Opinion: Funny Valentine? Say “No” to Live Nation Bait and Switch, “Yes” to a Smaller Amphitheater
“Don’t change a hair for me, not if you care for me …” – Rodgers and Hart, “My Funny Valentine.”
At the Irvine City Council meeting scheduled for Tuesday, February 14, 2023, at 2:00, the city staff will update the Council on the proposed amphitheater in the Great Park. The staff report, “Overview of Current Discussions with Live Nation and Review of Smaller Live Music Venue Options at the Great Park.” (pg. 2) reads:
“Plans for a permanent, live-music amphitheater venue in the Great Park were advanced when the City Council approved the Design, Construction, and Operation Agreement (DCOA) with Live Nation on September 27, 2022, which contemplates the construction of a 14,000-seat amphitheater. However, after approval of the agreement, Live Nation requested significant changes to the DCOA.
“On November 11, 2022, Live Nation formally requested revisions to the DCOA that would shift significantly increased costs and amphitheater design responsibilities to the City; introduce additional revenue streams for Live Nation; reduce controls on noise impacts …; and provide Live Nation with additional opportunities and flexibility to use the amphitheater.”
“Bait and Switch”
1: a sales tactic in which a customer is attracted by the advertisement of a low-priced item but is then encouraged to buy a higher-priced one
2: the ploy of offering a person something desirable to gain favor (such as political support) then thwarting expectations with something less desirable.” -Merriam-Webster.com Dictionary
On Tuesday, the Irvinhttps://www.merriam-webster.com/dictionary/astroturfinge City Council will celebrate Valentine’s Day by considering whether to spend tens of millions of dollars more than it agreed to five months ago on the proposed 14,000-seat Great Park amphitheater or to greenlight planning for a smaller, 6,000-8,000 seat facility not controlled by Live Nation. (Agenda Item 5.2 )
The Design, Construction, and Operation Agreement (DCOA) deal with Live Nation was approved on September 27, 2022, provided that the City would pay up to $110 million in construction costs on a facility estimated to cost up to $130 million; Live Nation would contribute only $20 million to construction costs. Live Nation now says construction costs may be as high as $150 million and is demanding that the City bear the entire increased cost. The DOAC specified that Live Nation would be responsible for design costs estimated at $2-4 million; Live Nation now seeks to shift those costs to the City. The DOAC provided for Live Nation to be responsible for purchasing and installing furnishings, fittings, and equipment (FF&E); Live Nation proposes to shift these costs, estimated at $15-30 million, to the City.
Live Nation additionally seeks to shift to the City its liability for a possessory interest tax and to make the City liable for liquidated damages if construction isn’t timely completed. On top of attempting to saddle the city with massive cost increases, Live Nation also seeks to reduce the City’s potential revenues. The Council-approved deal provided for a $5 per ticket surcharge, with revenues to be split 50/50 between the parties to cover maintenance costs. The surcharge was to be increased by 10 percent every three years; Live Nation now wants to drop those increases. Live Nation also now demands an exclusive right to host all events with more than 5,000 attendance anywhere in the park.
The DOAC provided that there would be no charge for concert parking; Live Nation now wants the right to charge for parking and to retain all parking revenues. Live Nation further demands ownership of naming rights and retention of all money received from them.
In addition to the above changes in financial aspects of the deal, Live Nation is demanding numerous other changes, which can be seen in its “redline” of the DCOA and summary chart that are Attachment 2 to the staff memo. Of particular concern is its new demand for deletion of the requirement that it comply with Irvine’s noise ordinance.
It’s noteworthy that the Council’s approval of the DCOA came only after five months of staff negotiations with Live Nation. The company’s demand for sweeping revisions only six weeks after the approval seems like a classic case of bait and switch.
Item 5.2 was placed on the Valentine’s Day agenda at the request of Councilmembers Larry Agran and Kathleen Treseder. Their memo of January 25, 2023, requested that staff “prepare a presentation on the current amphitheater project and a scaled-down amphitheater with a smaller footprint.” Staff did so with the assistance of a consulting firm. They concluded that a smaller amphitheater would be a viable option and that “a 6,000-8,000 seat venue could … allow the City to address various concerns that have been raised regarding the larger, commercially focused amphitheater, while also allowing the City access to a range of amphitheater concert acts.”
The consultants found that such a smaller venue could attract top talent, pointing to the 5,900-seat Greek Theater as a prime example that also delivers “a positive financial return to the City of Los Angeles.” Staff found that an 8,000-seat facility could be built at substantially less cost, approximately $80-90 million, would reduce noise and traffic impacts, and require substantially less parking, thus freeing up land for other park uses. Staff notes that a smaller facility could be moved from the Heart of the Park to the east, allowing the lake to be extended to the intersection of Great Park Boulevard and Skyhawk, a more aesthetically appealing configuration.
In an opinion piece published in Irvine Watchdog before the September vote, I suggested that the DOAC was a sweetheart deal for Live Nation. I raised several concerns that have been amplified by Live Nation’s counterproposal, including the one-sided financial structure of the deal, the noise issue, naming rights, and—above all—the wisdom of the City locking itself into a 30-50 year relationship with a company as controversial as Live Nation. That company has only become more controversial in the ensuing months, with the Taylor Swift ticketing fiasco, congressional hearings, and anti-trust investigations. I pointed to other models, such as the Greek Theater. The Staff report examines those models in a favorable light:
“[T]here are a number of successfully operating smaller amphitheaters that operate with a different model. In those models, the venue is controlled by a local operator on contract with the City rather than being controlled by the concert promoter. In this model, the sound is run through a house speaker system rather than sound systems brought in by the musical acts themselves. … In discussions with people familiar with the Greek Theater, this local operator control has been important in their mitigation of neighborhood impacts.”
Live Nation has mounted an “astroturf” lobbying effort disingenuously calling on the Council to “save live music.” The issue is not whether Irvine will have live music but whether the Council will allow Live Nation to control and profit from that music at the expense of the people of Irvine. The Staff report clarifies that Irvine can have live music without locking itself into an abusive relationship with a predatory corporation for the next half-century and presents a better option. The Council needs to go with Plan B.
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