The owner of the Bethesda Blues & Jazz Club is looking for $100,000 in county funds to buy sound and lighting equipment he said the county previously paid for but has since vanished or been replaced.
Rick Brown said much of the nearly $700,000 worth of equipment funded by the county and state for the Bethesda Cultural Alliance was gone by the time he bought the historic Bethesda Theatre in 2012.
The Cultural Alliance was a developer-created group meant to renovate and manage the Theatre, until it defaulted on its mortgage in 2010 and its bank foreclosed on the property.
Brown opened the Blues & Jazz Club in the space last year after pouring $8 million into buying and renovating the 1938 art deco space. In its first year, the Club made $2,500,000 in revenue but ended up in the red. Now, Brown said he needs county help to make the live music venue profitable.
In a letter to County Executive Isiah Leggett (see PDF below) requesting the $100,000 in aid, Brown pointed out that his main two competitors — the Strathmore in North Bethesda and The Filmore in Silver Spring — get major financial backing from Montgomery County.
Leggett included the $100,000 for the Blues & Jazz Club in his amended proposed capital budget for FY 2015, but it did not get the approval of the Council’s Economic Development Committee in a hearing on April 22. The Committee asked for more specifics on the request before making a decision in the Council’s budget reconciliation process.
According to Council staff, the county is in no way required to replace the sound and lighting equipment provided in a previous grant. The money dates back to a series of deals with developer Bozzuto, which built The Whitney apartment project on top of the Theatre space.
In 2003, Bozzuto created the Bethesda Cultural Alliance. The Alliance became the owner of the Theatre and renovated it for future use.
In 2003, the Council approved $375,000 to the Alliance for the full renovation of the property. In 2005, Bozzuto came back to the county for more money and in 2006, the county’s Department of Economic Development proposed a $1.5 million grant. The state also kicked in a $675,000 grant for the theater renovation.
It opened in 2007, as the Alliance picked a musical theater company to put on shows. By 2009, the deal between the Alliance and the theater company was off. In 2010, the Alliance closed the theater and defaulted on its mortgage. BB&T Bank then foreclosed on the building.
The Theatre went to auction with a $4 million debt attached.
The funds provided by the county have come under increased scrutiny after a March report from the county’s Office of the Inspector General that concluded the Department of Economic Development miscalculated the economic value of the theater renovation.
Brown said many of the items purchased with some of that money were gone by the time he took over in 2012. A large motorized screen worth $46,415 vanished. A $47,000 sound board was switched out and replaced “by a smaller, cheaper version.”
Brown said an $11,400 BSS signal processor was swapped out with a $399 unit that has since broken.
“What we request is that the County simply replace these items in our lease agreement. These would cost roughly $100,000 and would allow us to provide outstanding sound for the venue,” Brown wrote. “We are simply asking for the County to replace or repair the systems we thought we had when we bought the property.”
Unfortunately for Brown, it doesn’t appear the county owes the Blues & Jazz club any of the equipment. From the County Council staff report:
The County has no legal obligation to replace the equipment, and cannot confirm chain of possession of the equipment after BCA ceased operations. Furthermore, the original lease was executed almost a decade ago and contained no replacement or replenishment requirement-some of the equipment that is currently missing or was replaced at some point in time with lower quality equipment quite possibly would be not functioning just as a result of age or use. Bethesda Blues and Jazz provided the costs of the equipment as listed in the 2006 lease between the County and BCA. However, some of that equipment might cost more or less than those amounts if new, and probably would cost substantially less if the County were to replace the equipment with decade-old equipment.
The Council’s Economic Development Committee did not make a recommendation on the requested $100,000. But in the April 22 hearing, Councilmembers Marc Elrich and George Leventhal provided a brief preview of what the debate might be.
“Why on earth would we pay for their AV equipment,” asked Elrich.
“We are making a lot of noise about how we’re trying to promote a nighttime economy and here you have a live practitioner of live music in a venue that hasn’t been successful in the past,” Leventhal said.
“So the government’s supposed to be running businesses now,” asked Elrich.
Committee Chair Nancy Floreen cut off the discussion at that point, as the Committee didn’t yet have a specific proposal to make a recommendation on.