LTC 031-2018 Miami Beach Convention Center New Rental Rate UpdateM IAM MEACH
OFFICE OF THE CITY MANAGER
NO. LTC #
031-2018
LETTER TO COMMISSION
TO: Mayor Dan Gelber and Members o the City mmission
FROM: Jimmy L. Morales, City Manager ""
DATE: January 22, 2018
SUBJECT: Miami Beach Convention CenteNew Rental Rate Update
The purpose of this Letter to Commission (LTC) is to inform the Mayor and Commission of
the successful rollout of the new rental rates at the Miami Beach Convention Center
(MBCC).
Please see attached letter summarizing the positive market response and successful
bookings of new Priority 1 & 2 shows at the new rental rate as provided by Spectra Venue
Management.
JLM/KGB/ES
C: Kathie G. Brooks, Assistant City Manager
Mark Taxis, Assistant City Manager
Eric Carpenter, Assistant City Manager
Susanne Torriente, Assistant City Manager
Eva Silverstein, Tourism, Culture & Economic Development Director
TO: Jimmy L. Morales, City Manager
FROM: Dave Anderson, RVP Spectra Venue Management
DATE: January 18, 2018
SUBJECT: Miami Beach Convention Center Rental Rate Update
As the much anticipated Miami Beach Convention Center renovation moves closer to
completion, I wanted to give you an update pertaining to the implementation of the new MBCC
rental rates.
Following your approval of the new rates, both Spectra and the GMCVB have rolled out these
new rates to perspective clients who are looking to bring their events to the MBCC in 2019 and
beyond. Since then, we have confirmed 4 new Priority 1 (P1) bookings and, in addition, there
are 7 tentative Priority 1 (P1) bookings and also 7 tentative Priority 2 (P2) bookings currently
considering the MBCC that would be contracted at the new rental structure.
The new rental rates, now align the MBCC towards the middle of our competitive set within the
marketplace in which we compete on a domestic and international basis. Spectra, the GMCVB,
and the JLL team conducted extensive competitive convention center rate research to validate
the need for the rental rate adjustments. In addition, the fact that the MBCC has not had a
significant rate increase since 2005 further supports the rental rate increases. The positive
market response indicates that we are right on target in terms of current competitive pricing.
The new rental rate increases are also reflective of the enhanced service standards for the
reimagined MBCC and new best in class "customer first" mentality we intend to deliver on behalf
of our clients, exhibitors and attendees. We are in the process of implementing an extensive list
of new service enhancements, which have been developed over the last year with the Spectra
and GMCVB staff, in cooperation with Eva Silverstein and JILL We are currently finalizing these
enhanced services and will be rolling them out to our prospective clients in the spring of 2018 in
order to illustrate the heightened level of service that will be delivered at the new MBCC. These
enhanced service standards will also make the MBCC more competitive and we believe that
these enhancements provide an added basis for the rental rate increases.
MIAMI BEACH
CONVENTION CENTER
The new rental rates are also representative of the MBCC's newly expanded footprint and
selling spaces, which now include:
• 500,000 Sq. Ft. of Exhibit Space
• 84 Meeting Rooms
• South Florida's largest ballroom at 60,000 Sq. Ft.
• New 20,000 Sq. Ft. Roof Top Ballroom
• The Carl Fisher Clubhouse
• Over 750 parking spots on site
I have also attached the most recent MBCC floorplans which shows the layout of all our new
additional spaces which is being very well received by our clients.
As mentioned above, the new MBCC rate schedule has been implemented with new high
impact P1 and P2 contracts, and will soon be rolled out to our entire client base.
Items of note regarding the new rate schedule and guidelines:
• A Phase -In plan has been created for long-time clients in order to clearly communicate
the rate changes, and to allow for an incremental increase over a period of time in order
to transition them from the old rates to the new rates.
• Rate flexibility has been built into the guidelines to allow for the City Manager or his/her
designee to aggressively compete against other tier one cities for high impact business.
