Posted on 15 March 2012.
By Judy Reed
It was 1939, when Cedar Springs Clipper editor Nina Babcock said the businesses decided to tag Cedar Springs as the “Red Flannel Town” and hold a festival. The name stuck, and has been used cooperatively by the city and the festival for many years. The recognizable logo of a pair of long johns hanging on the clothesline and the words “Red Flannel Town” or “Red Flannel Festival” can be seen all over the city—on street signs, city trucks, letterhead, the water tower, and signs welcoming people to Cedar Springs.
That could change, however, if the city decides it cannot afford a licensing agreement recently proposed by the Red Flannel Festival for $8,000—the same amount the city told the Festival last year they would need to start paying to cover services the city provides, such as police protection at the Grand Lodge, DPW work, etc. for Red Flannel weekends.
At budget time last year, the City of Cedar Springs had a deficit of $55,000, and cut services to all community organizations, and also made cuts to city staff. “We had to cut so deep that no one was immune,” City Manager Christine Burns told the Post last year.
They city decided to phase in the cuts to the Festival, and donors came forward to help cover the difference. The two entities completed an agreement for four years with the Festival offering to pay $8,000 each year to the city for services rendered.
According to documents the Post obtained under the Freedom of Information Act, the RFF is now proposing a licensing agreement for the city’s use of the Festival’s trademark—for $8,000 per year, through 2015. Festival president Michele Andres said it’s difficult to determine what the trademark is worth. “What is the cost of someone’s identity and brand for 72 years? It’s been a shared responsibility—a quid pro quo. Now that seems to be over. The Red Flannel ad hoc committee thought that $8,000 would be cost neutral to both parties—to put it back where it used to be,” explained Andres.
The first indication that there was a problem with the city using the trademarked logos and text came in December, when the city ordered and began selling Red Flannel license plates and frames for the library fundraising program. According to Mayor Charlie Watson, Mayor Pro-Tem Christine Fahl was notified by the Red Flannel Festival committee that there was an issue of trademark infringement, and he told city staff to pull the plates until they could work through the issue. The Festival was on hiatus from November through January, and the Festival ad hoc committee (with three members from City Council—Watson, Fahl, and Pat Capek) met with the Festival committee.
According to documents and checks and invoices obtained by the Post, the RFF wrote the city a check for the license plates. Burns said the understanding was that the city would reimburse them next August for the plates they sold. The city then decided to write a check back to them right away, assuring them they would sell them all. But it was returned by the Festival, and they are working with the library to sell the plates. You can buy them at City Hall or the library (see story on page 7)
So why did the Festival pick now to enforce trademark rules with the city? “Obviously we support the library. But the board felt like it’s their duty to protect the trademarks,” explained Andres. “It’s created confusion—is it the city or the festival? We only generate revenue through donations or sales of our products, and we need to protect that. Anyone who wants to use trademarked items must get approval first.”
The RFF holds state trademarks on at least 10 different phrases and logos related to Red Flannels and the Festival is working on federal approval.
During the years that H.H. Cutler owned the main trademarks, only the Chamber of Commerce had rights to the marks, for $1 a year. That did not extend to the Festival or the city, according to a letter written to City Manager Frank Walsh in 1996 by lawyers for the children’s clothing manufacturer. Cutler later closed down.
The Post asked Burns what it would cost to remove the trademarked insignia from city property, if council decided to reject the Festival’s proposal. She wasn’t sure. “It would depend on whether it had to happen all at once or in phases,” she said.
Mayor Watson feels both sides want to work diligently to come to a compromise. “I feel both sides recognize we should work together for the betterment of the community,” he said.
“Working closely together benefits both the city and the Festival, and the community, with the economic impact the Festival brings,” noted Andres. “It’s critical that both organizations have open, honest, communication. We can’t do it without each other.”
The city will meet with the city’s lawyer on Thursday to discuss the proposal. According to Watson, they could come back with a counter offer, recommend council accept it, or that they deny it. He didn’t know yet what they would decide.
What do you think? Do you think the Festival should charge the city to use the logos? Do city taxpayers want the city to pay to use the trademark? Or is it time to develop something new? Send us a letter to the editor with your thoughts to firstname.lastname@example.org, and be sure to include your name, phone number and city or township.
By the numbers
Red Flannel Festival President Michele Andres told the Post last year that the 2011 budget for the Festival was about $90,000. To show how much the Red Flannel Festival has grown, total gross assets on the Festival’s 2010 tax return (the latest year available) were shown as $233,902. In 2004, the total gross assets were $4,625.
The 2010 return showed net total revenue of $57,346, with net expenses of $33,016. Net assets, including cash and savings, was listed at $130,250.
Schedule O showed gross expenses of Festival events at $45,161; and other expenses (including building and other expenses) at $16,489, for a total of $61,650. The largest single expense on Schedule O is advertising/printing, at a cost of $16,381. Gross income from fundraisers and events is listed at $65,940. The event that brought in the most money was the Grand Lodge, at $25,607 and the cost was $7,515.