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Drive-In Theaters Are Providing Temporary Benefits To Developers And Mall Owners

Houston

It’s summer, and the entertainment-loving public has few options. Stay-at-home orders have led to a myriad of closures and cancellations, and reopening phases in some states have been halted or reversed in recent days, as coronavirus cases continue to climb.

Enter the drive-in theater, an unexpected winner in the pandemic fallout. Often overlooked in the era of massive chains like AMC and Regal Cinemas, drive-in theaters are experiencing a boom in popularity as people seek safe ways to have fun outside of their own homes.

That boom hasn't gone unnoticed. Some companies are pivoting — and fast — to provide pop-up drive-in theaters, partnering with local developers and property owners to create new revenue opportunities.

Drive-In Theaters Are Providing Temporary Benefits To Developers And Mall Owners
The Kilburn Live Cinema Pop-Up at Park Meadows in Denver.

The drive-in theater business was relatively small before the pandemic. There were 305 permanent locations in the U.S. as of October, according to the United Drive-In Theatres Association, which doesn’t track pop-up locations. The number of drive-in theaters has been decreasing steadily for decades. 

Then the pandemic happened.

Events companies like Kilburn Live, a division of Kilburn Media, began to consider their options in February when concerns around the effects of the pandemic in the U.S. started to grow.

“As early as February [we] realized, looking at the landscape internationally, that we might be in trouble in terms of a large pause, so we pivoted then,” Kilburn Media CEO Mark Manuel told Bisnow.

Before the pandemic, Kilburn Live had rolled out immersion events like the Dr. Seuss Experience and the Nerf Challenge and was planning for the Peanuts Experience in 2020. Now, the company is focused on a different offering: its Cinema Pop-Ups.

“We needed large parking lots, and the natural answer to entities with large parking lots are the malls or the commercial complexes like The Star,” Manuel said.

The Star is the 91-acre campus that includes the Dallas Cowboys’ world headquarters and practice facility in Frisco, Texas. Kilburn Live formed a partnership with the Dallas Cowboys and opened a pop-up drive-in theater on June 26 at the complex.

Kilburn Live also formed a partnership with Brookfield Properties. On the same day that the drive-in theater at The Star opened, the company also opened pop-ups at the Park Meadows mall in Denver, Town East in Dallas, Willowbrook in Houston and Woodbridge Center near Woodbridge Township, New Jersey.

The company is working on more partnerships across the country. Five locations are underway, and another 10 are slated to open by mid-July. The expansion doesn’t stop there: The company has signed contracts for a total of 32 drive-in theaters around the U.S. and is open to more.

Of the 32 anticipated venues, about 95% are in mall parking lots. The number of available parking spots varies, and capacity at the current open locations can be anywhere from 140 to 225 cars.

Typical of a pop-up venture, Kilburn Live has opted to lease parking lot space for an average of 60 days, and nothing longer than 90 days, owing to the uncertainty of just how long the pandemic will restrict the reopening of businesses.

“When we originally planned this, I would've said by August, September, most of them would probably come down,” Manuel said. “I don't know anymore. I really don't.”

Drive-In Theaters Are Providing Temporary Benefits To Developers And Mall Owners
The Carflix Cinema location adjacent to Dezerland Park in North Miami.

Aver Productions wasn’t in the drive-in theater business before the pandemic. The audiovisual company specialized in technology for events at venues in Miami and the broader South Florida area and also worked with brands in other cities.

When cancellations started to appear, the company brainstormed ways to keep its staff employed. Carflix Cinema was one of several project ideas that came up. As an AV technology company, Aver Productions already had access to high-quality equipment and experienced staff to manage it. What it really needed was space.

“What I can tell you is, there's not a lot of space. There wasn't a lot of options, when it came to locations, especially a location like the one we have, with the size we have,” Aver Productions founder Eddie Bernal told Bisnow.

The company approached Michael Dezer, the developer of Dezerland Park, a large indoor theme park in North Miami. Bernal said the idea was met with instant enthusiasm, and while several available land parcels were considered, the company opted for an empty lot directly across from Dezerland Park.

The rationale was firmly based on the need for services and support. By opening next to Dezerland Park, Carflix Cinema could benefit from security, electricity and internet services provided by the developer. Dezerland Park was also able to help with applying for permits, logistics and dealing with the city of North Miami. Carflix Cinema opened on May 22, accommodating about 200 cars and 10 food trucks.

“We've been able to sell obviously a crazy amount of tickets — the first weekend that we opened, people were even reselling tickets out on the street, that's how crazy [it was],” Bernal said.

