The Silver Spring Penguin

PART ONE — Inside the Silver Spring Regional Center’s small conference room Monday night, MoCo exec Ike Leggett explained why talks with the Birchmere failed, and what it would take for a publicly funded music venue to succeed.

The answer to both questions, in three words: Return on investment.

“What we had was a basic concept” Leggett told a small group of local bloggers. The state and county would drop a combined $8 million over two years to turn the former JC Penney site on Colesville Road into a music venue.

Some residents requested what Leggett called a “small entertainment and dining experience,” so the county began courting the Birchmere. The original game plan was to create an 800-seat venue in downtown Silver Spring.

However, the Birchmere had plans of its own. Owners of the Alexandria, Va.-based supper club were considering an additional expansion into Loudoun County, according to Leggett.

Three Birchmere clubs in the same region would have diluted the audience, he argued, forcing the Silver Spring venue to shrink from 800 to 450 seats. On top of that, most of Silver Spring’s seats would have been sold to Maryland residents. Translation: No cash infusion from visitors from the District or Virginia.

“The vision was for a small entertainment and dining experience. But when you invest $8 to $10 million in public money, is that a sound economic investment?” Leggett argued.

“You can’t go to the state and say we’re ready to make that investment,” he added.

The deal really began to unravel in the spring. According to Leggett, the owners of the Birchmere wanted exclusive use of the venue, which would have limited its use for county- and community-sponsored events. The Birchmere’s owners also could not identify the financial risks they were willing to take, or the assurances they had for success.

“We never could get an agreement from the Birchmere,” Leggett said.

“The public contribution seemed to grow,” he continued. “Between the state and the county, we capped [expenses] at $8 million, but the county’s exposure could have gone higher than that.”

Meanwhile, “the goal post was constantly moved,” Leggett described.

That’s when other suitors — including Live Nation — made their move.

Editor’s note: The owners of the Birchmere and Live Nation have been contacted for comments. — JD (Sep 25, 2007)