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HomeMy WebLinkAboutSR - '08 PD Art of Food & Wine Festival �1���� CITY OF PALM DESERT COMMUNITY SERVICES DIVISION ' ' STAFF REPORT REQUEST: REQUEST FOR APPROVAL OF 2008 ART OF FOOD &WINE PALM DESERT DATE: January 10, 2008 CONTENT: 1. Letter/Event Summary from KemperSports to City Manager 2. 2007/2008 Event Budgets 3. Draft Schedule of Events 2008 4. December Draft Marketing Committee Minutes 5. KemperSports Management Contract 6. Correspondence from the Sister Cities Committee Recommendation: By Minute Motion: 1) Approve the 2008 Art of Food & Wine festival to be held in Palm Desert from November 6 through November 9; 2) Approve a budget of $650,000 for the event and appropriate $550,000 from the City's General Fund and $100,000 from the Redevelopment Agency; 3) Approve a one-year extension of Contract No. C26170 with KemperSports Management amended as stated in the Staff Report and Recommendation; 4) Appropriate $192,000 from the Unobligated General Fund for the additional expenses of the 2007 event. Executive Summary: In 2006, the Art of Food & Wine was created with the goal of establishing a signature event that would attract visitors from all over the country while expanding the Palm Desert brand through promotion. The festival would grow in the coming years to become a popular destination event. In 2007, the City hosted the event under the management of KemperSports. The results of this second year showed an overall growth in the festival as outlined in the attached letter to the City Manager. There was an increase in attendance, marketing REQUEST FOR APPROVAL OF 2008 ART OF FOOD & WINE PALM DESERT JANUARY 10, 2008 efforts, sponsorships, and in Valley-wide participation — both merchants and restaurants. While ticket sales fell below the budgeted projection, the value of the marketing, advertising, and branding of the City exceeded expectations. In 2008, the event line-up will be streamlined to be more cost effective and to take even more advantage of resources already in the community. There also will be a larger focus on group ticket sales. The momentum built by a second, successful year of the Art of Food & Wine has been tremendous, and the outlook for 2008 participation is strong. Staff recommends that the contract with KemperSports be amended by the City Attorney to include the following provisions: 1) Change base management fee to $299,250 which provides for a 5% increase over last year's contract; 2) Decrease the commission percentages as follows: a) Cash sponsorship from 18% to 15% b) In-kind sponsorships from 18% to 12% 3) Commissions in excess of $50,000 will only be paid if expenses meet the 2008 projections. With the above noted changes, the City's investment in the event would be $650,000 ($100,000 of which will come from the Redevelopment Agency) which includes management fees, marketing, and operational costs. While the 2007 event required additional funding to balance the budget, staff believes this is a cost of growing the event. The marketing exposure alone was valued at more than $800,000, made possible by limited cash buys and a significant amount of in-kind media partners and sponsorships. Figures for the event do not begin to account for the additional dollars in TOT and sales tax that were generated by the out-of-town guests attending the festival. Ticket purchasers came from as far away as New Jersey and Calgary, Canada, Michigan, and Nebraska, with a significant number of attendees from Arizona and Los Angeles and Orange counties. At its meeting of December 18, 2007, the Marketing Committee unanimously voted to continue with the Art of Food & Wine event under the management of KemperSports. The Committee agreed that the long-term benefits of the event are evident and recognized that the first few years require more of an investment. Staff recommends to the City Council that it concur with the recommendation of the Marketing Committee to continue the Art of Food & Wine festival and to contract with KemperSports to assume responsibility for the event organization and implementation. 2 REQUEST FOR APPROVAL OF 2008 ART OF FOOD & WINE PALM DESERT JANUARY 10, 2008 Background: In November 2006, the City of Palm Desert sponsored the inaugural Art of Food & Wine, produced by the Desert Springs JW Marriott Resort & Spa. Organizers set out to provide a high quality art, food, and wine festival, while spotlighting several of the attractions that make Palm Desert unique, including the Marriott, Desert Willow, and EI Paseo. The 2006 event was an extremely ambitious undertaking, especially for an organizing committee comprised of volunteers and sponsors. Because of the event's potential and support of key partners such as the Marriott and Southern Wine and Spirits, the City of Palm Desert took the lead to make it happen in 2007. Recognizing that City staff did not have the time or expertise to organize and implement such a large event, staff proposed hiring a professional management company. With Council approval, the City contracted with KemperSports to produce the second year. Staff continues to believe that contracting with a management company is the most cost effective method