By Brian Turk
By Drew AIles
By Taylor Boylston
By Bree Davies
By Emerald O'Brien
By Gina Tron
By Jon Solomon
A warrant issued by the city's treasury department on January 26 had been taped to the door, demanding payment of Facilities Development Admissions taxes -- or else. According to the notice, the unpaid FDA taxes spanned a three-year period, from June 1, 2000, to August 31, 2003, and totaled $587,833.64, including interest and penalties. Two things in life are inescapable: death and taxes. And when you're into the city for over half a million, you'd at least better make a call.
According to Denver treasurer Steve Hutt, the city sent NIPP a formal notice of assessment at the end of December. "They did not respond or protest," says Hutt. Maybe the assessment was buried beneath a pile of Christmas cards; maybe nobody in particular at Nobody in Particular thought it applied to them. Either way, Hutt says, the city was justified in taking action: "Under the law, after twenty days, if there's no payment and there's no protest, then we're authorized to seize the property." Which the city did last Monday, quickly gaining NIPP's attention.
Denver's FDA tax -- aka "seat" tax -- has been around since 1975 and is calculated at a rate of 10 percent on top of the price of admission. It applies to any event held at city-owned facilities, including Red Rocks, the Coliseum and the Auditorium Theatre, and it's intended to help maintain and improve said facilities.
According to Hutt, NIPP's outstanding balance was uncovered during a city audit. "They were making regular payments of the seat tax as they had events at the Coliseum and Red Rocks," he says. "But our audit showed that there were payments that were missing." Though Hutt won't -- or can't (Section 53-356 of the municipal code protects taxpayer confidentiality) -- elaborate further, he does allow that the debt stemmed from a combination of NIPP events held at Denver Botanic Gardens, Red Rocks and the Coliseum.
NIPP's had a couple of tough years. A few weeks ago, when Jesse Morreale sideswiped me with the news that he was parting ways with the company, I was stunned. The prospect of NIPP without Morreale was like Van Halen losing David Lee Roth. There's no disputing that the VH brothers made up the core of the act, but it was Diamond Dave who gave it its voice. The immediate question was whether Morreale, the company's mouthpiece, was walking the plank because of irreconcilable differences with his partners, Doug Kauffman and Chris Swank, or jumping from a sinking ship. "It's been a tough couple of years with the Clear Channel issue, among other things," Morreale says. "We had to make some difficult decisions, which led to disagreements, and it was just time for me to move on."
That Clear Channel issue, a two-and-a-half-year legal battle centering on NIPP's claim that the concert behemoth is monopolizing the market ("Taking On the Empire," August 23, 2001), has taken its toll both financially and emotionally; those stresses were compounded by a rough concert season and a doomed attempt to operate a theater in Detroit, leading to a few layoffs since summer. And while the FDA debt is substantial, NIPP's financial woes don't end there: The promoter also owes the city nearly $200,000 for back rent on Red Rocks and other city-owned venues.
Last Wednesday, NIPP had a sit-down with city officials and hashed out a tentative payment arrangement; by Thursday it was a done deal, and Kauffman and company were back in business. "We reached an agreement and worked out a payment plan that was amenable for everybody concerned," says Kauffman.
While NIPP seems to have weathered this storm, Kauffman and Swank will be working hard to keep the ship afloat. The plan, according to Kauffman, is to get back to basics: "We're going to concentrate more on our core business, which is the three theaters, the Denver Botanic Gardens and the Chautauqua series in Boulder, and select shows -- bigger shows at Red Rocks -- and the Warped Tour and the things that have perennially made us money. And to not stretch ourselves so thin, you know.
"So growing at a slower or more organic pace would be nice," Kauffman adds. "I mean, we still want to grow as a company. We still want to do different things. But, you know, you learn the hard way a few times and then you come back to the next opportunity and you approach the whole thing differently."
After all, if Van Halen could soldier on pretty successfully without Roth, the same could be true for NIPP.
As for the city and that FDA tax: The renovations at Red Rocks thus far are cool, but how about putting some seat warmers up there? Even better -- seat warmers that can be rolled up to double as pugil sticks to pummel obnoxiously drunk neighbors. Then again, maybe the city needs all the cash it can get to fumigate the place after five consecutive nights of stinky hippies celebrating the return of the living Dead.