R7C-Waive Bidding Requirement And Approve Agreement w- Global Spectrum For MBCCCOMMISSION ITEM SUMMARY
Condensed Title:
A Resolution accepting the recommendation of the Finance and Citywide Projects Committee waiving by
5/ih vote, the competitive bidding requirement and approving an agreement between the City and Global
Spectrum, LP (Global) for the operation, management, maintenance, promotion and marketing of the
Miami Beach Convention Center and Colony Theatre, based on those material and substantive terms and
conditions in the Term Sheet attached as Exhibit "A" to this Resolution; authorizing and directing Global
and the City Manager and City Attorney's Office to finalize the agreement based on the approved term
sheet; further authorizing 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, and 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, 2013, and ending on September 30, 2016, with two(2) one year renewal
terms, to be exercised at the City's sole option and discretion).
Key Intended Outcome Supported:
Improve the Convention Center Facility
Supporting Data (Surveys, Environmental Scan etc.):
The 2012 Community Satisfaction Survey indicated the average attendance last year at the Miami Beach
Convention Center was four times, yet 18% of residents visited over six times.
Item Summary/Recommendation:
On September 10, 2008, the City Commission approved Resolution No. 2008-26888 which approved an
agreement between the City and Global Spectrum, L.P. for the Management of the Miami Beach
Convention Center, Colony Theater, and Byron Carlyle Theater. The Agreement was for an initial three (3)
year term commencing on October 1, 2008, and ending on September 30, 2011, with two (2) one-year
renewal options, exercisable with ninety (90) days prior written notice, at the sole and absolute discretion of
the City. Please note that on April 15, 2011, the City terminated Global Spectrum's rights and
responsibilities with respect to the operation and management of the Byron Carlyle Theater following the
City Commission's approval of a management agreement with Broward Stage Door Theater.
The City Commission at its December 12, 2013 meeting directed the Administration to negotiate a new
agreement with Global Spectrum instead of competitively bidding the management agreement. The
attached Term Sheet represents substantive terms of a new management agreement with Global
Spectrum, which was presented to the Finance and Citywide Projects Committee at its May 13, 2013
meeting. The Administration recommends waiver of competitive bids approving all material and
substantive terms of the agreement between the City and Global Spectrum, for the operation,
management, maintenance, promotion and marketing of the Miami Beach Convention Center and Colony
Theatre.
Please refer to the attached Commission Memorandum and Term Sheet for detailed terms and conditions.
· nee and Citywide Projects Committee on May 13, 2013 and recommended proceeding with tt1e ~vai11erof 1
Financiallnfr-orm;..;;.:,;ca=t;;;.::io'"'-n"'r: ----------------,-----------.,...-------..
Source of Amount Account
Funds:
OBPI
$258,300 Base Mgmt Fee, plus an
incentive fee potentially equaling up to
100% of the Base Fee.
Convention Center Enterprise
Fund
A roved
Financial Impact Summary: This reflects the original fees for the Convention Center and Colony Theatre,
which will save the City over $80,000 over the 5 year term of the agreement. The Financial Performance
Criteria of the incentive fee was increased by $1 million from the current Gross Operating Revenue scale,
which incentivizes Global S ctrum to enerate more revenue for the Center.
MIAMI BEACH 724
AGENDA ITEM .......:...R;.....7_C __
DATE 7-ll-13
MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and M
FROM: Jimmy L. Morales, City Manager
DATE: July 17, 2013
SUBJECT: A RESOLUTION OF THE MA R AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA WAIVING, BY 5/7TH VOTE, THE
COMPETITIVE BIDDING REQUIREMENT AND APPROVING AN
AGREEMENT BETWEEN THE CITY AND GLOBAL SPECTRUM, LP
(GLOBAL) FOR THE OPERATION, MANAGEMENT, MAINTENANCE,
PROMOTION AND MARKETING OF THE MIAMI BEACH CONVENTION
CENTER AND COLONY THEATRE, BASED ON THOSE MATERIAL
AND SUBSTANTIVE TERMS AND CONDITIONS IN THE TERM SHEET
ATTACHED AS EXHIBIT "A" TO THIS RESOLUTION; AUTHORIZING
AND DIRECTING GLOBAL AND THE CITY MANAGER AND CITY
ATTORNEY'S OFFICE TO FINALIZE THE AGREEMENT BASED ON
THE APPROVED TERM SHEET; FURTHER AUTHORIZING 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, AND
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, 2013, AND
ENDING ON· SEPTEMBER 30, 2016, WITH TW0(2) ONE YEAR
RENEWAL TERMS, TO BE EXERCISED AT THE CITY'S SOLE OPTION
AND DISCRETION).
