WBEZ | #lollapalooza http://www.wbez.org/tags/lollapalooza Latest from WBEZ Chicago Public Radio en Lollapalooza, Grant Park, day one August 5, 2011 http://www.wbez.org/blog/city-room-blog/2011-08-06/lollapalooza-grant-park-day-one-august-5-2011-90210 <img typeof="foaf:Image" src="http://llnw.wbez.org/blog/photo/2011-August/2011-08-06/Muse copy.jpg" alt="" /><p><p style="text-align: center;"><img alt="" class="caption" src="http://llnw.wbez.org/blog/insert-image/2011-August/2011-08-06/Muse copy.jpg" title="Muse (WBEZ/Aaron Pylinski)" height="375" width="500"></p><p>Celebrating its 20<sup>th</sup> anniversary (give or take the years in between when the once traveling fest ceased existence), Lollapalooza returned to Grant Park for its seventh year in Chicago. It marked its largest attendance, with 270,000 fans expected over the weekend. Despite the larger crowds, the bottlenecks experienced in years past were less apparent on Friday, the first of three sold-out dates. The maneuverable pedestrian way of Columbus Drive helped clear the constant rush hour around Buckingham Fountain.</p><p>Another noticeable difference was the expansion/locale of the Perry’s stage; the tented area was larger than any dance tent I’ve seen at a festival. It’s also grown beyond the festival confines with numerous official and unofficial Lolla aftershows at local venues, the W and Hard Rock Hotel. The latter hosts an air-conditioned lounge where free massages, facials, tattoos, booze, food, swag and artists entice VIPs and performers.</p><p>But the main draw is, of course, the fest itself. With more than 130 acts appearing across eight stages through the weekend, I set out with my intrepid team: <em>Sound Opinions</em> production assistant Annie Minoff and photographer/writer Aaron Pylinski.</p><p>1 p.m. With a band name like Tennis, you might expect to see a kind of exchange between players. Not so much with husband and wife Patrick Riley and Alaina Moore, who shimmied behind her keyboards, letting out smoky “wah ah oh ohs” and “sha la las” (“She’s so hot!” exclaimed the guy next to me). The couple perused tunes from their debut album, <em>Cape Dory</em>, a musical recounting of their seven-month sailing trip down the east coast, but I got more of a beachy retro-surfer vibe. <em>-AM</em></p><p style="text-align: center;"><img alt="" class="caption" src="http://llnw.wbez.org/blog/insert-image/2011-August/2011-08-06/TheNakedandFamous.JPG" title="The Naked and Famous (WBEZ/Aaron Pylinski)" height="350" width="500"></p><p>1:30 p.m. New Zealand’s The Naked and Famous drew a large crowd for an early slot. Singers Alisa Xayalith and Thom Powers’ female/male vocal interplay and round robins, coupled with zippy synths and beats and a whole lotta energy, elicited an all-out dance party in the field by the time they closed with their infectious single, “Young Blood.”</p><p>2:17 p.m. The first unitard sighting came courtesy of Reptar keyboardist William Kennedy. Their sound at first recalled Vampire Weekend, but later with some dual drumming action, it got more cosmic, when the song “Blastoff” hit an electro swirl, jammier groove.</p><p>2:35 p.m. Delta Spirit’s took us on a roadtrip through the American south, and encouraged more handclapping from an audience who they apparently felt wasn’t quite “on the bus.” “C’mon Chicago!” singer Matthew Vasquez yelled. He dedicated a song to “anyone who has had to do construction for a living. Drywall is a beautiful thing.”<em> -AM</em></p><p style="text-align: center;"><img alt="" class="caption" src="http://llnw.wbez.org/blog/insert-image/2011-August/2011-08-06/FosterthePeople.JPG" title="Foster the People (WBEZ/Aaron Pylinski)" height="387" width="500"></p><p>3:02 p.m. By the time Foster the People hit the stage on the South side of the park, it was almost headliner crowded. It also marked the first cover song I caught, Neil Young’s “Heart of Gold.” Of course the band saved their one hit for near the end, but the crowd was pumped from the beginning, crowd surfing through some otherwise relaxed pop before “Pumped Up Kicks” arrived.</p><p>3:30 p.m. Mexican punk band Le Butcherettes took to the Google+ stage, slaying the crowd with their indelible garage sound.&nbsp; They played their hit song, “Dress Off’ as front woman Teri Gender Bender crooned and crowd-surfed. The set was so intense that drummer Gabe Serbian vomited into the photo pit. <em>-AP</em></p><p>4:00 p.m. London’s White Lies is a band with one theme. Well, maybe two: love and death. “Let’s go home together and die at the same time,” singer Harry McVeigh sang. “You’ve got blood on your hands, I don’t know its mine.” Tinny background keyboards played up the eerie morbidity. <em>-AM</em></p><p>4:12 p.m. Chicago’s Smith Westerns wrapped up their set with the one-two punch of “Weekend” and “Dye the World.” Their sing-along, harmonized pop seemed overly sweet when contrasted to the naughtier, sexier vibe of The Kills, who launched their set at 4:29 p.m. Alison Mosshart and Jamie Hince turned up the sizzle with Mosshart’s gritty, sexy growl meeting Hince’s more subdued delivery. They revved, rocked and rolled us into the early evening.</p><p style="text-align: center;"><img alt="" class="caption" src="http://llnw.wbez.org/blog/insert-image/2011-August/2011-08-06/Kills1.JPG" title="The Kills (WBEZ/Aaron Pylinski)" height="375" width="500"></p><p>5:10 p.m. Two Door Cinema Club singer Alex Trimble took the stage visibly flushed. “Ginger people aren’t supposed to be in this kind of heat,” he joked. The Northern Irish band’s pop was precise and danceable, if predictable. But Trimble’s vocals weren’t quite making it to the back of this significant crowd. I couldn't help thinking he might have done better if he took off that stylish but undoubtedly stifling sports jacket. <em>-AM</em></p><p>5:35 p.m. Pete Wentz’s new project, Black Cards, wasn’t quite what I expected. Three young gals danced, with one singing some pedestrian, dance-styled pop, while Wentz spent time behind a DJ setup or up front thanking fans and his mom. He told the crowd, “I just wanna have fun,” and explained, “this song’s about getting trashed and hanging out.” He stage dove. He threw toilet paper rolls into the audience. Fun, maybe? Funny (intentional or not), for sure.</p><p style="text-align: center;"><img alt="" class="caption" src="http://llnw.wbez.org/blog/insert-image/2011-August/2011-08-06/BlackCards.JPG" style="width: 500px; height: 360px;" title="Black Cards (WBEZ/Aaron Pylinski)"></p><p>7:00 p.m. Strolling by Perry’s stage, Skrillex has a crowd overflowing way outside the tent. I wonder if that’ll be the scene where there might be some issues over the weekend. I hear an ambulance siren, but there doesn’t appear to be any problems at the moment.</p><p>7:00 p.m. Bright Eyes’ Conor Oberst interrupted a solid rock n’ roll set to play the breathtaking acoustic folk song, “Landlocked Blues.” It made me realize how few political songs I’ve heard at the festival so far. “And the whole world must watch the sad comic display/If you’re still free start running away/’Cause we’re coming for you!” he sang. By turns muted and ferocious, he had the audience inthralled. He closed out the performance by descending from the stage to hug members of the crowd (and stage security). <em>-AM</em></p><p>8:17 p.m. Muse hit the stage flanked by honeycombed LED screens and illuminated by vibrant, colorful lighting. Their dramatic musical turns were met with perfectly timed fireworks that serve to augment the already thunderous rhythms onstage. Amid crowd faves, like mega-hit “Uprising,” they inject a Hendrix-styled rendition of “The Star Spangled Banner.” Meanwhile, over on the other side of the park…</p><p>8:30 p.m. Coldplay entered to the strains of cheesy orchestral music. Fireworks crackled overhead. They’re 15 minutes late.&nbsp;They went with a colors theme: Multicolored lazers beam out from the stage as the band launches into old faves like “In My Place” and “Yellow.” With a title like that the stage lighting designs itself. <em>-AM</em></p><p>&nbsp;</p><p>&nbsp;</p></p> Sat, 06 Aug 2011 06:52:00 -0500 http://www.wbez.org/blog/city-room-blog/2011-08-06/lollapalooza-grant-park-day-one-august-5-2011-90210 Lollapalooza goes south http://www.wbez.org/blog/jim-derogatis/lollapalooza-goes-south <img typeof="foaf:Image" src="http://llnw.wbez.org/Lolla-art1.jpg" alt="" /><p><p style="text-align: center;"><img style="width: 451px; height: 283px;" src="http://llnw.wbez.org/blog/insert-image/2010-November/2010-11-19/Lolla-art1.jpg" alt="" title="" /></p><p>From the minute they launched the Austin City Limits Music Festival in their Texas hometown, <a href="http://www.c3presents.com/">C3 Presents</a>, the promoters behind Lollapalooza, have been wildly ambitious, doing little to hide their dreams for eventual world domination. Not that it&rsquo;s been easy for them: Three years ago, an attempt to bring what would have been their third giant Walmart-style festival out east collapsed under its own weight when they couldn&rsquo;t secure a site in New Jersey or Pennsylvania, winning them nothing but the enmity of major metropolitan competitors.</p><p>&nbsp;</p><p>Now, like many imperialist Texans before them, the promoters have set their sights to the south: This April, they&rsquo;ll take a two-day version of their retooled Lollapalooza to Santiago, Chile.</p> <p>In addition to the usual list of mediocre mainstream acts, corporate figurehead Perry Farrell promises a roster with plenty of local bands, adding, &ldquo;We are also looking to bring some of those artists out to Chicago for a musical foreign exchange.&rdquo; (Read: Lollapalooza is likely to have more Chilean groups than Chicago acts when it returns to Grant Park for its seventh year this August. But the festival never has been overly concerned about the Chicago musical community anyway.)</p> <p>&ldquo;We are confident a massive music audience is awaiting us in Santiago,&rdquo; Farrell said in the company&rsquo;s hype release. &ldquo;What we are very interested to learn is how widely spread the demographic will be. In Chicago we have hipsters as well as young parents with children in attendance. It is one of the few places in the world where a generation gap doesn&rsquo;t exist.&rdquo;</p> <p>Ah, yes: Lollapalooza, uniting not just generations, but the world.</p><p>Meanwhile, TimeOut Chicago can be lauded for being the first local news organization <a href="http://chicago.timeout.com/articles/features/90421/the-culture-candidate">to get most of the candidates for mayor on the record about their opinions on the arts</a>. But, boy, did they blow it with a distressingly lame question about Lollapalooza.</p> <p><a href="http://chicago.timeout.com/articles/features/90429/lollapalooza-the-cultural-candidate">&quot;Do you see Lollapalooza as a boost for the local music scene or a challenge to local venues?&quot;</a> the magazine asked. As you might expect, that query resulted mostly in big fat blasts of political hot air. Far better questions would have been:</p><p><strong>What do you think of the Attorney General&rsquo;s anti-trust investigation of the festival, stemming from its exclusionary radius clauses and the impact those are having on the rest of the Chicago concert scene?</strong></p><p><strong>And: Do you think that Lollapalooza&rsquo;s sweetheart, tax-free deal with the city is bringing all of the money to Chicago that it should be getting?</strong></p><p>Alas, TimeOut always has been very friendly with the festival&mdash;to the point of &ldquo;co-sponsoring&rdquo; it and distributing its publication onsite every year.</p><p>In any event, of particular note was the response from Rahm Emanuel: &ldquo;Chicago is a fantastic city for local music all year round, and the fact that the Lollapalooza festival has chosen to make Chicago its home reflects that. We should work to ensure, however, that local music venues are not adversely impacted by the music festivals and events that come to Chicago.&rdquo;</p> <p>No, that doesn&rsquo;t say more than any of the other candidates did. But what TimeOut didn&rsquo;t tell its readers is that Emanuel&rsquo;s brother, as head of the massive William Morris Endeavor talent agency, owns 50 percent of the festival.</p><p>As for that exemption from the amusement tax that Lollapalooza continues to enjoy, if you still think it&rsquo;s insignificant, consider this: <a href="http://www.suntimes.com/news/cityhall/2899048,ricketts-wrigley-renovation-support-111610.article">As he runs around hat in hand seeking a $200 million loan of public funds to renovate Wrigley Field</a>, Cubs Chairman Tom Ricketts has been stressing that that money and then some would be paid back to taxpayers via the amusement tax&mdash;the same levy the city has waived for the Daley administration&rsquo;s buddies, C3 Presents.</p><p><strong>Earlier reports in this blog about Lollapalooza's shenanigans:</strong></p><p><a href="http://www.wbez.org/jderogatis/2010/10/crains-agrees-lollapalooza-tax-deal-warrants-scrutiny/40133">Oct. 19:&nbsp;Crain's Agrees:&nbsp;Lollapalooza tax deal warrants scrutiny</a></p><p><a href="http://www.wbez.org/jderogatis/2010/10/a-second-look-at-my-lollapalooza-tax-math/39092">Oct. 6:&nbsp;A second look at my Lollapalooza tax math</a></p><p><a href="http://www.wbez.org/blog/jim-derogatis/does-austin-get-crappy-deal-lollapaloozas-little-sister">Oct. 5: Does Austin get a crappy deal from Lollapalooza's &quot;little sister&quot;?</a></p><p><a href="http://www.wbez.org/jderogatis/2010/10/is-chicago-earning-all-that-it-should-from-lollapalooza/38601">Oct. 4: Is Chicago earning all that it should from Lollapalooza?</a></p><p><a href="http://www.wbez.org/blog/jim-derogatis/lollapalooza-liquor-sales-and-links-mayors-nephew">July 13: Lollapalooza, liquor sales, and the links to the mayor's nephew</a></p> <p><a href="http://www.wbez.org/blog/jim-derogatis/analysis-whats-behind-attorney-generals-investigation-lollapalooza">June 29: What's behind the Attorney General's investigation of Lollapalooza?