Va. Beach City Council approves $2M sponsorship of Something in the Water

Sponsorship allows festival organizers to keep taxes

Published December 7, 2022 by Robyn Sidersky

Virginia Beach native Pharrell Williams’ Something in the Water three-day music festival will get a $2 million sponsorship from Virginia Beach as part of an incentive package approved by the City Council Tuesday night.

Something in the Water debuted in April 2019 at the Oceanfront and was called off in 2020 and 2021 due to the COVID-19 pandemic. After the police shooting of his cousin in Virginia Beach in 2021 and a grand jury’s decision not to indict the officer, Williams announced the festival would not be held in Virginia Beach in 2022 due to its “toxic energy,” but last month, he announced at the Mighty Dream forum in Norfolk that the festival would return to Virginia Beach in April 28-30, 2023. This year, the festival took place in Washington, D.C.

Virginia Beach councilors voted 10-1 to reserve $2 million from the Tourism Investment Program for a city sponsorship of the festival. It means the festival’s organizers would keep the “but for” taxes, which include admissions, meals and local sales taxes sold within the festival’s footprint, which is from Fourth Street to 15th Street at the Oceanfront, and online ticket sales. They’re called “but for” taxes because they would not exist without the festival happening.

Councilman John Moss voted against it.

The actual sponsorship amount would be determined after the fact, and if it exceeds $2 million, council would have to vote again on the amount.

The city has already given festival organizers an advance of $500,000 for marketing and in-kind contributions, including use of various resort stages for concerts, use of public parking lots for festival support and rideshare, city public safety and public works personnel already programmed for that weekend, and availability of the Virginia Beach Convention Center.

Virginia Beach Economic Development Director Taylor Adams told Virginia Business that city funding contributes to local businesses and the local economy and helps with tourism recovery. The $2 million number is an estimate based on the 2019 festival’s data.

Now that council has approved the sponsorship, it allows Adams to get a contract in place with the festival’s organizers based on the incentives presented to council. He will also get to work on setting up a team within city staff to “be nimble and responsive” and “create the best guest experience we can.”

The last time Something in the Water was held in Virginia Beach, the hotel occupancy rate for the event was about 90% throughout the city and hovered between 94% and 96% in the resort area, and 86% throughout Hampton Roads, according to an economic analysis done by Old Dominion University. Hotel revenue generated $4.85 million for all of Hampton Roads, including $2.2 million in Virginia Beach. According to the ODU report, the economic impact of Virginia Beach-based and visitor ticket holders was $21.76 million, with resulting tax revenue of $1.19 million and a total economic impact of $24.11 million across Hampton Roads.

Tickets for the 2023 Something in the Water went on sale Nov. 5, although performers have not yet been announced. Tier 1 and Tier 2 level tickets, $195 and $225 respectively, have already sold out, according to the festival’s website.

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