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Bonnaroo, county begin contract talks

Posted on Wednesday, August 30, 2017 at 9:47 am

By Elena Cawley, Staff Writer

Negotiations for the new contract between Coffee County and organizers of Bonnaroo Music and Arts Festival have begun.

The proposed agreement includes multiple events held at Great Stage Park and a $6 million infrastructure project.

Members of the Coffee County Budget and Finance committee discussed the proposal by Bonnaroo’s representatives during the meeting on Aug. 22. Sam Reed, representing Bonnaroo, attended the meeting to discuss the proposal and answer any questions.

 

Expiring contract

Traffic flows into the Bonnaroo Music and Arts Festival for the 2005 festival.

The previous contract between the two parties outlined the fees organizers paid to the county for events held at Great Stage Park, the 700-acre home to Bonnaroo. The agreement, first negotiated in 2006, ended June 30.

This contract only mentioned Bonnaroo as a possible event at the site and did not refer to possibilities for holding additional events or any fees that would be collected from other events.

With a $3 fee for every ticket sold and a $30,000 flat fee, the county receives a check for about $250,000 each year, according to the old contract. In the expired contract, funds went to the county’s general fund and county officials could utilize the funds for countywide projects.

According to the expired agreement, Bonnaroo would also reimburse the county within 60 days of the festival’s end for expenses related to services provided because of the event. Those additional costs include overtime pay for law enforcement, expenses for ambulance service and road maintenance, and repairs incurred as a direct result of damage caused by traffic from Bonnaroo.

 

Proposed contract

Festival organizers first shared the proposed contract with county officials about two months ago, with the hope of having it approved by members of the Coffee County Commission in September or November. The commission does not meet in October.

The proposal includes multiple events held at the Great Stage Park in addition to Bonnaroo. It also outlines fees to be collected from tickets sold and the way funds from the collected fees will be utilized.

It also includes information about a new committee, the Great Stage Park Tourism Advisory Council, which would make recommendations related to the funds.

Organizers hope the new agreement will be in place for a 10-year period.

 

The difference

The old contract only mentioned Bonnaroo as an event held at the site, while the proposal suggests multiple events. While the county received a $3 fee for each ticket sold for Bonnaroo under the former contract, ticket fees will be collected for all the additional events that will take place at the site.

However, instead of funds going to the general fund, the collected fees will go to a fund with the purpose of improving infrastructure related to the festival site.

The funds will be managed by the Great Stage Park Tourism Advisory Council. The members of the council will make recommendations regarding the fund, with the goal of supporting existing and future events at the park. Recommendations have to be approved by the full commission.

 

Discussion

With county officials seeming reluctant, at first, to readily accept the redirection of the collected ticket fees from the general fund to the fund only to be used for improving infrastructure of the event site, festival’s representatives have focused the discussions on the additional revenues events bring to the area.

Bonnaroo pays for all of the cost the county and Manchester incur as a result of the festival, including equipment, rentals, police, fire, medical and ambulance overtime.

Organizers also give over $400,000 annually to local charities and community groups through the Bonnaroo Works Fund and the local vendor program, totaling $7 million in the 16-year history of the festival.

Additionally, organizers pay all state and local taxes and permits, which brings the local economy more than $37 million in economic activity and at least $400,000 in sales taxes to the county’s general fund, according to organizers.

On Tuesday, Reed presented detailed information about the effect Bonnaroo has on local sales-tax collections.

Reed said Bonnaroo’s economic impact studies, completed in 2006 and 2013, only revealed part of the financial benefits to the area.

“The economic impact, as a bottom-line revenue for the county, was largely based on the economic activity that takes place on the site,” Reed said. “It’s all county land, with three big categories of transactions, which are food, alcohol and merchandise.”

Reed said there are usually more than 200 vendors at the festival each year.

“Looking at sales tax numbers for the county, you can see a large bump in June of every month,” Reed said. “You can see this number is significantly higher every year.”

For instance, in 2016, sales-tax collection in June was about $729,000, while the average sales-tax collections were about $200,000 a month.

“So Bonnaroo itself handles all the ticket sales,” Reed said. “We pay 9.75 percent to the state in June of every year right after the event, usually. So you are seeing a sales tax bump that is largely associated with the tickets sold, and you get 2.75 percent of every ticket sold.”

With Coffee County receiving 2.75 percent of every ticket sold through sales-tax collections, the county saw $635,000 in 2017, $438,000 in 2016, and $731,000 in 2015, according to Reed.

Additionally, the county benefits from the 2.75 percent of sales taxes associated with transactions on the festival grounds. For example, these fund collections were $445,000 in 2017, $312,000 in 2016, and $520,000 in 2015.

“So we spent a lot of time before talking about the $3 tax and how it should be used,” Reed said. “But we need to take the total picture of what Bonnaroo does for the community.”

Additionally, there is sales tax, and Bonnaroo distributes about $400,000 a year to local area charities, said Reed.

“We also have the vending program, with local vendors having a chance to sell products, which brings another $250,000 across the community,” Reed said.

It’s necessary to reinvest in the long-term sustainability of the site to be able to hold multiple events.

“In 2017, the check (from the $3 ticket fees) was about $240,000,” Reed said. “Let’s take the special fee, which will help us grow, to ensure success for long term. That means more money for you. If we do more events, you will get more sales taxes.”

Members of budget and finance agreed that a flourishing festival events area with multiple events held at the site would translate into higher income for the county.

 

Infrastructure improvements

More events held at the site would require an improved infrastructure, and the first project to be completed is widening of Bushy Branch Road.

Festival organizers say they are in discussions with the Tennessee Department of Transportation (TDOT) to widen a 2.9-mile section of Bushy Branch Road in Manchester. The majority of festival attendees use Bushy Branch Road off I-24 exit 111 to enter the festival site.

According to festival organizers, the project would cost about $6 million and TDOT will possibly commit about $2 million for the project. This project will likely be completed in 2019, according to festival organizers.

Festival organizers are planning to widen Bushy Branch Road from Ragsdale Road to Shed Road. The road would be expanded from two to three lanes, and there will also be a pedestrian lane to make it safer for people who walk to the festival’s entrance.

Widening of this road will significantly relieve traffic at the exit and improve safety, according to organizers.

An example of possible future projects is improving Campground Road, the road leading to the festival site when coming off I-24 Exit 114.

Elena Cawley may be reached by email at tngenrep@lcs.net.