City Commission Approves New Deal with Arts, Beats & Eats

Despite some spirited discussion late Monday night, the city of Royal Oak and the Arts, Beats & Eats festival are inches away from a new contract.

The new agreement approved by the City Commission and festival producer John Witz includes:

• extending the contract for one additional year, to take it through 2015. The original contract revision asked for a two-year extension;
• expanding the festival footprint, adding Fourth Street from the railroad tracks to Main Street; Center Street from Fourth to Third streets; and Lincoln Avenue from Washington to about halfway to Main Street. The expansion was proposed to eliminate the overcrowding experienced last year;
• increasing the number of festival openings to two per block as opposed to one opening mandated in the prior contract; and
• eliminating cross payments between the city and the festival, which means the city would stop paying 20 percent of its share of parking proceeds to Arts, Beats & Eats and Arts, Beats & Eats would in return not have to pay Royal Oak 25 cents for each paid attendee after it pays $15,000 to the city.

The Labor Day weekend festival agreement is a tri-party contract between the city of Royal Oak, the Downtown Development Authority and Arts, Beats and Eats Inc. The agreement now needs the approval of the DDA to finalize the deal. The DDA was set to discuss the contract during its March 16 meeting, but tabled the discussion per City Manager Donald Johnson's suggestion to wait for the commission's action.

Royal Oak collected $29,383.25 from gate receipts last year and paid Arts, Beats & Eats $3,376.14 from parking profits, Johnson said.

The total economic impact of the event was about $23.69 million, according to Oakland County Planning & Economic Development Market Research Services using the Michigan tourism spending and economic impact model, Johnson said. The city’s net income before distribution for the 2010 event was more than $155,000 on revenues of $531,788, he said.

Although the changes favor Arts, Beats & Eats, it eliminates a problem for both parties because neither really had the means to verify the accuracy of the data provided by the other nor was there control over complimentary tickets issued by the festival, Johnson said 

“I think the amendment is extremely valuable to Royal Oak,” the city manager said.

The perceived willingness to lose that revenue for the city of Royal Oak did not sit well with Commissioners David Poulton and Patricia Capello, who voted against revising the contract. Mayor Jim Ellison and commissioners Terry Drinkwine, Jim Rasor, Michael Andrzejak and Charles Semchena voted in favor.

“This is business," Drinkwine said during the meeting, which stretched into the early hours of Tuesday morning at .

Witz said the new contract was proposed to cover costs and provide the city the high-caliber festival it deserves. “I have a great deal of respect for this partnership,” he said.

Capello said she is a tremendous supporter of the festival, but she must make decisions from the viewpoint of a municipality. “We have had one good year,” she said, adding that she thinks the existing contract is fine and contract changes should be well thought out and with more than one year under the city’s belt.

“We’re the ones losing here,”  said resident Sandra Wilkins, who is on the Arts, Beats & Eats committee as a neighborhood liaison. Wilkins said the event should be molded into what is best for Royal Oak, not the other way around. She felt the new contract was not in the best interest of the residents, but rather self-serving to those directly benefiting from the event.

Mayor Jim Ellison said he has full faith in Johnson, and if a new contract, including elimination of the controversial cross payments, is what is recommended, he supports it.

Despite a request by Johnson to remove the early termination clause, it remains in the new contract. Johnson removed the clause before the document was presented to the commission last night. It was in the first version of the revised contract.