L.A.'s Mayor, Jay Z and Live Nation's Alliance Draws Criticism Over Potential Conflicts

Jay Z and Eric Garcetti
Jay Z and Eric Garcetti
 AP Images/Invision

This story first appeared in the Sept. 12 issue of The Hollywood Reporter magazine. 

Revelers at Jay Z's Labor Day weekend Made in America festival might wonder how such a major music event in the center of downtown Los Angeles came together in only a few months without the usual bureaucratic red tape. Some longtime city observers point to an especially cozy relationship between Mayor Eric Garcetti, who made the event his passion project, and Live Nation, its producer.

The two-day event in Grand Park featuring Kanye West, John Mayer and others — an unprecedented L.A. outdoor concert in size, location and prominence — has generated controversy since it was announced in April. City Councilman Jose Huizar, a Garcetti rival whose district encompasses the park, had raised alarm about the impact of street closures and copious beer sales on residents and businesses. Plus, according to newly revealed city documents, the LAPD had warned the mayor's office of potential damage to city property as well as possible issues with drugs and weapons — initially opposing the event because of the challenge.

Garcetti, however, was undeterred. As Jay Z put it at an April press conference, he "pulled this thing together in record time." (A source close to Jay Z says the two hatched the Grand Park plan during a Dec. 9 stop of his Magna Carter tour at Staples Center.)

Now, as up to 50,000 fans pay $200 each for a two-day pass, questions persist. Why did the mayor angle so hard for Made in America when a comparable event typically would require a months- or years-long approval process with no guarantee of success? And was proper due diligence pushed aside?

Garcetti, 43, and his staff are adamant that their interest in pursuing Made in America is only about generating positive economic activity. (Live Nation is doling out a $600,000 rental fee for use of the park itself to L.A. County, which owns it, as well as $500,000 for services to the city, which controls the streets that surround it.)

But observers, none of whom would go on the record for fear of angering the mayor, note lurking conflicts of interest. Live Nation CEO Michael Rapino is a highly connected donor to national-level Democratic candidates. (He hosted Barack Obama at a July fundraiser at his home.) And the skeptics point out that Live Nation's registered city lobbyist, Joshua Perttula, served as an adviser on Garcetti's transition team and remains close to the administration.

Mayoral spokeswoman Marie Lloyd derides any insinuations of favoritism as "nonsense," and Dan Schnur, the director of USC's Jesse M. Unruh Institute of Politics, doesn't consider the mere presence of such connections as enough for substantive concern. "It's hard to see the quid pro quo," he says. (Live Nation and Perttula didn't respond to requests for comment.)

To be sure, many consider it a win to land a major event for downtown L.A. Still, the trouble, suggest critics, isn't necessarily a tit-for-tat malfeasance but a subtler sort of warping of the public interest. They say that even if Garcetti's enthusiasm for the festival arrived from a pure place, his cheap-date style of wooing Jay Z to Grand Park (rather than playing at least relatively hard-to-get for an event with no assessed economic payoff) placed the city's and county's affected departments in poor negotiating positions for the planning and permitting of the event. "They started from the top down," says a civic official of the approach pursued by the mayor's office. "It's highly unusual, this acquiescing. The people who are responsible for creating the contracts are very frustrated because they have no leverage. The city attorney's office thinks it's a shit show."

One example of the approach emerges in emails between Live Nation and the mayor's office obtained by THR. On June 30, Made in America lawyer Andrew Kupinse wrote Deputy City Attorney Daniel Kreinbring about a "note from street services [sic] about a required petition from 51% of the neighbors. It has us all confused. We assume this is not needed since it is a city sponsored event?" Later in the day, Patricia Whelan of the mayor's neighborhood services division wrote back to Kupinse, assuring "we have this handled. The neighbors consist of five entities, most of which are government. No worries on your end — I'll let Street Services know."

Such a narrow definition of an affected neighbor would surprise most downtown residential and business stakeholders, the most anxious of whom showed up for a July 22 meeting at City Hall and another Aug. 26 forum at Caltrans about the festival's impact. It certainly would surprise Huizar, whose staffer Sara Hernandez on May 1 circulated to multiple departments a far wider internal list of affected entities encompassing neighborhood groups, homeowners associations and business improvement districts. (Huizar's office declined comment.)

Neither the mayor's office nor Street Services, which answers to it, could explain the discrepancy. Lloyd would only assure that "the emails may cause confusion, but the normal petition process is being followed." However, she frames the maneuvering, generally, as bureaucratic entrepreneurism. "This administration has made it our job to cut red tape for initiatives that will boost our economy," she says. "Our aim isn't just to secure millions of dollars in economic activity from this event but also to demonstrate to other market-leading organizations that L.A. is open for business."

 

Aug. 28, 9:25 a.m. A previous version of this story incorrectly referenced a $500,000 rental fee paid by Live Nation to L.A. County. It is $600,000. THR regrets the error.

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