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Proposal: Shift tax exemption power for Lollapalooza, other events, to county

Fans listen move sounds Daedelus Perry's Stage Sunday August 7 2011 during day three LollapaloozGrant Park. | Tom Cruze~Sun-Times

Fans listen and move to the sounds of Daedelus at Perry's Stage Sunday August 7, 2011 during day three of Lollapalooza in Grant Park. | Tom Cruze~Sun-Times

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Updated: February 21, 2012 8:45AM

The Cook County Board would have the final say before granting tax exemptions for big-ticket events such as Lollapalooza under a plan introduced this week by County Commissioner Bridget Gainer in response to a report in the Chicago Sun-Times last year.

Currently, County Board President Toni Preckwinkle’s revenue director decides whether a group such as a non-profit or event qualifies for an amusement-tax exemption. But if the board approves Gainer’s measure that authority would shift, at least on bigger deals, to the board.

The measure comes months after the Sun-Times reported the city and county have been granting amusement tax exemptions for Lollapalooza for the last seven years. In 2011, that meant promoters saved $1 million in taxes at the event.

Here’s how it works: Though Austin, Texas-based Lollapalooza promoter C3 Presents puts on and manages the festival, booking the acts, hiring the vendors, overseeing the entire operation and reaping the profits, the Chicago Park District, which owns Grant Park, doesn’t contract directly with C3.

Nor does C3 obtain the liquor licenses for the festival. Instead, that’s arranged through the Parkways Foundation, the park district’s not-for-profit fund-raising arm, which serves as a conduit between the promoters and the district — an arrangement that cost the county $350,000 in amusement tax revenues last year.

Gainer’s proposal — which fellow commissioners Earlean Collins, Deborah Sims, Joan Patricia Murphy, and Liz Doody Gorman agreed to co-sponsor — calls for a board vote on any amusement tax exemption in which the county would lose $150,000 or more.

The measure, introduced Wednesday, also states: The County Board “may deny the exemption application if it finds that the exemption is not in the best economic interest of the county.”

“When we are laying off people at the county who work at the hospital and provide vital services then we have to look carefully at who’s getting away with not paying taxes,” Gainer said.

Preckwinkle did not immediately comment on the measure. But Gainer did say that the revenue director and the state’s attorney’s office were consulted in crafting the measure.

The proposal could come up for a vote as early as Feb. 1.

Mayor Rahm Emanuel has said he would ask the City Council to appoint a “third-party, independent” negotiator to broker talks with Lollapalooza and determine whether to eliminate the music festival’s multi-million dollar amusement tax exemption.

The hands-off stance is necessitated by the involvement of Emanuel’s brother, Hollywood super-agent Ari Emanuel. Ari Emanuel is the CEO of William Morris Endeavor, which co-owns Lollapalooza.

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