Guest Column: RAVE’s contract demand could be death knell for On the Waterfront
By Bruce Hammond
The Feb. 14 edition of the Rockford Register Star contained a story titled “RAVE seeks contract with Waterfront for park use.” I assume reporter Jeff Kolkey gave, for the most part, an accurate representation of the contents of the RAVE (Rockford Area Venues and Entertainment Authority) letter to the festival. However, a little elaboration and a little context are certainly in order.
The comments by Mike Dunn of RAVE and Gordon Kaye of SMG (SMG is a Pennsylvania-based company that serves as venue manager of the BMO Harris Bank Center) to the effect that their letter to On the Waterfront (OTW) was intended as a starting point for negotiations are clearly disingenuous, considering RAVE’s timing. A sincere effort to open a dialogue over OTW’s use of Davis Park would have begun last year — not last week.
The festival is six months away, their budgets have been approved, sponsorship negotiations are ongoing and tickets are on sale. RAVE/SMG thinks this is a good time to begin talking? I think it is more likely that this is just some judicious back-pedaling after their ham-handed efforts to cripple or end OTW were revealed prematurely. It’s not a very closely-kept secret that Dunn wants to run a Labor Day weekend event.
Before proceeding any further, a little history lesson might be in order to help clarify the unconscionable nature of RAVE’s demands.
Davis Park has been in use for about 20 years. Waterfront was the first major user of the facility. I don’t remember the exact year, but two of the headliners in Davis that year were Blood, Sweat and Tears and Steppenwolf.
OTW contributed $10,000 per year to the park for the first four years it used the facility. Although these contributions ended (I’ve always suspected this was at least partly the result of the park board’s unwillingness to spend money on improvements that would facilitate live music production), the festival continued to provide for park improvements.
Over the years, many park users — including RAVE — have benefited from OTW donating their production equipment. This includes electrical distribution, cable ramps, crowd-control cattle gates, fencing and a 40-foot by 30-foot stage roof.
In exchange, OTW — with no apparent formal arrangement — has always used the park at no charge and has not been obligated to use the arena’s personnel, ticketing, sponsors, catering or equipment. This has been true for the entire 20 years of the park’s existence, through several arena regime changes. In practice, however, the festival had a very collaborative relationship with the MetroCentre prior to 2002, and regularly used or hired Metro services, staff and equipment. RAVE now seeks to overturn every facet of this “understanding” in a week.
On the Waterfront has run an international award-winning festival for 28 years. In addition, OTW has produced events like Stars and Guitars, which brought in such acts as Keith Urban (twice), Sara Evans and Deep Purple (don’t snigger, it was a fantastic show); Groove Walk (a great night to be downtown); and managed the first two, highly successful years of the Rockford City Market.
Over those years, OTW has written checks for more than $10 million to local not-for-profits for their assistance in presenting the festival. This does not include money raised by churches and others who charge for parking in their lots during the festival. Nor does it include donations made by OTW to the Rockford Area Music Industry (RAMI) Awards’ Gary S. Wilmer Memorial Scholarship Fund, held by the Community Foundation of Northern Illinois. Waterfront paid staff and steering committee volunteers have contributed time and material to other local events, including AirFest, the RAMI Awards, First Night, Taste of Rockford, Rock the Red, Blues Fest, Rockford Fourth of July, etc.
Recent history has also included a lot of ink and talking heads expounding on how much OTW costs the city in terms of tax dollars directed to city departments for expenses related to the festival (Waterfront receives no direct payments from the city). The highest figure I have seen that is even vaguely credible would be from several years ago when a number in the $350,000 range was bandied about. This was when the festival was still on both sides of the river and showing total daily admissions that would put the city’s cost in the $1 per attendee range.
To put that number in perspective and to consider a part of the equation that the city never does, I want to do a few rough calculations based on the last time my brother, his wife and son came up from Springfield primarily to see Cheap Trick and one of the other Great Lawn headliners. For three nights at a Marriott, five meals at local eateries, $90 in OTW tickets and a tank of gas for the drive home, the total in taxes paid to local government would amount to at least $12, or $2 per person per day of festival attendance. (That’s 2 percent hotel/motel tax, 1 percent city food and beverage sales tax, 1 percent county public safety sales tax, 1 percent city highway sales tax and the 1.25 percent that is the municipality’s cut of the 6.25 percent Illinois Retailer Occupation tax.)
One could say that’s on the high side. Locals obviously don’t eat out that much and aren’t crashing at hotels. But then, festival entertainers and techs staying in hotels, paying for meals and filling their cars/trucks/buses with fuel aren’t usually counted in the festival attendance figures. A single dinner and a couple of drinks at a moderately-priced restaurant will send over a dollar to local governments. I’ll err on the conservative side and put the figure for the city/county cut at $1.25 per person.
In other words, even prior to 2009, On the Waterfront was never a net drain on city finances and, for the past two years, while OTW was losing about $115,000, local governments were beneficiaries of a small windfall. But, because of the way city employees — particularly first responders — are paid for special event work, the festival probably negatively impacts the Community Redevelopment Fund. Therein lies the problem. That fund is stretched pretty thin because it not only pays the $1 million per year RAVE operating subsidy, but also pays off the bonds that were issued to cover much of the $23 million building rehab and hockey franchise purchase.
