Waterbuffalo
07-25-2008, 05:03 PM
http://www.columbian.com/news/localNews/2008/07/07252008_An-amphitheater-bailout.cfm
Friday, July 25, 2008
By MICHAEL ANDERSEN, Columbian Staff Writer
Clark County’s “world class” concert venue is chronically short of both concerts and concertgoers, and county commissioners are considering an $8.7 million bailout.
The Amphitheater at Clark County, built in 2002 for $40 million at no public expense, has lost at least $1 million every year it’s been open, according to a consultant’s report.
The biggest of 11 concerts last year, Rush, drew 10,773 people to the 18,000-seat open-air venue.
Of the other 10 acts, only two sold enough to fill its 8,000 reserveable seats.
When the venue launched in 2003, promoters expected 38 concerts every year. But since then, the thriving U.S. concert market has lurched away from big-name, big-venue acts and toward niche musicians playing small to medium-sized clubs.
According to the county-hired consultant, E.D. Hovee and Co. of Vancouver, the amphitheater can’t be operated profitably under current rules and will close unless the company responsible, New York-owned Quincunx, is willing to pour money into the site indefinitely.
So Clark County, which owns the site and is due to collect $700,000 in rent next year, will hold a hearing Tuesday to consider cutting the rent to $300,000.
“We have a vested interest in their success,” Commissioner Steve *Stuart said Thursday.
Similar cuts would follow over the remaining 20 years of Quincunx’s lease. The amphitheater operator would also end a $100,000 annual facility payment and tens of thousands of dollars in promotions promised to the Clark County Fair.
Even then, the amphitheater can only come close to profit if it can double its annual attendance, according to Hovee.
To do that, the venue wants to add a removable wall that could enclose most of the reserved-seating area, potentially making shows possible year-round.
After all those changes, Hovee predicted, the amphitheater would cut its operating losses to $132,000 annually, plus $1.4 million in depreciation from its building.
The proposed deal was negotiated in recent months by county staff.
Hovee estimated that the amphitheater brings $10.1 million annually to the county’s economy, including spending by its 70,000 visitors and 100 employees.
If Quincunx can double attendance as proposed, the impact would rise to $16 million.
Stuart, who said in late 2005 that Quincunx’s rent was not negotiable, said he will probably vote for the rent cut next week.
He said his mind changed after he read Hovee’s report, prepared in December.
“I looked at that and realized that the market has changed,” Stuart said. “If we don’t work with (Quincunx), we are not going to end up with a better deal, because the market’s not going to bear it.”
In other words, if the county doesn’t deal, the $40 million venue — the one Clark County landed in 1998 after a bidding war involving Portland, Quincunx’s parent company and Trail Blazers owner Paul Allen — might sit empty.
Long-brewing trouble
The Amphitheater at Clark County has had problems almost from day one.
For its inaugural 2003 season, Quincunx booked nine shows.
In a 2005 interview with The Columbian, CEO Dan Braun described the result as “A complete disaster. An absolute disaster.”
Revenues for that year weren’t released in Hovee’s report.
Undaunted, operators aimed for 35 shows in 2004. They booked 16. That year, the venue spent $9.4 million and earned $6.5 million, a 42 percent operating loss.
“All I can say is that we probably picked the worst two years of the past 35 to open an amphitheater,” general manager Kiet Callies told The Columbian that year.
In 2005, Quincunx aimed for 25 shows and drew 10, losing $1.1 million on $3.9 million in revenue.
And so on.
From the first season, observers have pinned some of the blame on the venue’s relatively strict access rules, which gnarl traffic after big shows, and on the county’s requirement to end music by 11 p.m., a demand from neighbors.
“That venue is world class,” Dave Leiken of Double Tee Concerts, Oregon’s top live-music promoter, told The Columbian after the 2005 season. “But with the constraints and costs the way they are, you might as well mothball that place for the next three or four years. Or, be realistic and realize that if they can get five or six shows that are successful, that’s all of the money they are going to generate.”
Nationwide trouble
Gary Bongiovanni, editor-in-chief of the concert-industry magazine Pollstar, said Quincunx shouldn’t be blamed for the venue’s trouble.
The concert market is trying to “batten down the hatches” nationwide, he said, and amphitheaters in particular are struggling with smaller and smaller audiences.
“It certainly seems reasonable for them to ask for a reduction in light of the current operating environment,” Bongiovanni said.
If the county were to switch operators, it’d likely land with Live Nation, a Los Angeles-based corporation that controls more than 90 percent of the amphitheater market.
But there’s no reason to think they could do a better job than Quincunx, Bongiovanni said.
