2008-26888 ResoRESOLUTION NO. Zoos-26888
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVING ALL MATERIAL AND SUBSTANTIVE TERMS OF THE
AGREEMENT BETWEEN THE CITY AND GLOBAL SPECTRUM, LP (GLOBAL) FOR
THE OPERATION, MANAGEMENT, MAINTENANCE, PROMOTION AND MARKETING
OF THE MIAMI BEACH CONVENTION CENTER, COLONY THEATRE, AND BYRON
CARLYLE THEATER; APPROVING, IN SUBSTANTIAL FORM, THE MANAGEMENT
AND OPERATION AGREEMENT BETWEEN THE CITY AND GLOBAL, AS THE
SUCCESSFUL PROPOSER PURSUANT TO REQUEST FOR PROPOSALS NO. 20-
07I08,AND AUTHORIZING AND DIRECTING GLOBAL ANDTHE CITY MANAGER AND
CITY ATTORNEY'S OFFICE TO MAKE ANY NON-SUBSTANTIVE AND NON-MATERIAL
REVISIONS AND/OR ADDITIONS TO THE AGREEMENT, AS REQUIRED, TO FINALIZE
SAME; FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE
FINAL AGREEMENT, SAID AGREEMENT HAVING AN INITIAL TERM OF THREE(3)
YEARS, COMMENCING ON OCTOBER 1, 2008, AND ENDING ON SEPTEMBER 30,
2011, WITH TWO(2) ONE YEAR RENEWAL TERMS, TO BE EXERCISED AT THE
CITY'S SOLE OPTION AND DISCRETION.
WHEREAS, on February 13, 2008, the Mayor and City Commission approved the
issuance of a Request for Proposals (RFP) for the Management and Operation of the
Miami Beach Convention Center; Colony Theatre and Byron Carlyle Theatre; and
WHEREAS, RFP No. 20-07108 was issued on February 22, 2008, with an opening
date of April 11, 2008; and
WHEREAS, RFP Depot issued bid notices to 2,206 prospective firms, which
resulted in the receipt of the following two (2) proposals:
• Global Spectrum, L.P.;
• SMG; and
WHEREAS, at its regular meeting on July 16, 2008, following extensive discussion,
which included presentations and question and answer sessions from the two (2)
responsive proposers, Global and SMG, the Mayor and City Commission adopted
Resolution No. 2008-26860, and authorized the City Administration to enter into
negotiations with Global for an agreement for the management and operation of the
facilities; and
WHEREAS, in selecting Global Spectrum, the City Commission focused on three (3)
key areas: Global's partnership with Messe Schweiz, enhanced marketing opportunities
with Global and their affiliates, and Global's proposed operating deficit reduction; and
WHEREAS, the attached Management & Operation Agreement represents the
outcome of numerous negotiations sessions; improves upon Global's original proposal; and
addresses the three key areas discussed during the City Commission's deliberations.
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 hereby approve all material and substantive terms of the agreement between
the City and Global Spectrum, LP (Global) for the operation, management, maintenance,
promotion and marketing of the Miami Beach Convention Center, Colony Theatre, and
Byron Carlyle Theater; approving, in substantial form, the management and operation
agreement between the City and Global, as the successful proposer pursuant to Request
for Proposals No. 20-07108, and authorizing and directing Global and the City Manager and
City Attorney's Office to make any non-substantive and non-material revisions and/or
additions to the agreement, as required, to finalize same; further authorizing the Mayor and
City Clerk to execute the final agreement, said agreement having an initial term of three(3)
years, commencing on October 1, 2008, and ending on September 30, 2011, with two(2)
one year renewal terms, to be exercised at the City's sole option and discretion.
PASSED and ADOPTED this lOtti day of September , 2008.
A EST:
~~ MAY R
Matti Herrera Iio~oer
CITY CLERK
Robert Parcbcr
T:IAGENDA120081September 101RegularsGlobal Spectrum Convention Center Mgmt Agmt RESO.doc
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COMMISSION ITEM SUMMARY
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Substantial Form.
96,087
11, 2008. The following two (2) proposals were received:
Global Spectrum, L.P.; and
SMG
At its regular meeting on July 16. 2008. fallowing extensive discussion; which included presentations and
question and answer sessions from the two (2) responsive proposers, Global and SMG, the Mayor and
City Commission adopted Resolution No. 2008-26860, and authorized the City Administration to enter into
negotiations with Global for an agreement for fhe management and operation of the Facilities.
In selecting Global Spectrum, the City Commission focused on three (3) key areas. Global's partnership
with Messe Schweiz, enhanced marketing opportunities with Global and their affiliates, and Global's
proposed operating deficit reduction, Accordingly, since the approval of the award to Global Spectrum, the
City and Global held numerous negotiations sessions (in person and via conference call) to negotiate the
following Management Agreement (the Agreement) for management services for the Miami Beach
Convention Center, Colony Theater and Byron Carlyle Theater, with a focus in those key areas. In those
instances where SMG proposed more favorable terms for the City, Global was required to match those
terms as a starting point for negotiations (i.e management fee and capital contribution). The attached
Agreement delineates the negotiated terms in key elements of the Agreement, including those conditions
relating to improvement on operating deficit. the role of Messe Schweiz and the benefits proposed from
Global's marketing relationships and approach. Below. please find a summary of key Agreement terms.
attached Commission Memorandum and Management Agreement for detailed terms
Source of
funds:
OBPI
~ M I AM i B EAC H AGENDA ITEM ~S ~!
