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By Alessia Proietti

retrofitting building

Carnival Cinemas applies to rezone for residential development

Apr 18, 2024 | 12:01 PM

Carnival Cinemas has a new vision in mind for their location in Red Deer’s Capstone neighbourhood.

City council passed first reading on Monday to amend the Land Use Bylaw and the Capstone Area Redevelopment Plan to rezone 5402 47 Street from CAP-TD Capstone Taylor Drive District to CAP-PR Capstone Primarily Residential District. The rezoning is being fast tracked for the corner lot to facilitate a pending mixed use, residential and commercial development on the site.

Bill Ramji, owner of Carnival Cinemas along with the building and 2.32 acres of land it sits on, said that as of now, the current building can only be used for commercial purposes.

However, he and another entity, who cannot be named just yet, have plans to make an apartment building on the parking lot, and retrofit the current building to have apartments and a small commercial area on the main and further dwellings on the second floor.

Ramji put the building up for sale in August 2022 with intent to relocate the cinema but said he has had challenges in finding a buyer.

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READ: Capstone vision unchanged with Carnival Cinemas looking to relocate

“We tried and cast a huge net out there, trying to attract potential buyers, investors, people that could relocate here, build-to-suit, everything and anything possible we have tried here; there’s just no movement. There was movement on a partial side of it,” he said. “There was nobody out there, whether it was one entity or different entities that could take it over, so it just dragged on. Finally, when we had this opportunity, we decided it was the best use now going forward.”

Ramji said the project is dependent on the rezoning application. If approved, the next step will be to apply for a development permit.

He said while it’s still too soon to confirm, he may maintain some ownership of the land.

Ramji says the closing date for cinema operations will depend on the process with the City and the construction industry. He said he will keep it open as long as he can; but if all goes smoothly with rezoning and permits, the theatre could cease operations at the location by the end of the summer.

While he would still like to relocate, he says market conditions will impact his decision. As a second-run movie theatre, he explained the pandemic took a toll on their industry, with productions stopping and leaving larger cinemas to hold onto films for longer periods of time. During this time, people also increased subscriptions to video-on-demand services, streaming, and purchasing of home theatre equipment. Writers then held strikes in Hollywood, causing further production delays.

“Last year was almost trying to catch up but it wasn’t there and this year didn’t help either,” he said. “We are a large entity. When you sit on a site like this with property taxes, with our admission prices, with maintenance upkeep of the building, utilities; it takes a toll on us.”

He added, a major expense includes royalties to distributors for the movies, which can range from 35 – 60 per cent of ticket sales. With admission prices at just five dollars, he said 50 people a week leads to only $250 in gross revenue. The theatre is limited in increasing their admission costs, he says, as they are not a first-run cinema and would have to factor in the costs of starting operations from scratch in a new facility.

The surrounding properties of Carnival Cinemas are zoned CAP-PR to the West and CAP-TD to the north and south.

Currently, there is a high-rise residential project being built in Capstone, west of the cinema.

READ: City says project ground-breaking brings confidence to downtown Red Deer and anchors community vision

“Since our site is at the gateway of Capstone, I’m very happy with the new project that will go here because it is at the entrance. When the city first expropriated one acre of land from us, that was way back in 2015, it was the City’s vision that they could create this boulevard in front of us and open up the Capstone area,” he said.

“If the movie industry was thriving for us in this location, yes, we would be able to do it and and we could still hang around here; however, that’s not the case. I’m happy and I would really like to see this area develop and I’m sure when our project comes on board it will start bringing in more developers, more investors, more people that want to see themselves relocate to Capstone.”

A public hearing will take place at council’s May 13 meeting.

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