Unrivaled Funding Deal Goes To Council

Council legislative attorney Jeffrey Zyontz said the proposal would cut down on required public-use space, usually outdoors and free to anyone walking by, in exchange for more indoor space that people have to pay to enter. The greatest impact, he said, would be in Silver Spring and potential projects in Bethesda.

"The council must decide if that exchange is in the public interest," Zyontz advised.

Leggett aide Diane Schwartz Jones, who is shepherding the deal, praised the zoning measure "as a means of getting land for free to provide cultural opportunities while correcting some existing urban decay. . . . This is a tool to do something to help the communities and area businesses."

Until the Live Nation proposal surfaced, the county had only once before, indirectly, helped a for-profit entertainment company. In 2006, the council approved a Duncan administration $2 million economic development grant to the Bethesda Theater Alliance. The alliance owns the renovated art deco Bethesda Theater, which is managed by Broadway's Nederlander company.

To attract Live Nation, which describes itself as "the largest producer of live music concerts in the world," Montgomery patterned parts of its proposal after agreements it has made with nonprofit arts organizations. Round House Theatre and the American Film Institute in Silver Spring, Strathmore in Kensington and Imagination Stage in Bethesda occupy county-owned buildings either constructed or renovated by Montgomery. They are allowed to earn income, as would Live Nation, from renting out the county-owned venues. AFI takes in more than $200,000 annually in rentals, and Round House Theatre collects about $90,000.

The county's experience as a construction manager and landlord at the other entertainment venues has been mixed. The potential for cost overruns at the Live Nation site is unknown.

When the county built Strathmore several years ago, it came in nearly 100 percent over original estimates of $50 million to $60 million. The public paid most of the $100 million in costs, although some money was donated by private sources. For Live Nation, Jones said the county would cut back design features to control costs, if necessary.

Five council members have indicated that they will back the deal: Phil Andrews (D-Gaithersburg-Rockville), Valerie Ervin (D-Silver Spring), Nancy Floreen (D-At large), George L. Leventhal (D-At Large) and Duchy Trachtenberg (D-At large).

"The project will be good for Silver Spring in a lot of ways," Ervin said. "I think people will look back and say we did the right thing."

Don Praisner (D-Eastern County) and council president Michael Knapp (D-Upcounty) have expressed reservations but are thought to be leaning in favor.

Two council skeptics say the plans don't do enough to reward the county for its role. "I find some of the demands to be unreasonable," said council member Marc Elrich (D-At large). Council member Roger Berliner (D-Potomac-Bethesda) called it "a bad business deal that has morphed into a bad land-use deal."

Bruce Lee, of Lee Development Group, is frustrated by the critics.

"This is a backwards deal where the county came to us asking us to consider donating very valuable land, well ahead of any future project. They have never done that before. It does require a lot of thinking outside the box. We are simply asking for protections," he said.