DATE q_!D"Ug
m MIAMIBEACH
City of Miami Beach, I7rJ0 i:onvcnfon Conro~ diva Miami Beac a. r'~.orida 33139, viWw ^.iamib^ccFll,~ov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FeoM: Jorge M. Gonzalez, City Manager ,~
DATE: September 10, 2008
SUBJECT A RESOLUTION OF THE MAYOR AND CITY COMMISSION APPROVING ALL
MATERIAL AND SUBSTANTIVE TERMS OF THE AGREEMENT BETWEEN THE
CITY AND GLOBAL SPECTRUM, LP (GLOBAL) FOR THE OPERATION,
MANAGEMENT, MAINTENANCE, PROMOTION AND MARKETING OF THE MIAMI
BEACH CONVENTION CENTER, COLONY THEATRE, AND BYRON CARLYLE
THEATER; APPROVING, IN SUBSTANTIAL FORM, THE MANAGEMENT AND
OPERATION AGREEMENT BETWEEN THE CITY AND GLOBAL, AS THE
SUCCESSFUL PROPOSER PURSUANT TO REQUEST FOR PROPOSALS N0.20-
07108, AND AUTHORIZING AND DIRECTING GLOBAL AND THE CITY MANAGER
AND CITY ATTORNEY'S OFFICE TO MAKE ANY NON-SUBSTANTIVE AND NON-
MATERIALREVISIONS AND/OR ADDITIONS TO THE AGREEMENT, AS REQUIRED,
TO FINALIZE SAME; FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE THE FINAL AGREEMENT; SAID AGREEMENT HAVING AN INITIAL TERM
OF THREE(3) YEARS, COMMENCING ON OCTOBER 1, 2008, AND ENDING ON
SEPTEMBER 30, 2011, WITH TWO(2) ONE YEAR RENEWAL TERMS, TO BE
EXERCISED AT THE CITY'S SOLE OPTION AND DISCRETION.
Adopt the Resolution.
CONTRACT FUNDING
Funding is available from Convention Center Enterprise Fund, which funds the operation of the Miami
Beach Convention Center.
• Proposed Base Management Fee = $275,000 (plus incentive which cannot exceed an
amount equal to 100% of the base fee; capped at greater of CPI or 3%).
Funding is provided to the City by the selected proposer, per contract as follows:
• Capital contribution = $375,000
• Scholarship contribution = $ 12,500.
ANALYSIS
Convention Center
The City of Miami Beach has operated a Convention Center since 1958. The Convention Center was
expanded in 1968. in 1974, and was again expanded and totally renovated in 1987. Since that time.
the City has invested an additional $35 million in capital improvements to the facilities. The
Convention Center currently has a pending list of capital improvements valued at approximately
$16,600,000,
The Convention Center is approximately 1.1 million gross square feet, with approximately 502,000
square feet of exhibition space. The FY 2007/08 operating budget for the Miami Beach Convention
Commission Memorandum - Globa! Spectrum MBCC Management Agreement
September 10. 2008
Page 2 of 14
Center is $9,502,883 (Convention Center operating budget does not include depreciation,
management service fee, or debt service); the Colony Theatre operating budget is $425,799; and the
Byron Carlyle Theatre operating budget is $312,215.
Management Agreement for operation of the Convention Censer:
On September 7, 1990, the City of Miami Beach issued a Request for Proposals (RFP) for the
management of the Miami Beach Convention Center (MBCC) and the Jackie Gleason Theatre of the
Performing Arts (TOPA). The contract was awarded to Spectacor Management Group (SMG). On
December 19, 1990, the City of Miami Beach entered into athree-year Management Services
Agreement with SMG for the management of the MBCC and TOPA; on June 30, 1993, the City
exercised its option to extend the Agreement for two successive one-year terms (January 1, 1994 to
December 31, 1995). On April 19, 1995; the City Commission approved the waiver of formal bidding
procedures. thus extending the Management Services Agreement with SMG. and approving a new
Agreement for the period of October 1, 1995, through September 30, 1998.
On December 5, 1997, the City of Miami Beach issued Request for Proposals (RFP) No. 5-97/02,
seeking proposals from qualified firms for the management and operation of MBCC and/or TOPA. On
April 1, 1998. the City Commission adopted a Resolution authorizing the Administration to enter into
negotiations with SMG pursuant to the recommendation of the City Manager and the Evaluation
Committee. On July 15, 1998, the Mayor and City Commission adopted Resolution 98-22850,
authorizing execution of an Agreement with SMG for three (3) years with two (2) one-year renewals.
The two (2) one-year extensions were authorized on September 5, 2001, via Resolution No. 2001-
24573; these renewals expired on September 30, 2002.
