Forbes ‘Under 30 Summit’ cost city group $1.7 million

Philadelphia got some buzz during the last two years for hosting the Forbes Magazine “Under 30 Summit,” a three-day gathering of young entrepreneurs, artists and innovators. But it turns out it wasn’t free.

A city-controlled nonprofit paid Forbes $1.7 million to support the event, and incoming Mayor Jim Kenney isn’t thrilled about it.

Mayor Michael Nutter was excited in 2014 to get the Forbes Under 30 summit, which the magazine called “the most influential gathering of Millennials in the world.” Nutter made a March, 2014 appearance on MSNBC’s morning Joe program to talk about it.

“Philly is a hot town,” he said on the program, noting the rapid growth of the city’s millennial population.

There was no mention then of any city subsidy, or in media coverage this past January, when an Inquirer story said Philadelphia would become the “permanent home” of the Under 30 Summit.

The story reported Forbes editor Randall Lane said Nutter had promised “no explicit financial support but introductions to local corporations, entrepreneurs, and nonprofit institutions that might sponsor the event as it grows beyond the 2,000 who attended last fall.”

In fact, by then Forbes had already gotten a $1 million check from the Mayor’s Fund for Philadelphia, a city-run nonprofit that distributes several million dollars a year to community projects of many kinds, and also runs and makes significant revenue from the Philadelphia Marathon and the International Cycling Classic.

Nutter told me in a phone interview that the Fund is there in part to help market the city, and this was a wise investment. “This is a big deal. This is a big event,” Nutter said.

Paying for visitors and attention

It’s nothing new for this city and others to subsidize the tourism and hospitality industries.

The Forbes Under 30 summit, which by various accounts brings in from a few hundred to up to 2,000 people, is a lot smaller than the big conventions and trade shows that fill city hotel rooms. But Nutter says this event brings a uniquely-connected and influential cadre of entrepreneurs and artists who are here for three days “doing business, shopping, dining, and then talking about, tweeting and [using] all kinds of social media, talking about the fact that ‘I’m in Philadelphia right now at this incredible event’ and ‘I just met so-and-so, or I’m sitting down having a meeting,’ and all of this is taking place in Philadelphia.”

“That, from my perspective, is virtually priceless,” Nutter said.

Besides the general media attention and buzz, the city was featured in a seven-page section in the January, 2015 issue of Forbes magazine, and Nutter says there will be a similar section next year.

Nutter and City Representative Desiree Peterkin-Bell say the city got great value for its money, and cited a Forbes analysis of traditional and social media attention, which claimed the city got an astonishing 895 million image views from the event (I can’t tell from the Forbes information where that number actually came from).

I think it’s always hard to say how much this kind of stuff is worth. I’m skeptical that simple media attention to the city is so valuable. I think there may be greater value in smart, well-heeled people having a great Philadelphia experience. It can lead to them sending their kids to college or grad school here, or opening a branch of a business here. It’s hard to measure, but I think there’s something do it.

Whether it’s worth $1.7 million that could be spent on other priorities is very much in the eye of the beholder. But nobody beholds the cost unless it’s known, and Kenney didn’t know it until recently.

“I think obviously the city should be trying to attract events like this to bring national and international attention to the city” Kenney told me when I asked about this. “I think though, you kind of have to talk to the public and let them know because you know in the end it’s their money.”

I asked Nutter about the fact that no mention of the city payments appeared in that story on the Under 30 Summit finding a home here, and he said he didn’t remember what the Inquirer reporter had asked him.

So I can’t say the city was hiding its financial support of the event, but it wasn’t going out of its way to reveal it either. It wasn’t mentioned in the report on the work of the Fund for Philadelphia released last week.

Following the money

As I noted, the Fund for Philadelphia paid Forbes $1 million a year ago. That was money borrowed from the Philadelphia Industrial Development Corporation, the city’s economic development arm. The Fund for Philadelphia was supposed to raise money and repay that loan by Dec. 31, Thursday. PIDC President John Grady told me it’s apparent the loan won’t be repaid on time.

What happens now?

“It’s really at the city’s discretion,” Grady said. “If they want to extend the term of the loan, repay it, or at some point forgive it.”

As of next week, the Fund for Philadelphia will be effectively in the hands of a new mayor. If it repays that loan, that’s $1 million Jim Kenney does not have to spend on his priorities. If the city forgives the loan, then that’s $1 million less in the economic stimulus fund, which is also used at the mayor’s discretion to promote economic development.

The Fund made good on the rest of its $1.7 million financial commitment to Forbes just this month, with two checks totaling $700,000.

The paperwork on those payments are kind of curious, also. There are two contracts, both “sponsorship agreements” in which the Philadelphia Marathon and the International Cycling Classic commit to fees of $500,000 and $200,000 respectively, because they “wish to be a sponsor” of the 2015 Forbes Under 30 Summit. What’s curious is that the contracts are dated December 16, just two weeks ago, committing the cash to sponsor an event that had already occurred in October, three months before.

I asked Nutter why it was structured that way. He said he understands why I’m curious, but “there’s nothing to that.”

You can’t think of the Under 30 Summit as just an event, he said. It’s a relationship with Forbes and coverage which is ongoing. He said both the Marathon and Cycling Classic will get ample attention in the upcoming Forbes magazine section on Philadelphia (I noticed there was a full-page ad for the Marathon in the January, 2015 section).

There are no plans to subsidize the 2016 Forbes Under 30 Summit. It’s happening in Tel Aviv.