City strikes deal with Fantasy Fest promoters

BY PRU SOWERS

KONK LIFE STAFF WRITER

The organizers of Key West’s Fantasy Fest found themselves between a rock and a hard place recently when city commissioners threw down the gauntlet over continuing to subsidize the popular tourist event.

When the dust cleared, the Tourist Development Association (TDA) had voted to accept a five-year contract that Steve Robbins, TDA board member, initially said would not fly with his fellow board members. But faced with a second, even more tenuous three-year contract option offered by commissioners, the TDA voted to accept the conditions set out in the five-year option, eliminating the possibility the city would consider handing Fantasy Fest over to another marketing organization until 2021.

At the April 6 city commission meeting, several options were discussed including taxpayers continuing to pay approximately $240,400 a year for police, fire, transportation, code enforcement, parking, out-of-county police officer lodging, street closures and clean-up during the 10-day event. But a majority of the other commissioners wanted the TDA, which owns the rights to the name “Fantasy Fest” and charges participating businesses a variety of fees for sponsorship and parade entry, to kick in more money than what was required in the most recent five-year contract, which expired after last October’s Fest.

Commissioner Margaret Romero offered the harshest option, a one-year contract with a $45,000 increase over the $62,747 the TDA paid Key West and Monroe County last year as a partial reimbursement of their costs during Fantasy Fest. But Commissioner Richard Payne called that idea “a killer” that would force the TDA to come up with possibly draconian ways to increase its revenue from the event.

In 2014, the TDA took in $440,228 from sponsorship and parade entry fees plus promotional payments charged to businesses that advertised in the official event brochure. But TDA also spent just under $456,000 in the same year, resulting in a loss of almost $16,000, according to Steve Robbins, TDA board member.

Assistant City Manager Greg Veliz, who was in charge of the city’s negotiation with the TDA, came up with two options; a five-year contract extension with a $10,000 increase each year over the existing reimbursement, and a three-year contract extension with the same $10,000 hike each year plus a two-year option to renew where the $10,000 reimbursement fee would be renegotiated, possibly higher.

Veliz said his goal was to have the TDA pay approximately half of the $240,400 the city contributes each year to Fantasy Fest. Adding $50,000 to the almost $63,000 the TDA already pays would get close to that halfway mark, he said.

“If we could make some cost cuts, I think we could come in right about half,” Veliz told commissioners. “With our increased parking revenue [during Fantasy Fest] and our increased [sales] tax revenue, we could break even.”

Robbins said the TDA board wanted a five-year contract extension with a $10,000 increase in the first year and then a five percent increase in each of the remaining four years. But commissioners wouldn’t go for that offer and intimated they would be open to finding another event promoter if the TDA didn’t increase its reimbursements to the city. They eventually voted to offer the TDA both the five-year and the three-year options. The TDA board took the five-year deal.

“I think at first glance the [three-year option] looked like a better deal because it was a smaller commitment,” Veliz said. “But at the end of the day, to be locked in to the five-year, $10,000 option is a better deal for them. There are no questions at three years.”

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