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Do Montgomery's Millions Buy Big-Time Status?

When Montgomery County built a concert hall to compete with the Kennedy Center, the $100 million Music Center at Strathmore struck some residents as a symbol of an affluent suburb establishing itself as something more than an appendage to a big city. Others, appalled to see their tax dollars subsidizing symphony concerts, questioned whether the county should take on the role of music impresario.

To jump-start the reinvention of downtown Silver Spring, the county also went into the movie business, subsidizing the American Film Institute's Silver Theatre and Cultural Center. And now Montgomery is getting into rock and pop concerts, pumping millions into a deal to build a Live Nation music club in the long-vacant J.C. Penney building in Silver Spring.

The county isn't stopping there. County Executive Ike Leggett says he'd like to build a sports arena, most likely in Germantown, to host football, minor league basketball and hockey games, and all manner of concerts, graduations, and consumer and trade shows.

"We know there is a shortage of live entertainment in the county," Leggett tells me. "These are facilities that may not make a profit but provide an economic impetus. They help to bring more people" to developing centers such as downtown Silver Spring, generating tax revenue and giving people a place in which to gather.

It's a simple, and expensive, fact of modern life that big public venues tend to be supported by public dollars.

Naturally, libraries, recreation centers and parks are tax-supported; they're run by the government. But it's become increasingly routine for John Q. Public to help pay for privately operated facilities such as the University of Maryland's Clarice Smith Performing Arts Center, the proposed Birchmere concert hall in College Park or the Shakespeare Theatre Company's new Harman Center for the Arts in the District. Arts groups say the soaring costs of land and construction make it virtually impossible to build a modern facility without taxpayer money.

"People say, 'Wow, Live Nation is a big company, why can't they do this themselves?' " says Tim Firestine, chief administrative officer of Montgomery County, who negotiated the deal to bring the club to Silver Spring. "But without public subsidy, you wouldn't have Live Nation there. Most of the money from ticket sales goes to the act."

There's no question that Silver Spring is blooming. An outdoor jazz festival last month drew 25,000 visitors, and the area teems with people almost every evening. So why is it necessary to spend $4 million in county money to draw an additional 2,000 people on about 70 nights a year?

Firestine argues that the sight of an empty Penney building for two decades speaks for itself. The private sector just couldn't find a way to make that property profitable. The county concluded that Live Nation would create the critical mass of foot traffic needed to encourage more restaurants and small businesses to set up shop in downtown.

"How many failed attempts were there to redevelop downtown Silver Spring?" Firestine asks, citing "the big mall projects, the American Dream," a developer's grandiose plan for a retail and entertainment complex.

If you want a bottom-line payoff for your government investments, the Live Nation club at least promises to produce tax revenues. But the county justifies its spending on Strathmore and a sports arena in a different way: "Strathmore has generated a great deal of buzz for the county," Leggett says.

As Neale Perl, president of the Washington Performing Arts Society, puts it, "It's part of a cultural renaissance in which people are realizing that their old attitudes about 'oh, it's the suburbs, it can't be world-class' are so outdated. They go to Strathmore, and it's just jaw-dropping."

Since its 2005 opening, Strathmore has filled an average of 83 percent of its seats at 332 presentations, says spokeswoman Georgina Javor. The North Bethesda facility has more than 3,000 students in its resident dance and music programs, and every second-grader in the county attends a concert in the hall once a year. Next spring, Strathmore and the Baltimore Symphony Orchestra will put on six concerts for all Montgomery fifth-graders.

Those are benefits worth far more than dollars -- Strathmore is an entirely new amenity for a county that lures and keeps affluent taxpayers by focusing on quality of life. Similarly, a sports arena has the potential to add to the appeal of Maryland's most populous jurisdiction.

But the Live Nation deal is a far tougher sale. After the county's massive investment in downtown Silver Spring, the Discovery Channel headquarters and the AFI theater, there ought to be a point when the market is allowed to take over.

Is this the last investment the county will have to make to nourish downtown Silver Spring?

"I don't know when you hit that point," Firestine says.

That's something the county needs to know. Check out bustling Silver Spring one fine evening: The county's seeding worked (and more public amenities are coming soon). Now it's time to let the place blossom.

By Marc Fisher |  October 4, 2007; 7:47 AM ET
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Comments

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MoCo is full of alpha hotels. Maybe they should reign in their spending and cut taxes instead of trying to find even more ways to spend money.

Posted by: Stick | October 4, 2007 8:13 AM

I'm ok with an investment, if there is a return (on something other than quality of life). Will LiveNation share profits with the county? I doubt it. Will the county also subsidize LN with tax breaks or other incentives? I wouldn't be surprised. Marc, can you enlighten us to MC's track record with these other venues as they are operated?

