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On the downside, not unlike any business, there’s no guarantee it won’t someday relocate for competitive reasons. Similarly, the market for its product might dry up. Local residents, few of whom will actually be employed by the business, will experience temporary inconveniences when the business is open. Illegal activity will be a byproduct. Somebody might die.

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This is exactly the situation faced by Coffee County, a rural community of little over 50,000 residents located about 65 miles southeast of Nashville, as the Bonnaroo Music Festival readies for its fourth incarnation this month.

Its name drawn from Cajun slang roughly translating as “good times,” Bonnaroo is among the largest music festivals in the world with paid attendance this year expected to reach 90,000. A three-day camping/concert event, Bonnaroo attracts music lovers from all 50 states and two dozen countries. (Seventy tickets were sold in Japan last year.) Inspired by Woodstock, Knoxville music promoter and Bonnaroo founder Ashley Capps built his event with an eye also to European camping festivals with more staying power, like U.K.’s 112,000-person Glastonbury music festival, now in its third decade. Bonnaroo is off to a good start. After only three years, the festival has put the city of Manchester, Coffee County and indeed the state of Tennessee on the pop culture map. Rolling Stone magazine has called it “the American rock festival to end all festivals.

Bonnaroo, though, is more than just a Woodstock with legs; it’s a business with tremendous economic benefit to the state. Though no formal economic impact study of the event has ever been conducted (one is planned this year), a study of the inaugural festival in 2002 by Middle Tennessee State University estimated a $7 million economic impact on Tennessee. Given the growth of the festival, that number likely tops $10 million now. Sales tax revenues from last year’s event, according to figures provided by Bonnaroo, reached $1.3 million. The local portion remitted to Coffee County and its municipalities Manchester and Tullahoma offer those governments a solid spike in revenue collections. Retail and gasoline establishments up and down Tennessee's highways leading to Bonnaroo benefit from festival traffic. For a few days each year, Bonnaroo is one of the biggest tourist attractions in Tennessee.

But it’s not been all “good times” for the host county. Inside the fences of the event, held on private land, recreational drug use is widespread and un-policed. Last year’s event was marred by two drug-related deaths. It’s not exactly the reputation the Bible belt community of Coffee County would have gone seeking in a quest to bring economic activity to the area. Added to these morality concerns, Coffee County must grapple with choking traffic, a pounding on its infrastructure, and the stretching of its law enforcement, traffic control, first aid and ambulance services out of proportion to the needs of the local citizenry. All things considered, county officials argue Coffee County reaps less in economic benefits than outsiders might think.

To redress this perceived imbalance, the officials have made moves in the state legislature and at the bargaining table to get a larger piece of the pie. Granted, it’s a nice-sized pie—Bonnaroo is expected to gross $10 million to $15 million this year (90,000 tickets sold at approximately $160 a pop). But, not surprisingly, any move that cuts into the festival’s bottom line does not set well with Capps and other festival organizers.

Buried in the current tensions are the seeds of Bonnaroo’s future. Is the festival better off staying rooted in Coffee County, or should it pull up stakes and go elsewhere? The answer to this question is one festival organizers, county and even state officials need to carefully consider.

“Eyes of the World”
Capps, founder of AC Entertainment, started the Bonnaroo festival from scratch four years ago. In concert with New York-based Superfly Productions, Capps set out to create a Woodstock-like festival larger in size than previous outdoor events he’d staged. In his search, he surveyed sites in North Carolina and East Tennessee, as well as Sam McAllister’s 530-acre farm in Coffee County. The farm had once been the site of a failed rock festival called “Itchycoo Park.

Early support and cooperation from Coffee County officials and residents sold Capps on McAllister’s site. That support stemmed in part from skepticism that Bonnaroo would be any different from Itchycoo, particularly since Capps wasn’t advertising his proposed event by traditional means like newspaper advertisements in nearby Nashville. At one organizational meeting, a community leader advised Capps that if he thought he was going to sell 70,000 tickets to his concert perhaps he should start promoting it. Little did he know that via the Internet, the event was already sold out.

When 30,000 cars converged on Coffee County in mid-June of 2002, the 16-mile traffic backup on I-24 caught the attention of news media across the state and nation. The little-publicized event became one of the biggest news stories of the summer of 2002. Bonnaroo instantly became a signature summer musical event in America. It also became apparent that the mass influx of unconventional tourists was not going to yield the financial windfall that Coffee County desired.

As a camping event, attendees at Bonnaroo largely bring their own goods, or buy them in locales outside of Coffee County on their approach to the traffic-congested area. Unlike local municipalities Manchester and Tullahoma, Coffee County has little in the way of retail businesses that can benefit from the event anyway. By comparison, in preparing for the festival, Bonnaroo organizers spent $2.7 million in Manchester and Tullahoma businesses the week before last year’s event. The amount of sales tax from ticket sales remitted to the county is around $300,000 but must be divided with Manchester and Tullahoma, which bear none of the direct costs associated with the event. (Small wonder the local governments of those cities are bullish on the event and eager to keep it in place.) The county also struggles to successfully collect sales tax from many of the out-of-town and out-of-state vendors who sell everything from water to watermelons at the event but subsequently remit sales tax to their home jurisdictions.

