The rising cost of the Sunset Strip Music Festival, a decline in attendance at the Sunset Strip Farmers Market and problems collecting assessments from businesses who are members of the Sunset Strip Business Association have led the City of West Hollywood to propose a major re-examination of the festival and a new strategic direction for the Association.
A report presented to the City Council tonight even suggests that the annual music festival, which launched in 2007, might be put on hiatus this year while its problems are studied. Councilmember John D’Amico said the report is “a fairly strong indictment that maybe what we’re hoping for is not going to be realized.” The Council named Councilmembers John Heilman and John Duran to a subcommittee to work with the SSBA on the issues.
A major issue, according to the report, is that the festival has grown more rapidly than has the revenue it generates. The city has contributed $540,000 to cover expenses related to police and fire services and erection of street barricades and has waived $46,400 in fees. The Sunset Strip Business Association (SSBA), which manages the independently incorporated festival, has paid $128,000 to sponsor it and loaned it an additional $360,000, a debt that it has forgiven.
The report cites several problems faced by the music festival:
- It must compete for a time slot with more established festivals likely to attract the same audience. The festival has been staged at various times of the year — as early as June and as late as August . The summer is a problem because many bands travel to European music festivals and are unavailable to perform on the Strip. The festival has considered moving to late September or early October, which would please hotels which have lower occupancy rates then. At the same time, the City of West Hollywood is organizing its own major events — the annual Book Fair and the Halloween Carnaval — in the fall, which would make a fall music festival a burden on its staff.
- Delays in setting a date for the festival each year make it harder to promote and book talent.
- Closing Sunset Boulevard and setting up stages for band performances is very expensive. The report says the cumulative debt of the music festival over five years is $577,431.
The report says the SSBA and the city have agreed that a different management approach is needed. SSBA has decided to seek an established music festival production company to develop a plan to make the festival financially viable. The city report also recommends that SSBA consider broadening the scope of the festival to include art exhibits, fashion events and film screenings.
Another issue identified by the report is the failure of some businesses to pay the taxes assessed on them to support the SSBA. A business improvement district is financed by taxes levied by the city on its businesses, with the revenue from those taxes used by the BID to promote its members. The budget of the SSBA, which was established in 2001, has grown from $591,000 a year to more than $800,000 a year, with support from funding from sponsors of events such as the music festival as well as the BID tax.
The report says that the city was only collecting 80 percent of the assessed taxes until late last year, when it began notifying businesses that they were delinquent and giving them 30 days to pay. That effort has boosted collections to a four-year average of 92 percent. Now SSBA businesses, once $611,850 in arrears, are only $326,625 behind in payments. Businesses that don’t respond to city collection efforts face a legal claim or having their debt turned over to a collection agency.
Additionally, the Sunset Strip Farmers Market, which launched in 2012, saw a decline in average attendance from 600 people per week that year to 500 last year. The market is staged on Thursdays from May through October. A survey by the SSBA found that 90 percent of attendees live in the 90069 zip code area and more than a third attend the market two or more times a month. Those surveyed said they would like more vendors of fresh produce at affordable prices, more vendors of prepared foods and more options for parking. Revenue generated by the market comes from rental of booths by food vendors, beverage sales and sales of meals with partnering restaurants. The market’s losses, $249,977 in 2012, fell to $55,989 in 2013. The city contributed $50,000 last year to offset costs.