Despite strong public reaction to the news that the Dendy cinemas in Byron Bay are set to close in October there remains hope that a movie theatre will continue to occupy the site.
Echonetdaily understands as many as five other cinema chains are interested in the property.
And in related news, the anchor tenancy of Byron Plaza, Woolworths, changed hands last week for $18 million.
Gold Coast developer Robert Badalotti of Azzura Developments now owns the entire Plaza, including the cinema and the site of the soon-to-be-built Dan Murphy’s store.
Managing agent for the property, Jamie Bourke of First National Commercial Gold Coast, told Echonetdaily, ‘I am in negotiations with two theatre operators right now. I have another three who have been trying to contact me.’
Mr Bourke is the commercial asset advisor for Mr Badalotti, who last Thursday signed on the dotted line to purchase the Woolworths building.
Mr Bourke says Mr Badalotti ‘has every faith in Byron’ and that buying the Woolworths site on a six per cent yield demonstrates that. ‘With the $18 million for the site plus stamp duty of around another million, that brings it down to less than six per cent yield. It just shows that Mr Badalotti has a lot of confidence in the town,’ he told Echonetdaily.
Mr Bourke says that now Mr Badalotti owns the entire retail complex, which comprises 13 tenancies in all, he has plans to refurbish the whole precinct soon. Mr Bourke says that once the work is complete, the centre will be ‘like new’ and ‘worth about $50 million’, hopefully with a new cinema.
Mr Bourke has denied rumours that a deal was done with Woolworths, who also own the Dan Murphy’s chain, to remove the cinema so that a liquor licence would be easier to obtain. Asked as to whether the Ramada and KFC were among the new tenants, he had no comment.
Mr Bourke did say that claims made in a press release from Dendy cinemas were false and he spoke out on the weekend after reports said that it was an increase in rent that forced the Dendy cinemas closure. He said that in fact not only had the rent not increased but that he had offered a reduced rent, which was refused.
‘The Dendy cinema rent was not increased. Dendy came to us and asked for a reduced rent,’ said Mr Bourke.
‘We offered them a one-year lease at a considerable reduction in rent – so they could see the results of the refurbishment – to try keep them in the town.’
Mr Badalotti said he didn’t want to see them go because they are an integral part of the entertainment precinct in Byron Bay. But he said, ‘they refused our offer and tried to get us to lower it further. Dendy are just trying to save face in the town they are deserting,’ he added.
‘We feel it is a real shame that the cinema is leaving, which is why we are going down the track firstly of seeing if we can replace that, but we are looking at other things as well. It may become hostel accommodation or may become a medical centre. We are looking at varied opportunities that will get the best return for our client and the best mix for that particular part of town.’
The new Dan Murphy’s operation has signed a 27-year lease; that may change – they are in discussions to make it longer.
‘Dan Murphy is going under the theatre and into what was Crazy Clarke’s to the back corner trading area’, said Mr Bourke.
‘Woolworths will have a whole new front and the older buildings at the back will also have a new roof as well as new shopfronts, awnings, roofs, paving, ceilings and lighting. With the relining of the car park and landscaping, it will be like a new centre. Mr Badalotti will spare no expense. He will do what it needs. The tenants that are currently there are staying and the other shops will be amalgamated and refurbished.’