Should Irvine bet millions on a new amphitheater? – Orange County Registry

Irvine is the latest community to debate how deep she wants to be in the entertainment business.

The city is currently home to a temporary amphitheater built on Great Park developer FivePoint’s land, which is one of the hottest outdoor concert venues in California. But it’s time to make the provisional venue of 2017 a more permanent place.

So who would say no to replacing a facility that attracted more than 300,000 music fans last year?

Well, does that same place have tens of millions in tax dollars left over?

The deal Irvine made last year with giant concert promoter Live Nation to jointly build a 14,000-seat amphitheater on land in the city’s Great Park appears to be dead. The company, which is worth $18 billion according to Wall Street math, would bring in $20 million. The city’s construction share could be $110 to $130 million. The partners would share various revenue streams from the venue.

But while the two parties continued to haggle, city officials commissioned a study to consider building a less ambitious amphitheater. It would be about half the size (6,000 to 8,000 seats) with a construction cost of $80 to $90 million.

On Valentine’s Day night, the city council will deliberate on what’s next.

deep pockets

Take a look around Southern California and you’ll see that it helps to have really deep pockets behind any entertainment project.

Several newer arenas have been built with little or no tax money.

In Inglewood, billionaire football owner Stan Kroenke spent around $5 billion to build the landmark 70,000-seat Sofi Stadium for his National Football League Rams and their largest tenant – the Los Angeles Chargers.

Across the street from SoFi, billionaire basketball owner Steve Balmer is building the $2 billion, 18,000-seat Intuit Dome for his Los Angeles Clippers, scheduled to open in summer 2024.

In the Coachella Valley, entertainment investors Oak Valley Group and partners — including Live Nation, wink! – just spent $300 million to build the Acrisure Arena in the desert. The 11,000-seat indoor arena is home to a minor league hockey team and will host numerous concerts.

And in Anaheim, the billionaire Samueli family plans to spend $4 billion to convert parking lots and unused land around the city’s Honda Center indoor arena into an entertainment and commercial real estate complex called OCVibe.

But on the other side of Freeway 55, Anaheim didn’t have the same luck when it tried to sell the parking lot surrounding the city’s ballpark for similar celebratory multipurpose uses.

The city’s deal with the Angels’ owner, billionaire Arte Moreno, was met with a spate of economic, logistical and eventually legal problems — including political corruption allegations that scuttled the deal.

Good bet?

Documents from the City of Irvine indicate that the outdoor concert business is not very profitable for anyone but the entertainers onstage.

Musical talent accounts for around three quarters of ticket sales. There are myriad other costs associated with such production, leaving only modest profits.

Also, entertainers have been charging higher ticket prices in recent years — averaging about $70 at the Irvine facility in 2022. These rising costs increased the revenue stream that averaged nearly nearly for the 33 shows held at the temporary facility last year was $700,000.

But the city’s study says the expensive entrance fee limits attendance and thins profit margins.

Now Irvine was able to lower its investment with the cheaper, smaller amphitheater. But that in turn brings with it numerous challenges – even without Live Nation.

There’s more competition for acts and fans with the likes of the Greek Theater in Los Angeles or the Pacific Amphitheater in Costa Mesa. A small indoor theater is also being built at OCVibe in Anaheim.

Fewer seats can also mean many high-profile acts won’t be attending. However, according to city research, the organizers surveyed indicate that other entertainers still want a share of Orange County’s high entertainment spending.

However, risk-reward is not the kind of juggling that politicians do well.

bulldozers

Look, I occasionally enjoy an evening of music under the stars. In 2016 I saw Gwen Stefani headlining the final show at Irvine Meadows Old Amphitheater across from 405 from the Great Park grounds.