98-22888 RESO
RESOLUTION NO.
98-22888
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND
CITY CLERK TO APPROVE NEW RENTAL RATES FOR THE MIAMI
BEACH CONVENTION CENTER, EFFECTIVE OCTOBER 1, 1998, FOR
NEW BUSINESS, AND TO BE PHASED IN AS NEGOTIATED WITH
EXISITING CLIENTS.
WHEREAS, the City owns the Miami Beach Convention Center and is desirous of
facilitating the continued high impact convention, trade show, and community events at that
venue; and
WHEREAS, the City is desirous of maximizing revenue opportunities of the rental
rates charged at the Convention Center and minimizing facility operating deficits; and
WHEREAS, the rental rates have not been reviewed or revised since 1993; and
WHEREAS, the Administration has instructed SMG, the City's management
company for the Miami Beach Convention Center, to review the existing rate schedule; and
WHEREAS, the Convention Center Advisory Board and SMG have reviewed said
rates and proposed revisions to the rental rates in order to maximize revenues and minimize
operating deficits; and
WHEREAS, the Administration, Convention Center Advisory Board and SMG
have determined that adoption of such revised rental rate schedule, as set forth herein, will not
negatively impact the competitiveness of the Convention Center.
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 approve the new rental rate schedule for the Miami Beach Convention
Center, as set forth and incorporated as Exhibit" A" herein.
PASSED and ADOPTED this 9th day of September, 11
MAYOR
ATTEST:
J41wt fAA~
CITY CLERK
APPROVED AS TO
FORM & lANGUAGE
& FOR EXECUTION
SR:MDBDT:dt
Attachment
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MIAMI BEACH CONVENTION CENTER
RENT AL RENT RESTRUCTURE PROPOSAL
PROPOSED EFFECTIVE DATE 10/1/98
ACTUAL NSF RENT FOR HALLS - EXHIBIT SHO\VS
1) BASE NET RATE INCLUDES: NET SQUARE FOOT RATE FOR 6 DAYS USAGE.
2) ADDITIONAL USAGE DAYS BEYOND SIX (6) DAYS ARE CALCULATED AT A DAILY
NET SQ. FT.
3) MINIMUM RENT IS 40,000 NET SQUARE FEET PER HALL @ PREVAILING NSF RATE.
$.65/nsf for up to SIX days
S .07 /nsf for BEYOND SIX days
----------------------------------------------------------------------------------------------------------------------
BASE RENT FOR HALLS - MEETINGS/GENERAL SESSIONS/BANOUETS
PERFORMANCES (NON-EXHIBIT SHOWS)
,
1) BASE RENT INCLUDES: DAILY OPEN EVENT PER HALL PER DAY WITH MOVE-IN
, MOVE-OUT DA YS AT HALF OF DAILY RENT.
2) ONLY APPLICABLE WITH FOR NON-EXHIBIT SHOW EVENTS.
$6,000- /meeting/event day
$3,000-/move-in or move-out
meeting/event day
.
..
EXHIBIT "A"
REFERENCE OF TERMS:
Square Feet: Formula used to calculate the size of a booth square feet is LENGTH X WIDTH
Gross Square Feet - identifies all available space for sale in one or more halls.
Example: Hall D is 456 feet in length and 290 feet in width which = 132,240 Gross Square Feet
The Miami Beach Convention Center features four individual halls: A,B,C and D, which vary
slightly in size but total 502,848 Gross Square Feet.
Net Square Feet: The Exhibit Show floor consists of Booths and Aisles. The booth is where the
exhibiting company displays exist and the aisles surrounding the booths are where the attendees walk
to visit a booth. The net square feet is made up only of the space occupied by a booth.
Example: When a show promoter sells a boothls to an exhibiting company, commonly a BOOTH
that measured in a size of la' in length X la' in width is the size sold. When the show manager sells
many booths, collectively the booths sold are known as the Net Square Feet of a show. This is also
termed Actual Usage of a show floor. SMG adds up all the booths on the show floor and comes up
with the NET SQUARE FEET located in a hall or halls.
Show Day: When Show is open to attendees...Airconditioning, lighting is running.
,
Move-in/Move-out days: The show managerment sets up the show or tears it down.
