HomeMy WebLinkAbout2004-25578 Reso
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RESOLUTION NO. 2004-25578
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, APPROVING NEW RENTAL
RATES FOR THE MIAMI BEACH CONVENTION CENTER, EFFECTIVE
OCTOBER 1, 2004 FOR NEW BUSINESS, AND TO BE IMPLEMENTED
AS NEGOTIATED WITH EXISTING USERS.
WHEREAS, the City owns the Miami Beach Convention Center (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, expenses have increased at the Convention Center while revenues have
remained relatively flat; and
WHEREAS, current booking trends and occupancy projections would point to the ability
of the market to bear an increase in rates; and
WHEREAS, SMG as the City's manager at the Convention Center, has recommended
revisions to the Convention Center rental rates that would increase such rates from $0,65 to
$0,70 per net square foot for 6 days, and from $0.07 to $0,08 per net square foot for each
additional day, for exhibitions; and from $6,000 to $6,500 per hall per event day and $3,000 to
$3,250 per hall per move-in or move-out day for non-exhibit events, without adversely affecting
the competitiveness of the Convention Center; and
WHEREAS, the Administration, Convention Center Advisory Board (CCAB), and SMG
have determined that adoption of these rate revisions is in the best interest of the City; and
WHEREAS, consistent with Resolution No. 2003-25299, adopted July 30, 2003, it is
further recommended that a review of the Convention Center rental rates will be initiated
whenever the change in the Consumer Price Index (CPI), between the current CPI and the date
of CPI used to establish the last rate adjustment, is greater than five percent (5%), and said
review will be presented to the CCAB for item advisory recommendation.
NOW, THEREFORE, BE IT RESOLVED BY THE MA R AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, that the M or and City Commission hereby
approve new rental rates, as proposed in this Resolutio ,for e Miami Beach Convention
Center, effective October 1, 2004 for new business, and be . emeyjed as negotiated with
existing users. /
PASSED AND ADOPTED this 26th day of Ma ,2004.
Attest:
~~~-
F CITY CLERK ~
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APPROVED MTO
FORM & LANGUAGE
& FOR EXECUTION
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ity m Date
CllY OF MIAMI BEACH
COIVMISSION ITEM SUMMARY
m
Condensed Title:
A Resolution of the Mayor and City Commission ofthe City of Miami Beach, Florida, authorizing the Mayor
and to approve new rental rates for the Miami Beach Convention Center.
Issue:
The increase of rental rates for the Miami Beach Convention Center from $0.65 to $0.70 per net square
foot for 6 days, $0.07 to $0.08 per net square foot for each additional day for exhibitions, and from $6,000
to $6,500 per hall per event day and $3,000 to $3,250 per hall per move-in or move-out day for non-exhibit
events.
Item Summa /Recommendation:
The item recommends the approval of a rate increase for rental charges for the Miami Beach Convention
Center, The increase is the first requested since the last rate increase, approved September 9, 1998. It
addresses action toward operating deficit escalation brought about by flat revenues coupled with increased
expenses in large part due to living wage adjustments, since the last increase. The increase allows for
flexibility in negotiating phase-in for existing leases and previously offered guaranteed rates, with increases
to be phased in beginning October 1, 2005. SMG and the Administration feel that the proposed increases
are industry appropriate and that the current market will bear the increase without harming the
competitiveness of the Center.
Consistent with Resolution No. 2003-25299, adopted on July 30,2003 by the Mayor and City Commission,
it is recommended that a review of the rental rates will be initiated whenever the change in the CPl.
between the current CPI and the date of CPI used to establish the last rate adjustment, is greater than five
ercent 5% and said review will be resented to the CCAB for its adviso recommendation.
Advisory Board Recommendation:
The Convention Center Advisory Board unanimously approved the recommendations at its regular meeting
of April 27. 2004. and they were approved by the Finance and Citywide Projects Committee of the
Commission on Mav 19. 2004.
Financial Information:
Source of
Funds:
D
Finance Dept.
City Clerk's Office Legislative Tracking:
I Doug Tober
T:\AGENDA\2004\May2604\Regular\MBCC Rental Rate Increase.SUM.doc
AGENDA ITEM
DATE
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CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www.cLmiami-beach.fl.us
COMMISSION MEMORANDUM
From:
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez ~.,r-~
City Manager U
A RESOLUTION F THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING NEW RENTAL RATES FOR
THE MIAMI BEACH CONVENTION CENTER, EFFECTIVE OCTOBER 1,
2004 FOR NEW BUSINESS, AND TO BE IMPLEMENTED AS
NEGOTIATED WITH EXISTING USERS.
Date: May 26, 2004
To:
Subject:
ADMINISTRATION RECOMMENDATION
Approve the Resolution.
