Number crunch: CRA board recommends $1.17 million for nonprofits, denies Moogfest

As Buncombe County’s June 30 deadline to finalize its budget draws near, the competition among local groups seeking public funding has reached fever pitch. The county’s powerful new Culture and Recreation Authority weighed into the debate May 20, drafting a list of 15 nonprofits it recommends funding to the tune of $1.17 million (see box, “Cutting the Pie”).

One applicant that didn’t make the cut was Moogfest, which made headlines with a request for $250,000 mere days after the April event revealed that it had lost more than $1.5 million this year. The biggest winners were the Asheville Art Museum and Pack Place Education, Arts & Science Center, two longtime local institutions that are facing major change.

All told, the Culture and Recreation Authority’s recommended allocations add up to less than one-third of the $3.86 million sought by the 19 applicants — but more than twice what County Manager Wanda Greene is calling for. Amid a contentious campaign season that will determine which party holds a voting majority on the Buncombe County Board of Commissioners, the fiscal wrangling will come to a head over the next several weeks as the commissioners make final decisions on the grant requests.

Wait a moogment

Moogfest sought the $250,000 grant from the CRA’s Community Development Fund to help pay for next year’s event. The technology, art and music festival began calling Asheville home in 2010 after several years in New York City, but organizers pitched the revamped, five-day 2014 version as having a strong economic development component. That argument garnered this year’s festival about $180,000 in local government funding — the first time it had received such support. The county chipped in $90,000 several months ago, and the city of Asheville donated $40,000 plus another $50,000 worth of in-kind services. But for the most part, the 2014 event was privately funded.

In March, Moog Music President/CEO Mike Adams, who owns both the local instrument manufacturer and the festival, told the county commissioners that he expected Moogfest to generate some $30 million for the local economy and $238,000 in tax revenue, more than repaying the govenment investments.

The company’s CRA grant application did not provide data on the festival’s actual economic impact. Moogfest is working with the Economic Development Coalition for Asheville-Buncombe County to produce a detailed assessment that should be ready in early June, said festival spokesperson Jill Lieberman. According to the application, the event had a $2.74 million budget.

Adams had repeatedly stated publicly that he didn’t expect this year’s venture to make money, framing it as an investment in the future. Knoxville-based promoter Ashley Capps, who produced Moogfest from 2010-12 as well as a similar event called the Mountain Oasis Electronic Music Summit, said that only one of the four had been profitable. Capps was not involved in the 2014 Moogfest, and in March, he announced that he’d decided to discontinue producing such events here.

The festival’s CRA grant application, however, painted a sunny picture of the event and its future.

“By all accounts the most recent transformation of Moogfest was a success from many important aspects,” it states, noting that it had attracted several significant sectors: people with the means to invest in the area; “the world’s media,” which presented Asheville in “a very positive way”; and “large corporate sponsors who we hope will invest in the event in a meaningful way in coming years.” A survey of VIP ticket holders showed that 57 percent earned more than $100,000 a year and 52 percent worked in the technology sector.

“As a result of the success of the first-year event,” the application states, “we have seven legitimate candidates interested in underwriting: Google, SAS, Microsoft, Red Hat, IBM, Samsung and Intel.” It also reports that organizers are “confident” that they can cut at least $300,000 from next year’s expenses through “efficiencies associated with managing this event for a second time.”

According to the grant application, Moogfest’s ultimate aim is to “raise the standard of living for every household in Buncombe County. Moogfest is loosely based on SXSW, which has directly contributed to the 28.5 percent GDP growth in the Austin area since 2008. … Moogfest brands Asheville and, by association, the state with a cool factor that other areas of the country would have a very difficult time matching. This gives our area a unique competitive advantage when it comes to attracting and recruiting new technology firms.”

Try again

Moogfest was the only for-profit venture requesting a Community Development Fund grant this year, and it was three months late submitting its application. The deadline was Feb. 7, and Moogfest applied May 7, “respectfully asking for an exception,” said Lieberman. But CRA board members unanimously opted to deny that request.

“They didn’t meet the deadline, which is a concern that I have,” said Buncombe County Commissioner Joe Belcher, who serves on the seven-member CRA board. “There’s not enough data to determine if it’s sustainable.” In March, Belcher and the other two Republican commissioners had voted against awarding the festival $90,000 in economic development funds.

Meanwhile, the other two commissioners who serve on the CRA board made it clear that their rejection of the late application didn’t mean they’re opposed to the event. “I think it’s one of the better things we’ve ever done here,” declared David Gantt, who chairs both bodies.

“I’m a big supporter of the festival,” added Ellen Frost. “But it’s an economic development matter: It needs to come before the Board of Commissioners.” She invited festival organizers to apply for more economic development funding in the future.

The Culture and Recreation Authority was created last year to manage the county’s libraries, parks and recreational facilities while also providing support for some community partners. The county allocates a portion of its property tax revenue to fund the new agency, and the commissioners have the final say on spending decisions. But Gantt told his colleagues on the CRA board, four of whom (a voting majority) aren’t county commissioners, “We will give great deference to the recommendations of the Culture and Recreation Authority. … So it’s not just a perfunctory type exercise here: It’s going to carry some weight.”

Picking winners

The CRA recommended giving the Asheville Art Museum $500,000 — more than any other applicant. The institution had requested $2.86 million to help fund a $24 million renovation of its downtown facility. Kim McGuire, who serves on the museum’s board, said it has already raised nearly $15 million, 70 percent of it from private sources. “But central to our success is significant civic support,” she told the CRA board. “The new museum will have a significant return on investment for the county,” she continued, citing a projected 200,000 visitors a year and $7 million in annual economic impact.

But the county’s allocation for the ambitious project, which has been floated for a decade, would be “contingent on getting started: That means hammers and nails,” noted Frost during the CRA’s public meeting. (The CRA actually recommended adding another $250,000 to the $250,000 set aside for the museum last year, pending the start of construction.) On that basis, the agency’s board recommended the funding on a 4-2 vote, with Belcher and Matt Kern opposed and Vice Chair George Briggs out of town.

In another major decision, the CRA voted 4-2 (again with Belcher and Kern in the minority) to recommend $409,076 for Pack Place. The money would be released in quarterly increments, and only if the organization remains “under its current business model,” said Frost, who lobbied colleagues to support the proposal. “The moneys are not transferable” to any other management entity, she added.

The city of Asheville owns the building, which it leases to the nonprofit, and the county has traditionally helped cover operating and maintenance costs. But the current lease expires May 31, and some City Council members have been pushing for changes in the arrangement.

Several CRA members advised Pack Place board members to start preparing for changes in their management structure. “My strong, strong message to the Pack Place board is: start fundraising,” said Frost. Belcher sounded a similar note, saying, “You should reach out to every person you can to make it sustainable.”

Frost explained later that she thinks demonstrating an ability to raise funds from other sources could help Pack Place address the city’s concerns.

Many other local organizations sought much smaller amounts of county money, which the CRA board recommended with little discussion.