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What do 10,000 festivals add to the Minnesota economy?

Around lunchtime on the first Sunday in August, a few thousand hungry people converge on Dorset, Minnesota, population 22, which, with four local dining establishments—one for every 5.5 residents—has declared itself the Restaurant Capital of the World. That’s when the tiny community near Park Rapids celebrates Taste of Dorset, where visitors can sample local specialties, play kids’ games, and take a chance on being elected mayor: Anyone with a dollar can enter; the winner is drawn from a hat.

0613_10000-festivals_p1.jpgIrish Fair
Up to 100,000 fans of the Ould Sod flood St. Paul’s Harriet Island to enjoy traditional dancing and music, and sip Irish brews.

Last year, 3-year-old Robert Tufts was elected; past winners include a parrot and a St. Bernard. As restaurant owner Jeannette Dudley notes, “You don’t have to be human to win.”

It’s all tongue in cheek, but the impact on Dorset is undeniable. Most area businesses rake in their best day of the year. Last year, Dudley and her crew of 30-plus served more than 1,300 slices of the Dorset House Family Restaurant’s homemade pepperoni, sausage, and cheese pizzas at $2 each.

Down the street, Compañeros calls in 50 employees for the day to sell tacos, virgin strawberry margaritas, and Mexican mud balls (ice cream, crushed Oreos, strawberries, amaretto, and whipped cream). At 75 cents for a 7 ounce margarita, profits are not really the point, says restaurant owner Rick Kempnich. “We make a little, but it’s not the motivator,” he says. “It’s just a great event. It gives us exposure, and people come back.”

All over Minnesota, communities are making similar calculations. From Kandi is Dandy Days in Kandiyohi, Sinclair Lewis Days in Sauk Centre to Corn on the Cob Days in Plainview and Potato Days in Barnesville, it seems there’s a half-dozen celebrations for every summer weekend.

OK, maybe “Land of 10,000 Festivals” exaggerates a little. But you could add New Ulm’s Bavarian Blast; Uff Da! Days in Nevis; a few dozen art fairs, from Edina to Uptown to Ely; music festivals from the Bayfront Blues Fest in Duluth to the Rock Bend Folk Festival in Mankato to WE Fest’s country in Detroit Lakes and Twin Cities Jazz in St. Paul, and still only scratch the surface of festival culture here.

What is it about Minnesota and festivals? And what do they contribute to our economy?

A Frenzy of Festivals

Despite our affinity for festivals, no comprehensive list of the state’s celebrations exists. Explore Minnesota Tourism, a state agency, lists about 600 festivals in its database, but it relies on self-reporting by festival organizers, according to research analyst Patrick Simmons. The Tourism Center at the University of Minnesota puts the count in the ballpark of 1,500, but director Ingrid Schneider says there are no good estimates of festivals nationwide, so it would be difficult to say how that compares with other states.

Festival Facts

The Tourism Center at the University of Minnesota estimates the state has 1,500 festivals.

Explore Minnesota lists about 600 festivals.

The Minnesota State Arts Board granted $608,800 to 18 arts and cultural festivals for 2013, including $69,000 for Irish Fair. 

What all this festivity adds up to in total economic activity is similarly uncharted territory. While a few individual festivals have gathered data on their economic impact, thus far no one has put together an overall picture. Presumably, festival spending accounts for some portion of the $10 billion spent by travelers in Minnesota in 2011, according to a study by research firm Tourism Economics. That $10 billion in turn generated $17 billion in total business sales and $1.1 billion in taxes to state and local governments. How many millions or billions depends in part how far festivalgoers traveled, and how many booked hotel rooms, cabins, or camping sites, as overnight visits significantly drive up spending.

Such studies consider three prongs of impact, says Neil Linscheid, an extension educator in community economics at the U of M. The first is “direct impact”—spending at the event; the second is “indirect impact,” from business-to-business transactions (in Dorset, that could include vendors buying ingredients for all those pizzas and margaritas). The third is “induced impact,” as the kitchen and wait staff called in to work at Taste of Dorset spend some of their windfall down the street.

Studies of the economic impact of travel and tourism also usually exclude local spending, reasoning that the same money would have been spent locally anyway, just on something else. But we’re not so worried about the tourism part. With festivals such a big part of summer in Minnesota, we were curious about how much people chose to spend on festivals, as opposed to Twins games, golf or going to the mall. We looked at a sampling of festivals between Memorial Day and Labor Day, and tracked at least $66 million.

