CITY COUNCIL VOTES TO EXTEND CONTRACT FOR GREEK THEATRE; DEAL HIT BY CHARGES OF POLITICAL CRONYISM.

Byline: Rick Orlov Staff Writer

Bowing to lobbyist pressure, the Los Angeles City Council ignored threats of lawsuits and accusations of improper political influence Wednesday by granting a five-year extension to the operators of the Greek Theatre.

The 8-5 vote - the minimum majority needed to win passage - allows the Nederlander Corp. to continue operating the Griffith Park facility through 2006 without having to go through competitive bidding with other companies that said they would pay the city more money.

``If the people complaining about the Sunshine Canyon landfill think there will be a smell from that, it's nothing compared to the stench coming from this deal,'' Councilwoman Rita Walters said.

``Rules have been circumvented. Staff recommendations have been ignored. This will hold the whole city up to contempt. This deal reeks of political maneuvering.''

But Council President John Ferraro, in whose district the facility is located, said continuing the contract with Nederlander will allow restoration work to begin immediately to return the venue to its former grandeur while providing much-needed bathroom facilities, bringing in $500,000 a year to the city and giving theater workers the so-called living wage of $8.64 an hour.

``This is a good deal for the city and a good deal for the Greek Theatre,'' Ferraro said.

Extension of the contract has been subject to controversy and unusual procedures from the time the Recreation and Parks Department staff recommended that the city seek bids to operate the facility run by Nederlander for 30 years.

Most of that has been due to the lobbying efforts of Nederlander, through lobbyist/attorney Neil Papiano, a partner in the theater, and his close ties to Ferraro and other council members.

Councilman Hal Bernson was forced to recuse himself from the issue after it was disclosed he had purchased a condominium from Papiano at a favorable price.

Papiano denied any improper activities or political maneuvering.

``This is not an unusual event,'' Papiano said. ``The city extended the contract as it has in the past. It is perfectly legal and allowed by the current City Charter and the new City Charter. In fact, it is encouraged in the new charter.''

The Recreation and Parks Commission had overruled its staff and, on a 3-2 vote, urged the contract be extended for Nederlander.

Attorneys for competitors said they will challenge the council's action.

``This is the dirtiest deal I've ever seen,'' said George Mihlsten of the Latham and Watkins law firm that is representing the House of Blues. Councilman Joel Wachs, who has fought the law firm on a variety of other issues including the Staples Center, took note of the comments.

``If Latham and Watkins says something is dirty, it really must be,'' Wachs said.

Mihlsten said he expected to file a lawsuit in a matter of days to challenge the council's action once it is considered final. It will now go to City Attorney James Hahn for final approval as to form and legality.

The House of Blues has said it would agree to immediately begin making improvements at the Greek Theatre even though it would not be able to take it over for two years.