While Cleveland’s music clubs have not always had each other’s best interests in mind, one issue has united them, and that issue is the city’s 8% admissions tax on live concerts.
Music fans were admittedly shocked when news came out in July that the Beachland was facing a $400,000 bill to the City of Cleveland on unpaid taxes. They knew all too well what would happen if the City demanded full payment. The Beachland would close.
Others, outside of the music community, were understandably taken aback by the club’s owner, Cindy Barber, and her insistence that the tax be re-worked. After all, none of us like taxes and we all pay them.
In an effort to further pressure the City of Cleveland the owners of six clubs — The Beachland Ballroom, Brother’s Lounge, The Cleveland Agora, The Happy Dog, Now That’s Class, and Pebody’s — have all banded together in a coordinated lobbying effort they’ve titled, “Cleveland Music Clubs Unite to Ask for Change.” Pamphlets distributed around venues and music stores around town make clear the actions music fans should take — Call Mayor Frank Jackson and call Council. These pamphlets also state, in plain and certain terms, that failure to act will keep the clubs at a competitive disadvantage both locally and nationally, will harm area musicians who make a living working and performing at the clubs, will stymie neighborhood revitalization efforts, and will put the city’s status as a Rock ‘N’ Roll destination in jeopardy.
Recently, I had the chance to ask Mark Leddy, co-owner of the Beachland Ballroom, a series of questions regarding the city’s admissions tax. Please note, The following conversation has been edited for clarity.
I Rock Cleveland: Why is it important to the Beachland that the City of Cleveland’s admission tax be altered?
Mark Leddy: This is a life or death issue for us. The City’s current tax policy of skimming 8% of the nightly ticket gross is an impossible burden for us to meet. It’s high stakes gambling every night for clubs like ours to book national acts. We gamble that we will sell enough tickets to pay the band guarantees, house expenses like sound, band hospitality, door box/office, advertising, insurance, BMI/ASCAP fees and security. Most nights we hope to get close to covering all those costs and claw back into profitability with bar, food and merchandise sales. In other words, ticket sales are a loss leader. While we do make money a few times a month when we have sold-out shows, ticket sales are always a loser when you look at it our monthly sales or yearly sales.
IRC: How do you respond to the critics who say, “Well, you owed the tax, why didn’t you pay it?”
ML: First of all let’s make it clear that we do pay taxes, lots of taxes. We pay over $100,000 a year in property taxes, payroll taxes, sales taxes, alcohol “sin” taxes and such. It’s just not possible for us to pay another 8% tax on our ticket gross and survive.
IRC: How has the current admissions tax hindered what you’re able to do at The Beachland?
ML: Many bands and booking agents avoid coming to Cleveland because of this tax. Most of the Cleveland suburbs have no admission tax. Cities that do, like Cleveland Hts., have taxes in the 2% to 3% range. Nearby cities like Columbus have no admission tax. Clubs in Cleveland proper are at a big disadvantage because of this tax compared to suburban venues and regional venues.
IRC: How are smaller, independent clubs put at a disadvantage by this tax?
ML: Some of the bigger venues like Playhouse Square are non-profit and they pushed successfully in 2009 to exempt themselves from this tax. Most of the bigger venues are only doing a handful of shows per month. They look for slam dunk shows. They take risks as well but it’s just a different animal than Beachland where many of the acts we book have no track record.
IRC: Why do venues like the House of Blues and Jacobs Pavilion have no issue with the tax?
ML: Who says they don’t have an issue with it? Trust me they do. Live Nation, the owner of HOB, does many shows at The Lakewood Civic because they don’t have to pay that tax there.
IRC: Lastly, what are your next steps in this effort?
ML: We are working to build a strong club coalition to fight the tax. This list includes Happy Dog, Peabody’s, The Agora, Brothers Lounge, Now That’s Class as well as The Beachland. This coalition is meeting weekly to plot our strategy to end the tax. We are meeting again later this week. Among the things we’ll discuss is whether to get a website going. We may choose to have all the venues create a page on their venue websites focusing on the tax issue. Right now we need to change the political landscape. We are encouraging people to call, e-mail and Facebook the members of City Council and Mayor Jackson. There is some support on council to end this tax on smaller venues but we need them to hear from their constituents how important it is to allow the City’s music venues to survive and thrive.