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Coachella Threatens to Skip 2014, Relocate Over Proposed Event Tax

Pulp at Coachella 2012

Next year’s Coachella could be the last in Indio, California, where the music and art festival has taken place since 1999. Indio’s Desert Sun reports the festival’s promoters are warning they will take the shows out of Indio if the city goes through with a proposed admissions tax.

The proposal would put a tax of 5 to 10 percent on admissions to entertainment events with more than 2,500 in attendance. Promotions company Goldenvoice, which runs Coachella and the country-oriented Stagecoach festival, says that’s a deal-breaker. “If the tax initiative of putting $4 million to $6 million onto Coachella gets on the ballot, we’re going to take off 2014,” Goldenvoice president Paul Tollett told the Desert Sun. “2015 we’ll be at a new facility outside of Indio.”

At this point, the threat is merely hypothetical. Indio’s city council has already rejected city councilman’s Sam Torres’ proposal of the tax. Now Torres wants voters to have a chance to enact the tax through a ballot initiative. He reportedly said he needs about 2,700 signatures from Indio residents to get the proposal on the ballot. The deadline is August 10.

Tollett said he wouldn’t pass the cost of the tax, which he estimates at $36 per ticket, on to festival attendees. He puts the revenue Coachella generates for the city at more than $800,000 in ticket fees, plus tax revenue on roughly $9 million in food and drink sales, and more than $800,000 in transient occupancy tax. “We think this tax is outrageous for all the things we’ve done with Indio,” Tollett is quoted as saying.

Text messages forwarded to the Desert Sun by Torres, the city councilman, reveal Coachella’s promoters were already eyeing locations outside of Indio prior to the tax proposal. In one of the texts, Goldenvoice vice president Skip Paige says, “You know were [sic] moving right? All this is a game. Why in the world would we stay where we are not wanted.”

Paige declined to comment to the Desert Sun about the texts. Tollett said he couldn’t comment on them because he hadn’t seen them but reportedly added that some portions were misleading. For instance, one of Paige’s text to Torres says, “We made the decision to move out of Indio the day we got our 2 year permit and george [Williams, husband of a former city councilwoman] tried to sue us.” Tollett told the Desert Sun the company didn’t decide to move then and still doesn’t want to move.

Other aspects of the situation are similarly disputed. Another of Paige’s texts suggest Goldenvoice hasn’t met with city officials to work out a long-term agreement “because there isn’t one,” as he put it. Indio’s mayor, Glenn Miller, told the newspaper that’s not exactly true. The city manager, Dan Martinez, reportedly explained that talks about a long-term deal can’t go forward until we know the fate of the tax proposal and also what happens with Goldenvoice’s effort to buy Indio’s Eldorado Polo Club.

After the initial report, Indio city councilwoman Lupe Ramox Watson called for a special meeting of the council to talk about Indio’s relationship with Goldenvoice, according to a follow-up in the Desert Sun. The mayor reportedly emphasized that Goldenvoice executives have repeatedly said they want to stay in Indio, and despite any “hiccups” that can take place in tense business negotiations, both sides will do what it takes to keep the festivals where they are. “I respect Miss Watson’s concern, but I don’t see a special meeting at this time being warranted to discuss one item.”

Goldenvoice certainly has reason to be concerned about the possible tax. One Desert Sun columnist points out that “the Goldenvoice promoters of Coachella and Stagecoach aren’t a bunch of fat cats taking money from the city, thus making it OK to target them for remuneration.” In fact, on top of the revenue the festivals generate for the city, it’s worth pointing out that Tollett was forced to sell his house and company after piling up more than $800,000 in losses on the inaugural Coachella. His marriage ended soon after. In the first three years of Stagecoach, that festival lost an additional $7 million.

Wherever Coachella 2015 takes place, and whatever happens with Coachella 2014, next year’s Coachella is already on the schedule. Reprising this year’s bizarrely redundant two-weekend format, Coachella 2013 will take place April 12-14 and April 19-21. Unfortunately, that will be too late for all the sales taxes on your massive food and drink purchases to make this whole proposed tax thing go away just yet.

UPDATE: Councilman Torres has announced he will suspend his efforts to get the tax on the municipal ballot as a result of Tollett’s strong reaction to the initiative. “No matter how strongly I may feel about this tax, I’ll not jeopardize the livelihoods of working families,” he told Los Angeles’ NBC affiliate. A press release on the city of Indio’s website titled “Council Member Torres Suspends Music Festival Tax Proposal” includes the following quote from Torres: “The potential for the music festivals to move out of the city exists, and if this should occur it would negatively impact the region; I cannot in good conscience allow this to happen no matter how dire the city’s circumstances. … My sincere hope is that we can now move past this episode and I personally look forward to working to enhance relationships.”