Branson

When the announcement was made that AirTran Airline would be ceasing its direct Milwaukee Branson flight less than three weeks after its initiation the reaction within the community was mixed. Some had the “I told you so attitude,” some the “I don’t care attitude” and still others the “We’re getting another flight attitude.”

Some were concerned that if this was the harbinger of what is to come for the airport, that the city of Branson or Taney County could be liable for all or a portion of the airports $150 million in private debt financing. For what it matters, based on the public information that is available, the Ole Seagull believes there is no reasonable way that either the City of Branson or Taney County has any legal obligation to repay any of the private $150 million in debt used to build the airport.

The private investors who invested the $150 million are the ones who stand to lose their investment if the airport operation doesn’t go as planned. A July 2007 Bloomberg.Com report said, “The Branson Regional Airport Transportation Development District (BRATDD) plans to sell $117 million of high-risk, high-yield bonds to finance a new privately developed airport near a tourist area known for its country music and live entertainment.” It continued, “The Branson airport deal comprises unrated securities maturing from 2013 through 2037 that are expected to have a top yield of about 6.5 percent, according to the bond offering documents. Citigroup will underwrite the deal.”

According to the May 14 and 16, 2007 records of the Taney County Commission, Taney County is leasing the land the airport is on to the BRATDD and the BRATDD was going to issue up to $150 million in revenue bonds to build the airport. The Notice of the Public Hearing said, “The bonds will be revenue obligations of the District [BRATDD], payable solely from revenues derived by the District from lease payments made under the operating lease to the Company for the Airport.”

There is a misconception that the city of Branson is responsible for paying $2 million per year to the airport. The reality is that under an agreement penned with the airport developers by the city administration in power prior to the 2007 elections, the city is obligated to pay the airport $8.24 per passenger that disembarks at the Branson Airport that did not originally board in Branson. There is a $2 million dollar per year cap on the payments. Although not limited to first time visitors to Branson, the payment is limited to passengers arriving at the airport. The lower the number of qualified passengers arriving at the airport the less the city pays. Zero passengers equal zero payment.

In the opinion of an Ole Seagull, although the citizens of the City of Branson and Taney County should be pretty well insulated from any direct legal liability should the airport fail that might not be the case for those who purchased the reported high-risk, high-yield, and unrated bonds. They should hope that passenger research and estimates used to forecast revenues are more accurate for other areas than they were for the Milwaukee Market.

On the other hand, our community and citizens do have a vested interest. If the airport fails what does that do to the reputation of the Branson Area in terms of economic development etc? Can any reasonable person really believe that the new lower air fare rates out of Springfield either would have happened in the first place or will be maintained without a viable Branson Airport? “Ah Seagull, what if things went south for the airport, is there a possibility of a “bailout?” Now how could an Ole Seagull know the answer to that one?

The age of low air fares to Branson have arrived and it is thanks to the “Branson Airport (BKG) which is located approximately 10 miles south of Branson. That thanks is based on two aspects, the low cost air fares of the carriers actually serving BKG and the fact that low priced service has influenced and lowered the air fares fares currently available through the air carriers serving the “Springfield-Branson National Airport (SGF),” located about 45 miles northwest of Branson.

That said, the Ole Seagull has some questions that he’s wondering if he can get answers to. “Yes,” he knows he could probably pick up the phone and call people, but then some will return the calls others won’t and besides, whether they are good questions or not, at least they are on the public record and can serve as the start of a public discourse on the availability of low fares to Branson and how to let Branson’s prospective guests know about them.

1. Does the average theatre, attraction, or hotel care whether or not the person purchasing their tickets or renting their rooms flew in through BKG, SGF, STL or East Kishnif?

2. In fact, forget about flying, as long as they are alive, breathing and have paid for a ticket or room does the average theatre, attraction, or hotel care how the person purchasing those tickets or renting their rooms got there? Does it really make any difference whether they came by car, bus, motorcycle, moped, boat, train, canoe, etc. or any combination thereof?

