Beating Donald Trump to the punch, Mayor-President Kip Holden announced Wednesday that the Miss USA pageant will return to Baton Rouge this summer for the second year in a row, guaranteeing another event expected to again fill hotel rooms and give the capital city international television exposure.
But the pageant comes with a hefty price tag for taxpayers.
Last year, Miss USA BR Productions received an incentive package of $365,000. It also received another $1.25 million in tax credits, awarded two weeks ago.
This year, the production company is being offered a package of $545,000, and it applied for the same amount in tax credits, which are often swapped out for cash by out-of-state film companies.
A little more than half the funds in the incentive package this year are from the East Baton Rouge city-parish budget. The Metro Council on Wednesday voted 10-0, with two absent council members, to approve $230,000 of local funding for the package. Holden will provide another $50,000 in local funds from his discretionary economic development account.
The Miss USA organization and Trump have yet to formally announce the location or a date, but Holden said Wednesday after the meeting that the council action sealed the deal.
“This is monumental for Baton Rouge,” he said in an interview. “Right now, across the United States, everything is so competitive, so for Baton Rouge to get this great pageant for two years in a row tells other cities that we are very serious about getting business in Baton Rouge.”
Holden said that this year the event’s reach will be even farther than before because it will air on Univision, an American Spanish-language broadcast network. Univision announced on Twitter last month that the Miss USA pageant will be held July 12. That announcement is the only official confirmation so far of the event’s date this year. Last year, Holden made the announcement at the same time Trump revealed the location on the “Today” show.
Last year, the city-parish spent $1.145 million on the River Center, which is the venue for the event, for upgrades and necessary services associated with the pageant. But this year, the city-parish is assuming more of the hosting fees and will be providing another $186,900 of in-kind services that include security and electricity costs.
But Holden said it’s worth the investment.
“There will be thousands of people coming here from all over the country,” Holden said. “We’ll get publicity that will be seen all over the world. …”
An economic report provided by the Mayor’s Office and Visit Baton Rouge to the Metro Council says the city-parish earned $661,000 in sales tax revenue attributed to the 2014 event. This number was based on the estimated number of people who came to Baton Rouge for the pageant, on hotel data and on an estimated amount of money spent in the city per day.
Last year on June 8, the day of the pageant, Baton Rouge hotel revenue was 25 percent higher than the same date the previous year.
Visit Baton Rouge President and CEO Paul Arrigo refused to say the Miss USA pageant was coming to Baton Rouge, likely in deference to Trump, even after Holden made his announcement. Arrigo would only say that his board authorized him to pursue a contract for an event this summer for $200,000.
In 2014, Visit Baton Rouge, the regional tourism agency, provided $300,000 toward Miss USA. Arrigo noted that last year the agency had more money because of a BP tourism grant.
The other two sources of the incentive package are the state Office of Tourism, committing $50,000, and the Louisiana Seafood Board, committing $15,000. Both provided the same amount in 2014.
On March 25, the Miss USA production company collected $1.25 million in film tax credits, based on an audit that says it spent $4.2 million on the 2014 pageant in the state.
The organization has already applied for 2015 film tax credits, estimating total Louisiana expenditures at another $4.2 million.
The state tax credit program reimburses movie and TV producers for 30 percent of what they spend filming in Louisiana in the form of tax credits. But in most cases, the out-of-state filmmakers don’t have Louisiana income taxes so they sell their tax credits to others with such a liability. They also frequently return their credits directly to the state for a check worth 85 cents on the dollar.
The Louisiana Department of Revenue said Wednesday that it cannot disclose whether the Miss USA organization sought to sell back its tax credits in exchange for a check.
Before Baton Rouge, the Miss USA organization had a six-year run in Las Vegas. Nevada’s film tax credit program applies to 15 percent of costs for residents and 12 percent for nonresidents, making it half as fruitful as Louisiana’s program.
A total of 8,290 people attended the event in 2014 and watched as Miss Nevada’s Nia Sanchez was crowned Miss USA.
The live broadcast included 8 minutes of featured video showcasing the city and state, including spotlights on downtown Baton Rouge, the LSU Rural Life Museum, the Old Governor’s Mansion, the Queen of Mississippi Riverboat and a variety of local restaurants.
According to Nielsen ratings, the 2014 Miss USA pageant had 5.5 million viewers nationally. The pageant organization boasts that the event is rebroadcast internationally, reaching 100 million people.
The prime-time June broadcast last year, shot live from the River Center, made frequent mention of the capital city. It also drew the contestants and their family and friends to Baton Rouge for about two weeks, filling hotels and restaurants. Visit Baton Rouge reported last year that hotel occupancy rose between 8 and 17 percent during the four days leading up to the pageant in Baton Rouge over those dates in the previous year.
The Miss Universe Organization, which is the parent company of the Miss USA organization, estimated the value of the advertising for the city was about $95 million, based on international exposure in addition to the prime-time show that highlighted Baton Rouge and the surrounding area as the backdrop for the competition.
Follow Rebekah Allen on Twitter, @rebekahallen.
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