Bruce Murphy
Murphy’s Law

Festa Italiana Actually Canceled Due To Financial Issues

Italian Community Center had $1 million negative fund balance even before the pandemic.

By - Apr 19th, 2022 03:57 pm
2017 Festa Italiana. Photo by Jack Fennimore.

2017 Festa Italiana. Photo by Jack Fennimore.

Two weeks ago the media reported that Festa Italiana would be canceled for the third straight year due to the pandemic. “Due to the circumstances associated with COVID-19 and its impact on the organization during the past few years, the Directors deemed it the best course of action,” said the Festa Italiana organizers in a news release.

In fact, the festival is being canceled due to financial problems suffered by both the festival and its parent organization which date back to 2019, before the pandemic. The 2019 federal tax form for the Italian Community Center (ICC) which runs Festa Italiana, shows it had revenues of $1.15 million and expenses of $1.66 million, leaving a net deficit of more than half a million dollars for the year.

All told the ICC had a negative fund balance of $1.16 million at the end of 2019.

The ICC owns its cultural center in the Historic Third Ward, at 631 E. Chicago St., along with a large parking lot, but by the end of 2019 it estimated the land and buildings were worth $1.92 million while it owed secured mortgages and notes payable totaling $2.969 million.

One thing contributing to the net deficit was a bad year for Festa Italiana in 2019. The festival lost $231,419 that year, the tax form shows.

“People don’t realize, it’s extremely expensive to put on a festival like this,” said Rose Anne Fritchie, President of the Italian Community Center, in an interview with Urban Milwaukee. “One day of bad weather can break the festival.”

And in 2019, two of the three days for the festival had poor weather: one day of rain and another with a high temperature near 100 degrees badly hurt attendance, Fritche lamented.

Since then, she noted, the organization has had “two rough years” due to the pandemic. “Our two revenue streams are the parking lot, which caters to downtown businesses, and you know where that’s been over the last two years, and our agreement with Bartolotta for food and banquets, and that too has been way down. So for the last two years we have had very little revenue.”

Given the organization’s situation, “it would have been fiscally irresponsible to hold the festival this year,” she said. “It finally came down to a decision our board of directors felt it had to take. It was a very hard decision for the board. Truly hard.”

Other ethnic festivals, including Irish Fest, German Fest, PolishFest and Mexican Fiesta, have announced they will hold a festival this summer. Most have not held a festival since 2019, but Irish Fest held its event in 2021, though it could not feature entertainers from Ireland.

“This year we will feature entertainers from overseas, which we couldn’t do last year,” said Mike Mitchell, executive director of CelticMKE, the parent organization of Irish Fest.

The ethnic festivals were able to get pandemic funding through the federal Shuttered Venues program, which helped sustain them through the last two years. But that has not been enough to get the Italian Community Center back on its feet.

“We have taken steps in the last three years to shore up our financial situation,” Fritche says. “That includes some financial decisions that will make us a a viable entity for years to come that I’m not at liberty to discuss.”

When asked, Fritche said the organization is not in danger of losing the building and parking lot it owns.

One expense for the ethnic festivals is rent charged by Milwaukee World Festival, Inc. the nonprofit which leases and oversees the city land used by Summerfest. MWF has regularly collected more in rent from the festivals then it paid to lease the land and receive police protection, as Urban Milwaukee reported. In 2018 the combined rental and Milwaukee Police Department security fee Summerfest paid was $1,593,677, while it earned $1,875,000 in rental income, a surplus of $281,000. MWF, however, says it also has expenses for private security guards it hires.

The 2019 federal tax form for the Italian Community Center shows the Festa Italiana had rental expenses of $276,774, which would have accounted for the festival’s entire deficit of $231,419 that year.

MWF has never disclosed what it charges the ethnic festivals for renting the grounds. However, when asked whether Festa was charged $276,744, Julie Dieckelman, who handles media relations for MWF and Summerfest, said this was not accurate and the correct figure was $67,305.

Fritche said she did not know the amount charged for rent, but she did know “the rent has gone up over the years.”

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One thought on “Murphy’s Law: Festa Italiana Actually Canceled Due To Financial Issues”

  1. NieWiederKrieg says:

    Germanfest is always held on the hottest weekend of the year… The sun is scorching hot… The air is hotter than an oven… and the heat radiating off the black asphalt bakes your skin like a piece crispy chicken. The only way to survive is to stand as close as possible to the cool Lake Michigan shoreline.

    They should plant 300-400 chestnut, oak, maple, walnut, hickory, and elm trees on the Summerfest grounds for shade and aesthetics.

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