In the latest turn in the heated battle over who should run the Greek Theatre, a Los Angeles city commission voted Wednesday in favor of letting the city temporarily operate the Griffith Park venue itself.
Parks department officials first floated the controversial idea in February, after the commission and the City Council ended up at loggerheads over warring bids to run the Greek, a coveted and lucrative venue that last year grossed more than $27 million.
Last year, the Board of Recreation and Parks Commissioners recommended that Live Nation take over the theater, echoing the recommendation of an evaluation panel. But the council voted against that idea and asked the parks commission to consider redoing the bidding process. Its decision followed an outcry from neighborhood groups concerned about pulling the venue away from longtime operator Nederlander Organization, which had bid to continue running the venue alongside new partner AEG.
Faced with that stalemate, the parks department came up with another idea. Under the new "open venue" plan, no promoter would exclusively run the Greek. The city would take on responsibility for maintaining the theater and would control the concert calendar, allowing Live Nation, Nederlander and other promoters to book acts. It would also set aside a chunk of theater revenues annually to fund repairs and upgrades.
Promoters would still be responsible for managing and paying musicians, advertising concerts, and paying for security and ushers. The city would also hire an event staffing company to provide those ushers, ticket takers, security and other staff as needed — something that the head of the parks department stressed repeatedly at the Wednesday meeting.
"We will not be managing the venue," General Manager Mike Shull said. "We will leave that to the professionals."
The plan split the entertainment titans already warring over the Greek: Live Nation has welcomed the plan as a chance to bring its shows to the venue. But Nederlander argues that the city could extend its existing contract to run the venue and should do so to make sure the treasured theater remains in capable hands.
"They don't have expertise in the concert industry. They don't have expertise running a venue of this size," said Rena Wasserman, general manager for the theater under Nederlander. "I worry that self-operation would quickly throw the building into the Dark Ages."
Many neighborhood groups have also been skeptical of the city operating the theater. A letter from the chair of the Los Angeles Neighborhood Council Coalition, which includes scores of neighborhood councils, called it "irresponsible and reckless … to risk taxpayer dollars on this ill-conceived venture." The Greek Theatre Advisory Council, the Los Feliz Improvement Assn. and other local groups are also opposed.
"The City Council told you, 'You didn't do your job properly.' They threw it all out and said start over … and instead of starting over you said, 'You know, we screwed up so maybe we should run it ourselves,'" Studio City resident Allan Erdy said, spurring laughter from the crowd at the Wednesday meeting. "That's not an answer."
Backers of the plan, including the Los Angeles Parks Foundation, argue it would provide more money to the city. A report from the parks department estimated that under the new system, the city could yield $3 million to $4.8 million in net revenue next year, compared with the roughly $2 million it reaped last year.
That added money represents "tremendous revenue for a department that ... is in critical need," said Mark Glassock, director of special projects for the Los Angeles Neighborhood Land Trust.
Beyond those touted advantages, Shull has said there are few alternatives available to the city at this point other than operating the theater itself, at least temporarily.
The Nederlander contract expires at the end of October, leaving little time to restart the selection process, he said. If city officials still want to redo the bidding process, they could do so while the city temporarily operates the Greek, he said. Under the plan approved Wednesday, the Greek would operate as an open venue for at least two years.
Nederlander has argued that the city could legally extend its contract to run the venue and that Nederlander could match the money L.A. believed it would gain under the new model. In a letter to the parks commission, the company offered to increase the minimum rent it guarantees to the city to at least $3.5 million annually.
But Live Nation has warned against extending the Nederlander contract, arguing in a letter to the commission that "the Greek should not be beholden to the same company decade after decade in a manner that is anti-competitive."
Commission President Sylvia Patsaouras said that the department could not simply accept the Nederlander offer to pay higher rent without giving other companies a chance as well. The parks commission approved the plan for the city to operate the theater 3 to 1 on Wednesday, with Commissioner Iris Zuñiga opposing the idea. Zuñiga said she was concerned with how quickly the plan had been drafted and how thoroughly it had been thought out.
In a statement, Nederlander said it was disappointed with the decision but pointed out that "if this plan is to be implemented, it would require several more steps by the department."
Parks officials plan to return to the commission soon with a draft rental agreement for concert promoters, as well as more detailed plans for event management services and other aspects of theater operations.
Councilman Tom LaBonge, whose district includes the Greek, said he would ask a top city official to assess whether it was a good decision for the city. Because the parks department already has hundreds of recreation sites, he said, "I want to be certain that the department will be able to serve these existing facilities, as well as run a theater."