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Lollapalooza's Sweet Deal

"The new contract that will keep Lollapalooza in Grant Park through 2021 will yield more money for city, county and state governments," Jim DeRogatis reports on his WBEZ blog Pop N Stuff. "But city officials blew the opportunity to eliminate other unfair advantages that the Daley administration gave the politically connected concert in its original sweetheart deal, and to correct problems these create for the city's permanent music scene.

"When the Chicago Park District crafted the new pact, Mayor Rahm Emanuel broke his oft-stated promise to ask the City Council to appoint an independent negotiator to handle any new dealings with Lollapalooza, which is co-owned by Austin, Texas-based concert promoters C3 Presents and William Morris Endeavor, the Hollywood talent agency run by the mayor's brother Ari.

"The Park District secured an extra $1.35 million a year from the festival, which previously benefited from an unprecedented tax-free deal negotiated by its attorney and lobbyist, Mark Vanecko, a nephew of then-Mayor Richard Daley. But it will continue to give the giant concert an exclusive lock on Grant Park, prohibiting similar events by other promoters in the city's biggest public space. It failed to weigh the negative impacts on the Chicago music scene against the profits the festival brings to local hotels and restaurants; it solicited no public input from the music community and did not consult the City Council; it did nothing to address controversial radius clauses that are the most restrictive in the music industry, and it did not set any penalties if Lollapalooza fails to live up to its obligations."

In other words, Lollapalooza may no longer be the sweetheart it once was, but it still got a sweet deal.


DeRogatis, who began his career as an investigative reporter and hasn't lost any of those chops, has been on the case for years - all alone at times and especially in the beginning. He's also been right.

Last month he was able to report that "Lollapalooza Finally Will Pay What It Owes," which started like this:

"In a tacit admission that Lollapalooza's original long-term, tax-free deal with the city, crafted in part by Mayor Daley's nephew Mark Vanecko, was inequitable and possibly corrupt, promoters have reached a new agreement with the Chicago Park District under which they finally will pay all of the city, county and state taxes levied on every other for-profit concert, entertainment and sporting event.

"The economic benefit over the course of the deal - which now will keep Lollapalooza in Grant Park through 2021 - will increase to $4.05 million the monies raised from the event by local government this year, up from $2.7 million collected for parks improvements under the old deal last year."

In a closer look at the deal, though, DeRogatis finds another transparency hiccup, a broken mayoral promise, and provisions detrimental to the local music scene. Let's take a look at each.


"The new Lollapalooza deal was approved by the Park District Board and announced with considerable fanfare on March 14," DeRogatis writes. "But the contract itself has not been made public, and Park District Freedom of Information Officer Maria Castaneda rejected two requests for it and all relevant documents. 'The contract has not [yet] been executed for this matter,' she replied, and cited the public disclosure law's exemption for any information that 'would frustrate procurement or give an advantage to any person proposing to enter into a contractor agreement.'

"How this applies to Lollapalooza is unclear, since it already had an agreement with the city, and no other bids were solicited or considered for such a concert."

Par for the course given that the city didn't even bother to notify DeRogatis of the agreement despite his extensive reporting, which has easily outpaced that of other media outlets such as the Tribune, Sun-Times and Crain's, who were given a heads-up.


"In February 2011, after reports in this blog that 15 of his brother's employees at William Morris Endeavor had donated a total of $141,000 to his campaign, Emanuel pledged through then-spokesman Ben LaBolt that 'given his brother's position at WME [he] would ask the City Council to appoint an outside negotiator to handle any negotiations . . . so that there wasn't even a question of favoritism.'

"Later in the campaign and after his election, Emanuel repeated that promise directly to several other media organizations, including the Chicago Tribune, the Chicago Sun-Times and Time Out Chicago.

"'The Chicago Park District managed all negotiations regarding Lollapalooza, and the mayor was not involved in these discussions in any way,' Emanuel spokeswoman Tarrah Cooper said.

"But can the Park District superintendent or any member of his staff really qualify as the 'independent, outside negotiator' that the mayor promised when the mayor has the power to hire and fire these officials?"

No. Calling the head of the park district independent would be like calling police chief Garry McCarthy or schools chief Jean-Claude Brizard independent. They are Rahm's guys; it's not like Rahm was simply excusing himself from personally conducting the negotiations. He wouldn't be doing that anyway. The idea was to have an uninterested party handle the contract to avoid even an appearance of impropriety - that was the essence of Rahm's promise, and he failed to fulfill it.


"The festival undeniably provides a boon to some local businesses, especially restaurants and hotels," DeRogatis writes. "But it also undeniably hurts dozens of smaller music venues and concert promoters who comprise the city's musical infrastructure 365 days a year, as opposed to the three days that Lollapalooza occupies Grant Park."


"In addition to dominating the city's summer concert scene by its sheer scope and size - last year, Lollapalooza drew a record 270,000 attendees to hear its 130 bands - the festival wields unequaled power over the Chicago music scene via the radius clauses it places on all of those the acts that play on its stages," DeRogatis reports. "These prohibit artists from performing for six months before the festival and three months after it anywhere within 300 miles of Grant Park, which includes concert markets as far away as Milwaukee, Madison, Iowa City, Detroit and Indianapolis."

But isn't that industry standard? No.

"By way of comparison, the radius clauses imposed by the Pitchfork Music Festival, Coachella and Bonnaroo all are measured in weeks, not months. And last year's Dave Matthews Band Caravan, a joint production of national concert promoters Live Nation and Chicago-based Jam Productions, imposed no radius clauses whatsoever."


Go read the whole thing - and the backlinks to DeRogatis's previous reporting on the whole stinkin' mess. Then add it to the chapter in the city bible called How Chicago Works, which, as we know, is a primer on how Chicago only works for the connected.


Comments welcome.


Posted on April 17, 2012

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