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
CONTRACT FUNDING
Funding is available from Convention Center Enterprise Fund, which funds the operation of the
Miami Beach Convention Center.
• $258,300 per year, escalating by Consumer Price Index-All Urban Consumers (CPI-U)
-U.S. City Average, but not to exceed (capped at) 3%. Management fee will be
allocated to each facility as follows:
o Miami Beach Convention Center: $241,600
o Colony Theater: $16,700
Funding is provided to the City by Global Spectrum, per contract as follows:
• Capital contribution = $200,000 (one-time)
• Scholarship contribution = $ 12,500 (annually)
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Convention Center Management Agreement
City Commission Meeting
July 17, 2013
Page 2 of6
This reflects the original fees for the Convention Center and Colony Theatre, which will save the
City over $80,000 over the 5 year term of the agreement.
BACKGROUND
On September 10, 2008, the City Commission approved Resolution No. 2008-26888 which
approved an agreement between the City and Global Spectrum, L.P. for the Management of the
Miami Beach Convention Center, Colony Theater, and Byron Carlyle Theater. The Agreement
was for an initial three (3) year term commencing on October 1, 2008, and ending on
September 30, 2011, with two (2) one-year renewal options, exercisable with ninety (90) days
prior written notice, at the sole and absolute discretion of the City. Please note that on April 15,
2011, the City terminated Global Spectrum's rights and responsibilities with respect to the
operation and management of the Byron Carlyle Theater following the City Commission's
approval of a management agreement with Broward Stage Door Theater. On September 14,
2011, the City Commission adopted Resolution No. 2011-27728 extending the Management
Agreement for an additional two (2) years.
The Base Management Fee in the first year was $275,000 (plus incentive that cannot exceed an
amount equal to 100% of the base fee; capped at greater of CPI or 3% ). Global Spectrum also
provided the City with the following contributions:
•
•
Capital contribution (one-time)
Scholarship contribution (annual)
Net Performance Improvement
= $375,000
= $ 12,500
Pursuant to the Agreement, Global Spectrum guaranteed a Net Performance Improvement,
which is defined as the "Required Improvement" on the Fiscal Year (FY) 08/09 budgeted net
deficit of $1 ,492,134 (which includes both the FY08/09 budgeted net operating deficit and
includes Executive Salaries and Benefits). As per the Agreement, the Required Improvement
over the net deficit of $1,492,134 for each Contract Year was as follows:
• FY 08/09 = $ 500,000 (or a resulting net operating loss of $992, 134)
• FY 09/10 = $1 ,000,000 (or a resulting net operating loss of $492, 134)
• FY 10/11 = $1,500,000 (or a resulting net profit of $7,866)
On March 1, 2010, the City Commission adopted Resolution No. 2010-27372, which approved
an amendment to the Agreement adjusting the Net Performance Improvement by $50,301.20 in
each year due to a an interest shortfall credit which resulted from the City's requirement for
Global Spectrum to change banking institutions. The requirement for Global Spectrum to make
a $500,000, $1,000,000 and $1 ,500,000 improvement over the net deficit did not change. The
adjustment is only to the starting net deficit amount. For example, this Amendment changed the
Required Improvement over the net deficit of $1 ,542,435 (instead of $1 ,492, 134).
In the first year of the initial Term, to the extent the actual improvement achieved in the Fiscal
Year was less than the Required Improvement, as set forth above, the City could draw against a
required $500,000 Letter of Credit (LOC) provided by Global for any difference between the
Required Improvement and the actual improvement. The contract also allows Global to bank or
apply any excess improvement from year one to any shortfall of their required improvement in
year two (up to the value of their Incentive Pay). The Line of Credit provides a venue for the
City to collect if there are subsequent shortfalls on their Required Improvements.
