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Home / Articles / News / News /  Ruffled feathers
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Thursday, October 14,2010

Ruffled feathers

Flap over Boulder Creek Festival has nonprofit crying fowl

By Jefferson Dodge
A long-simmering dispute between the city of Boulder and a local nonprofit group over the ownership of the Boulder Creek Festival is threatening to boil over.

The city of Boulder is expected to seek bids for the management of the Memorial Day weekend event, but Boulder Creek Events, the organization that has run the festival for a dozen years, is questioning the city’s motivation and legal authority to do so. The nonprofit claims ownership of the event and its name. Boulder Creek Events officials say they have been singled out by city staff for years, possibly in an effort to drive them out, and they are fed up.

City officials, on the other hand, say they are not requesting bids for management of the festival in an effort to get rid of Boulder Creek Events. They laud the job that the organization has done over the years. But they do maintain that the city owns the event and must perform due diligence every few years by inviting bids to ensure that it is getting the best bang for its taxpayer buck.

Both sides produce documentation they say proves their ownership of the festival and its name, and the matter may well end up in court.

In the end, the future of an event that has grown immensely popular over the years may depend largely on its past.

Troubled history

The roots of the creek festival date back to 1984, when there was an event held to clean up areas along Boulder Creek. It received seed money from the Parks and Recreation Foundation, an entity created to support the city’s parks and recreation department. Officials say the foundation’s board consisted of the members of the city’s parks and recreation advisory group, who were appointed by city council.

According to a March 2009 memo in which the city asserted ownership of the event, the first festival was held in 1987, but by the mid-1990s, it had outgrown the city’s parks and recreation department, and a group called Boulder Community Celebrations (BCC) was created to take over management of the festival. BCC was a legally independent nonprofit that consisted of community members, festival volunteers and participants, the memo says. But after managing the event for about two years, BCC had incurred a significant amount of debt and had to be dissolved.

By all accounts, that’s when Chris Dailey stepped up. Dailey started out volunteering for the event and worked his way up to management positions. And in 1997, when the festival was in peril, he and his brother Nick agreed to take over the event’s management — and debt — from BCC. They formed an event production group called TeamFest, which later became Boulder Creek Events.

An Oct. 8, 1997, agreement shows that the deal included transferring all assets of the Boulder Creek Festival from BCC to the Daileys.

Dailey, now CEO of Boulder Creek Events, says that agreement transferred ownership of the event and its name to his organization. He has a letter from then-BCC board President Art Simmons affirming that an application was filed with the state in 1997 to trademark the name of the festival and that the assets transferred to the Daileys that year included all trademarks.

But the city counters in its March 2009 memo that the agreement does not list the festival itself among the assets transferred.

Dailey says that as part of the 1997 deal, in addition to taking on about $50,000 in festival debt, he agreed to send 25 percent of profits to the Parks and Recreation Foundation. In addition, the Daileys agreed to give the city the annual Great Rubber Duck Race, which is held the same weekend as part of the festival and benefits EXPAND (Exciting Programs, Adventures and New Dimensions), a city program that helps people with disabilities improve their recreation and leisure skills, to give them a better quality of life. The event generates $22,000 to $30,000 for the program each year, officials say.

Also, as part of the original deal, the city agreed to pay the Daileys an annual salary of up to $65,000.

City trademarks name

But a few years ago, Dailey says, city officials filed at the federal level to trademark the name of the festival. In addition, he says, about five years ago, after the festival had gained significant popularity, the city’s contracts for Boulder Creek Events to run the festival began to include language asserting city ownership of the event.

Boulder Creek Events officials say they suddenly had to start paying sales tax on beverage sales, and they were subjected to a city audit. They say they feel singled out, all the way down to special fence-height requirements that the city was enforcing for the festival but not other events.

In 2004-05, the city put the management of the 2006 festival out for bid, and among the entities challenging Boulder Creek Events for the contract was Downtown Boulder Inc. Boulder Creek Events officials say they won the contract hands down and that there were even discussions with the city about settling the ownership question by turning the festival over to Boulder Creek Events in its entirety.

But that never happened, and in a proposal to the city advocating for Boulder Creek Events to become sole owner of the festival, the nonprofit admitted that it did not own the event.

“At the present time, the Boulder Creek Festival is owned by the City of Boulder and is produced by Boulder Creek Events,” the group’s officials wrote to the city manager in November 2005. “However, it is our contention that a change in ownership will be in the best interest of both the City of Boulder and Boulder Creek Events.”