ANALYSIS
SMG, operating agent for the City for the Miami Beach Convention Center, submitted to the
City and the Convention Center Advisory Board (CCAB) for their consideration the
attached memorandum outlining potential revenue enhancements for the Center. The
submittal came as part of the regular operational review of the Center's operations in an
effort to address an expected increasing operating deficit for the Center in light of
increasing costs along with relatively flat revenues. The submittal included three items of
potential enhancements for consideration: an increase in the rental rates for MBCC users,
a possible move toward an exclusive exhibition electrical services provider, and a possible
move toward an exclusive or preferred security services provider,
The City of Miami Beach last reviewed and adjusted rental rates for the Miami Beach
Convention Center in 1998, with current rates in effect since October 1,1998, Since that
time, after showing growth through FY 2000-01, revenues have remained virtually flat while
operating expenses have continued to increase, growing by approximately 20% over the
past three fiscal years. Regular labor escalation coupled with insurance increases have
accounted for the majority of the increase in expenses.
SMG, in accordance with its Management Agreement and in conjunction with the submittal
of the revenue enhancements available for the Center as outlined above, surveyed current
rates of the Center as compared with eighteen competing convention centers throughout
the U.S. After review of the survey results, the current rates at the Miami Beach
Convention Center are at the bottom of competing facilities. Therefore, it is the opinion of
SMG that proposed rate increases would still allow the Center to remain competitive while
boosting revenues to the City, especially in light of pricing discretion available to SMG and
the Greater Miami Convention & Visitors Bureau through Commission Action of November
13, 2002 (Commission Resolution 2002-25052).
May 26, 2004
City Commission Memorandum
MBCC Rental Rate Increase
Page 2 of 3
The proposed rate increases would be as follows:
. Exhibit rates for the six day base rate would increase from $0.65 per net square foot to
$0.70 per net square foot
. Exhibit rates for additional days would increase from $0.07 per net square foot per day
to $0.08 per net square foot per day
. Non-exhibit rates per exhibit hall per event day would increase from $6,000 to $6,500
. Non-exhibit rates per exhibit hall per move-in or move-out day would increase from
$3,000 to $3,250
FISCAL IMPACT
The increases would average approximately 8-10% over the previous rates, with
implementation of new rates for existing clients beginning October 1 ,2005. The economic
effect to the City from this increase could be expected to be approximately $350,000 in a
stabilized year. Pre-existing guaranteed convention client rates would be honored per
proposals made.
Consistent with Resolution No. 2003-25299, adopted on July 30, 2003 by the Mayor and
City Commission, it is recommended that a review of the rental rates will be initiated
whenever the change in the CPI, between the current CPI and the date of CPI used to
establish the last rate adjustment, is greater than five percent (5%) and said review will be
presented to the CCAB for its advisory recommendation.
Convention Center Advisory Board Action
The survey results, as attached, were presented to the CCAB along with proposed
increased rates at the CCAB's regular meeting of April 27, 2004. SMG invited all users of
the Convention Center projected for the next two years to express their opinions regarding
the proposed changes. Representatives were present from the Graphics of the Americas
Show, DMG World Media, Jewelers International Showcase, Shoe Market ofthe Americas,
Swimwear Market, and the Miami International Boat Show. While some expressed a
desire for rates not to increase, overall opposition to the change was low, and discussion
focused more on the implementation schedule for the changes. After some discussion and
question and answer with the users and SMG, the Board voted 5-0 (with two absent) to
approve the rate revisions as proposed.
In addition to the proposed increases, the CCAB also reviewed potential changes that
would provide preferred or exclusive arrangements with the Security providers and
Electrical contracting companies at the Convention Center. Based upon the potential
adverse impacts raised by users and service providers, the CCAB voted to not consider
these proposals and only favored the increase in rental rates.
May 26, 2004
City Commission Memorandum
MBCC Rental Rate Increase
Page 3 of 3
CONCLUSION:
The Mayor and Commission should approve the recommendations for rental rate increases
presented herein. Additionally, SMG and the Administration are in agreement with the
CCAB that the potential adverse impacts with the move toward exclusive electrical and
security providers would outweigh the revenue gains, and therefore at this time they do not
recommend such a change. SMG will, however, continue to explore other options which
may enhance revenues without affecting the users' freedom of choice of contractors.
