OCEAN CITY — Resort officials last week approved the renewal of two major special events despite concerns about inflated figures in the new Return on Investment policy.
Last fall, in the interest of gaining a better understanding of just how much special events mean to the town in terms of the costs associated in supporting them versus the potential revenue gained, the Mayor and Council approved a Return on Investment (ROI) policy. The ROI policy is now attached to special event permit request forms and provides recommendations to the Mayor and Council on whether to approve the events, and whether to provide financial assistance or relief from some of the fees associated with the approvals.
Special events large and small are required to fill out an expanded approval request form and provide detailed information about the projected number of attendees, how many are expected to stay overnight, what support they would need from the town, both in-kind and financial, and if they are a for-profit or non-profit organization among other things.
The information supplied is then submitted to the various departments affected by the special events, and the department heads provide recommendations. In short, each special event would be analyzed to determine the town’s cost of supporting the event and the event’s potential impact on tax revenue and the business community.
On Monday, the Mayor and Council had on their agenda a slew of special events requests listed on the consent agenda, which is typically approved as a foregone conclusion. However, while the council ultimately approved all of the items in the consent agenda, it did single out a couple of major special events including Sandfest in late August and Bike Fest in mid-September over apparent anomalies in the ROI forms.
Councilman Dennis Dare pointed out perceived flaws in the ROI process for the two special events that appeared to inflate projections for attendees and participants and anticipated revenue and tax receipts.
For example, Dare pointed out Sandfest’s projected number of attendees has to be over-inflated.
“It says 200,000 spectators,” he said. “One could make the argument that 200,000 people walked past it, but you’d be hard pressed to suggest 200,000 came to Ocean City, rented rooms and went down there to see that.”
The ROI form for Sandfest projects $4.5 million in total spending associated with the event along with over $48,000 in tax revenue.
“That’s misleading,” Dare said. “I don’t think it’s intentionally misleading, but it’s misleading. It’s just not a destination event.”
Special Events Coordinator Lisa Mitchell said there were bugs to be worked out with some of the ROI program’s components, but said it provided at least a snapshot of the economic impact of the events.
“This is a new program and there are going to be a few bumps,” she said.
Dare said there were similar anomalies in the ROI forms for the Bike Fest event slated for mid-September.
“The short story is ditto,” he said. “It’s the same thing. It says 150,000 participants and 300,000 room nights. That’s three nights of 100,000. There are only 9,700 hotel rooms in Ocean City, so we know that can’t be true.”
Dare acknowledged there was worth in the ROI but continued to voice concern about accuracy.
“We probably need to tweak it, but we also need to have the promoters be more realistic in their projections,” he said. “It’s an established event and we know it has been successful. We just know it doesn’t raise $2 million in a weekend, otherwise we’d be doing it every weekend.”