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Convention Center Management Agreement
City Commission Meeting
July 17, 2013
Page 3 of6
Following the end of FY 2009, Global Spectrum paid the City $76,897, which represents the
shortfall from the "Required Improvement." This also included uncollected bad debt. In FY
2010 Global Spectrum surpassed the "Required Improvement" by $214,445. Over the first two
years of the Agreement, Global Spectrum reduced the operating loss of the MBCC by
$1,214,445. In FY 2012 the Convention Center generated an operating profit of $21,821, which
is only the second time in the history of the facility that an operating profit was produced. The
Operating Loss for the current Fiscal Year is projected to be $872,955 as of second quarter
projections.
FY 2010/11 Global Spectrum was not able to meet the net performance guarantee and was
required to pay the City $500,000, plus the earned annual incentive fee. As previously stated,
Global was required to achieve an annual Net Performance Improvement as specified in the
Agreement. As a penalty for not achieving the annual improvement, the City could draw against
the $500,000 Letter of Credit (LOC) provided by Global for any difference between the Required
Improvement and the actual improvement. In the final year of the Agreement, if the LOC does
not cover the shortfall, the City can draw against the earned Incentive Fee from that Fiscal Year.
Global is not responsible for any additional shortfall beyond the LOC and Incentive Fee. The
net performance guarantee was removed from the agreement at the time the renewal was
negotiated and is not longer a provision of the agreement.
The Management Agreement also has a requirement for Messe Schweiz (M.S.), in partnership
with Global Spectrum, within the initial term and subject to the existing booking policies and
commercial viability to use best efforts to book and actualize, one (1) M.S. owned show or event
during the initial term and one (1) (non-M.S. owned) international show or event.
Global Spectrum provided a Corporate Guarantee, on behalf of M.S., for $275,000 for the City
to draw upon if, notwithstanding M.S. "best efforts," as provided for in the Management
Agreement, M.S. failed to book and actualize shows or events as required. The March 2010
Amendment gave Global Spectrum until the end of the third contract year (September, 30,
2011) to book and actualize one M.S. produced/owned show or event before the $250,000
Guarantee is due to the City.
Global and M.S. were to also book, during the initial Term, one non-M.S. produced/owned
international show or event, or an additional $25,000 is due to the City. This show or event may
be actualized at any time up to 24 months following the end of the Term if, during such period,
the Corporate Guarantee provided by Global to secure this obligation remains in effect,
unaffected by the termination or expiration of this Agreement.
As required, in 2011 Global Spectrum booked and actualized a Messe Schweiz owned show
(Animalia) during the initial term of the Agreement. Animalia successfully attracted attendees to
the show, but was not able to generate a profit. M.S. and Global decided not to continue
producing the show. Global also booked a non-M.S. international show for 2012, which was
Kanas International who has now produced four (4) shows at the Convention Center.
Additionally, Global Spectrum, in partnership with Messe Schweiz (MCH), developed new
collateral material, which outlines the business industry and related selling points strictly
devoted to the European market. MCH also launched additional web pages within their website
that includes sales brochures and additional information regarding the MBCC and the
destination.
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Convention Center Management Agreement
City Commission Meeting
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Other Operational Highlights
Global Spectrum officially assumed management responsibility for the Miami Beach Convention
Center (MBCC}, Colony Theatre and Byron Carlyle Theater on October 1, 2008. Global
originally successfully transitioned 63 of the 77 full-time employees (81 %). The transition of
management was seamless and without any interruption to services.
