Talks to keep Lollapalooza in Chicago hit a snag

Lollapalooza organizers and the Chicago Park District reached a stalemate Thursday night in crafting a new contract to keep Chicago’s largest music festival in Grant Park for years to come.

Sources with knowledge of the negotiations said the impasse is centered on the city amusement tax. The festival — which draws 100,000 attendees for each of the four days — is subject to the tax, which increased from 5% to 9% for large-scale events over the course of the existing 10-year Lollapalooza contract. Festival organizers want safeguards against the city raising the amusement tax over the life of a new agreement.

The news of the standoff came hours after Lollapalooza co-founder Perry Farrell announced in a news interview that organizers had reached a 10-year deal with the city. Representatives for C3 Presents, which puts on the festival, were quick to say that negotiations were still ongoing.

A city official declined to comment Thursday, referring questions to C3. A Park District spokesperson could not be reached.

Lollapalooza’s current agreement, signed in 2012, was set to expire after last year’s festival, but the parties agreed to execute a one-year extension. This year’s festival opened Thursday in Grant Park and runs through Sunday.

Rus Blemker returned to the festival for the first time in years. The West Loop resident was not worried about whether a new Lollapalooza contract will be worked out.

“It’ll come back,” said Blemker, who was painting a purple watercolor of the Discord stage ahead of Wet Leg’s Friday set. His brushes and sketchbook sat atop a trash can.

“Lori is losing the Bears. She can’t lose another major event downtown,” he said, referring to the prospect of the Chicago Bears bolting for suburban Arlington Heights under Mayor Lori Lightfoot’s watch. He was more concerned with getting a good spot for Friday headliner Dua Lipa’s set.

Once a traveling festival before it found a home in Grant Park in 2005, Lollapalooza is said to generate millions in local economic impact and revenue. When the Lollapalooza contract was announced in 2012, after months of private negotiations, it was heralded as a “big win” for Chicago’s taxpayers, hotels, restaurants, cultural community and parks.

The contract includes a provision that festival organizers are on the hook for sales, liquor, leasehold and amusement taxes. The deal was executed just months after the city Office of the Inspector General noted that Lollapalooza organizers were not paying the 5% amusement tax, even though other music festivals were required to pay. At the time, in 2011, Lollapalooza organizers were giving 10.25% of profits to a foundation that raised private funds for the Chicago Park District.

Hiking the amusement tax to 9% for large performances was part of then-Mayor Rahm Emanuel’s 2018 budget. Lollapalooza organizers also pay a 1.5% county amusement tax, one source said, after receiving a break on that tax for years. The source warned that an additional tax hike would be passed on to ticket buyers.

Recent contract negotiations have sparked criticism over the lack of transparency from the Park District, while neighboring aldermen have complained about the noise and other nuisances. The one-year extension inked in 2021 was done behind closed doors, without any public discussion or vote. That was also the case with the decision to extend the festival from three days to four starting in 2016.

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Since Lollapalooza returned in 2021, after COVID-19 prompted the cancellation of the in-person festival in 2020, C3 and the city have also been less forthcoming than in prior years about police activity and hospitalizations involving fans. Previously, organizers shared the number of arrests, citations and hospital transports daily. This year, as was the case in 2021, a C3 official said they will share the total numbers after the event ends, following the lead of the city Office of Emergency Management and Communications.

Like her predecessor as Chicago mayor — a job that includes appointing park board commissioners — Lightfoot has received campaign support from people with ties to the festival.

In May, she spent five days in Texas for meetings with business executives and for fundraisers in Houston, Dallas and Austin, where C3 is based.

She came away with about $95,000 in donations, according to campaign disclosure reports. That sum included $5,000 from C3 co-founder Charlie Jones, who left the company two years ago, and $2,500 from Matthew Luckie and Jeff Waughtal, who founded FBR Management, the beverage concessionaire that worked with Lollapalooza.

FBR and Luckie donated a total of $5,000 to Lightfoot in 2021 as well. Courtney Fisher, who founded Four Leaf Productions alongside Jones, gave $2,000 last year as well.

Those sums are nowhere close to what Emanuel pulled in from C3 and Lollapalooza related businesses and individuals, who were consistent campaign donors.

Tribune’s Gregory Pratt and Doug George contributed.