Just two months to go before the planned grand re-opening of the Hollywood Palladium, the iconic theater has a gaping hole in its roof. There’s plenty of plumbing work to be done, along with electrical and finish work. The stripped exterior still needs millions of dollars worth of refurbishing to be restored to its original splendor.
As if that weren’t enough, the 1940s-era historic structure has become a pawn in a labor dispute between Palladium tenant and concert promoter Live Nation Inc. and a local of the International Alliance Theatrical Stage Employees.
Local 33 of the union wants Live Nation to hire union stage hands in upcoming Palladium productions and admits to pressuring the Los Angeles Community Redevelopment Agency into not dispensing $2.5 million worth of funding that is critical to completing the project.
More than 60 stage hands belonging to the local recently picketed in front of the Sunset Boulevard venue, denouncing both Live Nation and the redevelopment agency, which is planning to loan the money to building owner and developer Newport Capital Advisors.
“We don’t have a problem with the Palladium’s owner and developer, because they have all union contractors on the job, but we have a big problem with Live Nation,” said IA Local 33 spokeswoman Cherri Senders. “We believe that it is absolutely outrageous that the city’s redevelopment agency would even consider giving taxpayer money to a business that not only can afford the cost itself, but that is non-union.”
L.A.-based Live Nation, which is publicly traded on the New York Stock Exchange and is the world’s largest concert venue operator, declined to discuss the labor dispute or details of the restoration work progress. It is responsible for some $10.5 million worth of interior work of the restoration project, which has a total price tag of about $18 million.
A company spokesman would only say that the company plans to open on schedule in mid-October.
However, Newport Capital admits the funding is needed to complete its $7 million restoration of the Palladium’s exterior. The project would return it to its original finish, including installing custom fabricated storefront aluminum and glass window walls, a new marquee and facade lighting.
“This really caught us by surprise,” said David Zak, principal of Newport Capital, referring to the labor dispute and pickets. “We thought we were doing something that was good for the city and the community.”
The labor dispute is the latest twist in the long-running effort to rehabilitate the 68-year-old historic venue and return it to its former glory. During the real estate boom, the four-acre Sunset Boulevard site just east of Cahuenga Boulevard was being eyed more for its development value than anything else.
That prompted the Los Angeles Conservancy to start a campaign to save the venue. But in April 2007 Newport Capital stepped in and bought the property for $68 million and promised to run it as a theater. It also reached an 18-year lease agreement with Live Nation to operate the venue.
Newport, which has reserved the right to develop land around the venue in the future, later sought the $2.5 million loan from the redevelopment agency through a fa & #231;ade improvement program.
A July 3 memorandum by CRA Chief Executive Cecilia V. Estolano recommends the CRA’s board approve the loan, which would be issued at a 6 percent annual interest rate but can be forgiven incrementally during the next 18 years if Newport Capital meets certain requirements
Estolano denied that the loan is being delayed. In fact, she said her agency stepped in to bring together both sides in the dispute, but declined to offer details.
“We are bringing these parties together for the good of the community,” she said, during a brief telephone interview.
It is unclear when the agency’s board will take up the loan request. However, Estolano maintained that the loan application was moving forward in a timely manner.
Labor pressure
Zak said he was unaware of the union’s protest until the day before the picketing took place. That’s when he was contacted by city redevelopment officials who informed him of the coming protest.
But he said he is optimistic the loan will eventually come through once the labor dispute is resolved. “We’ve already met once with the union, and we plan to meet again to get this resolved so that we can stay on schedule,” Zak said. “I’m hopeful that we can work all this out.”
In the meantime, he said, Newport Capital’s lender on the project, New York City-based Anglo-Irish Bank, and the city’s redevelopment agency are still handling the paperwork and fine print on the loan.
However, not everyone is optimistic that the union and Live Nation will work out an agreement, or that the redevelopment agency will issue the loan if the dispute continues.
John Tronson, a principal in the Hollywood office of Ramsey-
Shilling Commercial Real Estate Services who represented Newport Capital in the theater’s acquisition, said if the loan doesn’t come through, Live Nation may be left holding the bag given how significant the loan is to the developer.
The $2.5 million loan would fund more than one third of Newport Capital’s $7 million exterior renovation project.
“I’ve been told that if they (Newport Capital) don’t get the $2.5 million, they’re just going to slap a couple coats of paint on the building, put up the old sign and walk away,” said Tronson.
Zak disputed that characterization, saying the company is committed long term to a quality project. “We believe in this project, and we believe it is something that the city and the community will be proud of,” he said.
The fact that Palladium owner Newport Capital has found itself a pawn in a larger union dispute doesn’t surprise those who are critical of the city’s cozy relationship with unions.
“Considering how tight the unions are with the city, from the mayor’s office on down, I’m not surprised that this would happen,” said Eric Christen, executive director of the Coalition for Fair Employment in Construction, a statewide association of contractors and other businesses that seek to counter union influence in the construction industry.
Christen said that union executives have heavy influence in many departments of the city, especially with members of the city’s redevelopment agency’s board of commissioners.
“The unions never give up,” Christen said. “Now, it looks like this developer, who has already acquiesced to hiring union workers for the restoration, is going to have to put up with more of the union’s extortion demands.”
Historic venue
The victim off all this may be the deco dance hall itself, which was designed by Gordon Kaufmann, architect of the Greystone Mansion, the Los Angeles Times building and the Santa Anita Racetrack in Arcadia.
The Palladium opened in September 1940 with a concert by Frank Sinatra and the Tommy Dorsey Orchestra. It was built by film producer Maurice M. Cohen on the site of the original Paramount Pictures lot, between Argyle and El Centro avenues.
During World War II, the Palladium hosted radio broadcasts featuring Betty Grable greeting servicemen’s song requests. When big band acts began losing popularity in the 1950s, the Palladium began to hold charity balls, political events, auto shows, and rock concerts. In the 1960s, Lawrence Welk broadcast his long-running TV show from the facility.
Since then, it has hosted the Emmy Awards and Grammy Awards shows and concerts by the Grateful Dead, the Rolling Stones, James Brown, Led Zeppelin, Madonna and Barbra Streisand, among others. But in the 1970s it began to lose much of its luster.
Live Nation, which recently cut long term recording and performance contracts with Madonna, U2 and hip hop artist Jay-Z, has promised to bring the Palladium back to its full luster and begin booking concerts there before the year’s end.
Every concert or performance requires a dozen or more stage hands to handle some lighting, staging and such.
