Tough Mudder misses contract deadline

The deadline passed weeks ago for Tough Mudder Inc. to file an economic impact study that documents how Santa Rosa County benefited from its April 9-10 event in Milton.

Although submission of the study is required before the county gives the company $80,000 in support money, Tough Mudder nevertheless sent an invoice to Tourist Office Director Julie Morgan, who has declined to pay it.

“This is a contingent contract. No monies will be paid until obligations are fulfilled, and at this time we do not have the study but do understand the Haas Center is working on it,” Morgan said. She added that funding is included in her department’s budget.

County Administrator Tony Gomillion backed her in an email: “My expectation is that we would not release payment until we receive the required study.”

Tough Mudder hired the University of West Florida’s Haas Center for Business Research to evaluate the economic impact of its military-style obstacle-course event.  But that contract allows the center 90 days to do the analysis, despite a 45-day limit established in Tough Mudder’s agreement with Santa Rosa County.   A Haas official said the study won’t be completed until sometime in July.

“An agreement is an agreement,” said Liz Horton, a member of the volunteer watchdog Tourism Development Council. “I don’t know why TM would tell us they could deliver (in 45 days) when their agreement with the Haas Center was 90 days. I applaud Julie for standing her ground.”

Litany of lapses

Tough Mudder’s failure to comply with the contract deadline is the latest slip-up in dealings between the county and the company dating back to last fall, when commissioners neglected to try negotiating the $80,000 support fee before voting unanimously to pay it.

Navarre Press has reported that local governments in Georgia, Kentucky and Texas didn’t give any taxpayer money to the for-profit Tough Mudder for staging its event in their areas.

Although Tough Mudder’s ticket prices for participants range to more than $100 apiece, it doesn’t share proceeds.

Morgan and county commissioners anticipated a bump in bed-tax revenue from Tough Mudder’s April 9-10 event, but the results turned out to be disappointing. The obstacle course didn’t return the county’s investment, at least when measured in lodging collections of the 5 percent bed tax, which rose in April by only 8 percent, or $14,820.

Thus the April bed-tax collections broke a string of double-digit monthly gains dating back to August 2015.

Tough Mudder’s spokeswoman, Jodi Kovacs, told a reporter that one reason the Haas study isn’t finished is that the center requested more information than the company had originally furnished. She said Tough Mudder has since complied with that request.

Verifying return on investment

The results of the economic impact study could affect whether the county agrees to pay Tough Mudder to return to Santa Rosa next spring. Some members of the TDC say they want to evaluate the study’s findings first.

The TDC, which had voted to give Tough Mudder only $20,000 before being overruled by the County Commission, has expressed doubt about the accuracy of the company’s economic impact study of its first event in Santa Rosa County, held in March 2015. That report was compiled by a San Diego State University professor of sports business using data supplied by Tough Mudder. It estimated the impact of last year’s one-day event at $6 million.

But some TDC members asked that the study be done locally this year, resulting in the Haas Center’s involvement.

The County Commission also voted last fall to seek an additional $30,000 for Tough Mudder in the form of a grant from the Florida Sports Foundation, a nonprofit group based in Tallahassee that promotes tourism. However, the foundation trimmed the grant to $10,000 and won’t pay until it sees evidence that a significant share of Tough Mudder revenues came from out-of-state visitors. That grant payment also awaits the Haas Center study.

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