Short on cash, the Brown administration is citing an obscure law in effort to impose fees on venues that include Babeville, the Town Ballroom and Sportsmen’s Tavern.
The City of Buffalo, facing projected budget shortfalls and desperate for revenue, is turning to a little-known chapter of the city code to collect a fee from music clubs and other entertainment venues for every ticketed event they produce.
The fee could add tens of thousands of dollars to the operating costs of bigger venues like Babeville, RiverWorks, Iron Works and Town Ballroom, as well as smaller clubs like Nietzsche’s and Mr. Goodbar.
Nearly all the venue owners and managers Investigative Post spoke to said they were blindsided by the fee, which they learned about last week via letters sent by the city’s Department of Permit & Inspection Services. And they expected the fee would raise the cost of tickets.
“This came out of nowhere,” said Donny Kutzbach, co-owner of Town Ballroom, a downtown music hall with a 1,000-person capacity. “And it’s absolutely confusing, especially considering what we already pay just to exist.”
City legislators were taken by surprise, too.
North District Council Member Joe Golombek told Investigative Post that he and other legislators are looking for answers about — and alternatives to — the fee.
“I’m very concerned by the amount the little guys are being asked to pay,” said Golombek, who learned about the fee from the owners of the Sportsmen’s Tavern, which is in his district.
The Sportsmen’s, Town Ballroom and other venues received letters saying that going forward the city would require a paid license for every event that “falls into the category of an Amusement,” as defined by city law.
Buffalo’s Town Ballroom in the Theater District. Photo by Garrett Looker.
These events “include but are not limited to lectures, exhibitions, theatre, sports, comedy, music and other shows that charge a fee for entry,” according to the letter.
Included in the correspondence was a schedule of fees based on the price of admission. To host an event with a ticket cost of $25 or less, the venue would be assessed a fee of $55. An event that costs $100 or more would incur a fee of $350.
The department’s commissioner, Catherine Amdur, told Investigative Post in an emailed statement the per-event licenses “have been an ongoing requirement in the City which venues pay for on a regular basis.” She characterized the letters as “a reminder” to venues that had not been paying the fee.
Nearly all of the dozen event venue owners and managers Investigative Post spoke to said they’d never before heard of an amusement license, let alone paid for one, and objected to the city adding another fee to their operating costs. Nearly all expected they’d have to pass on the cost of the fee to their customers.
Only one venue, Shea’s Performing Arts Center, told Investigative Post they were familiar with the fee and already had been paying it.
Dwane Hall owns the Sportsmen’s Tavern, which also operates the neighboring Cave and an outdoor venue between the two. Hall told Investigative Post he — like all other licensed music venues — already pays the city an annual fee that allows his venues to put on shows.
His three stages host more than 900 shows each year. He expects the newly levied fee will add between $45,000 and $55,000 to his annual expenses.
“I know the city’s desperate for money, and I understand everyone has to give a little bit, but they’ve got to find another way,” Hall said.
“For a small business like ours, it’s too much.”
Bill Casale, general manager of RiverWorks, told Investigative Post his venue hosts a variety of attractions every day that qualify as amusements under the city code, from musical performances to roller-skating to the Ferris wheel that overlooks the Buffalo River.
Casale said the amusement licenses would cost RiverWorks more than $100,000 a year. That’s on top of the annual license fees the venue pays to the city and to New York State to operate rides.
“We’re going to take a hard stance on this and band together with other affected entities,” Casale said.
City desperate for money
The city’s finances have been deteriorating for more than a decade as operating costs rise and revenues remain static. To balance annual budgets, Mayor Byron Brown’s administration and the Common Council have relied on one-shot revenues, including money from the city’s reserve funds and the sale of city-owned properties. For the past three years, the city has balanced budgets with federal pandemic relief funds.
The current city budget, which went into effect July 1, is balanced with a 4.2 percent hike in property taxes, an increase in garbage collection fees, at least $32 million in federal pandemic relief money, and nearly $15 million from the city’s reserves.
In the years that follow, the city will face mounting budget deficits, according to analyses by the city comptroller and the state-imposed financial control board. The control board in May identified up to $131 million in potential shortfalls over the next four years.
To address those looming gaps, the city is looking for new revenue sources, big and small, Golombek told Investigative Post.
Investigative Post asked the mayor’s office and Amdur, the permit and inspections commissioner, specific questions about the effort to collect the fee:
How many letters were sent out, and to what kind of venues? How much does the city typically collect in these fees in a year? How much more does it expect it might collect?
We received no reply to those and other questions, only Amdur’s emailed statement:
“Amusement Licenses for live performances have been an ongoing requirement in the City which venues pay for on a regular basis. Some venues have not been getting their Amusement Licenses and still need to be licensed. As a reminder, notices were sent to performance spaces in the City to provide information on applications for licensing their events or overall program.”
So far, only music venues report having received notice of the amusement license fee.
