Jay Z's Downtown Street Festival Would Pay L.A. Citizens Very Little
The Jay Z-curated Made In America festival in Grand Park and on downtown city streets Aug. 30 and 31 would pay local taxpayers a relatively small amount for police, street closures and other public services.
A motion introduced by City Council members Herb Wesson and Curren Price yesterday says concert promoter Live Nation "has agreed to enter into a contract with the city, which will include the payment of $500,000 for city services ... " For comparison, 2009's smaller Michael Jackson memorial at Staples Center for 17,500 fans cost the city $3.2 million in policing and other costs. Made In America expects 50,000 people.
The proposal to approve the half-million-dollar deal admits that ...
... it "may or may not cover all costs of city services ... "
However, boosters of the concert, which will feature Imagine Dragons, John Mayer, and Kendrick Lamar as well as electronic dance music DJs Steve Aoki, Afrojack and Borgore, say it will be worth it.
They have cited estimates that Made in America's 2012 debut on the streets of Philadelphia generated $10 million in economic impact for that city.
Some academics, like Robert A. Baade, professor of economics and business at Lake Forest College near Chicago, say these economic impact reports are pure fantasy. Philadelphia's was conducted by the Greater Philadelphia Tourism Marketing Corporation.
Baade told us previously that " ... the problem with these kinds of analyses has to do with the fact that the benefits are exaggerated and the costs are underestimated or ignored."
The much smaller Michael Jackson memorial at Staples Center in 2009 cost the city, by its own accounting, $3.2 million for police, street closures and other services. [Added]: The organizer of the memorial event eventually ponied up $1 million, leaving the city holding the bag for the rest of its costs.
Two days before that memorial, the boosterish Los Angeles Economic Development Corp. came up with an economic benefit estimate of $4 million based on the assumption that fans would come from out of town and spend on hotels, dining and souvenirs.
But businesses on the ground told us the numbers just didn't materialize. To be fair, fewer people showed up than expected. But as you can see, $500,000 doesn't go far when it comes to major events.
A city law requires special events organizers to cover the city's costs ... except if the council grants them an exception, which appears to be the play of Wesson and Price.
File photo of music fans by Timothy Norris/L.A. Weekly
Live Nation has agreed to cover any additional costs for "repair of any damage" to city property during the event, according to the City Council motion by Wesson and Price.
Because Made In America's organizers expect 50,000 people, double the capacity of Grand Park, much of the action will actually take place on the streets of downtown Los Angeles. Closures for the event are to include Temple Street to Second Street and Grand Avenue to Los Angeles Street.
According to documents obtained by the Weekly, a production coordinator for the event proposed that a major stage be placed near Spring and First streets. It would face northwest. A beer garden was planned nearby.
In fact Live Nation's special event application calls for "several" beer gardens as well as "branded activation areas," "several VIP areas," concession stands and a "Cause Village" for nonprofit outreach.
Mayor Eric Garcetti, who spearheaded efforts to embed the two-day party downtown, has said bars, hotels and restaurants would benefit, although some doubt that prognosis.
Mayoral spokesman Jeff Millman told us today that "we expect the $500,000 will cover the costs for our departments to ensure the concert is safe and enjoyable, while creating significant economic activity for our city."
The motion by Wesson and Price says that Live Nation has also agreed to enter into a contract with the L.A. County government that would have the promoter handing over an additional $350,000 to cover the county's costs.
Grand Park is run jointly by the city and county.
The Made In America proposal by Wesson and Price, which asks the council to back the $500,000 deal, suggests initial contracts have been drawn up and that handshakes have taken place.
Under California's Public Records Act, we've asked the city for any agreements between it and Live Nation but were told by an official in the mayor's office the terms for Jay Z's party, which already has a lineup, were still fluid and that any such preliminary documents were not subject to state law mandating transparency for the people.
One element left out of the proposal by Wesson and Price is concessions (alcohol, t-shirts, food), which can be quite lucrative for the concert business. The festival, which claims to be "all-ages," is sponsored by Budweiser and will require IDs for drinking areas.
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