Chicago Extends Lollapalooza Deal Through 2021, Tax Breaks For Promoters Pulled

By Chuck Sudo in Arts & Entertainment on Mar 15, 2012 3:10PM

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Photo by Flickr user cb804.

The Chicago Park District and C3 Presents, promoters for Lollapalooza, agreed to a new contract yesterday that will keep the annual festival in Grant Park through 2021.

With the new deal, C3 will be required for the first time to pay amusement and liquor taxes to the city, which could mean millions more in revenue for the city's coffers. Under the original agreement, C3 was exempted from paying taxes on the festival in exchange for contributing a percentage of its revenue to the non-profit Parkways Foundation, which is dedicated to improving Chicago's parks. Parkways has received nearly $11 million during Lollapalooza's first seven years in Chicago.

The tax exemption has come under closer scrutiny as C3's profits from the festival have skyrocketed. C3's Charlie Jones told Chicago Tribune pop music critic Greg Kot the festval lost money its first three years in Chicago. Last year, Lollapalooza earned $20 million.

Last summer, Mayor Rahm Emanuel called for an independent investigation of the deal brokered in part by Mark Vanecko, a nephew of former Mayor Richard M. Daley. (Emanuel's brother Ari is chairman of William Morris Endeavor, a co-owner of Lollapalooza with C3.) A January proposal by the Cook County Board of Commissioners would have required C3 to get their approval to have tax exempt status.

WBEZ's Jim DeRogatis, who's been on the story from the beginning, estimates the new deal will increase the city's take from Lollapalooza this year to $4.05 million, up from $2.7 million under the old deal.

With the loss of tax exempt status, Jones told Kot there will be an increase in ticket prices when the full Lolla lineup is announced in April.

“This is a good deal deal for the city and we felt it is the right thing to do. But it will affect ticket prices. There will be an increase. How much? To be determined. But it's been keeping me up at night.”

Last year, single-day tickets for Lollapalooza were $90, festival passes cost $210. the festival drew a record 270,000 people last year.