Clear Channel sends city surprise check Clear Channel sends city surprise check (December 12, 2003)

Shoreline owner admits underpaying, but lawsuits still unresolved

By Julie O'Shea

Clear Channel -- the media giant that manages Shoreline Amphitheatre -- has admitted to underpaying Mountain View in 2001 and 2002 and recently sent the city finance department a check for $11,505.

An audit, however, shows that Clear Channel owes Mountain View more than $91,000 in back rent. And city officials claim that number is closer to $2 million.

But Clear Channel, in a lawsuit filed in July, claims that the city is trying to get more money out of the company than the Shoreline lease stipulates. The amphitheatre, run by Clear Channel subsidiary Bill Graham Presents, sits on city land. As part of its current lease, Clear Channel pays rent and a percentage of its revenue to the city.

Problems arose after Mountain View officials discovered that Clear Channel was tacking a parking surcharge to each ticket price, and not giving the city its share of the revenue. The city argues that the extra fee is part of the ticket price and should therefore be shared, while the company contends it is parking revenue, which is not shared with the city.

Clear Channel and the city have scheduled a mediation hearing for next month to try and work out their legal woes.

So when city officials received an $11,505 check in the mail from Shoreline administrators last month, they said they were a little confused.

"I don't think I could provide much illumination on what that check is for, or what it represented and why they chose to send it at this point," said city finance director Bob Locke. "It struck me as highly unusual that they were going back that far in the past and finding money that they owed the city.

"It kind of confirmed our worst fears about the amphitheatre and their accounting practices," Locke added. The city has accused Clear Channel of falsifying its records in order to reduce its rent obligations.

Clear Channel attorney Richard Idell did not return repeated phone calls last week for comment but issued the following statement through e-mail: "To date, Shoreline's review of the years 1998 to 2002 has resulted in identifying areas of underpayment as well as overpayment. As a result, Shoreline Amphitheatre has made an adjusted payment of $11,505, which is in addition to more than $3.5 million of ordinary rent payments previously paid from 1998 through 2002."

The brief letter that accompanied the Nov. 25 check shows Clear Channel had underpaid in rent by $39,862 in 2001 and 2002. However, the company says it overpaid the city $28,357 from 1998 to 2002, and therefore sent a check for just $11,505.

"There are some problems with this accounting," City Attorney Michael Martello said, "and that's being kind."

The city countersued Clear Channel in October, accusing the company -- which owns more radio stations than any other media outlet in the U.S., of stealing public funds and violating its lease agreement.

The countersuit says Clear Channel has "not paid the full amount of rent owed and due to the city." The city also claims it is losing $100,000 a year in ticket revenue because Clear Channel has added a parking fee to the cost of all tickets, regardless of whether concertgoers parked in the Shoreline lot. The city does not receive a percentage of the parking receipts, but feels that because the parking fee is tacked onto every ticket, it is part of the ticket revenue and not a parking fee. Therefore, the city says it wants its fair share of this fee, too.

Under this assumption, a 2000 audit conducted by city contractor Maze & Associates says that the city was not given its fair share of the ticket price for the New Orleans by the Bay event. The audit says the city is entitled to $91,545 in additional rent, even though the parking fee was not attached to the ticket price in this instance but instead separately collected.

In an e-mail, Clear Channel's lawyer Idell said, "Shoreline Amphitheatre maintains that these cross-claims are untrue, and we will vigorously defend ourselves against these claims."

The e-mail added that "Shoreline Amphitheatre and the city of Mountain View continue to work through issues surrounding the interpretation of the lease and we look forward to mediating these differences with the city."

E-mail Julie O'Shea at joshea@mv-voice.com

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