of producing the event. The majority of signature events have a dedicated year-round staff including event directors, marketing, sales, logistics, finance, and an office assistant. Events such as the Palm Springs International Film Festival, Bob Hope Classic, and South Beach Wine & Food Festival all have their own offices and paid staff with benefits. The cost for maintaining a full time office including overhead is extremely high. By contracting with KemperSports, Palm Desert receives all the expertise in each of the aforementioned areas without being responsible for a year-round office and staff. Both the Desert Springs JW Marriott Resort & Spa and Southern Wine and Spirits are enthusiastic and optimistic about the future of the Art of Food & Wine. Southern Wine and Spirits' goal is to make the Palm Desert event the premier food and wine festival on the west coast, and they remain committed to the event. Over the last six years, they have successfully made the South Beach Wine & Food Festival the east coast's premier event. To demonstrate the festival's potential, this past year the South Beach Festival donated $1.5 million dollars to FIU's School of Hospitality and Tourism Management. The Food & Wine Classic in Aspen is a testament to longevity as it is now in its 27tn successful year. Food and wine promotion has become a priority for marketing the State of California. According to research by the California Travel & Tourism Commission, "Food & Wine came out loud & clear in the research with a strong significance in wine activities." Palm Desert's event falls directly in line with this State initiative. In addition, this year's festival received promotion on the State's tourism website. 3 REQUEST FOR APPROVAL OF 2008 ART OF FOOD & WINE PALM DESERT JANUARY 10, 2008 The Palm Desert Art of Food & Wine will continue to increase in popularity as seen in the growth of this year's event. It will continue to provide additional exposure to the City through marketing, and it will bring additional visitors from around the United States, Canada, and Mexico. With the groundwork laid from the past two years, the momentum is in Palm Desert's favor for expanding sponsorships, chefs, and attendance in the year to come. Submitted By: ���, _ ,�,��������� �� . , . � � � , � Kristy Kn iding � Sheila R. Gi ligan Marketing Manager Assistant City Manager Approval: GZ� Carlos L. ega Paul Gibson City Ma ger Director of Finance ;.'ITY COUNCIL ACTION: APPROVED ✓� DENIED RECEIVED QTHER . MEETI D.�°�E —l — � AY�S- l j "� I30�3 r ABS�N°I`a ABSTAIN; iIERIFIED BY: C' �riginal on File wi City Clerk' s Offi�� * Approved the reco�endations, with the stipulation that Contract No. C26171 be reviewed and approved by the City Attorney and will include specific language that requires any requests for additional funding must first come before City Council. 3-2 (Ferguson, Finerty NO.) 4 ����� CITY OF PALM DESERT COMMUNITY SERVICES DIVISION • ' STAFF REPORT REQUEST: REQUEST FOR APPROVAL OF 2008 ART OF FOOD &WINE PALM DESERT DATE: January 10, 2008 CONTENT: 1. Letter/Event Summary from KemperSports to City Manager 2. 2007/2008 Event Budgets 3. Draft Schedule of Events 2008 4. December Draft Marketing Committee Minutes 5. KemperSports Management Contract 6. Correspondence from the Sister Cities Committee Recommendation: By Minute Motion: 1) Approve the 2008 Art of Food & Wine festival to be held in Palm Desert from November 6 through November 9; 2) Approve a budget of $650,000 for the event and appropriate $550,000 from the City's General Fund and $100,000 from the Redevelopment Agency; 3) Approve a one-year extension of Contract No. C26170 with KemperSports Management amended as stated in the Staff Report and Recommendation; 4) Appropriate $192,000 from the Unobligated General Fund for the additional expenses of the 2007 event. Executive Summary: In 2006, the Art of Food & Wine was created with the goal of establishing a signature event that would attract visitors from all over the country while expanding the Palm Desert brand through promotion. The festival would grow in the coming years to become a popular destination event. In 2007, the City hosted the event under the management of KemperSports. The results of this second year showed an overall growth in the festival as outlined in the attached letter to the City Manager. There was an increase in attendance, marketing REQUEST FOR APPROVAL OF 2008 ART OF FOOD & WINE PALM DESERT JANUARY 10, 2008 efforts, sponsorships, and in Valley-wide participation — both merchants and restaurants. While ticket sales fell below the budgeted projection, the value of the marketing, advertising, and branding of the City exceeded expectations. In 2008, the event line-up will be streamlined to be more cost effective and to take even more advantage of resources already in the community. There also will be a larger focus on group ticket sales. The momentum built by a second, successful year of the Art of Food & Wine has been tremendous, and the outlook for 2008 participation is strong. Staff recommends that the contract with KemperSports be amended by the City Attorney to include the following provisions: 1) Change base management fee to $299,250 which