Section Zero went into liquidation owing $140,000 to creditors, stating the 2012 event had an estimated loss of $250,000, and the recession contributed to poor sales. Mr Mossman then transferred the brand to the new company, Martinborough Experience.
Mr Rae said the decision not to hold the three-day festival this year was not financial and they were aiming to bring it back for 2016 but not to Martinborough.
He said there could be a couple of sideshow events in Wairarapa.
WCC was initially receptive to the proposal saying it could invest $250,000 but then said the event was unlikely to make a big enough return on its investment.
It was still interested in seeing the event held in Wellington.
Mr Rae said the festival could eventually return to Wairarapa if it didn't work in Wellington.
"I think the council do want it but they want it on their terms ... so we may end up bringing it back to Wairarapa."
La De Da has attracted 50,000 people over the past four years.
Mr Rae said they were aiming to bring the international element back to the 2017 festival.