St. Paul Stories

On the first Sunday in June, traffic shuts down, and 250,000 people descend on St. Paul’s Grand Avenue for Grand Old Day to people-watch, enjoy live bands tucked into parking lots, and graze at some of the 150 food stands along the way. The free event started 40 years ago to raise money for the Grand Avenue Business Association, but the impact goes far beyond the day itself.

Irish Fair of Minnesota

Attendance: 80,00 to 100,000

Food and drink:
$2.4 million (77 percent of attendees spend an average of $34)

Souvenirs:
$1.1 million (30 percent buy souvenirs at an average of $40 each)

Parking:
$486,000 (a little more than half pay $10)

Lodging:
$306,000 (2 percent spend an average of $170)

Total spending:
$4.2 million

“We have a lot of businesses that say that their sales spike in June—for the whole month,” says Sue Evens, executive director of the Grand Avenue Business Association. “Not just on Grand Old Day, but even those that are closed on Grand Old Day. They say people come and want to come back.”

More than 73 percent are repeat visitors, Evens says, some from as far away as Wisconsin and the Dakotas, according to a 2006 survey by the Tourism Center at the U of M. A combination of wristband fees to beer gardens, sponsorships and vendor fees raised more than $100,000 for the Grand Avenue Business Association, but the vendors could do pretty well themselves. Three-quarters of the attendees surveyed said they bought something to eat or drink, spending an average of $23.22. Multiply that figure by 0.77 by 250,000, and that translates to $4.3 million.

Another St. Paul tradition, the Irish Fair of Minnesota, brings out a comparatively modest 80,000 to 100,000 people over three days, says Michael Gibbons, president of the fair’s board.

But between watching step-dancing, listening to groups like Gaelic Storm and Boiled in Lead, and admiring men in kilts, about 77 percent of visitors to Harriet Island purchased a pint or something to eat at the fair, according to a 2011 Tourism Center study, spending a average of $34. If we take the midpoint of attendance, 90,000, multiply it by 0.77 by $34, that adds up to $2.4 million.

The Irish Fair has no admission fee, but the survey concluded that patrons would only be willing to pay $5. “We don’t want that admission fee to be a barrier to people coming out,” says Gibbons. “We are about sharing the culture with people. We are not about being a profit-generating organization. We do have bills to pay, so we have to come up with some revenue.” The fair does charge food vendors a fee for their space, and takes a cut of their sales.

0613_10000-festivals_p2.jpgGrand Celebration Powwow
Hundreds of American Indian dancers gather for three days of competition in Hinckley.

In return, the fair’s profits go to support immigrant populations in the community. That’s something Finnegan’s CEO Jacquie Berglund can get behind. Minneapolis-based Finnegan’s is one of three beer options at the fair, along with Harp and Guinness, but Finnegan’s is the only one that donates 100 percent of its profits to organizations that fight hunger. The Irish Fair is the only sponsorship the local brewer buys all year, says Berglund. “It’s a great demographic for us.” And last year Finnegan’s sold 182 kegs over the weekend.

The Tourism Center survey found that three out of 10 fair attendees bought some kind of souvenir, spending an average of $40; that’s another $1.1 million. Add about half the attendees paying $10 for parking, 2 percent paying an average of $170 for lodging, and we’re up to $4.2 million. Now that’s thinking green.

The State of Minnesota has a stake in the success of such events, essentially contributing seed money to a small group of festivals that celebrate the arts and build community. In November the Minnesota State Arts Board awarded nearly $609,000 (some of it state taxpayer money) in grants to 18 groups and 2,700 artists across the state, including $69,000 to the Irish Fair, $59,240 to Twin Cities Pride in Minneapolis, and $40,535 to the Grand Marais Art Colony. The board estimates that 500,000 people participated in the 18 events funded.

An Artist's View

Minneapolis psychology professor Kelly Hazel has been selling her jewelry at art shows and festivals around the region for the past five years. So far her passion has not made her rich.

“Whenever you come out ahead, it goes back into the business for the next year,” she explains. “You do it because you love making things and can’t continue making them unless you sell some of them.”

Festivals usually charge $200 to $800 for artists to show their work; so far this year, Hazel has already spent $9,000 on materials, fees, and advertising. The Stone Arch Bridge Festival, held June 14–16 along the Mississippi River in Minneapolis, is one of her top-performing shows, she says, because all three days are profitable.

She has been able to qualify for more competitive shows after learning to work with precious-metal clays and hand-blown glass, allowing her to make components for her earrings, bracelets, and necklaces.