</a></p> <p><a href="../../../../../jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523">June 24: Illinois Attorney General investigating Lollapalooza for anti-trust</a></p> <p>&nbsp;</p></p> Fri, 19 Nov 2010 06:29:00 -0600 http://www.wbez.org/blog/jim-derogatis/lollapalooza-goes-south Crain's agrees: Lollapalooza tax deal warrants scrutiny http://www.wbez.org/jderogatis/2010/10/crains-agrees-lollapalooza-tax-deal-warrants-scrutiny/40133 <p><p style="text-align: center;"><a rel="attachment wp-att-40135" href="/jderogatis/2010/10/crain%e2%80%99s-agrees-lollapalooza-tax-deal-warrants-scrutiny/40133 /lolla-art2-2"><img height="298" width="480" class="aligncenter size-full wp-image-40135" title="Lolla-art2" src="/sites/default/files/archives/blogs//Lolla-art22.jpg" alt="" /></a></p><div>&nbsp;</div><p>The reputation of <a href="http://www.chicagobusiness.com/section/blogs">Crain's Chicago Business blogger Greg Hinz</a> precedes him: He's an arrogant, surly bulldog and dedicated contrarian, and he seemed to be gunning for me, eager to challenge <a href="../jderogatis/2010/10/is-chicago-earning-all-that-it-should-from-lollapalooza/38601">my reporting</a> on Lollapalooza's unprecedented, long-term, tax-exempt, competition-free sweetheart deal with the city.<!--break--></p><p>In reaching out to a colleague via email to find my contact information -- never mind that my email address is all over the Web, and my phone number is listed in the book (so much for bulldog journalistic chops) -- Hinz wrote, &quot;I was thinking of doing something on his lollapallooza [sic] post, but it apepars [sic] there's a big mistake in it. I hate to knock him without talking to him.&quot;</p><p>The mistake Hinz was referring to was the tax percentage I corrected <a href="../jderogatis/2010/10/a-second-look-at-my-lollapalooza-tax-math/39092">as soon as my error was pointed out</a>, but he wasn't deterred when we eventually spoke: He seemed determined, because I primarily am a rock critic, to snicker at my abilities as a reporter. (Again, never mind that I have spent nearly a quarter of a century wearing both hats, working for five years as a beat and investigative reporter before becoming a professional critic, and continuing as such to report difficult stories such as the litigious mess of Kurt Cobain's posthumous career, the city's assault on the Chicago club scene, and the R. Kelly scandal.)</p><p>But surprise: Hinz concluded that there are indeed significant questions to be asked about the 10-year deal between Lollapalooza, the Chicago Park District, and the CPD-powered non-profit Parkways Foundation. <a href="http://www.chicagobusiness.com/section/blogs?blogID=greg-hinz&amp;plckController=Blog&amp;plckScript=blogScript&amp;plckElementId=blogDest&amp;plckBlogPage=BlogViewPost&amp;plckPostId=Blog%3a1daca073-2eab-468e-9f19-ec177090a35cPost%3a26084b86-672b-4e45-931c-8434f4788429&amp;sid=sitelife.chicagobusiness.com">He wrote:</a></p><blockquote>Does Lollapalooza, the big music festival that occupies a chunk of Grant Park for several days each summer, get a sweetheart tax deal from the city of Chicago? That's the question a rock music writer who blogs on WBEZ's Vocalo website asked in a recent post and, while I don't think he proves his case, the matter does post [sic] some fascinating and unanswered questions.</blockquote><p>Hinz notes as I did that any other promoter staging a concert such as Lollapalooza or anything a fraction of its size &quot;normally would owe 5% in amusement taxes, which would amount to about $1 million a year for city coffers.&quot; Then he adds: &quot;On the other hand, the firm [Austin, TX-based promoters C3 Presents] appears to pay far more than that $1 million&sbquo;&nbsp;under its arrangement with the district.&quot;</p><p>That &quot;appears to pay&quot; part is key. The only numbers that can be confirmed to date are payments that average out to a million dollars a year over the first five years that the concert has been in Grant Park. Hinz is willing to accept city officials' word that the payment for 2010 will be double that, or about $2 million. I'm not -- at least not until the city's take officially is reported, and it hasn't been yet. And the only entity in a position to audit Lollapalooza's numbers is Lollapalooza itself.</p><p>&quot;All that dough goes to the park district, not the city,&quot; Hinz continues. By law, the amusement taxes any other promoter would pay would go to the city, and a separate, significant figure amounting to as much as a million dollars to close Grant Park for several weeks would go to the Park District.</p><p>Even if the city is making more money under the current deal than it would from a straight tax payment plus a rental fee for the park, well, the tax payment happens to be the law. As citizens, we may argue with the police officer who pulls us over for running a red light: &quot;Honest, sir, I had a very good reason!&quot; But in the end, the law is the law, and everybody is supposed to follow it. Why shouldn't big business?</p><p>While he was skeptical about this point when we talked, Hinz admitted in his blog post: &quot;There still is a nagging question about how C3 got the exemption from paying the city's amusement tax.&quot;</p><p>My reading of the municipal code -- and it's one that has been confirmed by several knowledgeable attorneys -- is that tax exemptions for big events such as Lollapalooza are allowed only when all of the profits, after reasonable expenses, go to a non-profit group for civic improvements. &quot;Parkways would appear to fit that definition,&quot; Hinz writes. &quot;But C3, which is in the business of making not only music but a buck?&sbquo;&nbsp;I've not been able to get an answer.&quot;</p><p>Well, at least this blogger is not the only one being stonewalled by city officials reluctant to answer thorny questions about the biggest private for-profit event ever to take place on the jewel of the city's lakefront being granted a tax exemption that it does not seem to deserve and which seems to be illegal, quite possibly thanks to the political connections between C3 and its attorney and lobbyist, Mark Vanecko, a nephew of Mayor Daley.</p><p>And Hinz ultimately came to the same conclusion I did:</p><blockquote>&quot;Those strike me as pretty good questions for the candidates to ponder as half the city prepares to run for mayor and alderman.&quot; <br /></blockquote> <p><strong>******</strong> <strong>Earlier reports in this blog about Lollapalooza:</strong></p><p><a href="../jderogatis/2010/10/a-second-look-at-my-lollapalooza-tax-math/39092">Oct. 6: A second look at my Lollapalooza tax math</a></p><p><a href="../jderogatis/2010/10/does-austin-get-a-crappy-deal-from-lollapalooza%E2%80%99s-%E2%80%9Clittle-sister%E2%80%9D/38614">Oct. 5: Does Austin get a crappy deal from Lollapalooza's &quot;little sister&quot;?</a></p><p><a href="../jderogatis/2010/10/jderogatis/2010/10/is-chicago-earning-all-that-it-should-from-lollapalooza/38601#more-38601">Oct. 4: Is Chicago earning all that it should from Lollapalooza?</a></p><p><a href="../jderogatis/2010/10/jderogatis/2010/10/jderogatis/2010/07/lollapalooza-liquor-sales-and-the-links-to-the-mayor%E2%80%99s-nephew/29595">July 13: Lollapalooza, liquor sales, and the links to the mayor's nephew</a></p><p><a href="../jderogatis/2010/10/jderogatis/2010/10/jderogatis/2010/06/analysis-what%E2%80%99s-behind-the-attorney-general%E2%80%99s-investigation-of-lollapalooza/27939">June 29: What's behind the Attorney General's investigation of Lollapalooza?</a></p><p><a href="../jderogatis/2010/10/jderogatis/2010/10/jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523">June 24: Illinois Attorney General investigating Lollapalooza for anti-trust</a></p></p> Tue, 19 Oct 2010 06:00:00 -0500 http://www.wbez.org/jderogatis/2010/10/crains-agrees-lollapalooza-tax-deal-warrants-scrutiny/40133 A second look at my Lollapalooza tax math http://www.wbez.org/jderogatis/2010/10/a-second-look-at-my-lollapalooza-tax-math/39092 <p><p style="text-align: center;"><a rel="attachment wp-att-39093" href="/jderogatis/2010/10/a-second-look-at-my-lollapalooza-tax-math/39092 /lolla-art-5"><img height="263" width="418" alt="" style="margin-left: 15px;" class="aligncenter size-full wp-image-39093" title="Lolla art" src="/sites/default/files/archives/blogs//Lolla-art2.jpg" /></a><code> </code></p><p>As noted in an update Wednesday afternoon to <a href="../jderogatis/2010/10/is-chicago-earning-all-that-it-should-from-lollapalooza/38601#more-38601">Monday's blog post about Lollapalooza not paying city taxes</a>, Department of Revenue spokesman Ed Walsh emailed to say that my reading of the Municipal Code was wrong -- and by no means is that a hard thing to do -- and I cited an incorrect figure for the taxes that a concert like Lollapalooza should be paying.<!--break--></p><p><strong> </strong>&quot;The amusement tax percentage you quoted in your posting was incorrect,&quot; Walsh wrote. &quot;The percentage is 5% not 9% foe [sic; <em>for</em>] live theatrical, musical, and other cultural performances held in a space with a maximum capacity exceeding 750 persons.&quot; (The capacity clause is what threw me.)</p><p>This changes the math in one of the key paragraphs of my original post thusly:</p><p><strong>The average payment of $1 million a year that Parkways has been collecting hardly is chump change, especially in this economy. It is more than $862,585.75 -- or the 5 percent in amusement taxes any other concert would pay on a total ticket gross of $17,251,715 last August. But it is less than $1,768,301 -- or the 10.25 percent of that gross figure due per the contract.</strong></p><p>And that does not even take into account the 8.5 percent of sponsorship revenue that the city should be collecting from Lollapalooza per the 10-year contract -- a figure we have no way of determining, since Lollapalooza does not report the amount it collects from deals with its sponsors.</p><p>One commentator posted to <a href="http://chicagoist.com/2010/10/05/dero_does_the_math_on_citys_lolla_c.php">Chicagoist's recap of my story</a> that it would seem to be the Park District and the non-profit Parkways Foundation that are falling short in doing their job to collect all of the revenue that the city is due per the contract. But the contract relies on Lollapalooza promoters C3 Presents to report two revenue figures -- for ticket sales and for sponsorship dollars -- and then pay their cut to the city. And the hitch is that C3 is the only entity in a position to track exactly how many tickets it sells, or how much it collects from sponsorships.</p><p>The fact also remains that any other for-profit concert would have to pay a substantial sum to rent Grant Park and close it for several weeks in the middle of the summer -- and sources have put the value of that at as high as a million dollars. So all of this still leaves the politically connected promoters coming up short in paying what any other business would have to pay to host an event even a fraction of the size of Lollapalooza.</p><p>In his Twitter feed, Frank Sennett, Time Out Chicago editor in chief and freestyle 140-character media critic, took Monday's post to task for not taking into account what he called <a href="http://twitter.com/SennettReport/status/26361741681">&quot;trade show context&quot;</a> -- that is, the city giving tax breaks to trade shows in consideration of the tourist dollars that major events bring to town, benefiting hotels, restaurants, and the travel business.</p><p>My story did note that civic boosters in C3's hometown say that Lollapalooza's smaller &quot;sister fest,&quot; the Austin City Limits Festival, brings $80 million a year into the local economy in Texas. I have never seen a specific figure quoted for Lollapalooza and Chicago, but since the ACL Fest has a capacity of 75,000 a day versus 90,000 daily at Lollapalooza, we might assume that the alleged ancillary benefits to the Windy City are worth $100 million or more.</p><p>But plenty of big concerts also draw people to Chicago from far and wide, and none of them get tax breaks. And if we should consider the positive effects on the local economy from Lollapalooza, we also should consider the down side.</p><p>One can debate or dismiss my contention that Lollapalooza is having a considerable negative impact on the city's club scene, leaving hundreds of sound technicians, bartenders, and club staffers underemployed for several months each year as the clubs go dark in the wake of the giant musical Walmart on the Lake. The most restrictive radius clauses in the concert business prevent bands that perform at Lollapalooza from playing elsewhere in the city for a total of nine months around the festival, unless they have the explicit blessing of C3. And this remains enough of an issue to have prompted <a href="../jderogatis/2010/10/jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523">an ongoing anti-trust investigation by the Illinois Attorney General.</a></p><p>In any event, unless I am once again misreading or missing something in the Municipal Code (section 4-156-020), exemptions for the amusement tax only are allowed for events<strong> </strong><strong>&quot;</strong>the proceeds of which, after payment of reasonable expenses, inure exclusively to the benefit of&quot;&brvbar; societies or organizations conducted and maintained for the purpose of civic improvement.&quot;</p><p>The non-profit Parkways Foundation applies for and is granted an exemption for the taxes at Lollapalooza. But Lollapalooza is very much a for-profit venture, and proceeds from it, after payment of expenses, <strong><span style="text-decoration: underline;">do not</span></strong> inure exclusively to the benefit of Parkways for the purpose of park improvements. They flow into the bank accounts of the Daley Administration's good buddies at C3 Presents.</p><p>I have yet to hear from any city official telling me how or why my read of this situation is wrong, or to read the work of any other reporter either furthering or disproving anything I've written about Lollapalooza's sweetheart deal with the city. (Hey, Frank and everyone else: It's a big story, and there's more than enough to it to keep a lot of reporters busy!) So I repeat the conclusion in my original post:</p><p><strong>Lollapalooza's financial deal with Chicago is ripe for examination by a </strong><strong>City Council grappling with a staggering budget deficit and slashing city services at a time when lay-offs of police officers, sanitation workers, teachers, and other civil servants are looming or are already underway.