Show a costly lesson for city


Show a costly lesson for city
Diamond gig gouges Stockton for $480K

DAVID SIDERS
Record Staff Writer
Published Monday, Feb 20, 2006

STOCKTON – The city lost $480,223 on the Neil Diamond concert at Stockton Arena last month, according to a city estimate.

The city paid Diamond $1million to perform the arena’s debut concert, a sellout hit but financial boondoggle in which the city acknowledged two days before the Jan. 15 event that it expected to lose about $400,000 and net nothing for the charity billed as the beneficiary of the event.

The actual loss was greater than expected, but City Hall officials said the nonprofit Stockton Parks and Recreation Foundation likely will earn $15,000 based on the success of a pre-show gala.

“It’s brutal,” Vice Mayor Gary Giovanetti said Thursday. “I guess you just have to keep it in perspective.”

City officials said in December when they booked Diamond that the concert would make money, but they backed off that assertion after reducing the price of more than 2,000 tickets – originally priced at $75 to $150 – to $22.25 each plus fees.

Ticket sales grossed $753,268, but the city spent $1.3million on Diamond, advertising and catering, among other things. The city estimated its total loss at $574,295, although arena operator International Facilities Group netted $94,072 on concessions, merchandise and fees, according to a budget estimate.

The budgets are subject to some negotiation between the city and IFG, and the concert’s overall impact on the city budget won’t be known until the arena’s overall gains and losses are tallied at year’s end.

“Won’t be doing that again ever,” Councilwoman Leslie Baranco Martin said of the city-organized event. “It was a mistake.”

The city initially declined to disclose how much it paid for the concert, releasing the cost only after The Record threatened to ask a San Joaquin County Superior Court judge to pry open the contract.

After the disclosure, the City Council distanced itself from the event. Councilmen Dan Chapman declined to attend.

Judith Buethe, whose public-relations company coordinated the pre-show gala for the city, said she sold fewer tables at the gala than she expected. The tables were priced at $5,000 and $10,000. More than 30 tables were sold. The city occupied four tables it didn’t purchase. Mayor Ed Chavez and Councilman Clem Lee paid for their own seats at the event, according to city records.

The gala itself – less the expense of everything from flowers to tissue paper to etched wine glasses – did well enough to contribute about $15,000 to the Parks and Recreation Foundation, which is supposed to funnel proceeds to city youth facilities such as the Children’s Museum of Stockton, Pixie Woods, and the Gary and Janice Podesto Impact Teen Center, according to the city estimate.

“People who were there saw the possibilities,” Buethe said. “They saw the possibilities for other kinds of big events. They saw the possibilities for Stockton itself.”

In 2004, the city authorized spending as much as $350,000 to book comedian Jerry Seinfeld to reopen the Bob Hope Theatre. The city originally declined to provide the cost of that show but did so in response to a California Public Records Act request after the Diamond disclosure.

The Hope, which lost more than $12,800 the month it reopened, continued to lose money until November, the first month the downtown landmark posted a profit, $8,321.

Theater general manager Jacqui James could not recall whether the Seinfeld concert itself made money, but she said such a notable event was good for business.

Deputy City Manager Johnny Ford – who said he believed the Seinfeld show broke about even – said Diamond could do for the arena what Seinfeld did for the Hope.

Diamond’s gross revenues were good, and the show itself brought nationwide industry attention to the arena, Ford said. It filled restaurants downtown and had other, less-measurable effects, he and Greater Stockton Chamber of Commerce CEO Douglass Wilhoit have said.

Interim City Manager Gordon Palmer said the city is out of the concert-promoting business for good. It will leave booking acts to arena operator IFG.

Said Giovanetti: “Swallow the pill and move on.”

Contact reporter David Siders at (209) 943-8580 or dsiders@recordnet.com

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