Demand builds: Probe Lolla sweetheart deal

August 8, 2011

Jim DeRogatis, WBEZ

Two aldermen with close ties to Chicago’s music scene are demanding that the City Council investigate the tax-and competition-free sweetheart deal that keeps Lollapalooza in Grant Park through 2018.

“It’s all about the asset of Chicago with Lollapalooza and whether or not we’re getting a fair deal,” said Ald. Joe Moreno (1st). “I don’t think we are. I don’t think we are from a council member’s standpoint, and also from a fan’s perspective.”

“This should have council oversight, and it is all the more reason that the City Council should pass an ordinance—already introduced under Daley—to view these and similar contracts first,” said Ald. Scott Waguespack (32nd). He added that his staff is “drafting an ordinance—or a resolution at least—to nullify the tax break.”

Initially reported by this blog last year, Lollapalooza’s possibly illegal tax exemption became the source of renewed focus last week, shortly before 90,000 people per day (plus uncounted flash-mob gatecrashers) arrived in Grant Park on Friday, Saturday, and Sunday. Last Monday, the Sun-Times reported that the city may have lost as much as $1 million annually for the last seven years, thanks to Lollapalooza’s unprecedented break from the amusement taxes paid by every other for-profit concert, festival, and sporting event. Then on Saturday, in fiery language rarely read in its editorial pages, the Tribune excoriated “Walmart by the Lake” (yes, they used those words) and demanded that “the region’s biggest music fest… pay its fair share.”

As the Chicago media at large finally took notice of the problematic contract, Rahm Emanuel’s spokeswoman told this reporter that the mayor would closely examine the tax exemption before it is granted again for 2012. But there are other troublesome aspects to Lollapalooza’s relationship with the city, including the egregious radius clauses it imposes on bands at the expense of local music venues, and the fact that the festival’s contract with the Chicago Park District  prohibits any similar concerts or festivals from happening in Grant Park. The only exceptions to the latter clause are Taste of Chicago and the other city-run music fests—and sources say that may have been the reason for Mayor Daley’s inscrutable flip-flop on privatizing those events just before he left office.

Lollapalooza’s Austin, Texas-based promoters C3 Presents were favorites of the Daley administration, and they hired one of his nephews, Mark Vanecko, as their attorney and lobbyist to negotiate their contract with the city. But the nepotistic connections don’t end there: The festival is co-owned by William Morris Endeavor, the all-powerful Hollywood talent agency run by Mayor Emanuel’s brother, Ari.