LA-Based Outdoor Cinema Plots National Expansion

At a time when the movie theater industry is struggling, Los Angeles-based Rooftop Cinema Club is plotting its expansion, which includes opening a new location in Santa Monica and several more locations across the country in the next couple of years.

“Concepts like ours are becoming a must-have” for landlords, Rooftop Cinema Club founder Gerry Cottle told Bisnow.

Rooftop Cinema Club’s model is not traditional. The permanent outdoor cinema concept targets underutilized spaces for its theaters and is especially focused on the tops of parking garages. Cottle says that these spaces are often the last place people want to park because their cars aren’t covered there. They’re located in urban areas, around other draws like restaurants, entertainment and services, which Cottle says is where the company wants to be. Parking garage rooftops also offer stunning views that make a great backdrop to a first-run movie or classic film. 

The juxtaposition of the parking garage and the outdoor theater is part of the experience. 

“We’re the last thing you expect on the top of the parking garage,” Cottle said. “That’s what I love about them — I love the wow factor.” 

Building a Rooftop Cinema Club means investing anywhere from $1M to $2M on build-out of these spaces, adding a bar and sound system, moving utilities such as water and power to the site and sometimes even bathrooms.

The company is comfortable making these sizable investments because it is planning on sticking around: Leases are signed for at least 10 years. 

Figuring out how to structure a deal for a space that wasn’t intended to be rented out is streamlined by implementing percentage-based rent. Cottle says while it varies based on location, they usually end up paying about 8%-10% of revenue at a location as their rent. The outdoor cinemas are usually open between seven and 10 months per year as weather permits, so the rent is also structured so it is paid throughout the year.

The model seems to be working. RCC has 10 locations open now and is working on opening a new location this month in Santa Monica, on the rooftop of a publicly owned parking garage in downtown Santa Monica. At a city meeting in April, members of the nonprofit that partners with the city to manage operations in its downtown said they were excited about the possibility of the parking structure having more occupied spaces and more people being drawn to downtown.

In the next three years, RCC is planning to open 11 new locations in Texas, Florida, Las Vegas and Atlanta. Doing so would more than double the number of existing locations of RCC.