</strong></p><p><strong>******</strong></p><p><strong>Earlier reports in this blog about Lollapalooza:</strong></p><p><a href="/jderogatis/2010/10/does-austin-get-a-crappy-deal-from-lollapalooza%E2%80%99s-%E2%80%9Clittle-sister%E2%80%9D/38614">Oct. 5: Does Austin get a crappy deal from Lollapalooza's &quot;little sister&quot;?</a></p><p><a href="../jderogatis/2010/10/is-chicago-earning-all-that-it-should-from-lollapalooza/38601#more-38601">Oct. 4: Is Chicago earning all that it should from Lollapalooza?</a></p><p><a href="../jderogatis/2010/10/jderogatis/2010/07/lollapalooza-liquor-sales-and-the-links-to-the-mayor%E2%80%99s-nephew/29595">July 13: Lollapalooza, liquor sales, and the links to the mayor's nephew</a></p><p><a href="../jderogatis/2010/10/jderogatis/2010/06/analysis-what%E2%80%99s-behind-the-attorney-general%E2%80%99s-investigation-of-lollapalooza/27939">June 29: What's behind the Attorney General's investigation of Lollapalooza?</a></p><p><a href="../jderogatis/2010/10/jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523">June 24: Illinois Attorney General investigating Lollapalooza for anti-trust</a></p></p> Wed, 06 Oct 2010 20:03:00 -0500 http://www.wbez.org/jderogatis/2010/10/a-second-look-at-my-lollapalooza-tax-math/39092 Does Austin get a crappy deal from Lollapalooza's "little sister"? http://www.wbez.org/blog/jim-derogatis/does-austin-get-crappy-deal-lollapaloozas-little-sister <img typeof="foaf:Image" src="http://llnw.wbez.org/blog/photo/2010-October/2010-10-26/ACL-art.jpg" alt="" /><p><p style="text-align: center;"><a rel="attachment wp-att-38616" href="/jderogatis/2010/10/does-austin-get-a-crappy-deal-from-lollapalooza%e2%80%99s-%e2%80%9clittle-sister%e2%80%9d/38614 /acl-art-2"><img class="aligncenter size-full wp-image-38616" title="ACL art" src="/sites/default/files/archives/blogs//ACL-art.jpg" alt="" style="width: 319px; height: 479px;" /></a><code> </code></p><p style="text-align: left;">Set to take place in the heart of the Texas capital at Zilker Park Friday through Sunday, <strong><a href="http://www.aclfestival.com/">the Austin City Limits Music Festival</a> </strong>is the smaller sister of <strong><a href="http://www.lollapalooza.com/">Lollapalooza</a></strong> -- maximum capacity 75,000 a day there versus 90,000 daily here -- though the success that promoters <strong><a href="http://c3presents.com/">C3 Presents</a></strong> have had with their hometown shindig since its launch in 2002 is what inspired them to expand to Chicago's Grant Park in the first place in 2005, and to sign a deal that keeps them here through 2018.</p><p style="text-align: left;">However, starting with the great <a href="http://www.thedailyswarm.com/headlines/austin-shitty-limits/">&quot;Dillo dirt&quot; scandal of 2009</a> -- it turns out that festival-goers were emerging from Zilker Park literally covered in crap, thanks to compost covering the grounds that partly was made of treated sewage sludge -- Austin residents have started to question many aspects of the way C3 does business there, just as Chicago residents are questioning the way it operates here.<!--break--></p><p style="text-align: left;">An increasing number of Austin promoters, club owners, musicians, and band managers -- many have contacted this reporter in recent months, all of whom spoke on the condition that they not be named -- now are raising similar concerns about C3's heavy-handed business dealings and the ACL Fest's radius clauses hurting that city's vibrant music scene the same way that Lollapalooza's clauses decimate club calendars in Chicago for several months every year.</p><p style="text-align: left;">These sources say that C3 threatens to ban acts from its festivals if they perform at non-C3 venues during other times of the year. And two of these Austin insiders compared the company's tactics to &quot;something out of &quot;ËœThe Godfather.'&quot;</p><p style="text-align: left;">The ACL Fest radius clauses are similar to Lollapalooza's, sources say, prohibiting bands that appear at the festival from playing elsewhere within a radius of hundreds of miles from the city for as much as six months before and three months after the mega-concert -- unless of course C3 grants its permission.</p><p style="text-align: left;"><strong>Though the office of the Illinois Attorney General continued to decline comment last week, sources say <a href="../jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523">its investigation of the Chicago radius clauses, first reported here in June, continues</a>.</strong></p><p style="text-align: left;">The venerable &quot;Austin City Limits&quot; Public Television show that gives the Texas festival its name also has distanced itself from promoters C3 in the last two years.</p><p style="text-align: left;">Much as C3 purchases the rights to the name &quot;Lollapalooza&quot; -- which its executives call &quot;one of the most recognized brands in music&quot; -- from its owners, Jane's Addition singer Perry Farrell and the powerful Hollywood talent agency William Morris Endeavor, C3 licenses the name &quot;Austin City Limits&quot; from the show originating at KRU-TV, even though the mainstream rock acts booked at the festival have much more in common with those appearing at Lollapalooza than they do with the country and roots musicians that the TV show has been presenting since 1976.</p><p style="text-align: left;">For the first five years of C3's agreement with &quot;Austin City Limits,&quot; the promoters were much more involved with the TV show, working with the producers &quot;to freshen the look of the show and with regards to C3 making talent suggestions for future bookings,&quot; according to a spokesperson for the show. Sources say that two of the &quot;three Charlies&quot; who run C3, Charlie Jones and Charles Attal, frequently could be seen in the control room during tapings, where their meddlesome presence was a source of considerable annoyance to the experienced producers of the legendary TV show.</p><p style="text-align: left;">That no longer is the case. &quot;In 2008, KLRU renewed their relationship with C3 solely as a licensing agreement,&quot; the show's spokesperson said.</p><p style="text-align: left;">Now, starting in March, <a href="http://www.bizjournals.com/austin/stories/2010/08/09/daily56.html">the TV show will be taped in a new theater</a> with a much larger capacity than its old studio. Located in a glitzy development including a W Hotel and luxury condominiums, the new Moody Theatre will be booked by a veteran of C3's -- and every other independent promoter's -- major competitor, the national concert giant Ticketmaster/Live Nation. And the new theater's capacity is such that it will directly compete with the major concert venue owned by C3 in Austin, <a href="http://www.stubbsaustin.com/">Stubb's Bar-B-Q</a>.</p><p style="text-align: left;">Finally, the Austin press now is raising questions about how much that city benefits economically from the ACL Fest. According to a report by <a href="http://www.kxan.com/dpp/entertainment/acl-pays-city-20000-to-rent-zilker-">KAXN.com</a> last week, the Austin Convention and Visitors Bureau claims that ACL brings $80 million a year into the local economy. &quot;But how much of that goes into the city's budget?&quot; reporter Reagan Hackleman asked. &quot;Roughly $100,000.&quot;</p><p style="text-align: left;">Hackleman wrote of C3's agreement with the city of Austin that:</p><blockquote style="text-align: left;">[It] allows ACL to close down the great lawn of Zilker Park for three weeks, and the entire park for three days during the actual festival. To close the park down, C3 pays a $20,000 rental fee to the City of Austin. They also pay $1,000 per day for utilities, $30 bucks for a sound permit and $1500 to use Republic Park for shuttle service.</blockquote><p style="text-align: left;">C3 also donates a portion of its ACL ticket sales to the non-profit Austin Parks Foundation, Hackleman wrote. But neither C3 nor the foundation would tell the KXAN.com reporter how much.</p><p style="text-align: left;">A few days after the KXAN story, and apparently in response to it, the Austin Business Journal ran <a href="http://austin.bizjournals.com/austin/stories/2010/09/27/daily38.html">an article touting just how much C3 and the ACL Fest give back to the community.</a> Wrote staffer Sandra Zaragoza:</p><blockquote style="text-align: left;">C3 Presents, the production company behind ACL and Lollapalooza music festivals, makes a point of giving back to the communities in which it host events. In Austin, C3's giving spans health care, education, food banks, environmental, literacy and music/arts education charities. &quot;It's a part of everything we do, whether its volunteering, mentoring or going to speak to classes,&quot; said Lisa Hickey, C3's director of marketing. &quot;It's a big part of the company culture. The partners at C3 really want us to get involved in the community.&quot;</blockquote><p style="text-align: left;">Zaragoza proceeded to describe some of the specific givebacks: $50,000 in tickets to charities and community outreach programs annually (the reporter claimed that Lollapalooza also donates $45,000 in tickets); an $875,000 donation last year to the Austin Parks Foundation via a deal similar to Lollapalooza's that bases the payment to the nonprofit parks group on a percentage of tickets sold, and recent donations of $20,000 each to St. Jude's Hospital, the Health Alliance for Austin Musicians, and the SIMS Foundation, which provides mental health services to musicians.</p><p style="text-align: left;">Although Lollapalooza is by far its largest annual project, C3 maintains a much lower profile in Chicago than it does at home in Austin. To date, the company still doesn't even have a listing for an office in the Windy City, and it does not play as big a role in musicians' charities here as it does in Austin.</p><p style="text-align: left;">Nevertheless, the perception in C3's hometown persists that Chicago benefits more from Lollapalooza than Austin benefits from the ACL Fest. Wrote KAXN's Hackleman:</p><blockquote>When compared to Lollapalooza, another three-day festival in Chicago produced by C3, the numbers look a little better for Chicago's parks department. Although Chicago does not charge C3 a rental fee, C3 did pay $1,050,000 to <a href="http://www.parkways.org/">The Parkways Foundation</a> (Chicago's non-profit park foundation).</blockquote> <p><strong>However, <a href="/jderogatis/2010/10/is-chicago-earning-all-that-it-should-from-lollapalooza/38601#more-38601">as reported yesterday</a>, serious questions loom about whether Chicago is collecting all of the money that it should be getting from Lollapalooza -- especially at a time of massive budget woes, with city services being slashed and lay-offs looming or already underway.</strong></p><p><strong>****** </strong></p><p>Earlier reports in this blog about Lollapalooza:</p><p><a href="/jderogatis/2010/10/is-chicago-earning-all-that-it-should-from-lollapalooza/38601#more-38601">Oct. 4: Is Chicago earning all that it should from Lollapalooza?</a></p><p><a href="../jderogatis/2010/07/lollapalooza-liquor-sales-and-the-links-to-the-mayor%E2%80%99s-nephew/29595">July 13: Lollapalooza, liquor sales, and the links to the mayor's nephew</a></p><p><a href="../jderogatis/2010/06/analysis-what%E2%80%99s-behind-the-attorney-general%E2%80%99s-investigation-of-lollapalooza/27939">June 29: What's behind the Attorney General's investigation of Lollapalooza?</a></p><p><a href="../jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523">June 24: Illinois Attorney General investigating Lollapalooza for anti-trust</a></p></p> Tue, 05 Oct 2010 06:00:00 -0500 http://www.wbez.org/blog/jim-derogatis/does-austin-get-crappy-deal-lollapaloozas-little-sister Is Chicago earning all that it should from Lollapalooza? http://www.wbez.org/jderogatis/2010/10/is-chicago-earning-all-that-it-should-from-lollapalooza/38601 <p><p style="text-align: center;"><a rel="attachment wp-att-38605" href="/jderogatis/2010/10/is-chicago-earning-all-that-it-should-from-lollapalooza/38601 /lolla-art-4"><img height="257" width="410" class="aligncenter size-full wp-image-38605" title="Lolla art" src="/sites/default/files/archives/blogs//Lolla-art1.jpg" alt="" /></a><code> </code></p><p style="text-align: left;"><strong>UPDATE, OCT. 6: Department of Revenue Spokesman Ed Walsh emailed today with the following correction to my reading of the amusement tax passages in Chicago's municipal code: &quot;The amusement tax percentage you quoted in your posting was incorrect. The percentage is 5% not 9% fo[r] live theatrical, musical, and other cultural performances held in a space with a maximum capacity exceeding 750 persons.&quot;</strong></p><p style="text-align: left;"><strong>He also wrote that the applicant for the tax exemption under 4-156-020b5c of the Municipal Code was the Parkways Foundation. I had written &quot;Lollapalooza.&quot; But C3 Presents and Parkways are in fact partners in presenting Lollapalooza, as the logo pictured above (as well as the 10-year deal with the city) makes abundantly clear.<br /></strong></p><p style="text-align: left;">* * * * * *</p><p style="text-align: left;">Five years into a long-term deal that keeps the massive concert in Grant Park through 2018, <strong><a href="http://www.lollapalooza.com/">Lollapalooza</a> </strong>has generated an average of a million dollars a year for a non-profit arm of the Chicago Park District dedicated to park improvements.</p><p style="text-align: left;">But the three-day festival, one of the biggest in the U.S., grossed more than $17 million last August, and politically connected concert promoters <strong><a href="http://www.c3presents.com/">C3 Presents</a></strong> have struck a sweetheart deal with the city that exempts them from paying the taxes that any other concert or entertainment event would have to pay.