Posted by: j | October 4, 2007 8:15 AM

In the case of Live Nation, the county's contribution of $4 million (the state is to kick in another $4 million) goes for construction and site work--not for operation of the club. Nor will the county provide any other tax incentives to the club. It's a construction deal only.
Strathmore is a tax-exempt foundation, so it gets a tax break in addition to the $98 million that the county spent on the building. But Strathmore is self-sustaining as far as operating costs go.
In all likelihood, the county would both build and operate a sports arena, though if a private operator came along and wanted to do it, I haven't seen anything in the county study that would preclude that from happening.

Posted by: Fisher | October 4, 2007 8:48 AM

Marc

"... the county's contribution of $4 million (the state is to kick in another $4 million)goes for construction and site work"

IT'S STILL THE TAXPAYERS MONEY!!!!

Posted by: Anonymous | October 4, 2007 9:27 AM

If MoCo Gov't. hadn't stepped in to revitalize Silver Spring it would still be the run down and blighted eye sore that is had become in the 70s, 80s, and 90s. Clearly without gov't. assistance SS was not going to revitalize on it's own or with the help of the business community. Which is also a sad commentary on the social responsiblities of our business leaders. Businesses, shops, theatres, etc. are all moving in to SS and the residents and homeowners are the beneficiaries as property values have increased. What MoCo should be thinking now is to let SS continue revitalization on it's own and focus on Wheaton.

Posted by: Consider the alternative | October 4, 2007 9:56 AM

Silver Spring is majority black and Hispanic - many of whom are here illegally (Mexican/South American Hispanics, plus Africans). It is the third world, compared to Bethesda. Most of the sales clerks are foreigners who prefer to wait on their own people first -- as a white woman they let their friends cut in line in front of me, often stopping my transactions to answer any questions their friends have. I've tried complaining to sales clerks, but then their friends start yelling at me. Today, I told a woman that in America, we wait our turn. I don't find Silver Spring at all pleasant. Hispanic and African dialects are heard much more often than English, and if you're white, they treat you badly. I look forward to moving later this year. In addition, the streets are unsafe after dark. Outside of the mall, the buildings remain run-down bodegas. It's a creepy place.

Posted by: disillusioned gringo | October 4, 2007 10:22 AM

Hi Marc - one more question if you don't mind! If the county subsidizes the construction of these venues, do they retain any equity in them?

Posted by: j | October 4, 2007 10:31 AM

I believe the construction and site costs are generally set up as loans but have a tendency to morph into grants. This seems to occur because the business plans are overly optomistic about attendance and revenues, and the operating costs, including labor, are typically higher.
When one looks at the Germantown SoccerPlex and Blackrock Arts Center, at Strathmore, the Convention Center, and soon at Live Nation, and heavan forbid, for another sports stadium, and at the redevelopment of Wheaton, Silver Spring, and Rockville, you really have to wonder if it wouldn't be better for the County to own the properties it develops, and either retain ownership and operational control, charge rent, or sell them outright and take the buildings and business back when they fail.

Posted by: me | October 4, 2007 10:54 AM

Go DC United!

Posted by: Anonymous | October 4, 2007 11:48 AM

What ever happened to laissez-faire government? Thankfully, not all of the counties in the Metro area believe in "From each according to his ability, to each according to his need"

Posted by: Leesburger | October 4, 2007 12:01 PM

MoCo now has an admirable set of arts performance and exhibit facilities but will be presenting touring artists and imported visual arts because it is neglecting to foster arts incubators, places where resident artists can create and rehearse.

Rehearsal facilities are particularly in short supply, and studios for many visual arts require specialized ventilation and other features. Shared rehearsal and studio space is a cost-effective investment for any jurisdiction that wishes to be a place where art is created, not just consumed.

Posted by: Mike Licht | October 4, 2007 1:36 PM

Silver Spring is majority black and Hispanic - many of whom are here illegally (Mexican/South American Hispanics, plus Africans).
-----
in crazy world maybe- tell us what it's like to live there. Silver Spring is 46% white, making them the largest ethnic demographic in a plurality that includes a sizable Asian population. But I've never noticed any negatives from shopping there- maybe you're being rude and don't know it?

Posted by: Anonymous | October 4, 2007 2:05 PM

Silver Spring is majority black and Hispanic - many of whom are here illegally (Mexican/South American Hispanics, plus Africans).
-----

That's why we need to pour more county dollars in there. The illegals always cluster around underdeveloped and untended areas. Once Silver Spring is revitalized, the trash will move out. The same happened in Alexandria and NW DC. The trash moved out and the whites moved in.

Posted by: Mark | October 4, 2007 6:40 PM

"...there ought to be a point when the market is allowed to take over."

Why?

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