That first sentence, according to city officials, is the smoking gun that proves the festival is owned by the city, not Boulder Creek Events. Dailey says that document was prepared with the understanding that the signed contracts had begun to include language about the city’s ownership of the event, and that such an admission was needed to secure ownership for Boulder Creek Events.

“We were tricked into this and did it under duress,” he says.

Dailey counters the city’s claim of ownership by producing the first page of a 1998 city license describing Dailey’s group as “doing business as Boulder Creek Festival.”

Mock’s take

Former Boulder City Council member Don Mock is what you might call a key witness. Dailey says Mock was involved in the 1997 discussions that resulted in Dailey taking over the festival.

Today, Mock is president of the PLAY (Parks and Leisure for Adults and Youth) Boulder Foundation, which is the new name of the Parks and Recreation Foundation, the group that helped found the festival in the 1980s.

With all of the time and effort needed to plan the festival, Mock says the city is too late in opening up the bidding process for the 2011 event. Dailey and his team agree, saying they are already well into the planning process for the next festival.

For Mock, the question is not who owns the festival, because the city can always keep the event from occurring simply by refusing to issue a permit for use of the public land. In fact, he says, if there is any question of ownership, the Foundation should be in the conversation, since it originally financed the event.

But he says it is more a question of reaching some agreement between the city and Dailey, like a sole-source contract for Boulder Creek Events that includes a back-up plan if Dailey were to, say, drop dead of a heart attack. (A 1997 contract between the city and Dailey’s TeamFest says that if the nonprofit were to dissolve, then its assets would go to the Parks and Recreation Foundation.)

Mock says Dailey should be allowed to continue running it, since he was the one who bailed it out in 1997.

“He built it back up into a very strong and viable festival again,” Mock says. “I think Chris Dailey deserves it because he was the only one who lifted a finger to save it.”

Mock says “no one even talked about the term ‘ownership’” when he and Dailey were involved in the transition to BCC and, a couple of years later, to TeamFest.

“No one started using the term ‘ownership’ until about 2005, when the city started using it and Chris Dailey said, ‘Wait a minute,’” Mock says, adding that at the same time, the city stopped listing the PLAY Boulder Foundation as a beneficiary of the event.

Mock says city officials have been more tuned into public event ownership ever since they caught heat for giving away three Boulder running events, including the city’s Pearl Street Mile. According to media reports, some said the recipient, Barry Siff, made money off public assets when he included the rights to the races when he sold his racing company in 2009.

Mock sympathizes with Dailey’s desire to have some stability, to avoid looking over his shoulder to see who is gunning for his event.

“He doesn’t want to live year to year, wondering if it’s going to be taken away from him,” Mock says.

At the same time, he adds, the city feels responsibility for the event and is obligated to make sure it is being fiscally accountable by issuing a request for proposals.

“I symphathize with both sides,” he says. “I don’t think it’s in anyone’s interest for this to blow up and leave a sour taste in their mouths.”

As for the Boulder Creek Events claim that there may be pressures afoot to oust them from their managerial capacity, Mock says, “I haven’t heard of any outside pressure.”

Sean Maher, executive director of Downtown Boulder, Inc. (DBI), told Boulder Weekly that he had no idea the city was issuing a request for proposals (RFP) for management of the Boulder Creek Festival, and that he’s not sure whether DBI would submit a bid for the event or not.

No unhappiness

Kirk Kincannon, the city’s parks and recreation director, says the RFP is being issued simply because the Boulder Creek Events contract is expiring. There is no ouster under way, he says, adding that the RFP is simply a way for the city to make sure it is getting “the best bang for your buck.”

“Chris has done an admirable job running the event,” Kincannon says. “I don’t think there’s any unhappiness based on what’s being provided. We’re just trying to see what we can do to enhance it, relative to green technology.”

He says that in the forthcoming RFP, there will be an emphasis on decreasing the carbon footprint of the event, through efforts like encouraging people to ride their bikes or take the bus to the festival instead of drive.

Kincannon confirmed that the city has a federal trademark for the festival’s name.

“The city’s position is that we do own the name of the event, and that promoters have been doing it on behalf of the city,” he says.

Asked about the 1997 agreement in which the BCC’s assets, including trademarks, were handed over to the Daileys, Kincannon replies, “That’s a good question. The city’s position is they have always owned the festival and the name.”

