The theater wars: The fight for control of the Uptown, and the changing face of the Chicago concert scene

In a city graced by a dozen historic marquees, preservationists, music lovers and community activists maintain that the Uptown Theater is Chicagos crowning jewel.

Designed by renowned architects Rapp & Rapp, the 4,300-seat theater opened at Broadway and Lawrence as a movie palace in 1925. But since a stint in the 70s when it hosted rock tours by Genesis, Lou Reed, the Grateful Dead and others, it has sat dormant and rotting. Meanwhile, one developer after another has reneged on promises to restore the venue to former glories.

A redeveloped Uptown Theater is seen by many, including 48th Ward Ald. Mary Ann Smith, as the key that finally could turn Uptown from a war zone into a thriving entertainment district — the only one in the city where live music is the main attraction. Now the theater itself has become what may be the bloodiest battleground yet in Chicagos long-raging war between two powerful concert promoters: national giant Live Nation and Chicago-based Jam Productions. And the fight is just heating up.

A TALE OF TWO MORTGAGES

Early in their career, Jam co-founders Jerry Mickelson and Arnie Granat promoted nearly 100 shows at the Uptown, from the Tubes in 1975 through the J. Geils Band in 1981. At that point, ownership of the theater began to change hands between what city attorney Judith Frydland called probably some of the worst landlords in the city of Chicago: Lou Wolfe, Ken Goldberg, John Trezakis. They let the building not only just stay vacant, but they allowed it to deteriorate.

Some of Jams detractors charge that the company wanted the Uptown to stay empty so it wouldnt compete with its other venues. Jam regularly promotes shows at the 2,500-capacity Riviera Theatre, which it bought in 2006, and the 4,500-capacity Aragon Ballroom, for which it has an exclusive agreement to book all non-Latin music concerts. Both are less than a block from the Uptown. But Mickelson said Jam has been trying to buy the Uptown for years, and it just couldnt make a deal with any of the owners.

Meanwhile, the Uptown crumbled: Over the last decade, the city had to make $1.4 million in emergency repairs to prevent the designated landmark from decaying to the point where it would have to be torn down. Estimates say it now requires $45 million worth of work before a single note can be played on its stage.

For several years, the keys to the building have been held by real estate investor David Husman, who started an as-yet largely inactive group called Broadway for Uptown to renovate the theater. The organizations president, Michael Scott, could not be reached for comment. Broadway for Uptown holds the first mortgage, but a defaulted second mortgage was purchased for $500,000 last year by a new corporation started by Mickelson with Joseph Freed, the successful developer of Block 37, the Sullivan Center and a building across from the Uptown that houses a Borders bookstore.

This corporation, UTA, also paid $50,000 to buy a company that owns a land trust which holds title to the Uptown. That company had been purchased from Terzakis by Robert Lunn, the financial adviser who filed for bankruptcy in 2005 after he was sued by former client Scottie Pippen of the Bulls. We own the company that owns the theater, Mickelson said. Its clear we own the theater.

In fact, nothing about the ownership of the theater is clear. The other parties with claims to the property include the city, which has a lien for the cost of the emergency repairs, and Broadway for Uptown, which holds the first mortgage. In February 2007, the Chancery Court entered a judgment in foreclosure proceedings on that mortgage requiring that the Uptown Theater shall be sold at public sale. According to Mickelson, Broadway for Uptown set the sale date five times, but whenever UTA tried to present a check paying off the first mortgage, Broadway either postponed or cancelled the sale.

UTA has tried to convince the Chancery Court to compel the sale, but the court has declined. Now UTA has taken the matter to the Illinois Supreme Court. But thats not the only court fight.

On Jan. 25, according to records obtained under a federal Freedom of Information Act request filed by UTA, city attorney Frydland presided over a secret meeting to discuss the future of the Uptown with other attendees including Scott of Broadway for Uptown and Mark Campana, president of Live Nation. Eighteen days later, on Feb. 11, the city filed a motion in Housing Court stating that it is very concerned about [the Uptowns] future and the intended plans of the successful bidder. It asked the court to impose a long list of requirements on bidders in the foreclosure sale, including placing $5 million in an escrow account available to the city.

Number one, its very unusual for the city to want to dictate what the terms of a foreclosure sale are going to be, said UTAs attorney, Steve Gistenson. Number two, we were saying to the city, which is a party in the foreclosure action, Dont you want to get this property developed? Join with us in our efforts to compel the sale!

The city has not done that, which begs the question of what elected officials want for the Uptown, and what their goal is in court. According to Mickelson: They tailored that document — the Feb. 11 motion — to Live Nation.

TWO LONG-STANDING GRUDGES

Ever since Live Nation, formerly Clear Channel Communications, came to dominate the national concert business in the mid-90s, it has vied for control of the Chicago market with Jam, one of the few remaining independent promoters. Experts say the most competitive part of the business is in mid-sized theaters under 5,000 seats, but Live Nation has been stymied in every attempt to purchase a venue here of that size, while Jam controls several. (It also owns the Vic Theatre and the Park West.)

