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FEATURE: Study Concludes St. Patrick’s Has Negatives, ‘Mixed Results’ for Business Community; Council Looking at Possible ‘Revisioning’

Category: Hospitality & Tourism

By Lou Phelps, Savannah Business Journal

February 1, 2018 - UPDATED 2/5/18 7:00 p.m. -  It’s been a long-running discussion:  has Savannah’s St. Patrick’s Day Parade and the multiple-day festival approach – versus just the historic parade - gotten out of control, with drunken and unruly crowds attracted from around the country to ‘a party’?   

And, what is the negative impact to many businesses in the Historic District? 

There’s also concerns that the current approach by the city’s leadership is driving away local participants from participating in non-parade activities during the festival period.   

In a report commissioned by the City and conducted by Georgia Southern University, assisted by the Savannah Waterfront Association, the city’s management team highlighted a number of negative outcomes from the current festival approach, at Thursday’s City Council Workshop.  GSU's Ben McKay made the presentation to the Council.  He’s a research specialist in the Bureau of Business Research and Economic Development at GSU.

The city is losing more than a quarter of a million dollars on the multiple-day festival, and almost half of downtown businesses are negatively impacted by the current approach, were the top takeaways.  

While the parade has taken place for over 100 years, the multiple day festival now held annually, with music and tourists flooding in for ‘the party of the South,’ has grown into a situation of unruly and drunken crowds, in the opinion of a number of Aldermen.

And, the work of managing an event that attracts hundreds of thousands of tourists is taxing the city’s employees who are expected to just ‘step up’ to handle the festival, according to Marty Johnston, the City of Savannah's Chief Operating Officer.  

“I don’t think the parade is the issue,” said Alderman Bill Durrence.  “What makes it (the festival) different is alcohol - that people can walk down the street with a drink. And, I don’t think that’s how the city should be identified.”

Georgia Southern University conducted a study of Savannah’s current ‘Tourist Infrastructure,’ and compared it to the approach of other cities in the South handling comparable-sized events, such as the Spoleto Arts Festival in Charleston.  Spoleto is 17 days long, with Charleston employing 20 full-time staff to handle the booking of events. For the Riverbend Festival in Chattanooga, that city has 11 full-time staff.  Riverbend, alone, generates a gross of $2.5 million revenue for the city.  Also studied were Memphis’ Barbeque and Blues festivals.    

What is different about these festivals was discussed, including that they have a much longer time frame, versus Savannah’s St. Patrick’s Day Festival that is generally a three-day event with the goal to honor Savannah’s Irish heritage. In 2018, the official festival will be shortened to two-days, just Friday and Saturday, March 16-17, with setup on Thursday. 

The parade will be held on Saturday, and the outdoor festival music and sale of alcohol will end at midnight, cutting off the outdoor concession of selling alcohol. Last call at the city’s bars will be at 2:55 a.m., as normal, according to Deputy City Manager Bret Bell.    

The St. Patrick’s Day parade itself is overseen by a volunteer committee. The impact on the city of the parade and festival, however, is “a lot of work by the city,” and without a defined city operating line item to summarize costs.  GSU looked at the expense and revenue line items that were impacted across multiple departments, including public safety, water and sewer, transportation, signage, other miscellaneous costs, and city staff overtime.  The operating budget for the festival is not normally annualized, and there is no specific team tasked with the festival’s management, according to GSU;  it’s just added onto the daily workload of city employees and department heads.  

Riverbend in Chattanooga attracts 350,000 attendees, has a $2.5 million operating budget, with 11  multiple events over 8 days.  Compare that to the City of Savannah that sold only $232,000 in wristbands last year for people to enter the ‘Festival District.’

To understand the impact to businesses in the Historic District, a survey was distributed by the Savannah Waterfront Assn, City Market Partners and the Savannah Downtown Business Association.  Of the respondents to the survey, 81 percent work downtown, and 54 percent said they are directly involved in the tourism industry.

“The parade is wildly popular,” according to the respondents, reported GSU.  But, only 56% of those participating in the survey view the festival ‘Positively’ or ‘Strongly Positive;’ and, only 54% of businesses report a positive overall impact - sales increases over cost of operations during the festival period.

As a branding event for Savannah, the GSU report said that tourists like to come back to the same locations where they’ve already been, and GSU believes that once even a younger crowd comes to St. Patrick’s Day, “they’re likely to come back. It’s almost a gateway into Savannah by a younger tourist, to come back and experience Savannah not at St. Patrick’s Day.”

“There are always going to be vocal complainers within a market, but, overall, participants were very excited about both – the parade and the festival, including security and organization,” said GSU. But a number of people attending the presentation said, afterward the meeting, that 46% of businesses in the Historic District NOT having a positive economic impact was very concerning.   And, there are those that see large increases in costs, with no positive impact to their revenues.  They must close down, or reduce operations during the period due to security, labor, repair and maintenance issues.   

The city used to fence all of River Street, with a control point where no kids were allowed, acknowledged Marty Johnston, addressing Alderman Johnson’s observation that the crowds are getting younger. Wristbands are now sold where people are entering the ‘festival zone,’ versus only on River Street, and therefore, there is not the control over those under 18 years of age.  “It’s one of the challenges we have,” she agreed.

