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JULY 22 - JULY 30, 2014

Fuzzy Math Behind Dyster's Argument to Throw Public Money at Blues Concert

By Frank Parlato

July 22, 2014

The Niagara Falls City Council on Monday night turned a deaf ear to the $40,000 request from Mayor Paul Dyster for the Niagara Falls Blues Festival in September, meaning that it is likely that no money will flow from the city to subsidize the event.

The $40,000 in funding that Dyster wanted to use to throw at the Blues Festival was to come from hotel bed taxes. The city applies a five percent tax on hotel room bills.

The Blues Festival received city funding every year from its inception in 2008 through 2012. City lawmakers reduced funding for the music festival in 2012 to $2,500 in light of mounting cash flow questions.

The city did not contribute at all to the festival last year.

Dyster however wanted a $40,000 donation this year and the council was prepared to approve a reduction to $10,000.

Apparently Dyster wanted to throw the whole $40,000 or nothing at all.

The  Blues Festival brings in "thousands of visitors who book hotel rooms and spend money in the city’s restaurants and bars," Dyster told the Niagara Gazette, but did not provide proof of exact numbers, most likely because there are none.

For a mayor who loves to spend money on studies, it is odd he has yet to produce one that proves publicly subsidized concerts bring back even a fraction of what they cost taxpayers.

Last year, the City Council ended a multi-year public money handout to the Hard Rock Cafe. All told $707,000 was given to the billion dollar chain. The Hard Rock never produced a report on how it spent the money claiming that what it spent and earns is a proprietary secret.

Many acts were booked that were paid substantially less than what the city paid Hard Rock, leading to speculation that Hard Rock was making a profit off taxpayers; even if the concerts bombed--as many did. They made their money upfront.

Hard Rock also had exclusive rights to beer and food concessions, limiting the spinoff benefit to other businesses and vendors in the area. No proof was ever provided that any Hard Rock concert brought in overnight visitors. In fact, since all the bands were has-been, legacy bands that long ago were reduced to performing at free events, it is unlikely that any concert produced more than a handful of hotel room bookings.

The council was asked earlier this year to give the Hard Rock $40,000 to supply funds for a single concert with the Hard Rock. Andrew Touma, Glenn Choolokian and Robert Anderson voted against it, killing the giveaway.

Dyster said that other communities have been promoting free shows

“As I look around, I see concert series going on in just about every other place in the region,” Dyster told the Gazette.

What Dyster failed to mention is that elsewhere concert promoters pay for the acts and realize profits from beer sales and sponsorships. The taxpayers do not need to fund concerts since free concerts can be profitable through hard work, resourcefulness, and. quite frankly, beer sales.

Niagara Falls, however, which has casino money to burn, is the only known community to actually pay public money for concerts.

Locally, Rick Crogan was able to put on one of the largest events to date on Old Falls St., the Niagara Music Festival, without a penny in public subsidy. With an estimated 21,000 attendees, Crogan proved that concerts can be successful without public money.

The money Dyster proposed to use for the Blues Festival is bed tax money. Bed taxes raises the total price of the room and hotel operators are required to collect and remit to the city. Eighty percent of the bed tax money goes to the secretive Niagara Tourism and Convention Center to spend as they see fit, and the remaining 20 percent is kept by the city for the purposes of "improving tourism."

This newspaper has long argued that a better use for the money is to improve the nearly impassable roads and beautify the city, as opposed to throwing beer drinking concerts that are one-time affairs, eat up a lot of money and produce very little in bed taxes.

Certainly they never pay for themselves.

For instance, Dyster wanted to give the Blues Festival $40,000.

The promoters, Toby Rotella and Sherry Kushner estimated that perhaps as many as 300 people booked rooms as result of the festival last year.

If the average room was $100 per night and the bed tax is 5 percent then the city would collect $5 per room. If there were 300 rooms booked the city would collect $1,500 in bed taxes for its $40,000 investment.  But 80 percent would go to the NTCC.  That means the city would get $300 for its own use.

Only in Niagara Falls would anyone suggest that investing $40,000 to get back $300 is a wise use of public money.

As part of his argument to spend $40,000 for the Blues Fest, Dyster believes a bigger act will potentially draw more visitors who would book more hotel rooms for the weekend festival.

“This would directly benefit the folks who raised the money through the bed tax,” Dyster told the Gazette.

There are a total of 3000 hotel rooms in the city.  If every single room was booked because of a big act blues concert, that would translate into $15,000 in bed taxes out of which the NTCC would get $12,000 and the city $3,000.

But there is not a blues act that can be booked for $40,000 which will fill every hotel room in the city. But even if it did the city would still get only $3,000.

The city would still lose $37,000.

Government should not be in the concert business.

Not only does it lose money for the people, but concert promoters, left to their own devices, will succeed on their own. The good ones will thrive and the bad ones will cease to do concerts.

The promoters of the Blues Fest told the Reporter they could produce the festival without public subsidy. The mayor chased after them to throw money at them.

If only the city was frugal and used its money for real improvements instead of for concerts and beer drinking events that don't require public money, between the bed tax and casino money, this town could be revolutionized.

Sadly, the mayor just doesn't think that way.





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©2014 The Niagara Falls Reporter Inc.
POB 3083, Niagara Falls, N.Y. 14304
Phone: (716) 284-5595

Publisher and Editor in Chief: Frank Parlato
Managing Editor: Dr. Chitra Selvaraj
Senior Editor: Tony Farina