Scottsdale brand growth shapes new event development program

The brand that is Scottsdale is a valuable one — one that is cultivated by an image: “The West’s Most Western Town” illustrated above. (File photo)

The brand of Scottsdale is a lucrative property and city leaders believe perpetuating the strength of that property is an investment risk worth taking.

The city puts its money where its mouth is, and has created a program that provides bed-tax money to assist and support major activities that bring people to the city and promote tourism.

Records show the city of Scottsdale has allocated $2.9 million in seed money for various events held in and outside the city since fiscal year 2013-14 — seed money they say is needed to help fledgling events get off the ground and promote the brand of Scottsdale.

The Scottsdale Tourism Development Commission — a body of seven individuals appointed by Scottsdale City Council — establishes the criteria for what city officials have coined a “New Event Development Program.”

The idea: help facilitate start-up events that can grow into marquee attractions — attractions that will eventually generate more tax revenue for the city and business opportunities for local proprietors.

Some opponents, however, say there really isn’t a good yardstick to measure the return on investment of a given event and without that kind of evaluation it’s hard to definitively point to success.

Still others agree with the program, but think public money should be spent only on events held within city limits.

The Scottsdale Tourism Development Commission met Dec. 20 to update its criteria for selecting those who apply for funds in the New Event Development Program. The commission opted to delay any decisions until its next study session discussion scheduled for February.

Tourism Development Commission Chairman Richard Scholefield said during the Dec. 20 meeting that any proposed amendments should be further vetted.

“I would like to suggest that this be a part of a larger discussion at the study session in February,” he said at the public hearing. “I don’t think it should be approved today, then revisited later.”

The program presently allows event organizers to apply for financial assistance ranging from $30,000 to $75,000. Requests that exceed $75,000 are evaluated on a case-to-case basis, city leaders say.

In documents provided to the Commission, it appears amendments to the program — updates that occur routinely — look to do away with the “dollar-for-dollar match” language within the application criteria.

Proposed changes would require all applications be received by the commission 90 days prior to an event, and that no dollars go toward paying for public relations firms or talent for the event.

The program is meant to provide dollars for promotional and marketing efforts only, city leaders say.

A breakdown of the numbers

So far this fiscal year, Scottsdale City Council has approved $443,000 in seed dollars to the following events:

  • Charles Schwab Cup Championship — $75,000;
  • AZ Central Food & Wine Experience — $82,500;
  • An off road expo — $75,000
  • NCAA Final Four — $150,000
  • Grand Prix of Scottsdale — $60,500.

Tourism officials contend funds are only paid after the event takes place and all criteria for allocation have been satisfied.

Over the last three fiscal years the city has allocated just over $2.4 million in Development dollars with notable allocations to the Scottsdale Polo Championships, the Scottsdale Rugby Bowl, Superbowl events, BCS Championship Bowl events, the P.F. Chang’s Rock & Roll Marathon and professional rodeo events, records show.

Jim Lane

“I would have to tell you that there has been introspection from my point of view on how that program is allocated,” said Scottsdale Mayor Jim Lane in a Dec. 20 phone interview.

Mayor Lane points out a 2010 vote by Scottsdale residents specifically outlines how bed-tax funds are allocated. The language of the ballot measure states:

“This proposition would increase the amount of transient lodging (‘bed’) tax required to be paid by hotels on gross income from 3 percent to 5 percent, and would use 50 percent of the total revenue for destination marketing and 50 percent for tourism-related event support, tourism research, tourism-related capital projects, and other eligible uses.  “A ‘yes’ vote shall have the effect of increasing the rate of tax charged to hotels on transient lodging from 3 percent to 5 percent of gross income, and would cause 50 percent of the total revenue to be used for destination marketing and 50 percent for tourism-related event support, tourism research, tourism-related capital projects, and other eligible uses as determined by city ordinance and state law.”

The 2010 proposition earmarked a 50 percent allocation of bed-tax remits to Experience Scottsdale. City leaders say those funds support “destination marketing,” which is advertising outside of the Scottsdale market with one goal: bring more people to Scottsdale.

A breakdown of bed-tax remits shows:

  • Fiscal year 2013-14: $15.3 million;
  • Fiscal year 2014-15: $16.9 million;
  • Fiscal year 2015-16  $17.4 million;
  • Fiscal year 2016-17: $18.7 million (budgeted).

