ValleyVote Update for 5-01-01 |
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By Mark Siegel
NESTLED in the hills of Los Feliz, the Greek Theatre has been a cultural icon of our city for more than 70 years.
Unfortunately, for the past 25 years, our community has been in a constant battle with the current operators, Nederlander Greek Inc., over the seriously neglected safety and security procedures, the deteriorating physical facilities and constant noise and traffic issues. Sadly enough, the current operators have failed to respond to our concerns or even to care to discuss these problems with us.
House of Blues Concerts offered an outstanding proposal to turn things around at the Greek. House of Blues Concerts offered the city one of the largest contracts in the history of the Department of Recreation and Parks: more than $23 million over the term of the 10-year contract. The financial commitment, which was backed by city-approved financial guarantees, included $11.5 million in capital improvements to the facility -- double that proposed by the Nederlanders -- and millions more in rent.
Equally important, House of Blues was committed to making a solid investment in community, youth and cultural programs. Furthermore, House of Blues Concerts' development proposal, in addition to offering a world-class design, was responsive to our environmental concerns. It called for restoring the sensitive canyons near the Greek Theatre -- rather than destroying the canyons to develop a parking lot, as proposed by the Nederlanders -- and included a clear and effective plan to resolve our traffic, noise, security and neighborhood-cleanup concerns.
Most importantly, House of Blues Concerts kept us, the community, involved throughout the process. The outstanding merits of the House of Blues Concerts proposal earned it the unequivocal recommendations of the Los Feliz Improvement Association, the Sierra Club, an independent review panel, the Department of Recreation and Parks staff and general manager, independent financial consultants retained by the city and numerous community organizations.
But city government failed to listen not only to the community, but also its own experienced team of experts, in not awarding the contract to House of Blues Concerts. City government allowed self-interests to prevail by throwing out both bids after an 18-month review process. The Department of Recreation and Park Commission recently decided to throw out the bids even though LeRoy Chase, its vice chairman, stated that the commission had before it two responsive bids from two responsive bidders. It is clear that House of Blues had the winning bid.
By throwing out the bids, the city of Los Angeles has lost millions of dollars and passed up an opportunity to renovate the Greek Theatre into a cultural icon of Los Angeles. What is most disturbing about this entire process is the fact that the Department of Recreation and Parks Commission has failed to listen to our concerns and recommendations.
Even though told over and over again about our issues and concerns, the city government has allowed Nederlander to operate this city-owned venue for 25 years on a sweetheart deal -- without once putting it out to bid -- because of political relationships. This 25-year stranglehold on the facility was unchallenged, and the city was making little or no financial return while the venue generated more than $150 million in revenues and the Nederlanders made millions. City government refused to allow a competitive bid process until we spoke up.
In fact, the contract to operate the Greek Theatre was opened to a competitive-bidding process only after a lawsuit and a referendum petition signed by more than 70,000 residents were filed. We are speaking loudly and clearly again, and again city government failed to listen.
We sincerely hope that city government will reconsider its action in throwing out the bids and award the contract to House of Blues Concerts.
If a new bidding process is commenced against the will of city constituents, we would only hope that House of Blues Concerts re-bids for the operation and improvement of the Greek Theatre. House of Blues has the experience and merits to renovate the theater into a great icon of the city, while making sure that our concerns are considered and addressed.
Every day of indecision marks another delay in the much-needed renovations of the Greek Theatre.
If the current operators were doing their job, we wouldn't be in this situation of having to repair a deteriorating venue. Unfortunately, we are faced with the possibility that this less-than-mediocre operation will continue for another few years.
City government has walked away from millions in revenue by throwing out the bids and losing all of the benefits provided in the House of Blues Concerts' winning bid, and, most unfortunately, city officials have turned their ears away from the voice of the people.