On January 8, 2003, the Mayor and City Commission adopted Resolution No. 2003-25107, which
authorized the issuance of a RFP for the management and operation of (1) the MBCC and TOPA; or
(2) TOPA only, with an option to manage and market other City Cultural Facilities to include but not be
limited to: the Byron-Carlyle Theatre, the Rotunda, the Acorn Theatre. the Bandshell and/or the
Colony Theatre. On October 15, 2003, the Mayor and City Commission approved Resolution No.
2003-25381, approving and authorizing the Mayor and City Clerk to execute a Management Services
Agreement between the City and SMG for the management, promotion, and operation of the MBCC
and TOPA. Subsequently, two amendments were executed: 1) on July 28, 2004 (Resolution No.
2004-25645), amended the Agreement to include additional management oversight of the Byron
Carlyle Theatre, the Colony Theatre, and the Little Stage Theatre; and, 2) on May 10. 2006
(Resolution No. 2006-26202), approved Amendment No. 2 to the Agreement which exercised both
one-year renewal options provided for in the current Agreement, and further amended the incentive
criteria and added termination provisions for the TOPA. The final renewal term expires September 30.
2008. (Please note that Management of the TOPA. renamed the Filimore Miami Beach at the Jackie
Gleason Theatre, was awarded to Live Nation June 2007 and SMG no longer manages that facility)
On February 13, 2008. the Mayor and City Commission approved the issuance of a Request for
Proposals (RFP) for the Management and Operation of the Miami Beach Convention Center. Colony
Theatre and Byron Carlyle Theatre (the "City facilities'), in anticipation of the pending expiration of the
term of the current management agreement for these City facilities.
Convention Center Booking Process:
The Convention Center booking is not solely managed by the convention center management
company. The City of Miami Beach has an Interlocal Agreement with the Greater Miami Convention
and Visitors Bureau (the"Bureau"), forthe joint promotion and booking of the Miami Beach Convention
Center to the convention, conference, and meeting market. Although convention bookings are
generally the direct result of the Bureau, the convention center management company may also
identify potential convention opportunities. These two entities work closely to identify opportunities.
coordinate facility availability, and promote the facility to potential users. The City of Miami Beach has
Commission Memorandum -Global Spectrurrr MBCC Management Agreement
Septernber 10, 2008
Page 3 of 14
an adopted booking policy for the Miami Beach Convention Center that states that reservations for
events occurring in more thantwenty-four (24) months are normally handled through the Bureau. As a
result, the Convention Center management company focuses on rental opportunities occurring within
the next twenty-four (24) months. Most of this short-term business is typically meetings, events, or
consumer or trade shows. As a result of a change to the booking policy in 2006 to allow social
catering. the convention center Management Company also works closely with the Food and
Beverage concessionaire to promote the facility for social catering events.
Other managed facilities:
The convention center management company has been responsible for management of the Colony
and Byron Carlyle theaters since July 28. 2004. This responsibility includes all day-to-day
management, including back of house operations and maintenance. Booking was added as an
additional responsibility at no additional charge to the City in November 2007 when the City's Cultural
Facilities Manager resigned.
The Colony Theatre, located at 1040 Lincoln Road, first opened in 1934 as part of Paramount
Pictures' movie theater chain. The Colony was transformed into a performing arts theatre in 1986, and
later added a new lobby and a cafe. Now owned by the City of Miami Beach, the Colony has recently
emerged from athree-year, $6.5 million renovationJrestoration. The interior now features a new, larger
stage house. additional lighting, and state-of-the-art theatrical rigging and sound systems. The
completely refurbished auditorium has a seating capacity of 440, which includes disabled-accessible
seating.
The Byron Carlyle Theatre, located at 500 71st Street, originally opened in December 1968 as twin
cinemas hosting first run movies in the heart of north Miami Beach. In the mid-1970's, the Theatre
was re-developed into a multiplex cinema and continued to operate until it was sold by its owner.
Wometco Enterprises, when the City of Miami Beach purchased it for refurbishment as a performing
arts venue. The Byron Carlyle Theatre was purchased by the City of Miami Beach in 2002 for a price
of $1.7 million dollars and has been partially refurbished at a cost of $1.7 million dollars. The total
seating capacity for the Theatre is 304, with 152 seats in the orchestra level and 138 seats in the
mezzanine level, in addition to seating that is ADA accessible.
RFP Process:
RFP No. 20-07/08 was issued on February 22, 2008, with an opening date of April 11, 2008. A Pre-
Proposal Meeting to provide information to firms submitting a proposal was held on March 13, 2008,
which resulted in the issuance of the following four (4) addenda: Addendum 1 -March 6, 2008;
Addendum 2 -March 21, 2008; Addendum 3 -March 28, 2008: and Addendum 4 -April 7, 2008.
RFP Depot issued bid notices to 2,206 prospective firms, while at least 66 prospective firms viewed
the RFP documents. This resulted in the receipt of the following two (2) proposals:
Global Spectrum; L.P.; and
SMG
At its regular meeting on July 16, 2008, following extensive discussion; which included presentations
and question and answer sessions from the two (2) responsive proposers, Global and SMG, the
Mayor and City Commission adopted Resolution No. 2008-26860, and authorized the City
Administration to enter into negotiations with Global for an agreement for the management and
operation of the Facilities.