OK, enough background, let’s get to the ultimatum delivered to On the Waterfront as set forth in the Rockford Register Star article.
The first item is a $6,000 fee for renting Davis Park. I have to assume this is for the four days of the festival plus sufficient time for setting up and striking the event. In the past, Waterfront has had the park from the Monday before Labor Day until the Wednesday after Labor Day. Anything less could cause some logistical and manpower issues. But assuming there is ample time allowed, $6,000, while unprecedented, is probably not a deal-breaker — for 2013.
Of course, you don’t get much for six grand. You get an old, leaky building that has an enclosed first floor and an essentially al fresco second floor, enough bathrooms to accommodate Waterfront’s Great Lawn reserved seating, inadequate space for dressing rooms and green rooms, no proper catering area, no air conditioning and no Internet access (most tours expect this). The park itself has ample electrical hook-ups but virtually no electrical distribution, a few tents, some picnic tables, no concession areas, no trash cans or bins, inadequate access for tractor-trailer rigs and buses, and very little usable parking.
This helps explain the long set-up/tear-down times. Waterfront must bring in stages, roofs, sound, lights, scaffold for follow spots and video projection, crowd barricades, fencing, tents, tables, chairs, electrical distribution, port-o-lets, raceways for cables and hoses, high-speed Internet, etc.
The next item is ticketing. The article states that Waterfront ticketing would have to go through RAVE with OTW receiving 25 percent. I assume this means 25 percent of fees, not 25 percent of the total ticket price, which would be outrageous by anyone’s standards. For the past two years — because of pre-RAVE MetroCentre shenanigans and better pricing for their ticket services from Coronado Performing Arts Center — festival tickets have gone through the Coronado box office. Since both the Coronado and the BMO Harris Bank Center box offices will probably be under RAVE control by summer, this only becomes an issue for this year if OTW has already contracted its ticketing or, down the road, if RAVE’s prices are not competitive.
The last two RAVE demands listed in the Rockford Register Star story are concessions and sponsorship. As they are stated in the article, either one of these stipulations likely sounds the death knell for OTW. Admission and reserved seating ticket sales do not come close to covering the cost of producing On the Waterfront each year, and that difference is made up through concession sales and sponsorships. It will be impossible for the festival to acquiesce to any significant changes from the status quo.
RAVE/SMG cites a pre-existing contract with Center Plate, but neglects to mention that OTW has been running its concessions starting well before the current RAVE/Center Plate contract. This should be enough precedent to allow OTW to continue to be exempt from this requirement.
Handing concession sales to Center Plate would seriously impact Waterfront’s bottom line. It would also eliminate a major fund-raising source for local not-for-profit groups, curtail a marketing and money making opportunity for some local businesses, and sacrifice some of the festival’s diversity.
The RAVE contract would also virtually eliminate Waterfront’s ability to attract major sponsors for Davis Park concerts and indicates that RAVE believes their business model for running the arena should also apply in their efforts to cash in on the festival.
La Monica Beverages and Pepsi have been valuable OTW sponsors well before RAVE/SMG decided to get into selling seasonal sponsorships for Davis. Waterfront would lose these sponsorships as well as any existing or potential sponsors whose inclusion would violate any RAVE exclusivity rights. Since OTW probably accounted for half of the people who entered Davis Park in 2011, maybe RAVE should be asked to fork over 50 percent of the money they collect to leave their sponsors’ artwork in place for the festival.
The sponsorship issue also presents one other negative for OTW. In 2011, RAVE had their sponsor banners encircling the second floor of the Lorden Building in Davis Park. If they are allowed to leave them there for the festival, Waterfront would lose another valuable source of income, because the second floor, which houses the Waterfront Back Stage Club, would become unusable for that purpose.
I have no way of knowing what the actual cost to On the Waterfront would be if they were to try to accommodate all of RAVE’s contractual demands. If we consider additional costs to the festival and lost revenue opportunities, I think it’s reasonably accurate to posit a figure expressed in hundreds of thousands of dollars. Considering that Waterfront is still trying to rebound from the adverse effects of the city’s Open Carry Ordinance, the nationwide recession since 2008 and Rockford’s elimination of all city assistance to the festival, this is certainly out of the question.
Clearly, a dialogue involving RAVE and OTW needs to begin … for the 2013 season. But this will have to involve more than just Waterfront being obligated to accede to RAVE’s wishes. It will also require the mayor and city council to accept the fact that the festival is good for Rockford, both culturally and financially, and be willing to contribute monetarily to the festival’s success. Otherwise, everybody — including RAVE — loses.
I have lived most of my life in Rockford. I have been involved in the entertainment business for nearly 50 years. I have been a Waterfront patron for 27 years, a volunteer for 24 and a production vendor for 22. However, I do not speak for the On the Waterfront. My comments here are personal opinions based on publicly-available information and, perhaps, a little common sense.
Bruce Hammond is a Rockford resident.
From the Feb. 22-28, 2012, issue
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