3. Would the answers to 1 and 2 above be any different for restaurants, retail shops, convention centers, etc.?

4. How much has the Branson Lakes/Lakes Area CVB (CVB) and the Branson Lakes Area Tourism Community Enhancement District (TCED) spent in the last year promoting low cost air fares to Branson?

5. Was one of the primary action items of those ads the intent to get the person reading the ad to go to the city of Branson owned web site, currently under lease to the TCED, “Explorebranson.com” and, from its front page, take an action that would allegedly give them information on the low fares available to Branson?

6. Is the primary source of information on that site talking about low air fares located at http://www.explorebranson.com/static/index.cfm?contentID=256, Click here to see page.

7. Does that page read basically the same the morning of May 16 as it has for the last few weeks?

8. In view of the impact that the new airport was anticipated to have and is having on low cost air fares and the current economic environment, what research has either the CVB or TCED done on the availability of low cost airfares to Branson?

9. As of the morning of May 16, when a potential Branson guests who has viewed the CVB/TCED ads about low fares to Branson takes the action prescribed in the ads will they get information on all the low cost air fares available to Branson?

10. If the answer to 9 above is anything less than a definite “Yes,” especially since taxpayer money is currently being used to promote “low cost air fares to Branson,” shouldn’t it be done in a manner that potential Branson guests get enough information so that they can make an informed choice?

11. Was any of that money spent in the Indianapolis, IN market?

12.  If so why?

13.  As of the morning of May 16, for a trip between Indianapolis, IN and either SGF or BKG, departing on July 11 and returning on July 18, what airline actually has the lowest air fare?

Most can remember the old Fram Oil Filter ads that said, “You can pay me now or pay me later.” The gist of the ad was that, in terms of a motor vehicle’s efficient operation, one could pay for an oil filter now and eliminate the problems a dirty filter would cause later or not purchase the oil filter now and pay later for the problems caused by a dirty oil filter.

Marketing works for destination and individual businesses basically the same way. Just like the oil filter it costs money that can either be spent now to generate business or can be ignored to be paid for later by the business that is lost because of the lack of effective marketing.

An an Ole Seagull’s opinion the destination marketing of Branson is where it all begins. It is what creates the “Tourist Pie” of tourists coming to experience Branson. It is the size of that pie that directly affects the chances for the economic success of each tourist business in Branson, the bigger the pie the better the chances for success.

If an Ole Seagull were to guess he’d say that the majority of destination marketing is done using taxpayer funds, controlled either by the city of Branson or the Branson Lakes Area Tourism Community Enhancement District, via a contract with the Branson Lakes/Lakes Area Convention and Visitors Bureau. He would further hazard a guess that the majority of the rest of the funds spent on destination marketing come from the time share industry and various other businesses that sell tickets, lodging etc.

The vast majority of businesses, shows, attractions etc., do not spend their individual marketing dollars on the destination marketing of Branson. They spend it in the hope of getting people already sold on the destination of Branson to do business with them. At the end of the day, to a particular business, it makes no difference if 10 million people come to Branson if it doesn’t get enough of those 10 million people to spend enough money in that business to provide for its financial success.

It is commonly called “intercept marketing” and is a concept that has been used in Branson for decades. The means of intercept marketing are virtually endless including but not limited to discount coupons, bill boards, ads in free tourist publications, TV, and radio, and giving different organizations a commission for marketing, selling and servicing your tourist related product. The purpose of most intercept marketing is to intercept the Branson visitor before they spend their time and money with someone else.

The bad news is that your business is competing with every other tourist business for each tourist’s money and time. Perhaps more important is the answer to the question, “Are the standard methods that have been used for intercept marketing in the past the best methods for the present?” An Ole Seagull would suggest, except for the better known shows and attractions, that if the method depends on the visitor being in Branson before being intercepted the answer, increasingly, just might be “No.”

