The Excelsior City Council voted 5-0 to move forward with the Concerts in the Commons series agreement with the Lake Minnetonka Excelsior Rotary Club. The three-year agreement has a 50/50 revenue split. Of the city’s 50% revenue, 75% will go toward Community for The Commons projects and 25% will go for maintenance in the Commons park.
Behind the decision
Earlier this year, the council approved a one-year agreement with the club to manage the concert series. The short-term agreement was put forward so they could continue discussions on longer-term shared revenue agreements. The club’s board decided not to sign the agreement because the members preferred a three-year agreement with 50% of gross revenue going to Community for The Commons projects.
City officials began having conversations with another potential partner, the Excelsior Brewing Company, which was open to a revenue split that was more favorable for the city, said Mayor Todd Carlson. The brewery had to withdraw because of concerns about insurance and the number of volunteers that would be required for the concert series.
Carlson and Councilmember Jennifer Caron had additional discussions with the club regarding an agreement. The club is asking for a three-year agreement to secure sponsorship to support the concert series, Carlson said.
Given the club’s expertise in managing the concert series, the members think they can double the revenue that has been contributed in the past. By maintaining the 50/50 split, the city should see an increase in revenue, Carlson said. The club has moved from its initial position of 10% to 25% for maintenance.
The Rotary club
“We don’t claim to be experts running concerts. We did do four of them in 2018 with you as a partner and we did eight of them in 2019, so we got 12 of these under our belt,” said Larry Lembrich, who spoke on behalf of the club.
When running concerts that are free to the public, it’s impossible to make money without sponsorship, Lembrich said. The sponsorship funds and donations of beer and wine to sell at the concerts drive all of the net profit.
The cost of the bands, portable restroom rentals and other miscellaneous items are absorbed by the beer and wine sales, Lembrich said. Any for-profit organization would have a difficult time making money running concerts that are free to the public, he added.
“We love doing it and we have 45 approximately members each year that are fully engaged in pulling this off, so we want to continue to do it,” Lembrich said.
The revenue that the club retains doesn’t stay in the club, Lembrich said. The money is donated to local organizations such as the Open Hands Foundation, ICA Foodshelf, Second Harvest Heartland and the 180 Degrees organization, as well as some international charities.
The club plans to double its revenue by increasing sponsorships. That is why they are so adamant about the three-year deal. “This doesn’t work unless we have strong sponsorships,” Lembrich said.
According to Lembrich, the struggle is getting sponsors to feel good about funding the series.
“It’s not giving us dollars for maintenance to keep those projects, you know, nice and shiny,” Lembrich said. “We do acknowledge the fact that with every asset you put in that park, it needs to have a maintenance schedule and dollars that have to be driven to do that, we’re willing to participate in that.”
Lembrich said the club is helping by paying the $6,000 annual fee to use the Commons and the 25% of the city’s revenue, which goes toward maintenance.
Councilmember Dale Kurschner said if it was a business deal, he’d advise that the city keep looking for other proposals.
“On the other hand, we don’t charge anybody else 50% of their revenue for any events in the Commons and so I think we need to keep that in mind,” Kurschner said.
This is a community and the club has been a great community partner, Kurschner said, adding he understands that a multiple-year contract is important for sponsors so they have continuity.
Councilmember Lou Dierking said she isn’t in favor of the split of revenue that goes to Community for The Commons projects and maintenance. The city has an aggressive master plan for the Commons and is investing quite a bit, she said.
“We can’t just focus on shiny objects. We also need to be focusing on the infrastructure to support those shiny objects as we go forward,” Dierking said.
Caron echoed Dierking’s concerns. “We have significant maintenance and we’re going to have to reinvest in these structures as they need roofs and floors replaced,” she said.
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