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Real Estate Transactions | 12 Months Ended
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Dec. 31, 2022
Real Estate Transactions [Abstract] |
Real Estate Transactions | NOTE 5 – REAL ESTATE TRANSACTIO NS Discussed below are the real estate transactions affecting the presentation in our consolidated balance sheets as of December 31, 2022 and 2021, and the profitability determination in our consolidated statements of income for the three years ended December 31, 2022, 2021 and 2020. Real Estate Monetizations Beginning in 2020, we reviewed our various real estate holdings in light of the fact that our cash flow from cinema operations had been adversely affected by the governmentally mandated cinema closings ordered in response to the COVID-19 pandemic and that, for the foreseeable future, other sources of cash would be needed to support our operations and that only very limited funds would be available for capital investment in our properties. Between the fourth quarter of 2020 and the second quarter of 2021, we classified as assets held for sale disposal groups and thereafter monetized the following real estate assets: The Auburn/Redyard Entertainment Themed Center (“ETC”), the Royal George Theatre, Coachella (land), and Manukau (land). In addition, in the third quarter of 2021, we monetized our Invercargill, New Zealand, property, comprised of a cinema and ancillary land. A ‘disposal group’ represents assets to be disposed of in a single transaction. A disposal group may represent a single asset, or multiple assets. Each of these transactions is discussed separately below. Auburn/Redyard, New South Wales In January 2021, we classified our Auburn / Redyard ETC as held for sale, reflecting the fact that approximately 2.6 acres of this property was non-income producing land. This disposal group, which consisted of land, the ETC building and related property, plant and equipment, was transferred to Land and Property Held for Sale at its book value of $30.2 million (AU$39.1 million), being the lower of cost and fair value less costs to sell. No adjustments to the book value of the assets contained within this disposal group were required. The sale of Auburn/Redyard was completed on June 9, 2021, for $69.6 million (AU$90.0 million). As part of the transaction, we entered into a lease with the purchaser for the cinema portion of the Auburn/Redyard site. The gain on sale of this property is calculated as follows:
|  | June 30
(Dollars in thousands) |  | 2021
Sales price |  | $ | 69,579
Net book value |  |  | (30,231)
Gain on sale, gross of direct costs |  |  | 39,348
Direct sale costs incurred |  |  | (622)
Gain on sale, net of direct costs |  | $ | 38,726
Manukau, New Zealand In December 2020, we classified our non-income producing land at Manukau, New Zealand, as held for sale. This disposal group, which consisted of land and certain improvements to that land, was transferred to Land Held for Sale at its book value of $13.6 million, being the lower of cost and fair value less costs to sell. No adjustments to the book value of this asset were required. The sale of this land was completed on March 4, 2021, for $56.1 million (NZ$77.2 million), of which NZ$1.0 million was received on February 23, 2021, and the balance of funds was received on March 4, 2021. The gain on sale of this property is calculated as follows:
|  | March 31,
(Dollars in thousands) |  | 2021
Sales price |  | $ | 56,058
Net book value |  |  | (13,618)
Gain on sale, gross of direct costs |  |  | 42,440
Direct sale costs incurred |  |  | (1,514)
Gain on sale, net of direct costs |  | $ | 40,926
Coachella, California In December 2020, we classified the non-income producing land at Coachella (held through Shadow View Land and Farming LLC) as held for sale. This disposal group, which consisted of land and certain improvements to that land, was transferred to Land and Property Held for Sale at its book value of $4.4 million, being the lower of cost and fair value less costs to sell. No adjustments to the book value of this asset were required. The sale of this land was completed on March 5, 2021 for $11.0 million. As a 50% member in Shadow View Land and Farming LLC, our Company received the benefit of 50% of the sale proceeds, being $5.3 million. As the other 50% member was Estate of James J. Cotter, Sr., t hese actions were approved by our Audit and Conflicts Committee. The gain on sale of this property, including both our interests and those of the other 50% owner of Shadow View Land and Farming, LLC, is calculated as follows:
|  | March 31,
(Dollars in thousands) |  | 2021
Sales price |  | $ | 11,000
Net book value |  |  | (4,351)
Gain on sale, gross of direct costs |  |  | 6,649
Direct sale costs incurred |  |  | (301)
Gain on sale, net of direct costs |  | $ | 6,348
Royal George Theatre, Chicago In February 2021, we classified our Royal George Theatre as held for sale as part of our strategy to monetize certain real estate assets. This disposal group, which consisted of the Royal George Theatre building and the associated property, plant and equipment, was transferred to Land and Property Held for Sale at its book value of $1.8 million, being the lower of cost and fair value less costs to sell. No adjustments to the book value of the assets contained within this disposal group were required. On June 30, 2021, we received net sale proceeds of $6.8 million (net of closing costs). The gain on sale of this property is calculated as follows:
|  | June 30
(Dollars in thousands) |  | 2021
Sales price |  | $ | 7,075
Net book value |  |  | (1,824)
Gain on sale, gross of direct costs |  |  | 5,251
Direct sale costs incurred |  |  | (295)
Gain on sale, net of direct costs |  | $ | 4,956
Invercargill, New Zealand On August 30, 2021, we monetized our cinema building and land in Invercargill for $3.8 million (NZ$5.4 million) to the owner of the adjacent property. This property, not then classified as held for sale, was monetized in a transaction whereby the purchaser leased back the Reading Cinema to our company. The gain on sale on this property is calculated as follows:
|  | September 30
(Dollars in thousands) |  | 2021
Sales price |  | $ | 3,803
Net book value |  |  | (1,425)
Gain on sale, gross of direct costs |  |  | 2,378
Direct sale costs incurred |  |  | (6)
Gain on sale, net of direct costs |  | $ | 2,372
Real Estate Acquisitions Exercise of Option to Acquire Ground Lessee’s Interest in Ground Lease and Improvements Constituting the Village East Cinema On August 28, 2019, we exercised our option to acquire the ground lessee’s interest in the 13-year ground lease underlying and the real property assets constituent with our Village East Cinema in Manhattan. The purchase price under the option is $5.9 million. The transaction is expected to close on July 1, 2024. Further information is at Note 20 – Related Parties.

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