Hearing On Madison Movie Theater Tuesday

MADISON, NJ - The weather-related reprieve is over, and the hearing on the possible demolition of the Madison Movie Theater is rescheduled for the Historic Preservation Commission meeting on Tuesday.

Saxum Real Estate, the property owner, will present their plans for the property at 7:30 p.m. in the Borough Council Chambers on the 2nd floor of Hartley Dodge Memorial. The meeting is open to the public.

The future of 14 Lincoln Place property has been the subject of much debate after Saxum Real Estate purchased the building. Locals were surprised when Bow Tie Cinemas unexpectedly shuttered its doors in May of 2017. The Madison movie theater, last owned and operated by Bow Tie Cinemas, had shown movies for over 90 years. Bow Tie purchased the theater in 2013, and upgraded the projectors to digital and and added stadium seating.

In January Saxum submitted plans to the Madison Land Use Office for the redevelopment of the theater site. According to Madison Mayor Robert Conley, the application is similar to the concept that was presented last year to the Madison Historic Preservation Commission and included a mix of residential and commercial.

In advance of the meeting, Saxum Real Estate released an open letter to the public outlining some of their plans:

Introduction

Saxum Real Estate, a Summit, NJ -based, real estate investment and development firm acquired 14 Lincoln Place in Madison, NJ, commonly known as the Madison Movie Theater, in February of 2017. Shortly following the acquisition, Bowtie Theaters, the then tenant and operator of the venue, vacated the building with virtually no notice, which has caused controversy within the community, generated by a group of individuals who wish to save the building and its movie theater use. While there has been a great deal of information circulated about the project, much of it has been misleading or inaccurate.

This statement addresses those inaccuracies and misconceptions.

Background

The Madison Movie Theater had been widely marketed for sale by a local brokerage firm, The Garibaldi Group, for over a year before Saxum closed on the purchase. During that time any group or individual had the opportunity to bid on the property. Through that public sale process, few potential buyers emerged as the building’s severely dilapidated condition and specialty configuration, the economic instability associated with the (obsolete downtown) movie theater use and the below market rent Bowtie was paying, were too concerning for most investors. Having extensive experience with challenged buildings located in similar downtowns, such as Ridgewood, Montclair, Red Bank and Summit, Saxum was one of the only groups willing to risk their capital and take on the liability of owning
such a building.

At the time of the acquisition, it was Saxum’s intent to allow Bowtie to continue to operate within the space until Saxum determined the best long-term plans for the building. Upon closing on the acquisition, Saxum informed Bowtie that it would not raise rents even though Bowtie was paying less than $10 per square foot in rent. This rent would not cover the operating expenses, real estate taxes and mortgage payments. Even with a heavily reduced rent, Bowtie was unable to maintain its operation. With an average of only 14 viewers per showing, Bowtie gave notice to Saxum on Memorial Day of 2017 stating that they would be vacating the building within 72 hours. It is critical to highlight that Saxum did not propose or suggest raising rents for Bowtie nor did it request that they vacate the building.

Following the announcement of Bowtie vacating the building, a contingent of residents began to express concerns over the loss of the movie theater. Saxum explored a variety of different plans for the property which included discussions with several movie theater operators. Unfortunately, the operators had similar
feedback: the building was in need of significant repair and, given the current economics of the theater business coupled with the extremely low local viewership, it would be difficult for them to even pay the discounted rent that Bowtie was previously paying, much less restore the building to a useable condition.

While the building has not been for sale since Saxum’s acquisition, it is important to note that the Borough of Madison has never offered to purchase the building from Saxum. Additionally, the local interested citizen group has never approached Saxum with an offer to purchase the building. That group has had the
opportunity over the last 18 months to raise capital and come up with ability to support a credible plan and has yet to provide one.

Building Condition

There is a misconception that the 14 Lincoln Place building is, individually, designated as an historical building. While the building is located within the Historic District in Madison and is of an older vintage, the building itself is not defined as a key contributing building. Most historic architects would agree, that a building’s historical value is not based on just on its age, but upon the historic contributions its architecture and design make. The building was designed for its utility, not for architectural value and therefore does not have a great deal of historic significance. It is important to note that Saxum has extensive experience in renovating and restoring historical buildings in similar communities and has spent millions of dollars preserving the architectural features of buildings that have actual historical significance and value. This building does not warrant such an investment and it is economically not viable to do so. While the building is located within the Historic District, Saxum has the right to demolish the building.