Contract Negotiations:
In selecting Global Spectrum, the City Commission focused on three (3) key areas: Global's
partnership with Messe Schweiz, enhanced marketing opportunities with Global and their affiliates.
and Global's proposed operating deficit reduction. Accordingly, since the approval of the award to
Commrsslon Memorandum -Global Spectrum MBCC Management Agreement
September 10. 2008
Page 4 of 14
Global Spectrum, the City and Global held numerous negotiations sessions (in person and via
conference call) to negotiate the following Management Agreement (the Agreement) for management
services for the Miami Beach Convention Center, Colony Theater and Byron Carlyle Theater, with a
focus in those key areas. In those instances where SMG proposed more favorable terms for the City,
Global was required to match those terms as a starting point for negotiations (i.e management fee
and capital contribution). The attached Agreement delineates the negotiated terms in key elements of
the Agreement, including those conditions relating to improvement on operating deficit, the role of
Messe Schweiz and the benefits proposed from Global's marketing relationships and approach.
Below, please find a summary of key Agreement terms.
~ Term I nree tat year Irnuai term commencing on vcrooer l: zuua, ana
ending on September 30. 2011.
A "contract year" shall be defined as the period from October 1
through September 30 of the following year (coinciding with the
2. Renewal Options
3. Management Fee
its sole discretion, may elect to exercise both options
ime.
r voar ccrala}inn by (~nnm,mcr Prirc Inrlov All
• Miami Beach Convention Center: $241,600
• Colony Theater: $16.700
• B ron Carl le Theater: $16,700
4. Capital Contribution and $375,000, payable within thirty (30) days of contract execution.
improvements Capital contribution will be used as determined by the City, in its
sole discretion.
Capital contribution will be amortized on a straight-line, non-cash
basis over thirty-six (36) months.
Global Spectrum (Global) to participate at corporate level,
including the facility's General Manager (as MBCC stakeholder)
on discussions relating to the proposed MBCC
ex ansion/im rovements.
5. Scholarship Contribution $12,500 per year, payable within thirty (30) days of contract
execution and, thereafter, within thirty (30) days of
commencement of each contract year.
6. Incentive Fee See below
T. Annual Budget ~ Global will prepare an annual operating budget for each contract
'
year (which also runs concurrent with the City
s Fiscal Year) to
meet the scope of services and objectives under the Agreement,
and consistent with the timelines, processes and procedures for
budget submission to the City during the City's budget process.
For the first contract year, Global is expected to assume and
commence o erations under the Cit 's a roved budget for
Commission Memorandum -Global Spectrum MBCC Management Agreement
September 10, 2008
Page 5 of 14
MBCC (as approved by City and effective on October 1, 2008).
Global shall submit an amended operating budget, for City review
i and approval, which must take effect by January 1, 2009.
Concurrent with its submittal of an amended operating budget,
and in no event later than January 1. 2009, Global will also
develop and submit, for City review and approval, the five (5) year
financial plan and other plans, and a five (5) year sales and
8. Messe Schweiz (M.S.) See below
Participation/Obligations
Global to provide three (3) candidates for General Manager
9. General Manager positions for City review and approval, prior to hire. City shall also
have prior approval of any replacement(s). _ _
10. "Transitioning" for SMG Global shall provide opportunities for current SMG employees to
apply for employment. Salary(ies) shall be competitive and
Employees consistent with industry standards for facilities in comparable
markets.
11. Naming Rights and City reserves sole right of approval over all naming and
Sponsorships sponsorship opportunities: and shall retain all revenues derived
therefrom from any exterior naming rights: revenues from interior
naming rights or other sponsorship/advertising opportunities shall
be retained by the City but shall be reflected as operating revenue
for the facili
12. Green Initiatives 1. Register with the U.S. Green Building Council for LEED
Certification.
2. Best efforts to achieve LEED certification.
3. Conduct an audit to determine potential opportunities for
''greening".
4. Schedule an FPL business audit.
Establish historical power usage
Plan for conversation
• Opportunities for re-sale of unused capacity (i.e. Energy
Sell Back Program)
5. Investigate additional water conservation technology and
recommend improvements to the City.
6. Use of Green cleaning chemicals.
7. Replace paper products with products manufactured from
recycled waste.
8. Institute a full recycling program including paper, cardboard,
glass, cans, and plastics.
9. Installation of sensor switches with automatic shut-off
capacity.
10. Conversion to lower energy consuming light bulbs and
fixtures.
11. Work with Centerplate on using bio-degradable food and
beverage products and reuse of cooking oils.
12. Investigate potential for installation of solar energy panels and
make recommendation for same to the City.
13. Strategic marketing relationship with energy provider to
reduce costs in return for advertising and marketing
Commission Memorandum - Globat Spectrum MBCC Management Agreement
September 10, 2008
Page 6 of 8
considerations.
14, Im lementation of Global "Ste -U "Pro ram.
