By Jesse Marx
By Chris Parker
By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
It wasn't until it was all over that Andrea Campbell really got worried.
By then, she should have been soaking up the glow of success. Campbell and her husband had just wrapped up Minnesota's biggest Fourth of July event: the Taste of Minnesota festival on Harriet Island.
But instead of relaxing as she tied up the festival's loose ends, Campbell heard her boss, Andy Faris, financier for Taste, say something that set her on edge.
"He expressed concern about settling up with the food vendors," Campbell recalls. "I started to get a little bit nervous there."
Faris's comment was one small indication of a looming crisis. The festival had bombed financially, and the owners didn't have the money to pay their bills.
"Mr. Faris counted on us and our 30 years of experience of paying our bills and bringing other people on—using our goodwill and credit—to gamble on this show," says Kevin Campbell, Andrea's husband and business partner. "And when everything is said and done, he walks away and says, 'Oops, I guess I don't have the money after all.'"
So far this month, 36 of the people who worked on the event have filed petitions in court to force the organizers into involuntary bankruptcy, bringing the claims against Faris and his business partners, Dan Hare and Terry Moore, to over $320,000.
"More creditors are joining," says Sam Stern, the attorney handling the creditors' claims. "They lost $1 million."
Taste of Minnesota was a Fourth of July tradition for 28 years, recently on Harriet Island and before that on the Capitol lawn. Modeled after the Taste of Chicago fair, the event historically featured food as the main draw and concerts as the side dish. Ron Maddox, a colorful character who died in February, was the co-founder.
In 2009, Faris, Hale, and Moore formed a company called International Event Management, LLC, and purchased the festival from the prior owners, Capital City Partnership. They inherited Maddox as the event organizer, since his contract ran through that summer.
But 2009 didn't go so well. The previous year's festival had been plagued with gang activity, so organizers were focused on keeping 2009 crime-free. For the first time in the festival's history, there was a charge for admission: At 3 p.m., festival-goers had to buy a $10 ticket good for food and beverages inside.
The ticket price seemed to pay off in terms of reduced crime, but overall the festival lost about $600,000.
But Faris wasn't going to let that discourage him. This year he would go all in.
He hired the Campbells, the husband-and-wife duo who run International Graffitti, Inc., an event-planning company that started the St. Croix music and art festival and brought Lollapalooza to Harriet Island.
Faris had a grand vision for Taste of Minnesota. He wanted to turn it into a concert that featured food, rather than the food festival it had always been. He also wanted to charge Ticketmaster-esque prices: $20 before 4 p.m. and $30 after.
On deck were four radio station sponsors: the Current, KQRS, Cities 97, and 93X. The stations lined up the musical heavyweights: Atmosphere, Sammy Hagar, Lou Gramm and John Waite, Counting Crows, Gin Blossoms, and the Offspring.
"One of the problems was that Faris kept adding to the budget," says Stern. "He acknowledged that things like the JumboTrons weren't part of the initial budget. He had a given entertainment budget. He exceeded it by $500,000. He just basically went for broke."
Meanwhile, Faris was still burdened with debt payments from the 2009 event.
By early April, the Campbells were anxious. They disagreed with the way Faris was beefing up the budget, and they were concerned that everything could fall apart.
They told Faris that he could pull out now and avoid accumulating major debt—before the press conference announcing the big plan. Sure, he'd have to swallow some pride, but it would minimize risk.
On April 19, the Campbells wrote Faris a letter spelling out exactly how much he would have to pay to make the 2010 Taste of Minnesota happen: $70,000 due by April 24, for outstanding 2009 police cost and marketing expenses; $130,000 due by May 1, for 2010 entertainment and production costs; $350,000 due by May 15, for 2010 entertainment and advertising and 2009 policing; $350,000 due by June 1, for 2010 entertainment contracts and bills and 2009 police bill.
On April 22, the Campbells turned in their letter of resignation, but Faris convinced them to stay on.
"He had some stock in a corporation that he runs, upwards of $2 million, and he said if he had to he would do a quick sale on some stock and come up with $1 million cash to pay for that event," says Kevin Campbell.
Faris certainly appeared to be in a position to cover his bills. He drove a Maserati, wore expensive clothing, and lived in a big house in Edina. His wife, Heidi, was part of the Rahr Malting family. By all appearances, he was a man of great means.
"We made it real clear that you cannot count on gate receipts and sponsorships to pay for the event," says Campbell. "We made it real clear that you could lose upwards of $1 million, and you better have that money in hand to help pay for it."
About a month before the event, the cracks started to show. Bills were coming due—about $400,000—and Faris didn't have the money.
The Campbells used their connections to help him get a short-term bridge loan. The money would be due at the end of the event.
The weather over the Fourth of July weekend was oppressively hot—so steamy that concert-goers risked heatstroke. Then came the rain. Over the four-day event, attendance was way below expectations: 60,000 when organizers had hoped for 100,000.
On the last day of the festival, Faris approached Rick Olson, who sold the tickets for the event.
"Andy came to me and said, 'Can you do me a personal favor and delay your billing?'" Olson recalls.
Faris wrote a check to the bank to pay the $400,000 bridge loan, and he settled up with the food vendors. But then the money ran out, leaving a lot of people unpaid.
"Kevin Campbell and I were hired guys," says Brian "BT" Turner, DJ for Cities 97. "We didn't go into it with the notion that if the event's a success and we make money we get paid. No. We were all in there as independent contractors—working."
Among the money still owed: $110,000 to the city of St. Paul, mostly for police services; $32,520 to McFarland Cahill Communications for public relations; $23,026 to the Campbells for event management; $18,000 to Brian Turner for his promotional work and services; $25,629 to Kam Talebi of CRAVE for food and services; $63,108 to Cummins NJPower; $15,569 to Craig Gass for concessions.
"I own a business," says Teresa McFarland, partner at McFarland Cahill Communications, who did PR for the event. "And I would never ask people to put effort forth if I had no intention of paying them—if I wasn't covered for the worst-case scenario, whether that's tapping into your own, or whatever. As a business owner with a certain ethic, you take care of people."
On October 6, the city of St. Paul booted Taste of Minnesota from Harriet Island, ending the long-standing tradition. The city issued an RFP for alternative Fourth of July events.
On October 29, Faris sent creditors a letter explaining that he "had exhausted all known avenues for a sale of Taste" and still didn't have the money to pay what he owed.
By then, the motivation for Faris's big gamble seemed clear to the Campbells.
"I think there was definitely some ego involved in what he was looking to do," Kevin Campbell says. "I don't think we understood it at the time, but they were looking to double-down on their losses for 2009."
Campbell corralled the other creditors and filed a petition to put the Taste owners into involuntary bankruptcy. More creditors are expected to come forward, including the city of St. Paul. Creditors have until December 27 to join the claim.
If the bankruptcy goes as expected, the remaining assets of Taste of Minnesota will be handed over to a trustee.
In the meantime, Faris says he is not the only one at fault—that many people made decisions that led the festival to flop financially.
"I've been pretty forward about what's going on with the company," Faris says. "It's been devastating for everybody."