St. Patrick’s Additional Tax Revenue ‘Fairly Low’

In arriving at the projected net loss for the City, typical March tax revenues are $6.4 million. Additional tax revenue linked to St. Patrick’s was only an increase of $147,637, according to the GSU study, using one approach to analyze available data, though that tax revenue figure could be as high as $285,000.  Johnston believes the total cost to the City is $500,000, creating a significant net loss.  

It was agreed that the tax revenue benefit is a range between $147,637 and $285,000 from additional sales taxes and hotel/motel taxes; the span is due to the variance in collections from the State, forcing GSU to adjust their analysis methods.  All March weekends have strong increases in tax revenues for the city.

“To put this party on, it’s expensive,” summarized Alderman Johnson.

The costs for the City government come from police overtime, traffic control and the costs associated with outside law enforcement brought in to help – in total, $370,000.  Add to this, rental of equipment ($26,000);   professional services to feed people ($26,000);  and other supplies such as for signage ($26,000); bringing the total costs to $449,000.  But that figure does not include sanitation and traffic engineering that also have overtime and other associated costs, explained Johnston, to arrive at her $500,000 total cost projection.  GSU’s analysis was formulated using line items that are tracked in the City budget.  Johnson estimated that there was an additional $50,000 in costs not captured in detail.

Questioned about how the overtime cost was developed, she explained that on a non-St. Patrick’s Day weekend, there are generally overtime costs of $98,000 for the police dept. for a two-week period, which appeared to mean that there was a net $270,000 increase in police overtime for the three-day period during the two-week pay period.

Johnson explained that, “Everybody goes to 12-hour shifts, often on top of 40 hours already worked.  The same approach is used for the Rock ‘n Roll Marathon.  Law enforcement from Georgia State Patrol, Pooler, Tybee and other area police are used for traffic control during the day, such as for the parade. The Savannah officers work at night.  Lodging for Georgia State Patrol, and other out of area law enforcement teams must be housed, fed, and compensated for mileage expense. Parade law enforcement starts at 3 a.m. 

The $232,000 proceeds from the sale of wristbands were used in part for Christmas decorations and fireworks in 2017.

The GSU study concluded by recommending that while it’s a signature event for Savannah, and adds significantly to branding and tourism, results are mixed for business owners. And, “the City of Savannah is not breaking even on this event.  While Savannah need hallmark events, there should be a professional manager for the festival.”

In response, Van Johnson said, “It takes some visioning from us, to ultimately define what St. Patrick’s Day in Savannah IS.  If we don’t, I don’t like the idea of Savannah being seen as ‘Let’s come, get drunk and trash the city.’ I don’t think that’s how we want to portray our city.  The crowds are younger, unsupervised and wilder … anything goes.  We’re driving people away, who say, ‘It’s just too wild down there.”

Johnston added that Michael Owens, president of the Tourism Leadership Council, “will clearly tell you that he hires staff specifically for that event.” 

And, to raise revenues using the approach of other city festivals, “Our staff cannot go out and get sponsorships for an event; it’s viewed as a conflict of interest,” she added. “But, when you hire an outside staff, they CAN go out and get sponsorships.”

“We haven’t been family-friendly in the twelve years I’ve been doing this,” she added. “We have people being bused in on a party bus, who come in from Augusta and Jacksonville, who get drunk for the day.  Even our bars aren’t making money off these people.  The music is conducive to those young people.  We have restaurants suggesting it’s not cost effective – people leave without paying their checks.”

And, she stated, “Successful festivals hire contracted people who know how to do these events.   We are just surviving through the Festival. We’re never going to improve it.”  

“There’s a supply issue with restaurants, that are over-crowded, running out of food, etc.” said Alderman Tony Thomas.  “Everyone runs to music, thinking that’s the answer.” But, he added, “Another big issue I see is hotel gouging. They require multi-night stays, and triple rates. I stay downtown (for the festival.) I was paying about $600 a night,” he said.  “We keep saying we’re going to clean up this festival.”  

Thomas added, “The first thing we need to do is sit down with the Irish community,” and the city needs to be working with the food truck industry, as well, to address food issues, though Alderman John Hall did not see it as the city’s responsibility to worry about whether restaurants were running out of food.

“Ultimately, we’re blamed,” countered Johnson. “It goes back to our brand.  We should be consistent.  If all we’re known for is ‘Come here and get drunk,’ then we’re not doing our job.”

Johnston added that along with St. Patrick’s Day, the City Council needs to look at, “What are we doing for Christmas?  ‘Why aren’t we decorating all over the city?’, we’re asked, which is improving.  We have the bones for some good things, but we need to develop how important that is.  Is it the city, TLC’s or VisitSavannah’s responsibility?”  she asked the Council to consider. Presently, the city employees are being expected to do their regular jobs, and then up the game for the special event entities. “Is it the city’s responsibility?” she asked.

In two weeks, the Council will be asked to approve this year’s St. Patrick’s Day Festival ordinance that will call for only a two-day event, Friday and Saturday, March 16-17, with set up on Thursday, March 15.  

How New Orleans deals with Mardi Gras was also suggested should be reviewed by the city staff, and what Savannah could learn from that city’s approach?

No research was presented on the percentage of local residents who no longer go to anything but the parade during the multiple-day festival due to the tenor of the event, or are even now staying away from the parade, beyond those marching.

Editor's Note:  The name of the GSU researcher was added Feb. 5, 2018.  

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