Posts tagged with Final Four

Looking at numbers to try to figure out how much money and liquor flow into Lawrence during a Final Four

Some of the strongest memories I have of KU’s past two Final Four appearances involve a Patton-like army of beer trucks invading downtown Lawrence. I was doing daytime journalism on both national championship game days in 2012 and 2008 and still remember the caravan of beer trucks downtown getting all the bars stocked for the evening game.

We’ll see what memories are made this time. An early contender: realizing I’m no longer hip enough to understand why a large number of people are standing in line for a band called Panic! at the Disco. In case you were wondering, that is why a line of people stretched around the block outside The Bottleneck in downtown Lawrence today. (If they want to see panic at a disco, tell my wife to let me wear my open collar disco shirt.)

I’m guessing the beer trucks, though, also will be a Final Four memory again. Liquor is big business all year in Lawrence, but it becomes even bigger during the Final Four. I’ve spent some time crunching numbers to try to give you an idea of some of the financial impacts a Final Four appearance has on Lawrence.

First, let’s look at the liquor side of things. I looked at figures from the state’s liquor enforcement tax. To be fair, I’m not an expert in this tax. In fact, I only like one of the three words. But the numbers from 2012 and 2008 — the last two times the Jayhawks were in the Final Four — do provide some evidence of the bump in liquor sales. This tax is charged to people who buy liquor at a liquor store, or bars and restaurants that buy it wholesale.

In 2008, the big bump came in March. It showed that there was a 22 percent increase in liquor enforcement tax collection in March 2008 compared with March 2007. The more fun number, though, is the total increase in sales. The numbers suggest liquor sales in Douglas County increased by $581,200 in that one month. But remember, only a portion of that amount represents retail sales. A good amount of it represents wholesale purchases made by bars and restaurants. So the actual retail value of all the additional liquor sold in that month would be significantly higher.

Fast forward to 2012, and the big bump in tax collections showed up in April, when liquor enforcement tax collections jumped by about 17 percent. That equated to about $617,000 in additional sales, with the same caveat that a good portion of that amount is wholesale purchases.

Those two months both produced about $50,000 in additional tax collections. You might think that is a nice bump in revenue for the city, which will cause some state tax collector to laugh at you. You silly person, the state does not share liquor enforcement tax revenue with cities. It keeps all of that.

However, there are other types of taxes that the city does benefit from during the Final Four. There is another type of liquor tax called a drink tax that bars and restaurants serve on liquor that you buy at their establishments. The city does get a share of that money.

The other tax, of course, is the general sales tax. That catches lots of items, including the Final Four T-shirts you buy, the semitrailer of Doritos, the 15 new big-screen televisions and other entirely reasonable supplies needed for a Final Four party.

Those numbers historically haven’t soared as much as you might think. In 2008, sales tax collections during the prime Final Four period actually were flat to slightly down. In 2012, there was a decent increase of about 5.5 percent during the Final Four period.

But there is also some evidence that even when spending does go up for the Final Four, consumers maybe pull back a little bit later in the year. For instance, the 2012 Final Four bump didn’t result in a big increase for the year. City collections were up 5.2 percent for the entire year. That is a really good sales tax year, but there have been plenty of years when sales tax collections in Lawrence have increased by 5 percent or more even when we are not in a Final Four. In 2008, sales tax collections for the year were up 3.8 percent.

The bottom line is that it takes a lot of T-shirt sales and party trays to move the sales tax needle in a big way in Lawrence.

Now, enough of that talk. I have to start unloading the Doritos truck. Have fun and be safe this weekend.

Reply 2 comments from Thomas Bryce Jr. Richard_shea

Leader of Alvamar says speculation of pending sale of club and golf course incorrect; preparations for Final Four begin to show up around town

When it comes to golf and rumors, I have been involved in several, and I'm proud to say I have never once been convicted of criminal damage to property. (Best golf tip I ever received: Never use a monogrammed golf ball.) So, I thought I should do my part to clear up a rumor floating around about Alvamar Golf & Country Club. A sale is not imminent, and neither is a plan that would eliminate nine holes of the 36-hole complex in West Lawrence.

"There is a lot of speculation about what people think they could do with Alvamar and some infill development," said Bob Johnson, chairman of the board of directors of Alvamar Inc. "But I know there are not plans to do away with even one of the 36 holes of golf that we have out there."

Johnson said rumors that a local developer is close to purchasing the country club and golf course also aren't true. When asked whether such a deal had been put on the back burner, Johnson said, "it is not even in the kitchen."

But it is no secret that the course and club have been available for purchase, by the right buyer. Johnson said that is still the case, mainly because the approximately 100 shareholders of Alvamar Inc. are generally in retirement age and believe a transition needs to be made.

"We are interested in selling, but we are equally interested in making sure the new ownership is committed to the community and the university," Johnson said.

Alvamar's country club course is home base for KU's golf program.

Johnson didn't provide any insight into why speculation about Alvamar's future has increased lately. For what it is worth, the speculation I had heard was connected to the talk going around town about convention centers and potential partnerships with Kansas University.

"I can tell you that we're not any closer or any more active on the sale front than we have been in the last year or so," Johnson said. "Nobody is close to buying it."

Johnson also made a point to note that Alvamar Inc., which in addition to owning the country club also owns significant amounts of raw ground in West Lawrence, doesn't need to sell the course for financial reasons. Johnson said the market for development ground is clearly rebounding in Lawrence, and Alvamar Inc.'s financial position is strong.

In other news and notes from around town:

• With KU ready to play its first Big 12 tourney game today, we are officially in March Madness. While the games are just getting started, the planning for the ultimate madness — if KU reaches the Final Four — is well underway. As they have in past years, city commissioners have approved an ordinance creating special rules for glass bottles and containers in the downtown area during the Elite Eight and Final Four time periods of the NCAA tournament.

From Saturday, March 29 to Monday March 31, anyone caught with a glass bottle or other glass container on downtown streets or sidewalks will be subject to a $100 fine. That's the weekend teams will play in the Elite Eight and punch their ticket to the Final Four with a victory. Such victories by the Jayhawks have been known to cause thousands of people to flood downtown for a massive street party. The same regulations will be in place the following week from Saturday April 5 to Tuesday April 8, which is when the Final Four and National Championship game will be held.

Walking around with a beer bottle on Massachusetts Street generally subjects you to a possible open container violation. But honestly, during Final Four celebrations, the open container violations often are too many to keep up with. But city officials do work hard to limit glass containers because of the safety hazards they can create. Many bars and restaurants often help out by serving even bottled beer in plastic cups during the time period.

The other March Madness preparation that happens around this time is that T-shirt companies start staking out their location for tents that will sell KU Final Four t-shirts. Lawrence-based Sun Creation has filed permits for 2300 Louisiana, which is the parking lot of Checkers, and 601 Kasold Drive, which is the Westlake Hardware parking lot. More will follow, if KU's fortunes are good.

Now, all we need is some vendor who is selling magic Joel Embid Back Cream. We'll let you set up anywhere you want.

• After you get done watching KU vs Oklahoma State, which tips off at 2 p.m. today, come over for a fun evening of the Lawrence City Commission and rental licensing discussions. You don't even need to take off your Crimson and Blue face paint, your Beak 'Em Hawks house slippers, and that giant Jayhawk tail feather. (I assume we're all wearing that again this year.) Commissioners will host a pubic information session from 6 to 8 p.m. at the Lawrence High School cafeteria, 1901 Louisiana.

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