When Los Angeles lawmakers weigh in Wednesday on who should get a lucrative contract to run the Greek Theatre, they won't just be deciding who will operate one of Southern California's most iconic amphitheaters — they'll be juggling two sets of political risks.
If City Council members choose recommended bidder Live Nation, they risk facing the ire of the Los Feliz Neighborhood Council and other neighborhood groups that have come out in force for longtime operator Nederlander, saying the company has earned their trust and would provide more rent to the cash-strapped city.
Voting for Live Nation would also break an ingrained City Hall tradition by defying the wishes of the councilman who represents the area, Nederlander supporter Tom LaBonge. Local lawmakers tend to defer to whoever represents the area immediately affected by a decision, partly because they want their colleagues to do the same for them.
"Every single one of them is going to want that colleague to vote with them on a project in their own district at some point," said Dan Schnur, executive director of USC's Jesse M. Unruh Institute of Politics.
But if council members reject Live Nation and side with Nederlander and its new partner, AEG, they open themselves to the accusation that Los Angeles hands out big contracts based on politicking alone. Both Greek Theatre bidders have hired a battery of lobbyists to press their cases, and Live Nation has hinted it could sue.
A recent vote to reject Live Nation "was inappropriately influenced by personal relationships, which have no place in a legal public contracting process," Live Nation attorney Victor De la Cruz wrote last week to council members.
The Greek Theatre drama began to unfold after a string of meetings last year, when the parks commission agreed with a staff recommendation to choose Live Nation. But when the decision was passed along to a council committee, lawmakers bucked that advice.
"It's not all about money; it's about community," LaBonge told committee members, who then voted 4 to 1 to reject Live Nation.
The lawmaker who disagreed, Councilman Joe Buscaino, asked his colleagues, "If we're not going to respect the process, why not just flip a coin?"
The decision now heads to the entire council. Both sides have lobbied heavily over the coveted contract for the Greek, a Griffith Park venue that generated roughly $27 million in gross revenue last year.
From October to December of last year, Live Nation reported spending more than $188,000 on City Hall lobbying and related activities over the Greek, according to city disclosures. Nederlander reported spending more than$165,000, and lobbyists for partner AEG estimate their firm spent an additional $30,000. The push to persuade council members seems to have only intensified since, with both sides bringing on more lobbyists.
Many have City Hall ties: For Nederlander, they include Marcus Allen, who served as a high-level aide to then-Mayor Antonio Villaraigosa; Tim McOsker, who was chief of staff to then-Mayor James K. Hahn; and Kathy Jones Irish, who once held the same job for LaBonge. For Live Nation, they include former Councilman Richard Alatorre; former state lawmaker Mike Roos, who once led the city parks commission; and Josh Perttula, a former special assistant city attorney who served on Mayor Eric Garcetti's transition team.
Live Nation has trumpeted the fact that an evaluation panel, arranged for the city by an outside consultant, unanimously recommended its proposal. The company promised to spend millions more fixing up the theater, replacing the theater terraces and roof instead of simply fixing them as Nederlander-AEG proposed, according to a staff summary. Live Nation has also taken aim at how Nederlander has run the theater, saying it didn't make the improvements it promised the last time its contract was renewed.
Nederlander-AEG, in turn, argues that the bid-scoring process was flawed, failing to fully account for its proposed spending on theater maintenance, upgrades and community outreach. The two companies point out that their plan guaranteed the city more money in rent — $77.5 million, compared with $60 millionover the next two decades. Community groups have echoed that point.
"Leaving hard money on the table is a mistake," said Jay Handal, co-chair of the Neighborhood Council Budget Advocates.
Nederlander also says it got city permission to alter its improvement plans.
As the debate rages, the Greek has become a campaign issue for candidates stumping in District 4 to replace LaBonge, who is termed out this year. Candidate Wally Knox sent out mailers inviting residents to join him in the fight to "stop the Live Nation takeover." Many other candidates have also sided with Nederlander, arguing the community wasn't heard.
The entertainment giants on both sides have chipped in to political campaigns: Nederlander and its employees have given more than $12,000 to city candidates and officials since 2010, including Mayor Eric Garcetti and Councilmen LaBonge, Mitch Englander, Gil Cedillo and Mike Bonin. AEG and its employees have contributed more than $65,000 during that period, including contributions to Garcetti and Councilmen Jose Huizar, Bernard C. Parks, Englander and Cedillo.
Live Nation employees,in turn, have contributedmore than $35,000 to city politicians and candidates during that time, including Garcetti, Councilman Mitch O'Farrell and District 4 candidate David Ryu. The company brought the Made in America festival to downtown Los Angeles last summer, an event championed by Garcetti as a boon to the local economy.
Nederlander has the backing of LaBonge and a number of community groups, but Live Nation could turn the tide if it convinces council members that the credibility of the city — or a legal battle — is at stake. Buscaino argued that the city risked worsening its business reputation if it disregarded the results of a fair selection process. A law firm representing Live Nation sent a letter Friday hinting at legal action, saying it had "submitted the superior proposal … and its selection is legally required."
Nederlander and AEG counter that the council is free to take or leave the staff recommendation. "It's not the job of the City Council just to rubber-stamp documents," said Rick Mueller, president of AEG Live North America.