The Irish Classical Theatre, the downtown mainstay that puts on more than 100 shows each year, told Investigative Post it received no letter. Torn Space Theater, on the city’s East Side, did not receive a letter, either, though the company’s founder and artistic director, Dan Shanahan, told Investigative Post the company had paid for amusement licenses when it mounted shows off-site.
The AKG Art Gallery and Hallwalls Contemporary Arts Center didn’t receive notices from the city, either. The AKG charges admission to view its galleries and for a wide variety of ticketed events each year.
Hallwalls hosts art exhibits, which are free to visit, but also lectures, films, concerts and other performances which sometimes involve a charge. The arts center is located inside Babeville, in the former Asbury Methodist Church on Delaware. Babeville includes two stages, Asbury Hall and the smaller Ninth Ward, which host concerts, lectures and other cultural events.
Babeville did get a letter about the new amusements fee, which the venue’s operator, Scot Fisher, called “ridiculous.”
Smaller music venues got letters, too, including Mr. Goodbar on Elmwood Avenue and Nietzche’s on Allen Street. Mr. Goodbar hosts music and comedy shows three or four nights a week. Nietzsche’s has live music every day.
Shea’s Performance Arts Center already pays amusement license fees for performances at its main hall, according to Theresa Kennedy, Shea’s communications director.
“We did recently receive a letter directed to Shea’s 710 Theatre,” Kennedy said in an email.
“Monstrosities,” “menageries” and “lifting machines”
The city’s authority to levy fees on “amusements” is derived from Chapter 75 of the city code, which define 16 classes of “theatrical, dramatic and operatic entertainments, shows, amusements, field games and public exhibitions of every kind intended to amuse, instruct or entertain.”
If an amusement is “given for gain” or if an admission fee is charged, the city can collect a fee from the event’s producer, according to a fee schedule published elsewhere in the code.
Many of the 16 classes of entertainment described in Chapter 75 are straightforward: “ … lectures, readings or recitations … exhibitions of paintings or statuary … vocal or instrumental music.”
Other class descriptions bring to mind the marquees and carnival barkers of a weird old America: “… sideshows, concerts or minstrel or musical entertainments … exhibitions of moving pictures known as ‘mutoscope,’ ‘kinetoscope,’ ‘cinematograph’ … bird shows, galvanic batteries, lifting machines, blowing and striking machines.”
The ninth class encompasses animal shows, the 12th class fireworks displays. The 14th class includes “museums of anatomy and all exhibitions of monstrosities or freaks of nature.”
An event that includes amusement rides — whether part of a summer carnival or a year-round attraction like the Ferris wheel at RiverWorks — would have to pay $200 each day it’s open for business. Ferris wheels, merry-go-rounds and other rides are covered by classes 10 and 11.
Previous effort to tax culturals
In 2019, the city had exhausted the reserve funds it could use to balance budgets, and the Brown administration — then as now — was casting about for new revenue streams.
The mayor’s budget team proposed a surcharge on tickets to events held at city-owned venues: Canalside, Kleinhans Music Hall, KeyBank Center, Sahlen Field and Shea’s Performing Arts Center.
Like the amusement license fee, the surcharge would have been applied on a sliding scale based on ticket price, ranging from 50 cents for tickets costing $10-$25 to $3.50 for tickets costing $75 or more. Initially the city hoped the new tax — which would require approval of the Common Council — would yield $2 million annually.
But the patrons and boards of directors of the city’s arts and cultural institutions rebelled. Shea’s Performing Arts Center retained a partner at Phillips Lytle to fight the surcharge. City legislators were leery and ultimately the mayor dropped the proposal.
The Brown administration doesn’t need the Council’s approval to collect the amusement fee because it’s already on the books.
Hall, who runs the Sportsmen’s Tavern, said he doesn’t understand how the amusements fee will work on a practical level. What if an event is canceled? What if it’s a charitable fundraiser?
Hall expects he’ll have to add a service charge to his ticket prices to cover the amusement licenses, because his profit margins aren’t great to begin with. He’s reluctant to do that, because Buffalo isn’t a rich city.
“People want to get a good bang for their buck and we want to be one of their choices,” Hall said. “I don’t know how much more they can squeeze out of us.”
Casale said RiverWorks has pre-sold thousands of tickets for future events, which means it’s too late to pass on the cost to customers — something he doesn’t want to do anyway, for the same reasons expressed by Hall.
Golombek, the North District legislator, said he and other Common Council members have been discussing the matter with the Brown administration in the hopes of finding an equitable, predictable and less onerous middle ground. He suggested raising the cost of annual venue licenses might be more palatable and easier to implement, for both the city and the affected businesses.
The mayor doesn’t need permission from legislators to collect a fee that’s already on the books, Golombek acknowledged. However, if the administration won’t negotiate, legislators can change the law.
But not until they come back from August recess. The Council held its last session of the summer Tuesday afternoon.
“We can’t change anything until September,” Golombek said. “But we are very open to doing that.”
posted 1 day ago – July 31, 2024
