Thank you to everybody who is still adding their comments and thoughts.  This one from Kevin Moore really got me thinking:

It IS possible to make old cinemas commercially successful – look at the website for the Rex cinema in Berkhamsted – a real gem. As well as a full house daily and a wide range of programmes to suit all tastes (particularly the elderly and the the young) there is a flourishing restaurant business (the gatsby)which shares the site. This formula is exactly what M-H needs using the Ritz – restored to its former glory on a prime site next to the bus station – not a new small screen cinema tucked away elsewhere in town.

The site for the Rex is www.therexcinema.com and it certainly is a lovely restoration.  

Kevin Moore

I agree with Kevin that the town is certainly big enough to support such a cinema and the Rex he talks about is a lovely old building.  Although time is pressing it might not be too late for the site.