The following is a summary of events and attendance during Global Spectrum's management
as compared to prior years, which was during a period of economic downturn nationally and
internationally:
Events
FY 08/09: 1 08
FY 09/1 0: 1 03
FY 10/11: 119
FY 11/12: 128
Attendance
FY 08/09: 632,700
FY 09/10: 708,750
FY 10/11: 661,625
FY 11/12: 661,327
The "Green" Initiatives implemented by Global Spectrum included the "Step Up" program (logos
placed on light switches and computers reminding employees to reduce energy when not in
use); programming of major mechanical control functions for energy reduction; single stream
recycling program; and the purchasing of green janitorial cleaning supplies, toilet tissue, paper
towels and hand soap. They worked closely with Centerplate to ensure that they are utilizing
recyclable products in regards to utensils, disposable plates and paper products. This effort has
already yielded significant results.
Extension of Management Agreement
As previously state, on September 14, 2011, the City Commission adopted Resolution No.
2011-27728 extending the Management Agreement for an additional two (2) years. The
following is a summary of the contract amendment included in the renewal:
1. Eliminate the Net Performance Improvement and guarantee. The requirement for Global
Spectrum to make a $500,000 (year 1}, $1,000,000 (year 2) and $1,500,000 (year 3)
improvement over the net deficit was based on the 2008-09 SMG Budget as the
measure of Global Spectrum's performance. SMG was the managing agent for the City
prior to Global. When Global assumed management responsibility it was partially based
on the fact the Global would improve the operating deficit at the facility, which is why the
Net Performance Improvement was negotiated into the original agreement. After
operating the facility for three (3) years, both parties agreed that Global should only
guarantee its own annually City-approved budget. Although various factors impact
annual budget fluctuations, Global has successfully continued to improve the operating
budget annually and even generated a small operating profit in FY 2011/12. To that
end, however:
a. If Global misses the City-approved budget Net Operating ProfiULoss by 5%,
Global will rebate to the City $.50 of each $1.00 in Incentive Fee they earned,
capped at an amount not to exceed 50% of the Incentive Fee earned in any
given fiscal year; and
b. Global Spectrum will be required to rebate Incentive Fee only in the case where
failure to achieve the City-approved budget Net Operating ProfiULoss by 5%, is
due to reasons that are under Global Spectrum's control. Such as: bookings for
conventions, tradeshows and corporate events within 24 months and day-to-day
maintenance of the facility and its infrastructure. Items beyond Global
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Convention Center Management Agreement
City Commission Meeting
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Spectrum's control include capital improvements due to storms or various acts of
God and new operating or maintenance requirements imposed by the City after
the current year's budget is approved.
2. Global Spectrum has met their obligation to book and actualize a Messe Schweiz owned
show (Animalia) during the initial term of the Agreement. The partnership between
Global and Messe Schweiz will continue for international sales efforts, as well on-going
participation on the Executive Management Committee. The $25,000 Guarantee for the
non-M.S. owned show remained in effect.
3. The Incentive Fee allows Global to earn up to 100% of the base Management Fee if
certain criteria are achieved. Both parties agreed the Incentive Fee is complicated and
should be simplified. Negotiated changes to the Incentive Fee included customer
satisfaction (30 points), financial performance (50 points), maintenance and capital
improvements (15 points) and discretionary (5 points).
Global Spectrum was awarded the contract in 2008 following a competitive bid process and has
managed the convention center since October 2008. The current agreement between the City
and Global Spectrum does not have any additional renewal provisions. On December 12, 2012,
the City Commission passed a motion made by Commissioner Weithorn authorizing the City
Administration to negotiate with Global Spectrum for a new Management Agreement instead of
proceeding with a Request for Proposals.
The following summaries the Net Operating Income, actual vs. budget, for the Convention
Center during Global Spectrum's management tenure:
FY 2008/09
FY 2009/10
FY 2010/11
Net Operating
lncome/(Loss)
BUDGET
Net Operating
Income/( Loss)
ACTUAL
(Over)/Under
Budget
Variance
FY 2012/13 Pro'ected as of 2nd tr $270,449
* Please note: Net Operating Income does not include transition costs or non-operating (City)
revenues or expenses that are part of the MBCC Enterprise Fund.
The following chart details the payments made to and from Global Spectrum during the first four
(4) years of the agreement, as well as projections for the current, and final, year.