The building is in significant disrepair. The previous owners did not properly maintain the building for decades. Professional engineers have confirmed that there are significant structural deficiencies and that the structural integrity has been compromised. The building is not up to current code standards for life/safety and it is a potential fire hazard if it were to be opened to the public. The building also contains a significant amount of mold and asbestos which create a hazardous health environment. All of these factors dictate that the building is so compromised that the cost to salvage the building is not an economically viable option.

Proposed Project Saxum has developed a project that will positively impact this great community. Saxum has presented plans and attended multiple meetings that included both the Planning Board and Historical Preservation Committee (HPC) and which were open to the public for comment. The meetings thus far were not required or mandatory, but simply an effort by Saxum to work openly with the community. Following its meetings with the Planning Board and HPC, Saxum has made significant design changes to address some of the design comments which were raised by the boards and arrived at a plan that holds significant benefits for Madison, which include:

• Saxum’s proposal includes the opportunity for a small theater to be created within the building. This space would serve as a viable option for a one or two screen theater operator to open a movie theater in town, in the event an operator were to step forward with a reasonable offer.
• Saxum’s proposal includes the contribution of 4 affordable housing units which the Borough of Madison has the legal obligation to provide.
• Saxum’s new project will also bring in an estimated $6.0 million in additional tax revenue over the next 20 years.
• Saxum’s project is only one foot and ten inches taller than the existing structure and will provide distinct retail and housing opportunities which will serve to enhance the walkability and vitality of Madison’s downtown.

While there has been a voice by some against the redevelopment of this site, there is an equally strong sentiment of support. Some may disagree with the best path forward, however there is a clear consensus among the residents in their desire to see the Borough of Madison flourish. Those in support of this project recognize the changing times and have witnessed many of their favorite local business closing over the years. New buildings bring much needed life and economic support to a downtown. The types of residents living in these apartments historically allocate the largest amount of their discretionary incomes to spending within their communities. Their residency dramatically improves walkability and creates the much-needed foot traffic that supports the local businesses, shops and restaurants and the new high-quality retail space further enhances the walkability of the downtown and contributes to the vibrancy and success of the community.

Summary

To correct misconceptions and incorrect information, we offer the following summary of facts:

• The building was publicly and widely marketed for sale by a third-party broker, at which point any individual or group could have purchased the building.
• Saxum did not propose raising rents on Bowtie and Saxum did not prompt Bowtie to vacate the building. Bowtie closed its operations of its own accord.
• With an average of only 14 viewers per showing, Bowtie abruptly gave notice to Saxum that they would be terminating their lease and vacating the building within 72 hours.
• Saxum discussed with other movie theater operators the possibility of leasing the building however the conversations did not materialize due to the condition of the building and economics associated with making a movie theater at this location a viable operation.
• The Borough of Madison did not offer to purchase the building from Saxum.
• The local citizen group has not approached Saxum with a plan or offer to purchase the building.
• The building is not identified individually as a key contributing Historical building, although it is an old building located within the Historic District in Madison.
• The building is structurally compromised, poses life safety concerns and health issues associated with the mold and asbestos and Saxum has the right to demolish the building.
• The proposed building is less than two feet taller than the existing structure.
• Saxum has proposed to include a small movie theater in the project in an attempt to attract an operator.
• Saxum’s proposal includes the contribution of 4 affordable housing units which the Borough of Madison has the legal obligation to provide.
• The development will generate an estimated $6 million in additional tax revenue over the next 20 years and will help enhance the walkability of the downtown by adding additional vibrancy and commerce to the community.

We at Saxum seek to create a project that will benefit the community both in the short term and for years to come. It will pave the way for a better and brighter future for downtown Madison. Thank you for all of those who continue to support our efforts.

The plans will be heard by the Planning Board to be scheduled once the application is deemed complete. Since the application calls for the demolition of a building in the historic district they also need to appear in front of the Historic Preservation Commission to be completed, Conley said.

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