Mayor Lane says changes are being proposed to the criteria that determines what events get city support. But the fact that bed tax remits continue to rise year after year proves the event-Development program is valuable to the city.

“How much do they promote Scottsdale and what do they bring to the table in terms of economic activity?

“How many heads are they putting in beds? Other than that it is spreading the word and bringing more people downtown. We do want to review that and make sure we are fine-tuning it and making sure it is more measurable and that we have straight-forward criteria that we can apply with some clear indication that it will have some level of success.”

Mayor Lane says the program and Commission have to keep downtown in mind when approving event programs.

“Just the idea of getting more activity in downtown that helps the entire base of business and the downtown retail sector (is important). One of the things we are running into now is the special events ordinance and how that has impacted downtown,” he said.

The mayor says fewer events are being staged downtown, and he thinks it’s important to bring popular events back to the area.

“How do we replace the events that have left our downtown? I believe we are of a mind to review the ordinance and the criteria of just how we disburse the dollars to replace the activity that no longer is coming to us.”

The Bentley Scottsdale Polo Championships features some of the best players the world of polo has to offer.

Keep Scottsdale dollars in Scottsdale

Scottsdale Public Relations Executive Jason Rose is a major proponent of the program but calls into question some recent allocations by the TDC for events held outside of Scottsdale.

Jason Rose

Mr. Rose is co-founder of Rose, Moser & Allyn Public and Online Relations and has been the recipient of TDC funds for his two signature events: the Bentley Scottsdale Polo Championships and the Fiesta Bowl Rugby & Balloon Classic.

The Scottsdale Independent has been a media sponsor of the Bentley Scottsdale Polo Championships and exclusive publisher of the Fiesta Bowl Rugby & Balloon Classic event program since 2012.

“(The Commission) provided for marketing seed capital that allowed us to articulate the event to a much broader audience,” he said of how dollars helped to promote The Polo Party.

“I take great pride that we had extensive post reports that we vastly exceeded our requirements for advertising, earned media and economic impacts. Our reports were very, very good.”

Mr. Rose says all funding for events — with the exception of major draws like the Super Bowl or BCS Championship Game — ought to be held within Scottsdale city limits. Mr. Rose points out both the polo and rugby events did not seek bed-tax dollars in both the first years of each event.

“I do agree there should be a limit on how long a program can participate,” he said noting the three-year limit eligibility for the Development program.  “I am a huge fan of the program. I think it does give opportunity for the next Barrett-Jackson or Arabian Horse Show to emerge. I have a great respect for the TDC and the established criteria for the program.”

But a few allocations this year have Mr. Rose raising questions.

“It is outrageous that an event that didn’t take place in Scottsdale was funded with these dollars,” he said of the $82,500 that was provided to the AZ Central Food & Wine Experience.

“The fact (the city) funded an event at Salt River Fields, I thought was total insanity. Why are we using Scottsdale tax dollars to create a rival event to the Scottsdale Culinary Festival? It was just crazy to me. Unless you are the Final Four or the Super Bowl — unless you are a mega-event — the requirement must be that you are in the city of Scottsdale.”

Records show over the last two fiscal years, the Food & Wine Festival has received $157,000 in Scottsdale bed tax dollars while the Bentley Scottsdale Polo Championships has received a total of 150,000 in bed-tax funding.

Also, the Fiesta Bowl Rugby & Balloon Classic has received a total of $138,616, records show.

Steve Geiogamah, Scottsdale tourism development manager, contends some events outside city limits still add to the brand of Scottsdale.

“The payment is not made until the event meets all of those contractual requirements, the contract deliverables,” he said. “That is some of the way we measure success for our program.”

Mr. Geiogamah points out the AZ Central Food and Wine Experience was en event supported by Gannett, the parent company of the Arizona Republic thus mass-marketing would occur highlighting Scottsdale as the destination, a major tenet of the event development program.

“Go back and take a look at the council direction when that allocation was approved. Even though the event was held off-site, we do fund events that are off-site,” he explained.

“Most of the branding efforts went through Gannett and Scottsdale was the recipient of that effort. The branding of Scottsdale was not only seen as a marketing event by it was advertised nationally.”

The criteria to be considered for the Development program is a good indicator of the value the city receives from the program, according to Mr. Geiogamah.

“We evaluate our program on an ongoing basis. We look at what is going on in the market. We take input from Experience Scottsdale,” he said of influences for the program.

“The guidelines are somewhat of a principal adopted by the tourism development commission.”

Northeast Valley Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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