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House of Blues?

In yesterday’s post we received some ideas from readers for development at Square 450 and 451. Please keep those flowing.

One reader suggested that the new development have a live music anchor. The Triangle has been down this road before but it was before I moved into the community. At one point, before the current RFP, the House of Blues (HOB) was close to finalizing a deal with the city for the 5th and Eye parcel. The deal between Live Nation, HOB’s parent company, and the city fell apart. I’ve read old coverage at other blogs including PQLiving and the Lifein MVSNA blog. I came across some of the arguments against the HOB but never uncovered a comprehensive explanation of why the deal fell apart. If I had to read between the lines the closest thing I could find to a showstopper might have been CM Jim Graham’s objection to big box competition for the local institution 930 Club.


Neighborhood Objections

The original set of objections to the House of Blues from the community was very similar to the objections to World Cafe Live in the Buccini/Pollin proposal for 5th and Eye. Residents of condo buildings adjacent to 5th and Eye were concerned about traffic and late night noise. That site was adjacent to 555 Mass and the DuMont. The community didn’t want those headaches – they wanted a project that would serve the neighborhood.

Square 451 has a location that has greater isolation from residential buildings. It is surrounded by NPR, the old Carnegie Library, the Convention Center, commercial buildings and the surface parking lot at Square 483 is planned to be offices. Not only is Square 451 not a direct neighbor to any residential buildings, the path potential concert goers would walk to/from metro along 7th Street (to either Gallery Place Metro or Convention Center Metro) would not pass by many, if any, residences. Square 451 truly is the superior location for a large live music venue compared to 5th and Eye.

The 930 Club objections

I want to preface the following arguments by saying that I do love the 930 Club venue. When I’m on the fence about whether to go see a certain band visiting the area, if the venue is 930, I usually decide to go. It’s an iconic institution for the city and I’d love to see it continue to thrive. That said, I can’t simply take the hyperbole (“We will lose half of our business, at least”) from 930 club owner Seth Hurwitz completely at face value. He has a vested interest in discouraging competition for his club. He has also been on record several times about his willingness to expand his business in the District. This would suggest he feels the consumer demand is high enough that he would be happy to ‘compete with himself’. It’s competing with others that he hopes to avoid.

A WBJ article dated from 2004 claims the club usually leads the nation in ticket sales offers this from Hurwitz:

Hurwitz says his next move isn’t nationwide expansion. He’d rather build a 5,000-seat venue somewhere in Washington, though plans for such a project are a long way down the road.

“Expansion to me is not a manifest destiny,” he says. “I’d rather maximize the niche that I have.”

Also from the WBJ, in late 2007 Hurwitz made an 11th hour attempt to persuade Montgomery County to break a deal with Live Nation and let him open a music venue at a site in downtown Silver Spring.

In the letter, Hurwitz offers to pay for no less than $2 million of the $8 million build-out so the county and state governments don’t have to take on the costs. He would also pay $15,000 a month in rent, split the naming-rights royalties with the county and have the option to buy the site for $10 million or 75 percent of fair market value, whichever is higher.

Under Live Nation’s letter of intent, the company would get an $8 million subsidy including $4 million each from Montgomery County and the state of Maryland, pay $7,500 in rent, get 100 percent of the royalties and have the option to buy the site for $8 million regardless of market price.

In Hurwitz’s letter attacking the Live Nation offer, he said, “We believe your reputation as a fair-minded decision maker entrusted with carefully spending taxpayers dollars suggests you would want to be apprised of an industry-leading, locally based company that shares your goals of making that property a luminous destination for music lovers.”

I can’t seem to dig up the article at the moment, but I’ve also read Hurwitz has unsuccessfully attempted to buy the Uline Arena in NOMA from Douglas Jemal. So there is enough evidence that Hurwitz believes the market can support more venues.

On the flip side, you can easily understand why Live Nation, owned by Clear Channel, is not who Hurwitz wants to compete against. Clear Channel has a near monopoly on FM radio which can influence recording labels of the artists. Clear Channel also could aim to freeze out 930 Club by telling artists if they want to play HOB or Fillmore in other cities they must commit to playing HOB in D.C. I hardly believe that this will doom 930 Club but it could create a trickle down effect where 930 starts compete more directly with Black Cat, who in turn must compete more with Rock ‘n Roll Hotel and Velvet Lounge, etc…

Wrapping up

What are people’s thoughts? Do you think a 2000 seat music venue fits well into this development? Should we be worried about protecting 930 Club’s market share? Are we open to allowing a Live Nation venue to enter the district but stand firmly against any form of subsidy to new competition for our existing local music scene? [note: I gathered from reading about Silver Spring venue that what rankled Hurwitz the most is government subsidizing a corporate chain to the detriment of local businesses] Should we simply give Hurwitz, or Black Cat owner Dante Ferrando, the first crack at any potential downtown music venue site? Does anyone think that this impending new venue in downtown Silver Spring now fractures the market to the point where a downtown D.C. venue is now a less appealing to investors like Live Nation, Hurwitz or others?

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Comments

  1. 1

    Anonymous says

    Competition is good. Many cities have tons of music venues. The DC area market could easily support more. I say give Hurwitz a crack at a proposal, and if he can’t match what House of Blues can offer, then it’s too bad.

  2. 2

    Nathan says

    If you’ve been to one House of Blues you’ve been to them all. What makes Chinatown lame is the number of chain stores and the House of Blues will be no different.

    Plus Live Nation has a horrible track record with extorting tax dollars to build their venues, even though they are the world’s largest live music company and could easily afford to build their venues. Just look at what is happening in Silver Spring. DC doesn’t need a House of Blues.

    I agree with the anonymous commenter above and think that Hurwitz should be given a chance. He is successful because he consistently provides the best acts in the DC area.