</p><p style="text-align: left;">Altruistic claims in Lollapalooza's press releases aside, the question looms:</p><p style="text-align: left;"><strong>Is Chicago really collecting all of the money that it should be getting from the musical Walmart on the Lake -- especially in the midst of what's been called <a href="http://www.suntimes.com/news/cityhall/2741252,CST-NWS-daley24.article">the worst budget crisis in the city's history</a>, with city services being slashed and lay-offs of police, sanitation workers, and teachers threatened?<!--break--></strong></p><p style="text-align: left;">As C3 Presents gears up this weekend for <a href="http://www.aclfestival.com/">the Austin City Limits Music Festival</a>, the smaller sister of Lollapalooza that takes place in Zilker Park in the company's home town, some in the Texas capital are questioning whether they get a raw deal from that three-day concert. Civic boosters in Austin say that the ACL Fest brings $80 million a year into the local economy. &quot;But how much of that goes into the city's budget?&quot; Reagan Hackleman asked last week in a report for <a href="http://www.kxan.com/dpp/entertainment/acl-pays-city-20000-to-rent-zilker-">KAXN.com</a>. &quot;Roughly $100,000.&quot;</p><p style="text-align: left;">The report continued: &quot;When compared to Lollapalooza, another three-day festival in Chicago produced by C3, the numbers look a little better for Chicago's parks department. Although Chicago does not charge C3 a rental fee, C3 did pay $1,050,000 to <a href="http://www.parkways.org/">The Parkways Foundation</a> (Chicago's non-profit park foundation).&quot;</p><p style="text-align: left;">Though C3 closely guards Lollapalooza's balance sheets, the concert industry trade publication <a href="http://www.venuestoday.com/">Venues Today</a> reported some impressive figures a few weeks ago for Lollapalooza 2010, with gross ticket sales for the three-day festival totaling $17,251,715 -- sponsorship revenue and food, beverage, and merchandise sales add substantially more to that number -- and total attendance hitting 238,247.</p><p style="text-align: left;">But as this blog reported in <a href="/jderogatis/2010/06/analysis-what%E2%80%99s-behind-the-attorney-general%E2%80%99s-investigation-of-lollapalooza/27939">a June post examining the unique 10-year deal that essentially creates a partnership between C3, Parkways, and the Park District</a>, a strange clause jumps out of the contract:</p><blockquote style="text-align: left;">[Parkways shall] obtain the Festival Permit&quot;&brvbar; obtain a liquor license in the name of Parkways&quot;&brvbar; <strong>and assist C3 in making appropriate filings (in Parkways' name if necessary) </strong><strong>to eliminate or reduce the amount of taxes, including sales tax and amusement tax, that must be paid in relation to the Festival</strong><strong>.</strong></blockquote><p style="text-align: left;">According to Chicago's municipal code, any promoter attempting to stage a concert in Grant Park or anywhere else that is even a fraction of the size of Lollapalooza would pay 9 percent in taxes on every ticket sold. On top of that, the Park District certainly would charge a substantial figure, possibly $1 million or more, to rent and close the city's prime lakefront public space for the more than three weeks of set-up, the concert itself, and the clean-up and tear-down afterwards.</p><p style="text-align: left;">The (literally) million-dollar question: <strong>Does the fact that for-profit concert promoters and Daley administration favorites C3 Presents partner with the non-profit Parkways Foundation and have <em>them</em> apply for all of Lollapalooza's licenses really mean that the Texas promoters are avoiding paying taxes that any other business would have to pay?</strong></p><p style="text-align: left;">As it boasts in all of its press releases, but as confirmed by documents obtained from the city, since 2005, C3 and Lollapalooza have generated more than $5 million for Parkways, the non-profit organization set up by the Chicago Park District, headquartered in its offices, and charged with raising funds for parks improvements. Financial reports are not yet available for 2010, and it is unclear if the number cited by KAXN -- $ 1,050,000 -- is accurate for Parkway's take this year.</p><p style="text-align: left;">The contract with the city stipulates that Lollapalooza pay Parkways 10.25 percent of gross revenue and 8.5 percent of sponsorship revenue each year. (There is no way to determine what the 8.5 percent of sponsorship revenue due the city should be, since C3 does not make the number it earns from sponsorships public.)</p><p style="text-align: left;">The average payment of $1 million a year that Parkways has been collecting hardly is chump change, especially in this economy. But it is less than $1,552,654 -- or the 9 percent in amusement taxes any other concert would pay on a total ticket gross of $17,251,715 last August. And it is less than $1,768,301 -- or the 10.25 percent of that gross figure due per the contract.</p><p style="text-align: left;"><strong>Should the city be making half a million dollars or more above what it has been collecting from Lollapalooza, in addition to a substantial sum to rent and close Grant Park? </strong></p><p style="text-align: left;">Jessica<em> </em>Maxey-Faulkner, director of the press office for the Chicago Park District, declined two requests in recent weeks to discuss Lollapalooza's tax status, saying that questions were best posed to C3 Presents and Parkways. C3 spokeswoman Shelby Meade and Parkways executive director Brenda Palm declined three requests to answer questions about Lollapalooza's tax status.</p><p style="text-align: left;">The Chicago Department of Revenue, charged with collecting taxes and fines from residents and businesses, also was less than completely forthcoming.</p><p style="text-align: left;">&quot;We are limited in what information we can provide,&quot; said Revenue spokesman Ed Walsh. He proceeded to cite an excerpt from the Municipal Code mandating that &quot;all information that the department or the department of administrative hearings receives from returns or reports from any investigation, or from any hearing conducted under this chapter, or under any tax ordinance, shall be confidential and shall be used for official purposes only.&quot;</p><p style="text-align: left;">&quot;What I can say,&quot; Walsh added after further probing, &quot;is the applicant&quot; -- Lollapalooza -- &quot;applied for and was granted an exemption under 4-156-020b5c of the Municipal Code.&quot;</p><p style="text-align: left;">Here is the passage of <a href="http://www.amlegal.com/nxt/gateway.dll/Illinois/chicago_il/municipalcodeofchicago?f=templates$fn=default.htm$3.0$vid=amlegal:chicago_il">the code</a> in question:</p><blockquote style="text-align: left;"><strong>4-156-020&sbquo;&nbsp; Tax imposed.</strong> Except as otherwise provided by this article, an amusement tax is imposed upon the patrons of every amusement within the city. The rate of the tax shall be equal to nine percent of the admission fees or other charges paid for the privilege to enter, to witness, to view or to participate in such amusement. <br /></blockquote><blockquote style="text-align: left;">B. The tax imposed by subsection A shall not apply to the following persons or privileges: <br /></blockquote><blockquote style="text-align: left;">(5) Subject to satisfying the requirement contained in subsection (C) of this section, the privilege of witnessing or participating in any amusement sponsored or conducted by and the proceeds of which, after payment of reasonable expenses, inure exclusively to the benefit of: <br /></blockquote><blockquote style="text-align: left;">(c) Societies or organizations conducted and maintained for the purpose of civic improvement.</blockquote> <p style="text-align: left;"><strong>Clearly, Lollapalooza is a for-profit venture, albeit one uniquely partnered with a non-profit, city-founded organization devoted to civic improvements. But profits from the concert, &quot;after payment of reasonable expenses&quot; such as staging costs and fees to the performers, <span style="text-decoration: underline;">do not</span> &quot;inure exclusively to the benefit of civic improvements.&quot; They flow into the bank accounts of C3 Presents.</strong></p><p style="text-align: left;">It is worth noting here that as reported previously, <a href="/jderogatis/2010/07/lollapalooza-liquor-sales-and-the-links-to-the-mayor%E2%80%99s-nephew/29595">C3's deal with Parkways and the Park District was crafted in part by lobbyist and attorney Mark Vanecko, a nephew of Mayor Richard M. Daley.</a></p><p style="text-align: left;">It appears that the vendors who sell food and alcohol at Lollapalooza also are getting a break on paying city taxes.</p><p style="text-align: left;">&quot;The city's Restaurant Tax has a premises provision that appears to make a festival exempt,&quot; Walsh said. &quot;The premises provision requires that the business owner has control over the space where the food is consumed, i.e. a restaurant.&sbquo;&nbsp; Food consumption at Lollapalooza likely doesn't meet that definition if patrons can consume the food anywhere they want on the grounds.&quot;</p><p style="text-align: left;">As for alcohol, Walsh said: &quot;Wholesalers remit the City's Liquor Tax to the City, not retailers.&quot; In other words, the companies that sell the beer and liquor to the festival's vendors pay the taxes; the vendors do not.</p><p style="text-align: left;">As reported earlier, alcohol sales at the concert are handled by a company called Lollapalooza Festival Services that lists as its officers Jeffrey Waughtal, co-owner of Stubb's Bar-B-Q, C3's major concert venue in Austin, and Kevin Killerman, a Wrigleyville bar owner and friend and client of Daley's nephew, Vanecko.</p><p style="text-align: left;">What does all of this mean to taxpayers?</p><p style="text-align: left;"><strong>It certainly seems as if Lollapalooza's financial deal with Chicago is ripe for examination by a City Council grappling with a staggering budget deficit and beginning to look at life after the Daley Machine, which could not have been friendlier to C3 at every turn.</strong></p><p style="text-align: left;">Of course, things always could get cozier. C3's partner in Lollapalooza is the William Morris Endeavor talent agency run by Hollywood super-agent Ari Emanuel, brother of former Chicago congressman and Daley fundraiser Rahm Emanuel, who resigned as President Obama's chief of staff last week to run for mayor of Chicago.</p><p style="text-align: left;"><strong>******</strong></p><p style="text-align: left;"><strong>Tomorrow: More on C3's relations with the music community in its hometown of Austin.</strong></p><p style="text-align: left;">Earlier reports in this blog about Lollapalooza:</p><p style="text-align: left;"><a href="/jderogatis/2010/07/lollapalooza-liquor-sales-and-the-links-to-the-mayor%E2%80%99s-nephew/29595">July 13: Lollapalooza, liquor sales, and the links to the mayor's nephew</a></p><p style="text-align: left;"><a href="/jderogatis/2010/06/analysis-what%E2%80%99s-behind-the-attorney-general%E2%80%99s-investigation-of-lollapalooza/27939">June 29: What's behind the Attorney General's investigation of Lollapalooza?</a> </p><p style="text-align: left;"><a href="/jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523">June 24: Illinois Attorney General investigating Lollapalooza for anti-trust</a></p></p> Mon, 04 Oct 2010 06:00:00 -0500 http://www.wbez.org/jderogatis/2010/10/is-chicago-earning-all-that-it-should-from-lollapalooza/38601 Lollapalooza, liquor sales, and the links to the mayor's nephew http://www.wbez.org/blog/jim-derogatis/lollapalooza-liquor-sales-and-links-mayors-nephew <p><p style="text-align: center;"><img width="505" height="364" alt="" src="/sites/default/files/archives/blogs//Lolla-Beer-Tent1.jpg" title="Lolla Beer Tent" class="size-full wp-image-29606" /> <br /><em>Alcohol sales at Lollapalooza 2009<br /></em></p><p>Ties between Lollapalooza promoters C3 Presents and attorney Mark Vanecko, a nephew of Mayor Richard M. Daley, run deeper than previously reported, and include a link to alcohol sales at the massive three-day music festival in Grant Park, according to public records and corporate filings.</p> <p>Although the liquor license for the concert is issued in the name of Parkways Foundation, the non-profit arm of the Chicago Park District, beer and hard liquor actually are sold to the crowd of as many as 95,000 daily by Lollapalooza Festival Services, a company co-owned by Kevin Killerman, a Wrigleyville bar owner with dozens of complaints for underage drinking on his record, and a friend and legal client of Vanecko.</p> <p>The deal for Lollapalooza was awarded to Austin, Texas-based C3 without competitive bidding, and it precludes any other festival that is not run by the city from taking place in Grant Park. Lollapalooza has had a major impact on the local music scene because of its controversial radius clauses prohibiting bands playing at the festival from performing within 300 miles of Chicago for as many as six months before and three months after&mdash;<a href="http://208.100.14.212/jderogatis/2010/07/jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523">a policy that is being investigated for anti-trust concerns by Illinois Attorney General Lisa Madigan.</a></p> <p>&nbsp;</p> <p><strong>FRIENDS IN HIGH PLACES</strong></p> <p>After conducting three years of &ldquo;brand analysis and marketing surveys&rdquo; to determine that &ldquo;Lollapalooza is the most recognized name in music today,&rdquo; C3&mdash;which was operating under the name of its parent company Capital Sports &amp; Entertainment at the time&mdash;partnered with Lollapalooza founder Perry Farrell and his partners, Hollywood&rsquo;s William Morris talent agency, and first brought the alternative rock concert to Chicago as a reinvented &ldquo;destination festival&rdquo; in 2005.</p><p style="text-align: center;"><img width="204" height="300" alt="" src="/sites/default/files/archives/blogs//Lolla-drinking-1-204x300.jpg" title="Lolla drinking 1" class="aligncenter size-medium wp-image-29597" /><code> </code> </p><p>The first two concerts in 2005 and 2006 established a unique partnership between Parkways, the city, and CSE/C3. The 2005 concert raised $400,000 for park programs and improvements, and the 2006 concert raised $928,000. CSE/C3 reportedly operated at a loss during the first two years to help establish its &ldquo;brand,&rdquo; which helped remake the summer concert industry locally and across the country.