For their part, Bonnaroo organizers act as exemplary corporate citizens. Last year, they made $190,000 in charitable contributions to the community, including $30,000 for a skate park in Manchester. Bonnaroo also pays for damage to roads and for overtime costs of law enforcement officers and medical personnel—they even feed them. But county officials contend that the sales tax profit, around $100,000, largely goes towards paying “hidden” costs like meeting time, planning and zoning activities, staff training and vehicle depreciation.

But there’s more behind county complaints than just a fervent desire to break even on Bonnaroo. Coffee County is facing some substantial financial obstacles that have nothing to do with the festival. The county is looking at approximately $100 million in school construction needs. Overcrowding in its prison is so bad that the state has decertified it pending an expansion. With little economic base to draw on to fix those problems, and with a highly successful festival making millions of dollars within its jurisdiction, it’s not surprising that eyes turn to Bonnaroo.

Nor is it surprising that county officials sought to address their budget shortcomings by singling out Bonnaroo with a giant tax. To the tune of 8% per ticket, the county originally aimed to raise about $750,000 annually for itself. Combined with the state’s 9% sales tax, one of the highest in the nation, the proposal amounted to a 17% tax on the event. Though the proposal was lowered to 5% (a combined 14%), Capps says the arbitrary tax still would have amounted to the largest tax of its kind on any such event in the nation. He makes it clear such a proposal endangers the future of the festival in Coffee County.

"Municipalities and counties throughout America are having budget problems,” Capps says. “Coffee County is no exception. It’s just a human tendency to look at this thing and say ‘This could help solve our problems.’ That’s a dangerous thing, though. You can get into a situation there of killing the goose that lays the golden egg.”

“Shakedown Street”
To enact the tax, Coffee County first had to get authority from the state legislature in the form of a private act. Such legislation almost always sails through the General Assembly and has in the past for such activities as white water rafting in Polk County. In short order, the state Senate unanimously passed the act before last year’s festival. Fortunately for Bonnaroo, election year politics intervened. The Democrat-controlled state House wasn’t about to let Coffee County’s Republican representative Judd Methany get any legislation passed, even if it was a simple local bill.

Unable to enact the tax and with relations with festival organizers at an all-time low, the county nevertheless remained determined to get some compensation to alleviate the burdens of its hidden costs. A long and what Capps describes as “difficult” negotiation led to a non-binding agreement, or memorandum of understanding signed last December. Bonnaroo would dedicate $3 from each ticket to Coffee County for its general fund purposes, not to exceed $300,000. (The county originally wanted $500,000.) The bulk of the money would come in lieu of the festival’s charitable contributions. In exchange for the $3 ticket surcharge, the festival’s organizers got what county Mayor Ray Johnson describes as long-sought security that they could keep the event in Coffee County—at least temporarily. Though the state permits the event, lobbying by the county to have the permit pulled could conceivably end the festival. “They know now they’ve got three years without the county commission trying to run them out of town,” says Johnson of the settlement. “As long as they meet the requirements, we won’t give them any trouble.

Publicly at least, both sides say they feel good about the deal and, generally speaking, about where the relationship stands today. Bonnaroo organizers can at least temporarily focus on making the festival the best event it can be in Tennessee. Coffee County officials, on the other hand, can now reap some fringe benefits from the festival, and in turn address budget concerns that might assuage even the staunchest opponents of Bonnaroo’s presence in the community. Dispersal of those funds promises to be an interesting study in wise governing given the uncertain long-term prospects of that revenue stream.

That’s not to say the storm has passed. For one thing, the agreement isn’t legally binding. And Johnson makes it clear that at least in his mind a privilege tax is not off the table. “Before we could get it passed, though” says Johnson, a former lawmaker, “the current anti-tax climate on Capitol Hill will have to change.”

Johnson remains convinced a $7 tax on $160 Bonnaroo tickets isn’t going to keep someone from California or Japan from attending the festival. Nor does he think a $7 tax will drive Bonnaroo organizers to other shores. He sees market forces as more integral to the decision-making. “When they get to the point they’re not making the kind of money they think they should make, they’ll be gone,” says Johnson, seemingly unfazed that it was his own negotiations that recently removed over a quarter million dollars from the event’s bottom line. “We realize that.”

Coffee County Commissioner Robin Hines seems equally unconcerned about the prospect of a Bonnaroo departure. “Of course we want them,” Hines says, agreeing that some economic impact is better than none. “But if they decide they don’t want to come back here, we’re not going to go chase them. It’s not something we’d go off to seek. It’s not Dollywood with permanent jobs.”