13. Public Benefits 'Global Spectrum will produce a FREE Senior s Dance geared
toward Miami Beach residents, three (3) times per year.
14. Use of the FacilitiesfCMB The primary purpose of this Agreement is for management.
"
" operation, and promotion of the Miami Beach Convention Center
Brand and other Facilities. Global shall not use and/or otherwise exploit
the logo, trademark: identity, and overall "brand" of MBCC, Byron,
Colony and/or the City without the express prior written consent of
the City. This shall include, without limitation, the use of the
MBCC. Byron, Colony, and/or City logo, trademark, identity, and
"brand" in business ventures and/or other related opportunities
with Global affiliates, joint ventures, partners. contractors, and/or
agents, without prior City approval.
15. Facilities Maintenance Global responsible for day-to-day and capital maintenance of
Facilities. and all equipment thereon, in a manner consistent with
industry standards for similar first-class facilities.
City will provide Global with asset inventory, and updated
Facilities Condition Assessment Report, which was prepared by
City's consultant (VFA), as well as assessment reports for Byron
and Colony. The reports will establish "baseline" condition of
Facilities at commencement of Term.
Notwithstanding above or anything in the Agreement, Global shall
accept Facilities in their "AS IS" condition.
City will develop Minimum Maintenance Standards/Specifications
for Facilities (to be attached as Exhibit to Agreement).
Global will return the facilities (MBCC, Colony and Byron Carlyle
theaters) to the City in the same condition it was received: except
16. Guarantees
i
the Commencement Date:
1) Performance and Maintenance Guarantee: Corporate
Guarantee, in the amount of $600,000.
• The full amount of the Corporate Guarantee will be
available for either performance and/or maintenance.
• Global to pay for any/all outside legal fees that may be
incurred by the City in prevailing in any action to collect on
Corporate Guarantee
• If payment of any amount claimed against the Corporate
Guarantee is not received within thirty (30) days of
submission of a claim, then Global shall also be
responsible for interest at the greater of the statutory rate or
prime rate, to be paid on the amount claimed against the
Corporate Guarantee.
2) Messe Schweiz (M.S.) Guarantee: Global to provide a
Corporate Guarantee on behalf of M.S., in the amount of
575,000, for the City to draw upon if: notwithstanding M.S.
"best efforts" as provided for in section 10.2(c)(3). M.S. fails to
Commission Memorandum -Global Spectrerm MSCC Management Agreement
September 10. 2008
Page 7 of 8
book and actualize shows. as follows:
• $50,000 in event M.S. does not book and actualize one
M.S. produced/owned show during initial Term;
• $25,000 in event M.S. does not book and actualize one
non-M.S. produced/owned international show during initial
Term:
• Global to pay for any/all outside legal fees that may be
incurred by the City in prevailing in any action to collect on
M.S. Corporate Guarantee
• If payment of any amount claimed against the M.S.
Corporate Guarantee is not received within thirty (30) days
~ of submission of a claim, then Global shall also be
~ responsible for interest at the greater of the statutory rate or
prime rate, to be paid on the amount claimed against the
M.S. Corporate Guarantee.
3) Letter of Credit to secure "Net Performance Improvement."
Letter of Credit (LOC) in the amount of $500,000.
• Net Performance Improvement is defined as the Required
Improvement on the Fiscal Year (FY) 08109 budgeted net
deficit of $1,492,134, which includes both the FY08/09
budgeted net operating deficit and includes Executive Salaries
and Benefits.
• Required Improvement over the net deficit of $1,492,134 for
each Contract Year is as follows:
.. FY 08109 = $ 500,000
.. FY 09110 = $1,000,000
~~ FY 10111 = $1.500,000
• In the first year of the initial Term, to the extent the actual
improvement achieved in the Fiscal Year is less than the
Required Improvement, asset forth above, the City shall draw
against the LOC provided by Global in the amount of the
difference between the Required Improvement and the actual
improvement (referred to herein as the "Improvement
Shortfall").
• If there is improvement in excess of $1 million in the first
Contract Year, Global may apply a portion of such excess
improvement (the "Banked Portion"), against any
Improvement Shortfall in the second Contract Year, but such
Banked Portion shall only be applied to the second Contract
Year up to the amount of the earned Incentive Fee for the first
Contract Year.
• If the second Contract Year results in an Improvement
Shortfall, such shortfall will first be reduced by applying the
Banked Portion, if any, from the first Contract Year. If there is
~ a remaining shortfall, the City shall draw against the LOC
provided by Global in the amount of the remaining shortfall. If
there is still a remaining shortfall after applying both the
Banked Portion, if any, and the LOC, then the City will draw
against the earned Incentive Fee from such Fiscal Year on a
dollar for dollar basis to cover the shortfall. In the event the
Improvement Shortfall exceeds the combination of the Banked i
Portion, if any, plus the LOC plus the amount of any earned
Commission Memorandum -Global Spectrum MBCC Management Agreement
September 10. 2008
Page 8 of f 4
Incentive Fee from such Fiscal Year. Global shall not be
responsible for the excess.
