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Tuesday, Jul 23, 2024

Entertainment House of Blues searches for local investors

Entertainment: Progress Slows on Site’s Renovation

As the construction process slows on the House of Blues’ site in Downtown San Diego, the company has been trying to secure local investment for the project.

In San Diego, the company has discussed getting funding from its landlord, locally based Music Village LLC, said Liam Thornton, senior vice president of development for House of Blues Entertainment, Inc.

HOB has a 10-year lease on 29,000 square feet at Music Village, a $20 million, 80,000-square-foot mixed-use project in the former Woolworth’s building.

Executives involved with the Music Village project would not comment for this story.

When Los Angeles-based House of Blues first announced last December that it had leased a 29,000-square-foot site in Music Village, the company had said the concert venue/restaurant could cost up to $10 million.

At the time, the company expected to open the 1,450-person capacity nightclub in the summer or fall of this year.

On Sept. 20, House of Blues announced it was reorganizing and focusing its funds on its current venues and concert business, and was laying off 39 employees, mostly from its headquarters in Hollywood.

It also announced it would seek debt and joint venture financing for its unbuilt venue projects in several cities, including San Diego.

Looking For Local Investors

The company has been looking into local investors for more than a month, Thornton said.

He would not disclose the amount of funding needed to complete the San Diego location, but said he was confident HOB would find the financing it needs.

“It’s not a matter of if, it’s a matter of when,” Thornton said.

Once financing is found, the nightclub could be built in eight months, he said.

Until the money is in place, however, progress on the San Diego venue has been stopped in many ways.

Available funding has been used to keep the design, project management and permitting process moving forward, Thornton said.

“We’re moving forward with what we’re able to do to keep the project on track,” he said.

However, major contracts for general construction , including drywall and structural, mechanical, electrical and plumbing work , have not been issued, Thornton said.

Peter Hall, president of the Centre City Development Corp., was disappointed to hear of House of Blues’ trouble with funding, but he was not surprised.

Troubled Start

“I think the financing markets have been tough on entertainment in the last six months or year, much like hotels and some of the other sectors,” Hall said.

The local House of Blues project has been troubled from the start, he said, noting it should have been open a year ago.

“Getting the lease signed took a year longer than it should have, getting the plans resolved has taken substantially longer than it should have there’s been a lot of challenges with the project,” Hall said.

“Good things sometimes just take time, but this one has been an uphill climb,” he said.

He’s pleased that the other projects in Music Village, chief among them the Diegan Hotel, are still moving forward.

If the House of Blues doesn’t end up finding investor for the San Diego nightclub, he’s confident that another restaurant or entertainment project could end up in the space, Hall said.

According to HOB’s Thornton, discussions with landlords about financing single locations are also taking place at other cities in which the company has planned venues.

For instance, the city of San Jose is being asked to invest in the San Jose venue, he said.


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