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99-23356 RESO RESOLUTION NO. 99-23356 A RESOLUTION AUmORIZING SMG, MANAGING AGENT FOR THE MIAMI BEACH CONVENTION CENTER, TO ENTER INTO AN AGREEMENT WITH SMG CLEANING, A WHOLLY-OWNED SUBSIDIARY OF SMG, TO PROVIDE SHOW AND BOOTH CLEANING SERVICES FOR EVENTS AT THE MIAMI BEACH CONVENTION CENTER ON A NON-EXCLUSIVE BASIS. WHEREAS, the City of Miami Beach contracts SMG, as managing agent for the Miami Beach Convention Center; and WHEREAS, SMG has been approached to provide booth cleaning services to exhibitors and show managers using the Miami Beach Convention Center and other South Florida locations; and WHEREAS, SMG proposes to create SMG Cleaning, a wholly-owned subsidiary of SMG, to provide these services at the Miami Beach Convention Center and other South Florida locations on a non-exclusive basis; and WHEREAS, SMG, in accordance with its Management Agreement with the City dated October 1, 1998, shall receive approval from the City for any related party transactions; and WHEREAS, the City currently receives no revenues for the aforestated booth cleaning services, and SMG Cleaning proposes to return twenty percent (20%) of gross on-site sales and five percent (5%) of gross off-site sales to the City. NOW, THEREFORE BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission herein authorize SMG, the managing agent for the Miami Beach Convention Center, to enter into an Agreement with SMG Cleaning, a wholly-owned subsidiary of SMG, to provide show and booth cleaning services for events at the Miami Beach Convention Center on a non-exclusive basis. er , 1999. PASSED AND ADOPTED THIS 20th DAYOF 0 ATTEST: ~t r(l,t~ C CLERK APPROVED AS-; FORM & LANGUh{:I;: & FOR EXECUTlOi\j SR:MDB:dwt F:\CONVCNTR\OOUG\WPDOCS\COMMCLNG.020 ~-- LO-;fs.-qj ,. .~ CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 http:\'ci miami-beach.f1.us COMMISSION MEMORANDUM NO. I t.. 1- ~9 TO: Mayor Neisen O. Kasdin and Members of the City C mmission DATE: October 20, 1999 FROM: Sergio Rodriguez City Manager SUBJECT: A RESOLUTION AUTHORIZING SMG, MANAGING AGENT FOR THE MIAMI BEACH CONVENTION CENTER, TO ENTER INTO AN AGREEMENT WITH SMG CLEANING, A WHOLLY-OWNED SUBSIDIARY OF SMG, TO PROVIDE SHOW AND BOOTH CLEANING SERVICES FOR EVENTS AT THE MIAMI BEACH CONVENTION CENTER ON A NON-EXCLUSIVE BASIS. Administration Recommendation: Adopt the Resolution. Background: On July 15, 1998, the City of Miami Beach approved a new Agreement with SMG to provide management services for the Miami Beach Convention Center and Jackie Gleason Theater. The current Agreement took effect on October 1, 1998 and runs through September 30,2001, with the City's option to award two additional one-year extensions. In that Agreement, SMG is required to obtain City Commission approval in order to enter into any Agreement with related parties to provide servtces. SMG has been approached by at least one convention decorating company to provide sub-contracted booth cleaning services to shows produced by that decorator in the South Florida area. SMG proposes to start a separate company, SMG Cleaning, which will provide those services at the Miami Beach Convention Center and possibly other sites as required in Soutll Florida. All direct costs, including labor, supplies, and capital expenditures required for the operations will be incurred by SMG Cleaning, with executive level oversight provide by senior level SMG management located at the Miami Beach Convention Center. SMG Cleaning will remit 20% of gross sales to the City of Miami Beach for events at the Miami Beach Convention Center, and 5% of gross sales to the City of Miami Beach for events off-site from the Convention Center. Preliminary estimates would indicate that approximately $30,000-40,000 in revenues would be realized by the City, with potential to grow the business upon expansion to other decorators. Additionally, in exchange for storage of the equipment at the Miami Beach Convention Center, SMG Cleaning would permit the use of that equipment when available for Convention Center operations at no charge. AGENDA ITEM DATE C1G lb.2.l)-~ This issue was addressed by the Convention Center Advisory Board at its regular meeting on September 30, 1999, and was approved by a vote of5-1, with one abstention. Analy~is: Approval of this item would result in an additional $30,000-40,000 in revenues to the City of Miami Beach. Currently, no revenue is realized from other cleaning contractors working in the facility. Additionally, the use of the equipment by the Convention Center staff would help increase efficiency at no addtional capital costs to the City. Lastly, by placing this service under the direct supervision of the City's managing agent, additional control is gained over the complete cleaning responsibilities for Convention Center events, not just those currently addressed by SMG. The City, by its Agreement with SMG, is indemnified by SMG, and would also have no exposure to liability from SMG Cleaning due to this service provision. Conclusion: The Administration and Convention Center Advisory Board recommend approval of this authorization to increase revenues to the City and increase control over Convention Center cleaning operations. SR:'~~ F:\~~~\DOUG\WPDOCS\COMMCLNG.020