Uncertainty over Lansdowne cinema engulfs World Exchange theatre, too
Manager says building owner would rather not convert facility to office space
By David Reevely, OTTAWA CITIZEN September 3, 2013
OTTAWA — Uncertainty about Lansdowne Park’s planned new movie theatre is one reason why the World Exchange Plaza hasn’t signed a new operator for its cinema, the downtown office complex’s leasing manager said Tuesday.
“The incentive for us is to continue on,” Daniel Gray told city council’s finance committee, explaining that converting the multiplex inside the World Exchange into office space would be expensive and difficult, even though the building’s owner is asking for permission to do just that.
Windowless theatres with sloped floors aren’t easy to repurpose, Gray said, estimating it would take 10 years to recoup the cost. And that’s in a normal market, whereas just now Ottawa has a glut of office space downtown. It’s so expensive that Place de Ville’s underground cinema, once the biggest in town, has been mothballed for nearly 20 years.
Three theatre chains have approached him in at least a general way about taking over the World Exchange cinema when the Empire Theatres lease expires at the end of the year. Empire is getting out of the movie house business; it has sold most of its screens and is walking away from the rest, including the one at the World Exchange.
But, said Gray, there’s a problem: Movie distributors won’t give the same movies to theatres within five kilometres of each other. “They’re not going to give two locations in close proximity to each other what I’ll call the A-quality films,” Gray said.
The World Exchange and the now-closed cinema at the Rideau Centre managed the problem by catering to different audiences, with the Rideau Centre showing more teen-blockbuster flicks and the World Exchange typically screening movies that are a bit higher-brow. Both of them were Empire cinemas, so that division was easy to maintain.
But now the Rideau Centre’s theatre is closed and everyone is waiting see what happens with the theatre at Lansdowne. It is under construction, an integral part of the city’s agreement with the Ottawa Sports and Entertainment Group to redevelop the Glebe fairground. It’s also another Empire property whose future is unclear and it’s only 2½ kilometres from the World Exchange Plaza.
Both OSEG and Empire have said they expect to honour the agreement to have a cinema at Lansdowne, meant to be a high-end operation with luxurious seats, good food and a liquor licence, but neither has said just how. A cinema operator there could also take over the World Exchange theatres, co-operate with it, compete with it, or make taking it over an obviously foolhardy move for anybody, depending who it is. If there’s no Lansdowne theatre, running the World Exchange cinema would be a lot more attractive.
“We really have no comment on this issue at this time,” said OSEG’s lead partner, Roger Greenberg, through a spokesman. Negotiations are continuing over the Lansdowne theatre and that’s it.
In the meantime, the World Exchange’s owner, the British Columbia Investment Management Corp., and its real-estate company Bentall Kennedy (Gray’s employer) want the option to turn their cinema into something else.
At issue is an agreement between the city and the property’s original developer, which included a promise to include an “entertainment” use in the building. The agreement has been amended over the years, most recently in about 1997, and even the city’s lawyers aren’t sure it committed the World Exchange’s owners to keep providing entertainment after the building was finished. Everyone agrees that that entertainment use, even if it is legally required, wouldn’t necessarily have to be a movie theatre. But the companies want a definitive ruling saying that they can do whatever they want in the theatre space as long as it’s consistent with the building’s mixed-use zoning.
Most councillors on the finance committee weren’t happy about the prospect.
“There’s actually more pressure for entertainment downtown than 15 or 20 years ago,” observed Gloucester-Southgate’s Diane Deans, what with all the condo towers city council has approved lately.
Councillors on the finance committee weren’t convinced they had enough information to decide. It wasn’t clear how binding the agreement is, for instance.
At the suggestion of Mayor Jim Watson, city manager Kent Kirkpatrick was told to take charge of the file and bring a proper report to the finance committee’s next meeting, scheduled for Oct. 1.
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