A cutting-edge local music festival is playing a familiar song in the concert industry: the financial blues.
Clay Nutting, co-founder of TBD Fest, has been named in a lawsuit over nonpayment of a $200,000 loan. The breach of contract and fraud lawsuit was filed Dec. 9 in Sacramento Superior Court on behalf of Katrina Arnaud, a Sacramento-based certified public accountant who says she took out a mortgage on her house to provide half of the loan she gave to Nutting, an organizer of the three-day concert that incorporates art, food and fashion.
According to a signed contract submitted as an exhibit in the lawsuit, the $200,000 loan to Nutting was to be paid back to Arnaud on Aug. 10 through monies received from TBD Fest sponsorships and ticket revenues. TBD Fest, held Sept. 18-20 in West Sacramento’s The Bridge District, was attended by a combined crowd of 30,000.
“I feel betrayed,” Arnaud said in an interview Monday. “I believed in (Nutting’s) vision and his dedication to the project. It was a community project, and I was willing to support Sacramento.”
Nutting, who has not been served a copy of the lawsuit, acknowledges that he owes Arnaud $200,000. Nutting said he’s in talks with a new investor for TBD Fest that will help organizers fulfill some of their financial obligations. The investor, Nutting said, is a concert-industry veteran who already has helped TBD Fest pay some of its debts. He declined to name the investor.
“We’ve been in communication with (Arnaud) as frequently as possible,” Nutting said. “When a couple of payments were missed, she started getting concerned. I said that we had some money coming in and and want to get back on the payment schedule. If she wants to protect herself, that’s understandable.”
TBD Fest’s attendance grew 40 percent this year from its 2014 debut. The multistage event showcases a variety of music not often seen locally in a festival setting, including electronic dance music and indie-rock. The festival also includes displays from local artists and cooking contests with Sacramento chefs.
I’m heartsick. If he doesn’t pay this loan back, I could lose my home.
Despite being hailed as an artistic success, TBD Fest was beset by financial issues during its first year. According to Nutting, the festival lost an undisclosed amount of money. As The Sacramento Bee previously reported, a number of vendors weren’t paid for their work that year, including Betsy Hite, a Sacramento-area caterer and restaurateur. Hite was contracted for $22,000 to provide meals for stagehands, bands and other backstage personnel. Though she was paid a $10,000 cash deposit prior to TBD Fest 2014, she still hadn’t been paid the balance months later. Hite and TBD Fest organizers remain in an ongoing dispute about how much is still owed, in part because of meal overruns that increased the balance.
TBD Fest organizers also faced a series of financial issues after the 2015 event, including nonpayments to a headlining musical performer as well as local visual artists.
In a letter obtained by The Bee dated Oct. 26, the talent agency representing the artist Pretty Lights demanded payment of $92,500 from TBD Fest organizers. The electronic-music act was booked for $185,000 as TBD Fest’s headliner on Sept. 18. The letter, from Creative Artists Agency, stated that the artist was to be paid the outstanding balance by Sept. 19. It was addressed to the attention of David Steinberg, controller of TBD Fest, and Michael Hargis, who co-founded TBD Fest with Nutting.
According to Nutting, Pretty Lights has since been paid the $92,500. Calls to CAA by The Bee were not returned.
Some local artists, however, are still waiting to be paid. Emily Swinsick, a Sacramento based visual artist, is still awaiting payment from TBD Fest organizers. She said she and her collaborator, Brad Owen, were contracted for $3,500 to construct an 8-foot-by-8-foot art installation for the festival, but have not received any money.
“It’s frustrating,” Swinsick said. “I put everything on my credit card (for the art materials). At this point I’m paying interest on something I don’t have.”
A local aerial dance troupe also said it was awaiting payment from TBD Fest in mid-October. After broadcasting its complaints on social media, the troupe said it received its payment of $1,500 from TBD Fest organizers.
Nutting said plans are moving forward for TBD Fest 2016, but the scope of the festival may change. Organizers also have canceled plans to throw a New Year’s Eve block party in midtown near LowBrau, a restaurant co-owned by Nutting and Hargis.
“We’ve learned some lessons over the past two years and overshot what our capital needs are,” Nutting said. “We feel that we’re building something important and great for the city. We took some lumps, and we’re excited about getting our obligations taken care of. It’s a priority.”
A case-management conference regarding Arnaud’s lawsuit against Nutting is scheduled for July 21 in Sacramento Superior Court.
“I’m heartsick,” Arnaud said. “If he doesn’t pay this loan back, I could lose my home.”
Editor's note: This story was changed Jan. 21, 2016, to correct the people named in the lawsuit due to a mistake with the court filing.