Assessing iPic

The story of iPic in Delray is a long and complicated one.

So let’s sit for a spell and unpack a little of it because it’s important to try and understand.

The CRA board chose iPic over three other proposals in August 2013. That was six years ago.

Ipic’s winning bid promised a theater and office space on land that once housed the library and the Chamber of Commerce.

But the history of that RFP goes back even further than 2013.

I was on the commission in the early 2000s when we moved forward with a complicated transaction to move the chamber and library and free up the land for redevelopment. The goal was to give the chamber and library new and better facilities replacing what had become dilapidated buildings.

Both of those goals were achieved—with the chamber occupying beautiful space under the Old School Square Parking Garage and the library occupying larger space on West Atlantic Avenue. The library’s board believed that the library would better serve the needs of the community on West Atlantic.

We agreed.

It was not an easy decision and it was not without controversy either.

I remember hearing from residents who didn’t want the library to move to the West Atlantic corridor. One citizen put it bluntly: “why would you put the library out there with those people?”

Yep, that was said.

It just made us want to move it more.

Still, the transaction was a complicated one since the Chamber had a lot of years left on a very sweet lease and there were a lot of moving parts and entities involved.

But it got done, because that was an era where people were able to work together. I sure miss those days.

Once the deal was struck,  an RFP was issued and awarded to a group that envisioned a mixed use project and a hotel. But the Great Recession hit and the deal never got off the ground. Eventually, the CRA issued a new RFP and that led to the iPic deal.

It should be noted that CRA staff liked the iPic bid, but did not rank it first. There was another theater concept—an European style theater if I remember correctly—that they ranked ahead of iPic.

But once the Boca-based iPic was chosen, the CRA staff embraced the concept and worked to make it happen.

The proposal sparked controversy—as so many projects do—over concerns about traffic, design and parking. Those are the usual bugaboos—all understandable.

Mix in personalities, ancient feuds, politics, misinformation and the difficulty of getting things done and it took nearly six years from awarding the RFP to opening night. When iPic won the deal the expected opening date was 2016—it took twice that long.

It seems like the entire town showed up for the grand opening party which may have been the best party Delray has ever seen.

The reviews were mostly glowing—the building was next level beautiful, with living walls of plants, striking art work and plush seating.

The office space—still in the process of being leased—is also beautiful and much needed in our downtown to complement and diversify our abundance of food and beverage options.

Since then, I’ve been to iPic twice. Most of my friends have gone as well— a time or two.

We tend to agree—it’s a good experience but very expensive and not something we see ourselves doing regularly and many of us are movie fans who go frequently.

That said, I supported iPic and hoped the concept would succeed creating a new use downtown and adding jobs to our city since there were promises—albeit sometimes vague ones– to move their corporate headquarters here. It’s important for cities to be business friendly and to have good economies. That doesn’t mean compromising your ethics, selling your soul or offering back breaking incentives. But it does mean hanging an “open for business” sign at your City Hall and being reasonable. It also means welcoming debate.

That said,  I and many others were disappointed in the tone of the debate surrounding iPic.

And while I sympathized with the views and concerns of opponents, I thought more than a few crossed the line with personal attacks on those who supported the project. I also thought some elected officials pushed it by supporting the use but adding costly conditions (outside the scope of the RFP) making it more difficult to succeed.

I felt so bad about the treatment, that I invited iPic CEO Hamid Hashemi to lunch to tell him that despite the vitriol Delray was a nice place and many people wished him and his company success.

So when the news broke last week that iPic missed an interest payment on over $200 million in debt and may have to consider bankruptcy it stirred a lot of emotions. This week, bankruptcy became the path and iPic will operate as usual until it either restructures or is sold.

There was the usual chorus of “I told you so’s” and a slew of people wishing the company ill will which I think is wrong.

Do we really want to see a company fail? Do we want to see an empty building in the heart of our downtown? Do we want to see iPic staff lose their jobs because management loaded the company up with debt?

I don’t think so.

You know who should be mad?
iPic shareholders who have seen their stock plummet.

The retired teachers who depend on their Alabama pension fund also have a right to be angry and concerned since they funded a large chunk of that debt.

And yes, citizens of Delray are justified in feeling disappointed. Our downtown’s real estate is precious. It’s not a good feeling to see a high profile project threatened.

The initial financial blogs quoted iPic as saying sales dipped as a result of the government shut down earlier this year. That really doesn’t pass the smell test.

Round two explanations made more sense: iPic was a trendsetter but other chains are loading up on the luxury too—often at lower ticket prices. So there’s competition in an industry being disrupted by streaming services. Add crushing debt to that equation and all the innovation in the world or the biggest rooftop bar won’t save you.

Still, many people in this community supported the downtown iPic. I did.

