Los Angeles City Council Votes to Reject Live Nation's Bid for The Greek Theatre

The Los Angeles City Council today rejected the recommendation of the Department of Recreation and Parks to accept Live Nation's bid for a contract to run the city's iconic Greek Theatre. The motion passed by a vote of 11-3..

Though the recommendation is non-binding, the news is something of a victory for Nederlander and AEG, whose joint bid this past October was scored lower than Live Nation's by 59 points by an independent consultant hired by Recreation and Parks.  The decision would seem to validate Nederlander's main argument that the proposals were not compared on an "apples to apples" basis and failed to take community input into consideration.

This long and winding process will now go back to Recreation and Parks, which will reconsider its findings but not necessarily have to change its final endorsement.

In a statement, Live Nation said that "today's action by the City Council puts aside the clear and unanimous findings of the lengthy, comprehensive and competitive bidding process established by the City for the Greek Theatre concession contract... Fortunately, only the Board of Recreation and Parks Commissioners can award the contract, and they have unanimously voted in favor of Live Nation. Now that this City Council has given its opinion, the process calls for Recreation and Parks staff to negotiate a contract with Live Nation."

Alex Hodges, CEO of Nederlander Concerts, responded to the news as well, saying: "We are grateful for all the community support and know our proposal is the most fiscally responsible for the City and reflects the best of LA. We look forward to working with the Department and the Commission and are confident that our proposal is the right choice for the City and will bring this iconic landmark into the future, while respecting its past."

The City Council speaker asked the council to meet behind closed doors to discuss the issue at hand because of possible litigation. While the speaker didn't specify what legal issues existed, a story in the L.A. Times reported on a leaked memo sent to the council by Mike Feue, the L.A. city attorney. The memo instructed lawmakers that they couldn't overturn the Recreation and Parks decision at this juncture but they could reject the contract after it is negotiated and approved by the that department. The attorney also warned that overturning the decision could be seen as a "violation of city contracting rules and prompt a lawsuit against the city."

Following the closed-door meeting, council members were given time to make their views known and question the Recreation and Parks commission. Representative Paul Koretz said he had spoken with just about every lobbyist and old friend in Los Angeles while considering the issue. Joe Buscaino, in a dramatic gesture, ripped a piece of paper which he said is the message the city sends to businesses making bids on city contracts if it fails to support the Greek's RFP process.

In making the decision, the City Council heeded the recommendation of its Arts, Parks, Health, Aging & River Committee, which reviewed Parks and Recreation's findings and heard public testimony.  On Jan. 26, the committee voted 4-1 to "not concur" with the Recreation and Parks Department recommendation for Live Nation.. 

Today's lively meeting in the packed council chamber was filled with partisans that saw Live Nation, clad in red, sitting on one side of the room and Nederlander supporters, in green, on the other. Each side was allowed to give 20 minutes of testimony in one-minute increments. Live Nation COO Joe Berchtold, Nederlander chairman and president Jimmy Nederlander and AEG CEO Dan Beckerman gave testimony. This was followed by the commissioners of Recreation and Parks, who spoke to the fairness of the RFP process for the Greek which reportedly cost $250,000.