The fight has been nothing short of brutal: In 2006, an Illinois jury awarded Jam $90 million in damages from Clear Channel for unfair business practices after a trial which revealed that a Clear Channel executive wrote an email saying that the company wanted to kill, crush and destroy its competitor, Jam. Although Live Nations name and some of its top executives have since changed, it remains intensely competitive, and it desperately wants the Uptown.

My position is that its a court matter, and we would prefer that it reside in the courts and lets see how it plays out, said Live Nations Campana. But he added, Were eager. Were interested in understanding who holds title for the building because we have an interest.

Ald. Smith makes no secret about wanting Live Nation to work with Broadway for Uptown to develop the theater. The proposal that has been put on the table by Live Nation and their affiliates is the best one for the theater and community, Smith said. I base that on their work at other venues throughout the country, their successful work at [Charter One Pavilion on] Northerly Island and past experience with Jam.

According to Smith, when she was a rookie alderman in the late 80s, following a successful $12 million renovation of the Fox Theater in Detroit, Ilitch Holdings, Inc. approached her about restoring the Uptown. The mayor was only in office a year and a half at the time, and I took the Fox Theater people into the department of planning. They had a complete proposal outlined, brilliant But Jerry Mickelson and his pals did everything they could to kill that deal, [and] they succeeded in convincing the city that because the Chicago Theatre continued to be in trouble, that the Uptown was helpless.

We never went in front of the city and said that, Mickelson responded. This never happened. But in addition to Smiths enmity, Mickelson and UTA also are facing the considerable political clout of Live Nation, which is represented in the Uptown case by Chico & Nunes, the firm headed by Mayor Daleys former chief of staff, Gery Chico.

Sources said that Broadway for Uptown no longer wants to sell the Uptown, and it has partnered with Live Nation to restore the theater. Live Nation originally hired Chico, who is allied with Ald. Smith, to explore a deal to buy the Congress Theatre. But all of the parties decided there was much more potential at the Uptown.

Are politicians attempting to sway the courts in favor of Live Nation? Your guess is as good as mine, UTA attorney Gistenson said.

They are in court, and they are going to have to work it out, Ald. Smith said. All we can do is put evidence on the table [But] you can see why — when you put all of the evidence together, or at least when I put all of the evidence together — I have a deep-seated hope that Live Nation and their folks will prevail.

Smith added that she is not worried about the court proceedings dragging on while the Uptown continues to fall down. The courts arent stupid and they dont like to be used, she said. And the city has other options: It can condemn the building or take control under eminent domain. We have a TIF there [a Tax Increment Financing development zone] and we can do that, absolutely. Thats a whole different scenario of opportunity. But anyway, were getting into the ultra-hypothetical now.

We think eminent domain will be an uphill battle for anyone, because were doing all we can to get this thing moving, Mickelson said. I can understand their position if we bought it and didnt do anything, but weve been trying to move it along from the minute we got involved.

AT LAST: A CHICAGO MUSIC DISTRICT

Since long before the tragic stampeding deaths at the E2 nightclub in 2003, the city has been notoriously harsh and restrictive on dance clubs and live music venues. And despite its international reputation, elected officials have done little to promote Chicago as a music capital.

One thing Smith and Mickelson agree on — and which is likely to happen no matter who prevails in court — is that the Uptown will become the centerpiece of a thriving entertainment district that also includes the Riv, the Aragon, the historic Green Mill jazz club, the recently reopened Kinetic Playground and the Shake, Rattle & Read bookstore in a two-block-square area unrivaled as a musical hotbed anywhere in the U.S.

The restoration of the Uptown also has the potential to remake the Chicago concert scene: It will compete directly with the Auditorium and Chicago theaters downtown, as well as with the Rosemont Theater in the suburbs. Insiders are split about the impact it will have on the Aragon: Mickelson said that venue will be hurt by competition from the Uptown, but another promoter said the venues will attract different acts. Neil Young or Van Morrison might perform at the ornate and seated Uptown, while Slayer and the White Stripes might prefer the general admission Aragon.

The wild cards among the theaters on the local music scene are the 3,600-seat Chicago Theatre on State St. and the 4,200-seat Congress Theatre on Milwaukee Ave. Late last year, New Yorks MSG Entertainment, a division of Madison Square Garden and Cablevision, bought the Chicago Theatre from Theatre Dreams, which had controlled the venue since 2004, and which booked many fewer concerts there. MSG has not announced its plans for the theater.

Meanwhile, C3 Presents, the Texas-based promoters of Lollapalooza, recently trumpeted an exclusive deal with owner Eddie Carranza to book the Congress Theatre. That 82-year-old venue also is sorely in need of repairs — the estimates range from $12 to $15 million — but unlike the Uptown, it can host concerts in the mean time, and Live Nation had been booking shows there for several years. Now, C3 partner Charles Attal said, Well book everything we can that makes sense… The same stuff were doing at Stubbs, his companys 3,000-capacity venue in Austin.

Stubbs is selling tickets for shows by Feist, Panic! At the Disco, Cat Power and My Chemical Romance — the same acts Jam and Live Nation are booking here now, and the kind either company might book at the Uptown in the future. This means that while those two promoters wrestle for control of one landmark venue, a third major competitor is poised to muscle into the business at another — and the war over the citys great theaters and control of local concert dollars isnt going to end any time soon.