Her husband helps with the business, KLH Designs, working every festival. She usually works 10 to 12 shows a year, but is opting for a more relaxing summer this year and will only work six or seven.

Hazel has considered opening her own jewelry store, but in the current climate, “it’s way too risky,” she says. “It’s fun keeping this as a small business and not having to rely on it.”

—Raya Zimmerman

Tall Ships, Short Season

Though summer in Duluth can be brief, the city on the big lake makes the most of its location. When the tall ships sailed into Lake Superior in 2010, some 250,000 visitors from 42 states and four Canadian provinces turned out to greet them, and most of them needed places to stay. Tourism is a major player in Duluth’s economy, with 3.5 million visitors generating a total of $800 million in economic impact each year, according to Gene Shaw, director of public relations for Visit Duluth. And while the flotilla of 10 replica ships from the 1800s will be a stirring sight this year, it’s far from the only thing the state’s fourth-largest city has going for it. Shaw estimates that Duluth has more than two dozen festivals.

The waterfront park is called Bayfront Festival Park, and it lives up to its name, with programming pretty much nonstop from mid-June to Labor Day, including the Twin Ports Festival, All Pints North Summer Brewfest, Bayfront Reggae and World Music Festival, Bayfront Jam, and Bayfront Blues Festival.

Similarly, Minneapolis seems to have an art fair almost every weekend (the big ones are Uptown, Powderhorn, Loring Park, and Stone Arch Bridge) and music events like Rock the Garden at the Walker Art Museum and the Basilica Block Party. In the City of Lakes, the 10-day Aquatennial still reigns supreme. The city’s Downtown Council estimates that 400,000 people attended in 2011. Meet Minneapolis calculates that at an average of $50 each, that adds up to an economic
impact of $20 million.

0613_10000-festivals_p4.jpgTall Ships
Just one of the draws to Duluth, where Lake Superior Bay provides a stunning setting for music and more.

If one of those events went away, residents of the state’s largest city would probably find a festival to replace it. Smaller towns, however, sometimes struggle to keep a festival relevant. In Baudette, known as the Walleye Capital of the World, Willie Walleye Day started in the 1960s to honor the city’s “most famous resident,” the 2½ ton, 40-foot-long statue that has greeted visitors since 1959. With inflatable bounce houses for the kids, a dunk tank, and jugglers, Willie Walleye Day seeks to bring anglers and their families into town, instead of just cocooning at lake cabins.

“Without this event, we wouldn’t have that extra draw to those families,” says Mike Hovde, president of the local chamber of commerce. But it has sometimes been hard to keep Willie Walleye Day going. The tradition lapsed for a time, until the Lake of The Woods Women of Today led a revival in 1992. The group relinquished control three years ago, and the chamber of commerce stepped in.

“Willie Walleye is too important to us,” Hovde says, especially because the big fish is photographed “constantly,” so the chamber wants to keep the tradition going, including the uptick for area businesses that comes with the day.

Minnesota Renaissance Festival

Attendance:
303,000

Ticket revenue:
$5.4 million (most visitors pay $18.95 per ticket)

Food and drink:
about $15.2 million (estimated $50 per visitor)

Total spending:
$20.6 million


WE Fest

Attendance:
47,000
over three days

Ticket revenue:
$7.1 million
(tickets start at $99 x 41,000 = $4.1 million); 6,000 sold-out VIP tickets at $500-$1,000 = $3 million)

Miscellaneous spending:
About $9.4 million
($200 each per attendee)


Minneapolis Aquatennial

Estimated attendance in 2011:
400,000

Estimated economic impact in 2011:
$20 million 

Small doesn’t necessarily mean struggling, however. Nevis, population 390, appears to have a hit on its hands with Uff Da! Days. The 10th annual celebration of Scandinavian heritage, complete with lutefisk and Swedish meatballs, draws thousands. People line up for hours for food at a local church and the latest installment of the play, The Continuing Saga of Ole and Lena, in which Lena has recently moved from Norway to Nevis, says entertainment chair Bev Flynn. “People plan all year to come to Uff Da! Days.”

In Ely, the Blueberry Art Festival draws between 40,000 and 60,000 visitors to an arts and crafts fair of about 300 vendors. Vendor fees generate about $50,000, which local businesses can use for promotions and advertising, says Ellen Cashman, events coordinator for the resort town’s Chamber of Commerce. The economic benefit doesn’t end there. Out-of-town guests often get a hotel room for the weekend, buy gas, eat, and shop at the festival, she says. Eighty percent of the vendors come back from year to year, a sign that the festival is good for them, too.