<strong> </strong></p> <p>After the 2006 concert, CSE/C3 hired Mayor Daley&rsquo;s nephew Mark Vanecko as its attorney and lobbyist to work on its first long-term contract with Parkways and the city. Vanecko helped negotiate a five-year deal netting Parkways $1 million a year and keeping Lollapalooza in Chicago through 2011.</p> <p>Only two years into that deal, C3, Parkways, and the city struck a new 10-year contract that will keep the festival in Grant Park through 2018. Vanecko is not listed as an attorney or lobbyist in that contract, but his ties to C3 remain:</p> <ul><li>Named for the &ldquo;three Charlies&rdquo; who run Lollapalooza and the Austin City Limits Festival&mdash;Charlie Jones, Charles Attal, and Charlie Walker&mdash;C3 branched off from CSE in March 2007. CSE originally was established as a superstar sports agency by Texans Bart Knaggs and Bill Stapleton, built around their biggest client, bicyclist Lance Armstrong. Knaggs and Stapleton still are listed as officers of C3 in corporate filings in Texas, but the January 2008 corporate filing in Illinois lists only the three Charlies. According to that filing and the company&rsquo;s last report in December 2009,though C3 could have chosen any qualified representative, <strong>Vanecko is listed as the company&rsquo;s registered agent.</strong> (Under Illinois law, every corporation must have a registered agent to receive tax notices and other legal documents, such as service of process or official government communications.)</li><li>Lollapalooza&rsquo;s 10-year contract notes that &ldquo;for so long as the Festival is called &lsquo;Lollapalooza,&rsquo;&rdquo; another corporation, Caring &amp; Daring, &ldquo;will receive a benefit from [the Chicago Park District] and Parkways,&rdquo; though exactly what that benefit is never is spelled out. Incorporated in Delaware in December 2007, Caring &amp; Daring lists Jones, Attal, &ldquo;Perry Ferell&rdquo; [sic], and Peter Grosslight, chief of William Morris&rsquo; music department, as its managers. Once again, as of its last reporting in October 2009 and though the company could have chosen any qualified representative, <strong>Vanecko is listed as Caring &amp; Daring&rsquo;s registered agent.</strong></li></ul> <p><a href="http://blogs.suntimes.com/music/2008/07/lollapaloozas_promoters_addres.html">In an interview in March 2008,</a> the three Charlies said Vanecko was not involved with Lollapalooza during its first two years in Chicago. According to Attal, Vanecko was hired to work on the first five-year deal after <strong>&ldquo;</strong>we met him through a friend of a friend&rdquo;&mdash;Chicagoan Graham Hickey&mdash;&ldquo;and we became friends with him.&rdquo; Jones added that hiring Vanecko &ldquo;had nothing to do with him being the mayor&rsquo;s nephew&hellip; So what?&rdquo;</p> <p>Hickey does not work in the music business, but he is a music fan often seen backstage at concerts around town. His sister-in-law works at C3, and he has said that he went to high school with Vanecko. He is a frequent and vocal defender of C3 and Lollapalooza whenever they are criticized, and he has posted in the comments section of almost every story this reporter has written about the festival.</p><p style="text-align: center;"><a href="/jderogatis/2010/07/lollapalooza-liquor-sales-and-the-links-to-the-mayor%e2%80%99s-nephew/29595 /lolla-drinking-3" rel="attachment wp-att-29598"><img width="300" height="172" alt="" src="/sites/default/files/archives/blogs//Lolla-Drinking-3-300x172.jpg" title="Lolla Drinking 3" class="aligncenter size-medium wp-image-29598" /></a><code> </code> </p><strong>WE DON&rsquo;T WANT NOBODY THAT NOBODY SENT</strong> <p>In sharp contrast to most of Chicago&rsquo;s high-powered lawyers and lobbyists, Mark Vanecko flies so far under the radar that he almost is impossible to find. The only image of him that turns up in a Google image search is a photograph from the Sun-Times of him serving as a pallbearer for grandmother Elanor &ldquo;Sis&rdquo; Daley, the wife of the legendary Chicago machine politician and mayor, Richard J. Daley.</p> <p>In a series of articles entitled <a href="http://www.suntimes.com/news/politics/980869,CST-NWS-daleyfamilymain.article">&ldquo;Daley 3.0: Meet Chicago&rsquo;s New Power Generation&rdquo;</a> published by the Sun-Times in June 2008 and profiling the clout-wielding grandchildren of the first Mayor Daley, investigative reporter Tim Novak noted that Vanecko, a big music fan in his early 40s, &ldquo;lives in Lake View with his wife and baby, [and] left his family&rsquo;s law firm of Daley &amp; George a few years ago, opening his own legal practice, focusing on sports and entertainment. He also represents developers, including a company that bought and sold land near the mayor&rsquo;s proposed site for a temporary Olympic stadium. Vanecko is also a registered lobbyist, helping bars get liquor licenses from the mayor.&rdquo;</p> <p>Mark Vanecko is one of three children of Mary Carol Vanecko, daughter of Mayor Richard J. Daley and sister of Mayor Richard M. Daley. Mark&rsquo;s brother Robert Vanecko frequently has made headlines for controversial business deals involving city pension funds and risky real estate ventures, <a href="http://www.suntimes.com/news/watchdogs/2438776,CST-NWS-watchdogs28.article">most recently last month,</a> when the Sun-Times reported that several of his<em> &ldquo;</em>real estate deals are falling apart, records show, potentially jeopardizing the money he got from the pension funds representing Chicago&rsquo;s police officers, teachers, city employees and CTA workers.&rdquo; The story went on to note that:</p> <blockquote><p>Vanecko has been a source of public embarrassment for his uncle, the mayor, who said last summer [2009] that he&rsquo;d been unaware of Vanecko&rsquo;s deal with the city pension funds until he read about it in the Sun-Times. &ldquo;When I did find out, I made it very clear that it was not a good decision and that he should end the business relationship immediately,&rdquo; Daley said then. &ldquo;But, as an adult, Bob made&hellip; a different decision, which led to a very painful string of news stories that have, indeed, caused tension in my family. I love my nephew. It&rsquo;s difficult for me to have my disappointment in him made public.&rdquo;</p></blockquote> <p>Robert&rsquo;s brother Mark Vanecko seldom has appeared in news stories, except for his role with Lollapalooza. An Internet search yields few results if you want to learn anything about his legal practice: Listings for his office appear on a few directory Websites, giving only an address and a phone number. Use the wrong listing, and both are out of date; use the right one, and the office appears to have no receptionist, just voice mail. There are no descriptions of what services Vanecko provides or what type of clients he services, <a href="http://www.suntimes.com/news/politics/980897,CST-NWS-daleyfamilymark.article">though Novak&rsquo;s Sun-Times article</a> reported that in addition to Lollapalooza, Vanecko has represented:</p> <ul><li>Eurus Development, a company that bought and sold property that had been earmarked as the site of a temporary stadium if the city won its bid for the 2016 Olympics. C3 Presents staged several of the events intended to woo the Olympic committee, and the three Charlies said they hoped to play a major role in staging the games here if the city won its bid.</li><li>And Kevin Killerman, whom Novak described as <strong>&ldquo;a businessman who pleaded guilty in 1992 to 45 counts of serving alcohol to a minor at a North Side bar.&rdquo;</strong></li></ul> <p>The list of bars in which Killerman has an ownership interest include Casey Moran&rsquo;s Tavern, 3660 N. Clark; the Martini Club, 4933 N. Milwaukee; Kendall&rsquo;s Food and Spirits, 2263 N. Lincoln; the Twisted Lizard, 1964 N. Sheffield; O&rsquo;Donovan&rsquo;s, 2100 W. Irving, and Kelsey&rsquo;s, 2265 N.&nbsp; Lincoln. <strong>According to public records, Killerman also is one of two officers of Lollapalooza Festival Services, the corporation that sells beer and liquor at the music festival.</strong></p> <p><strong>FOLLOW THE BEER</strong></p> <p><a href="http://208.100.14.212/jderogatis/2010/07/jderogatis/2010/06/analysis-what%E2%80%99s-behind-the-attorney-general%E2%80%99s-investigation-of-lollapalooza/27939#more-27939">As noted in this blog&rsquo;s previous analysis of Lollapalooza&rsquo;s deal with the city,</a> the contract stipulates that the non-profit Parkways Foundation shall &ldquo;obtain the Festival Permit&hellip; obtain a liquor license in the name of Parkways<strong>&hellip; </strong>and assist C3 in making appropriate filings (in Parkways&rsquo; name if necessary) to eliminate or reduce the amount of taxes, including sales tax and amusement tax, that must be paid in relation to the Festival.&rdquo;</p> <p>Nothing in the municipal code prohibits C3 or Lollapalooza Festival Services from applying for the liquor license themselves, and some attorneys who&rsquo;ve examined the contract say it&rsquo;s unusual to have Parkways doing it. Questioned about the liquor license in August 2009, Parkways&rsquo; Brenda Palm&mdash;the executive director who has seen her annual salary jump from $62,000 to more than $109,000 in the five years since Lollapalooza came to Chicago&mdash;wrote via email that, &ldquo;Parkways&rsquo; agreement with C3 Presents is for producing the event, including the sales of alcohol. The alcohol is purchased from distributors who have the Chicago metro area in their territory for specific products.&rdquo;</p> <p>In response to the same question at the same time last year, C3 spokeswoman Shelby Meade wrote, &ldquo;Our concessionaire is Lollapalooza Festival Services. Local beverage distributors are: US Foods, City Beverage, Beverage Capital Corp, Mayor Brothers&rdquo;&mdash;sic; she presumably meant soft-drink vendor Mayer Brothers&mdash;&ldquo;Heritage Wine Cellars, Coca-Cola, [and] Power Distributing.&rdquo;</p> <p>Incorporated in Texas in July 2008, Lollapalooza Festival Services lists its two officers as Killerman and Jeffrey Waughtal, co-owner of Stubb&rsquo;s, the Austin barbecue joint that also is C3&rsquo;s major concert venue in its hometown. The corporation&rsquo;s registered agent in Illinois is CT Corporation Systems, a company that serves as registered agent for businesses operating in foreign jurisdictions, and which also serves as C3&rsquo;s registered agent for filings in Louisiana and California. <strong>But Vanecko is or has been the registered agent for several of Killerman&rsquo;s other businesses.</strong></p><p style="text-align: center;"><img width="390" height="323" title="" alt="" src="http://llnw.wbez.org/blog/insert-image/2010-November/2010-11-13/Vanecko-Killerman.jpg" /> <br /><em>The only images that turn up for Mark Vanecko (left) and Kevin Killerman </em><br /><em>(right, from his Facebook page) in Internet image searches.<code> </code> </em><br />&nbsp;</p><p style="text-align: center;">Like Vanecko, Killerman has a very low public footprint for such a high-profile businessman in the hospitality industry. No photos of him turn up on a Google image search, and he represents himself on his Facebook page with a cartoon image of the villainous Snidely Whiplash.</p><p>Vanecko did not respond to a message left on Monday on his office voice mail, and he has not responded to numerous other requests for comment about Lollapalooza in years past. Killerman did not respond to messages left at two of his bars on Monday.</p> <p>Citations for underage drinking are among the most serious that the city can levy against bar owners, and some have reported being shut down for a week or more because of one complaint. Beyond the 45 guilty pleas for serving alcohol to a minor in the early &rsquo; 90s, it is difficult to determine if Killerman has any other more recent marks on his record as a liquor vendor.</p> <p>The city has cited Killerman more than 20 times in the last three years, with most of the citations in 2009. However, notices of these citations do not list the specific violations behind these complaints. Though all of these citations have been settled for over a year, efforts to retrieve most of the publicly available case files for these citations at the Daley Center were unsuccessful. The few case files available for public examination were for violations cited by the Department of Streets and Sanitation.</p> <p>As in most festival settings, alcohol sales at Lollapalooza are handled via a system that only distributes wrist bands to those who have proven that they are of legal drinking age. This policy can be circumvented by legal-age drinkers passing the wrist bands or alcoholic beverages to minors, but there are no complaints of underage drinking on record for the festival, as far as could be determined.</p><p style="text-align: center;">&nbsp;</p><p style="text-align: center;"><img width="300" height="285" alt="" src="/sites/default/files/archives/blogs//Lolla-Drinking-4-300x285.jpg" title="Lolla Drinking 4" class="size-medium wp-image-29601 aligncenter" /></p><p>According to Parkways&rsquo; annual reports for 2008 and 2009, Kevin and Julie Killerman donated between $5,000 and $9,999 to Parkways for each of those years, and Mark and Kim Vanecko donated between $2,500 and $4,999 for each year.</p> <p>Asked on Monday if Parkways was aware of Killerman&rsquo;s guilty pleas for serving minors, executive director Palm wrote via email that the non-profit is &ldquo;unaware of any conviction&rdquo;&ndash;though a guilty plea is of course different than a conviction. She added that Parkways &ldquo;played no role in selecting subcontractors&rdquo;&mdash;that is, Killerman and Lollapalooza Festival Services. She also added that Parkways still has not been subpoenaed as part of the Attorney General&rsquo;s investigation, though Madigan&rsquo;s office has oversight of all 501(c)3 corporations in Illinois.