provides for a 5% increase over last year's contract; 2) Decrease the commission percentages as follows: a) Cash sponsorship from 18% to 15% b) In-kind sponsorships from 18% to 12% 3) Commissions in excess of $50,000 will only be paid if expenses meet the 2008 projections. With the above noted changes, the City's investment in the event would be $650,000 ($100,000 of which will come from the Redevelopment Agency) which includes management fees, marketing, and operational costs. While the 2007 event required additional funding to balance the budget, staff believes this is a cost of growing the event. The marketing exposure alone was valued at more than $800,000, made possible by limited cash buys and a significant amount of in-kind media partners and sponsorships. Figures for the event do not begin to account for the additional dollars in TOT and sales tax that were generated by the out-of-town guests attending the festival. Ticket purchasers came from as far away as New Jersey and Calgary, Canada, Michigan, and Nebraska, with a significant number of attendees from Arizona and Los Angeles and Orange counties. At its meeting of December 18, 2007, the Marketing Committee unanimously voted to continue with the Art of Food & Wine event under the management of KemperSports. The Committee agreed that the long-term benefits of the event are evident and recognized that the first few years require more of an investment. Staff recommends to the City Council that it concur with the recommendation of the Marketing Committee to continue the Art of Food & Wine festival and to contract with KemperSports to assume responsibility for the event organization and implementation. 2 REQUEST FOR APPROVAL OF 2008 ART OF FOOD & WINE PALM DESERT JANUARY 10, 2008 Background: In November 2006, the City of Palm Desert sponsored the inaugural Art of Food & Wine, produced by the Desert Springs JW Marriott Resort & Spa. Organizers set out to provide a high quality art, food, and wine festival, while spotlighting several of the attractions that make Palm Desert unique, including the Marriott, Desert Willow, and EI Paseo. The 2006 event was an extremely ambitious undertaking, especially for an organizing committee comprised of volunteers and sponsors. Because of the event's potential and support of key partners such as the Marriott and Southern Wine and Spirits, the City of Palm Desert took the lead to make it happen in 2007. Recognizing that City staff did not have the time or expertise to organize and implement such a large event, staff proposed hiring a professional management company. With Council approval, the City contracted with KemperSports to produce the second year. Staff continues to believe that contracting with a management company is the most cost effective method of producing the event. The majority of signature events have a dedicated year-round staff including event directors, marketing, sales, logistics, finance, and an office assistant. Events such as the Palm Springs International Film Festival, Bob Hope Classic, and South Beach Wine & Food Festival all have their own offices and paid staff with benefits. The cost for maintaining a full time office including overhead is extremely high. By contracting with KemperSports, Palm Desert receives all the expertise in each of the aforementioned areas without being responsible for a year-round office and staff. Both the Desert Springs JW Marriott Resort & Spa and Southern Wine and Spirits are enthusiastic and optimistic about the future of the Art of Food & Wine. Southern Wine and Spirits' goal is to make the Palm Desert event the premier food and wine festival on the west coast, and they remain committed to the event. Over the last six years, they have successfully made the South Beach Wine & Food Festival the east coast's premier event. To demonstrate the festival's potential, this past year the South Beach Festival donated $1.5 million dollars to FIU's School of Hospitality and Tourism Management. The Food & Wine Classic in Aspen is a testament to longevity as it is now in its 27tn successful year. Food and wine promotion has become a priority for marketing the State of California. According to research by the California Travel & Tourism Commission, "Food & Wine came out loud & clear in the research with a strong significance in wine activities." Palm Desert's event falls directly in line with this State initiative. In addition, this year's festival received promotion on the State's tourism website. 3 REQUEST FOR APPROVAL OF 2008 ART OF FOOD & WINE PALM DESERT JANUARY 10, 2008 The Palm Desert Art of Food & Wine will continue to increase in popularity as seen in the growth of this year's event. It will continue to provide additional exposure to the City through marketing, and it will bring additional visitors from around the United States, Canada, and Mexico. With the groundwork laid from the past two years, the momentum is in Palm Desert's favor for expanding sponsorships, chefs, and attendance in the year to come. Submitted By: �� _ . • . , ( } �,� � / `����, ���� Kristy Kn iding � Sheila R. Gi ligan Marketing Manager Assistant City Manager Approval: G��-Y Carlos L. ega Paul Gibson City Ma ger Director of Finance 4