Payments to Global Actual Actual Actual
2010/11
Actual Projected
S ectrum 2008/09 2009/10 2011/12 2012/13
MBCC $ 241,600.00 $ 251,585.33 259,132.89
$ 16,700.00 $ 16 17.390.21 17,911.92
$ 16,700.00 $
Incentive*"*" $ 148,500.00 $ 140,250.00 248 802.37 254,881.22
tal $ 423,500.00 $ 415,250.00 $ 270,990.16 517,777.91 $ 531,926.03
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Convention Center Management Agreement
City Commission Meeting
July 17, 2013
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Actual Actual Actual Actual Projected
Payments to CMB 2008/09 2009/10 2010/11 2011/12 2012/13
Performance
Guarantee $ 76,897.00 $ -$ 646,334.69
Capital $ 375,000.00
Scholarship $ 12,500.00 $ 12,500.00 $ 12,500.00 $ 12,500.00 $ 12~
Total $ 387,500.00 $ 12,500.00 $ 658,835.00 $ 12,500.00 $ 12,500.00
• FY 08/09 the Incentive Fee was equal to 54% of Base Fee; FY 09/10 there was no CPI Adjustment in, and the Incentive Fee was equal to 51% of Base Fee;
FY 1 0/11there was a 1.1% CPI Adjustment; Incentive Fee was equal to at 54%; Performance Guarantee was not achieved the Incentive was forfeited; FY
11/12-CPI Adjustment was 3%; Incentive Fee is projected at 92%; FY 12/13-CPI Adjustment is estimated at 3%; Incentive Fee is projected at 92%.
The Adminsitration and Global Spectrum have been negotiating terms of a new agreement,
which was presented to the Finance and Citywide Projects Committee (FCWPC) on May 13,
2013. The FCWPC recommended two (2) one (1) year renewal options instead of one (1) two
(2) year renewal. They also requested the laguage pertaining to Messe Schweiz be finalized
and is reflected in the attached term sheet. At the time of the FCWPC Global Spectrum was still
finalzing the terms of their relationship for the new agreement and details were not available.
Those details have been worked and are included in the attached Term Sheet, along with all
other terms, for your review and consideration.
CONCLUSION
The attached Term Sheet represents substantive terms of a new management agreement with
Global Spectrum. Based on the direction from the City Commission at its December 12, 2013
meeting, and following the direction from the FCWPC, the Administration recommends waiver of
competitive bids approving all material and substantive terms of the agreement between the
City and Global Spectrum, for the operation, management, maintenance, promotion and
marketing of the Miami Beach Convention Center and Colony Theatre.
T:\AGENDA\2013\July 17\Giobal Spectrum Convention Center Facilities Management Memo,docx
730
PRELIMINARY TERM SHEET (DRAFT #6)
Management Agreement for the
Exhibit ''A''
Miami Beach Convention Center and Colony Theater
Between the City of Miami Beach and Global Spectrum (Global)
Date: May 21, 2013
TERM
1. Form of Agreement
2. Facilities covered under
Agreement
3. Term
4. Renewal Options
5. Management Fee
6. Capital Contribution and
improvements
7. Scholarship Contribution
8. Incentive Fee
ement Agreement.
Miami Beach Convention Center (MBCC), and Colony Theater (Colony).
Collectively, aforestated may also be referred to as the Facilities.
Three (3) year initial term commencing on October 1, 2013, and ending
on September 30, 2016.
A "contract year" shall be defined as the period from October 1 through
September 30 of the following year (coinciding with the City's Fiscal
Year).
Two (2) one (1) year renewal options, exercisable with ninety (90) days
prior written notice, at the sole and absolute discretion of the City
Manager. City Manager, at its sole discretion, may elect to exercise both
options at the same time.
$258,300 per year, escalating by Consumer Price Index -All Urban
Consumers (CPI-U)-U.S. City Average, but not to exceed (capped at)
3%. Management fee will be allocated to each facility as follows:
• Miami Beach Convention Center: $241 ,600
• Colony Theater: $16,700
This reflects the original fees for the Convention Center and Colony
Theatre.
This will save the City over $80,000 over the 5 year term of the
agreement.
$200,000, payable within thirty (30) days of contract execution,
Capital contribution will be used as determined by City, in its sole
discretion.
