Features
Fillmore To Cost More
Montgomery County officials assured the county council in Jan. 2008 that taxpayers would be on the hook for no more than $8 million for construction costs on a new Fillmore-branded music hall in Silver Spring, Md.
On the eve of groundbreaking on the fast-tracked project, however, they learned it’s already $3.2 million over budget.
And some of them are fuming not only about the budget overrun, but the way they almost never learned about it.
Documents subpoenaed in a lawsuit filed earlier this year by Seth Hurwitz’s
The suit, in part, alleges county officials were deliberately hiding information about the costs.
Local officials who quickly approved not only the subsidy but an unorthodox development plan appear to be backpedaling on what once appeared to be enthusiastic support of the project. This is not surprising given the sour economy and the timing of the revelation during election season.
News of the rising construction cost comes just four months after county executive Isiah Leggett, who brokered the Live Nation deal, approved the district’s first spending cuts in 40 years, according to the Washington Post. There have already been layoffs, furloughs of public employees, and cutbacks in school spending and amenities such as parks and recreation.
“We could have spent the money on something else,” County Council member Marc Elrich told the paper.
While it’s been widely reported that overages beyond the initial $8 million would be borne by Live Nation, that’s not entirely correct. Ultimately, the overage will be paid either directly by the county or fronted to the county by Live Nation, which would be repaid in the form of reduced rent.
With an annual lease of $90,000, Live Nation could run the Fillmore Silver Spring rent-free for 35.5 years if it fronts the $3.2 million difference. Or longer, if cost overruns continue to accumulate.
Groundbreaking for the project, originally slated to take place in October, was first pushed up to Sept. 11 and again to Sept. 2, a source familiar with the project told Pollstar. The groundbreaking could be more than merely symbolic, as it starts the clock ticking on another controversial component of Lee Development’s Silver Spring plan.
Hurwitz declined to comment on the ongoing case, but a spokeswoman would neither confirm nor deny that a motion for a temporary restraining order to halt the groundbreaking would be filed by Sept. 2.
Despite the cost overrun, Leggett and other council members continue to praise the plan.
“Yes, the costs are higher, but it is still a very good deal for the county,’ Leggett aide Diane Schwartz Jones told the Post, insisting that the actual “hard costs” of construction will remain around $8 million.
“This project brings a highly successful first-class entertainment venue to Montgomery County,” she said.
The county agreed to kick in the construction costs and then lease the building, a former department store, to Live Nation after talks with The Birchmere fell through.
Hurwitz stepped in with a proposal to privately finance the venue, but the LN deal – including public funding – was quickly finalized. That’s an issue that continues to irk some council members and observers who have tagged the deal “corporate welfare.”
“It is wrong. When something goes this bad and you have not closed the deal, I think you have an obligation to open it up again, and pay what a real organization should pay for space like this,” council member Marc Elrich told the Post.
“When we are cutting critical services to be giving $7 million in county funds to this monopolist, I just feel that is not in the public interest,” added council member Roger Berliner.
Council President Nancy Floreen told the paper it will not be jumping into the fray, though Leggett should have come back to the body to request an amendment to approve the increased spending, according to the Post.