Buying a T-shirt at the 2008 Hollister Motorcycle Rally will
double as an investment toward the city’s ailing general fund.
Update: City manager and council members speak out about city’s
plan to sell merchandise at the 2008 Hollister Motorcycle
Rally.
Buying a T-shirt at the 2008 Hollister Motorcycle Rally will double as an investment toward the city’s ailing general fund.
The Hollister City Council on Wednesday approved a plan – to take over “official” rally merchandise sales – which officials believe is a slight risk with an upside that’s far more likely and potentially lucrative.
The council at the same meeting also, as expected, approved a deal with the San Benito County Chamber of Commerce to have the organization manage the event, while replacing the now-defunct volunteer committee that previously handled the duties.
The plan to try to cash in on rally merchandise, however, roused the most debate among council members.
Councilwoman Pauline Valdivia was particularly concerned about the risk of getting involved in a business venture with costs involved – such as the $295,000 price tag for goods alone. But other officials convinced her that the risk was minute, especially when compared with the potential revenue that would filter into the city’s general fund.
She also pointed out that it’s still crucial to draw a consistent attendance base to ensure the merchandise gets sold.
“We need to get the people here, too,” she said before ultimately agreeing with four other council members at the meeting who unanimously approved the move. Councilwoman Eugenia Sanchez was absent from the special meeting.
City Manager Clint Quilter’s presentation to the council estimated that selling T-shirts, hats and pins will net a six-figure sum anywhere between about $85,000 and $425,000. The higher amount would entail selling all of the estimated 50,000 shirts and 5,000 hats.
“That’s money going into somebody’s pocket, and it’s going to Florida or somewhere else,” Quilter said.
Quilter noted how it’s hard to devise an accurate estimate for merchandise sales because many of the vendors from last year’s event have refused to share their sales numbers. The city manager called the street vendors “very secretive” about their financial information – as the less they report, the less they’d have to pay in sales taxes.
Quilter contended that the plan carries a lower risk to Hollister than prior years’ arrangements. Last year Hollister counted on a $180,000 upfront payment from “official” T-shirt vendors to pay for law enforcement costs. Quilter and promoter Seth Doulton, also present at Wednesday’s meeting, said it’s unlikely the city could obtain that amount again from private vendors.
A lowball example Quilter presented – selling 60 percent of the projected units – would still result in a surplus for the city on the event, he said.
The council OK’d the plan while also approving a deal with the San Benito Chamber of Commerce to have the organization manage the 2008 event. The Hollister Motorcycle Rally Committee has been credited with helping to resurrect the event in 2007 after its cancellation the year before due to poor finances.
“I was very pleased with how well they did,” Quilter said.
The chamber must deposit $200,000 to the city for law enforcement costs by March 31, while Hollister will pick up the remaining expenses, according to the deal. Officials have conservatively estimated that additional amount at about $180,000, but the 2007 law enforcement costs ended up lower than projected last year, at about $320,000.
As part of the deal, the chamber wanted to be ensured by the city it would make $75,000 from the rally in a shared revenue stipulation over city merchandise sales. The chamber has potential to make more than that from other revenue sources, such as a partial take on booth-space rentals.
Mayor Doug Emerson, who has opposed the rally in the past, called the chamber partnership a “good business decision.”
“I’m real comfortable with it,” he said. “To me this just makes good business sense.”