</p> <p>C3 spokeswoman Meade said the Texas promoters had no comment for further questions for this story.</p> <p>Chicago Park District spokeswoman Jessica Maxey-Faulkner made the same claim of ignorance of Killerman&rsquo;s record of serving minors, saying that the city agency &ldquo;is not aware of any conviction of any Lollapalooza liquor manager for the charge of serving alcohol to a minor&rdquo;&ndash;though again, she was asked about guilty pleas, not convictions. As in the past, she had no comment on the Attorney General&rsquo;s investigation.</p> <p><strong>WHY SHOULD CHICAGO MUSIC FANS CARE ABOUT ANY OF THIS?</strong></p> <p>In the 2008 interview in which the three Charlies were questioned about their relationship with Vanecko, Jones ruminated about how C3 came to Chicago: &ldquo;We were just naive enough not to know that we needed to know anybody. We had a great product, we sent somebody up to the Park District who spoke publicly, and the deal got done before anybody realized it was actually happening.&rdquo;</p> <p>Twenty-one years into the second Daley administration, many Chicagoans have come to believe that any major undertaking in this city has to have been blessed by one of the most powerful mayors in U.S. history, and it probably has some business connection to his cronies. But even given this cynical acceptance of the way things work in the City That Works, Lollapalooza stands out.</p> <p>C3 has secured an exclusive, long-term contract for the city&rsquo;s largest and most prestigious public park to hold a lucrative and expensive private concert complete with corporate underwriting under the aegis of a non-profit city group and in partnership with the city itself. All of this was done without competitive bidding and with no hint of the sometimes insurmountable hurdles placed in the way of other concert promoters, or of harsh anti-music initiatives such as the rave ordinance, the promoters ordinance, and the overly zealous post-E2 wave of code enforcement raids that have hassled smaller music venues in recent years.</p> <p>The Park District scoffs at the notion that plans to promote a concert such as Lollapalooza in Grant Park should have been put out to bid, saying that it &ldquo;issued a permit to use land for a specific time limit, it was not purchasing a commodity, nor anything else.&nbsp; The Chicago Park District receives compensation for the permit&hellip; it does not &lsquo;bid out&rsquo; any of its athletic permits or special use permits for instance,&rdquo; Maxey-Faulkner wrote. But the 10-year contract with Lollapalooza in fact makes Parkways and the Park District partners in the festival&mdash;partners that are actively colluding to hurt the business of smaller local music venues via the unprecedented terms of Lollapalooza&rsquo;s restrictive radius clauses, to the point where the Attorney General has launched an investigation of these anti-competitive measures.</p> <p>As it has since news of its investigation broke two weeks ago, the Attorney General&rsquo;s office declined on Monday to comment for this story.</p><p><strong> </strong></p></p> Tue, 13 Jul 2010 06:00:00 -0500 http://www.wbez.org/blog/jim-derogatis/lollapalooza-liquor-sales-and-links-mayors-nephew Analysis: What's behind the Attorney General's investigation of Lollapalooza? http://www.wbez.org/blog/jim-derogatis/analysis-whats-behind-attorney-generals-investigation-lollapalooza <p><p style="text-align: center;"><img width="500" height="375" alt="" src="/sites/default/files/archives/blogs//lisa_madigan1.jpg" title="lisa_madigan" class="size-full wp-image-27941" /><br /><em>Jam Productions co-founder Arny Granat with Illinois Attorney General </em><br /><em>Lisa Madigan at the Obama inauguration festivities <code> </code> </em><br />&nbsp;</p><p>The revelation that Illinois Attorney General Lisa Madigan is investigating the giant three-day Lollapalooza festival in Grant Park came as a shock to the local and national music communities, and it has left just about everyone on the concert scene wondering: <strong><em>What the heck is going on?</em></strong></p> <p><a href="http://208.100.14.212/jderogatis/2010/06/jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523">This blog first reported last Thursday</a> that Madigan&rsquo;s office is investigating anti-trust issues stemming from the so-called &ldquo;radius&rdquo; or &ldquo;exclusivity clauses&rdquo; that Lollapalooza promoters C3 Presents impose on all acts performing at the festival, prohibiting them from playing within 300 miles of Chicago for as much as six months before and three months after the August concert.</p> <p>Subpoenas have been issued to key players at C3 and its partner, the Hollywood-based William Morris Endeavor talent agency. Yet the executives who&rsquo;ve been subpoenaed and the Attorney General&rsquo;s office both have declined to talk about the specifics of the investigation, and it is unclear if the radius clauses are the only aspect of Lollapalooza that is under legal scrutiny by the state.</p> <p>Here is a look at the key questions about the investigation and the ongoing issues behind the scenes.</p> <p><strong>IS THE INVESTIGATION JUST ABOUT THE RADIUS CLAUSES? AND ARE THEY REALLY THAT BIG OF A DEAL?</strong></p> <p>Many promoters and booking agents regularly include some form of radius clause in a performance contract for any venue above the level of the smallest clubs. They say it makes solid business sense to insure that a group does not undercut ticket sales for a show on Oct. 1 by playing a show on Sept. 20 and another on Oct. 10. At Lollapalooza, bands and their agents willingly agree to the radius clauses in return for a lucrative festival payday and the chance to perform in front of a much larger crowd.</p> <p>Yet as the festival model has proliferated in the concert business, replacing individual tours that crossed the country each summer and performed at outdoor amphitheatres, indoor theaters, or clubs, the radius clauses for major festivals such as Lollapalooza, Coachella, and Bonnaroo have been criticized by smaller club owners and promoters in surrounding communities who protest that their venues are being denied the right to present hundreds of acts, as Steve Knopper noted in a story for Rolling Stone on June 10. (<a href="http://www.rollingstone.com/music/news/17386/121652">Here is a link to his follow-up piece;</a> the original story is subscription-only.)</p> <p><a href="http://leisureblogs.chicagotribune.com/turn_it_up/2010/06/lollapalooza-one-of-many-festivals-with-exclusivity-clauses.html#more">In his own analysis for The Chicago Tribune,</a> Greg Kot questioned whether the Attorney General will look into other festivals and street fairs that impose radius clauses on bands. But as Kot&rsquo;s breakdown of the radius clauses makes clear, the terms at Lollapalooza are the most extreme in the concert biz.</p> <p>The Pitchfork Music Festival restricts its acts from playing in Cook Country or at another festival in neighboring states for two months before the Union Park concert and 14 days after it. Southern California&rsquo;s Coachella Festival imposes a radius clause of about four months before and one month after its desert celebration for several states in the southwest. And Bonnaroo issues a 300-mile radius clause for two months before and two months after the big jam-fest in rural Tennessee.</p> <p>Todd Martens of <a href="http://latimesblogs.latimes.com/music_blog/2010/06/so-maybe-coachellas-booking-rules-arent-so-egregious-after-all.html">The Los Angeles Times</a>, who&rsquo;s written about California promoters attacking Coachella&rsquo;s radius clauses, addressed the news of the Lollapalooza investigation by writing an open letter to the city of Chicago and jokingly thanking us, saying we&rsquo;ve &ldquo;reminded music fans here in L.A. that our annual Coachella Valley Music &amp; Arts Festival may indeed appear to be downright altruistic in comparison with your annual waterfront party, Lollapalooza.&rdquo; However, writing for <a href="http://www3.timeoutny.com/chicago/blog/out-and-about/2010/06/is-lollapaloozas-radius-clause-that-big-of-a-deal/">TimeOut Chicago</a>, Brent DiCrescenzo echoed the question voiced by some Chicago music fans when he asked, &ldquo;Is Lollapalooza&rsquo;s radius clause that big of a deal?&rdquo;</p> <p>In earlier interviews, executives at C3 Presents have said they waive the radius clause for any band that asks, in addition to working with local clubs to present official Lollapalooza after-shows. (Update: Sources say C3 often has a stake in ticket sales at the official after-shows in local clubs.)</p> <p><strong>But if the clause is waived so frequently, why is it in the contract at all&mdash;especially considering the ill will it generates on the local music scene?</strong></p> <p>The existence of these clauses in the Lollapalooza contracts gives C3 an unprecedented amount of control in the Chicago concert market and a powerful tool to use against competitors, if it chooses to enforce its own legalese.</p><p style="text-align: center;"><img width="299" height="300" alt="" src="/sites/default/files/archives/blogs//12-19-08-Amended-Multi-Festival-Agreement1-299x300.jpg" title="12-19-08 Amended Multi-Festival Agreement" class="size-medium wp-image-27947" /><br /><em>Cover sheet for the agreement that assures Lollapalooza <br />a place in Grant Park through 2018 <code> </code></em></p><p style="text-align: center;">&nbsp;</p><p><strong>IS THE ATTORNEY GENERAL LOOKING AT OTHER ASPECTS OF THE DEAL BETWEEN LOLLAPALOOZA AND THE CITY?</strong> </p><p>In addition to investigating anti-trust complaints, the Attorney General's office has oversight of all non-profit 501(3)C corporations in Illinois. And Lollapalooza has been set up in a unique way: <strong>All of the city permits and licenses actually are issued in the name of <a href="http://www.parkways.org/">Parkways Foundation</a>, the non-profit entity set up by the city to oversee fundraising for parks improvements, and headquartered within the offices of the city Park District.</strong></p><p style="text-align: center;"><strong><img width="300" height="192" title="" alt="" src="http://llnw.wbez.org/blog/insert-image/2010-November/2010-11-13/parkways-300x192.jpg" /></strong><code> </code> </p><p>&ldquo;Parkways Foundation is established as the philanthropic partner of the Chicago Park District,&rdquo; reads the organization&rsquo;s official mission statement. &ldquo;[Its] purpose is to seek private investment to preserve and enhance the physical and cultural landscape of Chicago public parks.&rdquo;</p> <p>It is not uncommon for non-profit groups to apply for the permits for festivals and street fairs on the level of the Old Town School of Folk Music Folk &amp; Roots Festival or the Green Music Fest sponsored by the West Town Chamber of Commerce. But Lollapalooza is several hundred times bigger than any other music event in the city. It charges steep, fixed ticket prices for entry to the city&rsquo;s biggest public park, rather than suggesting a donation to walk down a closed-off street or through a neighborhood park. And, beyond permitting and licensing, the city has no direct involvement with the many smaller festivals and street fairs the way that it does with Lollapalooza.</p> <p><a href="http://www.chicagoparkdistrict.com/index.cfm/fuseaction/news.detail/object_id/6e0c4e38-038b-4d98-8f44-af47e9e733a1.cfm">The 10-year deal</a> that the city made with Lollapalooza essentially makes Parkways Foundation and the Park District partners in the giant concert and players in the music industry. Approved in late 2008 and obtained under a Freedom of Information Act request to the city, the new deal replaces the original five-year agreement that was negotiated in 2006 by C3&rsquo;s attorney Mark Vanecko, a nephew of Mayor Daley, and it assures Lollapalooza a home in Grant Park through 2018.</p> <p>The city&rsquo;s deal with Parkways and C3 Presents stipulates that the Texas concert promoters will cover all expenses for the festival, including the substantial cost of clean up; that it will contract with all vendors, and that it will pay for all services. <strong>In return, and no surprise given C3&prime;s fondness for them, the deal includes a radius clause protecting C3 from competitors and assuring that the Texas company is the only entity besides the city that will present a major concert in Grant Park</strong>.</p> <p>&ldquo;In any year that the Festival is held, the CPD [Chicago Park District] shall not authorize any other person to hold in the Festival Area a multi-day, multi-stage music festival which is the same or substantially similar to the Festival,&rdquo; the clause reads, before listing the only exceptions as the city-run Taste of Chicago, Country Music Fest, Gospel Fest, Jazz Fest, Viva! Chicago Latin Music Fest, and Celtic Fest.</p> <p>For its part, the deal stipulates that Parkways shall &ldquo;obtain the Festival Permit&hellip; obtain a liquor license in the name of Parkways&hellip; <strong>and assist C3 in making appropriate filings (in Parkways&rsquo; name if necessary) to eliminate or reduce the amount of taxes, including sales tax and amusement tax, that must be paid in relation to the Festival.</strong>&rdquo;</p> <p>Is Lollapalooza, thanks to its partnership with the non-profit Parkways, shirking the tax responsibilities that another for-profit concert in Grant Park would face? Or is that question even relevant when the concert has generated about $4 million since 2005 for parks improvements?</p> <p>Non-profit organizations such as Parkways are required by law to make their tax filings public. Because the tax documents for Parkways on file with <a href="http://www.illinoisattorneygeneral.gov/charities/search/">the Attorney General&rsquo;s Charitable Trust Database Search</a> are incomplete, the full set of documents for 2005 to 2008 was obtained via a Freedom of Information Act request to Parkways. The 2009 filing apparently has not yet been made.</p> <p>A review of these documents reveals that Parkways reports income from Lollapalooza as &ldquo;royalties.