Talks between the city of Solvang and its tourism nonprofit have failed. Again. And both parties say discussions are done for good.
With negotiations dead, the city insists that the Solvang Conference and Visitors Bureau (SCVB) has gone dark while the people who run the bureau are under a different impression.
“We’re not going to go dark,” said the bureau’s president, Kim Jensen. “We’re going to go private.”
He was talking from his perch on a pink upholstered stool in the showroom at Ingeborg’s Danish Chocolates, his shop at 1679 Copenhagen Drive. Less than a block away, behind one of the city’s windmills, City Manager David Gassaway was sifting through the bureau’s books in the SCVB office.
Jensen said he doesn’t have anything to hide.
“That’s why we’re letting David look at the books,” he said.
What’s at issue is more than $822,000 that the city said was marked as “unspecified” expenses.
Jensen said that money was spent on salaries for bureau employees and other labor-related costs.
Gassaway and Solvang City Council members also want to know why the SCVB has been behind on its tax filings. Tax returns obtained by the Sun show that tax forms from 2016 and 2017 were dated July 2019 by former Executive Director Tracy Farhad.
“We’re not the sharpest tools in the shed when it comes to CPA work,” Jensen said. “But we do have people to back up what we do.”
Mayor Ryan Toussaint and the rest of the City Council have become increasingly frustrated over what they say is a lack of answers.
“They didn’t even know they hadn’t done their tax returns until we asked for them,” Toussaint said.
More than that, the city doesn’t agree with some of the SCVB’s expenditures. The city hired efficiency consultant Tom Widroe to assess the bureau’s books. He said he didn’t like the $822,000 in “unspecified” expenses, and he didn’t like the investment the bureau had made in “awareness marketing,” not unlike product placement techniques that giant brands like Starbucks use in films and TV.
“It’s very expensive and not very effective,” Widroe said of such marketing.
Jensen said he wanted to expand the city’s efforts to seize broad, national attention. He was planning to spend $30,000 to help draw The Bachelorette to Solvang. He also wanted to bring in Hallmark and Netflix to film content in the city and hoped O, The Oprah Magazine would profile Solvang.
To attract that kind of attention, he said, the city needed to provide the bureau with more funding.
But a total shake-up in the city’s politics has radically shifted the way the council sees the SCVB.
Toussaint said the tension began with a change in the city’s political climate. He ran for City Council in 2016 on a platform that was heavy on fiscal belt tightening. His ideas found more allies in 2018 when every incumbent was bounced off the council, except Toussaint who moved up to the mayor’s seat.
That changeover set the stage for new conversations, Toussaint said, and one of them was about the money the city sent to the SCVB to run and operate the Visitor’s Center and accompanying website.
Once conversations began in July about money—the city’s money—and how the bureau was spending it, Toussaint said questions were raised that never received answers.
The first was the contract, which interim City Attorney Chip Wullbrandt said wasn’t a real, legal contract and declared it void. That was on June 24, though the city manager didn’t provide notice to the SCVB that the contract was void until July 8.
But Toussaint said the city wanted to renew the relationship with the SCVB, because the bureau has well-established relationships with vendors for events like the Grape Stomp and Festival (STOMP) and Julefest—both seen as critical to the city’s tourism business.
With that in mind, the City Council offered $600,000 to the SCVB for a year-long contract. The hang-up for the SCVB, which would ultimately kill that and any future offers, was an at-will clause allowing the city to end the contract at any time.
Jensen said that clause was a non-starter, and the city’s insistence on maintaining ownership over all SCVB property was also unacceptable. But the two sides managed to come to a short-term deal to keep the lights on at the SCVB. That contract, for $25,893, ended on the last day of August.
The SCVB’s lawyer, Jack L. Collison, sent a final rejection to Wullbrandt on Aug. 23 in an email obtained by the Sun. But Collison offered to continue the short-term relationship.
“SCVB recommends that agreement be extended until Dec. 31, 2019, which will keep the Visitor’s Center and website operational with a funding estimate of approximately $80,000. SCVB would like to add the two events, STOMP and Julefest, which would increase the funding total to approximately $150,000,” Collison wrote in the email.
The city refused that request and didn’t offer a new deal.
Now, the council is shifting focus. The city has contracted Visit the Santa Ynez Valley to promote its upcoming events, and consultant Widroe is planning to help field bids to contract out some of the other services the SCVB provided to the city.
Toussaint said he wants to refocus on hotel bookings. He estimates that the city is making about $4.5 million in taxes from hotel room stays—money that goes directly to city coffers.
But severing ties with the SCVB could lead to other problems.
“What would definitely result in legal action is if they refused to return assets,” Toussaint said.
Back in the chocolate shop, SCVB President Jensen was adamant that those assets in question belong to the bureau. But he agreed that the time for making a deal is over, and he insisted that every contract the city has offered has been a bad one.
“It’s the same ugly sister,” Jensen said. “I told you, I’m not kissing you.”
Staff Writer William D’Urso can be reached at wdurso@santamariasun.com.
This article appears in Sep 5-12, 2019.
