ATLANTIC CITY — Two weekend-long concerts scheduled for September at Bader Field have been canceled, partially over the luxury tax levied on booze, hotel rooms and entertainment in the resort.
“I found out about it (Monday) morning, and it was a complete surprise, because we went through a lot to get it,” said Third Ward Atlantic City Councilman Steve Moore, who is chairman of the Revenue & Finance Committee.
City Council members got a memo Monday alerting them to the cancellation — nearly six months after they agreed Jan. 18 to let promoter Starr Hill Presents reserve Bader for Sept. 22 and 23 and Sept. 29 and 30. The council gave Starr Hill its approval Dec. 3 for the Phish shows this weekend and the Metallica-headlined Orion Music + More from June 22 to 24.
Ken MacDonald, Starr Hill’s director of venue development, said Monday that neither he nor any colleagues ever announced which artists would play in September at the 142-acre former municipal airfield, also home to Surf Stadium and Flyers Skate Zone.
MacDonald declined further comment.
And the memo did not explain why Starr Hill is pulling out.
But part of the reason is the 9 percent luxury tax levied on all entertainment purchases in the resort, some government officials said.
As with its Dave Matthews Band Caravan in 2011, Starr Hill will not pay the 9 percent tax on ticket sales for Phish or the Orion Fest under an agreement with the state Department of Treasury. The Treasury has such agreements with various other promotion companies. But once those agreements in place or now under negotiation expire, the state will not extend waivers anymore, spokesman Andy Pratt said.
“Going forward, we’re not giving waivers because there’s difficulty interpreting the law and applying the law based on Internet sales and sales at the door,” Pratt said. “Now we have to apply the taxation at the higher rates. But everybody knows Atlantic City needs some assistance here, so … there are discussions under way to see what can be done with the tax code.”
State officials started investigating the “discord” between collecting the luxury tax from tickets sold online and in Atlantic City a few years ago, Pratt said.
He did not have more information to provide late Monday.
But most venues and promoters have paid the luxury tax since it was enacted six decades ago.
“Would they like to not have to pay the tax? I’m sure they would, as would every other business,” said state Sen. Jim Whelan, D-Atlantic, who lives a couple of blocks from Bader Field and used to be city mayor. “That’s not unusual, … but over time, you expect people to pay (in) full — the government can’t be in the business of subsidizing these events indefinitely.”
Last year’s Dave Matthews event was the first of its kind in decades at Bader Field.
Things went smoothly. Nearby residents had few complaints aside from parking trouble in the city’s Chelsea Heights neighborhood. Aside from the black dust sticking to their limbs by the end of each day, concertgoers also had nothing negative to note.
Starr Hill paid $200,000 to cover police, fire and emergency medical personnel overtime and other costs incurred by the municipality to hold the three-day event in 2011. The company will pay the city $80,000 daily — or about $40,000 more over the span of the three-day events — for this month’s festivals.
“I think the reality is (those events) can work, but they’re going to work on a limited basis, and I don’t think you’d want to have a major event there every weekend,” Whelan said.
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