This newspaper article points out the reason that some city's news media are hesitant, or flat out refuse, to run stories about WTS Conventions receiving grants of tax dollars from the city or the CVB, or about city-owned or state-owned venues giving the WTS deep discounts off the regular rental rate.
Part of the problem is that local CVBs far overestimate the $$$ impact of WTS Conventions, which makes the local politicians eager to give the WTS as much as $16,000 a year.
Probably 75% of WTS Conventions receive rental rates which range from free to 75% of the regular rate.
As shown in the posts starting this thread, in some cities the WTS has even conspired with the local CVB or city tourism dept to illegally obtain $$$ from the local room tax fund, which state legislation says is to be used to "promote tourism", (not directly subsidize individual convention's expenses).
These scenarios will continue until the exact scenario is investigated in each city, with disclosure then made to local taxpayer groups who aren't favorable to, what is in effect, donation of tax dollars to the WTS.
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Friday January 04 02:10 AM EST
TCC losing out on concert revenue
By Joe Burchell,
ARIZONA DAILY STAR
Competition is pushing the Tucson Convention Center, once the only place in town to see big-name performers ranging from Elvis to Elton John to the Rolling Stones, into the background of the concert picture here.
The TCC's fall from concert popularity comes as the City Council is contemplating cutting off the center's yearly $3.1 million taxpayer subsidy, requiring it to bring in enough money to cover its operating costs of $7 million.
With the city facing potential budget deficits during the next several years, Vice Mayor Carol West said at a recent City Council budget meeting that making the TCC self-supporting, so the $3.1 million taxpayer subsidy can be used for other needs, should be a priority.
Touring concerts are among the most profitable users of the 31-year-old center, helping to offset the losses resulting from the council-mandated discounts given to conventions and local nonprofit groups.
Six concerts were staged in the 9,700-seat TCC Arena last year, down from nine in 2000.
Last year's events also tended to be smaller draws. The largest crowd was 7,558 at an Ozzy Osbourne concert in November, compared with more than 8,500 for both Elton John and Kiss in 2000.
Meanwhile, the county's Tucson Electric Park got into the concert business last year, drawing more than 10,000 people to two of its four events; two casinos opened concert venues with acts that once might have played the TCC; and Old Tucson continued to upgrade its summer concert series.
Competition for the concert dollar only figures to get stiffer this year because the casino concert facilities that opened in the fall will be in operation for the full year and TEP is planning to expand its concert offerings.
After clearing a $54,000 profit on four concerts last year, TEP hopes to hold six shows this year.
"We are really trying to push public service and public safety and cooperation to get our foot in the door with the promoters," said Kate O'Rielly, the county's director of community services.
The Pima County Fairgrounds, a nonplayer in the concert arena the last couple of years, has hired a new executive director and marketing director who hope to start staging concerts there.
For the TCC to break even, Director Hymie Gonzales said the city needs to increase the rates for conventions and nonprofit groups, on which it now breaks even or loses money when those events are held. Or the city could bring in more commercial events like concerts and family shows, which could require displacing some of those low-revenue users, he said.
For example, every summer the Jehovah's Witness convention occupies much of the facility for five weeks. The group pays discounted rent, gets free parking, allows no concession sales, and generates no ticket fees, which means the TCC loses money on the event.
But pushing the event out of the convention center would set off protests by hotel and restaurant owners who count on the 15,000 attendees to pump up summer business, he said.
Gonzales said he's trying to establish better relationships with concert promoters and developing plans to co-promote some events as first steps toward re-establishing the TCC's position as a concert venue.
Danny Zelesko, president of Evening Star Productions, confirmed TCC representatives are reaching out to promoters more.
"They're very anxious to get more shows in there, and they are anxious to make deals to get the right shows." he said. "In the past, there were people down there who didn't seem to care if they had shows in there or not."
Zelesko said THE TCC is a victim of changes in the concert business and of increased competition. The big-name groups are playing fewer dates, charging more and ignoring smaller markets like Tucson.
Gonzales said the cost of doing fewer and smaller shows is significant. Financial breakdowns of each of the major concerts were not available. The Convention Center did bring in $3.9 million last year for all its events, including conventions, trade shows and concerts.
Ozzy Osbourne brought the TCC nearly $70,000 before expenses, and it wasn't nearly as successful as the bigger shows from past years, he said. The next-biggest show last year was rapper Snoop Dogg and Friends, which drew just over 5,600 people.
Concert promoter Ryan Dahlstrom of C&R Entertainment said TCC rental rates are one of the reasons business is going elsewhere.
One night in the arena is $2,530 or 10 percent of the ticket sales, whichever is more. Plus the center gets a 5 percent box office fee, a $1 ticket surcharge, 35 percent of merchandise sales and all concession revenue.
Dahlstrom has mostly promoted shows at Old Tucson and Desert Diamond Casino, which he said is upgrading its lighting and sound systems to be more attractive to concerts.
Gonzales said it costs more to rent the TCC than most other venues because it costs more to heat, cool, light and maintain an indoor facility than an outdoor one.
He said he can't compete on rent with places like Old Tucson, the New West nightclub in Marana and the casinos because they are using concerts to attract customers to their primary business and absorbing much of the shows' costs.
Rob Horgan, director of marketing and public relations at Old Tucson, confirmed that's what the park is doing.
The park, which has gotten increasingly into the concert business since reopening in 1997, needed a way to attract Southern Arizona residents in the summer so it included free admission to eight concerts as part of its $45 annual pass, Horgan said.
Dahlstrom also promoted five other concerts at Old Tucson, for a total of 13 shows in 2001.
With just 4,000 seats, Horgan said he doesn't believe Old Tucson is competing with TCC. But of the six arena concerts at the TCC, only two attracted more than 4,000 customers.
* Contact Joe Burchell at 573-4244 or at [email protected]