• If the third Contract Year results in an Improvement Shortfall,
the City shall draw against the LOC provided by Global in the
amount of the shortfall. If there is a remaining shortfall, the
City will draw against the earned Incentive Fee from such
Fiscal Year on a dollar for dollar basis to cover such shortfall.
In the event the Improvement Shortfall exceeds the
combination of the LOC plus the amount of any earned
Incentive Fee from such Fiscal Year, Global shall not be
17. Food and Beverage -•___. _.._.. __ .__~_.._._._ ._. __......._.._.._.. _.._ _._._.~... _.
Oversight Ce~nterplate Food and Beverage Concession Agreement (at
18. Marketing ~iooai to creme an m-House aaies ana rviarxeung uepanmenr
to focus on marketing the facility to a broad spectrum of event
users
• Global to develop an advertising buy program that will offer
preferred (discount) pricing for MBCC, Byron Carlyle Theater
and Colony Theater clients on select Comcast services,
including but not limited to:
o In-market ROS advertising on Comcast channels
o On Demand
Comcast.net
Cross channel marketing opportunities
• Global to provide assistance in obtaining discount pricing for
advertising buys for the City of Miami Beach, MBCC, Colony
Theater and Byron Carlyle Theater clients/users in out-of-
market Comcast service areas.
• Global to secure CNN Headline News Comcast
"Newsmakers' for MBCC, Colony Theater and Byron Carlyle
Theater:
::• A minimum of four (4) "Newsmaker' interviews per
calendar year.
o Segments provided to the MBCC, to be used by the City of
Miami Beach and MBCC users. Each "Newsmaker" show
consists of five (5) minute interview format of
approximately 21 airings during aone-week period (42
total times per month) on CNN Headline News. (Value:
$20.000)
o Best efforts to secure additional Newsmaker show
opportunities.
• Global Spectrum to secure Comcast Bill Envelope Messaging:
~: A minimum of two (2) times per year, City of Miami Beach
or MBCC users to be provided the ability to send
messaging to Comcast subscribers in Miami-Dade,
Broward and Monroe Counties on the monthly Comcast
Bill Envelope (900.000 bills per month). (Value: $65.000)
Best efforts to secure additional Comcast bill envelope
messaging opportunities.
• Global Spectrum to secure Comcast Bill Messaging.
i c, A minimum of four (4) times per year. the City of Miami
Beach or MBCC users will be provided the ability to send
Commission Memorandum - Globa! Spectrum MBCC Management Agreement
September 10, 2008
Page 9 of 14
messaging to Comcast subscribers in Miami-Dade,
Broward and Monroe Counties on the monthly Comcast
Bill (900:000 bills per month). (Value: $32,000)
;:• Best efforts to secure additional Comcast Bill messaging
Incentive Fee:
In addition to the Management Fee, and provided Global has met the criteria as set forth below,
Global shall be entitled to receive an annual incentive fee (Incentive Fee) during the Term of the
Agreement, in an amount equal to the base management fee.
Should Global not achieve the required net performance improvement for the Fiscal Year, and the
Letter of Credit is not sufficient to cover the funding gap between the net performance improvement
achieved and the net improvement goal for the Fiscal Year, then the City shall deduct from the
calculated Incentive Fee the amount of the funding shortfall, and any remaining portion of the
calculated Incentive Fee shall be provided to Global.
Incentive Fee Criteria/Calculation.
A. Customer Satisfaction -Contract Year 1 - up to twenty (20) points
1. Completion of evaluations by clients: A total of 10 percentage points will be awarded based
upon the percentage of completed evaluations received of all booked events that use the
facilities as detailed below:
70% completed 10 points
65% completed 7 points
55% completed 4 points
Less than 50% 0 points.
2. A total of 10 percentage pointes will be awarded at the sole discretion of the City Manager
Customer Satisfaction -Contract Years 2 and 3 -The City shall award Global up to 20
percentage points for customer satisfaction based on customer evaluations, using such
survey instrument as may be determined by the City Manager, subject to the following criteria:
1.Completion of evaluations by clients: A total of 10 percentage points will be awarded based
upon the percentage of completed evaluations received of all booked events that use the
facilities as detailed below:
70% or greater completed 10 points
65% completed 7 points
55% completed 4 points
Less than 50% completed 0 points.
2)Average score of evaluations: A total of 7 percentage points will be awarded based upon
the average score below. Score will be determined based upon overall positive score. A
positive score is defined as any score of excellent or good.
Average Score
90% 7 points
80-89% 5 points
70-79% 3 points
Less than 70% 0 points.
Commission Memorandum -Global Spectrum MBCC Management Agreement
September 10, 2008
Page 10 of 14
3)The City may award Global a maximum of 3 points for comparison of results to the prior
year of customer satisfaction surveys. The score will be based upon a comparison review of
scores from previous contract year results.
B. Utilization of the Facilities
Utilization (Occupancy Percentage): Occupancy will be calculated based on the total number
of actual use days divided by the total number of available use days. (i.e. For the Convention
Center Exhibit Halls, 730 Total Hall Use Days divided by 1460 Total Number of Available Use
Days Equals 50% Occupancy. 730/1460 = 50%. Utilization does not include any city use.
