Deal Puts Hall In Limbo

Lawsuits between the City of San Jose and Santa Clara County, triggered by the county’s planned construction of a House of Bluess-operated concert hall on its fairground property, have been settled for at least $36.5 million. While the deal doesn’t directly affect the proposed venue, county officials reportedly hope to break ground on it as early as next summer.

San Jose’s city council agreed to the settlement, most of which is earmarked for county projects and service improvements, including $22.5 million toward a $74 million state-of-the-art crime lab. Other monies will go toward seismic upgrades for the county hospital and court buildings, according to The Mercury News of San Jose.

While the settlement does not directly address the disputed concert hall, it should help free up other county funds that in theory could go toward making the hall a reality.

However, the two-year delay caused by the lawsuits, as well as the cost of litigation, have caused the projected cost of the building to skyrocket from an original estimate of $57 million to $83 million, according to the paper.

Santa Clara County officials told the paper they intend to run the numbers again on the cost of building the venue to see if it still makes financial sense.

Patrick Love, the county’s director of special projects, is confident it does.

“We basically already know it’s going to pencil out,” he told the paper. “The demographics are as good as they were before. But we have to revalidate the project by updating the feasibility studies. Basically, everything is the same. The city lawsuit put it on hold and we’re resuming where we left off. However, it’s now more costly.”

An updated study is expected to be reviewed by the county board of supervisors in about a month, Love told the News.

Both sides agree the settlement may be the largest of its kind in their history, but will benefit city and county residents.

“It was going to take something significant to get both sides to bury the hatchet and cooperate on community projects and move on,” San Jose City Attorney Rick Doyle told the paper.

Santa Clara County supervisors gave the green light to the theatre project in 2004, enlisting House of Blues Concerts to develop and operate the venue. The city had similar ideas of its own, hoping to build a music hall downtown in partnership with the San Jose Sharks hockey team that operates HP Pavilion At San Jose. That project has since been abandoned.

San Jose then filed suit, claiming Santa Clara County needed its approval to build the hall on fairgrounds property, which is part of a county island surrounded by the city.

The county had sought $40 million for the delays in the theatre project, and will likely have to reconsider its previously approved bond issue that was to pay for construction of the 7,000-seat concert hall.

Santa Clara County Counsel Ann Ravel told the paper the settlement allows the city use redevelopment funds to help pay for the crime lab which, in turn, enables the county to take money previously earmarked for the lab and spend it instead on the concert hall.

A House of Blues Concerts spokesman wasn’t available for comment.

San Mateo County Superior Court Judge Maire S. Weiner in February threw out San Jose’s case against the county over the theatre project. A month later, she ruled the county could take most of its counterclaims against the city to trial. A trial date was postponed when the two sides tried to settle.