Sundance side industry of lucrative corporate leases in Park City collapses
Corporate interests not seeking space
Heineken USA during the Sundance Film Festival in January had a spot along Main Street, giving the brand of beer a high-profile marketing opportunity.
Mastercard International, Kia Motors America and Apple were also on Main Street during the 2020 edition of the festival. They were some of the corporate interests that entered into temporary leases along the shopping, dining and entertainment strip, occupying buildings for just a matter of days for the visibility offered by Main Street during Sundance.
The corporations have long arrived in Park City for Sundance, spending tens of thousands of dollars, if not more, on a temporary lease of a storefront or a gallery on Main Street. The year-round tenant essentially moves out in the days before Sundance as the corporate interest moves in. The temporary setups can be elaborate reworkings of the inside of a building, turning the spaces into lounges, reception areas or product showcases. They are then dismantled, sometimes after the opening weekend. Some of the corporate interests have official ties to Sundance as sponsors, but many of them are not connected to the festival and desire the presence in Park City anyway.
But with the worries about the continued spread of the novel coronavirus, Sundance in early December outlined plans for a greatly scaled back festival in 2021. Sundance organizers intend to operate just one venue in Park City — the screening room at The Ray theater at Holiday Village. The festival instead will largely be held online and in screening rooms across the U.S. even as the base will be in Park City.
The economic hit to the Park City area is expected to be significant without the Sundance crowds. Much of the attention has been on industries like lodging, restaurant and transportation, but the expected disappearance of the temporary corporate setups during Sundance will even further darken the economic picture.
The deals between building owners or tenants and the corporate interests are negotiated privately, and dollar figures are not made public, but it is believed at least some of the agreements reach well into six figures. The building owners or tenants essentially see a temporary lease with a corporate interest as being a better financial option than remaining open with the year-round business for the days covered in an agreement.
One of the figures who has been involved in negotiations for temporary corporate locations for years, businessman Mike Sweeney, said in an interview there has not been action in the market. He said the Town Lift Plaza along lower Main Street, under the control of the Sweeney family, will not be leased temporarily during Sundance after years of some sort of activity there during the festival.
“I don’t think there’s going to be much demand at all,” Sweeney said, adding, “Nobody’s approached us on that. Zero.”
Sweeney in a typical year negotiates deals for the family’s properties as well as other places on Main Street. By early December, he normally would have been in talks regarding up to 10 temporary leases and could have finalized up to five of them. He would walk Main Street with potential clients, showing them buildings available for Sundance.
The deals, he said, could involve sums of several hundred thousand dollars, depending on the size of the space, the location and the length of the lease. The range generally runs from approximately $25,000 for a short lease of a small space in a spot toward the ends of Main Street to upward of $225,000 for a lengthier lease of a well-located larger space.
The monies generally go to the building owner, the tenant or some sort of split between the two. The building owner benefits from a cash infusion on a street where real estate is some of the priciest in the state while the tenant can sock away funds for the spring shoulder season that follows in the months after Sundance.
“You’re not going to see that this year,” Sweeney said.
He predicted smaller businesses that usually reach temporary lease agreements will especially suffer. The deals during Sundance could have allowed them to “pick up $100 grand, $75,000.”
“They’re going to have to figure out how to make that up,” Sweeney said.
The Meyer Gallery is one of the Main Street businesses that normally enters into a temporary lease during Sundance. The owner, Susan Meyer, said leases have been negotiated most years since 2005. The ride-hailing firm Lyft occupied the Meyer Gallery building in 2020 and previous temporary tenants have included state film commissions from outside of Utah.
“It’s a very significant amount of money that we rely on,” Meyer said, explaining that sales at the gallery during the second half of January usually slip and a lease during Sundance is a better option financially.
She said the gallery in a normal year gives staffers eight or nine paid days off during Sundance, a benefit that is made possible by the temporary lease. Meyer said the funds from the lease also cover the gallery’s rent for six months. The Meyer family owns the building, reducing the impact of the loss of any income from a Sundance deal in 2021, but the effects on others on Main Street who are accustomed to temporary leases during Sundance could be “crippling,” she said.
“It will be missed,” Meyer said.
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Mother Nature has not delivered any early gifts to Park City skiers and snowboarders. As December nears, the area is suffering through an especially dry spell of weather.