For purposes of this section, a Use Day shall be defined as all event days. as well as load-in
and load-out days. Each day will consist of a twenty-four (24) hour period of time. With
respect to multiple days shows. a "Run" each day of the run will be considered as an individual
use day.
The City may award Global up to forty (40) percentage points for utilization of the Facilities,
over and above the baseline established. For purposes of this section. the "baseline
utilization" for each Facility shall be established based on the average of the utilization of the
Facility for the last two (2) years prior to the commencement of the Term of this Agreement.
The points shall be allocated, by Facility, as follows:
1) Contract Year 1 Utilization of Miami Beach Convention Center/Exhibit Halls -15 points
a} Below 67% = 0 points
b) Achieving 67% = 5 points
c) Achieving 70% = 10 points
d) Achieving 72% = 15 points
2) Contract Year 2 Utilization of Miami Beach Convention Center/Exhibit Halls -15 points
a) Below 67% = 0 points
b) Achieving 67 % = 2.5 points
c) Achieving 69% = 5 points
d) Achieving 71% = 10 points
e) Achieving 73% = 12 points
f) Achieving 75% = 15 points
3) Contract Year 3 Utilization of Miami Beach Convention Center/Exhibit Halls -15 points
a) Below 69% = 0 points
b) Achieving 69% = 5 points
c) Achieving 71 % = 10 points
d) Achieving 73% = 12 points
e) Achieving 75% = 15 points
4) Contract Year 1 Utilization of Miami Beach Convention Center/Meeting Rooms - 15
points
a) Below 50% = 0 points
b) Achieving 50% = 2..5 points
c) Achieving 55% = 5 points
d) Achieving 60% = 7.5 points
e) Achieving 65% = 15 points
Commission Mernorandcrm -Global Spectrum MBCC Management Agreement
September 10. 2008
Page 11 of 14
5) Contract Year 2 Utilization of Miami Beach Convention Center/Meeting Rooms - 15
points
a) Below 55% = 0 points
b) Achieving 55% = 5 points
c) Achieving 65% = 15 points
6) Contract Year 3 Utilization of Miami Beach Convention Center/Meeting Rooms - 15
points
a) Below 55% = 0 points
b) Achieving 55% = 5 points
c) Achieving 65% = 10 points
d) Achieving 70% = 15 points
7) Contract Year 1 Utilization of Colony Theatre - 5 points
a) Below 60% = 0 points
b) Achieving 60% = 2 points
c) Achieving 65% = 3.5 points
d) Achieving 70% = 5 points
8) Contract Year 1 Utilization of Byron Carlyle - 5 points
a) Below 36% = 0 points
b) Achieving 36% = 5 points
[NOTE: If the City chooses not to privatize the Byron Carlyle, and therefore chooses to have
Global continue to manage and operate the Facility, utilization criteria for Contract Years 2 and
3 will be mutually agreed upon.]
9) Contract Year 2 Utilization of Colony Theatre -10 points
(assumes Byron Carlyle under private management)
a) Achieving 60% = 0 points
b) Achieving 65% = 3 points
c) Achieving 75% = 5 points
d) Achieving 85% = 10 points
10) Contract Year 3 Utilization of Colony Theatre -10 points
(assumes Byron Carlyle under private management)
a) Achieving 56% = 0 points
b) Achieving 65% = 3 points
c) Achieving 75% = 5 points
d) Achieving 85% = 10 points
C. Marketing and Promotion
The City shall award Global up to thirty-five (35) percentage points for marketing and
promotion of the Facilities, based on the following criteria and points allocation:
a. Corporate Meetings: (up to 15 Points)
As a percentage of total new bookings:
0 5% = 3 points
~~ 10% = 7 points
.> 15% = 10 points
Commission Mernorandum -Global Spectrum MBCC Management Agreement
September 10. 2008
Page 12 of 14
c. Social Events (greater than 1,000 persons): (up to 5 Points)
As a percentage of total new bookings:
0 5% = 3 points
v 10% = 7 points
0 15% = 10 points
c. Shoulder Season bookings: (up to 15 Points)
As a percentage of total new bookings:
c: 5% = 5 points
:: 10% = 10 points
15% = 15 points
2. Marketing and Promotion -Contract Year 2 and 3
a. Corporate Meetings: (up to15 Points)
As a percentage of total new bookings:
.; 10% = 3 points
15% = 7 points
~~ 20% = 10 points
c. Social Events (greater than 1,000 persons): (up to 5 Points}
As a percentage of total new bookings:
0 10% = 3 points
~~ 15%= 7points
~> 20% = 10 points
c. Shoulder Season bookings: (up to 15 Points)
As a percentage of total new bookings:
<~ 10% = S points
15% = 10 points
.: 20% = 15 points
In order to be considered a "new' booking, an Event cannot have been held at a Facility for
the five (5) years prior to the contract year. An Event will only be considered and counted as
"booked" if the sale was initiated by Global (or M.S.), not by the GMCVB, and upon the City's
receipt of a fully executed contract
Corporate Meetings shall be defined as: predominantly Event in which all the attendees are
from the same company or corporation.
