A key committee of Los Angeles lawmakers bucked a city commission and its staff Monday, rejecting their recommendation to hand over control of the Greek Theatre to a new operator.
The question of who will run the Griffith Park venue has become a battle royal between entertainment titans pushing their points in City Hall. Hundreds of people packed the Monday meeting, clad in red and green shirts to show which company they backed -- Live Nation or existing operator Nederlander, which has partnered with Staples Center developer AEG in a bid to keep running the Greek.
The parks commission recommended last year after a string of lengthy and impassioned hearings that Live Nation take over theater operations. On Monday, a City Council committee voted 4 to 1 to reject that recommendation.
"Something about the Greek is magical and the magic also is related to the Nederlander group," said Councilman Tom LaBonge, who represents the area where the theater is located.
LaBonge voted with the majority of the committee members to reject Live Nation. The only lawmaker on the committee who dissented was Councilman Joe Buscaino, who argued the process that picked Live Nation had been fair.
"If we're not going to respect the process, why not just flip a coin?" Buscaino asked.
The decision now heads to the entire council for a vote. Live Nation Chief Operating Officer Joseph Berchtold said he was confident the council would support moving forward with their proposal, despite the committee vote against them.
"There was no factual debate on the support of our proposal today," Berchtold said. "We think that will carry the day."
Neighbors have eyed the decision anxiously because the theater sits near the entrance to Griffith Park, past an affluent stretch of Los Feliz where homeowners worry about theater noise, traffic and other nuisances. The venue made nearly $23 million in gross receipts and provided more than $1.6 million in payments to the city in 2013, according to the parks department.
Though Nederlander-AEG said it would guarantee millions more in city revenue, Live Nation said it would devote much more money to renovating the theater over time, a staff analysis of their proposals found. An evaluation panel unanimously recommended choosing Live Nation.
Parks department manager Michael Shull said "there's no disputing" that Nederlander-AEG had offered the city more guaranteed revenue, but that when the higher Live Nation spending on improvements was factored in, Live Nation was offering more total value to the city.
Nederlander-AEG argues that recommendation was based on a flawed analysis that failed to fully account for how much it would spend on theater upgrades and community outreach. It stressed that its higher guaranteed rent would provide needed money for the city.
"Should the profit from the Greek Theatre go to fund L.A.'s parks and recreation programs throughout the city, or should it go to Live Nation shareholders?" asked Rick Mueller, president of AEG Live North America.
Nederlander-AEG also rallied a number of community groups to its side, including the Los Feliz Neighborhood Council and others who say they are happy with how Nederlander has run the Greek. More than 30,000 people have signed an online petition to keep them in charge.
Live Nation is saying "we're going to give the city less rent and we're going to make a ton more profit," said Luke Klipp, treasurer of the Los Feliz Neighborhood Council, at a news conference outside City Hall on Monday. "This is a city asset, and if the city selects Live Nation, we're saying we value private profits over public good."
Live Nation, in turn, has emphasized its promises to spend more updating the Greek, arguing that Nederlander had let the theater fall into disrepair. For instance, the company says the theater terrace stands need to be completely replaced because of earthquake risks.
"Minor repairs and Band-Aids as the Greek turns a century old are no longer enough," said Matt Prieshoff, chief operating officer for Live Nation in California.
Live Nation also argued that Nederlander-AEG was misleading the public by focusing solely on the guaranteed minimum revenue for the city and not the total value of the investments and improvements at the Greek.
The question of who should run the Greek has paralyzed decision makers in the past: More than a decade ago, after city staffers recommended handing over control of the theater to House of Blues instead of Nederlander, the parks commission ended up rejecting both bids after a protracted public battle over the theater contract. Nederlander ultimately continued to operate the Greek after reaching a deal with House of Blues to team up on marketing.
When Nederlander wasn't recommended to win, it "went on to wage a campaign of misinformation, turning it all into a political circus. Sound familiar? ... If politics trumps basic fairness and the integrity of the city's contracting process today, no company will ever bid on this contract again. Why bother?" Live Nation attorney Victor De la Cruz said at the Monday meeting.
This time around, the Greek has become a talking point for some candidates running to represent District 4 when LaBonge is termed out of office later this year. Attorney Wally Knox said Live Nation had "no place at the Greek," calling it "a gigantic company specializing in some of the noisiest events on the planet." Businesswoman Sheila Irani, also among the 14 candidates in the race, said Nederlander offered better revenues.
Candidates Fred Mariscal, Tomas O'Grady, David Ryu, Ross Sarkissian, Tara Bannister and Mike Schaefer also say Nederlander-AEG should operate the theater. Former LaBonge aide Carolyn Ramsay said Monday that the proposal should return to the parks commission for more review.
But others have avoided wading into the warring proposals. "The awarding of city contracts should not become overly political," candidate Teddy Davis wrote in response to a Los Angeles Times questionnaire. Unless there was a flaw in the scoring process, the recommendation should stand, Davis wrote.
If the full council decides to reject the recommendation to choose Live Nation, Shull said the parks commission would have several options, including reconsidering their recommendation, restarting the selection process, or simply reiterating their choice of Live Nation.
The current contract to run the Greek ends at the end of October. The new agreement to run it will span at least a decade, with chances to twice extend the agreement for an additional five years each. Shull said the parks department had originally aimed to execute the new contract by the end of April, a goal that now looks unlikely.