Opinion: Hasty, One-Sided Live Nation Deal Costing Irvine $110 Million Hinges on Vice Mayor Kim
On Tuesday, July 18, 2023, Vice Mayor Tammy Kim and Councilmember Mike Carroll submitted a Memo requesting that the Live Nation contract be considered for approval. However, the Design, Construction and Operating Agreement (DCOA) contract was not released until Friday, July 21st at 6:55PM, leaving less than 2 business days to review the multi-million dollar contract.
At the time of publishing the DCOA, a Special Meeting was scheduled for 1:55PM, just 5 minutes before the already scheduled 2:00PM Great Park Board meeting by Great Park Board Chairman Mike Carroll. However, before we go into the behind-the-scenes politics of this issue, let’s take a look at the terms of the latest contract.
Upon review of the DCOA, here are terms that may be concerning to Irvine residents:
- No staff report has been provided.
- Operating season increased from 5.5 months to 8.5 months — an increase of over 50%.
- Seating capacity was not to exceed 14,000 seats. Now Live Nation is requiring a capacity of no less than 14,000 seats.
- City must pay Live Nation nearly $10,000 for each day construction is delayed from expected delivery day.
- Live Nation is not required to comply with amended City ordinances, including Noise Ordinance.
- If Live Nation charges for parking on City land, they will keep all the revenue.
- This project has not gone before any of the Commissions, unlike all other city projects.
There is No Staff Report
City staff have not been able to review the terms of the DCOA, as the contract was provided after work hours on Friday evening. That leaves less than 2 business days to review this multi-million dollar contract. Nobody can be expected to digest all the details in the latest DCOA within this timeframe.
Below is a comparison chart city staff provided for the February 14, 2023 Great Park Board meeting. The below chart compared the original terms from November 2022 with the February 2023 terms. Note: These are not the current terms.
It is imperative a similar analysis is presented to members of the public as well as the City Council before any decision is made.
Operating Season extended from 5.5 months to 8.5 months (DCOA Section 1(gg))
In the original terms, the operating season was May 1 to October 15 (5.5 months). Under this current DCOA, the operating season is March 1 to November 15, giving Live Nation an additional 3 months of use each year. That’s an increase of over 50%.
In comparison, the City only gets exclusive use of the amphitheater for up to five City Events per year — an amphitheater the City designed, constructed, and paid for (DCOA Section 10.3). Why would the City use taxpayer funds to build an amphitheater for Live Nation, a for-profit private business worth over $22 billion, with so little in return?
Live Nation Changes Language Around Seating Capacity to Accommodate Potential Larger Venue (DCOA Section 1)
The previous February 2023 proposal stated a seating capacity not to exceed 14,000 seats. Now Live Nation is requiring a capacity of no less than 14,000 seats. This change indicates Live Nation may want an amphitheater larger than 14,000 seats — potentially much larger, with no limits in the new contract language.
From the February 2023 proposal:
From the current DCOA:
City Must Pay Live Nation nearly $10,000 For Each Day Construction Is Delayed From Expected Delivery Day (DCOA Section 6.2(b))
Ever remodel your home? Did the construction complete on time?
Under Live Nation’s requirements, if the City (who is required to design and build the amphitheater) has any delays in construction and is not able to hand the keys over to Live Nation by the “Expected Delivery Date”, then we would be required to pay an amount “equal to 1/365th of the Base Operation Fee for each day following the Expected Delivery Date.”
What is the Base Operation Fee? The Base Operation Fee is $3,500,000 (DCOA Section 14.1), for a daily calculated fee of nearly $10,000.
Live Nation Not Required to Comply With Amended City Ordinances, Including Noise Ordinance (DCOA Section 12)
Section 12 of the DCOA states if the City changes any of our laws, Live Nation shall have remedies set forth in Section 8.6(a). However, Section 8.6(a) is missing from the DCOA. It is unclear whether this omission was intentional.
What are the remedies Live Nation is seeking? Does Live Nation plan to backfill these remedies in a future version of the DCOA which includes Section 8.6(a)?
Live Nation May Charge for Parking and Keep All Proceeds (DCOA Section A-1(3))
Live Nation had originally agreed not to charge for parking. However, in their February 2023 Proposal, they changed their mind. And based on the recent DCOA, Live Nation still plans on charging for parking and keeping all the proceeds.
Below is a screenshot for parking options for two recent events at the FivePoint Amphitheater by Live Nation.
Based on the above prices, if Live Nation were to charge $60 for parking and an average of 4,500 vehicles are present for 25 concerts per year, Live Nation would generate at least another $6,750,000 a year in parking fees on City land. For comparison, this sum dwarfs the $3.5M annual Operation Fee Live Nation calculated for the venue.
