IMAX--Kingsport Economic Development Board approves tax incentive to lure theater to Kingsport
June 6, 2012
SHARON CASKEY HAYES
KINGSPORT — IMAX may be coming soon to a theater near you.
The Kingsport Economic Development Board approved a “payment in lieu of taxes” (PILOT) plan Tuesday to encourage the construction of an IMAX theater at the Kingsport Town Center.
Mall owner Somera Capital Management and Frank Entertainment are expected to invest at least $8 million to expand and renovate the theaters at the mall on Fort Henry Drive. Somera will fund the construction part of the project, while Frank Entertainment will pay for the interior furnishings and theater equipment.
Construction is expected to begin later this year.
Jake Farver, senior vice president of Somera Capital Management, told KEDB members Tuesday that Frank Entertainment plans to locate at the mall with or without incentives.
However, the company will be more likely to include an IMAX if the city kicks in some type of motivation.
Jeff Fleming, assistant city manager for development, suggested implementing a PILOT agreement, in which Somera Capital Management would be required to pay property taxes based on the current value of the property — and not based on the value once the additions and renovations are completed. That agreement would remain in place until year eight, when Somera would be expected to pay taxes based on the value of the property at that time.
Fleming pointed out that every theater that’s located at the mall or considered locating at the mall has asked the city for financial help. He said the city has consistently turned down such requests because other theater companies haven’t offered anything other than theaters.
Fleming said Frank Entertainment’s plan is different — featuring an entire entertainment complex.
“Either way, they’re going to be doing a new theater in Kingsport. It’s just a matter of whether it’s going to have an IMAX or not,” Fleming said. “And since it’s such a value-added proposition that is not currently in the Tri-Cities region, we felt like that was something that should be encouraged.”
Frank’s complex will feature 12 theater screens including five 3-D screens, a full-service restaurant and lounge, two bars, a soft play area for children, bumper cars, laser tag and laser maze arenas in a two-story environment, plus 24 lanes of regulation bowling.
If Frank Entertainment brings an IMAX format Extreme Screen to the complex, the Kingsport Town Center will become a destination place for folks across the region, said Kingsport Mayor Dennis Phillips.
“There is nothing that Kingsport needs more than a good movie theater,” Phillips said.
In all, Somera Capital Management plans to add 40,000 square feet of space to the current 27,000-square-foot theater for Frank Entertainment. Farver said the goal is to start construction on the 40,000-square-foot addition in the third quarter of this year. The addition will be located in the parking lot facing Fort Henry Drive, adjacent to the theater area.
The new theater section is set to open by Easter 2013. The existing theater will then be converted to the family entertainment center and will open by late summer 2013. The current theater location will remain open for business during the construction process.
Phillips told KEDB members he wanted some assurance that construction will indeed begin in the third quarter this year. As a result, KEDB members voted to approve the PILOT plan, contingent on Somera Capital Management beginning construction in the third quarter.
“Our goal is to be under construction in 90 days,” Farver said.
Frank Entertainment plans to take control of the theater on July 1. The theater is currently operated by Marquee Cinemas, whose contract expires June 30.