The NEW Engage Franklin - Correcting the Record & What we DID get CORRECT

 

Franklin Community News

Correcting the Record - Setting the FACTS Straight on the NEW Engage Franklin"

What WE DID Get Right

Financial Implications Moving Forward for the NEW Engage Franklin.

Rescind the 1.5 Million Naming Rights Agreement with Ballpark Commons/ROC Ventures

Correcting the Record - Setting the FACTS Straight on the NEW Engage Franklin

Sometimes no matter how hard you try to get it right you don’t.  Based upon all the documentation and records you have, you believe you have it right and it wasn’t.  Unfortunately, there is part of the story we did not get accurate and want to correct the record and apologize to the NEW Engage Franklin.

What is Engage Franklin?  Engage Franklin is a Destination Marketing Organization DMO) that is contracted by the Franklin Tourism Commission and is supported by a Franklin local hotel room tax that is collected and provided to the organization. 

Destination marketing organizations such as Engage Franklin (a.k.a. convention & visitor bureaus) are non-for-profit organizations that help promote and market local attractions, accommodation options, tourism services, transportation, associated retail stores, restaurants, events & more. Engage Franklin’s long-term objective is to attract visitors to Franklin and develop our local economy as a result of increased tourism.

According to Destination Marketing Association International, (now Destination International) “each $1 spent on destination marketing organizations generates $38 in visitor spending”. This is the basis for their existence.

Franklin Community News made an inaccurate claim that the NEW Engage Franklin was controlled by Mike Zimmerman and ROC Ventures based on historical records.  It is clear after attending the Franklin Tourism Commission and speaking to a couple individuals that NEW Engage Franklin is NOT associated with Mr. Zimmerman or ROC Ventures and Mr. Zimmerman does not have a current self interest or controlling interest of the current NEW Engage Franklin Board.

The NEW Engage Franklin has an entirely NEW board of all VOLUNTEERS that are owners, operators, managers of Franklin Hotel, Hospitality, Retail businesses, as well as civic members.  These board members give freely of their time and talents to help all of Franklin's hospitality/retail sector thrive.  These VOLUNTEERS on the Engage Franklin Board ARE NOT beholden to ROC Ventures or Mike Zimmerman.  We wanted to set the record straight and thank the New Engage Franklin for your dedication and efforts.

What WE DID Get Right

NONE of what is reported below has ANYTHING to DO with the NEW Engage Franklin.

The Franklin Tourism Commission three years ago entered into a “Naming Rights Agreement” with Ballpark Commons (BPC) and ROC Ventures. The agreement called for paying BPC and ROC Ventures 1.5 Million over ten years for the naming rights of Milkmen Ball Park  to “Franklin Field ''.   That contract should have NEVER been entered into as the state statutes 66.0615(fm) clearly does not provide the authority for the expense under the statute: 

• Tourism Promotion and Tourism Development are defined by the State as any of the following that are significantly used by transient tourists and reasonably likely to generate paid overnight stays at more than one establishment on which room tax may be imposed. 
  

• Marketing projects, including advertising media buys, creation and distribution of printed or electronic promotional tourist materials, or efforts to recruit conventions, sporting events, or moto coach groups.

• Transient tourist informational services.

• Tangible municipal development, including, but not limited to, a convention center.

There is NOTHING in the Naming Rights Agreement that refers to ANYTHING relating to increased hotel room nights or increased transient tourism.  There is NOTHING in the state statute above that allows the Tourism Commission to pay a for profit business a sponsorship unless it increases hotel room nights or transient tourism.  Paying a 1.5 Million Dollar naming rights agreement to BPC/ROC Ventures DOES not increase hotel room nights or transient tourism.  BPC/ROC Ventures would still generate room nights as a result of the activity they provide from events like “Enchant” and baseball tournaments held over weekends.  

The payment of 1.5 Million to BPC/ROC Ventures does nothing to INCREASE hotel stays and transient tourism according to State Statues 66.0615. The Wisconsin Hotel and Lodging Association indicates that there are three criteria that all MUST be met in order for an expenditure to be eligible. This DOES NOT meet all three criteria.  In reality the Franklin Tourism Commission should have received the naming rights of “Franklin Field” for free since the City created a $30ish million dollar Tax Increment Financing District to support the development of Ballpark Commons.   

What is provided from BPC/ROC Ventures to the city in exchange for the 1.5 Million is NOTHING that will benefit the city.  In fact much of the language in the agreement was the exact same language used in the negotiations with “Routine”( a for profit sports clothing business) before they pulled out as the "Naming Rights Sponsor" in 2019 and sued Zimmerman for proceeding with a naming rights agreement that was not signed according to the Milwaukee Journal Sentinel.  In fact if you look at the Franklin agreement you will find two instances of where BPC/ROC Ventures did not replace the word “Routine” with “Franklin Field”.

Mr. Zimmerman. BPR/ROC Ventures developed a VERY creative “scheme” to tap into the hotel room taxes for his personal gain and that of ROC Ventures.  Additionally, the following was included as part of the “Naming Rights Agreement” language from BPC/ROC Ventures that would REQUIRE the Franklin Tourism Commission to:

• Have a Tourism Center in the Lobby of the ROC Ventures Office as long as the Tourism Commission pays all expenses related to the Tourism Center (including but not limited to its design, construction, installation, maintenance and operations).

• Create Engage Franklin as a 501(c)(4) tourism entity that spends at least 51 percent of its revenues on tourism promotion and tourism development as defined by Wis. Stat. § 66.0615(fm).

