An uncommon deal for Lee, Live Nation - Washington Business Journal

Washington Business Journal - by Mike Mills Editor - Friday, August 29, 2008

This week, workers began removing a city block’s worth of grass-like carpet in downtown Silver Spring. When the fake turf was installed in 2005, it was meant to cover the eyesore of a vacant lot amid the newly revitalized town center. But, to everyone’s surprise, the plastic field became one of the most popular places for families and neighbors to hang out. This ad hoc village green will now become a public ice rink and a memorial to veterans.

Alas, a few blocks away is another vacant lot that, if developed in the way the Montgomery County executive envisions it, would strain the definitions of both a “public common” and the “public good.”

The land, which fronts Colesville Road, is owned by Lee Development Group, a respected builder and landowner run by one of Montgomery County’s founding families. County Executive Isiah Leggett persuaded Lee to convey part of the property to the county so entertainment giant Live Nation can open a Fillmore music hall there.

Leggett’s plan would allow Lee to count the transferred land, valued at $3.5 million, toward a requirement that developers include a certain percentage of “public open space” when they build in Silver Spring. Though the public would not, as a rule, be freely gathering at the new Fillmore (you need a ticket), the plan envisions the venue being available for rent and used, on occasion, for public events.

Lee went along with this plan only after receiving some handsome assurances from Leggett. Lee, for example, gets as much as 15 years to decide what else to do with the remaining property. And when Lee decides, it can go ahead without further approval from county planners. This controversial provision will require a change in zoning laws. The matter is before the County Council in September.

Had a private citizen come up with this plan, it wouldn’t “pass the laugh test,” said Planning Board Chairman Royce Hanson in a July 29 memo to the council. He’s hoping the council will reject this attempt to strip his agency of its authority to approve future development.

Supporters of the Leggett plan, including many Silver Spring residents, dismiss Hanson’s opposition as a petty, intramural squabble over executive and regulatory powers. But Hanson’s right: This deal requires too many government contortions for what should be a private sector-led initiative to bring a music hall to town.

It was former County Executive Douglas Duncan who first approached Lee a few years ago to bring the locally owned Birchmere music hall to Silver Spring. When that deal fell apart, Duncan’s successor, Leggett, quickly struck this much more generous deal with Live Nation. Leggett’s largesse doesn’t just extend to Lee: In addition to $8 million in state and county grants intended for the Birchmere, Live Nation will get $800,000 in tax credits over 10 years, below-market rents, income from naming rights and a loosening of food sale minimums for its liquor license. Outraged at this handout to a competitor, locally based I.M.P. Productions last year offered to open a 9:30 Club on the lot on its own dime. But Leggett wouldn’t speak with them.

Leggett’s plan has a lot of intangible costs: Developers whose names are not Lee will no doubt seek similar deals to skirt the regulatory approval process and sector plan. Also, the county will have zero control over the design or quality of anything Lee decides to build on the site.

The planning board offers three alternatives to the current plan, each of which would preserve its authority.

I have a fourth: Slap a fresh patch of plastic grass on the Lee lot, put up a band shell and let the good times roll.

E-mail: mmills@bizjournals.com Phone: 703/258-0820