Event deficit of as much as $25,000 will have to be covered by downtown Port organization now scrambling for money
The Aug. 30 Rock the Harbor Harley-Davidson event may have drawn thousands of people to downtown Port Washington, but the tens of thousands of dollars it lost has put Port Main Street Inc. in a dire financial situation.
Mayor Tom Mlada, who serves on the Main Street board of directors, said Monday that although the final numbers are not yet in, preliminary figures show the festival lost between $20,000 and $25,000.
That’s money that will have to be made up by Main Street — which signed the contracts for the festival — despite the fact that festival organizers repeatedly vowed not to use any of the group’s funds to pay for the event.
The debt from the festival is so large it will require almost all of Main Street’s reserves to pay it, according to a person with knowledge of Main Street’s operations.
City Administrator Mark Grams said it will be difficult for the group to recover and could affect events planned for the remainder of the year, such as Christmas on the Corners, which kicks off the holiday shopping season, or even a planned comedy night fundraiser.
“Main Street is in an extremely difficult financial condition,” he said. “Everything could be in jeopardy.”
The Common Council is expected to discuss the situation when it meets on Tuesday, Sept. 17 — the same day the Main Street board is expected to meet.
City officials may be called on to help Main Street as it tackles the problem, Mlada said, although he stressed that the organization has not approached the city for any sort of financial aid.
“The city has a vested interest in the success of the program,” he said. “If the program needs some short-term help, I think the council would consider it. What terms and conditions there might be, I don’t know.”
A city bailout could be a tough sell, Grams said.
“Are you going to trust taxpayer money to the same board of directors that got you into the situation?” he asked.
Rob Helm, president of the Main Street board, would not comment on the size of the deficit, saying bills and revenue are still coming in. The group will have a better idea of the amount in a week or two, he said.
He also downplayed the effect it might have on the organization, noting that the group is continuing to seek sponsorships and donations to offset the deficit.
“We’re confident we’ll get through it,” Helm said Friday. “We’ve got options, things we’re discussing.”
When asked if the deficit would eliminate the organization’s reserve funds, he said, “I don’t think it will go that far.”
Mlada, too, said he does not believe the deficit will significantly affect the remainder of Main Street’s events for this year, although he acknowledged that some may be trimmed.
Sara Grover, executive director of Main Street, said in a statement:
“While we celebrate the successful aspects of an event that brought many visitors into our city and provided many of our businesses with a very profitable day, we must address the financial commitments associated with the event as well.
“Unfortunately, as our Main Street Board discussed publicly during our meeting in August, the budgeted sponsorship money simply didn’t materialize as the committee had hoped, meaning we entered into the event anticipating a fairly significant deficit, and that is what we must now resolve.”
Main Street Inc., which was formed in 2008 to help revitalize what was then a struggling downtown, is funded primarily through a special assessment added to the taxes of properties in the Business Improvement District that yields about $56,000 annually.
It also receives a $25,000 annual subsidy from the city, and supplements that with money from fundraisers, donations and events.
The city also provides in-kind services to many of the organization’s festivals. For Rock the Harbor, Grams said, the Public Works and Parks and Recreation departments brought in items such as fencing, picnic tables and garbage cans, the Police Department helped patrol the event and the Fire Department provided a first aid station.
In addition, the city closed the marina launch ramps the afternoon and evening of the festival, he said, losing business on what is typically a busy holiday weekend.
The organization is perhaps most visible through the numerous events it stages that draw thousands of people to the downtown, which include the Kiss of Indulgence and Maritime Heritage Festival.
It is also involved behind the scenes, working on business attraction and retention and building improvement initiatives.
Rock the Harbor, which was primarily planned by Main Street board member Cathy Wilger and former board president Amy Gannon, was touted as another way to bring people to the downtown and expose them to all the city has to offer.
It achieved that goal, Mlada said.
“It brought a lot of people here to Port Washington. Certainly, it did bring in some folks who hadn’t discovered Port Washington before, and the feedback from them was positive,” he said. “A number of businesses told us they were successful in terms of sales. There was good energy and the experience was extremely positive. Those things are important.
“But at the end of the day, you can’t separate out the finances. Going into the event, we knew this was an uphill battle. I know the effort Amy and Cathy put forward in trying to obtain sponsorships. It’s a tough time to get those.”
Wilger did not return phone calls seeking comment.
Main Street hasn’t done an evaluation to determine what went wrong, Mlada said, but it was likely a combination of unrealistic expectations in terms of sponsorships and more competition than expected.
“Obviously, the sponsorships didn’t come through at the level we had hoped,” Mlada said. “And there were a plethora of other events in the Milwaukee area that provided competition. I don’t think the full scale of that became evident until we were close to the event.”
The organization is looking “at all our options” to address the deficit, Mlada said, including loans or advances as well as fundraising.
“Obviously, we have to address the bills that haven’t been paid and the operations for next month and through the end of the year,” he said.
Main Street is also approaching some vendors and businesses who benefitted from Rock the Harbor to see if they would make a contribution, Mlada said.
“Whether that’s practical, I don’t know,” he said, especially since the event has passed.
Even last year, before this occurred, some aldermen questioned whether to trim the city’s annual contribution to Main Street, Grams said.
Mlada said the fiscal problems point to a need for Main Street to initiate a comprehensive, long-term fundraising program.
“We need to use this as an opportunity to sell ourselves to the community,” he said. “I’m not sure we’ve done the most effective job of that. We need to get people invested in Main Street and what it does.”
Image Information: THE ROCK THE HARBOR Harley festival brought people to downtown Port Washington, but the event left Port Main Street Inc. saddled with its debt. Press file photo