• ROC and MMB assert that the annual base payments ($150,000 a year/1.5 Million 10 years) are less than the value of the Naming Rights. Thus, it is anticipated that after Engage Franklin is created, Engage Franklin will make further payments to MMB as consideration for the Naming Rights.

• If the Franklin Tourism Commission does not create the 501(c)(6) Engage Franklin, or if Engage Franklin does not fully compensate ROC and MMB for the value of the Naming Rights, ROC and MMB may terminate this Agreement for convenience.  If ROC and MMB terminate for convenience, MMB may cease to use or display the Name at or in connection with the Stadium, and the Franklin Tourism Commission will be liable to MMB for the payment of all past due amounts owed to MMB (if any), and amounts due to MMB for benefits provided through the date of termination.

• Once Engage Franklin is an approved 501(c)(6) the Franklin Tourism Commission may assign this agreement to Engage Franklin including all rights and obligations.

In an effort to tap into and control the Franklin local hotel tax revenue and the organization that would control it Mr. Zimmerman, BPC/ROC Ventures allegedly did the following:

• Provided a naming rights agreement for 1.5 Million Dollars that is not an allowable expenditure under State Statue 66.0615.

• Created a 501(c)(4) on May 20, 2021 with a registered agent of Joe Alvino at Alivo at 7044 South Ballpark Drive, Floor 3, Franklin, WI 53132. "Joseph Alivo, based in Franklin, WI, US, is currently a President at Prospect Training Academy and Rock Tournaments”.

• The initial creation of Engage Franklin under Zimmerman was to have the control of the city's DMO tourism entity (Engage Franklin) that spends at least 51 percent of its revenues on tourism promotion and tourism development. - #2 above.

• Once Zimmerman controlled Engage Franklin he controlled the purse strings of the organization and could appoint his hand picked board. Thus guaranteeing additional revenue by exercising #3 above that was in the contract.   “ROC and MMB assert that the annual base payments ($150,000 a year/1.5 Million 10 years) are less than the value of the Naming Rights. Thus, it is anticipated that after Engage Franklin is created, Engage Franklin will make further payments to MMB as consideration for the Naming Rights.”

• Once Engage Franklin was established under Zimmerman/BPC/ROC Ventures control, the agreement “Naming Rights Agreement” provided language that the Tourism Commission may assign the contract to Engage Franklin with all rights and obligations - #5 above.  This now allows Zimmerman/BPC/ROC Ventures to have full control of not only the 1.5 Million he now is basically paying himself, but also the rest of the hotel tax revenue intended to be used to promote tourism in Franklin.

Financial Implications Moving Forward for the NEW Engage Franklin.

So let's now follow the money trail and see the impact of what  this “scheme” now does and impacts a group of business volunteers who want to support the local hotel and hospitality sector.  This new Engage Franklin Board, due to the actions of Mr. Zimmerman, now has limited resources to do what they should be doing to support Franklin as a result of this grand scheme of Mr. Zimmerman/BPC/ ROC Ventures.

According to the Department of Revenue In 2022, the following is what was reported by the City of Franklin:

• The City of Franklin Collected $471,578 which was an 8% local tax on hotel stays.

• The city of Franklin retains 30% that goes to the general fund and releases 70% or $319,684 to the Tourism Commission; the 30%/70% split is required by state statutes.

• Not part of the report but verified - The Tourism Commission retains 30% ($79.924) and has contracted with the NEW Engage who receives 70% (239,763). By state statute the Tourism Commission Must contract with a non profit organization (DMO) if one does not exist.

• As indicated in the initial “Naming Rights Agreement”, the Tourism Commission assigned this agreement to the NEW Engage Franklin.  Moving forward, the NEW Engage Franklin is responsible for paying $150,000 per year for “Naming Rights”.

• The NEW Engage Franklin budget based on local hotel tax revenue in 2022 is $293,763.  After paying a required yearly expense for “Franklin Field Naming Rights” that the Tourism Commission entered into with BPR/ROC Ventures of $150,000 per year, the operating budget of Engage Franklin is now $89,763.

Unfortunately $89,763 dollars a year is not enough for the NEW Engage Franklin to provide the mission and services of what a Destination Marketing Organization (DMO) needs to provide to support the local hotel and hospitality sector in Franklin.  Typically a DMO has an Executive Director, sales/support/sponsorships staff, website development, marketing, visitors guide, meeting/event/convention services, and promotional campaigns to bring in visitors from out of Franklin.

The NEW Engage Franklin has been put in a complete no win position to provide the services that need to be provided as a result of a $1.5 Million Dollar Agreement that was approved by the Franklin Tourism Commission prior to 2021.

Rescind the 1.5 Million Naming Rights Agreement with Ballpark Commons/ROC Ventures

Franklin Community News and Concerned Residents Affected by Sound from Ballpark Commons (CRASBC) are asking that the Franklin Tourism Commission do what is right and immediately sever the “Naming Rights Agreement '' that the commission entered into with BPC/ROC Ventures.

We have consulted with the Wisconsin Department of Revenue, Legislative Fiscal Bureau, and the Legislative Council that the expenditure of the $1.5 Million from local Hotel Tax Revenue is not an appropriate expenditure based on the State Statues.  We also request that the Tourism Commission provide the NEW Engage Franklin the resources it needs and deserves to support ALL of Franklin Hotel and Hospitality Businesses not just the self serving interest of one Franklin Business.  Other cities are experiencing a rise in lawsuits as a result of municipalities not following the state statutes relating to local hotel room tax.