In New Ulm, 5,300 people paid to attend the Bavarian Blast, a music fest with more than 20 bands playing polka, country, rock, and, of course, German folk music. With beer supplied by the hometown August Schell Brewery, the event measures success by the number of kegs emptied and piled in a pyramid behind the bar. Last year the pyramid was five or six high, says Paul Sabatino, the Blast’s president. At $4 for a 16 ounce glass, that’s about $48,000 of beer.

More Than Money

For sheer wackiness, it’s hard to beat Pola-Czesky Days in the central Minnesota town of Silver Lake. The 44th annual event has the usual festival fare: a car show, street dance, parade, craft fair, kickball and volleyball tournaments, and specials on chicken, pastries, and beer.

And then there are the toilet-bowl races on Main Street. Kevin Nowak grew up hearing about the tradition of wheeled contraptions with toilets for seats that were propelled down the street by pushing plungers against the asphalt. It all came crashing down in 1987 when someone with 10 commodes stuck to a hayrack crashed into a barricade, flushing the tradition for 20 years.

Nowak grew up vowing Silver Lake would someday regain the title of “Toilet Bowl Racing Capital.” After high school, he petitioned the City Council to revive the races. He was granted an exhibition year and never looked back. Now the event’s MC, he has been known to pull people out of the crowd and put them in a vehicle he has assembled. “People love it,” he says, “and want to be a part of it.”

Twin Cities Business Businesses sponsor the races, and the civic association runs a kid-friendly obstacle course between heats. Duane Yurek, an event leader, says it’s the women in the churches baking kolaches, a Czech fruit-filled pastry, and the men in the Lions Club cooking chicken dinners that make the event successful.

In all, Silver Lake estimates that it raises $40,000 a year to fund half a dozen civic-minded groups like the Silver Lake Lions Club. Forty thousand dollars may not sound like a huge number, but it makes a big difference in a city of 800 souls. And it’s a reason for Nowak, a mechanical engineer who now lives in Victoria, to make the trip home each August. “It’s a nice last hurrah of summer. All my friends come back for that weekend.”

Andy Greder has written for the St. Paul Pioneer Press and Reuters. Ann Harrington is senior editor of Twin Cities Business.

This article is reprinted in partnership with Twin Cities Business.


Big Numbers

No assessment of the state’s festivals and their economic impact would be complete without this word: “Renaissance.” The home-grown Minnesota Renaissance Festival got its start in 1971 when 25,000 people gathered in a field in Jonathan, a planned community now part of Chaska. The fair soon moved to Shakopee, and four decades later, it has become an institution, with 303,000 visitors over seven weekends. Corporate parent Mid-America Festivals runs similar festivals in three other states.

The Minnesota festival has 600 entertainers and 250 artisan booths on the site, which is meant to resemble a 16th-century village. At $18.95 for admission, visitors paid about $5.4 million total, factoring in reduced prices for kids 5 to 12 and the 800 customers who bought $80 season passes. Add an estimated $50 each for turkey legs and something to quaff, and that’s another $15.2 million, even without a trinket to take home.

But the Renaissance isn’t the only festival that’s cashing in big. WE Fest, held the first weekend of August at Soo Pass Ranch just outside of Detroit Lakes, has become the largest camping and country music festival in the nation, attracting A-listers like Carrie Underwood and Keith Urban, along with 47,000 fans per day. Tickets start at $99 for the three-day festival, but prices rise as the dates get closer. That’s at least $4.1 million. Six thousand VIP seats (the chairs themselves purchased from Chicago’s late Comiskey Park) were sold out this year by early May. At $500 to $1,000, that’s at least another $3 million, or $7.1 million in total ticket revenue. Randy Levy, a longtime staffer before he became owner, says the festival has come a long way since 1983, when 8,000 fans showed up to see Alabama. “We continually invest in better production, meaning sound, lights, and video, and it’s true state of the art.” It’s common for attendees to spend a couple hundred dollars over the course of the weekend, Levy says, adding that every hotel in the area sells out, and grocery stores do “enormous business.” Two hundred dollars times 47,000 equals another $9.4 million for food, drink, merchandise, and lodging. Ka-ching.

Moondance Jam in Walker, one of the nation’s largest classic rock festivals, boasts headliners like Mötley Crüe and Cheap Trick and a similarly pricey model: Three-day tickets for $180 to $200, VIPs for $475 to $500. And the convenience stores in Walker, population 943, sell a lot of ice.

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