This flexibility includes, but is not limited to, offering reductions in rent to events that
have an extraordinary commitment of room nights and/or revenue, are able to book
during typically slow periods for the MBCC and hotel community, or are major launch
type events which have the potential to grow exponentially over time.
Phase-in Plan:
The Miami Beach Convention Center is very proud of the strong relationship between the venue
and our long-time users. In order to assist these long-time recurring users, we have created a
rate transition schedule to gradually move them into the new rate structure over a period of time.
To have them absorb the entire rate increase at one time could severely impact the success
and or existence of these short-term MBCC events, which provide a needed revenue stream to
the MBCC.
A phase-in period will be established for "Recurring Events." "Recurring Events" are events that
took place on a regular schedule (annual, semi-annual, monthly, tri -annual) within the MBCC.
BEACH
MIAMI
CONVENTiON CENTER
This phase-in period would be offered for any Recurring Events that are presently hosted at the
Convention Center.
For events that qualify as "Recurring Events," the rate increases, which will include annual CPI
increases during the rate transition time period, will phase-in at 15% per year until their rental
rate reaches the then -prevailing MBCC rate. For events that are hosted more than one time per
year, the rate increase will be applied on an annual basis, not a show -by -show basis. A "Year'
is defined as calendar year, and the initial increase will apply to events convening between
January 1, 2019 and December 31, 2019. The 15% per year calculation will initially be based on
the last contracted rate charged for that event, and then annually thereafter based on the prior
year's rate.
Communication of Phase -In Plan:
Within the month, the Spectra sales team will be sending correspondence to each of its clients
to reinforce messaging about the new MBCC renovations, explain the new rate schedule, and
the rate phase-in process specific to their event. Face-to-face meetings and site tours will also
be scheduled to verify future space requirements in the newly renovated MBCC, answer any
specific questions about the new rate schedule and confirm interest in future dates.
Rate Flexibility:
As discussed above, the City Manager, or his designee, may also evaluate the unique
characteristics of an event, or prospective event, in determining the appropriateness of
reductions from the published rental rates for use of the Miami Beach Convention Center. The
need for this flexibility is based on the competitive nature of the industry and those specific
destinations that the MBCC is frequently bidding against. In order to deliver the desired
economic impact for our community and industry partners as well as achieve the overall MBCC
and GMCVB goals, this flexibility is important. It will also ensure that the MBCC and City of
Miami Beach are delivering the most competitive package each and every time.
Criteria that will be considered for rent reductions could include, but are not limited to the
following itemized considerations below, and would be subject to the Manager's approval:
• Events with extraordinary commitment of utilized hotel overnight rooms in Miami -Dade
County
• Events with a significant commitment of hotel overnight rooms during periods identified
as "need periods" as evidenced by the GMCVB TAP report or through the annual
GMCVB goal setting process
fill
4111111111
MIAMI BEACH
CONVENTION CENTER
• Events that generate extraordinary ancillary revenue for the City within the Miami Beach
Convention Center through ancillary services such as contracted food and beverage,
Audio Visual, Telecommunications, and/or other MBCC provided services
• Events that, in addition to their utilization of the majority of the space at the Miami Beach
Convention Center, will result in significant economic impact to the City through the
programming of other major functions within the City of Miami Beach
• Events that the City Manager determines will generate significant economic impact and
where rental rate reductions are required to compete with a verifiable offer from a
competing city
• Events that demonstrate minimal traffic impacts either through the nature of the event or
through traffic mitigation measures
Please also note that each request for a variance from the established rates will be considered
on a case-by-case basis.
The successful rollout of the new rate structure with new Priority 1 and 2 bookings underlines
this assumption. Our ability to stay flexible with rental rates when needed and assist our long-
time clients with a gradual transition back into the MBCC will create a level of economic impact
for the City of Miami Beach and hotels that far outweigh the investment that was made for this
long overdue renovation.
Thank you very much for your continued support.
