Live Nation failed minority hiring requirements at Chastain Park: ATL audit
By David Pendered
Live Nation has not met its minority participation requirements for Chastain Park Amphitheater. In addition, the company has not submitted reports of minority participation at either Chastain or Lakewood Fairgrounds, the two amphitheaters it has under lease agreement with Atlanta, according to a new city audit.
Live Nation has agreed to work with the city to correct the situation, according to the document prepared by City Auditor Amanda Noble and presented Tuesday to the Atlanta City Council. The audit was started in late 2018 and delayed, initially, by Live Nation’s refusal to meet auditors’ demands for documents and, this year, by the pandemic, Noble wrote in her transmittal letter.
Live Nation has been less congenial in another key aspect identified by the audit – documentation of revenues that are the basis of its payments to the city
Live Nation refused to produce documents to prove that it has paid all the money it owes to the city. Live Nation contends its lease agreements don’t require the release of such information; city auditors recommend the contracts be amended to require the release of financial information to ensure full payments are made.
Regarding Live Nation’s compliance with the city’s disadvantaged business enterprise program, the audit states:
- “Live Nation has not submitted minority participation reports for the Lakewood or Chastain concert venues. Contract compliance staff found that the company has not met the minority participation requirement for its Chastain subcontractors….
- “Also, Live Nation representatives said that they have never provided minority participation reports for their subcontractors to the city for Lakewood Amphitheater since it took over the management responsibilities from Filmworks in 2009. [Office of] Contract Compliance staff requested that Live Nation prepare an aggregated report for the missing years through 2019 and begin to submit the required annual report beginning in 2020.”
Live Nation contended during a meeting with city officials that it worked with three minority subcontractors at Chastain Park Amphitheater. City officials determined two of the three subcontractors were not certified, or were in the process of being certified, as a disadvantaged business enterprise, according to the audit. This certification is awarded by the state Department of Transportation.
Atlanta’s Office of Contract Compliance is responsible for ensuring the contracts with Live Nation comply with the city’s minority subcontractor program, according to the audit.
Regarding the documentation of payments to Atlanta, the audit reported Live Nation refused to produce documents to prove that it has paid all the money it owes to the city. The audit repeatedly observes that Live Nation is not required to release such information under terms of existing contracts. The audit’s first page begins with this paragraph:
- “The city received $4.2 million in revenue from Live Nation under the lease agreements for Lakewood and Chastain Park Amphitheaters from calendar years 2016 through 2018. Although the company provided revenue summaries each year, Live Nation declined to provide detailed documentation to the city to support revenue for the period for either venue. The city’s contract for Lakewood does not require the information to be provided, but the Chastain contract requires Live Nation to provide specific documents to support ticket revenue, name-in-title sponsorship agreements, and parking fees. Live Nation only provided contractually required documentation for the 2018 concert season at Chastain.”
In a section where the audit recommends a contract amendment be drafted to address the issue of documentation, John Lavelle, the city’s director of real estate in the Department of Enterprise Assets Management observed, in full:
- “While I defer to Law regarding the need to amend the contract with Live Nation with respect to our rights to audit, the language of Article 12 in the Summary of Terms that supplements the Amphitheatre Agreement appears to me to be all encompassing and unequivocal: “The City shall have the right to audit all documents used by Live Nation to determine the percentage rents….” The language was developed by the Law Department at the time that the City took over management of Lakewood from Filmworks, USA, Inc. Of course, any amendment of the business terms would have to be negotiated with Live Nation prior to passage of any ordinance in order to be effective.