OCEAN CITY — The debate over providing city funding subsidies to pre-existing or recurring private sector special events resurfaced this week at the Tourism Commission level.
Last month, the Mayor and Council had before them a pair of requests from the Tourism Advisory Board (TAB) to provide some funding for a new private sector special event and a pre-existing one. In simplest terms, TAB was established years ago to carefully vet proposed private sector special events and provide funding support in the form of seed money for them with approval from the Mayor and Council.
The idea is with a little funding support from the city, the special events will grow each year, thereby attracting more visitors to Ocean City in the shoulder seasons and putting more heads in hotel beds and more guests in restaurant seats. Each year, the city grants $300,000 to TAB to provide seed money after careful review to various special events that can and do provide a mutual benefit and a positive return on investment.
As its name suggests, TAB is an advisory board and does not make decisions on allocating funding to various special events, but merely makes recommendations to the Mayor and Council, which often follows the TAB recommendations but, in some cases, approves or denies a request after their own review of a proposed special event.
The question is, at what point should the city funding stop and the private events stand on their own financially. The debate arose last month when TAB requested renewed funding for the “Love on Tap” craft beer festival slated for late February.
The event has expanded each year to the point it has outgrown its private sector venue and needs to be moved to the convention center this year to be able to continue to accommodate visitors, participants and vendors. During a work session last month, TAB officials requested additional funding for the special event to accommodate the move to the convention center, and all agreed the move was a positive one that was mutually beneficial to the event producer and the town.
However, Councilman John Gehrig, while saying he supported the craft beer festival and was happy for its growing pains, questioned at what point should the city stop subsidizing successful private events. He said continuing to provide funding for successful private special events appeared to break from the original intent of providing seed money for new events. On Monday, Gehrig renewed the debate at the tourism commission level.
“The city is investing in this craft beer event and it’s growing to the point it needs to be moved to the convention center,” he said. “That’s a great thing and I’m happy for them and there’s mutual benefit for the city. I just think we need a policy for the TAB that spells out funding for pre-existing events.”
Commission member Todd Ferrante agreed there should be some guidelines, but pointed out some events, such as the craft beer festival or even Bike Week, for example, are unique in that they continue to grow and should probably be reviewed on a case-by-case basis.
“I think we have to look at the policy, but this event has an opportunity to grow and we want it to grow,” he said. “Maybe we could put some caveats on it. If they continue to grow, at some point they could be obligated to pay back money to TAB when they become successful.”
While Gehrig was referencing the TAB policy in general, he said the recent approval for funding to facilitate the craft beer festival’s move to the convention center seemed to be government overreach into what should maybe be a private enterprise.
“We basically got in the way of private enterprise,” he said. “Those are the kinds of unintended consequences. I don’t think it can be arbitrary because then you can have personal preference coming into play. That’s why we need a policy.”
Commission member Michael James said it is not unusual for events to outgrow their private sector venues, facilitating the need to move to larger publicly-owned venues.
“It happens all the time in the convention business,” he said. “We had events that outgrew our facilities at the Carousel and they moved to the convention center.”
Pursel said if moving private sector event to the convention center meant keeping them in Ocean City, especially during the offseason, then the town should facilitate that even if it means bending the rules.
“We want to keep them in Ocean City,” she said. “If they outgrow the private facility and the only way to keep them in town is a move to the convention center, then that’s a good thing.”
Ferrante pointed to OC BikeFest, underway this week, as another example of TAB funding being used beyond the initial seed money phase.
“If we limited it just to seed money, we would have never kept providing funds to support Bike Week,” he said. “We’ve funded that for more than three years and look at what that has become.”
Gehrig reiterated his support of the craft beer festival and Bike Week and most of the special events and that the town should do what it can to nurture them and allow them to grow. He just has concerns about the lack of an apparent specific policy on how TAB funding should be allocated to them and for how long.
“We’re talking about bringing in even more events,” he said. “I just think we might be opening Pandora’s Box. I think we need to have at least some policy in place or else every event is going to come in requesting funding.”
Convention Center Director Larry Noccolino said most of the major sports tournaments and events the town’s facility hosts shop around for the communities willing to provide seed money and in-kind support and services.
“I’ll give you two examples — the basketball tournament and the wrestling tournament,” he said. “The basketball tournament already happened and it was a big success. The wrestling tournament is about to happen. They didn’t want to come here because they had offers from other communities that included seed money, but it worked out that they decided to come here.”
However, Noccolino agreed with Gehrig about carefully defining the policy on how seed money is allocated and for how long.
“We’re getting calls every day,” he said. “This could get away from us if we don’t stay on top of it.”
Another issue raised on Monday was just how TAB picks and chooses the events it recommends to the Mayor and Council. Gehrig questioned if TAB can possibility kill a proposed event before the Mayor and Council ever get to weigh in. He used the upcoming Spartan obstacle course race as an example.
“As a courtesy, the Spartan event went to TAB first, but TAB doesn’t have any veto power,” he said. “But if TAB said no, the Mayor and Council might have never heard about it.”
However, Ferrante said TAB doesn’t really have any authority other than making recommendations.
“TAB has always been a recommending body,” he said. “It can’t spend the city’s money and it never has.”