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The Mechanics
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Budget Tue Aug 09 2011

What Might Festivals Mean For the City's Budget?

The City is currently faced with a $635.7 million deficit for the upcoming budget year. Since the City is cutting programs that seem as if they would be necessary in order to save money, what could possibly be cut, or reduced in funding, to save the budget?

A possible answer might be Taste of Chicago.

Taste of Chicago is, for those unfamiliar, a massive food festival that occurs for 10 days in Grant Park. In order to save money, in the past five years the Chicago Country Music Festival has been eliminated and merged with the festival, along with several other music festivals. This was the first year that the Chicago Park District ran the festival, as opposed to the Department of Special Events, which merged with the Department of Cultural Affairs. Prior to leaving office, Daley did attempt to privatize Taste of Chicago, but only found one bidder, who wanted to charge admission to the festival.

Here's the important thing: Taste of Chicago is free for admission, which is great if you're there for the music. If you want to eat the food, you have to buy tickets and use those tickets to pay for the food.

This past year's Taste of Chicago saw a 10 percent decline in attendance. The City possibly sees Taste as their pride and joy. After all, the people who do go there for the food bring in revenue to the city, as does anyone who travels to Chicago for Taste of Chicago and uses the CTA, parks in the public garages or stays in a hotel. But then again, Lollapalooza, the gargantuan music festival that just finished, also brings in revenue thanks to people riding the CTA to get to Grant Park and staying in hotels because they've come from out of town. (Ever tried getting a hotel room in the downtown area during Lollapalooza? It's almost impossible.) Lollapalooza is run by a company, charges for admission and people still have to pay for food. (It also gets a tax break from the city.)

It is possible for major festivals in cities to charge admission and still be accessible to the public. Milwaukee's main festival, Summerfest, was the brainchild of then Mayor Henry W. Maier and has always been operated by a nonprofit, the Milwaukee World Festival, Inc.. The festival was, as Mayor Maier once put it, "for those who don't have summer homes and...don't belong to golf clubs." The first Summerfest, as Maier points out in his autobiography The Mayor Who Made Milwaukee Famous*, "did not net as much money as officials would have liked (what ever does?), Howard Meister, president of the World Festivals Board, pointed out this first year was a pilot project." The second year of Summerfest in 1969 ran up $137,000 in debt, and in response, events had to have full sponsorship, running audits were established and "Basic business procedures that had been overlooked would be established," according to Maier's book. The festival also sought out a private loan, which it paid off through festival profits.

Fast forward to the present. Summerfest's admission this year was $15 a day on the weekends and after 4pm on weekdays, and they also had three-day tickets for $33. Preliminary numbers showed that this year's festival had a 2.6 percent increase in attendance and an 8 percent increase in revenue from ticket sales and food and beverage commissions. Even in its early years, the festival gained steam and has become the cornerstone of the Milwaukee summer. However, while there was an increase in attendance, there was a decrease in riders on the shuttles run by the Milwaukee County Transit System and the system is considering cutting them next year.

So Summerfest has been a success for that city even though it is not run by the city and charges admission. The problem is that Summerfest has always been run by Milwaukee World Festival, while Taste of Chicago has always been run by the City of Chicago. Could it survive a transition to a new management organization? Or could it even survive suddenly shifting to people having to pay to attend the festival in addition to paying for food?

If the City would be wary of charging admission to Taste of Chicago, maybe it's time they either part with Taste or do something about the tax exemption that Lollapalooza is getting. The festivals in Chicago are currently costing them a bit of money the City desperately needs.

*Maier didn't want the title to be The Mayor Who Made Milwaukee Famous, but his editor went with the title, which comes from an article published by The Economist in 1988.

 
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