This year's Something in the Water festival had a bigger economic impact than the first festival in 2019, according to a new analysis of five large Virginia Beach events.
Something in the Water 2019 created an estimated $1.1 million in direct tax revenue to the city, or taxes collected for tickets, food and other things sold at or directly related to the event. The 2019 event created about $24 million statewide in wider economic impact - things like hotel bookings, restaurant sales and the like.
This week’s analysis by Virginia Beach staff indicated the festival’s impact this year was around $27.7 million overall with around $1.5 million in city tax revenue.
Virginia Beach contracted Vince Magnini, a Longwood University business professor and hospitality analyst, to study the impact of the festival and other events. He told the City Council the city only barely made its money back from Pharrell Williams’ star-studded music event.
The tax money that came directly from the festival will get paid back to Williams’ and promoter Live Nation’s group as an incentive, but that amount will be less than half of the $2 million city expected, says a separate report from the city’s auditor.
Virginia Beach struck a deal with festival organizers for an incentive based on direct tax incomes to the city rather than an up-front lump-sum incentive. The city set aside $2 million, but the festival only tallied $970,000 in taxes between tickets, food and other sales, according to the report by Virginia Beach auditor Lydon Remias.
Live Nation, which helped put on Something in the Water, also put on the Beach It! country music festival in June at the Oceanfront and got the same kind of incentive. That festival brought in $351,000, while the city set aside $1.5 million for a potential incentive.
The remaining balance of those incentives will get rolled back into the city’s tourism fund.
Other events with different incentive structures had varying economic impacts.
Perennial Oceanfront favorite, the North American Sand Soccer Championships, earned Virginia Beach $15 for every dollar the city put into the event. In comparison, Something in the Water earned Virginia Beach between $1.04 and $1.18 for every dollar spent by the city.
Mangiani’s analysis also looked at two smaller first-time events – the free Jackalope extreme sports festival and Bulls and Barrels Beach Rodeo. Both of those lost the city money.
Councilman Michael Berlucchi said he’s heard some complain about “festival fatigue” but he said there are plenty of unquantifiable benefits these events bring.
“Young people in particular … are really excited about the fact that the city of Virginia Beach is programming in a way that is representative of their lifestyle, in their interests,” Berlucchi told the council.
“It results in citizen satisfaction, a sense of pride in one's community and quality of life, excitement about community, both for residents and also for visitors,” he said.
“I don't think that all of those impacts came through in the study."
Sign up HEREto be one of the first people to get the most important local news every weekday.