When Bob McDowell was running for the position of Branson Alderman in 2007 he said, the leadership of city government had to “earn back the benefit of the doubt position” from the community. For what it is worth, based on what he personally has witnessed and been involved with this week and what he believes has gone on behind closed doors for over the last three years, an Ole Seagull would suggest that the Branson/Lakes Area Tourism Community Enhancement District Board (TCED) has to earn back the benefit of the doubt position from the stakeholders, the Branson Lakes Area CVB (CVB), paid staff and volunteers of the CVB, and the tax payers who authorized the tax.

The CVB has been doing the marketing for the Branson area for the TCED for the last three years under a contract that expires on Sep. 30. The contract has a provision that provides the TCED with the flexibility to renew the contract for up to another three years without going out for other bids (RFP).

A major agenda item for the TCED’s April 20 meeting was to “Discuss marketing RFP options for Fiscal 2010.” As part of that process, the TCED was presented with letters from two major stakeholder groups, “The League of Branson Theatre Owners and Show Producers” and the “Branson Lakes Area Lodging Association,” expressing their great satisfaction with the marketing efforts of the CVB and encouraging the TCED to extend the contract.

In addition, Dan Lennon, Vice President Marketing & Public Relations, made a presentation summing up the results of the CVB marketing efforts for the years 2006 and 2008. In spite of the challenges, all the following areas were up from 2005, the year before the CVB marketing program went into effect, Rate of First Time Visitors, City of Branson Sales Tax, City of Branson Tourism Tax, TCED Tourism Tax, Spending Per Party, Average Length of Stay, Overall Visitations, Family Visitations, and Overall Visitations. Amazingly, this was done, according to the report, at a Marketing Cost Per Visitor of $.92 as opposed to $2.41 for Las Vegas and $2.20 for Wisconsin Dells.

What was the reaction of the TCED regarding the CVB contract extension? Among other things, a comments by a TCED member indicating the CVB had packed the audience, another comment by a TCED member, blurted out to the Chairman during Lennon’s presentation, that they had to leave by 4:00 p.m., comments that things needed to be coordinated with the city of Branson and the passage of a motion that had something to do with the TCED having its financial oversight committee attend a future meeting.

Having sat there and not clearly understood the motion the Ole Seagull wrote the TCED asking for the specific wording of the motion they had approved. He received a reply from the TCED’s Chairman stating the wording would not be forthcoming because “It is possible when the board reads the minutes that the motion Jan lists is different from what board members believe they voted on. That is why the minutes and motions are not final till the Board approves them. Please, do not try to quote us till we have approved. We want to be accurate and follow procedure.”

To an Ole Seagull the TCED’s actions at the meeting and Akers reply represent the attitude of the TCED toward the CVB, the stakeholders, and the general public. An attitude that it is their game and they will play it the way they want, how they want, and when they want. To him it seems that they are failing to realize the potential impact of their actions, or inactions, on the marketing of Branson and its stakeholders, the people who have invested their lives and money in their businesses and all the others who rely directly or indirectly on those businesses for their income.

An Ole Seagull would suggest that if the TCED wants the benefit of the doubt they are going to have to earn it back. In his opinion, their actions this week have done nothing in that regard.

Recently the Branson area has been shocked by the accusations of the city of Branson being involved in fraud and cover-ups made by Ruth Denham, who was the city’s Interim Director of the city’s Planning and Development Department until a new Director was hired this week. What’s amazing to an Ole Seagull is Denham’s sudden epiphany and concern for the basements in Buildings 2 and 3.

After all, it’s not like they were new news or that she had just found out about them. In fact, according the very documentation Denham submitted on March 30, Sam Proffer, a former employee who worked in the Planning and Development Department while she was its assistant director, put her and all city officials on notice.

According to Denham’s information, on July 23, 2007 Proffer “ emailed Paul Link and Terry Dody stating in part, ‘It is my recommendation that the City not sign any CAF [Community Acknowledgement Form] for any reason until all of the buildings down at the Landing have met the requirements of our own floodplain ordinances and the NFIP regulation.’” “Proffer went on to say, “If FEMA does approve the application, and certain buildings are non-compliant are removed from the floodplain due to insufficient or inaccurate information, the City will have participated in misleading  other regulatory agencies, lenders, tenants, etc.”

