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Click here to see a slideshow of last year’s haunted house

Fright fans who enjoyed last year’s haunted house at the park district will likely have to turn elsewhere for their thrills come Halloween.

A contract dispute between the district and the vendor that produced the harrowing Murder Mansion attraction appears to have spooked both sides, prompting threats ranging from legal action to an active smear campaign. Colin Reed, the artistic director for Darkhouse Entertainment, the agency behind the wildly successful 2008 event, sent a scathing e-mail to park officials this month after they allegedly backed out of a verbal agreement. According to Reed, the park’s last-minute demands that he provide insurance for the event, and concede another 10 percent of the profits, were deal breakers.

“If I’m going to be the primary insurer, I should just take the event and find a warehouse and keep all the profits to myself,” Reed said of the dispute.

Reed said his studio has already spent six months working toward this year’s event and he may sue the district to cover those expenses.

The park was also slated to provide a temporary stage to Reed’s company for a concert series hosted by the village at the picnic grove. That production, Pops in the Park, was to begin Aug. 12 with a standup comedy performance.

Two weeks beforehand, according to Reed, the park district said it would not be the lead vendor and asked that Darkhouse Entertainment file the appropriate paperwork with the village. To stage an event at the grove the municipality requires liability insurance.

“Those are requirements,” Sally Cody, assistant to the mayor, said. “We do not let anybody slide on those.”

The standup comics were moved to Doc Ryan’s on Madison and at least two other Pops in the Park events will be cancelled altogether.

“No one feels as bad about this as I do,” Larry Piekarz, director of the park district said.

Piekarz declined to elaborate on what led to the falling out because Reed has threatened to take the district to court. He referred questions to the park’s attorney, Jim Wascher.

The business side of last year’s haunted house was held together by a handshake, according to Reed and Wascher. No additional insurance coverage was asked of Darkhouse Entertainment, and the park put up $5,000 to help with costumes and other production costs. When the event ended, Reed paid back the $5,000 along with 40 percent of the profits.

Those same terms were in place this year, according to Reed, but then the park board suggested that the agreement at least be documented. He agreed, but then the park district asked its attorney to review it and the contract was altered.

Wascher represents a number of park districts and public agencies in the area and said it is “standard operating procedure” that any vendor – whether a theater studio or hotdog hawker – carry their own liability insurance. According to Wascher, Reed also wants to keep the $5,000 before divvying up the proceeds.

The attorney said he was not previously aware of last year’s verbal agreement.

“… [Y]our assertion that your company or you have an oral contract to offer Murder Mansion at the park district is incorrect,” Wascher said in an Aug. 12 letter to Reed. “The only oral contract was for last year’s haunted house.”

Parties on both sides of the dispute mentioned the possibility of working together in 2010, though Reed suggested the discord may be too severe. For the park district, Wascher said the decision of continuing a business relationship with Darkhouse Entertainment rests with the board.