LOS ANGELES (CBSLA.com) — The Los Angeles City Council rejected a proposal Wednesday for Live Nation to take over operations of the Greek Theatre and suggested instead that the city seek new bids for the management of the Griffith Park concert venue.

Several council members said a competing proposal by longtime venue operator Nederlander and AEG offered more guaranteed revenue for the city in the form of rent, but the 11-3 vote did not automatically grant the contract to Nederlander.

The city, however, could choose to extend Nederlander’s concession contract while officials decide whether to conduct a new bidding process for an operator.

Live Nation appeared to have the upper hand when the city’s Recreation and Parks Commission voted in October to award the contract to them rather than longtime venue operator Nederlander, but members of the City Council’s Arts, Parks, Health, Aging and River Committee voted last month to reject that decision.

As with past discussion regarding the Greek Theatre, backers of each bidder, dressed in their respective colors of red for Live Nation and green for Nederlander, packed the City Council chambers for Wednesday’s vote.

Many of the Greek Theatre’s neighbors have come out in favor of Nederlander, which has been the operator for nearly 40 years. They say they are concerned Live Nation would not be as sensitive about concert noise and traffic congestion affecting the surrounding neighborhood.

Nederlander, which recently teamed up with Anschutz Entertainment Group to bid on the new agreement, has also argued that its package promises $17.5 million more in rent revenue — the only dollars guaranteed to go into the city’s coffers.

But Live Nation officials say their proposal scored higher than Nederlander and offered more money for mprovements to the facility, including $25 million in the first year of the contract, while Nederlander proposed spending $18 million in the first two years on upgrades to the facility

Recreation and Parks Department General Manager Mike Shull argued at last month’s committee meeting that the department designed the bidding process to “encourage innovation” and to “look forward beyond what the Greek is currently today.”

While Nederlander guaranteed more in rent, Shull said, the upgrades to the venue are important because “investing in our facilities is something we don’t do very well in the city.”

The support of Councilman Tom LaBonge, whose district includes the Greek Theatre, gave Nederlander’s proposal a boost last month, with many of his colleagues deferring to him on the issue.

“It’s not about money, it’s about community,” LaBonge said, referring to what he feels is Nederlander’s success in working out noise and traffic issues with the neighboring community.

Councilman Joe Buscaino cast the lone dissenting vote at the time, saying Live Nation won by a “wide margin” and that meddling with the process will give the impression that “L.A. is business unfriendly.”

Live Nation’s venues in Los Angeles include the Wiltern and the Hollywood Palladium. The company also ran the recent Made in America Festival at Grand Park in downtown Los Angeles.

Nederlander operates the Pantages Theatre and the City National Grove of Anaheim.

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