Both Bernal and Manuel noted the difficulty in obtaining permits to operate pop-up drive-in theaters, which must be approved by cities. Both companies began the process months ago, and have only recently secured permits.

Now that the concept has been proven, Bernal is looking at how to transition the drive-in theater to a drive-in venue, and expand to other locations in South Florida. Hotels and other traditional venues remain closed, but companies are still looking to move ahead with campaigns and events.

“We've been in talks with a lot of entities and a lot of companies that are looking to put down actual live events, like stand-up comedy, concerts and things like that,” Bernal said. “That way, we can basically try to sell the days, rather than selling tickets.”

Bernal is in expansion talks with other companies in South Florida, and is open to partnerships in other cities. However, he said the ultimate goal is to revert back to being an AV technology provider and let others handle the actual running of drive-in venues.

Drive-In Theaters Are Providing Temporary Benefits To Developers And Mall Owners
The ticket booth at a prior location of the Blue Starlite Mini Urban Drive-In in Austin.

For Josh Frank, owner of the Blue Starlite in Austin, Texas, drive-in theaters are not a recent revelation — they’re an extension of his passion for film. Frank opened the first location in early 2010 and has since opened up two other locations in Round Rock, Texas, and the small mountain town of Minturn, Colorado.

“My business model that started 10 years ago was all based on the idea that there's lots of land out there that developers just sit on for years and do nothing with,” Frank said. “The idea was, turn those empty lots that are used for nothing into urban drive-ins.”

Like Kilburn Live and Carflix Cinema, Blue Starlite locations do not own the land they sit on. In Austin, Frank’s method has been to simply approach the owners of empty lots to discuss a lease. The Round Rock and Minturn locations were secured by approaching local city councils.

Most drive-in theaters tend to have 10 or 15 acres. Frank said he only needs 2 or 3 acres to accommodate one or more screens, as well as the audience. Typically, the number of cars allowed at each location is less than 40.

This has allowed him to set up shop in areas that are becoming trendy. The Austin location has moved around over the past decade but has resided in the Mueller neighborhood for a few years, pre-dating the aggressive development that has since occurred there.

“I go in there, I set up my drive-in, it gets lots of attention, the area gets attention, and a couple of years later, the guy that rented me the land for a modest rate that makes it worthwhile for me, they end up selling their property for millions of dollars,” Frank said.

The selling point for the Blue Starlite brand is less about the size and more about the intimacy. Frank’s screens are either made from found objects or are composed of custom-made trailers with inflatable screens and projectors.

Before the pandemic, Frank could count on “hit or miss” Wednesday and Thursday nights, and busy Friday and Saturday nights. Now, he’s selling out every night.

“I went from being open three to four days a week to being open every night of the week,” Frank said.

Amid the rush of interest in drive-in theaters, Frank said he would be happy to expand, but only with the right partners.

“I haven't thought much about [expansion] in the last three months honestly, because I haven't had time to, but I have seen all of these other versions pop up. Clearly, if you read about them, you know they're only going to be around as long as the people behind them are making a lot of money,” Frank said.

“That doesn't interest me. What interests me, and what I've even done with my portable ones, is, I like to pick somewhere that becomes a long-term space, even though the infrastructure is removable, I feel that's very important to one's brand, and to the experience.”

Drive-In Theaters Are Providing Temporary Benefits To Developers And Mall Owners

The rise in pop-up drive-in theaters has allowed companies like Kilburn Live and Aver Productions to retain their staff and make some money during the pandemic when other options were limited. But as a revenue stream, it’s not comparable to what they were making before.

“A production company like us, we're used to making anything from $30K to $60K a day in revenue, and that's not dealing with venues, that's simply us putting the screen in your backyard,” Bernal said.

“Going from that to generating $15K of revenue a day, and at the same time, having to use that money to upgrade and run the entire venue, from police officers to permitting, to generators to everything, the money, it's just not there, it's not substantial.”

Manuel said that with all the uncertainty around the pandemic, pop-up theaters could be around for the rest of 2020, though he hopes to be proven wrong.

“No one's making a ton of money off of these things,” Manuel said. 

“It's innovativeness, but you've really got to keep the ticket prices down … because there's so many people out of work, so many people looking for entertainment, you really have to try and find the right medium where the mall's happy, you're happy and the guests are happy.”

Events and production companies are some of the biggest, albeit temporary, new players in the drive-in movie theater business. But over the past three months, Frank has also been approached by ordinary people who are interested in starting one in their own city.

“I put them in touch with my tech guy that gets me all my deals, I give them advice. As long as it's not going to impede upon what I'm doing, I'm happy to share my knowledge to an extent,” Frank said.