[Dynagroove] Interesting reading regarding Detroit's Electronic Music Festival

[Amy Ricketts]

>From the Detroit Free Press, April 13, 2005:


Techno fest fee, future in city's hands

With creditors clamoring, event seeks $5 charge

April 13, 2005

BY BRIAN McCOLLUM
FREE PRESS POP MUSIC WRITER



Behind the public glow of Detroit's annual techno festival, a cloud of
money problems and mismanagement has grown uglier by the year -- and has
pushed the city's biggest annual music event to the brink of collapse.


Championed for years as a cultural landmark by civic leaders and fans
worldwide, the event's immediate fate now lies in the hands of the Detroit
City Council, which next week will consider an unprecedented plea from the
festival's latest organizers.


If producer Kevin Saunderson gets his way, the council will venture into
uncharted territory and allow him to charge admission next month at
city-owned Hart Plaza.


If the council votes no, Saunderson said his Fuse-In fest probably won't
happen. And for the first time since 1999, Memorial Day weekend techno --
along with its hundreds of thousands of fans -- would be absent from
Detroit's riverfront.


"If this doesn't pass," he said, "we start looking ahead to 2006."


Justified or not, Saunderson will be saddled with heavy baggage when he
and supporters, including mayoral aide Lucius Vassar, go before the
council. Despite massive public success, the free festival has been
plagued by near-fatal financial woes and organizational disarray.


In its two previous incarnations -- the Detroit Electronic Music Festival
(DEMF) and Movement -- producers have left a trail of jilted creditors and
burned bridges. Until last year, when organizers took the stage pleading
for donations, the issues have been largely invisible to audiences that
number in the hundreds of thousands each year.


Today, the scenario is more muddled than ever. Movement founder Derrick
May is out; former partner and fellow techno DJ Saunderson is in.


A slew of local contractors and small firms still await compensation from
Movements '03 and '04, staring with growing hopelessness at aging invoices
that in some cases top $30,000. After months of futile attempts to
collect, they've begun to speak out in frustration.


That's the dubious backdrop against which Saunderson and his team are
scrambling to stage Fuse-In, the latest incarnation of a tradition
launched in 2000.


It's also left a vexing question for local supporters: How could something
so good go so wrong?


Breaking with tradition

In his presentation to the council, Saunderson will cite a study by the
Detroit Metro Convention & Visitors Bureau, which stated that the 2002
DEMF drew 1.5 million visitors and put $94.8 million into the coffers of
area businesses.


"When it's bringing that kind of money into the city, there's no way this
thing should be in the red," Saunderson said.


He said his strongest council ally is Kenneth Cockrel Jr., who at 42 is
the council's youngest member and a longtime techno fan.


Cockrel, the council's president pro tem, said Tuesday he has not
discussed the festival issue with colleagues and would not venture a
prediction on whether the event will be allowed to charge admission. Like
other city officials, he said a principal concern is setting a risky
precedent at Hart Plaza, which hosts dozens of gatherings each year, all
free for patrons.


Allowing a private company to charge for access would require strict
guidelines, he said, because it would "break a tradition of free,
signature music events that goes back more than 20 years."


Cockrel said the council's decision would also be guided by logistical
issues: the fences, checkpoints and manpower needed to limit entry to
ticket-holders.


"You have to do it without bringing chaos to Hart Plaza and Jefferson
Avenue," he said.


Vassar, director of corporate and civic affairs for Mayor Kwame Kilpatrick
and Saunderson's chief city liaison, said Fuse-In's fee proposal is for
this year only.


A weekend of 300,000 attendees paying Fuse-In's proposed $5 entry fee
would bring in $1.5 million -- more than enough, Saunderson said, to cover
costs, pay previous contractors and leave seed money for the 2006 event.


While angry creditors finger May as the most culpable figure behind
Movement's debts, some say Saunderson also deserves blame. May took the
festival's reins in 2003; Saunderson came aboard three weeks before the
2004 event as registered agent for the newly formed Movement 2004 limited
liability corporation.


Saunderson said the partnership with May, a friend since their days at
Belleville High School in the early 1980s, left him responsible only for
expenses incurred by the new corporation. But he said he feels an ethical
obligation and would use funds from this year to resolve earlier debts.


He's also motivated by pragmatism: He knows his job would be easier if the
festival's reputation were clean.


"I'm all about uniting, and the festival should do that for fans and
businesses," he said. "My goal is to reestablish relationships and prove
that this is going to happen differently."


In September, Saunderson resigned from the Movement 2004 partnership and
submitted his own fest proposal to city officials, who gave the go-ahead
in February.


May would not talk about his soured business relationship with Saunderson
or discuss details about any legal liability that may still be held by his
former partner.


Saunderson said he has learned from previous producers' mistakes, but he's
also acutely aware that among the festival's backstage supporters -- the
vendors, sponsors and contractors who have helped and been hurt -- a dicey
reputation has taken root.


