This is the second of a two-part series on Newport Beach Chamber of Commerce’s financial challenges. Part one offered an overview of the Chamber’s fiscal health. Part two explores the income, or lack thereof, derived from Taste of Newport and other Chamber events.
For more than two decades, Taste of Newport has been one of Newport Beach’s signature events.
Hosted by the Newport Beach Chamber of Commerce, attendance at this year’s three-day festival of food, drink and music was down 10 to 15 percent, according to chamber CEO Richard Leuhurs.
“Overall, the event lost money,” said Leuhurs, despite a large turnout for the Saturday night headliner concert featuring the musical bands Devo and Blondie. Friday and Sunday attendance figures were “soft.”
The event has had financial difficulties for the past several years. According to the Newport Beach Chamber’s most recent publicly available 2010 federal tax filings, Taste of Newport lost $10,431 on the 2009 event. The chamber reported a net profit of $2,310 from the 2008 event. In 2007, the chamber’s tax return shows the event lost $11,542.
Taste of Newport is the chamber’s largest revenue generator, and the most expensive event to stage. For the years 2007-2009, event expenditures ranged between $1.2 and $1.4 million each year.
The chamber’s other major event, the Newport Beach Christmas Boat Parade, has done much better, netting just over $110,000 during the same three year period. Although a much more profitable event than Taste of Newport, gross revenues and expenses of the boat parade are small in comparison.
Despite the lack of profitability in recent years for Taste of Newport, the chamber can still boast that the combined net profit from all of the group’s yearly fundraising events, which include Taste of Newport, the boat parade, and other chamber sponsored events throughout the year, reached just over $208,000 for that same three year period.
However, yearly overall profits have declined dramatically during those the three years. In 2009, the chamber netted just over $40,000 for all of its fundraising events combined. In 2008, the net profit was just over $80,000. In 2007, net profit was $90,000.
Financial statements for 2010 and 2011 have not yet been released, and were not provided by the chamber.
One cost that hasn’t changed is CEO Richard Leuhurs’ annual salary, which has remained at $134,000, despite recent chamber layoffs.
According to Leuhurs, the chamber lost money due to the 2006 economic collapse of the real estate market and the chamber’s lack of ownership of the land that the chamber building sits on.
For now, Leuhurs said, the chamber can and will survive by cutting costs and reducing staff.
To help defray some of the costs associated with fundraising events, the chamber has requested assistance from the city in the form of special event grants and fee waivers.
In 2012 and in the upcoming 2013 funding cycle, the city has given the chamber $12,200 to help support Taste of Newport, according to financial documents provided by the city. The chamber had sought nearly $50,000 for the event in 2013.
The city was much more generous when it came to the chamber’s Christmas Boat Parade grant request. The city gave them $30,000 dollars for the 2012 event and another $35,000 for next year’s parade. The chamber had sought $50,000 for next year’s parade.
The city was also very accommodating to the chamber’s request for fee waivers. From 2008 to 2010, the chamber had just over $92,000 in fee waivers issued for the Taste of Newport event alone. Another $30,000 in estimated costs were also waived during that same period for the Christmas Boat Parade.
“The Special Events Advisory Committee reviews all applications for city event support during an annual review and grant award process. The review includes the applicant’s proposed event budgets, but it does not involve a review of an applicant’s or organization’s overall financial picture,” City Manager Dave Kiff said about whether or not the city took the financial health of the chamber into account when it reviewed its applications for grant monies and fee waivers.
Kiff said the city was aware of the chamber’s financial struggles, and that the city requires anyone awarded a grant to provide a post-event report, including a financial statement.
According to Leuhurs, the city conducted an additional audit of its 2010 Taste of Newport and Christmas Boat Parade fundraisers and found no issues with what and how the chamber spent the money.
The Newport Beach Chamber of Commerce continues to present the Christmas Boat Parade, which runs Dec. 19-23 this year.