Mark Siegel is a board member of the Los Feliz Improvement Association and is publisher of City Watch.http://www.citywatchla.com
With House of Blues Concerts refusing to play sucker for another round of bidding on the Greek Theatre contract, longtime operator Nederlander looks as if it's a shoo-in to win the deal.
The loser, of course, is the public, which presumably won't see the more than $5 million in extra improvements and $5 million in added revenue previously offered by House of Blues. Another stunning success for City Hall!
In round one, Nederlander successfully parlayed its extensive insider influence and had a contract extension sewed up until public outcry and a petition drive to put the issue to a public vote forced the City Council to back down.
In round two, House of Blues offered a better bid by almost $11 million and won the approval of consultants -- but still couldn't win. Rather than take the better offer, the Parks and Recreation Commission decided to give Nederlander another crack at the deal by rejecting both proposals and starting the bidding all over again.
Now House of Blues has filed a lawsuit against the city, which undoubtedly will think nothing of entering into a consent decree or agreeing to a settlement costing taxpayers millions. Just as long as the insiders get the contract and the public gets the bill.
As the only bidder, Nederlander is free to submit a low-ball offer -- almost certainly less than what House of Blues originally bid -- and then take the prize. We urge House of Blues to reconsider its position and submit yet another bid to operate the Greek. Nederlander lost its best friend at City Hall with the death Tuesday of Council President John Ferraro, and the process now just might be a bit more open and fair.
Richard Alatorre, the king of City Hall corruption, has finally admitted his crimes and been sentenced -- if you can call a house arrest a sentence.
The former city councilman admitted taking $41,840 in cash under the table for political favors as a city councilman and a board member of the Metropolitan Transportation Authority -- money that came from people who wanted and got political favors. But astonishingly, he wasn't ordered to pay a penny back because the judge found a fine was "not appropriate, as you lack the ability to pay."
That's funny, considering that the king of corruption walked away from his City Hall job into a cushy, $114,000-a-year job as a political appointee to the state Unemployment Insurance Appeals Board.
To the Democratic Party power structure, pals are pals after all. Alatorre gets a slap on the wrist and the public gets slapped in the face by the powers that be.
Justice was not served by throwing away the book and allowing a political figure who wielded enormous influence for 14 years to walk away virtually unscathed, unpunished and under no obligation to make restitution.
After a four-year probe that ended with a plea agreement, Alatorre got away with admitting his guilt to one count of willfully evading the payment of federal income tax for the 1996 tax year -- the lightest charge he faced.
Why wasn't he charged under state law with more serious crimes? Where were the city Ethics Commission, the MTA and all the other agencies that knew full well the games Alatorre had played for years?
It's a shameful case that raises the bar on public cynicism
THERE'S a reason why special interests spent 15.6 percent more on lobbying City Hall in the year 2000 than in 1999: The city government is up for sale -- and the bidding war is still on.
Last year, 80 different lobbying firms combined to spend more than $15 million lobbying for their pet interests in City Hall.
The City Ethics Commission, which likes to pretend that it runs a tight ship, will never come out and admit that special interests are buying their way into City Hall. But that's the clear intimation in its report documenting the last year's lobbying expenses. And for every suspicious intimation, there's a damning allegation.
In a recently filed $10 million lawsuit, House of Blues Concerts charges the city with running a "sham competitive biding process" over the Greek Theatre's operating concession. That certainly seems believable, given the "pattern and practice" of the well-connected receiving special treatment in City Hall.
There's no shortage of intimations or allegations to confirm an overlooked but glaring problem in city politics: the corrupting influence of money.
The evidence is everywhere -- in the LAUSD's long history of scandal-tainted contracting, in April's mayoral campaign that could easily end up costing more than $10 million, in a single school-board race that promises to carry a $1 million price tag.
And, of course, the problem isn't confined to just Los Angeles. The U.S. Senate is in the midst of a two-week-long debate on campaign-finance reform, searching for some cure for the ill of a government that trades access for campaign contributions.
