Benefits V05

July, 2008

Harmony Residents Group Benefits of Project Niagara

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Our Current Understanding of the Facts Project Niagara is hoping to attract 250,000-300,000 visitors annually. This is expected to bring additional tourism revenue to Town and Region retail and hospitality businesses, and increased attendance at the Shaw Festival. The artistic program for Project Niagara has been described as classical, pops, popular, jazz, and world. Proponents have stated that such a festival would enhance Niagara-onthe-Lake’s reputation as an arts and cultural destination. The approaching bicentennial of the War of 1812 has provided the impetus for the clean up of the former DND rifle range. Parks Canada expects to use revenues from the proposed festival to construct and maintain a presentation centre commemorating the Battle of Fort George. The Shaw Festival generates $59m in revenue to local businesses annually. The festival itself lost $927,000 in 2007, with attendance of 265,648. Another point of reference is the Tanglewood Festival, which adds $50m (U.S.) to the Berkshire economy each year. Our understanding is that ticket sales cover less than half the operating costs for Tanglewood, and that endowments make up the rest. As well as classical music, the Tanglewood Festival includes contemporary, rock music, and a three day jazz festival. Although the Blossom Festival itself focuses on classical and pops music (weekends only during July and August), the site is used for rock and country music concerts at other times. Ravinia also includes rock, blues and country music in its programming. Canada’s attractiveness as a tourist destination for Americans has been in decline for several years. 9/11, SARS, border crossing delays, fuel prices and the U.S. economy have all contributed to this decline. A U.S. government report showed a 2.3% drop in visits and a 3.4% decline in spending between 2005 and 2006. Statistics Canada reported 13.7 million same-day visits by Americans in 2006, a 12.5% drop from 2005, which was the previous all-time low. Specifically in Niagara, U.S. visits declined 39% between 2001 and 2006, with visits from all countries declining by 35%. As of April, gas prices had risen on average 22% in the past year, and are expected to reach $2.00/litre by 2012. In a recent AOL survey, 60% of Americans indicated they are looking for ways to trim travel costs. A Siena Research Institute poll showed 80% of New Yorkers plan to vacation closer to home due to rising gas costs. Michigan State University forecasts (Michigan) tourism to drop 2% in 2008 due to rising fuel costs. The Ontario Ministry of Tourism predicts an 8.6% decrease in U.S. visitors in 2008. Project Niagara’s feasibility study has not been made public, so its projections of economic viability are not available. Project Niagara has stated they believe they will draw their audience from the same demographic as the Shaw Festival, and expect many Harmony Residents Group Harmony with the Environment Harmony for Niagara-on-the-Lake Residents

July, 2008

Harmony Residents Group Benefits of Project Niagara

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Shaw patrons to stay longer or simply spend more to attend concerts. The Niagara-onthe-Lake Chamber of Commerce has formed a committee to enable Project Niagara, but it has not as yet assessed potential economic benefits. Our Analysis Using the Shaw Festival as an example, we can assume Niagara would indeed derive economic benefit from a music festival. As Project Niagara expects Shaw patrons to “add on” a concert during their visit, and as many concert goers are likely to bring a picnic, we can expect the net economic contribution to be less than the Shaw festival. Whatever the projected benefits, we see the following risks: 1. The proposed festival does not draw the anticipated attendance. The ability of the proposed festival to draw 250,000+ visitors per year is questionable. Two of the factors contributing to the decline in visitors from the U.S., border security and gas prices, are chronic. A third factor, the U.S. economy, could impact tourism for some time. Further, the proposed music festival would compete with well established festivals such as Tanglewood, Blossom and Ravinia. Although they are both excellent orchestras, the Toronto Symphony and the National Arts Centre orchestras do not enjoy the same reputation as those in Boston, Cleveland and Chicago. It is reasonable to assume it would take time for a new festival to establish itself. Also, if Tanglewood, Blossom and Ravinia, established festivals anchored by well endowed orchestras, are including rock, blues and country music in their programming, it is reasonable to assume a festival in Niagara-on-the-Lake will follow suit. The more financially challenged the festival is, the more it will be likely to shift its programming in that direction. As an independent entity, the festival will be obliged to pursue the most profitable sources of revenue. 2. Festival visitors spend all of their time at the concert site and bypass the town. Picnics are meant to be a feature of the proposed music festival. Plans for the site include picnic grounds, at least one restaurant and other amenities which may deter people from patronizing local businesses. Similarly, attendees who are shuttled to the site for larger concerts would have limited opportunity to patronize local businesses. 3. The proposed festival draws its attendance largely from existing visitors to Niagara-on-the-Lake. Project Niagara has stated they believe they will draw their audience from the same demographic as the Shaw Festival. The travel predictions cited above suggest that many patrons will adopt an “either-or” approach – not an “as well as” approach - to their visits as they attempt to manage their vacation costs. This could lead them to attend concerts instead of patronizing existing attractions such as the Shaw. A further risk to the Shaw is fundraising; if the proposed music festival draws from the same demographic, it may attract philanthropy dollars that might have otherwise gone to the Shaw.

Harmony Residents Group Harmony with the Environment Harmony for Niagara-on-the-Lake Residents

July, 2008

Harmony Residents Group Benefits of Project Niagara

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Our Position While the potential for some economic benefit to the Town and Region is indisputable, we remain skeptical as to the size of the benefit. Until we see hard evidence to the contrary, our analysis above suggests that the proposed festival could actually pose risk – both to residents and to Town and Region businesses. In a worst-case scenario, a struggling festival could shift its programming to rock music, attract a demographic different from Niagara-on-the-Lake’s desired image as a cultural and arts destination, fail to significantly add to local business revenues, yet increase congestion, and drive away existing visitors. We believe the proposed music festival should start small, and grow only after it has established economic viability and a world-class reputation. As explained elsewhere, we also believe the proposed festival should be located at a site other than the Parks Canada property on Lakeshore Road, where the environment, impacts to residents such as traffic and noise, and costs to the Town and Region are less of a concern. If the proposed music festival does proceed on the Lakeshore Road property, we want Parks Canada to take steps (through the lease agreement or some similar means) to ensure that artistic programming remains consistent with that described by Project Niagara in its concept presentation. It should restrict both the types of music and decibel levels. We would also expect Town Council to support such restrictions with appropriate noise bylaws. In addition, we would expect Town Council to ensure the festival pays municipal taxes (or payments in lieu), and is in no way subsidized by NOTL ratepayers. Sources of Information  Blossom Festival website  CBC News website  http://www.detnews.com  The Fort-Worth Star-Telegram  http://www.nydailynews.com  http://www.newsday.com  Niagara Advance  Ontario Ministry of Tourism website  Ravinia website  The St. Catharines Standard  Shaw Festival website  U.S Embassy Report  Tanglewood Festival website  The Toronto Star  The Town Crier

Harmony Residents Group Harmony with the Environment Harmony for Niagara-on-the-Lake Residents

July, 2008

Harmony Residents Group Benefits of Project Niagara

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Remaining Questions 1. What kind of jobs will the festival create? 2. Will the proposed music festival be paying taxes to the Town and Region? 3. Will the Town or Region be expected to subsidize any festival expenses? 4. What is the ongoing cost impact to the Town and Region for infrastructure, traffic management, waste management and recycling? 5. What are the details of the artistic program for the proposed music festival?

Harmony Residents Group Harmony with the Environment Harmony for Niagara-on-the-Lake Residents