Bongiovanni was not optimistic about the concept of a removable wall.
“I imagine putting that wall in is not going to be terribly expensive, and it may lend a great deal more utility to the use of the facility,” he said.
But even if the venue could expand to serve other events such as corporate meetings, it’d take a lot to turn things around.
“I don’t know that there’s been a lot of history of those kind of things being successful,” Bongiovanni said. “If you’re only talking about playing to 8,000 seats, a lot of times there are other venues. … The artists are probably going to prefer to play in a real theater.”
No reason to expect profit?
Bridget Schwarz, a leader in the neighbors’ group that won restrictions on the amphitheater’s traffic and sound, wrote in an e-mail Thursday that the music business was already undergoing “enormous *changes” when the venue went in.
“As far back as 1999, there was no reason to believe the amphitheater would ever earn a profit for Quincunx, or even recoup construction costs,” she wrote.
Schwarz, whose neighborhood association formed in response to the amphitheater concept, is now running for county commissioner.
In 2003, after neighbors won concessions on traffic, she called it perhaps “the best-managed and safest amphitheater in the world.”
Quincunx has become a significant player in county elections. They’ve contributed to all three sitting commissioners. Last month, the owners gave $10,000 to
Brad Lothspeich, an amphitheater manager running against Schwarz and others.
‘Intend on succeeding’
Stuart, the sitting commissioner, said he believes in Quincunx and Braun, its CEO.
“For as much flak as they have received, Dan is really committed to our community,” he said. “He is someone who believes in where he lives and enjoys it and wants to make it better. Those kind of business owners I have faith in.”
Stuart noted that the venue’s operating hours won’t change and that it continues to host community events like Clark College and high school *graduations for free.
Reached on his cell phone Thursday night, Braun said Quincunx wants to sign a new deal with the county even though the consultant still doesn’t expect them to turn a profit.
“The competitive spirit of our company is substantial,” he said, laughing ruefully. “If you look at the Hovee report, you must conclude that the people in this business must have a competitive drive.”
Though sometimes “people don’t understand,” he said, “we are here to be good partners in the community and we really intend on succeeding.”
Braun said he was too busy preparing for the night’s James Taylor concert to comment further.
The event had sold “a little under 10,000” tickets by 9 p.m., he said.
Michael Andersen covers Clark County government: 360-735-4508 or michael.andersen@columbian.com. Staff writer Jeffrey Mize contributed reporting.
Friday, July 25, 2008
By MICHAEL ANDERSEN, Columbian Staff Writer
Clark County’s “world class” concert venue is chronically short of both concerts and concertgoers, and county commissioners are considering an $8.7 million bailout.
The Amphitheater at Clark County, built in 2002 for $40 million at no public expense, has lost at least $1 million every year it’s been open, according to a consultant’s report.
The biggest of 11 concerts last year, Rush, drew 10,773 people to the 18,000-seat open-air venue.
Of the other 10 acts, only two sold enough to fill its 8,000 reserveable seats.
When the venue launched in 2003, promoters expected 38 concerts every year. But since then, the thriving U.S. concert market has lurched away from big-name, big-venue acts and toward niche musicians playing small to medium-sized clubs.
According to the county-hired consultant, E.D. Hovee and Co. of Vancouver, the amphitheater can’t be operated profitably under current rules and will close unless the company responsible, New York-owned Quincunx, is willing to pour money into the site indefinitely.
So Clark County, which owns the site and is due to collect $700,000 in rent next year, will hold a hearing Tuesday to consider cutting the rent to $300,000.
“We have a vested interest in their success,” Commissioner Steve *Stuart said Thursday.
Similar cuts would follow over the remaining 20 years of Quincunx’s lease. The amphitheater operator would also end a $100,000 annual facility payment and tens of thousands of dollars in promotions promised to the Clark County Fair.
Even then, the amphitheater can only come close to profit if it can double its annual attendance, according to Hovee.
To do that, the venue wants to add a removable wall that could enclose most of the reserved-seating area, potentially making shows possible year-round.
After all those changes, Hovee predicted, the amphitheater would cut its operating losses to $132,000 annually, plus $1.4 million in depreciation from its building.
The proposed deal was negotiated in recent months by county staff.
Hovee estimated that the amphitheater brings $10.1 million annually to the county’s economy, including spending by its 70,000 visitors and 100 employees.
If Quincunx can double attendance as proposed, the impact would rise to $16 million.
Stuart, who said in late 2005 that Quincunx’s rent was not negotiable, said he will probably vote for the rent cut next week.
He said his mind changed after he read Hovee’s report, prepared in December.