Now almost three years later Denham, who had the information since July 2007, steps forward accusing the city of fraud. In her March 30 memo she describes the situation as “a classic story of money, greed, and cover-up, all of which I fear as a citizen may land on the lap of the taxpayers of the City of Branson, including myself.”

The Ole Seagull knows it will be very unpopular to point out that Denham knew or certainly should have known about the situation involving the CAF since at least July of 2007. Yet, until recent days there has been no record of her making the appropriate city officials or FEMA aware of the fraud she is now allegedly so concerned about. As a citizen, the Ole Seagull doesn’t look at Denham as a courageous whistle blower standing up for what she believes in. What he sees is simply a government employee, charged with a responsibility that did not fulfill that responsibility.

In his opinion, Denham was the assistant director of the department and, if she believed Proffer was right, should have taken action on Proffer’s email. Yet, in spite of her position as “assistant director” of the department what does the record show, based on the information presented so far, nothing, absolutely nothing at all. Until now that is.

Whether one agrees with Proffer or not at least he had the courage to put his conviction in writing and take a stand. That’s more than can be said for the number two person in the department, the very person now accusing others of fraud and cover up, etc.

When a person points their finger at someone, they have at least three fingers pointing back at themselves. An Ole Seagull can only wonder if the process of selecting a new director of the Planning and Development Department had more to do with Denham’s recent accusations than her concern about what “may land on the lap of the taxpayer of the City of Branson.”

It’s amazing, the Ole Seagull never thought he would see a government entity that operated more in secret than the city of Branson administration that was in place prior to the 2007 elections, but he was wrong. The way the Branson Lakes Area Tourism Community Enhancement District Board (Board) decides to spend millions of dollars in public funds, comparatively speaking, makes that old administration appear like it was conducting its business publically on the “Wheel of Fortune.”

Missouri’s Sunshine Law is very specific stating “It is the public policy of this state that meetings, records, votes, actions, and deliberations of public governmental bodies be open to the public unless otherwise provided by law.” Even where the law authorizes exceptions to that policy it states, “Sections 610.010 to 610.200 shall be liberally construed and their exceptions strictly construed to promote this public policy.”
Oh, it gets even more specific. The Sunshine Law goes on to state, “Nothing in sections 610.010 to 610.028 shall be construed as to require a public governmental body to hold a closed meeting, record or vote to discuss or act upon any matter.”

A favorite move for the TCED Board is the standard alleged use of two exceptions to the Sunshine Law. The first is Subsection 610.021(1) relating to “Legal actions, causes of action or litigation involving a public governmental body and any confidential or privileged communications between a public governmental body or its representatives and its attorneys.” The second is Subsection 610.021(12) relating to “Sealed bids and related documents, until the bids are opened; and sealed proposals and related documents or any documents related to a negotiated contract until a contract is executed, or all proposals are rejected.”
When one considers the way the TCED Board awarded the initial contract to the “Branson/Lakes Area Convention and Visitors Bureau, a division of the Branson Lakes Area Chamber of Commerce” in October of 2006, it makes a mockery out of the intent of the Sunshine Law. The TCED Board invoked the provisions of 610.021(12) to keep the public out of the process until they made their decision and announced it.
No member of the public knew who had made what type of presentation or when while competing for the millions of dollars to market Branson. Even under the old Branson administration the process was very public including public presentations by each entity interested in doing the marketing for the city. Why all the secrecy back in 2006? No one knows because it was all done behind closed doors with the public excluded, but were an Ole Seagull asked he’d opine, “They wanted to make sure the “right” organization got the contract.”

That contract expires Sep. 31 this year. Any bets on who is going to get the new contract or if the TCED Board will have enough respect for the tax-paying public to honor the intent of the Sunshine Law?