City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01890 11/19/2024 Discussion Item 24.
Budgetary Adjustment: Increasing the Budget for Visit Sacramento for Iconic Events Support and Production
File ID: 2024-01890
Location: Citywide
Recommendation: Adopt a Resolution: 1) establishing the FY2024/25 Iconic Events Support and Production Program (I17700000) as a new Multi-Year Operating Project (MYOP); 2) authorizing the City Manager or the City Manager’s designee to transfer $2,000,000 from the available fund balance of the Community Center Fund (Fund 6010) to the expenditure budget of the FY2024/25 Iconic Events Support and Production Program (I17700000) for Visit Sacramento; and 3) approving the conditions regarding the use of those funds for iconic events support and production as outlined in Exhibit A.
Contact: Megan Van Voorhis, Director, 916-808-5979, [email protected], Convention & Cultural Services; Michael Jasso, Assistant City Manager, 916-808-1380, [email protected], Office of Innovation and Economic Development Presenter: Megan Van Voorhis, Director, 916-808-5979, [email protected], Convention & Cultural Services;
Attachments:
1-Description/Analysis
2-Resolution
Description/Analysis
Issue Detail: Sacramento has cultivated a vibrant identity as the “City of Festivals,” a reputation built on its dynamic array of annual events that draw both locals and visitors. With events like the Farm-to- Fork Festival, Aftershock, and GoldenSky leading the charge, Sacramento’s festival scene has not only become a staple of local culture but has also driven substantial growth in the city’s tourism sector. These festivals attract thousands of visitors each year, generating millions in economic activity, supporting jobs across industries, and contributing significant tax revenues that bolster the city’s economy. This influx of attendees from beyond Sacramento enhances its status as a tourism
File ID: 2024-01890 11/19/2024 Discussion Item 24.
destination, bringing attention to the city’s hospitality offerings, cultural attractions, and unique local businesses. The increase in overnight stays and room demand during festival season boosts hotel occupancy and short-term rental utilization, cementing Sacramento’s role in California’s tourism landscape.
Unfortunately, music festivals have faced significant challenges recently, with many events canceled both in the U.S. and internationally. Key drivers include escalating production costs, softening consumer demand, and broader shifts in social and technological habits that impact festival attendance. The rising costs of essentials like security, equipment, artist pay, and insurance have strained festival budgets. Many festivals operate on thin margins, and as inflation drives up expenses, ticket prices are rising too, which has deterred some consumers amid other inflationary pressures on their pocketbooks. Festival promoters are reluctant to increase ticket costs further, wary of pricing out attendees, leading to financial struggles that have forced numerous festivals to cancel.
Despite these challenges, major festivals and artists with massive followings continue to draw large crowds.
In response to these dynamics, and the critical role that iconic events play in Sacramento’s identity as a tourism destination, Visit Sacramento is seeking a one-time budgetary increase for Fiscal Year 2024/25 in the amount of $2,000,000 to sustain its efforts to support iconic events production.
Policy Considerations: Goal 3 of Creative Edge: Sacramento’s Arts, Culture & Creative Economy Plan calls for building upon and expanding Sacramento’s unique creative economy, in particular it cites iconic event development and co-production as a priority.
Economic Impacts: Music Festivals have made substantial economic contributions in Sacramento as measured by the Destinations International Event Impact Calculator. For example, in 2024, Aftershock generated an estimated $31.3 million, while GoldenSky contributed $13.3 million, bringing the combined economic impact to $44.6 million. Those two festivals also supported 13,384 jobs in 2024, an increase of 1,000 jobs compared with 2022. Those positions span lodging, food and beverage, transportation, facility management, audio visual services, retail, and security - illustrating that the reach of economic impact from music festivals extends widely, benefiting a variety of industries and supporting the local workforce across different sectors.
In 2024, local sales tax revenue from Aftershock and GoldenSky reached $231,077 and state sales tax contributions were $1.1 million. Transient Occupancy Tax rose to $2.27 million, indicating the festivals’ positive impact on the hospitality sector. Indeed, those two festivals attracted significant overnight visitors, with 87,646 attendees from outside the 75-mile radius - up from 54,034 attendees in 2022. This 62% increase over two years spurred room demand, reaching 111,286 rooms in 2024.
Environmental Considerations: The recommendation in this report is not a project under the
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not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment, as contemplated by Section 15378(b)(4) of the CEQA Guidelines (Cal.
Code Regs., tit. 14, §15000 et seq.), and is, therefore, not subject to CEQA pursuant to Section 15060(c)(3) of the CEQA Guidelines.
Sustainability: Not Applicable.
Commission/Committee Action: Not Applicable.
Rationale for Recommendation: A one-time increase in Visit Sacramento’s budget sustains its ability to provide support for iconic events production in light of the enormous economic impact iconic events have on Sacramento, the critical role festivals play in Sacramento’s identity as a tourism destination and some of the challenges in the festival landscape.
