Fillmore Silver Spring: The End of the World as We Know It? Why the new LiveNation venue may not doom the 9:30 Club, the Black Cat, or other D.C. nightclubs

It’s early August and the Fillmore is naked. Only two of the nightclub’s four chandeliers are hanging, and the murals celebrating its namesake’s hippie heritage have yet to be painted on the blank orange walls. That doesn’t matter to Bruce Lee, president of Lee Development Group, who is beaming on the concrete stage. Lee has spent nearly a decade trying to bring a music hall near the intersection of Colesville Road and Georgia Avenue in Silver Spring—and what he calls the “Mercedes of music” is almost here.

When Mary J. Blige takes this same stage on Thursday night as the Fillmore Silver Spring’s opening act, Lee’s quest will be complete. “This project took two governors, two county executives, three economic development people, and two county councils to complete,” he says during a hard-hat tour of the space. The opening also required a one-of-a-kind, no-bid deal with Montgomery County and Live Nation Entertainment, the world’s largest concert promoter and parent company of Ticketmaster.

The Fillmore, which holds up to 2,000 people, has the potential to reshape the D.C.-area music scene. It could draw fans away from long-dominant venues like 9:30 Club and Black Cat, shifting dollars and buzz to the suburbs. Unlike other industries, more competition in the live music world can actually drive prices up as clubs throw money at the limited number of bands who can fill large rooms. The new entrant could cause a domino effect: Smaller clubs lose some of their acts to bigger stages, and a $15 show could easily become $20 with prices rising across the board.

And unlike most venues, the Fillmore has the support of a public company with deep pockets. Last year, Live Nation generated more than $5 billion in revenue. In the first half of 2011, the Beverly Hills, Calif.-based live events business grew its share of tickets sold for the top 100 concert tours from 41 percent to 48 percent. If the Fillmore succeeds—and that’s a huge if—Live Nation will have pulled off something that it and its corporate predecessors have never done: successfully running a nightclub in the D.C. market. Fortunately for Live Nation, it got a lot of help from Montgomery County.

Downtown Silver Spring’s revival wasn’t enough to activate the north side of Colesville Road. Montgomery County wanted that to change. In 2002, then-County Executive Douglas Duncan approached the Birchmere about opening another location in the old J.C. Penney building, owned by Lee Development. The Alexandria, Va., cabaret-style hall, which seats 500, has hosted major blues, folk, and jazz acts since 1966. The owners seemed like a good fit to operate a suburban venue. Duncan wanted the Birchmere to run an 800-seat music hall in Silver Spring for a sweet deal: The state of Maryland and the county would each contribute $4 million to the project. Lee Development would donate the land in exchange for the county’s approval to develop the surrounding site. All the Birchmere had to do was invest $1 million.

But the Birchmere negotiations dragged on, and power changed hands. Isiah “Ike” Leggett was elected county executive in 2006, and the county’s talks with the Birchmere broke down in the summer of 2007. Lee says Leggett wanted a bigger venue than Duncan’s Birchmere proposal. Montgomery County officials also wanted to seek another company to operate the venue because years of talks hadn’t led to any progress, says Diane Schwartz Jones, the county’s assistant chief administrative officer. The Birchmere owners want to put the whole thing behind them, and declined to discuss exactly why the deal fell through. “The Birchmere wishes Live Nation the best of luck,” says Jim Matthews, a Birchmere partner.

With the Birchmere gone, Lee pressed ahead. When he heard that attempts to bring a House of Blues in downtown D.C. in 2006 had failed, he contacted Live Nation to see if they were interested in a Silver Spring project. “They were like, ‘Where’s Silver Spring?’” he says. But Live Nation executives visited the site, and they liked its Metro accessibility, ample parking, and proximity to D.C.

Meanwhile, Seth Hurwitz, co-owner of 9:30 Club, decided his promotion company, It’s My Party Inc., could run the proposed venue. He says he didn’t express interest sooner than 2007 because he felt the Birchmere would be well-suited for the project. Now that they were out of the picture, a letter outlining Hurwitz’s intentions was hand-delivered to Leggett on Sept. 24, 2007. But Hurwitz was too late. The county and Live Nation signed a non-binding letter of intent for the site on Sept. 18 of that year. The deal was similar to the one offered to the Birchmere, but Live Nation was not required to invest money in the construction of the nightclub.