Social Events shall be defined as: banquets, weddings, single day receptions, and/ordinners
without meeting or exhibition components, and single day large non-profit organization events
at the facility.
Shoulder Season Bookings shall be defined as: any Event booked from June 1 -September
30.
D. Maintenance of Facility and Capital Equipment.
The City shall award Global up to five (5) points if Global has met or exceeded the
maintenance goals set forth in the approved and adopted maintenance and operation manual
for the Facility (including the comprehensive preventive maintenance program). Such
evaluation shall take into account the annual review of the City's Property Management
Division and/or a yearly review by an outside independent party.
Commission Memorandum -Global Spectrum MBCC Management Agreement
September 1Q 2008
Page 13 0/ 14
Messe Schweiz (M.S.) Participation and Obligations
1. Key-Man clause - M.S.'s active participation, as defined in the Agreement, shall be required
throughout Term of Agreement. In the event that M.S. ceases to be an active participant, City
may terminate Agreement. Global shall have a written agreement with M.S. securing its
involvement in Global contract throughout Term, and will provide City with a copy.
During initial Term of Agreement. Global/M.S. shall Execute the MBCC lease between the City
and ABMB for use of MBCC in 2009.2010. and 2011, by October 31, 2008 and secured with
the applicable deposit.
3. Obligation to book and actualize other shows or events
(a) Shows or events shall be defined as: Occupying one or more exhibit halls; or
occupying least 57,000 square feet of meeting room space; or a show or event that
requires a minimum of three nights with 1500 hotel rooms occupied on the peak night
in Miami-Dade County.
(b) A show or event will only be considered and counted as "booked" upon the City's
receipt and approval of a fully executed contract. including a deposit.
(c) An event will be considered as actualized when it has actually occurred.
(d) An event will be considered and counted as all uses which involve a scheduled
beginning and ending time, typically within the same day. With respect to multiple day
shows; a "Run", each Run shall be considered only as a single show.
(e) Within initial Term, Global/M.S., shall, subject to existing booking policies and
commercial viability:
(1) Use Best Efforts to book and actualize one (1) M.S. owned show during the
Initial Term. GS/MS to demonstrate/evidence the best efforts utilized to
book/actualize show.
(2) Use Best Efforts to book within the Initial Term and actualize (which can occur
after the Initial Term) one (1) (non-M.S. owned) international show. GSlMS to
demonstrate/evidence the best efforts utilized to book/actualize show.
4. Penalty provisions if Global/M.S. do not timely comply with booking obligations in Item Nos. 2
and 3 above:
a) At City's sole option, City may exercise Default provisions under Global Agreement;
and/or
b) Notwithstanding M.S.'s best efforts pursuant to subsection 10.2 (c) (3) (e) {1) and (2),
exercise its remedies under subsection 8.4 (b) (2) hereof.
5. M.S. required to actively participate in Agreement. Active participation shall be defined and, at
a minimum, include:
a) Participation by Messe Schweiz Senior Management staff on an MBCC Executive
Management Committee, such Committee will meet regularly but no less than four (4)
times a year;
b) Participation by Messe Schweiz Art BasellArt Basel Miami Beach staff on a
Convention Center User Group;
c) Establishment by M.S. of a European sales office and MS. staff person to
market/promote/sell MBCC (office to be established within 30 days of contract
execution: operate throughout Agreement Term;
Commission Memorandum - Global Spectrum MBCC Management Agreement
September ?0, 2008
Page 14 of 14
d) Assistance to Global Spectrum in the development of customer service, employee
training, and sales and marketing programs;
e) Development of an international marketing plan for the MBCC. Such international
marketing shall be submitted to the City no later than January 1, 2009.
6. City Manager and a City Designee shall serve on Executive Management Committee, which
will meet regularly, but no less than (four) 4 times a year.
7. City shall have principal oversight, supervision, and control over certain M.S. activities [i.e. the
`firewall° concept]:
(a) City shall have primary and final oversight/review/approval of any proposed business
terms, including without limitation; MBCC (and/or any of the other Facilities) lease
terms and/or any and all other incentives and/or City proposals, commitments;
initiations, etc.; related to ABMB.
(b) Same provisions in subsection (b) above would apply to new M.S. owned shows
and/or any shows (including international shows) brought to the City by M.S..
(c) M.S. shall be required to submit any proposed business and/or other terms for
proposed M.S. owned and/or new (including international) shows to City, for its
approval of said business and other terms, rp IOr to any such deal being made
(provided City shall not veto any shows based on show content or theme. and that City
review is limited to business terms).
CONCLUSION
The attached Agreement represents the outcome of numerous negotiations sessions, as well as one
that improves upon Global's original proposal and addresses the three key areas discussed during
Commission deliberations. If approved, Global Spectrum will immediately begin transitioning the
building operations for an October 1, 2008 start date. It will be critical for the City Administration to
work with SMG and Global Spectrum to ensure a smooth transition. October presents particular
challenges as it marks the beginning of a busy fall season.
Attachments
T^AGENDA12008~September t0lRegular.Global Spectrum Convention Cenler Mgmt Agmt MEMO.tloc