What happened to Headquarters Live?

While a cornerstone enterprise in the rejuvenation of Downtown Salisbury has proven a business disappointment, the historic Headquarters Live building will have a rent-paying and tenant contributing to city commerce and culture as a historic office and community center.

Many people wondered whether the music/entertainment venue concept projected by developers Bradley Gillis and Joey Gilkerson would succeed. After purchasing the 1920s-era Station 16 Headquarters, the owners of Devreco renovated the 12,000-square-foot building for the mixed use of an entertainment venue and an upstairs floor of offices.

Skepticism over the venue’s prospects washed away almost immediately, as the community was drawn to the building for one seemingly successful event after another. For the first time since the 1950s, Downtown Salisbury boasted a locale where concerts could be held, wedding vows could be exchanged, church services could be conducted, retirement parties could be held and community awards could be presented.

It was all very nice and invigorating – it just wasn’t profitable.

As losses continued, it became obvious to the Devreco team that an office-leasing business plan would better fit the building and Downtown. The owners could have continued on as losses mounted, but the property wasn’t maximizing its potential — something such investments must do under the standards of business.

Commercial developers managing a music house probably isn’t a formula for success. Headquarters Live didn’t start that way. In late October 2014, Devreco announced the downstairs music venue would be leased to Jim Baeurle, a music promoter with deep ties to other promoters and music acts. When the venue officially opened in January 2015, the schedule was filled with acts and it seemed Headquarters Live was off and running.

But Devreco’s relationship with Baeurle was terminated before the end of the first year, and Joey Gilkerson took over as the facility’s manager.

The overhead of a historic building, constant changes in music business dynamics, and the need to sell lots of seats – and lots of alcohol – to make a sustainable profit, were all factors in the venue’s lack of success.

The two options are to sell more tickets, or maintain a small venue but charge prices higher than the Salisbury market might allow.

“I don’t think smaller is necessarily the ticket,” Gilkerson said. “The consultants we had analyze HQ all said similar things – it needs to be bigger for national acts, and it’s a little too big for small local shows.”

He added: “If you have 50 to 75 people in HQ, it does not feel like a successful event. The room is pretty empty at that capacity.”

When its huge bay doors open with access outdoors, the venue can accommodate about 900 people, with customers both inside and outside. The standing-room space allows about 350 people inside.

“To have a successful music venue, it turns out you need between 500 and 1,000 people to attend.”

Gilkerson admitted that leasing the building will better fit his company’s business focus.

“We have to stick to our core competency of being real estate guys. At HQ, we never had the luxury of being a hands-off landlord. We became music venue operators.

“It’s very difficult to find a qualified and experienced operator interested in a landlord/tenant relationship.”

After hearing from multiple bidders, the City Council in 2013 chose Devreco as the buyer, based upon their use concept and accelerating reputation as both visionaries and risk takers. The purchase price, $85,000, was criticized by some at the time, but Devreco planned to put more than $500,000 into its renovation.

Special construction details, combined with the expenses of the business start-up related to a music venue, drove the investment costs to upwards of $1 million.

At the time of sale, the 1928 building appraised for less than $200,000.

Anyone who has toured the building and taken a few minutes to scrutinize its outside would have to agree Devreco did a remarkable restoration on one of the most important structures on the entire Eastern Shore.

They retained the firehouse theme and used it in their marketing. The way the building so easily links to the past is a testament to thoughtful planning.

Gilkerson and his partners recognize that their decision is being met with disappointment, second-guessing and even some public anger.

“Yes, I am seeing and hearing the buzz – some of it is quite frustrating. I hear ‘Headquarters is closing already? That place looked awesome! I have not had the chance to make it to a show yet.’

“It makes you want to say: ‘Well, if you had come …’ I’ll just leave that there.”

In spring 2015, Headquarters Live welcomed to the Salisbury Area Chamber of Commerce for an official ribbon cutting ceremony and open house. The band Eastern Electric performed. The event was attended by local leaders including, developer Brad Gillis, Delegate Mary Beth Carozza, County Councilman John Hall, City Councilwoman Laura Mitchell, City Council President Jake Day and Mayor Jim Ireton.

