Bonnaroo Music & Arts Festival representatives have asked Manchester City officials about annexation, expressing an interest in incorporating the property into the city, according to Manchester Mayor Lonnie Norman.
After failing to sign a long-term contract with Coffee County last year, Bonnaroo representatives have started exploring other options for a partnership.
Last year, county officials had the chance to sign a long-term deal with Bonnaroo, which would have guaranteed ticket fees and grant money that would be used for a $6-million road project at no cost to local taxpayers.
However, instead of taking the deal, county officials insisted Bonnaroo pay the $200,000 they had included in the county budget despite the lack of a contractual agreement. Though it had no legal obligation to do so, Bonnaroo did pay; but doing so only stalled discussions about a long-term agreement.
Currently, The Farm, which is home of the music festival, is on Coffee County’s land, meaning the county receives the sales tax revenues generated during the four-day event – about $1 million per year.
If Manchester City annexes the land, the city will initially start receiving any growth in tax sales dollars, and 15 years following annexation, all sales taxes from the event will go to Manchester’s coffers.
With no long-term deal in place between Coffee County and Axis Nation, LLC, the company behind the Bonnaroo Music & Arts Festival, members of Coffee County Budget and Finance Committee asked about the status of the relationships between the two parties on Tuesday.
Coffee County Mayor Gary Cordell said that he had talked with Jeff Cuellar, director of Bonnaroo community relations and that Cuellar didn’t mention anything about a long-term deal.
“They didn’t put anything on the table,” Cordell said. “I think there is a discussion going on with Manchester maybe, but I am not aware of any discussions with the county.”
Manchester Mayor Lonnie Norman said on Wednesday that he was approached by Bonnaroo representatives about a year ago, and they asked about annexing to the city and tying onto the city’s sewer system.
At that point, Norman told them what annexation would take. Norman also suggested they talk with Director of Manchester Water and Sewer Department Bryan Pennington.
Ticket fees no longer benefit the county
Under the deal that expired June 30, 2017, Bonnaroo paid a $3 fee for each ticket sold and a $30,000 flat fee to the county each year – amounting to roughly $250,000 annually.
Last year, Bonnaroo representatives offered to sign a long-term deal and use the ticket fees for widening of Bushy Branch Road in Manchester, the road that leads to the festival’s main entrance.
Bonnaroo officials even suggested raising the fee from $3 to $4 per ticket to fund that infrastructure project. The proposed deal would have been for 10-year period to ensure a long-term relationship between the parties. The county, at that point, insisted on receiving the $200,000 to fill its budget gap.
These ticket fees will no longer be designated for the county, or any specific project, such as the road project, until a long-term agreement is reached with either the city or the county.
Discussions at this point have been minimal, Bonnaroo officials say.
According to Bonnaroo officials, they have assured the county they will continue to pay for public service expenses associated with festival, such as police, medical, fire, traffic and public safety personnel provided by the county during the event.
“Heading into our 19th Bonnaroo on The Farm, we remain as fully committed as ever to supporting the Manchester community, Coffee County and the State of Tennessee through viable economic impact,” Cuellar said. “As always, our focus is on creating the best festival experience possible, so that Bonnaroo continues to be a destination for hundreds of thousands of fans, volunteers, staff and artists, year over year.”
If the city annexes the land, which is home to the festival, the county will lose sales tax revenue.
The large-scale entertainment event, staged in Coffee County since 2002, brings tens of thousands of visitors to the county every June.
The attendees represent a considerable influx of economic activity. During the four days of the festival, about $1 million in sales tax revenue is generated on The Farm from ticket sales, on-site vending and merchandise.
The city can annex the property with the written consent of the owners or by referendum, according to www.tn.gov.
If the land is annexed by the city, the city will immediately begin to receive any sales tax revenue that is above the average revenue generated in previous years.
So if the main event grows and if more events come to The Farm, the sale tax dollars generated from that growth will go to the city’s coffers.
State law requires local option sales tax and beer wholesale tax revenue collected in newly annexed areas to continue to go to the county for 15 years except for any increase in revenue, which goes to the annexing city.
At the end of that time, the city will receive all sales tax generated on the property.
In 2017, the festival generated $1,070,712 sales tax revenue for the county.
Bonnaroo also supports community initiatives though its charitable arm, the Bonnaroo Works Fund. The organization has provided more than $7 million in grants to area nonprofits over the last 17 years to support educational and environmental causes aligned with the mission of Bonnaroo Works Fund.
This year’s event is set to June 13-16.
Elena Cawley may be reached via email at email@example.com.