Nashville’s famed Exit/In, closed to the public since the pandemic started, is staring down another major hurdle as it enters its 50th year: co-owner Chris Cobb announced over the weekend that the storied venue is being put up for sale by its landowners.
Cobb tells Billboard that he and his wife and Exit/In co-owner, Telisha Cobb, have been in talks with their landlords for over a year to possibly purchase the land, but COVID accelerated the owners’ desire to unload the property, including neighboring bar Hurry Back (also owned by the Cobbs).
“It caught us a little off guard,” Cobb says. “But we were already working in that direction.”
Exit/In had been talking with North Carolina-based real estate company Grubb Properties to become the second venue to benefit from their Live Venue Recovery Fund. So far, the fund has partnered with Headliners Music Hall in Louisville, Ky. and is securing additional investments to help as many independent venues as possible own their own property.
According to Grubb Properties director of acquisitions Hillary Schmidt, the Live Venue Recovery Fund is an impact fund that partners with live music venue operators to help them establish long-term ownership. She explains that the fund has been in the works since the pandemic, though in fits and starts. Just over a year ago, Grubb Properties CEO Clay Grubb met venue owner and now-president of National Independent Venue Association Dayna Frank at the Aspen Institute. The two struck up a friendship over their love for live music and the idea to help independent venues was created.
The original idea was that “having independent live music venues is critical and establishing long-term ownership is critical to success because when you have more owner/operators, you’re creating this diverse live music ecosystem,” says Schmidt.
“Grubb Properties has worked with a couple independent venues, one here in Charlotte and another in Chapel Hill, so it feels like this conversation has been ongoing,” adds Grubb Properties corporate communications manager Emily Ethridge. “Then when everyone is scrambling and different things keep happening during the pandemic, we figured this was the best way to respond. We came up with this program and made it official, not just one offs.”
The fund is uniquely helpful for venue operators, landlords and Grubb Properties and its investors. Grubb has a committed return for investors but all gains above a 12% IRR (internal rate of return) will be donated to NIVA. The added benefit for investors is that they can also write off the return above 12% that is donated.
In the case of Exit/In, the Grubb fund would purchase the property and lease it to the Cobbs with an option to eventually own the properties themselves.
“My experience thus far with Grubb has been nothing short of amazing,” says Cobb. “They are a values-driven company. They are an employee-owned company. They are doing good work out there.”
Both Grubb and Cobb hope the fund can be utilized to help more venues that were hit hard by the pandemic and have been without revenue for nearly a year. Because venues were forced to remain closed, the Paycheck Protection Program was not a suitable fit for many live music spaces. The Save Our Stages Act (now known as the Shuttered Venues Operators grant) was passed by Congress in late December, but the $15 billion will now be spread across indie venues, movie theaters, zoos, museums and more. The SBA has still not opened up applications for the grants and venues continue to struggle staying afloat while awaiting funds.
SVO grant funding specifically states that the money cannot be used to purchase property, but Schmidt says that should not deter venues from reaching out to Grubb about the fund. “If there are venues who are interested in participating in this program, they should absolutely reach out to us,” says Schmidt, who has so far been cold-calling venues. “We’ve been asking for three years financials, pre-pandemic.”
The number of venues the fund can help has no cap, but will be determined based on the amount Grubb raises. “Our hope is that we can go full tilt now and work with as many venues as possible to figure out solutions.”
Since the pandemic, Billboard has determined that roughly 90 independent venues have permanently closed. While some venues including Exit/In have received financial support from local governments, and with SVO grants pending, many spaces have a long way to go to recover and property ownership could help pave the way for stability going forward.
“We still don’t know what is going to happen here but we certainly hope we can begin having more conversations about property ownership for small businesses and start to make some long-term change,” says Cobb. “When situations like this continue to happen where beloved spaces, micro-businesses, mom and pops continue to lose their leases and are forced to go out of business, that’s a broken cycle.”