LA Recreation and Parks GM Mike Shull speaks with LA Recreation and Parks Commission President Sylvia Patsaouras at the end of Wednesday’s meeting
The Greek Theatre drama isn’t short on dialogue or a cast, but as it weaves the reader through another plot twist, its ending seems so elusive. Few characters have had the ability to set the narrative of this story like Mike Shull, GM of LA’s Department of Recreation and Parks. It was Shull who touched off a political fight at City Hall when he recommended Live Nation be awarded the contract for the Greek Theatre. When that plan was rejected, it was Shull who introduced a proposal to end Nederlander’s decades-long management of the Greek and opt instead to run the facility as an open venue. On Wednesday, the commissioners at Rec and Parks voted 3-1 to approve his plan to self-operate the Greek for at least one year. We caught up with Shull after the meeting to learn more about the man who’s been steering this process since the beginning.
First let’s talk about the vote, 3-1 in favor of self-operation.
They actually voted in favor of running it as an open venue.
What’s the difference?
We own the venue. We’ve always owned the venue. We don’t operate the venue. We’ll never operate the venue. We’re going to go to the industry of professionals that do this and pay them a fee on our behalf. That will allow us to have more control over the venue. We’ll get more money from parking — probably all of it — as well as all of the money from sponsorships and food and beverage. Right now we only get six percent of food revenues. We’ll still have promoters and they’ll still do what they do best. That doesn’t change under an open venue plan.
Who will manage the calendar?
We’ll manage the calendar and it will be first come, first served, with a challenge process for times when there are multiple holds.
What happens next?
We’ll be talking with the community about some of their concerns and we’ll begin putting policies together that this board will need to adopt. We’ll need a user agreement, a booking policy, and a food and beverage RFP.
LA is a very competitive city. Will not having a full-time promoter on staff, continually advocating on its behalf, negatively affect the Greek?
Artists want to play there. It’s the Greek Theatre. And that’s what the promoters have all told me. That artists want to play there. And they want to put artists there. Getting acts and talent into the facility is never going to be a problem for the Greek Theatre.
How long to do you plan to operate the Greek as an open venue?
We’re going to run it for a year as an open venue and we’re going to evaluate it, much like we evaluate things that we haven’t done before. This commission will make a decision about what we do next, and that may be going out for a new RFP.
Several days ago Nederlander made an offer to increase the rent it pays the city by $1.5 million if its contract was renewed. Bret Gallagher with Live Nation made a proposal earlier this month to pay the city $15 million if the Greek was an open venue. You called them “unsolicited proposals.” Did you feel these were real offers being put on the table?
They weren’t a fair representation. This department has an obligation to make sure that its business practices are fair. That’s just like an RFP process that’s not an RFP. We didn’t request those proposals. You can’t judge one over the other, that’s why you have a process in which everybody gets a chance to submit. Whether the offers are good or not good…I don’t have an opinion on that. It doesn’t represent what we’re required to do as a fair business practice. If someone is willing to throw that kind of money around, it probably leads you to think that it’s a pretty competitive market and you’ll likely solicit more than one proposal.
An open venue model is risky. Instead of guaranteed money, you’re risking the city’s revenues. Why take that risk?
We’ve averaged $1.5 million in rent from this facility over the last 12 years. When you’re operating a $200 million operation (referring to the Rec and Parks department’s overall budget) that’s not a huge risk. It’s a risk, but it’s not a huge risk.
It’s a risk of making less than you would have with a renewal of Nederlander’s contract.
There’s a potential for that. I think the risk is small. Very small.
It’s the Greek Theatre. It’s an iconic venue that artists want to play. And I think with the promoters that are interested in putting acts there, we’re not going to have any issues of putting talent there.
What happens to the tens of millions of dollars that were planned for capital improvements?
We believe that our net revenue will be between $3 million and $4.8 million depending on how many events we do. We’ll take a percentage of that net revenue and set it aside for capital improvements so that we have a sustainable funding stream that will ultimately go back into the facility and hopefully increase more revenue. The only difference with the RFP is that there was a one-time slam of money.
Over $20 million.
A lot of money actually, and I agree and think it’s a fair comment. I don’t have that ability. But we are creating a sustainable source of funding and may be able to do that in five or six years. Until then, we’ll take good care of the facility.
But big plans, like restoring the original Greek columns or changing the roof, are essentially off the table now?
Yes. We are going to do a historic structures report, which is required by the (California Environmental Qualities Act). That’s just a report used to guide what kind of future changes we’d make at the venue. Whether we continue to operate it, or someone else comes in, it’s still going to be a valuable report for the department to have. You can’t make major modifications to a historical facility without one. In the previous RFP we expected (the winning bidder) to do it, but now we’re just going to do it ourselves. Regardless of what happens in the future, that will be a beneficial document.
Does the open venue plan have to be approved by the City Council?
The action today does not require action of the City Council; however, the City Council can still assert jurisdiction if it chooses to. They certainly have the authority to do that.
Long term, is the plan still to put the Greek back up for an RFP and eventually bring it back under exclusive management?
We’re going to do it a year, we’re going to evaluate it and from there we’re going to decide what we do. A new RFP is still on the table. In fact, we’re going to still work on preparing a document — we want to be ready if we decide to go that way. But everything is still on the table.