Observing from beyond the solar system, a cultural outsider looks in.

Wednesday, March 25, 2009

Economics 101 and The Villagers Attack

Muvico has sold its Egyptian 24 multiplex cinema in Arundel Mills to Cinemark, along with 3 other theatres in its upscale, modern movie palace chain. The Arundel Mills theatre is one of the top-grossing theaters in the nation. The Muvico chain has built some of the most opulent modern multiplex movie houses in the country, and in better economic years, they have been highly successful. But Muvico sold the 4 theatres in a bid to stave off bankruptcy as a result of the economic downturn.

But Florida-based Muvico ran into trouble as the recession hit the credit markets. The company said it would use the proceeds of the sale to retire a $55 million debt to iStar Financial.

The Miami Herald and other Florida newspapers have reported that the company has been in default since October and is in danger of being taken over by iStar. The other three Muvico theatres included in the sale are in Florida.

The worst economic conditions since the great depression have caused numerous other corporations in all kinds of industries to go bankrupt. It seems like every day, we hear about a major bank in trouble, the entire Detroit auto industry ready to go down the tubes, or some other such impending economic disaster.

Outside the banking and auto industries, other corporations that have recently failed include Nortel Networks, CompUSA, The Sharper Image, Shoe Pavilion, Linens ‘n’ Things, Mervyns, Circuit City, Levitz Furniture, Lenox, Lillian Vernon, Mattress Discounters, Gottschalks, Trump Entertainment Resorts, and Waterford Wedgewood, to name just a few.

The historic Senator Theatre in Baltimore recently closed its doors and stopped showing first-run films for the first time in 70 years, but if you read the Baltimore Sun, you might gather that this particular business failure exists in a void that isolates it completely from disastrous economic conditions. Other businesses have failed because the housing bubble burst, the credit industry collapsed, and Wall Street’s ponzi scheme was finally revealed. Not The Senator. That one business failure is all Tom Kiefaber’s fault…at least if you read the Baltimore Sun.

This, in spite of the fact that the Maryland Daily Record has reported that Kiefaber stopped making payments on The Senator's mortgage in October, exactly the same month that Muvico, one of the biggest and most powerful movie chains in the country, started having problems. So, was there really nothing wrong with the economy in the past few months that might have affected The Senator? Was it really all Kiefaber's fault?

There is a bizarre local reaction of scorn and aggression toward Tom Kiefaber, now that his heroic efforts to preserve The Senator over more than 20 years (and plan for its future as a multi-purpose entertainment community asset) have finally left him bankrupt. It begins to resemble something out of the Salem witch trials or Nathaniel Hawthorne’s early American novel, “The Scarlet Letter.” By blaming Tom for something that is the result of economic conditions beyond his control, city officials and the Baltimore Sun have incited some kind of weird mob scene, with the villagers lighting torches and closing in on the imagined villain, who has actually done nothing wrong. In Kiefaber's case, he has in fact done a lot right for the community by sacrificing so much to keep The Senator available as a community resource.

If there was anything remotely funny about it, it would remind me of this:

Unfortunately, this isn’t Monty Python. It’s real life, and Tom Kiefaber’s family, while going through what must already be some of the hardest circumstances a family can face, is also being subjected to public scorn and ridicule directed at their most publicly visible family member. If this is the thanks that Baltimore gives to the family that has preserved The Senator for all of us, what kind of illogical, vindictive mob have we become?

Labels: , , , , , , , , , , , , , ,


Post a Comment

Subscribe to Post Comments [Atom]

<< Home