Why should the city freely relinquish parking operations and give Live Nation all the revenue for parking on City land? This is a complete giveaway to Live Nation that the city should reject outright.
Live Nation Project Has Not Gone Before Any of the City Commissions Prior to City Council Approval
Commissioners were informed that all projects in the Great Park would be going before the various Commissions for review and recommendation. However, this project has bypassed all the Commissions. A project of this magnitude and cost must not be rushed through without proper vetting and review and should go through the same process as other city projects.
Politics and Patrick Strader
It’s a playbook Irvine has become all too familiar with, involving the same players Irvine has dealt with for years.
First and foremost is Patrick Strader, a lobbyist who works behind the scenes, wheeling and dealing for his business clients. Some refer to him as Irvine’s 6th Councilmember due to the influence he holds over the Irvine City Council — and this Live Nation deal is no exception.
Strader works for Starpointe Ventures and has been negotiating on behalf of LiveNation as their paid lobbyist. The tension involving the Live Nation contract is mainly due to the political dealings between Strader and Carroll. When it comes to projects involving Patrick Strader, Farrah Khan and Mike Carroll have consistently been in support. These three have been making deals since before Mike Carroll was appointed to the Irvine City Council in 2019.
Khan and Carroll in Complete Unison Under Strader’s Direction
Councilman Mike Carroll led the effort to agendize the re-negotiated Live Nation contract known as the Design, Construction and Operating Agreement (DCOA) by first placing it on the City Council agenda on Tuesday, July 18, and then hastily calling a Special Meeting on Friday, July 21. And there’s no question how Khan and Carroll will vote on this issue. The three have a history of working together.
Back in May 2019, Strader helped orchestrate the deal to get Mike Carroll appointed to the City Council. Strader always had a working relationship with the Republican party before collaborating with Melahat Rafiei, a powerful political consultant with influence over Democrat party officials throughout California. That 2019 meeting took place with the four: Strader, Rafiei, Khan and Carroll.
The Irvine City Council make-up was a 3-2 Republican majority in 2019. Khan wanted to get the Orange County Power Authority up and running with the help of a third vote. This deal would get her just that, along with other offers that were made including an attempt to land her a seat on the Coastal Commission.
Below are photos that were captured of then-Councilmember Farrah Khan, then-Commissioner Mike Carroll, then-lobbyist for FivePoint under their former CEO Emile Haddad, and Khan’s campaign consultant Melahat Rafiei, who has since accepted a plea deal in a federal investigation for corruption.
In order for Khan (a Democrat) to justify her vote for Carroll (lifelong Republican), Carroll agreed to change his political party affiliation from Republican to Independent. This change happened the day of the appointment. But 6 months later, Carroll switched back from Independent to Republican. Below is a screenshot taken the day before the appointment of Mike Carroll from the Orange Juice blog.
Who Does Carroll Work For?
Fast forward to the Live Nation deal. Chairman Carroll called for a Special Meeting just 5 minutes before the previously scheduled Great Park Board meeting. Why would he do that?
The Special Meeting’s agenda item is the same as the 4PM City Council meeting agenda item. Here is the item from the 2:00PM Special Meeting Agenda:
Here’s the item from the 4:00PM City Council agenda:
As it turns out, Live Nation made a mistake by rallying their troops to come to the Great Park Board meeting at 2PM when the item had been agendized for the 4PM City Council meeting. By hastily calling for a 1:55PM Special Meeting to cover Live Nation’s mistake, Mike Carroll is ensuring all of Live Nation’s recruited supporters are seen and heard anyway.
The below is an email and Instagram post that were sent out to Live Nation supporters on Thursday, July 20 at 5:30PM, before the Special Meeting notice was publicized at 6:55PM on Friday, July 21, 2023.
What has Mike Carroll done to inform and encourage Irvine residents to participate? Nothing. But Strader is not having Live Nation rally their supporters ahead of the general public’s knowledge of a Special Meeting for nothing. Strader is going to find a way to get Live Nation’s support heard and prioritized, as usual.
Based on the two prior Council meetings in November 2022 and February 2023 involving negotiations with Live Nation, there is no question Carroll and Mayor Khan will be siding with the Live Nation by stating how many supporters are in chambers and how many cut-and-paste emails they have received. It is likely very few of these supporters are Irvine residents and taxpayers, if any.
And based on the past Live Nation City Council meetings, Councilmembers Kathleen Treseder and Larry Agran, will comb through the terms and details of the DCOA and question its benefit to Irvine residents.
That leaves Vice Mayor Tammy Kim as the swing vote and nobody knows how she will vote.
Based on the terms outlined in the DCOA, are the concerns outlined in this article enough to say no? Absolutely. But will they be? Tune in to find out at the Special Meeting this Tuesday at 1:55PM.
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