Tourism Commission makes a risky call by committing $600,000 to sponsor air show
6 August 2012
Commissioners had to know there would be critics ready to jump about the appropriateness of spending an unprecedented amount to sponsor an event that last year ended in tragedy. In September, a plane crashed near the event grandstands, spraying debris into a crowd, killing the pilot, 10 spectators and injuring 69 people.
As a result, insurance for the event skyrocketed more than 500 percent to $2 million. Race organizers said they didn’t find that out until May.
Race director Mike Houghton made a last-ditch effort to rescue the event, one of Northern Nevada’s premier tourism draws, by seeking commission sponsorship. Commissioners, viewing the distribution as a one-time investment, unanimously supported the request.
The commission routinely distributes sponsorship money to organizations statewide for events, but the outlays are usually much smaller.
Commission staff analyzes the potential rate of return on state tourism grants. In the case of the Reno Air Races, event attendance is normally about 215,000, including 70,000 visitors who come to the region. It fills 15,000 hotel rooms and has a direct and indirect economic impact of up to $80 million. The state anticipates getting a $6 million return on its $600,000 investment.
So was it a wise investment of taxpayer dollars? And was it really even taxpayer dollars being spent?
The commission has taken great pains to explain that the money is generated by room-tax revenue from the state’s hotels and that the $600,000 was a surplus over the anticipated amount.
How would the money have been spent if not on the races? Most of it — $500,000 — was going to be used to advertise the state’s new branding message. Instead, the state will rely on the media to write about that.
The bigger concern to the commission now may be the precedent that was set by their support. Commission Chairman Lt. Gov. Brian Krolicki emphasized that the sponsorship was a one-time expense.
But how long will it be before other organizations seek similar treatment?
Proponents argued that the race has a 48-year track record and tradition, and that it was a nonprofit group that made the request.
But would it be any different, for example, if another nonprofit made a pitch to build a large outdoor music festival venue and contracted with the organizers of the Electric Daisy Carnival to have multiple events throughout the year that promised to bring thousands of people to Southern Nevada and guaranteed a huge return on the investment?
Hopefully, the commission will have a good response.
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