But he adds that there is no desire to get rid of Boulder Creek Events.

“I don’t think there’s anyone coming in, trying to take it over,” Kincannon says. “It’s just good practice to make sure we’re getting the best deal for the city. … It’s good to seek different ideas and do due diligence. It’s nothing against the existing promoter.”

Kincannon says the city plans to pick an event management firm by December, allowing “just enough time” for that group to plan the 2011 festival. But city spokesperson Patrick Von Keyserling told Boulder Weekly it is still unclear whether the RFP will be issued for the 2011 festival or the 2012 festival.

Chris Dropinski, who was the city’s parks and recreation director when the event was transferred to Dailey in 1997, says she was not involved in the negotiations after the original transfer from the city to BCC, and that she doesn’t recall the details. Other city officials involved in negotiations regarding the festival over the past decade were not available for comment.

Grease stains

Dailey says that grease stains left on the ground by vendors after the 2010 event may be a lingering issue, since the city complained about it and slapped Boulder Creek Events with a hefty cleanup tab, even though he says his crew returned to clean it up. The matter went to arbitration.

“The day after the Boulder Creek Festival is the cleanest that park is all year long,” Dailey says of his track record on picking up after the event.

City Council member Lisa Morzel says she heard about grease stains left after last year’s festival, but that should not warrant issuing an RFP.

“I think Chris does an amazing job of getting things cleaned up,” she says, adding that it is unfair to Dailey to wait until just a month or two before the festival to get a contract signed, which is what happened in 2009.

Morzel says Dailey’s contract should simply be renewed unless there are problems. “It comes up every year, and I just don’t know what is the point. … They have turned what was a failing venture into what is a very successful venture. They generate a lot of revenue for the city each year.

“If there’s some kind of problem, then tell me what it is,” she adds. “I don’t know why staff are interjecting themselves into it. Maybe it needs to come to council.”

In response to a request for comment, the city attorney’s office issued the following statement: “The city’s position is that the city owns the event and all the rights that flow from that ownership. Regardless of any state trademark filings, Mr. Dailey is and has always been a licensee of the city, his use of the mark inures to the city’s benefit, and has no independent rights in the mark. State trademark filings convey no rights, and they don’t carry any evidentiary presumptions like federal trademarks do.”

When asked why the city applied for a federal trademark several years ago, the written response from the city attorney’s office was, “It is the city’s practice to protect all of its assets.”

In response to a question about the transfer of trademarks from BCC to Dailey in 1997, the city attorney’s office replied, “The city was not a party to the agreement between Boulder Community Celebrations and Mr. Dailey, therefore, we cannot confirm the validity of that agreement.”

“We’re not going to lay down,” Dailey says. “We’ll take them to court if we have to. We’ve let them push us around too long.”

Respond: letters@boulderweekly.com

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REPLY TO THIS COMMENT

The Boulder Creek Festival is the best event in the area.  Shouldn't the City of Boulder be concentrating on something in the area that isn't working?

 

REPLY TO THIS COMMENT

This whole issue is pointless.  If the city felt that ownership of the festival was in their best interest they should have taken it more seriously in the past.  To come around and claim ownership only after it has developed a strong following is the easy way out.  Leaving ownership to Boulder Creek Events is clearly in the best interest of the festival since they revived it.  To be honest, this makes the city look like the bad guy.  Where were they when the Creek Fest needed help years ago?  Oh wait, Dailey was there and they weren't.  If they push Boulder Creek Events aside, the event will probably flounder.

 

REPLY TO THIS COMMENT

The quote from the city attorney is disingenuous (lawyer-ese for bullshit).  From what I have read, the city applied for the federal trademark years after Dailey obtained his state trademark.

Trademark law is quite clear--if there is a prior state trademark, the federal trademark only protects the holder from infringement in areas outside of where the state trademark applies and has been continuously used. 

 

In other words, if the City attorney and the City staff want to hold a Boulder Creek Festival in Boulder, Utah, they're welcome to.  But if the city grants another firm the rights to hold an event here in our fair city, and they don't change the name of the event, Chris Dailey will prevail in court.

What an incredible waste of city resources.  Frankly, the city attorney is just attempting to blusterbuss Chris Dailey by throwing up specious legal mumbo-jumbo that won't hold up if he were to defend it in court (and using our tax dollars).

 

 

 

 
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