Capital contribution will be amortized on a straight-line, non-cash basis
over five years. No repayment of unamortized portion if termination for
cause.
Global Spectrum (Global) to participate at corporate level, including the
facility's General Manager (as MBCC stakeholder) on discussions
relating to proposed MBCC expansion/improvements.
$12,500 per year, payable within thirty (30) days of contract execution
and, thereafter, within thirty (30) days of commencement of each contract
year.
1. A total of up to twenty-five (25) percentage points will be awarded
based on the average survey score for each of the following ten
(10) departments (Global shall be awarded up to 2.5 points per
department, for a total possible score of 25):
Sales
Event Management
Operations
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TERM
Food & Beverage
IT/Telecommunications
Audio Visual
Valet Parking Services
Business Center
Visit Miami Beach
Fire Inspector
If a department's average survey score is 93% or higher, Global
shall be awarded 2.5 points for such department (out of 25)
If a departments' average survey score is from 90% to 92.99%,
Global shall be awarded 1 point for such department (out of 25)
If a departments' average survey score is less than 90%, Global
shall be awarded 0 points for such department (out of 25)
Survey instrument administered by independent third party jointly
selected by City, GMCVB and Global Spectrum.
2. A total of up to five (5) percentage points will be awarded based
upon the percentage of completed customer satisfaction surveys
(which survey form shall be subject to the prior written approval of
the City Manager) out of total potential surveys (of which there shall
be one per Event) received from all Events that use the Facilities as
detailed below:
70% completed
65% completed
55% completed
Less than 55%
5 points
3 points
1 points
0 points.
3. Financial Performance: A total of up to fifty (50) percentage points
will be awarded based upon the percentage of annual Gross
Operating Revenue generated as detailed below
• $17.50M >revenue= 50 points
• $17.25-$17.499M = 35 points
• $17.00-$17.249M = 25 points
• < $16.99M = 0 points
• Note: The Financial Performance Criteria represents a $1 million
increase from the current Gross Operating Revenue scale.
4. Maintenance and Improvement of Facility and its Capital Equipment.
A total of up to fifteen (15) percentage points will be awarded if
Global has met or exceeded the maintenance standards set forth in
the Agreement (including, without limitation, the Comprehensive
Preventive Maintenance Program and maintenance of Capital
Equipment, as may be amended from time to time during the Term
by the City). The City Manager's evaluation pursuant to this
subsection shall also, without limitation, take into account the annual
review by the City's Property Management Division and/or a yearly
review by an outside independent consultant retained by the City
2
732
TERM
9. Messe Schweiz (M.S.)
Participation/Obligations
Manager.
5. Discretionary. A total of up to 5 percentage points may be awarded,
as determined by the City, in its sole and absolute discretion. The City
may take into account, but not be mandated by, the following:
community involvement; extraordinary quantifiable and measurable
creative initiatives that directly result in Global securing new City-wide
business for the City of Miami Beach during the off season period;
and/or demonstration and integration of new strategic Global
corporate resources to the benefit of the tourism and/or cultural
community of Miami Beach; and/or development of new or enhanced
revenue streams for Facility use and services.
**If the City elects to proceed with the Convention Center Expansion and
Enhancement Project, the Incentive Fee criteria must be revisited and
prior to the re-opening of the expanded and enhanced Convention
Center.
M.S. will actively participate in Agreement. Active participation shall be
defined and, at a minimum, include:
a) Provide Global with on-going advice, as requested,
regarding the management, marketing and operation of
the Center;
b) Participation by M.S. on a Convention Center User Group;
c) Continued cooperation by M.S. in providing international
sales and referrals of interested European I International
show producers Global throughout the Term of the
Agreement;
d) Continue to explore the possibility of producing additional
M.S. shows at the Miami Beach Convention Center
subject to date availability and commercial viability as
solely determined by Global and M.S.
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 oversighUreview/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, prior 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).
(d) M.S. shall be responsible for its air fare and any other
travel costs for travel to Miami Beach related to its
participation in this Agreement, as set forth herein, and
3
733
TERM
i 1 0. Public Benefits
11. Food and Beverage
Oversight
12. Marketing and Promotion
any and all such costs shall not be considered as
Operating Expenses.
