Seafood Festival Awash in Cash
IRS Filings Show Hefty Earnings;
Chamber Says Money Funds Event
By Patrick Cronin
Hampton Union, Friday, July 29, 2011
[The following article is courtesy of the Hampton Union and Seacoast Online]
HAMPTON -- The Hampton Area Chamber of Commerce's tax filings for the last five years show the annual 2½-day Hampton Beach Seafood Festival has generated more than a half million dollars in revenue each year between 2005 and 2010.
The revenue figures represent income from the $5 admission fee, income from food and craft vendors who rent space to participate, the sale of souvenirs, such as the festival's official T-shirt, and beer and wine tent proceeds. The filings also show the Chamber of Commerce, which produces the annual event, spends a great deal of money each year to host the festival. Any remaining profits go directly back into the chamber's budget, according to Chamber President BJ "Doc" Noel.
Noel, along with Dean Merrill, chairman of the chamber's board, and board members Eileen Nevins and Skip Windemiller, sat down with the Hampton Union this week after learning the Union had located the chamber's tax documents via GuideStar, a public Web site that publishes tax filings of nonprofit agencies.
"All the revenue that we do generate does goes back into the festival and the chamber," said Noel, as chamber officials opened up for the first time about how much money the festival makes.
Inquiries into the earnings of the Seafood Festival, which celebrates its 22nd year this September, have often been made. Interest this year was rekindled by complaints to selectmen on July 11 by festival Chairman Jude David regarding how much the town charged the festival for services it provided in support of the 2010 event.
A 2010 tax return for the nonprofit organization shows the chamber generated $541,483 in gross revenue from the Seafood Festival last year. But after expenses — listed as $449,986 — the festival netted a $81,497 profit, which officials said all went back into the chamber's $760,000 operating budget for the organization as a whole. Even with that revenue, the nonprofit landed in the red in 2010, with a deficit of $26,738, according to its 2010 tax return.
How does seafood festival make money?
Organizers estimate the festival, on average — when the weather cooperates — draws about 150,000 people from across the United States the weekend after Labor Day each year.
Noel said the festival makes the bulk of its money through admission fees, which last year generated $212,944 in revenue. The next biggest money makers, according to chamber officials, were the beer tent at $97,587 and corporations, which pay up to $15,000 to be prominently advertised as sponsors — at $81,700.
Noel said officials also bring in revenue by renting space at the festival to food and crafts vendors. Last year, craft vendors paid $500 for a booth while food vendors paid $1,125 to $1,200, depending on their desired location underneath the tent. All told, food and craft vendors brought in $101,000 last year.
Other revenue generators included $11,962 for souvenirs and $20,228 from the sale of Coca-Cola products.
So where does the money go?
Nevins, a former chairman of Hampton chamber's board of directors, said the majority of the revenue goes back into the festival, with the chamber spending $459,986 last year to put on the event.
Some of the major 2010 costs include $23,559 for insurance, $27,966 for police/security and $63,625 to rent tents from Karl's Event Services, based out of Milwaukee, Wis.
Chamber officials also spent $4,725 for trash removal, $13,117 for electricity and $14,806 for portable toilets."I don't think people realize just how much money it costs to put on this event," Merrill said. "It's like creating a miniature city for three days."
Another $31,904 was spent on attractions such as music, entertainment, fireworks, a Kiddieland and culinary chef demonstrations.
The chamber also foots the bill — as part of its corporate sponsorship package — for top sponsors to stay at the Ashworth by the Sea Hotel and for a sponsorship party at the Purple Urchin.
Other costs include salaries. Noel said David takes home an annual salary of $35,235 and gets an annual bonus depending on how well the festival does each year based on net proceeds after expenses. The chamber also pays $55,598 for 20 laborers and other staff who set up and take down the festival and aid in its organization.
Not included in that amount, he said, are the salaries of the chamber staff, who he says work 362 days a year to organize the event.
Noel said the cost to put on the festival would be significantly higher if it weren't for the nearly 500 volunteers who help run the event.
As a reward for volunteering, the chamber provides each volunteer with a crew T-shirt, free admission, and last year, the chamber threw a $6,045 party for them at the Ashworth to thank them.
The festival also receives help from First Student Bus Company, which provides buses for free shuttle rides to the festival with the chamber only paying for gas.
Noel said the Hampton Rotary mans admission gates and for doing so gets a percentage of the proceeds. Last year, the service club took home $43,319, which helped fund several charities in the Hampton community.
Noel said the Seafood Festival now represents 63 percent of the chamber's overall operating budget. The chamber, he said, fronts the majority of cost for the festival hoping to make it back.
"We put tons of money out up front and then we pray for the good weather," he said. "If the weather is bad and no one shows up we are out all that money. So goes Seafood Festival, so goes the chamber of commerce for that year. I don't know how else to put it."
In 2009, when it rained Friday night and Saturday, the chamber lost money. If it weren't for a rain insurance policy, which allowed the organization to collect $80,000, Noel said the chamber would have ended up in the red that year as well.
The chamber, he said, now counts on revenue from the festival to help fund itself.
Merrill said the chamber is in the tourism business and as such, has significant higher costs than other chambers and can't survive on membership fees alone. For instance, the chamber runs an information center at Hampton Beach and puts out a visitors guide and calender of events that is mailed across the country.
In good years, when revenue from the festival exceeds what goes into the operating budget, Noel said the money is put into the chamber's general fund balance. The fund balance, Noel said, is there to protect the organization from off years, like the one in 2010.
Currently that fund is at $229,439.
Festival puts Hampton Beach on the map
Noel said the purpose of the Seafood Festival is not to be a huge income generator for the chamber but rather to extend the season for the business community. He added that when the weather is good, beach businesses reportedly have the best weekend of the year, including Fourth of July.
When the chamber first put on the Seafood Festival 22 years ago it was relatively small. Now, it has become a world-class event, and has been named by American Bus Association as one of the "Top 100 Events in North America."
Noel has watched it grow.
"We used pay $2,000 in insurance but after Sept. 11, (2001) that skyrocketed to $23,449," he said. "Tents used to cost $17,000 but due to new safety regulations now cost us $63,000."
The chamber, he said, has invested $104,000 over the years in infrastructure — installing underground gas and electricity lines on Ocean Boulevard — to host the festival.
By going public with its budget, Nevins said she hopes the rumors about how much the festival makes will be put to rest. "I wish people would focus on what we do for the area in promoting businesses in the Seacoast," Nevins said.