The 11-3 vote marks the latest turn in the lengthy battle over which of the entertainment giants will run the iconic and coveted venue in Griffith Park -- a question that has spurred legal threats, become a rallying point in political campaigns and set off a deluge of lobbying at City Hall.
The Nederlander Organization, which has run the theater for decades, teamed up with AEG in a new bid to keep running the Greek. It competed against Live Nation, which was unanimously recommended last year by an evaluation panel set up by an outside consultant.
After a string of meetings, the choice of Live Nation was also backed by the city parks commission, whose members are appointed by the mayor. But when city lawmakers were asked to weigh in, most disagreed with the decision to choose Live Nation.
The Wednesday council vote against Live Nation does not automatically overturn its selection: In a confidential memo obtained by The Times, City Atty. Mike Feuer said the Wednesday vote was only advisory and that the parks department retained the right to award the contract.
The decision now returns to the parks commission. Its possible options include changing its choice, sticking with its selection of Live Nation or restarting the entire process.
In the Wednesday vote, city lawmakers asked the parks commission to consider redoing the selection process "in consultation with the community" and a council committee that oversees parks. The existing contract to run the Greek expires at the end of October.
The lengthy hearing was packed with supporters of the competing bidders -- Nederlander-AEG supporters wearing green, Live Nation backers in red. For more than an hour, the council retreated behind closed doors to get legal advice before returning to discuss the matter publicly.
The two proposals had been rated on a long list of factors: Nederlander-AEG had offered the city more rent over the course of two decades, but Live Nation had suggested spending more to upgrade the aging theater, putting its overall investment higher, according to a staff summary of the two proposals.
"This entire process, we tried very, very hard to be transparent and to be objective and to make sure to the best of our ability that this was awarded on merit and nothing else," said Michael Shull, general manager of the parks department.
Nederlander-AEG argued that the scoring process was flawed. Neighborhood groups such as the Los Feliz Neighborhood Council have backed Nederlander-AEG, saying the existing operator had won their trust and would provide more sorely needed cash to the city.
"The city is always saying how it desperately needs more revenue," said Marian Dodge, past president of the Los Feliz Improvement Assn. "If that is the case, why is the city throwing away $17 1/2 million dollars in guaranteed revenue?"
But Live Nation argued its proposal got a higher rating for good reason. Its attorneys have strongly hinted at legal action, saying in one letter that an earlier council committee's vote against Live Nation was "inappropriately influenced by personal relationships."
"When the city embarks on [a selection] process, it does not get to arbitrarily move the goal posts," said Victor De la Cruz, one of the attorneys representing Live Nation.
During Wednesday's hearing, several council members quizzed city staffers about how the two competing proposals were scored, questioning whether the system reflected what community members and city leaders wanted out of the Greek.
"My first priority is revenue," said Councilman
Others said the parks department had followed a fair and sensible process. Councilman
He called out mockingly, "Calling out all businesses -- come to Los Angeles! Apply for a contract. Be a part of the request for proposals. But at the bottom of the ninth inning" -- Buscaino tore up a piece of paper -- "there's your proposal."
Nederlander and AEG cheered the decision Wednesday, saying it was "confident our proposal is the right choice for the city." Live Nation said it would "continue to protect our position as the winning bidder for the Greek Theatre concession."
Times staff writer Peter Jamison contributed to this report.