WILMINGTON –– Wilmington City Council passed a substitute version of a resolution featured on its agenda Tuesday 5-2, solidifying a policy that outlines who can use tickets in the name of advancing city business opportunities at the Live Nation-managed Live Oak Bank Pavilion at Riverfront Park.
The city will hold off on paying for a season VIP box and table for four tickets to at least all 20 shows until it receives its first payment from Live Nation, as part of its management contract at the publicly funded $38 million waterfront amphitheater.
A Live Nation invoice from May sets the price at $14,124. Since three shows have already taken place, it’s unclear at this point if the city’s fee will be prorated by the time it receives revenue generated to pay for it.
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Mayor Bill Saffo spearheaded the alterations of the initial proposal, which first sought to front the cost of the VIP box straight out of the general fund and would have comped councilmembers for their tickets if used for specific public purposes; the revised policy requires elected officials to pay for tickets themselves.
The previous iteration would have allowed the tickets to be used for economic development, community development (non-profits, private, and public entities that improve quality of life in the city), and employee performance recognition. Tuesday’s version narrows the eligible use down to just economic development to lure and retain job creators in the region.
Councilmembers Neil Anderson and Kevin O’Grady dissented (O’Grady did not explain why). Anderson balked at the notion the city was buckling to public pressure, provoked by news articles that outlined the spending proposal, first reported by WHQR.
Turns out, the city wasn’t alone in looking to dip into public finances to cover ticket costs for public officials.
In late June, a New Hanover County spokesperson emailed a Live Nation rep following up on an unreturned voicemail, seeking to receive a list of packages or sponsorship opportunities the management company was offering at the venue. The county spokesperson said they reached out at the request of county management to potentially use the tickets to award employees throughout the year. Live Nation informed the county its packages for the year are sold out.
Origins in transparency
A policy prescribing who can snag city-owned tickets for a publicly funded entertainment venue and for what purpose is next-to unheard of in the United States.
City parks staff and the attorney’s office scoured for similar policies across the state and country, coming up with just one point of reference in Miami. (Asked to share the policy, a City of Miami spokesperson provided a highlighted version of an ordinance that prohibits all city officials from accepting tickets upon terms that are more favorable to the public; Wilmington’s spokesperson has not immediately provided a copy of the Miami policy referenced in Monday’s agenda review meeting.)
“It is actually not typical,” parks director Amy Beatty said at the city’s Monday briefing. Publicly owned venues trigger pressure exerted on public officials for requests for tickets, she said, whereby most places have tickets held by venue management that “fall into the hands of the public entities.”
“I think that there’s not policies for us to look for because there’s, a lot of cities don’t do this –– buy these boxes –– in the first place, because there’s so many regulations on what officials can actually take advantage of,” deputy city attorney Meredith Everhart said at the briefing. “So that’s why we can’t find any policies to mirror this after because nobody else really does this because it’s such a risk of stepping into something that you don’t want to be into.”
When surveying other public bodies for their internal ticket distribution rules and learning there were none, Beatty said she often heard in response that the governments wished in hindsight they had adopted such a policy and to share Wilmington’s with them once it was adopted.
Beatty’s intention in bringing forth the resolution was to transparently address the elephant, she explained, so the public could be apprised of the city’s attempt to “minimize the risk of councilmembers being compromised.”
Council to pay for themselves
After the Monday morning meeting, the mayor (who attended but did not participate in the VIP ticket discussion) swayed fellow councilmembers toward his alternative proposal, crafted with the assistance of the city’s attorney. The mayor’s workaround aimed to dilute the most publicly distasteful tenants of the deal: taxpayers footing the bill for councilmembers’ exclusive season tickets, at $176.55 a pop, including tax.
As first drafted, the policy would have given councilmembers first dibs on the tickets, then the city manager to divvy out for approved use, and if still unclaimed, they would revert back to the public. If staff or council attending for economic development purposes wished to invite a plus-one, they would have to reimburse the city for the cost of the ticket. Employees being recognized for performance could bring a plus-one without having to cover the cost.
“Councilmembers are going to pay for their own tickets,” the mayor explained at Tuesday’s council meeting. “I don’t think any one of us are asking for any free rides or want any free tickets. We would pay for our own way to these concerts just like any other person.”
The revised resolution refines the use of the city’s VIP tickets for economic development purposes to only encompass “job creation retention or expansion” (the original definition left room for a broad interpretation). It cuts out community development (which could be revisited later on) and employee recognition.