But while Washington finally grapples with the problem, City Hall continues to indulge in it -- raising big bucks and selling out the public interest.
It would be nice to see one of the well-heeled mayoral candidates play the part of Sen. John McCain in fighting to clean up the political money chain at City Hall.
By Beth Barrett Staff Writer
House of Blues' $10 million lawsuit alleging that the city of Los Angeles engaged in a "sham competitive bidding process" and political favoritism over the Greek Theatre's operating concession will be vigorously fought, [Using taxpayer money] city officials said Thursday.
House of Blues Concerts Inc. filed the lawsuit in Superior Court alleging a three-year pattern of political favoritism by the city toward longtime operator Nederlander-Greek, which it claims culminated last month in the Recreation and Parks Commission rejecting both House of Blues' and Nederlander's bids, even though House of Blues asserts it submitted a more lucrative offer.
House of Blues, in its request for a writ of mandate, asked the court to order the city to set aside the commission's action and to award it the 10-year contract to operate the Greek Theatre.
Assistant City Attorney Mark Brown said upon preliminary review, he felt confident the city would defend the commission's action as legal. "It is always within the power of the awarding authority to terminate the process of awarding a contract," Brown said.
House of Blues representatives said during a City Hall press conference they believe the Recreation and Parks commissioners went beyond their discretionary powers and participated in an arbitrary process to prevent House of Blues from winning the contract to run the popular Griffith Park venue.
"We feel we have a very, very strong case that the city broke the law," House of Blues lawyer Jim Arnone, with Latham & Watkins, said during a news conference. "We want the court to order the city to follow the law."
At the heart of the lawsuit is House of Blues' allegation that the commission abused its discretion in rejecting the bids, and had an obligation to take the better offer. House of Blues asserts its bid would have given the city more than $10 million more in capital improvements and revenue than Nederlander's offer.
"They can't act in an arbitrary and capricious manner," Arnone said.
Adam Burke, Nederlander's attorney, said he believes the city's charter gave the commission the right to reject both bids, which it did by a 3-1 vote, after the commission repeatedly deadlocked between the two firms.
"The city charter says they reserve the right to reject in every instance an RFP (request for proposals)," Burke said. He added that the city currently is acting in good faith by moving ahead with the new bid specifications.
Brown, the city's attorney, said barring a court order, the city intends to proceed with a new request for proposals, and to move ahead with the selection process. Recreation and Parks Department General Manager Ellen Oppenheim said the new specifications are scheduled to be completed sometime next month.
With Nederlander's contract due to expire Oct. 31, the 2002 season as well as a series of improvements would be in jeopardy if a vendor isn't selected before the contract ends.
Adam Friedman, House of Blues senior vice president, said the company hopes the litigation will be concluded quickly. "We're convinced they were not within their lawful rights and that they had a lawful obligation to accept the higher bid," Friedman said.
By Beth Barrett Staff Writer
House of Blues Concerts plans to file a $10 million lawsuit against Los Angeles today, saying the city "engaged in a sham competitive bidding process" and political favoritism over the Greek Theatre's operating concession.
The lawsuit, to be filed in Superior Court, seeks to set aside last month's Recreation and Parks Commission vote to reject bids from both House of Blues and longtime operator Nederlander-Greek, and award the contract to House of Blues, which made the more lucrative offer.
It also claims the commission's action is the culmination of a three-year pattern of political favoritism toward Nederlander, designed to keep the firm operating the popular Griffith Park venue at the expense of taxpayers.
"The essence is that the city had an obligation based on its own procedures to award the bid to House of Blues and it failed to do so," Adam Friedman, House of Blues senior vice president, said Wednesday.
Nederlander-Greek attorney Adam Burke said he had not seen the lawsuit, but that he would view any action as "desperate people doing desperate things." Burke said the commission's decision to reject both proposals was legal and done in compliance with the City Charter.
