Council Rescinds Greek Theatre Deal

Under mounting public pressure, the Los Angeles City Council voted Wednesday to rescind the controversial agreement that gave the politically connected Nederlander family the exclusive right to continue running the Greek Theatre without a competitive bid.

Lawmakers voted 13 to 1 to take the action after learning that a referendum--sponsored by a Nederlander competitor, the Universal House of Blues--would be placed on the November ballot. The measure asks voters to overturn the agreement and force the city to seek offers from other bidders.

“Our hands are not clean,” said Councilwoman Rita Walters, urging her colleagues to cancel the deal and seek competitive bids. “The way this whole thing was handled, from the start, has been tainted. . . . This action all along has been in defiance of open meetings and the bidding process.”

For 25 years, the city has contracted with Nederlander to run the outdoor amphitheater in the hills of Griffith Park. Instead of the lease going out for competitive bid when it came up for renewal, lawmakers have given extension after extension to the company owned by members of the Nederlander family, who are personal friends of Council President John Ferraro. Ferraro, who pushed for the extension, is also a longtime friend of the Nederlanders’ attorney, Neil Papiano.

After the council voted 9 to 5 in December to extend the agreement for five more years, the House of Blues went to work to force a referendum. In just a few weeks, the group obtained 72,000 signatures, far more than the 40,000 needed to put the matter before city voters.

City staff warned council members that if they failed to rescind the contract, the matter would be placed on the ballot, at a cost of $1.8 million.

After a hastily called vote, even Ferraro voted to overturn the contract. Councilman Nate Holden was the only holdout. He urged his colleagues to stand by their earlier decision.

“We need to think seriously about the consequences of this action,” he said. “Here we are today acquiescing to someone who doesn’t like what the council has done. We need to be able to manage our own affairs.”

On Wednesday, an attorney for the Nederlander family appeared in Los Angeles County Superior Court to seek a temporary restraining order blocking the council’s action. The judge, however, put the matter over to a hearing March 6.

Attorney Adam F. Burke argued that petitioners working for the House of Blues obtained signatures under false pretenses. Burke said some people were told that the petition called for adding bathrooms to the theater. Others were told that the city wanted to tear down the beloved amphitheater, he said.

“It’s sad that someone can go and lie to the public and trick people into signing a petition,” Burke said. “It’s a sad day for the referendum process. Now anyone who wants to change a decision can circulate a campaign with lies.”

House of Blues representatives called Burke’s allegations “ludicrous.” “It’s an insult to the intelligence of the 72,000 people who signed the petition,” attorney George Mihlsten said.

In the meantime, the city Parks and Recreation Commission is preparing the paperwork to seek competitive bids for the contract. The request for proposals will go out within two weeks, officials said.

“Let’s go out to bid,” said Rick Taylor, a political consultant representing the House of Blues. “If you’ve got the best bid, more power to you. I think the council did the right thing. They did the respectable thing as an elected body.”

Councilman Joel Wachs, a mayoral candidate who led the fight against the Nederlander contract, called Wednesday’s council decision a “victory for the people.”

“It is just important to know that abuses cannot go unchecked and there is someone looking over people’s shoulder,” Wachs said.

Earlier this week, Ferraro signaled that he had changed his mind on the deal. He urged his colleagues in a letter to reverse their decision on the contract.

“We should not let this matter drag on until an election could be held,” he wrote. “Nor should we incur the additional public expense involved in such an election.” He added, however, that the city’s referendum process had been abused.