“I think it’s a pretty simple, straightforward policy,” the mayor said. “I want to clear up any misconstrued things that have been out there in the public. Somebody made a comment that we were going to take developers there. Absolutely not. This is for economic development and for job creation only.”
Saffo stood firm in his belief that the city should own a box at the venue, just like other major cities in the state –– “this is no different.”
Whether an economic development use qualifies as appropriate will be determined by the city manager. If any tickets go unused, the city will sell them back to Live Nation or through some other legal mechanism, still yet to be determined.
Anderson, who the day prior had assumed council would pay for tickets themselves before learning otherwise, was irked by council’s about-face on the matter.
“I do hate a little bit that we’re kind of giving in –– I saw a headline on WECT –– the sensationalism, the journalism, is what’s wrong with the country. When you print something like that, it’s so –– it was inaccurate, it was just, it’s a problem,” he said. “We’re going to pay for this with proceeds from that. There’s four seats. It’s four seats, is what we’re talking about here. We were talking about rewarding some employees potentially. What is wrong with that? What is wrong with taking some kids there that might not be able to afford it?”
Monday afternoon, WECT published an article, “Wilmington taxpayers could be on the hook for $14K worth of VIP tickets for City Council at new amphitheater.” The article and segment covers the possibility that the city could use the tickets to impress an apartment developer. Appropriate economic development ticket-use is defined in the initial resolution as increasing the city’s “population, taxable property, agricultural industries, employment, industrial output, or business prospects.” Under this reading, apartment developers –– which increase the population and tax base through their commercial and residential projects –– appear to be eligible recipients.
Anderson specifically mentioned the potential use by an apartment developer as incorrect. A WECT spokesperson told Port City Daily Wednesday morning the station stands by its reporting “100%.”
The councilman went on to list the city’s last several years of travel expenditures (each member is allotted $4,150 annually), which have come in well under budget. “This is a frugal council,” he said. “It’s just insinuation that, in the media, bothers me,” Anderson said. “And letting it dictate policy, it bothers me.”
Councilwoman Margaret Haynes jumped in, justifying council’s work while traveling, explaining the trips aren’t “fun” but rather likened it to work while missing out on family time and their regular jobs.
“My point was, simply, we’re not running around spending the public’s money like, you know, in our wallet,” Anderson said.
“Absolutely, but that doesn’t sell newspapers. And TV ads and stuff,” Haynes interjected. “So it’s a shame that we’ve come to that here. Hopefully, the press can rise to the occasion and report things more appropriately.”
“Well there’s a way you can overcome it,” councilman Charlie Rivenbark chimed in. “Just don’t pay a damn attention to them. Have the political will to do what you feel like is in your heart. That’s what I do.”
Later in the conversation, councilman Clifford Barnett, who is a pastor, quoted a section in the Bible: “Flee the very appearance of evil. Meaning that you don’t want to give anybody the opportunity to take your good and make it appear to be evil.”
Eleven cents per taxpayer
Councilman Kevin Spears did the math and figured the city’s VIP box order would cost each taxpayer $0.11 (an accurate assumption, according to the latest Census data available).
Councilmembers relished in the fact that the revised policy would not even cost taxpayers the handful of change first proposed. The tweaked bid funds the expense through venue revenues.
Wilmington voters –– 34,247 of them –– approved $38 million in projects in the 2016 parks bond. Riverfront Park eventually went well over budget ($18 million over, to be exact), costing just as much as the entire parks bond to construct; voters approved a $20 million riverfront park.
City officials scrapped to find other revenue sources to cover the shortfall. In the end, $16.2 million came from the parks bond, $8.2 million from a limited obligation bond, and $6.1 million was cash funded by the city.
The city, and thereby tax and ratepayers which fund the bulk of the city’s operations, are paying off both the principal and interest of the bonds and already contributed to the additional millions that went into paying for the city’s marquee venue (Wilmington paid for all but $3.3 million of it; of that, $900,000 came from CFPUA, $400,000 from donations, and $2 million from Live Nation).
Revenue generated by this public investment is shared between Live Nation and the city in accordance with a 10-year management contract, approved in 2017. Under the arrangement, Wilmington gets $2 for every ticket sold (for a sold-out show, that’s $14,200, as much as $284,000 every year for 20 sold-out events) and $200,000 in rent annually. Revenues generated from this arrangement get deposited into the general fund.
Either way it’s diced, it’s still public money.
Below, view a copy of the revised ticket distribution policy passed by council Tuesday.
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