Irvine might lose out on a new 14,000-seat amphitheater in the Great Park after new demands from Live Nation could dramatically increase costs for the city, according to a report from Irvine city staff.
The amphitheater was the main attraction under the city’s new framework plan approved last year, with city manager Oliver Chi pledging it would be the Hollywood Bowl of Orange County.
It could also cost taxpayers $150 million.
[Read: Irvine City Council Moves Ahead With Publicly Financed Great Park Amphitheater]
But city staff are no longer recommending that plan after Live Nation made new demands, like an additional $20 million from the city.
There’s now a potential alternative for a smaller amphitheater at the request of Councilmembers Larry Agran and Kathleen Treseder.
City council members will decide which plan they want to pursue on Tuesday evening.
Talks for the amphitheater started last September, when the city council approved an exclusive negotiation agreement with Live Nation and laid out the expenses that both the city and the company would be responsible for.
But according to a city staff report, Live Nation rejected that agreement and sent back a much different proposal last November.
Under Live Nation’s proposal, taxpayers would have to chip in an additional $20 million in the amphitheater, pay for the construction plans, pay the facility’s possessory interest taxes, give up sponsorship and naming rights, allow Live Nation to charge for parking and eliminate any noise restrictions on the proposed 14,000-seat venue.
That means Irvine would be on the hook for $150 million to build the amphitheater.
Noise complaints were one of the main concerns raised by residents who live around the Great Park, pointing to the existing FivePoint Amphitheater that had 134 noise complaints from May to September of last year, which was already down 83% from the previous year after Live Nation installed noise mitigation measures.
Live Nation would also not be required to coordinate events with the city or meet customer satisfaction standards set by the city under their proposal.
Live Nation declined to comment on the issue.
City Manager Oliver Chi said while he felt Live Nation was negotiating in good faith with the city, it remained unclear whether or not the city and the company could find common ground.
“Live Nation has never said do this or else, but they’ve certainly been advocating for their interests,” Chi said in an interview. “I expect whatever the final version of the agreement is will be radically different.”
Despite Live Nation’s proposed changes, city staff estimate that 14,000 seat amphitheater would bring in at least $3.5 million for the city annually in fees, along with generating higher sales and hotel tax revenue.
Now, city staff are proposing ditching plans for Live Nation’s amphitheater and building a smaller venue that would seat around six to eight thousand people at the same spot.
Chi said the request for a smaller venue came from Agran and Treseder, and that the preliminary studies the city has done show it could be profitable.
While details on a smaller venue are still limited, staff project it could cost taxpayers anywhere from $80-90 million and would bring in less money than the Live Nation project would.
The new facility would be more akin to LA’s Greek Theater, according to a report from city staff, which pointed out that while the facility only has 5,900 seats, it still brings in cash.
“It is one of the more successful venues in the State, attracting top talent, and delivering a positive financial return to the City of Los Angeles, while successfully co-existing with an immediately adjacent residential neighborhood,” staff wrote.
The additional funds earmarked for the $150 million Live Nation amphitheater would instead be invested on other park projects.
“Delivering a well-positioned, medium-sized amphitheater, and redirecting excess dollars to other public park amenities, may actually improve the City’s return on investment from a public benefit perspective,” staff wrote.
Irvine city council members will have to decide between pursuing the original amphitheater plan or the new, scaled down option at their meeting on Valentine’s Day evening.
The Great Park Task Force, a city organized group of residents from the neighborhoods surrounding the park, is currently staying out of the issue.
Parrisa Yazdani, co-chair of the task force, said during their discussions they felt it was too soon to make a decision on the issue, but made it clear she was speaking on her own behalf and not the task force as a whole.
“The opinion of the task force has been that we understand that multi million deals … they’re never going to go back and forth one or two times. They’re going to go back fifty times,” Yazdani said. “I think it would be premature to make a decision before any hard negotiations.”
Camiar Ohadi, a member of the task force, said he felt most of the task force reacted negatively to the news.
[Read: Irvine’s Great Park Advisory Board Falls Apart]
“People were shocked,” Ohadi said. “The distance is too far to negotiate. Let’s walk away, call it a day.”
Chi said that while he did not speak for the task force, most of the members he spoke with were against moving forward with Live Nation’s current proposal.
“The opinions shared with me indicated a preference for taking care of the community’s concerns. The impression I got was there wasn’t a ton of support at that point for the redlined agreement Live Nation wanted to do,” Chi said. “They seemed fairly resolute in that their preference was for a medium sized amphitheater.”
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at email@example.com or on Twitter @NBiesiada.
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