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MEMORANDUM
Private Management for Public Facilities
Doug Tober
General Manager
Miami Beach Convention Center
~ackie Gleason Theater
To: Christina Cuenro
Cc: Convention Center Advisory Board
Ita Moriarty
Thorn Connors
Jeffrey Iserson
Kay Hollander
Date: April 7, 2004
Re: Revenue Enhancement Opportunities
As the managing agent on behalf of the City of Miami Beach at the Miami Beach Convention
Center for over thirteen years, SMG is proud of the accomplishments we've made for the
facility. As any account matures, the opportunities for significant revenue enhancement
opportunities become harder to locate. However, as we appear headed toward an upsurge in
the booking pace for the Center, we have reviewed our operating results and competitive
environment and are pleased to offer the below suggested revenue enhancements for
consideration of implementation in order to offset the increasing costs of operation for the
Center.
Rental Rate Revisions
The City of Miami Beach last amended the rental rate structure for the Miami Beach
Convention Center on September 9, 1998 (Commission Resolution No. 580-98). The existing
schedule for exhibitions is $0.65 per net square foot for the initial six days and $0.07 per net
square foot for additional days, with a minimum of 40,000 net square feet per exhibit hall
used. For non-exhibition events, the rental rate is $6,000 per day for event days and $3,000
per day for move-in or move-out days.
In response to competitive pressures brought about by a sagging economy and post-91l1
effects, coupled with the continued proliferation of exhibition facility construction, the City
. Page 1
approved a package of available incentives on November 13, 2002 (Commission Resolution
2002-25052), allowing for continuation of ability to discount rates up to 25% for certain
convention business, reduced minimum square footage for small and growing shows, and
certain food and beverage offsets for facility rental.
Since the first full year of effect of that rental rate increase, we have seen Convention Center
rental revenues remain fairly constant, while indirect expenses for the facility have increased
over twenty percent. Note that FY 00/01 should be somewhat discounted as an anomaly, due
to the Microsoft Global Briefing during that year skewing both revenue and expense figures.
FY 99/00 FY 00/01 FY 01/02 FY 02/03
Rental Revenue $3,810,238 $4,766,099 $4,038,625 $3,696,274
Indirect Expenses $5,950,990 $6,900,224 $6,394,649 $7,287,660
Total Operating P/L $ 29,057 $1,206,820 ($ 101,783) ($ 911,654)
Operating expenses, however, have been greatly affected by monumental increases in
property, liability, and health insurances, as well as annual labor increases of four to five
percent.
In reviewing our current rental rate structure, we have surveyed a competitive set of facilities
(approximately mirroring those used in the CSL study of Convention Facilities done for the
GMCVB in 2001) as to present published facility rental rates. In reviewing the results, current
as of February 2004 (see attached), we find that the Miami Beach Convention ranks at or near
the bottom in extrapolating rates for both six and ten day sample events.
Therefore, we feel that, based on the above referenced analyses, coupled with the encouraging
booking projections for the next two years, the market would bear an increase to the current
rental rate structure. We are proposing that the base rate for six days be increased from $0.65
nsf to $0.70 nsf, an escalation of 7.7%, and that the extra day rate be raised from $0.07 nsf to
$0.08 nsf, or just over 14%. We also propose that the non-exhibit rate for the MBCC be
increased from $6,000 per hall per event day to $6,500 per hall per event day, and from
$3,000 per hall per move-in/move-out day to $3,250 per hall per move-in/move-out day, an
increase in each case of 8.3%. As shown on the attached spreadsheet, even with these
increases, the MBCC will still rank near the bottom of the scale of the competitive set
surveyed. We would recommend that these rates become effective for new contracts
negotiated following its passage, and to be phased in by October 1, 2005, for existing clients
unless previously negotiated rate guarantees are in effect. This schedule would allow our
lessees proper advance notice to incorporate the changes into their event budgeting cycles.
Assuming a blended average increase of approximately nine percent, the proposed rate
schedule would return an estimated additional $350,000 annually toward the Center's
operating revenues in a stabilized year.
. Page 2
Exhibition Electrical Services
In 1996 and 1997, SMG reviewed with the City the opportunity to move toward an exclusive
supplier for exhibition electrical services at the Miami Beach Convention Center. After an
extensive review of the highly lobbied process, the City opted to increase the commission
percentage paid by approved contractors from 20% to 30% and forego the additional revenue
available from an exclusive contractor.
While exhibition managers generally oppose exclusive services being claimed by facilities on
the grounds of reducing competition and service quality while increasing prices, currently
74% of exhibition facilities in the United States provide exhibition electrical services
exclusively either in-house or through a third party provider. This figure is according to
Tradeshow Week, a leading industry publication and database source. The fact that control
over contractor quality and operations for one of the facility's most expensive and most
potentially dangerous infrastructure elements lends further weight to the argument in favor of
this service being overseen by the venue as much as is possible.
