Nederlander-House of Blues Proposal to Run Greek Theatre Faces Council Vote

Hoping to drop the curtain on a long-running drama, the Los Angeles Recreation and Parks Commission will decide today whether the Nederlander company should continue to operate the Greek Theatre, even though its bid is significantly less than a proposal rejected earlier this year.

Nederlander emerged in September as the lone bidder on the lucrative operating contract after the company struck a deal with its competitor, the House of Blues.

Although the House of Blues at one time offered to pay the city several million more for the contract, the commission threw out that proposal earlier this year under pressure from then-Mayor Richard Riordan and late council President John Ferraro, a longtime friend of the Nederlanders.

With its rival now on the same team, Nederlander has agreed to spend $6 million to fix up the aging landmark, compared with $11.1 million initially offered by the House of Blues. Nederlander also proposes to pay the city $12 million in rent over the next 10 years--about the same amount once offered by the House of Blues.

The Nederlander proposal falls $2 million short of the bid’s stated requirements, but Recreation and Parks officials are urging the commission to award the contract and move on. In light of the country’s current economic woes, it is doubtful that the city will get a better deal, officials said.

“We can’t roll back the clock,” said Ellen Oppenheim, general manager of the Recreation and Parks Department. “We have a good bid, and I believe the board should take action to approve it.”

She also noted that the proposal is a huge improvement over Nederlander’s current contract, which requires the company to pay the city $50,000 annually in rent. The new plan would pay Los Angeles $1.2 million annually while picking up the tab for all maintenance and repairs at the facility--which alone could cost more than $6 million over the next decade.

Under the proposal, Nederlander has agreed to completely refurbish the historic theater in the hills of Griffith Park to include a new stage, facade and sound system.

Although that initial capital budget was set at $6 million, Nederlander attorney Adam Burke said the company expects to spend an additional $4 million on other improvements, including landscaping and new concession stands. The company also plans to hold more concerts at the facility, adding about 10 events to the current level of 55 to 60 a year.

“There are a lot of positive things about to happen to the Greek,” Burke said. “This is one of the best, if not the best, rent deal at any public facility anywhere in the world.”

‘A Very Good Deal for the City’

Commissioner Lisa Specht, who strongly supported the House of Blues’ bid the first time around, said she also believes that the Nederlander proposal will be “a very good deal for the city.”

“The bottom line for me is that the city has benefited from going through this process,” she said.

The long and somewhat tedious process started in late 1999, when House of Blues officials complained that the council had circumvented city rules by extending Nederlander’s contract without an open bid.

In January 2000, the council voted 13 to 1 to rescind that agreement after learning that a House of Blues-sponsored referendum was going to be placed on the ballot, asking voters to overturn the Nederlander pact and force the city to seek other offers. The deal also was clouded by the fact that Ferraro was a close friend of the Nederlanders and their attorney, Neil Papiano.

At the council’s urging, the Recreation and Parks Commission put the contract out to bid, sparking the bitter competition between Nederlander and the House of Blues.

Under pressure from Ferraro, however, the commission deadlocked on giving the contract to the House of Blues, the highest bidder. Instead, the panel threw out the two bids last spring and agreed to start over.

That move prompted the two companies to join forces. As it stands now, the House of Blues will assist Nederlander with concert bookings and marketing.

Adam Friedman, executive vice president of House of Blues Concerts, said that although his organization has teamed with Nederlander, the city will still get a better deal than it would have initially. Neither company would disclose the financial terms of their joint effort.

“The city got a great deal here,” Friedman said. “We are going to have to work our tails off, but we are ready to do that.”