Summerfest Blows Off City Meeting
No festival official attends scheduled meeting. Partnership with city “broken”, Ald. Murphy says.
On Monday there was a joint scheduled meeting of the Harbor Commission’s Marketing and Finance & Personnel Committees and the sole agenda item was a “Discussion with Milwaukee World Festivals,” the organization that runs Summerfest.
Such meetings have gone on regularly over the years, since the Harbor Commission is Summerfest’s landlord and the main city body that has overseen the festival. But this time no one from Milwaukee World Festival showed up.
Which reportedly left commission members very unhappy.
“I thought it was very disrespectful and didn’t show any willingness to work with their landlord,” says Ald. Michael Murphy, who attended the meeting as a member of the Common Council.
Ron San Felippo, vice-president of the Harbor Commission, has served on that board for 19 years and before that served for 10 years on the Summerfest Board, and has been on both sides of discussions between the two groups. “We’ve always had good faith discussions,” he says, “unlike what happened Monday.”
San Felippo says he can’t ever recall Summerfest officials blowing off a meeting like this.
But she did not explain why festival officials did not attend the scheduled meeting.
The snub by Summerfest officials comes three months after Mayor Tom Barrett asked the festival to pay the full cost of services by the Milwaukee Police Department, which provide security for the festival. The estimated cost of that was $813,297 in 2019, but under Summerfest’s lease, Milwaukee World Festival will pay only $134,392, leaving a difference of $678,905.
City officials noted this was the fourth year in a row that taxpayers had been forced to pay for uncompensated costs of police services. They also noted that the Milwaukee Bucks and Milwaukee Brewers pay for the full cost of city police services they receive.
But Summerfest officials replied that the festival “was in compliance with the terms of its lease,” which required only the $134,392 payment to offset security costs.
But since the current lease was signed in 2009, Murphy notes, the cost of police services has “risen dramatically” because of the rising risk of mass shootings and other crowd incidents. “You see a higher level of law enforcement which obviously means higher costs.”
“There’s an unfairness here, and the unfairness has a very negative impact on the taxpayers in the City of Milwaukee,” Barrett said back in August.
Every city resident pays for this, “even if they can’t afford to go to Summerfest,” San Felippo notes.
But Summerfest officials replied that they pay $1.8 million in rent to the city and that “more than covered” police costs for Summerfest, and that they receive no subsidies from the city.
But Summerfest uses lakefront land not far from the Harbor House restaurant, which was paying $123,348 in annual rent (as of 2015) for about one acre of city land. At that rate, Summerfest would be paying $9.3 million for its 75 acres of city land.
As for city subsidies, Summerfest has recently paid off $25 million in revenue bonds from the Redevelopment Authority of the City of Milwaukee. Using the city’s authority means the bonds are exempt from federal taxes — saving the festival considerable money.
Summerfest was founded by the city and has benefited from many city subsidies. The full amount has never been calculated, but in the 1980s the city spent $42 million for improvements to the Summerfest area. The vast majority of its current infrastructure was paid for by either the city or by charitable donations from businesses, foundations and individuals in the community. Meanwhile the festival pays no state (sales and income) taxes nor local (property) taxes because it is a tax-exempt non-profit.
Yes they do, says Howard Sosoff, chairman of the World Festival board. “Milwaukee World Festival, Inc., is not a public-private entity,” he tells Urban Milwaukee. “It is a private corporation.”
San Felippo was stunned to hear Sosoff characterize it that way. “So basically they no longer want a partnership with the city or any of their services? I’m very surprised to hear that.”
“I would think they would want to see us as a partner with the city, not an antagonist. If that’s their position there’s going to be some very hard words when their lease comes up. They’re sitting on some of the most valuable land in the city. In the future they might have to pay the actual value of what they’re getting.”
The current lease does not expire until 2030.
San Felippo says he heard that some Summerfest board members were “were hurt when the discussion came up about uncompensated police services.” If so, he says, their response — that the city should take the money out of the rent payment — was worse. “It’s a little bit tone deaf,” he says.
The no-show at the meeting looks like a message from Summerfest’s leaders: they won’t even discuss the issue of paying more for police.
Which leaves Murphy questioning the future of the festival’s longtime partnership with the city. “I think it’s broken,” he says.
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More about the Summerfest File
- Murphy’s Law: Summerfest Pays No Net Rent - Bruce Murphy - Nov 26th, 2019
- Murphy’s Law: Should Summerfest Pay Higher Rent? - Bruce Murphy - Nov 14th, 2019
- Murphy’s Law: Summerfest CEO Awarded $2.33 Million - Bruce Murphy - Nov 8th, 2019
- Murphy’s Law: Summerfest Blows Off City Meeting - Bruce Murphy - Nov 7th, 2019
- City Hall: Milwaukee Losing As Summerfest Safety Costs Grow Quickly - Jeramey Jannene - Aug 8th, 2019