“I looked at that and realized that the market has changed,” Stuart said. “If we don’t work with (Quincunx), we are not going to end up with a better deal, because the market’s not going to bear it.”
In other words, if the county doesn’t deal, the $40 million venue — the one Clark County landed in 1998 after a bidding war involving Portland, Quincunx’s parent company and Trail Blazers owner Paul Allen — might sit empty.
Long-brewing trouble
The Amphitheater at Clark County has had problems almost from day one.
For its inaugural 2003 season, Quincunx booked nine shows.
In a 2005 interview with The Columbian, CEO Dan Braun described the result as “A complete disaster. An absolute disaster.”
Revenues for that year weren’t released in Hovee’s report.
Undaunted, operators aimed for 35 shows in 2004. They booked 16. That year, the venue spent $9.4 million and earned $6.5 million, a 42 percent operating loss.
“All I can say is that we probably picked the worst two years of the past 35 to open an amphitheater,” general manager Kiet Callies told The Columbian that year.
In 2005, Quincunx aimed for 25 shows and drew 10, losing $1.1 million on $3.9 million in revenue.
And so on.
From the first season, observers have pinned some of the blame on the venue’s relatively strict access rules, which gnarl traffic after big shows, and on the county’s requirement to end music by 11 p.m., a demand from neighbors.
“That venue is world class,” Dave Leiken of Double Tee Concerts, Oregon’s top live-music promoter, told The Columbian after the 2005 season. “But with the constraints and costs the way they are, you might as well mothball that place for the next three or four years. Or, be realistic and realize that if they can get five or six shows that are successful, that’s all of the money they are going to generate.”
Nationwide trouble
Gary Bongiovanni, editor-in-chief of the concert-industry magazine Pollstar, said Quincunx shouldn’t be blamed for the venue’s trouble.
The concert market is trying to “batten down the hatches” nationwide, he said, and amphitheaters in particular are struggling with smaller and smaller audiences.
“It certainly seems reasonable for them to ask for a reduction in light of the current operating environment,” Bongiovanni said.
If the county were to switch operators, it’d likely land with Live Nation, a Los Angeles-based corporation that controls more than 90 percent of the amphitheater market.
But there’s no reason to think they could do a better job than Quincunx, Bongiovanni said.
Bongiovanni was not optimistic about the concept of a removable wall.
“I imagine putting that wall in is not going to be terribly expensive, and it may lend a great deal more utility to the use of the facility,” he said.
But even if the venue could expand to serve other events such as corporate meetings, it’d take a lot to turn things around.
“I don’t know that there’s been a lot of history of those kind of things being successful,” Bongiovanni said. “If you’re only talking about playing to 8,000 seats, a lot of times there are other venues. … The artists are probably going to prefer to play in a real theater.”
No reason to expect profit?
Bridget Schwarz, a leader in the neighbors’ group that won restrictions on the amphitheater’s traffic and sound, wrote in an e-mail Thursday that the music business was already undergoing “enormous *changes” when the venue went in.
“As far back as 1999, there was no reason to believe the amphitheater would ever earn a profit for Quincunx, or even recoup construction costs,” she wrote.
Schwarz, whose neighborhood association formed in response to the amphitheater concept, is now running for county commissioner.
In 2003, after neighbors won concessions on traffic, she called it perhaps “the best-managed and safest amphitheater in the world.”
Quincunx has become a significant player in county elections. They’ve contributed to all three sitting commissioners. Last month, the owners gave $10,000 to
Brad Lothspeich, an amphitheater manager running against Schwarz and others.
‘Intend on succeeding’
Stuart, the sitting commissioner, said he believes in Quincunx and Braun, its CEO.
“For as much flak as they have received, Dan is really committed to our community,” he said. “He is someone who believes in where he lives and enjoys it and wants to make it better. Those kind of business owners I have faith in.”
Stuart noted that the venue’s operating hours won’t change and that it continues to host community events like Clark College and high school *graduations for free.
Reached on his cell phone Thursday night, Braun said Quincunx wants to sign a new deal with the county even though the consultant still doesn’t expect them to turn a profit.
“The competitive spirit of our company is substantial,” he said, laughing ruefully. “If you look at the Hovee report, you must conclude that the people in this business must have a competitive drive.”
Though sometimes “people don’t understand,” he said, “we are here to be good partners in the community and we really intend on succeeding.”
Braun said he was too busy preparing for the night’s James Taylor concert to comment further.
The event had sold “a little under 10,000” tickets by 9 p.m., he said.
Michael Andersen covers Clark County government: 360-735-4508 or michael.andersen@columbian.com. Staff writer Jeffrey Mize contributed reporting.