See the third letter on this link advocating non-profit status for the Varsity so as to keep it operating.
I'd say it's a function of commitment; how many people are willing to put up money in the way that Weaver Street Market is organized to support a community movie theater? That's the real issue. There is no reason not to try!
In France, where I spend a lot of time, the city of Nice acquired a theater with many problems and has turned it into a quite successful operation. Instead of concentrating on two screens, tho, the Nice theater has about 6 smaller ones and perhaps 30 films shown over the course of each week.
I think other formulas need to be tried both in organizing the theater and in what and how films are shown. I do not know what the architectural considerations may be but perhaps the same idea would work even better in another space.
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