"Just say no to techno" is the going refrain at one firm involved with
several area events, including the past five techno fests.


In May's office near Eastern Market, where just a year ago dozens of
staffers bustled day and night, it's a starkly deserted scene, with a lone
part-time assistant fielding phone calls and the regular batch of mail
from lawyers representing disgruntled clients.


Among them are the Detroit area entrepreneurs -- many in their 20s and
devotees of the local music scene -- who had inked deals with Movement to
help promote, publicize and run the two festivals. Their services and
their bills were diverse: Sara Gozmanian, management consultant, $11,500;
Milad Elmir, Web designer, $25,000 plus commissions, and Chris Tennyson,
public relations professional, $35,718.


Their contributions varied, but their dilemma is the same one faced by at
least 10 other Movement contractors: They haven't been paid what they say
they're owed. And they've been navigating what many describe as a maze of
revolving corporate names and elusive communications.


"It's been a series of one promise broken after another," said Gozmanian,
who coordinated a Movement dinner party last year at the Fox Theatre.
"Derrick would explain the financial problems he was having. He'd tell me
he'd pay in three months. Then it would be, 'Give me another three
months.' I offered ideas. I proposed a monthly payment plan, which I
thought was reasonable. None of it came to be."


May said he intends to resolve all Movement debts. He has paid "hundreds
of thousands of dollars out of my own pocket," he said, prioritizing
payments to banks such as Wells Fargo, which helped finance the fest.


"Unfortunately, there are urgent bills that can't go unnoticed," May said.
"But everyone will be paid, and I am sorry for those who have had to wait.
These debts are very much real, and I take full responsibility."


Agent Richard Maher said May has spent most of the past year overseas,
where his performances continue to fetch premium fees.


"Every single cent that Derrick gets, outside his very basic day-to-day
living expenses, is going to his creditors," said Maher. "He's working
very hard to pay these people and to clear his name."


Gozmanian has chosen not to seek legal action against May or Movement
2004. The investment in court costs and attorney fees outweigh any likely
gain, she said, which is why she'll continue to pursue the matter on her
own -- even as she's begun to give up hope. Echoing others awaiting
payment, she said the biggest frustration has been a lack of response from
the Movement camp.


"The difficulty in actually making personal contact has been almost
impossible -- all the meetings that have been promised, all the e-mails
back and forth, with no action ever taken," she said. "It's turned into a
nightmare, like everything that involves the festival seems to do."


Big crowds, no profits

Two days before the start of Movement 2004, Detroit's prime party sat
stuck inside a row of semitrailers next to Hart Plaza. And it wasn't
budging.


With hordes of techno fans set to make the annual pilgrimage into the city
to immerse themselves in dance music and culture, the festival's nerve
center lay barren. Contractors refused to unload their stage rigs and
audio gear until payment was in hand -- money that Movement organizers
didn't have.


The next day, after pleas from city officials and a late private loan, the
trucks were unloaded. For the throngs of young folks who piled into the
plaza, including legions from out of state, the festival went off as
expected: three days of music on five stages, with fans dancing under the
Detroit skyline.


The DEMF's debut in 2000 had been a milestone for modern Detroit music,
the first prominent recognition of techno in the city where it was born.
Endorsed by civic leaders, it became a mammoth commercial and artistic
success, drawing crowds estimated at 1 million-plus and rave reviews.


But during its three years behind the DEMF, production company Pop Culture
Media spawned its own batch of jilted creditors and court judgments.
Despite firm president Carol Marvin's success scoring big sponsorships,
including Ford Motor Co. in 2001, the fest struggled to turn a profit.


May braced for a difficult climb when he was granted control of the
festival in early 2003. The City of Detroit had withdrawn its $338,000
cash contribution upon expiration of Marvin's contract, and May faced four
months and a floundering economy to solicit sponsorships, the festival's
fiscal lifeblood.


Things only got worse in 2004. Battles over corporate control among May
and his silent partners -- including Detroit businessman Raymond Owens and
attorney John Simpson -- consumed months that might have been devoted to
festival production. The resulting split led May to reincorporate,
ditching the Owens-controlled Derrick May Inc. and forming Transmat Events
LLC, with May's mother, Eleanor Tankersley, as registered agent.


Lacking cash and sponsors with just a month to go, May teamed up with
Saunderson and created the Movement 2004 corporation while securing a
high-interest loan from an unnamed private investor. That $75,000 cash
injection dried up quickly in the weeks before the festival, and crises
such as the unloaded trucks were confronted and negotiated on an
hour-by-hour basis.


"There were a lot of bad decisions made," said one insider close to the
Movement organization. "Derrick had a bad habit of not seeing problems
before they arrived."


