Santa Clara supervisors nix concert hall – Silicon Valley/San Jose Business Journal:

Santa Clara supervisors nix concert hall – Silicon Valley/San Jose Business Journal: :

Santa Clara County Supervisors on Tuesday killed plans to build a 7,000-seat concert hall at the County Fairgrounds. The vote was 3-2, and all three no votes cited the county’s deteriorating financial picture as a reason not to take a risk on the $96 million concert hall that would have been operated by the House of Blues.

The county had approved the development two years but was stopped by a lawsuit from the city of San Jose. Later the city settled the lawsuit and agreed to pay the county $22.5 million. The original project did not require any cash input from the county. But when it came back this time, the project, long supported by Supervisor Blanca Alvarado, required start-up cash of $15 million, which was too much for Supervisor Jim Beall.

So the county fairgrounds music hall proposal is dead — years too late, millions of dollars wasted., and god knows how many lawyer’s kids sent off to Stanford on the proceeds (the only real winners, again).

An interesting last-minute entry into the intrigue was AEG Live, who offered to pick up the $15 million tab (why? to become operator of the venue? to replace House of Blues as promoter? the story doesn’t say), but that was turned down, and House of Blues as expected, made disappointed noises but continued to refuse to open the checkbook. The county should have, to be honest, asked itself the really tough question about why it’s “partner” in this refused to take any risk or put up any money in the venue; House of Blues had the potential to benefit, but assumed basically no risk or equity in the venture. why wasn’t that a red flag to the county from day 1?

Given that promotion in the bay area is a two player market: House of Blues and Clear Channel’s corpse of Bill Graham’s Presents, it seems clear that AEG sees this as a market it can enter if it can just get the nose of the camel into the tent; but not this time. I could well see an investment here simply to create a wedge into the market for later expansion.

I have questions about the downtown plan the Sharks and City were pushing — but at least both sides were investing and had motivation to make it work and shared the financial risks.

And one wonders: does that plan now spring back to life with the county’s plan dead? Or has too much time past. And as much as we’ve lambasted the city for having to fork over tens of millions of dollars in the lawsuit over this, I have to ask: if they do end up building the downtown music hall, does that money then end up looking like a good investment in furthering that project?

Time will tell. the downtown building was financially marginal when it was proposed; today, in a softer market, is it still worth doing?

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