City must limit support for New Year’s party

August 21, 2012 

THERE’S NO question that Columbia’s first Famously Hot New Year’s Eve party was a rousing success, drawing a diverse and unexpected crowd of 20,000 people, garnering national attention and generating an estimated $1.5 million in economic impact for hotels, restaurants and retailers.

We commend the city and organizers for their admirable effort — but we also caution against depending on public funds to bail the event out in future years.

Pouring hundreds of thousands of dollars into festivals, as the city has been known to do, is irresponsible.

The New Year’s Eve bash is a legitimate use of hospitality-tax dollars if it brings people from afar who not only have a good time but help spur the local economy. But there must be a limit.

While Columbia’s $55,000 contribution was relatively modest, it was more than planned. The city unexpectedly had to shell out $22,500 in June to cover expenses from the event held months prior. That brought the city’s share to a fourth of the overall cost of $212,600.

The larger-than-expected crowd contributed to the cost overruns, which included $19,300 extra for security and $15,500 more for a gala/VIP venue that had to be moved outdoors to accommodate the crowd. More importantly, anticipated corporate contributions of $175,000 fell well short, at $92,500.

We understand why the city helped settle the bill for the initial party, but that is an all-too-familiar scenario that can get out of hand if Columbia officials aren’t careful. The example that leaps to mind is the now-defunct 3 Rivers Festival, which sucked up $1.6 million in city tax dollars from 2000 to 2006 before finally being shut down.

While 3 Rivers generally drew respectably sized, diverse crowds, it never was able to consistently break even. More often than not, City Council not only provided initial funding for the festival, but had to come back after the final bills rolled in to bail it out with additional public money.

That must not be allowed to happen with the New Year’s festival. Festivals must be more than losing ventures with noble goals; they must make fiscal sense.

Sam Johnson, a member of Mayor Steve Benjamin’s staff, and Columbia attorney Charles Appleby, co-chairs of the New Year’s Eve party, expect this December’s event to cost $400,000, with corporate donations covering the lion’s share. They expect to get a better response from corporate donors this year because they began seeking pledges earlier, reaching out to companies before they had set their annual budgets for giving.

Plans are to use $65,000 in public money, including $15,000 from Richland County. That means the city’s share would drop by $5,000.

But what happens if private donations come up short again this year? And what of years to come?

We are all for events that promote Columbia’s economic development and brand the city, but they should be driven primarily by private donations, not public money.

It’s encouraging to see that is the goal of the New Year’s Eve party’s organizers. But city officials must set a limit and stick to it to ensure that it never again is stuck bailing out a money-losing event year after year after year. If a party can’t make it on its own, it shouldn’t exist.

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