While pricey, we liked the idea of another use in the downtown and we liked the idea of Class A office space and a corporate headquarters too.

We liked that iPic offered corporate event space, special events and unique programming through partnerships with entities such as Netflix. We trusted their projections and studies that showed that this market could support an iPic so close to the Mizner Park location.

We liked that business publications were featuring the company and that it was able to go public and was considered an innovator in its space.

So seeing it fall into bankruptcy is no reason to celebrate.

This is where strong communities come together and make lemonade out of lemons. I hope and trust we will do just that.

So what can we learn from this?

iPic Delray has not struggled because of parking or traffic woes.

The local theater was not challenged because downtown Delray isn’t strong enough to support the use.

Clearly, the business model is deeply flawed.

But other chains are managing to figure it out.

Living Room Theater at FAU regularly sells out offering offbeat, independent and foreign fare.

Alamo Drafthouse and other innovative chains seem to be doing well and drawing crowds.

I hope iPic finds a good strong buyer with solid vision and a healthy balance sheet. I also hope the Alabama teachers don’t get crushed in the process. That one might be tough…

It would be great if the Class A office space that was built gets leased and brings much needed jobs to our city.

Regardless, whatever happens we should find ways to work together to pick up the pieces and make this a success somehow, someway. That’s what strong towns do.

What a concept, huh?

 

 

 

Comments

  1. Bruce Leish says:

    As you stated, we do not want to see an empty building in downtown.
    I would however like to see this bankruptcy as a wakeup call for IPic management and the CRA/Cury Commission. This theatre model was not in the best interests of the residents of Delray. A publicly owned site, a former library no less was given over to a use that mist residents will use once or twice or never. I hesitate to use the word elitist use, but that really is what this site became. If it was going to be a theatre, it shoukd have been a reasonably priced downtown theatre that the majority of residents coukd enjoy and support. This theatre, unlike its Boca cousin doesn’t even offer an area of less expensive seats. $29 is so out of line with normal movie pricing that ir seems like we’re in a time warp and ended up in the year 2100.
    They need to lower their prices and they’ll have lines out the door. And although the building is nicely designed, it should have had first floor windows along the street as required in the development regulations. From an urban design standpoint, it destroys the streetscape.
    I wish them success in reorganization an hope they realize their biggest flaw. Not enough people want to go to $29 movies.

  2. Frances Bourque says:

    Yes!!What a Concept!!!!

  3. Robert J Wieder says:

    Rooting for negativity results on Delray’s IPIC venture is so very similar to “talking head comedians” cheering for a USA recession to initiate before the 2020 election…..so that one party and it’s candidate will hopefully lose the election…..
    This is #GoodForTheFew
    And NOT
    #POSITIVEFORTHEMANY !!!

    Stinkin Thinkin has no credence anywhere….
    IMHO

    Bobby Delray

  4. Christine Kig says:

    Jeff, THANK YOU for writing the backstory to our current situation. As always, you present the situation honestly and fairly, unlike all of the other “stories” that are now overtaking FB and groups within FB. Even as a chamber, we had specific goals for the city, some even discussed with Kelly Smallridge, that were unattainable at the time. Well now we may have a potential opportunity to improve and diversify the business community on and around Atlantic Ave. Your leadership and ability to see the big picture is admirable. Thank you for your continued voice in the health of our city.

  5. Jeff,
    You are spot on, and your sentiment reflect most of the people in Delray and beyond.
    I too hope the iPIC sorts things out as many do restructure and reinvent themselves to being solvent.
    Your leadership is needed and hope many follow in your footsteps.
    Roy Assad

    • Jeff Perlman says:

      Thanks Roy.
      Truly appreciate your kind comments.

    • Jeff,

      At first I had my concerns about the location of the theatre. Once the commission approved the project I became supportive of the project. For years I went to the Ipic in Boca because of the comfort of the seats and the ability to order food without even leaving my seat. I’ve been to the Delray iPic multiple time since it’s grand opening, and had an incredible experiences every time. I hope they are successful with the restructuring

    • Christine King says:

      Completely agree, Roy!

  6. Marie Speed says:

    Agree 100 percent, Jeff. This is disappointing and I really wanted it to succeed. But during the time between its approval and its opening its market had changed and the competition was offering many of Ipic’s amenities at a lower price, as you pointed out. Sigh. And it was the party of the decade.

  7. Thanks for sharing the history of the project, there are many complex details surrounding this project, and Ipic themselves. I did not realize that Hashim Hamid founded Muvico, which was ultimately taken over by Regal. Both those names are still powerhouses in this region and that man deserves respect. With that being said, lets find something transformational and sustainable for decades to come with that space, which is impressive and comfortable to be in! If it does not work out being a theater, it could be a great convention center too

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