Baltimore's Pier Six Concert Pavilion has lost hundreds of thousands of dollars of revenue due to an ongoing lawsuit that alleges the venue's operator won its contract through a rigged bidding process, city officials say.
In documents submitted to the city's Board of Estimates this week, the Baltimore Development Corp. says the suit, filed by Baltimore lawyer Billy Murphy's firm on behalf of losing bidder AEG Live Mid-Atlantic, has "materially disrupted" sponsorships, premium seat sales, maintenance and bookings at the concert venue.
Venue operators Live Nation and SMG estimate they've lost $480,000 in sponsorships, $40,000 in premium seats and "several shows," the documents state.
Kimberly A. Clark, a BDC vice president, said venue operators will not be able to make their full $300,000 payment to city government this year because of the suit. She said the city plans to amend its contract with the company to allow a lower payment.
Even so, Clark said the deal with SMG is a winner for the city. She said the companies will be expected to make full payments in future years.
"We know it will still be significantly more than the previous operators," she said of the contract.
At issue is a dispute between AEG Live and city officials over the selection of SMG to operate the concert venue. In December, AEG Live — represented by Baltimore lawyer Hassan Murphy — filed a lawsuit over the award, alleging that the city participated in "illegalities and improprieties" in awarding the contract.
The lawsuit alleges the bidding process was "fraught with irregularities."
"At best, the [Request For Proposal] process did not adhere to the simple, fair and straight-forward proposal evaluation procedures," the suit states. "At worse, it was manipulated by SMG/Live Nation and those with significant power."
A. William Reid, senior vice president of AEG Live Mid-Atlantic, objected last year when the Board of Estimates voted 4-0 to approve the deal.
Reid said his firm's offer was to hold 45 shows a year. He said the bid was worth more than $20 million to the city in profit-sharing — far more than the other firms' bid.
"Something is fishy," he said at the time. "This could be a case of contract steering."
In January, AEG won a temporary stay in the case that blocked SMG from working at the venue. That stay was lifted in February upon appeal to the state's Court of Special Appeals.
"Currently, the appeal process is ongoing and the City is optimistic that a favorable resolution will be achieved," documents submitted to the Board of Estimates state.
Frank Remesch, general manager of SMG, said the delay in starting work at Pier Six "put us behind the eight ball on shows and sponsorship."
"You really should be booking for outdoor venues in December and January," he said.
In September, the BDC said the city chose to move forward with Live Nation and SMG because it had the largest capital improvement program and the best returns for the city.
Live Nation and SMG would invest $3.4 million in capital improvements over the contract's term and would hold at least 25 shows annually, according to the deal. The city also gets 2.5 percent of the venue's gross ticket revenue.
Anthony McCarthy, spokesman for Mayor Catherine Pugh, declined to comment, citing the pending litigation.