Financial Considerations: There is sufficient funding available in the Community Center Fund (Fund 6010) available fund balance to make the recommended budgetary transfer.
Local Business Enterprise (LBE): Not applicable.
Background: The production of iconic events to support tourism recovery was included as a part of the City of Sacramento’s American Rescue Plan Act investment strategy for arts and creative economy through Resolution #2022-0064. Accordingly, a $1.5 million grant was provided to Visit Sacramento to support tourism recovery through the production of iconic events that attract visitors (and their associated spending) to Sacramento. Consistent with the Creative Edge plan’s iconic event production strategy, the grant would build upon and reinforce existing events and programs in the city and carefully consider ways to incorporate and reflect Sacramento’s unique culture. The objectives of the tourism recovery investment were to:
· Increase hotel room nights (and the associated transient occupancy tax) · Increase local spend through parking, restaurants, and local vendors · Integrate the local creative community into broader tourism recovery efforts The conditions of that grant dictated that events would be chosen based upon their ability to achieve favorable tourism-related impacts as evidenced by 1) the number of out-of-town attendees, 2) the number of hotel room nights booked, 3) the amount of transient occupancy and sales tax generated, 4) attendee spending on parking, restaurants and retail; and 5) the number of local support service providers engaged (crews, rentals, security, etc.) as well as associated spending with those service providers. Further, they would ensure each iconic event incorporates and reflects Sacramento’s
California Environmental Quality Act (CEQA) because it involves government fiscal activities that do unique identity and culture, as evidenced by 1) the number of local artists/musicians represented File ID: 2024-01890 11/19/2024 Discussion Item 24.
the number of local breweries, wineries and restaurants represented, 3) the engagement of the local community in the lead up and follow up to each iconic event through sponsored events/activities at local independent music venues, etc., and 4) the number of partnerships between the event organizers and local creative sector businesses. Additionally, they were asked to provide quantitative and qualitative data on how they achieved equitable outcomes and progress toward equity goals.
Subsequent to that investment, the City of Sacramento made an allocation of an additional $500,000 to Visit Sacramento as a part of the annual budget to support iconic events production.
onstage, as vendors or in other capacities throughout the live experience as well as associated spending with or subsidies provided to those artists/musicians or local music support providers, 2) RESOLUTION NO. 2024-
Adopted by the Sacramento City Council
November 19, 2024
Budgetary Adjustment: Increasing the Budget for Visit Sacramento for Iconic Events Support and Production
BACKGROUND:
A. Sacramento has cultivated a vibrant identity as the “City of Festivals,” a reputation built on its dynamic array of annual events that draw both locals and visitors.
B. Sacramento’s festival scene has not only become a staple of local culture but has also driven substantial growth in the city’s tourism sector. These festivals attract thousands of visitors each year, generating millions in economic activity, supporting jobs across industries, and contributing significant tax revenues that bolster the city’s economy.
C. The City of Sacramento has previously supported iconic events production through a $1.5 million American Rescue Plan Act grant to Visit Sacramento to support tourism recovery.
D. The City of Sacramento provides $500,000 annually through a budget allocation to Visit Sacramento to support iconic events production.
E. This one-time increase in budget to Visit Sacramento for iconic events production will cement its efforts to maintain Sacramento’s identity as a City of Festivals, in light of broader festival landscape dynamics.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The FY2024/25 Iconic Events Support and Production Program (I17700000) is established as a new Multi-Year Operating Project (MYOP).
Section 2. The City Manager or the City Manager’s designee is authorized to transfer $2,000,000 from the available fund balance of the Community Center Fund (Fund 6010) to the expenditure budget of the FY2024/25 Iconic Events Support and Production Program (I17700000) for Visit Sacramento.
Section 3. The conditions regarding the use of the funds for iconic events support and production as outlined in Exhibit A of this resolution are adopted.
Exhibit A
Conditions On Use of Funds for Iconic Events Support & Production
1.) Iconic events will be chosen based upon their ability to achieve favorable tourism-related impacts as evidenced by:
a. the number of out-of-town attendees;
b. the number of hotel room nights booked;
c. the amount of transient occupancy and sales tax generated; d. attendee spending on parking, restaurants and retail; and e. the number of local support service providers engaged (crews, rentals, security, etc.) as well as associated spending with those service providers.
2.) Each iconic event chosen should incorporate and reflect Sacramento’s unique identity and culture, as evidenced by:
a. the number of local artists/musicians represented onstage, as vendors or in other capacities throughout the live experience as well as associated spending with or subsidies provided to those artists/musicians or local music support providers;
b. the number of local breweries, wineries and restaurants represented; c. the engagement of the local community before, during and after each iconic event through sponsored events/activities at local independent music venues, etc.; and
d. the number of partnerships between the event organizers and local creative sector businesses.
3.) Each iconic event must provide quantitative and qualitative data on how they achieved equitable outcomes and progress toward equity goals.