Publication Date: Friday, July 11, 2003
Quagmire by the Bay
Quagmire by the Bay
(July 11, 2003) With Clear Channel in charge, Shoreline Park could get litigious
By Michael Miller
Shoreline Amphitheatre was built on a reclaimed garbage dump 18 years ago, and by many measures is a huge success. But simmering disputes between the city and amphitheatre management threaten to trash a relationship that has been productive for nearly two decades.
Clear Channel -- the Texas-based media conglomerate that operates the amphitheatre -- is prepared to sue the city over parking, while the city argues that Clear Channel is shortchanging the city on its share of the amphitheatre's revenue.
"The city and Clear Channel have very different discussion styles," said City Attorney Michael Martello. "The city makes most decisions discussion style and makes most decisions in public. I would characterize them as favoring the shrill of the polemic."
City Finance Director Bob Locke agreed. "The operators of the amphitheatre over time have been difficult to deal with," he said.
The city gets just under 7 percent of total revenue, excluding parking, from the amphitheatre, a sum of $955,000 in 2002. City council members and Clear Channel executives agree that their relationship has been productive in general. But since May of last year, the city and Clear Channel -- which owns nine radio stations in the Bay Area -- have been at odds over a number of issues.
Clear Channel protested when the city moved concert overflow parking from a Charleston Road lot, which the city says is not included in the lease. According to a claim filed with the city, Clear Channel disagrees, and says it should be compensated for the change.
The city intends to eventually develop the Charleston site for a luxury hotel. However, the lot has sat vacant since 1999, and the current economy means development plans are on the horizon. Still, the city values the property at $30 million. Martello says that Clear Channel just wants part of that money.
"Legally, they don't have much to stand on," he said. "They claim a negative impact on business, but they have made more money since they moved [to a different lot]."
Clear Channel has threatened to sue the city, and the city has been in negotiations with the company for at least a year.
Martello characterized the negotiations as "not good natured."
The city council held its second closed meeting in the last two weeks last Thursday to discuss possible litigation. And although no council member would comment on the proceedings (state law forbids it), Martello said things should become clear within a month.
Clear Channel representatives did not respond to numerous calls for comment.
Though the city and Bill Graham Presents -- which has run Shoreline since it opened, and is now owned by Clear Channel -- have had disputes, there has always been enough trust to resolve them, said Danny Scher, a former BGP vice president.
But this did not keep the relationship from being tumultuous.
The amphitheatre's was not signed until the afternoon of the first concert on June 29, 1986.
"The way I did business and the way BGP did business, it was built on trust," said Scher. "Cities are just the opposite; they want everything signed, sealed, and delivered."
But Scher said that a certain level of trust existed between the city and BGP.
"Either side could have said they wanted a different deal," he said, "but the thought never crossed our mind."
There were many disagreements over the years, including a few debates over parking and a noise problem that embroiled Palo Alto.
"Nothing ever spoiled the product," Scher said. "We would always find a constructive way to solve it. It was a very successful relationship on every level."
Clear Channel is a global conglomerate, and has operated the amphitheatre since 2000, when it purchased SFX Inc. for $4.6 billion. SFX had purchased Bill Graham Presents -- a homegrown company that controls many local performance venues and founded by music mogul Graham -- in 1997.
In addition to its nine local radio stations, Clear Channel operates the Chronicle Pavilion in Concord, the Warfield and Fillmore in San Francisco, Berkeley's Greek Theatre, the Mountain Winery in Saratoga, and the Punchline Comedy Club.
The company's size has made negotiations more difficult, said Locke, as have changing times.
"The issues are bigger, and there's more money on the table now," he said. "When that lease was signed, the North Bayshore area was less developed. The music industry was also different."
Locke said that while city has an independent auditor examine Clear Channel's financial reports each year, figuring out the city's revenue share is difficult. The lease clearly covers income from tickets, merchandise, food and sponsorship money. But with Clear Channel simulcasting concerts and making nationwide sponsorship deals, determining what portion of company revenue comes from Shoreline is tricky.
One industry observer has tried to understand Clear Channel's division of revenue.
"I haven't honestly been able to understand their books," said Gary Bongiovanni, editor of Pollstar, a concert-industry magazine.
City officials do not have to dig deep into Clear Channel's books to find one fee they want a portion of: parking. A $3.75 charge is added to every ticket purchased at Shoreline, which Clear Channel says is used for parking. Cars can then enter most lots for free.
The city argues that a universal parking fee is not what is delineated in the lease, because Clear Channel charges everyone, even if they walk or take public transportation.
"They just found a way to increase their bottom line," Martello said. By separating parking fees from ticket prices, Clear Channel made $1.6 million last year, with no portion going to the city.
"I think it's always been a relationship of different styles," said state Assembly member Sally Lieber, a former Mountain View mayor. "They're rock and roll promoters and we're a city government."
Lieber rattled off disagreements between the city and Bill Graham Presents, which is still the name Clear Channel uses for the local concert promotion branch.
They clashed over selling naming rights -- first Yahoo and then Lycos tried to gain rights to the name -- and there were different visions of a flea market proposed by Clear Channel.
This year will also be the first without New Orleans by the Bay, a variety festival Clear Channel discontinued due to declining attendance. City council members said closing the event after 14 years was not a controversial decision.
Across the Bay, Clear Channel took over the Concord Pavilion in 2000, and since then, though city revenues there have increased, popular shows, like the Fourth of July show and jazz festival, have been discontinued.
Mark Deven, Concord's parks and recreation director, said the city's relationship with Clear Channel has been virtually conflict free. Clear Channel pays 20 percent of Deven's salary.
The company also pays Concord $1.7 million to cover debt payments on the Pavilion, and Concord gets a cut of the profit that Clear Channel makes beyond that.
Though city council members declined to speak about the pending litigation, Mayor Michael Kasperzak said there have been changes since Clear Channel took over.
"When BGP was the owner and operator, they had one point person," he said. "There have been at least three general managers since then, and the corporation has gotten more involved. ... Things worked better when someone we knew was there."
Overall, though, the city was still extremely positive about the relationship.
"I think Shoreline Amphitheatre adds a lot to the city," Kasperzak said. "It adds a cultural base and draws a lot of business. People know Mountain View."
"The history of Shoreline shows how creative Mountain View is about providing great things for the community," said Council member Rosemary Stasek. "Mountain View took a garbage dump and turned it into a premier venue."
Anna Thompson contributed to this report
E-mail Michael Miller at email@example.com