County, Live Nation sign lease for music hall in Silver Spring

The lease agreement was expected to be completed by the end of December. The process was delayed by the holidays, officials said. If construction and approvals go as planned, the venue could open in 2010 at the former J.C. Penney site on Colesville Road.

‘‘This is a huge step. We’re very excited, because not only are we getting a huge cultural boost to downtown Silver Spring, but we’re going to put more people on the streets, more people in the restaurants,” county spokesman Patrick K. Lacefield said Friday.

Lacefield said there are several significant differences between the original letter and the signed lease. Most significantly, Live Nation no longer has an option to purchase the property, as was originally the case. The lease is valid for 20 years, with two five-year options to renew.

‘‘We decided we’d rather own it. Now, we’ll not only get the income from the economic activity that it’ll be generating, but also own that asset from now on,” he said.

The lease agreement also includes a promise from Leggett to appoint a community Silver Spring Arts and Entertainment District Advisory Committee that will advise the county of residents’ concerns regarding the project and arts and entertainment venues more generally.

Since the nonbinding letter of intent was signed, Bethesda-based concert promoter I.M.P. had made attempts to woo the county into reopening negotiations, claiming the process did not consider other companies that might provide a better deal. County officials, however, refused, saying that although the letter had been labeled as nonbinding, the county would not abandon its good faith effort.

The deal includes $4 million apiece from the county and the state, and a $3.5 million land donation from the Lee Development Group, which owns the J.C. Penney site. Live Nation will be responsible for paying for utilities and outfitting the building. Any cost overruns will also be paid by Live Nation, or the company will have to ensure through engineering that the project remains within budget, Lacefield said.

Lacefield said the next step would be working with the Lee Development Group to close on a contract to finalize the land donation, and begin getting approvals from Park and Planning. The county and state have already designated $2 million apiece for the project; the remaining funds are included in both Gov. Martin O’Malley’s (D) and Leggett’s fiscal 2009 capital budgets.