Sincerely,
Dave Anderson, RVP Spectra Venue Management
CC: Kathie Brooks, Assistant City Manager
Eva Silverstein, Tourism, Culture and Economic Development Director
Attachments: Miami Beach Convention Center Rental Rate Card
Updated Miami Beach Convention Floorplans
Attachment
MBCC Rental Rate Card
MIAMI BEACH CONVENTION CENTER
Rental Rates
Updated 12/28/17 �y
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NON EXHIBIT FLAT $9,000.00 $4,500.00
RATES
*Conventions & Tradeshows (only): complimentary meeting room use on event days plus 2 comp days in the mtg. rooms associated w/ the hall(s) beyond show days. Additional days and extended meeting
rooms billed at prevailing rates.
*Up to 6 days
Additional Days (added to base NSF rate)
Exhibit Halls A -D
Net Square Footage
Rates - Exhibit Events
$1.05
$0.10
Per NSF up to 3
additional days
$0.15
Per NSF for additional days 4-10
$0.20
Per NSF for each additional day beyond 10
Net Square Footage Rates -
Minimum of 40,000 NSF charged
per hall
GRAND BALLROOM'
Non-Conv/Trade
Convention/Trade
Move-in/out
F&B Offset
Carl Fisher Ballroom ABC
$ 22,500.00
$
18,000.00
$
9,000.00
$
225,000.00
2/3 Carl Fisher Ballroom
$ 18,750.00
$
15,000.00
$
7,500.00
$
187,500.00
1/2 Carl Fisher Ballroom
$ 15,000.00
$
12,000.00
$
6,000.00
$
150,000.00
1/3 Carl Fisher Ballroom
$ 11,250.00
$
9,000.00
$
4,500.00
$
112,500.00
Carl Fisher Breakouts (ea.)
$ 1,250.00
$
1,000.00
$
500.00
th
Ocean Drive Ballroom
$ 15,000.00
$
12,000.00
$
6,000.00
$
150,000.00
1/2 Ocean Drive Ballroom
$ 10,000.00
$
8,000.00
$
4,000.00
$
100,000.00
Ocean Drive Ballroom (ea.)
$ 2,500.00
$
2,000.00
$
1,000.00
Lincoln Road Ballroom
$ 15,000.00
$
12,000.00
$
6,000.00
$
150,000.00
1/2 Lincoln Road Ballroom
$ 10,000.00
$
8,000.00
$
4,000.00
$
100,000.00
Lincoln Road Ballroom (ea.)
$ 2,500.00
$
2,000.00
$
1,000.00
SW Meeting Rooms 101-108 (ea.)
$ 1,250.00
$
1,000.00
$
500.00
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West Meeting Rooms 201-211
$ 1,250.00
$
1,000.00
$
500.00
NE Meeting Rooms 234-237
$ 1,250.00
$
1,000.00
$
500.00
SE Meeting Rooms 230-233
$ 1,250.00
$
1,000.00
$
500.00
SW Meeting Rooms 212-227
$ 1,250.00
$
1,000.00
$
500.00
Collaboration Comer 228-229AB
$ 8,750.00
$
7,000.00
$
3,500.00
1/2 Collaboration Comer 228AB
$ 5,000.00
$
4,000.00
$
2,000.00
Collaboration Comer (ea.)
$ 1,875.00
$
1,500.00
$
750.00
,v
Sunset Vista Ballroom
$ 17.500.00
$
14,000.00
$
7,000.00
$
175,000.00
1/2 Sunset Vista Ballroom
$ 12,500.00
$
10,000.00
$
5,000.00
$
125,000.00
1/4 Sunset Vista Ballroom
$ 7,500.00
$
6,000.00
$
3,000.00
$
75,000.00
*Conventions & Tradeshows (only): complimentary meeting room use on event days plus 2 comp days in the mtg. rooms associated w/ the hall(s) beyond show days. Additional days and extended meeting
rooms billed at prevailing rates.
Carl Fisher
Ballroom ABC
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