Michael Dorf addresses NIVA 2022 while Ben Lovett (right) listens during a panel on July 11, 2022.
At the inaugural conference of the National Independent Venue Association (NIVA) in Cleveland, Ohio, this week, venue proprietors emphasized the importance of real estate in sustaining concert halls.
The driving forces behind two DC venues — City Winery DC and not-yet-opened Art Place at Fort Totten — agreed that becoming a developer rather than relying on outside developers was a potential key to long-term success for music venues.
In a panel on July 11, City Winery Founder and CEO Michael Dorf described the success of City Winery’s business model.
“What we do is very primitive, and it’s similar to every venue out there: We sell alcohol. That’s the basis of live entertainment, whether it’s a sports complex or a theatre. We sell alcohol,” Dorf said.
“In the movie business, the axiom is that the profits are in the popcorn,” he added.
Starting in 1987, Dorf ran the Knitting Factory music venues, and he was frustrasted that they didn’t make more money. He realized he could reap higher profits if he “made the popcorn” — or in this case, the alcohol.
“In my case, it was a very personal and hedonistic thing. I wanted it to be wine because I really dig wine. So, we make the wine,” Dorf said. “On some level, it’s a primitive lemonade stand with a high margin.”
He added, “It was a realistic approach: This place makes money from the sale of alcohol, and we need to sell a lot of alcohol to do what we really love to do, which is put on great music and offer a great time.”
Dorf founded City Winery in New York City in 2008. It now has expanded to at least eight locations with an additional four “concept locations.” City Winery Washington DC opened in 2018, and the company leases its Ivy City location from Douglas Development. The desire to sell wine supported the idea that City Winery must also be a dinner destination and offer seated concerts.
“Are we a live entertainment business with a really interesting beverage model or are we a wine company that has figured out a really unique way to market ourselves by booking concerts?” Dorf asked rhetorically. “Or are we in the real estate business because everything we do is predicated either on the deal we make with a developer or the property we buy. The pandemic really exposed the problems with landlords.”
During pandemic lockdowns, lenders were very forgiving in the cases where City Winery owned their properties. “As we keep growing now, we look at the underlying components of what we have. We are a place that brings people together. Developers like that. If you can be your own developer, even better,” he said.
Development for New DC Venue at Fort Totten
In May, The Venue Group, also known as tvg hospitality, opened the Meridian Arts Club, a new concert hall in a development called The Lumberyard in Huntsville, Alabama. Huntsville funded the development, and the city reached out to tvg due to the company’s success opening similar spaces in London.
It just so happens that tvg hospitality’s CEO is Ben Lovett, also a musician with popular British folk band Mumford & Sons.
During the panel at NIVA, Lovett followed Michael Dorf’s thoughts on development with this own.
“What Michael said about real estate really resonates with me,” Lovett said. “That’s a huge part of what’s been going on for multiple industries across multiple demographics in countries around the world.”
In the UK and Europe, independent promotors have the opportunity to bring live shows into many more rooms than they do in the United States, Lovett said. He expressed shock when first coming to the USA in 2010 and discovering there had been significant consolidation among American venues and promoters.
“I want find young new artists and put them on. I cannot because there is nowhere to put them on unless I’m locked into a deal,” he elaborated. “I didn’t want to be locked into a deal. I wanted independence.”
To level the playing field, Lovett and tvg began forming independent partnerships where they place music venues within larger campuses like The Lumberyard. “That campus sustains the venue so that we can put on the sort of shows that we want,” Lovett said.
The company is involved with building seven US venues right now, all of which are brand new construction. One is a new venue to be located near the Fort Totten metro station in Washington DC in an existing mixed use development called Art Place at Fort Totten. The Morris and Gwendolyn Cafritz Foundation funds development of the mixed-use campus, which includes “a meaningful range of residential and commercial uses, including a childcare facility, children’s museum, grocery store, and mixture of community and arts spaces,” according to its website.
The concert venue will be part of Phase 2 of the project, which began construction in February. The music hall, along with additional retail and residential offerings, is slated to open in 2025.
In Huntsville, the goal was to give people reasons to live near the new campus and to enjoy the area, Lovett said. The goal is similar in the DC development.
tvg enters into its development deals to build new spaces rather than to redevelop existing ones, Lovett added, stressing that his goal is to bolster independent venues and independent promoters.
“If people have venues and they are working, I would be the first person to stand up and sing their praises,” he said.