News Politics

Greek Theatre, Paul Koretz completely flabbergasted

LOS ANGELES (CNS) – A Los Angeles councilman said today he is in
disbelief at the idea of the city taking over operation of the Greek Theatre,
but was unable to convince his colleagues to intervene in the Recreation and
Parks Department’s decision to stop using an outside management firm.
Councilman Paul Koretz told reporters that he is “completely
flabbergasted by the idea that our city’s Department of Recreation and Parks
wants to run the Greek Theatre” after being given the opportunity to consider
“two absolutely world class, top-of-the-line proposals by proven venue
operators.”
Instead of re-examining the bid proposals from Live Nation and
Nederlander Concerts, which has run the outdoor concert venue for about 40
years, the Recreation and Parks commission “tossed out these two premium
bids” and decided the city would run the theater itself, Koretz said.
The Los Angeles City Council revisited the management of the Greek
Theatre today at Koretz’s request, with the councilman pushing his colleagues
to intervene to have the Recreation and Parks Department drop its plan to run
the venue.
Mike Shull, general manager of the department, told the City Council
that he remains “steadfast” in the plan to have the city manage the venue.
If the city keeps Nederlander, which lost a competitive bid, and then
restarts the competitive bidding process in a year or two, the same fight over
what vendor should run the venue would occur, Shull said.
The City Council accepted Shull’s report for filing, but took no other
action.
Koretz said this will likely be the end of the debate for some time, as
he “sensed” there was not a “taste” among his colleagues for asserting
jurisdiction over the Recreation and Parks Department’s decision.
He had initially wanted to ask his council colleagues to override the
Recreation and Parks Commission’s vote from earlier this month to operate the
Greek Theatre as an open venue.
Koretz said he would have supported either extending Nederlander’s
contract for a year, or having Live Nation and Nederlander formally compete for
interim control of the venue over the next one or two years.
“I can’t imagine that we will run this system as well as either Live
Nation or Nederlander/AEG would have done,” Koretz told City News Service
following the council meeting. “They are superstars in their industry, whereas
I think we should focus on the things we do well and pick someone to focus on
what they do well.”
Representatives of neighborhood councils and local community groups
joined Koretz in saying that they do not feel the city is qualified to run the
Greek Theatre.
Jay Handal, co-chair of the Neighborhood Council Budget Advocates, said
“the department does not have the expertise, nor does it have the personnel to
operate the venue, nor has it truly and transparently costed out every aspect
of them operating the venue.”
Facing pressure from Nederlander Concerts and community groups, the City
Council previously had said it would not support awarding the venue’s
management contract to Live Nation, which won a competitive bid conducted by
the Recreation and Parks Department.
The council’s rejection of Live Nation appeared to give the victory to
Nederlander, but instead of extending Nederlander’s contract, which ends in
October, Recreation and Parks staff proposed that the city handle the Greek
Theatre’s management itself.
The Recreation and Parks Commission that oversees the department agreed
with the plan, in which the city will decide in 2016 whether it wants to again
seek out an outside company to handle management of the venue, starting in
2018.
Recreation and Parks officials said the “open venue” model could be an
opportunity for the city to gain a bigger cut of revenues from the summer
concerts held at the Greek Theatre.
Officials estimate the city could net $3 million if 50 concerts are
held, or $4.8 million for 70 concerts. Under its revenue-sharing agreement with
Nederlander, the city received $1.97 million of $27.2 million in gross receipts
in 2014.
Recreation and Parks officials have said the Red Rocks Amphitheatre in
Denver is an example of a successfully run, city-owned and -operated venue that
Los Angeles could follow.
Nederlander Concerts had offered more money if city officials extended
its contract, with CEO Alex Hodges saying last week that the company’s contract
could be extended and amended to have “an increased annual minimum rent
guarantee to the city of $3.5 million for 2016, with zero expense or risk to
the city.”

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