The Essence Festival of Culture has been a staple of New Orleans’ Fourth of July weekend for more than 30 years.

But for the second year in a row, Essence Fest is late on paying its vendors, Perdido Street has learned.

The late payments have alarmed state and local officials and upended Essence Fest’s negotiations with Mayor Helena Moreno’s administration over a contract that would allow the festival to return to New Orleans in 2027.

With its contract in limbo, festival organizers have reached out to officials in Houston and Atlanta in recent months to discuss relocating Essence Fest, sources told Perdido Street.

Kirk McDonald, CEO of the festival’s parent company, Sundial Media & Technology Group, told Perdido Street that negotiations with New Orleans are ongoing and that Essence Fest is committed to paying its vendors.

“Essence has paid approximately $11 million to Louisiana partners for the 2026 festival, and we are proud of the local businesses that helped build it with us. Many have been with us for years, and every one of them will be made whole,” McDonald said.

In recent weeks, however, at least two out-of-state vendors have contacted Moreno directly to share their frustrations over late payments and a lack of communication from Essence Fest officials.

“Obviously, we are very concerned at this point as this is an extremely large receivable and we are a small Company,” a vendor who is owed more than $500,000 told Moreno in an Oct. 12 email obtained by Perdido Street.

A second vendor traveled to New Orleans on Oct. 2 to meet directly with Moreno at City Hall. (Both vendors declined to comment and asked that they not be named.)

Essence Fest faced similar criticism over late payments earlier this year, when local officials learned in February that the festival still owed the Ernest N. Morial Convention Center nearly $400,000 and three local vendors a combined $3.8 million for their work seven months earlier on the 2025 festival. The festival in March announced that it had reached agreements to pay those vendors in full. Later that month, Moreno formed a steering committee to manage City Hall’s relationship with the festival.

“Ensuring vendors are paid has been a consistent focus in every conversation with festival organizers. It’s disappointing that these issues continue to persist,” Kevin Ferguson, Moreno’s chief of staff and a member of the steering committee, told Perdido Street. “We have made it clear that any agreement for 2027 will have contractual provisions to prevent this situation.”

The repeat failure to pay vendors on time could jeopardize Essence Fest’s ability to secure the package of incentives it says is needed to put on a successful event in future years in New Orleans.

Under a now-expired set of agreements with Louisiana Economic Development, Essence Fest since 2021 has received more than $7.6 million in state funding, according to records obtained by Perdido Street.

A separate contract with City Hall, which expired in September, entitled Essence Fest to a combined $1.7 million in direct annual payments from the city, the New Orleans Tourism and Cultural Foundation, New Orleans & Co. and the Greater New Orleans Hotel and Lodging Association.

State Rep. Jack McFarland, a Jonesboro Republican who chairs the House Appropriations Committee, also heard from frustrated vendors and told Perdido Street that legislative leaders are unlikely to approve state funding for Essence Fest in the future.

McDonald said some of the delays are because Essence Fest “has not received the full civic payment guaranteed under its contracts with local civic partners.” He said the festival was still owed $200,000 as of Oct. 19, though he wouldn’t say which “partners” hadn’t paid.

“We have drawn on every available resource to keep paying our partners. This simply comes down to timing,” McDonald said.

Essence Fest kicked off contract renewal negotiations last year, when it sent then-Mayor-elect Moreno a five-page proposal requesting annual subsidies of $10 million to $12 million from the city, state and other entities going forward to expand programming and cover rising operational costs.

In an Aug. 17 letter to Essence Fest, Moreno’s steering committee told festival organizers that the proposal was “simply unfeasible in this current environment.”

The committee said the 2026 festival was a “significant improvement” from the previous year’s festival, which faced widespread criticism from attendees after its concerts at Caesars Superdome ran well behind schedule.

But the committee said that it had also identified “concerning trends” in a 2026 post-festival review.

The 21-page review, which Perdido Street obtained through a public records request, highlighted several areas in need of improvement.

It said the festival’s decision to shuffle major acts like Babyface and Patti LaBelle after tickets had already been sold resulted in “significant frustration among traveling fans who booked tickets for specific days.”

It criticized the festival for announcing two of its headliners just two weeks before the festival, arguing that major artist announcements should be made prior to the end of the calendar year preceding the festival.

It said problems persisted with timely payments to third-party vendors, “which nearly created a work stoppage” just days before the event.

And it said that local hotels that had set aside rooms for Essence Fest attendees “experienced the lowest room pick-up” in the history of the festival.

Moreno’s steering committee told Essence Fest in its Aug. 17 letter that if it wanted to stay in New Orleans, it needed to provide proof that its vendors had been paid.

Essence Fest didn’t provide that information, records obtained by Perdido Street show. But in an Aug. 27 letter, Essence Fest assured City Hall it was in “regular correspondence” with their vendors and were committed to paying them in full.

The Moreno administration later offered to extend Essence Fest’s existing contract by one year, though festival officials are holding out for a multi-year agreement, sources told Perdido Street.

With negotiations at a standstill, Essence Fest has published a flurry of posts on social media in recent weeks touting its economic impact in New Orleans.

“ESSENCE Festival brings Black culture, creativity and joy to the world, all while making sure New Orleans feels the love, too,” the festival wrote in a post on Instagram, highlighting an independent study from Dillard University that found that the 2025 event resulted in $253 million in visitor spending and supported 2,436 jobs.

Moreno’s steering committee warned Essence Fest in its August letter that if the two sides couldn’t reach an agreement, the city would likely proceed with an open solicitation and request for qualifications and proposals from firms interested in offering a similar “world-class celebration of Black culture, music, entrepreneurship, entertainment, and community in New Orleans.”

Essence Fest, in its response, argued that much of the information the steering committee sought was proprietary. It also accused Moreno’s steering committee of making direct contact with its corporate sponsors “to support efforts to produce a competitive event over the July 4 weekend.”

It pointed to a Request for Qualifications posted online July 1 seeking “interested parties for the operation, production, promotion of an annual, first-class, three-day New Orleans Culture Summit.”

City Attorney Charline Gipson, a member of Moreno’s steering committee, told Essence Fest in an Aug. 31 letter that the solicitation was erroneously posted online by a third-party vendor and was never authorized for release.

Essence Fest officials say they want to stay in New Orleans. But with next year’s festival just nine months away, they’re exploring other cities in case they don’t reach an agreement with City Hall.

No matter how the negotiations play out, the Moreno administration said its goal is for New Orleans to have a festival over the Fourth of July weekend.

“The city remains committed to hosting a successful event around Independence Day that highlights our rich culture and builds a strong engine for economic activity for our small businesses and residents,” Ferguson said.