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What does the Venue include? If it includes the food and drinks, then half the budget is probably reasonable. If it doesn't, then that is alot to spend on the venue. I would sit down and talk again with FH and set a hard budget, something that you are both comfortable with.
without knowing all the details, it sounds like this place is maybe a bit over the top. Count yourself lucky that your guy is talking honestly about how he feels, instead of blowing up later on because he bottled it up.
I agree with @tksjewelry that if it includes the catering costs, half your budget is reasonable. You shouldn't spend more than half of your budget on catering and venue.
and just remember, it's ONE day. A very special day, but how much debt do you really want to incur over a wedding? since your date is Sept 2013, I don't think you need to stress too much at this point, you've got time to decide.
As a fellow Chicago bride, our venue ended up being half our budget as well but, like tksjewelery eluded to, it includes everything. We don't have to rent chair covers, get a cake, pay for booze, etc. I'm not sure what place you're looking at but, just because at fave value it's more expensive, having a place that includes lots of extras may actually end up being cheaper in the long run than other alternatives. I say, put a spreadsheet together and compare prices between places and included and "hidden" costs (eg. chair covers) that are present at this, and other locations and see what happens.
Good luck!!
This place includes a ceremony location and all seating and lighting for that, tables, chairs, furniture, and dance floor. It is decorated so we do not need any linens (except for napkins). We can also bring our own alcohol in to save money. It does NOT include catering, but the list of prefered vendors is lengthy and includes some pretty reasonable options. We are also not having any flowers, centerpieces, having a friend marry us for free, doing an IPod, and doing a bunch of DYI.
It's your FI's wedding too... that doesn't mean you have to roll over on everything but do try to keep in mind that you have a long way to go and making decisions that you're both comfortable with will go a long way toward harmony & bliss.
Look at more venues, try to find one you both like that is in your budget. Set a firm budget that you're both okay with and keep an open mind about venues.
Yup, I agree with @lexy. Look at other venues, itemize lists and then do a price comparision. Make sure you're both on the same page and stuck to the budget.
Good luck!
@Lexy: Oh! Totally agree! I already contacted two other places to look at that he suggested in a price range he'd be more comfortable with. I was more shocked at the sudden change of heart. We had discussed the budget and our concerns for a good three hours last night and we had come to the conclusion that we still wanted the priciest place. To hear him change after we were so certain just got to me, I suppose. I'm feeling better now that we have a plan of action!
@ohmybears48: Oh good! It's easy to get caught up in the emotions of things. Some people (like your FI I'm assuming) just process those sorts of decisions a little slower :) Good luck dear.
@ohmybears48: I agree with the PP about if the venue includes everything (linens, dinnerware, food, beverages, tables and chairs), it is normal for it to be 50% of your total budget. But also, make sure it includes service charge and tax. Sometimes those little fees make a huge difference in the overall price.
Also, is there a way you can negotiate? You can leverage all the venues against each other and get a better price, even if you didn't like the other venues. It's not like your dream venue knows that. =)
Good luck!
What's the venue?
A nice benefit to having so much included is that it's a lower stress situation for you. If you go with a venue that doesn't include as much, but you still need the items in order to have the event, you'll be spending the time finding vendors for those things. Thatmeans more contracts and more things to pontentially go wrong, and as you add up these costs you might find yourself near the original venue's price anyway.
@kathryn83: Salvage One. It's a fantastic venue. My number one priority is providing a venue that is unique for my traveling family. Doing it at a hotel or a banquet hall is not an option, or it wouldn't be worth the 2 hour + drive for my family to make that day.
An update on this situation is that we looked in to five other places that are all-inclusive or mostly inclusive that meet all of our other criteria. All but one had a food and drink minimum around 18k for the night! It would actually be cheaper to go with the moderate prices caterer and the expensive venue than it is to go with the all-inclusive restaruant considering we'd also have to pay a ceremony fee at most of those places as a well as decorate to get the feel that we want!
@ohmybears48: Love Salvage One.
I hear you on traveling families--90 percent of our guest list will be FLYING in, so I'm finding myself in a similar situation.
P.S. Thanks for the reception list, sending you a PM now.
@ohmybears48: I don't really understand this sentence: "Doing it at a hotel or a banquet hall is not an option, or it wouldn't be worth the 2 hour + drive for my family to make that day."
Wouldn't your family want to be there to witness you getting married and celebrate with you regardless of how fancy your venue is? 
I understand the desire to "wow" your guests, but I guess I don't really understand why it wouldn't be "worth it" to your family if you had your reception at a hotel... (I also don't think two hours is that far to travel for a wedding; FI and I do that regularly for his extended family who live far away.)
@ohmybears48: If that price does NOT include the catering, it represents much too much of your total budget for you to consider. My venue -- INCLUDING venue rental fees, sound system, tables and chairs, all table service (china, flatware, glasses, etc.), table linens, all food and beverage costs (except for the cake itself), AND all taxes and gratuities, was a little more than half of my total wedding budget.
@ohmybears48: I think you need to come up with a complete and realistic budget. It sounds like you have an idea of what the whole wedding should cost, but you need to start breaking it down into how much you expect to spend per item. I suspect that when you do this you will find that you can't afford to spend half your budget on the venue. Normally, it's recommended that the whole reception (venue, linens, dishware, food, drinks, etc) by about half the budget. Keep looking and don't forget to consider some non-traditional venues like museums, art galleries, restaurants, and parks
I flip-flopped on my budget (related to spending 75% of it on my venue...including food/alcohol/cake/favors) countless times. My FI was the one that had to wait out my crazy money-panic.
I would give your FI some time to think about it, while looking at what a lower budget venue would actually be (we found that the actual cost difference for what we would settle for was within $5k, which wasn't worth sacraficing our dream venue).
It is a huge amount of money that everyone has to be on board with.
@msfahrenheit: Yep! We've got that down. 20K is our budget, but we are putting in a bit of flexibility up to 5K for other expenses we cant think of.
Just so I make it clear, this place comes with all rentals. And we are going linen-less. The only expense we will have is alcohol (which we will purchase ourselves) and food/service/equipment for food. Everything else is included.
That 50% was an overstatement (was tired when I first wrote the post!). It's actually about 30% when you take out the ceremony useage fee. With the caterer we contacted, the total will be around 16K, after tax for food only.
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We are in the really early planning stages of our wedding planning. However, we are finding that we need to book a venue quick. Our first stop was at the most expensive option, and OF COURSE we fell in love with it. The other venues we have seen haven't been able to hold a candle to this place, but renting this venue would cost almost 1/2 of our budget.
Today, after spending last night convinced that we were going to book the place anyways, the FI comes back to say that he isn't comfortable about spending the money on this place or about spending the amount of money we had planned.
I'm not sure what to do now. I really love this place. It's fantastic and it comes with a ton of extras. It meets my requirement of making my wedding in the city a true destination for my traveling family (his are local). Should I hold out and see if he flip-flops again? I'm thinking of making him go see some more venues, but frankly... I'm venued out. I just want to make the decision before this place books up (it's already booked up until July 2012).