"It's sad that taxpayers' dollars will be used to defend a lawsuit in which everything the commission did, according to the city attorney, was in compliance with the charter."
Nederlander-Greek attorneys defend Nederlander's bid, saying it is comparable financially and has better financial backing.
City Attorney's Office spokesman Mike Qualls said he could not comment on a lawsuit until it is filed.
The lawsuit asserts, in part, that the city repeatedly has been willing to break the law to assure Nederlander's continued operation of the theater.
Most recently, House of Blues alleges, the Parks Commission deliberately ignored its offer to pay more than $10 million above Nederlander's in revenue and capital improvements over the 10-year life of the contract.
Previously, the lawsuit claims, the city broke the law in its efforts to extend the 25-year contract in 1999 without competitive bidding -- despite Nederlander allegedly grossing more than $150 million while the city made little or nothing from the deal.
The City Council was forced to rescind that no-bid, five-year extension award to Nederlander in the face of a petition drive in January 2000 that would have placed the issue before voters.
The lawsuit claims those efforts to extend the contract were in violation of the City Charter, and other local and state laws.
When the commission rejected both bids last month on a 3-1 vote, House of Blues' lawsuit says, it did so completely without cause.
The board created an artificial excuse to start the bidding process over, the lawsuit claims. A new bid proposal is anticipated as early as next month.
Nederlander's contract expires in October, putting in jeopardy the future operation of the theater.
Friedman, with House of Blues, said the residents of Los Angeles have been damaged most by the delays in awarding the bid.
"The city didn't care how much it cost taxpayers to put this out to bid again, but pushed a bid away worth $10 million more -- all for political favoritism," he said.
Politics: The practice of acting as consultants to officials they try to influence raises questions, commission officers say.
By PATRICK MCGREEVY, Times Staff Writer
The Los Angeles Ethics Commission will examine the relationship between elected officials and City Hall lobbyists who double as political consultants for those they are seeking to influence, top panel officials said Monday.
Commission President Miriam Krinsky said a story in The Times on Sunday raised enough concerns over the perception of a conflict of interest created by the dual roles to justify a review by the panel into whether new rules are needed. "The situation described is one that is reasonably troubling to people to the point we should look at it," said Krinsky, who is also a federal prosecutor. "There are problems worth considering. Even if it's simply appearances, that's of sufficient import for us to consider it."
Commission Executive Director LeeAnn Pelham said she will recommend that the panel examine the issues raised by lobbyists who also work as political consultants for the elected officials they lobby. The review, she said, will be part of a broader look at ways to curb undue influence by lobbyists at City Hall.
Lobbyists may legally work as paid political
consultants for the City Council members they are attempting to influence on
behalf of other clients. The Ethics Commission only requires disclosure of the
relationships.
Two-thirds of the City Council members have, at
one time or another, hired political consultants who also worked as lobbyists
seeking council votes for clients.
In the ongoing battle between House of Blues and the Nederlander-Greek Corp. over control of the Greek Theatre, seven of 14 city council members who will probably vote on the matter have at some point hired as political consultants the same lobbyists whose clients are bidding on the contract.
Jim Knox, executive director of California Common Cause, said the practice allows lobbyists special access to wield undue influence over elected officials. Krinsky and Pelham said Monday the commission will consider whether the business relationships pose a real or perceived conflict of interest, and also will look at whether regulation is warranted.
Even the appearance of a conflict might warrant rules to avoid a perception that can be damaging to city government, officials said. "Whether there is a perception of a conflict or a real conflict, this is important for the commission to look at because they are equally damaging," Pelham said.
There are constitutional issues that could hinder the commission from barring people from working as lobbyists and political consultants, but the panel might restrict elected officials from voting on issues involving their political consultant/lobbyist, said Barbara Freeman, a staff member for the Ethics Commission. "It's premature to say what the solution might be," Pelham said, adding that the panel also will consider whether there should be restrictions on political fund-raising by lobbyists.
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