&rdquo; In 2005, Parkways collected $400,000 in royalties from Lollapalooza; in 2006, it collected $928,229; in 2007, it collected $1,010,870, and in 2008, it collected $1,505,725, for a total of $3,844, 824.</p> <p>But Parkways has had some additional Lollapalooza income, as well as expenses, stemming from the annual &ldquo;Galapalooza&rdquo; kick-off party and fundraiser for VIPs on Thursday night before the start of the festival weekend. According to its tax filings, Parkways spent $69,039 on Galapalooza with no income from the party in 2005; it spent $30,656 in 2006 but took in $22,343 after expenses, and it spent $41,946 in 2007 but took in $97,444 after expenses (though it does list an additional $6,606 in unspecified &ldquo;Lollapalooza expenses&rdquo;). The statement for 2008 does not provide specific breakdowns for expenses, but the total figure for &ldquo;special event expenses&rdquo;&mdash;which also includes Mayor Daley&rsquo;s Garden Party&mdash;was $199,978.</p> <p>By no means is Lollapalooza the only entity generating income for or making contributions to Parkways. Other 2008 contributors included rival concert promoters Live Nation ($25,000), Wilson Sporting Goods ($84,030), Kraft Foods ($287,500), and Tiffany &amp; Co. ($1,250,000). But since the concert arrived in 2005, Lollapalooza has become the biggest and most reliable source of annual income, and Parkways&rsquo; board obviously believes executive director Brenda Palm is doing a very good job partnering with the concert.</p><p style="text-align: center;"><img width="255" height="178" alt="" src="/sites/default/files/archives/blogs//Caption-for-Garden-Party-095.jpg" title="Caption for Garden Party 095" class="size-full wp-image-28009 " /></p><p><code> </code> In 2005, Palm's salary was $62,000. In 2006, it jumped to $78,200; in 2007, to $85,000, and in 2008,&sbquo;&nbsp; to $95,000 plus $14,273 in &quot;other compensation from the organization and related organizations.&quot; This year, the city also has allowed Lollapalooza to expand beyond the geographic perimeters and attendance levels set in the 10-year contract, stretching the site of the concert to include an additional 80 acres (almost all of Grant Park, plus Columbus Drive) and allowing 20,000 additional people a day on top of the earlier capacity of 75,000 for a total of 95,000 concertgoers per day. <strong>Is the Attorney General examining the deal between Lollapalooza, Parkways, and the city and scrutinizing the financials at Parkways? </strong>&quot;Parkways has not been subpoenaed,&quot; Palm wrote in an email response to that question on Monday. </p><p style="text-align: center;"><img width="192" height="300" alt="" src="/sites/default/files/archives/blogs//c31-192x300.jpg" title="c3" class="aligncenter size-medium wp-image-28005" /> <img width="170" height="134" alt="" src="/sites/default/files/archives/blogs//Jam2.jpg" title="Jam2" class="aligncenter size-full wp-image-27951" /><code> </code></p><p><strong>IS THE INVESTIGATION AN OUTGROWTH OF A TURF WAR BETWEEN RIVAL CONCERT PROMOTERS JAM PRODUCTIONS AND LOLLAPALOOZA'S C3 PRESENTS?</strong> </p><p>&nbsp;</p><p>While the sheer size of Lollapalooza has had an impact on every club and concert venue in Chicago&mdash;tying up more than 120 acts every summer&mdash;the biggest hit has been on local independent concert promoters Jam Productions, which would otherwise book many of the alternative-leanings acts that play the festival at indoor venues such as the Aragon Ballroom and the Vic and Riviera theaters. Several years ago, Jam also announced plans to build a new outdoor amphitheatre in Hoffman Estates, but that project has been put on hold because of the changes festivals have wrought in the summer concert business and the overall downturn in the economy.</p> <p>Jam was co-founded three decades ago by Chicagoans Jerry Mickelson and Arny Granat, who now is much less involved in the trench warfare of the day-to-day concert business.</p> <p>Jam does not impose radius clauses on any of the bands it books, whether those groups are playing small clubs such as the Double Door or Schubas, mid-size theaters such as the Vic, the Riviera, or the Aragon, or arenas such as the United Center and the Allstate Arena. Instead, the company builds on its long history of working with artists and their booking agents, relying on &ldquo;mutual trust&rdquo; that none of the parties involved will make another deal undercutting a show&rsquo;s chances for success.</p> <p>In this increasingly litigious and contract-crazed society, this policy not only seems anachronistic, but almost unbelievable. Yet it has been confirmed by several industry sources.</p> <p>Jam is hardly a saintly or altruistic enterprise, however. For years, the company was the 800-pound gorilla in the Chicago concert business, and it often was criticized by other local promoters for heavy-handed tactics against smaller competitors. But the business changed in the mid-&rsquo;90s with the emergence of the corporate giant Live Nation, which recently grew even more powerful after its merger with Ticketmaster, pitting the once powerful Jam simian against a new 800,000-pound King Kong.</p><p style="text-align: center;"><img width="100" height="100" title="" alt="" src="http://llnw.wbez.org/blog/insert-image/2010-November/2010-11-13/WhoMickelson1.gif" /> <br /><em>Jam co-founder <br />Jerry Mickelson</em></p><p style="text-align: center;"><br />&nbsp;</p><p style="text-align: center;"><img width="500" height="217" src="http://llnw.wbez.org/blog/insert-image/2010-November/2010-11-13/Three-Charlies.jpg" alt="" /> <br /><em>The &quot;three Charlies&quot; of C3 Presents: Jones, Attal, and Walker</em><br />&nbsp;</p><p>Jam point man Mickelson is famously frank and outspoken about any issue that threatens his business. But like Captain Ahab chasing the white whale, Mickelson has focused most of his ire in recent years on Ticketmaster/Live Nation, and he has made no criticisms on the record about C3 or Lollapalooza&mdash;even after former Live Nation top executive Charlie Walker joined Charlie Jones and Charles Attal of Capital Sports &amp; Entertainment, and they formed the offshoot company C3 Presents, named after the &ldquo;three Charlies&rdquo; who run it. (Walker&rsquo;s name is the one on the new 10-year deal with the city.)</p> <p>C3&prime;s Charlies have long maintained that they are not competing with Jam. In fact, through <a href="http://safetyservicesystems.com/default.htm">S3, Inc.</a> (Safety Services Systems), which is partly owned by Jam, Jam has claimed a significant piece of business with Lollapalooza every summer, providing the hundreds of security staffers who work 24 hours a day throughout the festival and during the weeks of set-up and break-down before and after.</p> <p><strong>Nevertheless, sources say that several local music promoters&mdash;including Jam, as well as several clubs that Jam works with but does not own or control&mdash;filed complaints about Lollapalooza&rsquo;s radius clauses with the Attorney General&rsquo;s office in the months before subpoenas were issued about two weeks ago. </strong></p> <p>In an effort to determine exactly which clubs and promoters filed complaints about Lollapalooza with the Attorney General, this reporter reached out to every rock promoter in Chicago above the level of the smallest club bookers. The owners or bookers at Schubas and Lincoln Hall, Empty Bottle Presents, and Martyrs said they were not among the complainants. But none of the other players on the concert scene who were contacted responded to a request for comment.</p> <p>Jam&rsquo;s Mickelson also failed to respond to a request for comment.</p> <p>In numerous interviews, C3 Presents has said it would like to play a bigger role in the local concert market beyond Lollapalooza, thereby challenging Jam with even more competition at a time when it already is struggling against Ticketmaster/Live Nation. Yet while C3 has promoted other high-profile events in Chicago&mdash;including the election night celebration for President Obama in Grant Park and several big-ticket VIP events when the city was unsuccessfully wooing the 2016 Olympics&mdash;it has promoted few concerts here besides Lollapalooza.</p> <p>Sources say that C3&rsquo;s deal to book shows at the Congress Theatre unraveled several months ago after two years of inaction, and the contract that C3 won from the Park District in 2008 to promote non-sporting events at Soldier Field&mdash;beating out an elaborate plan that Live Nation crafted in response to the same request for proposals&mdash;has to date resulted in no C3 concerts at the home of the Bears. (UPDATE: C3 is promoting a show by Deadmau5 at Stadium Green at Soldier Field on July 2.)</p> <p>In addition to declining to comment on the Attorney General&rsquo;s investigation, C3 spokeswoman Shelby Meade declined to comment on the company&rsquo;s activities at the Congress and Soldier Field, or what sources say is its role in starting a new Website called <a href="http://do312.com/">Do312</a> devoted to advertising and promoting musical events in Chicago. Modeled on <a href="http://do512.com/">Do512</a>, a Web site in C3&rsquo;s hometown of Austin, Texas, that trumpets all of C3&rsquo;s concerts there, the current Do312 calendar lists numerous small club shows here, as well as Taste of Chicago concerts and Downtown Sound gigs at Millennium Park<span style="text-decoration: line-through;">&mdash;though it does not list any shows promoted by Jam.</span> (CORRECTION: Several Jam shows are listed in the calendar section &ldquo;Big Stuff.&rdquo;)</p> <p><strong>HAS JAM DECIDED THAT C3 IS NOW AS BIG A THREAT TO ITS BUSINESS AS TICKEMASTER/LIVE NATION, AND HAS THE CHICAGO COMPANY DECLARED WAR ON ITS TEXAS RIVALS?<br /> </strong></p> <p><strong> </strong>If so, the battle is being fought in secret and well under the radar, in stark contrast to the high-profile, all-out death match between Jam and Ticketmaster/Live Nation, which has found Mickelson railing against the merged giant in every interview he grants as well as in televised hearings on Capitol Hill.</p> <p>The Attorney General&rsquo;s office would no doubt protest the notion that it does the bidding of any local company, or that it would launch an investigation solely on the request of Jam&nbsp; protesting a competitor&rsquo;s policies. But, as noted earlier, Madigan&rsquo;s office is refusing to comment on the ongoing probe.</p> <p>Whatever the scope of and motivations behind the investigation, it is clear that all of these questions will hover over the Chicago music scene until Madigan finally says exactly why her office has set its sights on Lollapalooza&ndash;<a href="http://leisureblogs.chicagotribune.com/turn_it_up/2010/06/lollpalooza-exclusivity-clauses-not-always-enforced.html#more">or if she takes one of several possible actions</a> ranging from a lawsuit filed on behalf of Chicago residents, to crafting a consent decree whereby Lollapalooza agrees to change the way it does business, to giving the concert a clean bill of health and ultimately doing nothing at all&ndash;which sources say is the least likely outcome of all.</p><p style="text-align: center;"><a href="/jderogatis/2010/06/analysis-what%e2%80%99s-behind-the-attorney-general%e2%80%99s-investigation-of-lollapalooza/27939 /lollapalooza-2010-3" rel="attachment wp-att-28006"><img width="300" height="278" alt="" src="/sites/default/files/archives/blogs//lollapalooza-20102-300x278.jpg" title="lollapalooza-2010" class="aligncenter size-medium wp-image-28006" /></a> </p><p style="text-align: left;"><strong>UPDATE, TUESDAY 1:50 p.m.: </strong>The Hideout has responded, and it is another among the local clubs and smaller festival promoters that have NOT filed a complaint about Lollapalooza with the Attorney General. </p><p style="text-align: left;"><strong>UPDATE, WEDNESDAY 4:30 p.m.: </strong>The Abbey Pub has responded, and it is another among the local clubs that have NOT filed a complaint about Lollapalooza with the Attorney General. Numerous other clubs and promoters still have not responded, including Jam Productions and Live Nation.</p></p> Tue, 29 Jun 2010 06:01:00 -0500 http://www.wbez.org/blog/jim-derogatis/analysis-whats-behind-attorney-generals-investigation-lollapalooza BREAKING: Illinois Attorney General investigating Lollapalooza for anti-trust http://www.wbez.org/jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523 <p><p style="text-align: center;"><a href="/jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523%20/attorney-general-logo-2" rel="attachment wp-att-27525"><img alt="" class="aligncenter size-full wp-image-27525" src="/sites/default/files/archives/blogs//attorney-general-logo1.jpg" title="attorney general logo" height="69" width="489"></a> <a href="/jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523%20/lollapalooza-2010" rel="attachment wp-att-27526"><img alt="" class="aligncenter size-medium wp-image-27526" src="/sites/default/files/archives/blogs//lollapalooza-2010-300x278.jpg" title="lollapalooza-2010" height="295" width="318"></a><code> </code></p><p style="text-align: left;">The office of Illinois Attorney General Lisa Madigan is investigating Lollapalooza sponsors C3 Presents and their partners for anti-trust issues stemming from the radius clauses that the Austin, Texas-based concert promoters impose on all of the artists who play the giant, three-day concert in Grant Park, according to numerous sources familiar with the investigation.<!--break--></p><p style="text-align: left;">The controversial radius clauses prohibit Lollapalooza acts ranging from the top headliners to the smallest "baby bands" at the bottom of the bill from playing anywhere else in the Chicago area for months before and after their appearance at Lollapalooza in August. Sources have said that the most extreme of these clauses stretch from six months before Lollapalooza to three months after it, and that they encompass a 300-mile radius -- which would include concert markets as far away as Milwaukee, Madison, Iowa City, Detroit, and Indianapolis.</p><p style="text-align: left;">Many local Chicago club owners and independent concert promoters have said that these radius clauses are decimating the local music community and significantly hurting their business for much of the year, and that they constitute unfair, anti-competitive practices. Lollapalooza promoters respond that the clauses are standard practice in the concert industry, and that they waive them for any artist who asks to be excused from their requirements.