Leesburg Partnership gets ’Band-Aid’ boost from city

LEESBURG – City commissioners on Monday evening unanimously approved a nearly $150,000 financial relief package for the Leesburg Partnership after the nonprofit was forced to cancel Bikefest amid the coronavirus pandemic.

After a long, sometimes heated and somber discussion about the future of the Main Street Program, the board agreed to loan the partnership $78,120 with 0% interest and begin the process of buying a parking lot from the nonprofit for around $60,000.

The commission also agreed forgive utility bills through April 2021, which is estimated to cost the city $7,500, as well as a $3,500 invoice for emergency services provided to the nonprofit’s Mardi Gras fundraiser.

In total, the city agreed to spend about $149,120 to assist the partnership.

The partnership, which celebrated its 25th anniversary last year, hosts 34 community events in Leesburg every year including the city’s Fourth of July celebration, the Craft Beer, Wine & Food Fest and the Christmas Parade. The biggest is Bikefest – the largest three-day motorcycle and music festival in the world – which has a massive local and regional economic impact.

As most Main Street Programs do to promote local buy-in, the partnership relies on thousands of volunteers and only employs three full-time staffers.

And as its name suggests, the organization is also a partner to the city as well other local organizations and works to promote businesses.

For instance, the partnership co-hosted the Downtown Master Plan meetings with the city as it worked through the visioning process. The partnership serves as a support organization to smaller nonprofits including the Leesburg Center for the Arts.

And when the coronavirus started sweeping the country and taking a toll on local restaurants, the partnership quickly implemented a curbside takeout lane and promoted it on social media. Some local restaurant owners have credited that program for their survival.

In March, the partnership canceled Bikefest, which was originally scheduled for April 23-25, after the CDC issued early recommendations for large events.

“The partnership was in a position where they were gearing up for Bikefest, what cash they had available they had engaged in deposits for entertainment and the like,” Leesburg City Manager Al Minner said during the meeting. “The cancellation of Bikefest essentially was the one strike that financially crippled the organization.”

Then last week, the partnership penciled the event back onto the calendar for Nov. 13-15.

But some of the money was already spent. The loan from the commission will cover deposits the partnership made for Bikefest entertainment, including the headlining bands as well as staging and sound companies. Those contracts are still in place and have been extended for the new Bikefest date.

Under tentative terms, the $78,120 loan would start being paid back May 1, 2021 on a monthly basis with no interest.

Another part of the aid package is the sale of the parking lot behind the partnership’s downtown building. Estimates show the value of the lot at $6.30 to $6.90 per square foot, meaning the city could pay between $57,834 and $63,334 for the 9,180-square-foot lot.

The partnership initially asked for the city to guarantee that the lot would stay a lot as well as maintain the existing $30,000 line of credit the partnership has with the city for the lot. But the commission rejected both stipulations. Commissioners agreed they didn’t want deed restrictions on city property.

That lot purchase will come back to the commission for further approval.

Already, the partnership has been operating leaner than usual. A “quarantine budget” in city documents shows a $21,984 in monthly expenses, $19,137 of that coming from a federal Paycheck Protection Program loan to cover payroll. CEO Joe Shipes took a 30% pay cut, documents show.

Typically the partnership’s monthly budget is around $30,000.

Once the PPP funds run out, the nonprofit will lay off two of its three full-time staffers: Main Street Manager Joanie Smalley and Operations Manager Cathie Reel.

“It’s so sad,” Shipes said. “They’ve worked so hard over these years. We all do whatever it takes and we never tell anybody no.”

Commission discussion centered around the survival of the partnership and Jay Hurley was the most vocal.

“I’m actually surprised that we’re having this discussion in this manner,” Hurley said, speaking first on the issue. “After 20-something years of the partnership overseeing all the quality of life aspects that we do as far as events go in town, we’re basically giving them $11,000. That’s what we’re doing.”

“We’re buying a piece of property, so, big deal,” he continued. “We’re going to give them a loan that they’ve got to pay back for $70,000... Let’s just call it as it is guys: If this happens, it’ll be the end of the partnership.“

Commissioner Mike Pederson echoed much of Hurley’s statements, summing them up succinctly.

“We need the partnership to survive,” he said.

Later in the meeting, Hurley directly asked the partnership’s board president, Sandy Stokes, if he thought the package was a Band-Aid.

“My candid answer is, it is a Band-Aid,” Stokes replied. “It does two things: It gives us enough cash flow, without getting into the sale of the parking lot... to cover our overhead and our reduced payroll that we’ve implemented, and it gets us through Bikefest 2021 in April.”

Stokes explained that after every Bikefest, the partnership is left with a couple hundred thousand dollars to help get it through the year.

“So this is going to crimp the cash flow for the partnership,” he said.

Commissioner Dan Robuck III said he had mixed feelings on the package. He started off by saying that the partnership has done a lot of good for the city, but that he feels the partnership should have had more robust reserves.

“I think this is a good compromise,” Robuck said. “I think this keeps the organization intact in a way that allows them to scale back up when things return.”

As for reserves, Stokes said that the partnership had about $135,000 in reserves at the end of last fiscal year. But much of that money, as it is every year, is tied up in Bikefest prep.

Commissioner John Christian said he thought the aid could be a slippery slope.

“I can see the Chamber of Commerce coming in the next meeting, the Center for the Arts coming in the next month and the CDC coming in the next month... saying the same things,” he said.

Christian also suggested the partnership present a plan to the city that showed the organization was building its reserves.

Mayor Elise Dennison said she, too, was concerned about the ask.

“If the Bikefest in the fall doesn’t happen, or even if it does happen, when are you coming back for more money?” she directly asked Stokes.

“Never, I hope,” he replied.

“Do you have funds to go ahead and put this on?” she followed up.

“I do believe that we have the funds to do the next Bikefest,” he said, explaining that much of the entertainment is already paid for. “This is bare bones but it’s a lifeline that you guys are hopefully going to offer us, and we appreciate that.”

Still, concerns remain that the rescheduled 2020 Bikefest may not happen at all.

The coronavirus continues to spread around the world. And while states and countries are working to get back to normal, it’s unknown when that might be or what “normal” will look like going forward.

And events like Bikefest are caught in the cross-hairs.

“These are uncertain times,” Shipes said.