EFFECT OF PROPOSED RENTAL INCREASES
New Business
All new business not quoted firm pricing previously will be contracted at the new rental rates effective
October 1, 1998. The effective increase will vary based on length of show, but below fmd two
examples:
2 move-in/3 show/} move-out days show
· Current rate schedule - 3 show days @ $.045/NSF + 3 move-in/move-out days @
$O.05/NSF/day = $0.45 + $0.15 = $O.60/NSF
· Proposed rate schedule - 6 days @ $0.65/NSF
· Net change is $0.05/NSF or 8.4% increase
4 move-in/4 show/2 move-out days show
· Current rate schedule - 4 show days @ $0.45/NSF + 6 move-in/move-out days @
$0. o 5/NS F/day = $0.45 + $0.30 = $0. 75/NSF
· Proposed rate schedule - 6 days @ $0.65/NSF + 4 additional days @ $0.07/NSF/day = $0.65 +
$0.28 = $0.93/NSF
· Net change is $0. 18/NSF or 24% increase
Existine Business
Regular recurring business will have the new rate schedule phased in over a period of years. Intent
would be to inform users by October 1, 1998 and grant current users a one year freeze on current rates,
through September 30, 1999. Following that, stepped increases on the rates will not exceed 12% per
year, contractually the limit we have set regarding rate increases. We will respect that 12% annual cap
going forward until the rent is up to the new rate.
,
By way of preliminary analysis, the cumulative effect on revenues for recurring business will be as
follows:
Fiscal Year Total Rent Increase vs. Prior Year
97-98 $ 2,221,067 $ 0
98-99 $ 2,283,884 $ 62,817
99-00 $ 2,541,554 $ 257,670
00-01 $ 2, 7J 6,067 $ 174,513
01-02 $ 2,809,320 $ 93,253
N.B. - Increases reflect Boat Show increases spelled out in current five year contract, which would not
be subject to normal increase procedures as outlined above.
Previously contracted convention business would be addressed on a case-by-case basis, but it would be
assumed generally that contracted rates would be honored.
~ITY OF MIAMI BEACH
ITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH. FLORIDA 33139
jp: \\ci ,miami-beach, fJ, us
COMMISSION MEMORANDUM NO.
580-(/8
TO:
Mayor Neisen O. Kasdin and
Members of the City Co ission
DATE: September 9, 1998
FROM:
Sergio Rodriguez
City Manager
SUBJECT:
A RESOL ION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND
CITY CLERK TO APPROVE NEW RENTAL RATES FOR THE MIAMI
BEACH CONVENTION CENTER, EFFECTIVE OCTOBER 1, 1998, FOR
NEW BUSINESSES, AND TO BE PHASED IN AS NEGOTIATED WITH
EXISITING CLIENTS.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
The City of Miami Beach last reviewed and adjusted rental rates for the Miami Beach
Convention Center in 1993, with current rates in effect since July 1, 1993. At the direction of
the Administration, SMG, Operating Agent for the City for the Miami Beach Convention Center,
at the beginning of 1998 began a process to survey current rates of the Center as compared with
seventeen competing convention centers throughout the U.S. The results, as attached, were
presented to the Convention Center Advisory Board along with proposed increased rates at the
CCAB's regular meeting of June 25, 1998. The new rates would simplify the existing rate
schedule, moving toward a system of billing more in line with current industry trends regarding
daily charges and minimum rentals. These proposed rates and the current rates are as attached.
SMG met with the administration to review their recommendations, and subsequently, at its
regular meeting of July 23, 1998, all regular users of the Convention Center were invited to
express their opinions. Representatives were present from the Graphics of the Americas Show,
I.B.S. Flea Markets, Baron's Antique Shows, Miami Home Design and Remodeling Show, and
the Miami International Boat Show. All expressed a desire for rates not to increase. After some
discussion and question and answer with the users and SMG, the Board voted 7-0 (with two
absent) to approve the rate revisions as proposed.
AGENDA ITEM-Bill
ct-Cl-Cjg
DATE
1
ANALYSIS
After review of the survey results, the current rates at the Miami Beach Convention Center are
in the lower ranges of competing facilities. Therefore, it is the opinion of SMG, the
Administration, the Convention Center Advisory Board, and the Greater Miami Convention &
Visitors Bureau that the proposed rate changes would still allow the Center to remain
competitive while boosting revenues to the City. The increases would range from 8% to 35%
for existing clients, with phasing in of new rates for those existing clients beginning October 1,
1999 at up to 12% per year until such time as the new schedule was attained. The ultimate
effect to the City from regular clients (representing approximately two-thirds of annual rental
income) would be an approximately additional $257,670 in FY1999-2000, an increase of
$174,513 above that in 2000-01, and another $93,253 in 2001-02, or an ultimate total of
approximately $588,253 (including previously negotiated Boat Show increase for 1999) in
additional annual rental fees after achieving full implementation. Again, this represents only
regular clients; new businesses would be affected immediately by the rate increases, with
existing convention clients' rates addressed on a negotiated case-by-case basis.
!=ONCLUSION
The Mayor and Commission should approve the proposed rental rate schedule for the Miami
Beach Convention Center as presented.
SR:~:DT:dt
Attachments
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