Live music in Silver Spring inched closer to reality Thursday, when a Montgomery Council committee approved $2 million for the Live Nation music venue.
The panel approved the project without changes, though committee members previously had said they wanted some details clarified first.
The money would help fund a deal set up by County Executive Ike Leggett to allow California-based Live Nation, which operates the Fillmore and House of Blues music venues, to take over the site of the old J.C. Penney store on Colesville Road.
The county and state each has pledged $2 million for the venture, but members of the council’s planning committee said last week they wanted land use and zoning-policy details worked out before they signed off on another $2 million for the project.
Council President Mike Knapp said he changed his mind after hearing that the move had been misinterpreted as hesitation over the project. County leaders are counting on another $2 million in funds from the state in the spring to complete the $8 million in government aid for the venue.
“If our action was being misinterpreted as not wanting the resources for this project, I wanted to correct that,” Knapp told The Examiner. “We haven’t spent the money yet, we’ve appropriated it. We have the opportunity to look at all facets of this still.”
Council staff expressed reservations about some financial aspects of the deal in an analysis of the project, saying a rent increase of $562 a month after five years for a 10,800-square-foot commercial space is low and questioning that Live Nation will be able to credit excess construction costs against rent.
“Council staff does wonder how low the rent can go,” staff documents said.
Under those terms, if the project cost $1 million more than expected, Live Nation could go 10 years without paying rent, though the company would have to “essentially loan themselves the money,” Leggett’s spokesman, Patrick Lacefield, said, since the rent accounts for $90,000a year.
Music fans and Silver Spring citizens groups have praised the deal, hailing it as a great move for music-lovers and a boon for the neighborhood, which lagged for years before its recent — and continuing — redevelopment. The venue’s location has been empty for 18 years.
Planning Committee Chairman Marc Elrich said the county could get a far better deal for the project.
“Pretty simply, my concerns are that the rent is too low,” Elrich said. “The expected fair market value of leasing it is $6,000 a night and we are charging $7,500 a month.”