Amid the lively scene at Hart Plaza last Memorial Day weekend -- a
colorful collage of hip young people and thumping techno beats -- the
organizational disarray began to seep from backstage and onto the festival
grounds. Midway through the festival, donation tubs sprung up across the
plaza; the most lucrative drew $76 over the course of a day. By the fest's
final day, May and Saunderson roamed the plaza concourse, signing
autographs for $5 contributions.


In a cramped office near the main stage, tensions ramped up as staffers
bickered among themselves and pleaded with contractors to keep the
festival's electrical supply running. A bleary-eyed May came and went --
his girlfriend was at a nearby hospital giving birth to their baby girl.
In moments of exhaustion, he told his staff that this was it. He couldn't
endure another bout in 2005.


"I didn't have to put my money, neck and reputation on the line," May
said. "I love this music and this city. But I don't want any pity. I chose
to do this. I rolled the dice, and this is where it ended up. It's been a
hell of a year for me."


Lack of business sense

Many creditors interviewed for this story were careful not to lob
accusations of bad faith. It wasn't ill will, they said, that created the
financial mess, but poor decisions and inexperience.


"Basically, these are guys who don't know what they're doing," said one
veteran contractor who is involved with several city festivals and asked
not to be named. "They're musicians trying to be businessmen and put on an
event. I believe Derrick took this on out of a genuine love and passion
for his music. He's just not an event planner."


Others, like Milad Elmir, aren't as charitable.


"You'll hear people say, 'Well, they're artists, not business people.' I
don't buy into that line of thought," he said. "An artist can still ...
conduct affairs the right way."


Elmir, who owns the Detroit Internet firm EXO, is among those whose anger
is tinged with a sense of betrayal. "We looked at it as a way to help a
good cause, a commitment to our city," he said. "I still support the
festival, but I can't support the individuals who have been involved in
it."


Elmir said he was approached by May to run the Movement Web site, eagerly
accepting a deal that called for a $25,000 payment and a cut of
merchandise sales. But jitters quickly set in.


"There was no business plan. They were winging it," he recalled. "If I'd
known that, I'd never have gotten involved."


Elmir said he has given up hope of an amicable resolution and by month's
end will be filing suit against May, Saunderson and the various entities
under which festival business has been conducted -- including Saunderson's
new Fuse-In corporation.


Chris Tennyson already made that move. In July 2004, he secured a judgment
in Wayne County District Court against Derrick May Inc. for $35,718 --
money owed to his publicity firm Seyferth, Spaudling, Tennyson for work at
the 2003 fest.


"We're very upset about how all this has happened," he said. "It shouldn't
be run like this. It doesn't have to work like this."


Decision time

What may have remained a quiet series of disputes has taken on heightened
importance as Saunderson prepares to face the City Council, pushing the
festival's finances from the private realm into the public sphere. Despite
his formal separation from May, many insist he retains responsibility for
Movement's finances as he charges ahead with Fuse-In plans.


"He doesn't have a clean slate. A clean slate would be getting everybody
paid and not hiding behind a new corporation," Elmir said. "What he's
asking is that the city give him this privilege when he's a documented
mismanager with a proven track record of helping screw this thing up."


Amid the growing animosity, the festival's defenders say it's vital that
the public grasps the bigger picture: Movement's money problems don't rest
in the hands of any single individual.


Derrick Ortencio, hired by May as Movement director, said the fest's
greatest obstacle was the city's withdrawal of funding -- an early blow
that created a domino effect of difficulties.


"There was tremendous pressure on the festival to deliver a comparable
product" to the DEMF "under totally different parameters," said Ortencio,
who left Detroit last summer for his native Toronto. "The financial
support just wasn't there. Does that make it OK if somebody doesn't get
paid? Absolutely not. But it's important to remember the root of where the
financial problems started."


City bureaucracy presented its own set of problems, said Maher, May's
agent. The 2002 arrival of the Kilpatrick administration brought
formidable shifts at City Hall, including wide budget cuts and changes in
the delegation of duties. "The ongoing political wrangling with the city
to reach a satisfactory agreement for the festival to go ahead, both
years, was the No. 1 factor against us," he said.


Jon Witz, producer of the annual Arts, Beats & Eats event in Pontiac, said
the techno festival has been dogged by unique problems, but said
sponsorship dollars are out there for the taking.


"Generally, where an event gets lost, especially if it's doing well from
the crowd and programming perspective -- which Movement was -- is due to
the organizers and municipalities," he said. "If there are problems
getting sponsors, that means there's some disconnect with the people who
would want to support it. ... It is possible to get it right, if not for
this year, then in 2006."


Still, it will take more hopeful rhetoric to soothe those such as Elmir,
who said $25,000 was a costly price for a lesson in the techno festival
business.


"When our elected officials keep giving contracts to these same people who
have handled things the way they've been handled, they're endangering the
festival," Elmir said. "This is a cautionary tale for anyone thinking
about getting involved."


Contact BRIAN McCOLLUM at 313-223-4450 or mccollum at freepress


.com.



























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