Nope, they won’t have to remain free… and answers to other questions about privatizing the city music festivals

December 14, 2010

Midday Monday, three days after the information was supposed to appear online, the Chicago Department of Procurement Services finally got around to posting an addendum with 84 questions from promoters considering whether to bid on the contract to privatize the big summer music festivals.

The 84 corresponding answers shed some light on what the Daley administration hopes to accomplish in its waning days by pawning off the Taste of Chicago, the Blues Festival, and five more formerly public music events—though by no means do they solve the primary riddle, “Why now?”

The (literally) million-dollar question is No. 15: “Will the producer be allowed to charge admission to all or parts of the events?

The city’s answer: “Ideally, these festivals would remain free, but respondents should submit responses that include their recommendations on the economic model which can include an entrance fee.”

We can read that as the city saying it sure would be nice if a promoter came up with a plan that could keep these festivals free, but we know that’s as likely to happen as the mercury hitting 110 degrees today. Even Daley crony Megan McDonald, overseer of the privatization drive as executive director of the Mayor’s Office of Special Events, has said as much in her public statements.

The economics simply don’t make free admission possible for a private festival, as opposed to a city event, and that’s obvious from the profit and loss statements and corporate sponsorship information that the city also released as part of this addendum. The numbers for all seven festivals over the last three years reveal that while they generate considerable revenue, only a few have made money. (Bear in mind the economic downturn; for comparison’s sake, it would be fascinating to see the reports for the years preceding the recession.)

The charts are tacked on at the end of this post, but to summarize: The smaller festivals (Gospel, Celtic, Country, Jazz, and Latin) all lost money in 2008, 2009, and 2010—a total of about $4.7 million, which isn’t as much as it might seem, when you think about all of that music spread over 15 multi-day fests in three years.

The Blues Festival grossed $1.8 million and netted $218,000 in 2008; it grossed $1.1 million but lost $506,000 net in 2009, and it grossed $968,000 but lost $331,000 net in 2010. Taste of Chicago grossed $17 million and netted about $15 million in 2008; it grossed $14 million but lost almost $1.5 million in 2009, and it grossed $13 million and netted about $171,000 in 2010.

This would seem to indicate that at least two of the festivals are financially viable, with proper management, and that several of the others ought to be either abandoned or consolidated, or at least have their programming and operations audited by a committee of experts who know what they’re doing. But the numbers hardly spell disaster as part of a $6.5 billion annual budget, any more than they equal salvation in the face of a $655 million deficit this year. And they don’t necessarily scream, “Privatize!”

So, what are some of the other things that the city is seeking or willing to allow as it divests of its marquee musical events? According to the addendum:

  • The events cannot take place in Millennium Park, but they don’t have to stay in Grant Park. “All venues will be considered.”
  • The events cannot be combined.
  • Naming rights can be sold, “as long as the name incorporates the current name of the event. For example, you could have the name ‘Acme’s Chicago Jazz Festival,’ but you could not have ‘Acme Fest,’ or ‘Acme’s Jazz and Heritage Festival.’”
  • The city is not expecting revenue sharing from the events, but it is expecting “Liquor License fees, Street Closure fees, Building Department Permit fees (for large tents, stages and structures), Itinerant Merchant license fee, [and] Food Vendor license fees,” as well as reimbursement for city services.
  • As for those services, “the Producer may submit a plan for the privatization for some services. However, public safety city services are not negotiable. Although your security plan may include private security services, the plan will be reviewed by the City to determine the level of augmentation by the Chicago Police Department and that will not be negotiable. Additionally, services provided by the Health Department, Fire Department, and Office of Emergency Management and Communications will not be negotiable.”
  • The city reserves the right to negotiate permit and park rental fees, and to veto particular acts, vendors, or corporate sponsors without the promoters even having recourse to an appeals process.

And, given the fact that the festivals already are behind the eight ball in terms of being months late for booking talent in 2011, when will the city decide on a winning bidder?

“Because of the complexity and large amount of variables with this RFP, a definite timeline cannot be set. However, the City acknowledges that it is in everyone’s best interest to resolve all issues as quickly as possible, and will work quickly to expedite all aspects of this RFP.”

Which is to say, “Soon—but we ain’t really saying.”

Meanwhile, Procurement Services has changed the date that bids are due, from 4 p.m. on the day before the night before Christmas, to 4 p.m. on Monday, Dec. 27.

Earlier reports in this blog about privatizing the city festivals:

Dec. 7: City festivals chief responds to this blog’s reporting on the push for privatization

Dec. 6: Are a political power struggle and a sweetheart deal fueling the city's push to privatize the summer music festivals?

Nov. 22: Psst! Hey, buddy: Wanna buy a city festival?