'-''"''"'""' ...,,., ........ trum will continue to produce a minimum of three (3) d ... , ...............
to City of Miami Beach senior citizens.
The City Manager shall require that, during the Term of this Agreement,
a member of Global's Executive Level Employees, have food &
beverage experience and be charged (among his/her duties) with
supervising, monitoring and ensuring consistent performance, quality
standards, and compliance with the City's agreement with the City's
Food and Beverage provider;
Global to continue following marketing and promotional obligations (as
part of Global's comprehensive approach to marketing the Facilities):
1) Global to continue to provide continuously during the Term
hereof, an in-house ad-agency capability to place Event-related
advertising.
2) Global to provide a report on sales and marketing efforts, as
provided for in Section 6.3.
3) Global to develop an advertising buy program that will offer
preferred (discount) pricing for each Facility's users on select
Comcast services including, without limitation:
A. In-market ROS advertising on Comcast channels;
B. On Demand;
C. Comcast.net; and
D. Cross-channel marketing opportunities.
4) Global to provide assistance in obtaining discount pricing for
advertising buys for the City and Facility users in out-of-market
Comcast service areas.
5) Global to secure CNN Headline News Comcast -"Newsmakers"
for Facilities including, without limitation:
A. A minimum of four (4) "Newsmaker" shows per Contract
Year during the Term hereof. Each "Newsmaker" show
shall consist of a five (5) minute interview format of
approximately 21 airings during a one-week period (42
total times per month) on CNN Headline News; and
B. Segments provided to the Convention Center, to be used
by the City and Convention Center users.
C. Best efforts to secure additional Newsmaker show
opportunities.
6) Global to secure Comcast Bill Envelope Messaging including,
without limitation:
A. A minimum of two (2) times per Contract Year, the City
or Convention Center users shall be provided with 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); and
B. Best efforts to secure additional Comcast Bill Envelope
Messaging opportunities.
4
734
TERM
13. Net Operating Profit
Guarantee
14. Other
7) Global to secure Comcast Bill Messaging including, without
limitation:
A A minimum of four (4) times per Contract Year, the City
or Convention Center users will be provided the ability to
send messaging to Comcast subscribers in Miami-Dade,
Broward and Monroe Counties on the monthly Comcast
Bill (900,000 bills per month); and
R Best efforts to secure additional Comcast Bill Messaging
opportunities.
For any Contract Year, if the actual Net Operating Profit or Net
Operating Loss achieved is unfavorable as compared to the Approved
Budget by a margin of greater than Fifty Thousand Dollars ($50,000),
then the Incentive Fee earned by Global for such Contract Year shall
be reduced by fifty cents ($.50) for every dollar of Shortfall, up to the
Cap.
For purposes of this subsection, "Shortfall", with respect to any
Contract Year, shall mean either (i) if the Approved Budget reflects a
projected Net Operating Profit, the amount by which the Net Operating
Profit projected in the Approved Budget exceeds the actual Net
Operating Profit in such year by more than Fifty Thousand Dollars
($50,000); or (ii) if the Approved Budget reflects a projected Net
Operating Loss, the amount by which the actual Net Operating Loss in
such year exceeds the Net Operating Loss projected in the Approved
Budget for such year by more than Fifty Thousand Dollars ($50,000).
The "Cap" shall mean fifty percent (50%) of the Incentive Fee actually
earned by Global in the applicable Contract Year. Notwithstanding the
foregoing, the Incentive Fee shall not be reduced to the extent Global's
failure to achieve the applicable benchmark is due to reasons outside
Global's reasonable control, such as a Force Majeure affecting the
Facility, or new operating or maintenance requirements imposed by the
City after finalization of the Approved Budget (The parties acknowledge
that items within Manager's control may include, but are not limited to,
bookings for conventions, tradeshows and corporate events 24 months
and in, and day to day routine maintenance of the Facility)."
ALL OTHER TERMS AND CONDITIONS OF THE CURRENT
MANAGEMENT AGREEMENT SHALL REMAIN IN EFFECT.
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