Politically, culturally and across city business circles, the Headquarters Live project received ample public support because of its unique vision and purpose. The venue and its aspirations generated a lot of excitement for Downtown Salisbury.

Even though the music venue concept is dead, Gilkerson said a lot of good has been achieved.

“I think the support was also strong because we were taking a vacant building, in desperate need of maintenance, and bringing it back to life.

“That is still the case. There will be more people and jobs downtown on a daily basis because of this change. This is still leaps and bounds from the old firehouse being a storage shed for old Christmas lights.”

Headquarters Live will remain open into the summer and honor booking contracts.

The new commercial lease tenant is the Gannett Co. Inc., whose Delmarva Media Group publishes The Daily Times and Wicomico Weekly within the county. Delmarva Media Group will bring approximately 55 employees into Downtown, which is positive economic news.

No newspapers would be printed in the old firehouse on South Division Street – Gannett moved its Salisbury-based printing operations to Wilmington in 2011 – but a circulation/distribution center would operate from the building’s basement.

From its 1923 inception, The Daily Times was printed and staffed in Downtown Salisbury – from two locations on West Main Street, and from 1957 through 2008 on East Carroll Street and Times Square.

A press expansion in 2008 prompted Gannett to move the operation to the Northwood Industrial Park, where the presses cranked for a mere three years before a consolidation to Delaware.

The East Carroll Street building, which Gannett sold to Peninsula Regional Medical Center, was razed in 2015.

In a statement released in The Daily Times, Brad Gillis of Devreco described the move away from Headquarters Live as part of its continuing mission to help grow Downtown Salisbury, where it owns, leases and continues to redevelop properties.

“We started this grand experiment in 2013,” he said. “The community spoke and we listened; an arts and entertainment venue was born.

“After several years of operation we realize the experimental arts and entertainment venue did not maximize the true potential of this historically significant building. We were not currently fulfilling our original mission to best of our ability,” Gillis said.

“Our team is excited to provide the opportunity for The Daily Times to return to Downtown Salisbury,” he said.  “It is an ideal solution for the space that will boost the economic benefit to the community, create jobs and overall enhance the local area.”

Mayor Jake Day, who has worked behind the scenes to save the music venue, said the addition of more workers to Downtown cannot be discounted.

“I’m a big supporter of all historic building redevelopment efforts, including the renovation of our long-vacant Downtown fire station into a vibrant building,” the mayor said.

“I loved all that Headquarter Live has been and while I’m excited to see 55 new employees contributing to the city core’s economy, I will miss this particular venue.”

Day pointed out that a 750-seat amphitheater along the River Walk near Salisbury Boulevard is part of the 2018 spending plan, so there will soon be a Downtown venue for some music and entertainment.

“Headquarters Live was our city’s baby step into the music scene,” he said. “I’m now excited to see our next step come to fruition with the Riverwalk Amphitheater in 2018.”

Ccity Councilman Jim Ireton, who served as mayor when the firehouse was sold to Devreco, called the closing a “wake-up call” for Salisbury.

“It’s disappointing. I wanted those guys to succeed more than any person on the planet,” Ireton said. “We now know the importance of getting those parking lots developed and getting people established in Downtown.

“We need to move the Lot 1 project (also being developed by Devreco) along — now. We have to continue with (Mayor Day’s) vision to get Downtown living and breathing 24 hours a day.

“This is a wake-up call in what has mostly been progressive and positive news concerning Downtown. Next, we need to check and see how our other Downtown businesses are doing — take their temperature, see what their needs are and how they’re faring,while there’s so much change going on.

Ironically, “Dueling Pianos,” the music act that appeared at Headquarters Live in February and had the entire city talking, will make another appearance Friday night. The group’s first sold-out show and the accompanying positive publicity, was seen as an indicator that Headquarters Live was on a good business course.

In fall 2014, signage was added to Headquarters Live, the music hall that will occupied the old Fire Department Headquarters in Downtown Salisbury.

Greg Bassett is editor and general manager of Salisbury Independent. Reach him at gbassett@newszap.com

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