A Vancouver city councillor is lobbying the B.C. government to modernize the liquor laws banning licensed theatres from screening movies.

Heather Deal says the province's alcohol regulations are threatening to run a beloved East Side landmark, The Rio Theatre on Broadway, out of business.

"We've hit a crisis point," Deal said. "We're going to the province and asking them to… work with us to ensure this incredibly important cultural space continues to survive."

The theatre has alternated between movie house and live music venue since it was bought out in 2008 by current owner and general manager Corinne Lea.

For the past 15 months, Lea has fought to obtain a liquor-primary licence to start serving booze at its concerts. On Thursday, it was granted – on the condition that the theatre ceases to show films.

"I was devastated and so were all my staff," Lea said. "We were under the impression that as long as we don't serve alcohol [during movies] we should not have a problem."

With movie audiences dwindling across North America, Lea argues The Rio cannot sustain itself on film screenings alone. Unlicensed live music events are similarly unprofitable.

"Most live concerts, they want weekends. They're not booking Sunday, Monday, Tuesday nights," Lea said. "That's why from my point of view, it was actually a smart business plan to have movies on the slower weekday when you don't typically have a concert."

But the Liquor Control and Licensing Branch doesn't agree. The theatre's licence was issued with a condition stating that "under current regulations and policies, you cannot operate as a licensed live theatre at some times and an unlicensed movie theatre at others."

"This establishment is not permitted to show movies or any type of cinematic screenings at any time," it said.

After spending roughly $15,000 on the licensing process, Lea chose to express her frustration by hand-picking the final film to be screened at the theatre. On Sunday night, a showing of The Girl with the Dragon Tattoo was followed by the rabble-rousing 1978 classic Network.

"It's an expression about how we feel," Lea said, quoting a famous line from the film: "I'm mad as hell, and I'm not gonna take it anymore."

Deal has put a motion in to discuss the Rio's dilemma at the next council meeting, arguing that allowing Lea to test out her proposal on a trial basis "costs the province nothing."

If a trial proves successful, Deal says the province could consider going a step further and permitting liquor sales at the movies.

To avoid underage drinking, the councillor argues theatres could only allow alcohol in lobbies, where drinking could be monitored, or during adults-only events such as midnight screenings of the Rocky Horror Picture Show.

"Maybe someone can have a beer before they go and start throwing rice and toast around," she said.

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