allow megaplexes outside of a 1-2 mile radius of downtown that has kept other companies from building. In fact another company could build outside of that radius, however they could not build a theatre bigger than 6 screens, which for most companies really isn't worth the time to build. It has been this poilicy that has prevented competition and the breakup of the movie monopoly that Douglas dominated. "

 TAG wrote on March 27, 2008 12:45 pm:
" Will Marcus honor the Douglas Theaters Gift Certificates? "

 Ella wrote on March 27, 2008 1:26 pm:
" It has been so hard to understand why the North 27th St business area (which include quite a few hotels) has not been given a theatre complex. Why does everything go south or east? And we have nothing EXCEPT downtwon where we have to hunt-pay for parking to see a movie. There are more developments (North 14th St, Fallbrook, Highlands) growing. Thing about that as REVENUE. "

 pjk wrote on March 27, 2008 2:58 pm:
" Haven't been to a movie in probably 5 years. First they are way to expensive for 1.5 hours. Second, try to find parking downtown. I'll wait for the dvd on this venture. But north Lincoln does need something beside the awful Wally World. "

 Kenny wrote on March 27, 2008 3:55 pm:
" What folks do not realize is that the city ordinance about no other theater company coming within a radius of downtown is designed to protect Douglas Theaters; deon't have to say "Douglas" to mean it. Same thing with the six screen limit. Ask yourself "why six screens"? The reason is an real movie company like AMC would never have just a six screen theater, unlike Douglas does. See, just because rules on theaters do not specifically say "Douglas Theaters" for the people that need something obvious to recognize it doesn't mean that the rules were not designed to protect Douglas. And why? Because Douglas negotiated with the city on their Downtown improvements. You scratch my back, and I scratch yours. "

 JB wrote on March 27, 2008 4:19 pm:
" Sad to see the last of the local theater companies. North Lincoln needs to get the old Joyo to have movies more often. "

 Narrow focus wrote on March 27, 2008 4:19 pm:
" Obviously the Big Picture solution is to never give tax incentives to corporations. If you accidentally give them a tax incentive, make sure that you tie it to a requirement that they never sell their property or business. If they do sell their property or business, they should be required to take a loss. Finally, make sure that you blame 20 years worth of local politicians (but only those in the opposing political party) for a private business owner’s decisions.

"

 I wonder wrote on March 27, 2008 5:02 pm:
" Will the REEL DEAL card thing end or be retained? Its where you get 1 point for each movie ticket bought and then after 10 points you get a free movie pass or at 5 points a free small pop or small popcorn. I'd like that to continue to be honored. "

 Big Movee wrote on March 27, 2008 10:14 pm:
" The biggest critics seem to be those that have nothing at risk. Put your family's finances on the line and maybe you'll be rewarded too. The Brehm family risked their financial future when everyone said video rentals would put theaters out of business. I hope they reinvest their $40 million in Lincoln, but with all the criticism and class-envy you can blame them if they take their money and run. "

 George wrote on March 28, 2008 9:42 pm:
" It would be nice if people would really get their facts straight, but then that wouldn't make the story as much fun. Read about the city council and understand that Douglas Theatres turned down the city because they knew it wasn't the best idea. But when the city came back and asked again, they decided to work with the city because that's what the city wanted.

Again, please everyone, don't let the facts get in your way to a good blog. "

 Mr Mardock wrote on March 29, 2008 11:03 pm:
" In Response to George:

Thank you, sincerely, for having at least some background knowledge on this subject. It's nice to see Lincoln has a few people left willing to read beyond what the paper says and gather their own information. "

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