“Fire on the Mountain”
Capps, who according to close associates was quite upset about the $300,000 settlement, makes no bones about the fact that he’s always considering his options, as any good businessperson does. Certainly there are plenty of farms located off interstates in Tennessee and throughout the Southeast that could host his festival. And in fact, Capps says he’s continuously being lobbied to relocate Bonnaroo. “We’ve had a number of people in Middle and West Tennessee propose sites to us since the first festival,” Capps says. “We’ve been very heavily lobbied by people outside the state. We’ve tried to do due diligence and if something sounded interesting we’ve often taken a look at it.” And while he says he very much values his relationship with Coffee County officials and the “can do” attitude of its residents, Capps adds that his festival, “would definitely work in other locations.”

Both county officials and Capps show equal prowess at issuing convincing bluffs. But in fact both sides would be well served to consider the evidence of just how lucky they are to have found each other in the first place.

Capps’ recent eyewitness account of a failed festival event in New York sheds light on the value of the relationship he has established, warts and all, with Coffee County. Planning to use his Bonnaroo brand to create a similar event in the northeastern United States, Capps set his sites on a location called Riverhead in Suffolk County, New York last year.

At Riverhead, another festival organizer was already busy preparing to host a 50,000-person festival to take place two months prior to Capps’ proposed “Bonnaroo Northeast.” That promoter had already spent close to $2 million preparing the site. Just days before the event was to occur, however, the county withdrew its permit for a mass gathering, issuing last-minute concerns about health and safety and even the propensity for the event to become ‘another Bonnaroo.’ Capps attributes the turnabout by the county as a sterling example of “sheer politics.” The event was quickly abbreviated and moved to a football stadium in New Jersey. Capps as quickly folded plans to expand Bonnaroo to the northeast in 2004. (A “Bonnaroo Texas” is planned for later this summer.)

Capps could also move his signature Tennessee event to a football stadium, or a parking lot, or to a cornfield in Indiana for that matter. Doing so, however, would mean beginning at square one with a new community, a prospect filled with uncertainty. For Capps, the known in Coffee County is perhaps better than the unknown. He admits as much when he says, “Field Day’s experience just illustrated the kind of environment where you can’t be successful trying to create an event like this. It reinforced that we want to make Bonnaroo Tennessee the best event it can be … that we’re going to keep that in Tennessee for the moment.”

Moving the festival off McAllister’s farm would also upset the brand experience Bonnaroo customers now expect of the camping festival as it exists in Coffee County. Elevated on Tennessee’s Highland Rim, McAllister’s farm includes a distant view of Monteagle Mountain, the front range of the Cumberland Plateau. It’s fitting that a festival of so-called “jam band music,” derivative of Appalachian mountain music, takes place in view of the foothills of those very mountains. At the first Bonnaroo, attendees from all corners of the world were led in a chorus of the song “Tennessee Jed” by the surviving members of jam band innovators The Grateful Dead, chanting “Tennessee, Tennessee, there ain’t no place I’d rather be.” That “Bonnaroonies” travel from around the world to an idyllic spot in the highlands of Tennessee offers concertgoers a sense of musical and geographical convergence that just can’t be duplicated in a parking lot, a football stadium or a cornfield.

From the county’s perspective, losing the event now clearly means the loss of substantial income it would find hard to replace. Particularly if the county follows through with stated plans to use the money to address pressing budget problems, it will have created a dependence on festival proceeds, the loss of which could be remedied only by a tax increase—hardly palatable for a community that has seen its taxes rise in 13 of the last 18 years.

And though it’s true that Bonnaroo might not create any permanent jobs, the festival-triggered, month-long spike in part-time jobs and increased general economic activity surely provides some solace for a county that has recently watched 400 jobs with The Carrier Co. move to Mexico (and another 150 with K2 go overseas).

“Ripple”
The county also stands to lose a precious identity it has forged as a burgeoning part of Tennessee’s globally recognized musical heritage, something state officials have noted.

"Bonnaroo is important to tourism to Tennessee,” says Susan Whitaker, commissioner of the Tennessee Department of Tourist Development. “Our state is known for the blues, soul and rock of Memphis; the country music of Nashville; and the bluegrass of Northeast Tennessee. Bonnaroo’s unique lineup broadens our brand and reputation as the place to be if you want to hear great music.”

Unlike almost every other rural Tennessee county, Coffee County now has a musical birthright that if fostered and grown can become an integral part of Tennessee’s historically significant musical stage.

Over time, locals in Coffee County have grown to appreciate that distinction. Whereas four years ago residents appeared bitterly divided over the event, today local politicians and business people alike agree that most support the festival and its continuation.

Where does that leave Bonnaroo? For now, the relationship between Capps and company and county officials seems stable. Nonetheless, state tourism and development officials would do well to keep an eye on what may seem for now nothing more than a schoolyard squabble. Rhetoric flung about in an effort to gain advantage at the bargaining table can have an accumulating, stinging effect. The importance of the relationship between Coffee County and Bonnaroo has grown beyond being primarily a question of county economics and festival profits. Bonnaroo has become an important part of Tennessee’s musical heritage. Over time, it may well rival some of the state’s more established claims to fame. The Nashville Sound, Memphis Blues and Bonnaroo.