</p><p style="text-align: left;">Late Thursday afternoon, Madigan press secretary Robyn Ziegler said, "We cannot confirm or deny whether or not we have an investigation." But music business super-agent Marc Geiger confirmed that he is among those who have been subpoenaed: "I did receive one," he wrote via email. He declined further comment.</p><p style="text-align: left;">Sources said executives at C3's offices also received subpoenas, but company spokeswoman Shelby Meade said only, "No comment in this question." Geiger launched Lollapalooza with concert founder Perry Farrell as a traveling day-long alternative rock festival in the early '90s. He is now a vice president at Beverly Hills-based William Morris Endeavor, the company run by Hollywood giant Ari Emanuel, brother of presidential chief of staff Rahm Emanuel, and model for the character of Ari Gold on HBO's "Entourage." The talent agency retains 50-percent ownership of Lollapalooza along with C3.</p><p style="text-align: left;">Most concert promoters impose some form of radius clause on bands to ensure that they draw the biggest audience possible -- and make the most money for all involved -- without competing with themselves. A group that performs at a 1,000-seat venue in Chicago in mid-October might be required to refrain from performing at another smaller or larger club in this market from early September through early November, or at least refrain from announcing and advertising a November show until the October show sells out.</p><p style="text-align: left;">The difference with Lollapalooza's radius clauses is that they are some of the longest and most extensive in the business, and they affect a huge number of acts, since there are more than 120 bands performing at the mega-concert. And, unlike a concert with two or three bands on the bill, Lollapalooza does not rely on any one headliner to sell tickets. In fact, promoters consistently trumpet the sheer volume of acts and wealth of different experiences offered in Grant Park as the main draw.</p><p style="text-align: left;">Geiger defended the radius clauses <a href="http://blogs.suntimes.com/music/2009/08/marc_geiger_the_other_force_be.html">in an August 2009 interview</a> by saying they were common practice in the concert industry. When asked why the promoters wouldn't waive these clauses for all but the headliners, allowing the smaller artists to play elsewhere in the market for fans who'd rather see them in a club or theater setting, Geiger said:</p><blockquote><strong>Geiger: </strong>When you sell out a couple of years in a row, you don't want to be arrogant in any way, shape or form. But then you have to look at it and say that if Lolla wasn't there and you had all of those shows in the clubs, if we're looking at it from a dollar spent by the consumer standpoint versus all of those bartenders and people who work at the clubs, the consumer would have to go out to 15 shows to see a fraction of the bands. They wouldn't have as much musical knowledge, background and enrichment, and they would have had to spend seven times as much, plus the parking and individual drinks to get anywhere near the same musical input they get from Pitchfork, Lolla or anything else"¦ [But] I'm not down at the local level there on that front.</blockquote><p>The "three Charlies" who oversee Lollapalooza as the executives who run C3 Presents -- Charlie Jones, Charles Attal, and Charlie Walker -- also defended the radius clauses <a href="http://blogs.suntimes.com/music/2008/07/lollapaloozas_promoters_addres.html#more">in an interview in March 2008</a>, when this reporter questioned them extensively on the issue. Here is a transcript of their comments:</p><blockquote><strong>Q. What do you say to Chicago club owners and fans who complain that Lollapalooza is hurting their business and the local music scene because acts are shut out of performing elsewhere for six months?</strong></blockquote><blockquote><strong>Walker:</strong> Look, the music business in North America changed. The festival model up here has worked. Whether it was C3, Live Nation, Jam or [Metro owner] Joe Shanahan on that site in this city, someone was going to do a festival. In this case it happened to be us. Yeah, it sucks up 130 bands in the summer. But they can still play the market in the fall.</blockquote><blockquote><strong>Q. C3 owns several clubs in Austin. Would you be happy if all those bartenders, security guards, sound technicians and staffers suddenly lost a big part of their livelihoods? Half a dozen Chicago club owners have shared their schedules with me from before and after Lollapalooza, and in some cases, they now have half the number of shows they had in the summers before Lollapalooza.</strong></blockquote><blockquote><strong>Jones:</strong> I don't know what the facts are or what the show count is, but we're there and they are there. There is nothing I can really do about it.</blockquote><blockquote><strong>Q. You could waive the radius clauses for all but, say, the top five or eight headlining bands each day.</strong></blockquote><blockquote><strong>Attal:</strong> So who is going to decide, "This band gets a radius clause and this band doesn't?" You can't do it that way. We have a radius clause because we don't want all of these bands playing all over the city. Not that they necessarily would, but it's to protect us.</blockquote><blockquote><strong>Walker:</strong> Everybody does it. It's the way the business works, and it's good, sound business for us and the acts. That's the way we operate.</blockquote><blockquote><strong>Q. You often say, "Lollapalooza is not in competition with Chicago clubs or promoters," but that certainly sounds like a competitive policy.</strong></blockquote><blockquote><strong>Attal:</strong> I've never had a band call me and say, "Hey, I want to play the Double Door" where I didn't say, "Great, let's call the promoter to play the Double Door."</blockquote><blockquote><strong>Q. I know of a band that was scheduled to play a free lunchtime show at the Chicago Cultural Center a few years ago, and Lollapalooza made the group cancel.</strong></blockquote><blockquote><strong>Attal:</strong> Bull----!</blockquote><blockquote><strong>Jones:</strong> That is not true.</blockquote><blockquote><strong>Q. I'm telling you what the group's manager told me.</strong></blockquote><blockquote><strong>Attal:</strong> Well, we.... They probably read their contract and didn't call me and talk to me about it. Ninety percent of the bands aren't going to call me, they're just going to look at the contract. If someone calls me and says, "I want to play the Double Door, I want to play here, etc.," I'll work it out with them. I've done it in the past. But we can't let 130 bands go do side gigs, because then why do Lolla?</blockquote><blockquote>It might loosen up a little bit once this thing gets to the point where it's sold out. We struggled to get where we are today with it. You've got to weigh the pros and cons. Last year, we didn't crush it; we had a good crowd, but we didn't sell out. So we have to get to the point where ACL [the C3-owned Austin City Limits Festival] is... But we're not taking it out of our contracts. We can't. All the bands have to read it and if there is an issue, they can take it up with me and we will talk about it. No one has an issue with it.</blockquote><blockquote><strong>Q. The Chicago music community has an issue with it. All of the club owners I've talked to have an issue with it.</strong></blockquote><blockquote><strong>Jones:</strong> But they're doing after-shows every night!</blockquote><blockquote><strong>Attal:</strong> There's no question, if I was a club owner and a big festival dropped on my city, I would feel the same way. But I can't help the way the business changed in North America. That does not mean that we're not going to protect the integrity of our line up and say, "Go play where you want." It's not the way we are going to do business.</blockquote><blockquote><strong>Jones:</strong> I don't know if it's about the radius clause or more about the fact that it's a huge vessel--it has changed the dynamic of the city. It's not like it was before Lollapalooza was there, but neither is Manchester, Tenn. or Nashville or wherever else.</blockquote><blockquote><strong>Walker:</strong> It's not like we're sitting here trying to figure out how to negatively impact other businesses. We try to do the best we can.</blockquote><p>Chicago club owners and independent promoters generally have been reluctant to criticize the Lollapalooza radius clauses -- at least in on-the-record interviews -- because they are vying to host official Lollapalooza after-hours concerts, and they do not want to lose out on that business when they already are losing out on dozens of other gigs over the summer. A full roster of official afterhours shows at Metro, the House of Blues, Lincoln Hall, the Empty Bottle, the Congress Theatre, and Reggie's Rock Club <a href="http://leisureblogs.chicagotribune.com/turn_it_up/2010/06/lollapalooza-2010-aftershows-set-.html">was announced on Tuesday</a> to coincide with this year's Lollapalooza weekend, August 6 to 8.</p><p>But sources said complaints from local clubs and promoters were part of what triggered Madigan's investigation. And some of the city's best-known promoters did speak out against the radius clauses <a href="http://blogs.suntimes.com/music/2008/03/the_lollapalooza_that_ate_chic.html">in interviews with me in March 2008</a>. Here are some of the comments they made at that time.</p><blockquote><strong>Joe Shanahan, owner, Metro:</strong> "It's a very different summer now for all of us. I look at those Lolla bills, and I know they're paying so many of those bands really well. It may not be the career moves that all of them should be making, but I'm not their manager or their agent. I'll still be standing in the fall, and they'll come back to work for us then or in the winter. But the shift has definitely been to the other seasons because of this."</blockquote><blockquote><strong>Michael Yerke, talent booker, House of Blues:</strong> "There's no doubt about it: If Lollapalooza wasn't there, there would be more shows at places like Metro and the House of Blues and the Vic Theatre and probably for that matter Reggie's. On the other hand, we have a good relationship with those guys [Lollapalooza promoters C3 Presents], and we do a couple of the after shows. At least we're getting a couple of shows during that weekend, where if we didn't have a relationship with them, we'd probably have no shows at all! It's hard, but Lollapalooza isn't the only culprit: You also have the Warped Tour and the Linkin Park tour that swallow up a lot of bands that take away from Metro and House of Blues as well."</blockquote><blockquote><strong>Bruce Finkelman, owner, the Empty Bottle:</strong> "If you look at summertime in Chicago and summertime around the country now, it's just festivals taking over everything. The summer used to be a really big time, but now, you're not looking at bands that are on tour, but at acts that are just going from one festival to another. It's a completely different scenario now."</blockquote><blockquote><strong>Sean Duffy, talent booker, the Abbey Pub:</strong> "When I first started rolling at the Abbey, before Lollapalooza and Pitchfork and Intonation, my summers were awesome. Summers always slowed down a little bit: You lost some of the bands to Ribfest or the Randolph Street Festival or whatever. But then, all of the sudden, the summer that Lollapalooza came here, the talent pool was completely empty. During the summers now, you're lucky if you have a couple of shows, and you're just picking up the leftovers that couldn't get into any of the festivals. And some bands that play at these festivals can't play anywhere else in the city for 90 days before and 90 days after -- that's six months, and that's just ridiculous! I'm not against more clubs opening; I'm against more festivals! Lollapalooza alone probably wiped out about 60 club shows last summer, and we've just got to rein that in."</blockquote><p>With a handful of notable exceptions, such as a performance by Radiohead in Grant Park's Hutchinson Field promoted by Chicago-based Jam Productions in 2001, city officials were reluctant to allow for-profit rock concerts in the lakefront park. The Park District notoriously blocked performances by the Smashing Pumpkins, the survivors of the Grateful Dead, and other bands throughout the '90s.</p><p>The Park District's attitude changed in 2005 when it was presented with a proposal by C3 to reinvent Lollapalooza as a Chicago-based "destination festival" generating more than $1 million a year for parks improvements. All licenses and permits for Lollapalooza are taken out not in the name of C3, but by the non-profit Parkways Foundation, an organization headquartered inside the Park District's offices.</p><p>In 2006, Lollapalooza signed a contract with the city to continue bringing Lollapalooza to Grant Park for five years. For that deal, C3 was represented by attorney Mark Vanecko, a nephew of Mayor Richard Daley.</p><p>In November 2008, only two years into that first five-year deal, the city signed a new 10-year deal with C3, extending Lollapalooza's hold on Grant Park and the local concert industry to 2018 -- or a year after that, if the city had succeeded in winning its bid for the 2016 Summer Olympics, when Lollapalooza would have taken a one-year sabbatical.</p><p>C3 organized several of the events promoting Chicago during that unsuccessful Olympics bid, and executives said that they had hoped to play a major role in festivities here if the Olympics had come to the Windy City. C3 also organized the election-night celebration for President Obama in Grant Park, as well as several events at the inauguration in Washington, D.C.</p></p> Thu, 24 Jun 2010 16:33:00 -0500 http://www.wbez.org/jderogatis/2010/06/breaking-illinois-attorney-general-investigating-lollapalooza-for-anti-trust/27523