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Curtain may drop on Lollapalooza's county tax break
Organizers will have to seek County Board's OK for annual waiver of amusement fee

Thursday, February 02, 2012
Chicago Tribune
by John Byrne

After years of a free ride courtesy of a clout-laden deal,Lollapalooza might have to start paying Cook County taxes.

Commissioners voted Wednesday to require organizers of events like the giant summer lakefront music festival to come to the County Board for approval of a long-running tax break.

The organizers have had county and city amusement taxes waived since relaunching Lollapalooza in Grant Park in 2005. It was part of a deal brokered with the help of lobbyist Mark Vanecko — a nephew of then-Mayor Richard Daley.

Now Texas-based concert promoter C3 Events LLC will have to ask commissioners to continue the county portion of that perk. The tax break was to help get the expensive-to-produce music festival off the ground. Lollapalooza has sold a lot of tickets since then and has established itself as a premier music weekend each August.

Commissioner Bridget Gainer's measure requires events that generate more than $150,000 in amusement tax revenue for the cash-strapped county to ask the board to waive the county tax.

"I think we should see it as a success that no longer needs government support going forward," Gainer said of Lollapalooza, which drew about 270,000 people last August.

Lollapalooza would have brought in about $350,000 in county amusement taxes in 2011 based on 1.5 percent of ticket revenue, said Gainer, D-Chicago.

Instead of paying the tax, Lollapalooza promoters have made an annual contribution to theChicago Park District's nonprofit Parkways Foundation. Gainer was a member of the Parkways board when that agreement was reached, and she said the idea was not for the tax break to remain in place long term.

Until now, the amusement tax exemption has been granted through the county Revenue Department without the commissioners considering it.

The measure to change that was approved 16-0. County Board President Toni Preckwinkle said she would wait to see the proposal Lollapalooza organizers submit for 2012, but that she is "inclined to agree" with Gainer.

A C3 spokesman said the promoter plans to keep the concert in Chicago.

"Lollapalooza has called Chicago home for eight years, and we appreciate and value the relationship we have developed with the city. We look forward to talking with city leaders about the best way to continue our partnership and we look forward to calling Chicago home for many years to come," said C3 spokesman Steve Patterson.

The festival's city amusement tax exemption continues. Mayor Rahm Emanuel's brother Ari has financial ties to C3, and the mayor has said an independent panel should look into the city's arrangement with the company.

On Wednesday, Emanuel spokeswoman Sarah Hamilton said the mayor will create an "independent third party" to review C3's application.

"The organizers have not yet applied for an exemption with this administration, but if and when the City receives the 2012 application, you can be sure that we will thoroughly review it with an eye toward protecting taxpayers," Hamilton said in an email.

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