FY 99/00 FY 00/01 FY 01102 FY 02/03
Gross Sales $3,424,188 $4,428,897 $2,882,649 $2,874,153
MBCC $1,027,257 $1,328,669 $ 864,496 $ 860,905
Commission
As evidenced in the above table, after a record year in FY 00101, over the past two years we
have seen a significant decline in the gross sales and commissions returned to the facility.
Overall curtailment of exhibitor spending due to the sagging economy has been reflected
strongly in this decline. Additionally, more aggressive sales efforts on the part of some
providers, resulting in a decline in the gross prices charged, have also played a part. Lastly,
although difficult to pinpoint specific examples in our market, a national trend toward the
introduction of third party service provision brokers, which can be either independent or, in
some cases, affiliated with show management, have further diluted pricing, with reduced
grosses to the electrical contractor affecting the facility's commission while exhibitors may
not see lower prices for those same services. In these cases, as a "silent partner" in this
service, the facility absorbs 30% of all pricing discounts without having any voice in what that
pricing will be... all while seeing no reduction in the cost of the raw product we provide for
this service, namely the electricity.
In reviewing our current operations, we have effectively three vendors providing exhibition
electrical services in the facility. A review of the twelve month period ending January 2004
showed that approximately two-thirds of the events were handled by Edlen Exhibition
Electrical Services, approximately one-quarter of the events were serviced by Edd Helms
Electric, and the remaining eight percent were handled by Tri-City Electric.
. Page 3
In consideration of at least protecting our ongoing revenue stream, and hopefully growing it,
we have a number of options available for consideration. These include:
1. Taking the service in-house. While this option would ultimately have the highest
recurring rate of return and yield complete control, the cost of startup equipment and
ongoing maintenance and upgrades, additional supervision overhead, and anticipated
opposition from lessees and contractors alike would lead to my not recommending
pursuit of this option.
2. Selection of an exclusive provider. This option would allow control by the Center
over pricing, discounting, quality of service, and safety adherence. It would be
estimated that commissions paid could be expected to be at least 40%, as compared to
the existing 30%, and the required usage by lessees would provide more pricing
stability and consistency, all with the Center's control toward respecting market value.
While this could encounter some lessee resistance, selection and oversight over the
best choice would prove beneficial to the City in the long run without harming service
standards for our users. Additional revenues to the City could be expected to be in
excess of $250,000 annually under this scenario, with opportunity for capital
investment from the successful provider as well.
3. Selection of co-exclusive providers. A bit of a revision of the above, this option could
respect the predominant market share of two principal providers, thus alleviating most
lessee resistance. The Center could still maintain control over pricing schemes as a
more strongly-voiced partner, yet provide an element of competitive choice for the
lessee. Commissions returned to the City would be expected to be lower than that of
option 2.
4. Establishment of a set pricing schedule. An alternative to the exclusive concept, this
would allow lessees to still select from an approved contractors list, but would
establish pricing for standard product offerings at a fixed rate rather than remission of
a percentage of gross sales. This option would allow for protection of the City's
revenue stream, effectively putting the competitive discounts providers may feel
necessary to get business into their hands exclusively without affecting the amount
received by the City. This option could prove viable as a compromise for opposition
to movement to an exclusive, but would not be as [mancially beneficial to the City.
The first three of the above options would allow us, in addition to enhancement of revenues,
increased control and oversight over the service provided, as well as the safety required in the
delivery of this extremely important service. While SMG has by contract the right to provide
these services, or contract for them as it sees fit, I feel that the highly visible nature of this
policy decision as well as its history of controversy warrants City and Advisory Board input
into its determination.
I feel strongly that we need to revise the manner in which we provide electrical services to our
clients, and welcome discussion of the above or other potential options toward a beneficial
resolution to this issue.
. Page 4
Preferred Security Provider
Another service provision choice currently available to our lessees is that of event security.
While SMG provides general building perimeter security and loading dock entrance guards,
lessees are responsible for providing security services for their individual shows. The venue
requires that contractors providing these services are selected from an approved vendor list;
the companies on this list have submitted proof of insurance and proper company licensing to
provide security services in the State of Florida. We currently receive no commissions from
security services provided within the facility.
At present, the MBCC lists five contractors on its approved vendor list. For the period ending
January 2004, 54% of events utilized Accurate Event Services, 29% used Andy Frain Services
of Florida, with the remainder distributed across other smaller vendors or in-house security
forces (i.e., Miami-Dade County Public Schools, St. Thomas University).
With the change in our society's security needs, we feel it is wise to gain further control over
the security provided for our events. Operationally, the limiting of the number of vendors
allows us better access to their procedures review, and thus better control over the security of
the venue. Therefore, we feel that exploring the possibility of an exclusive or preferred
contractor could meet those control needs as well as introducing additional revenue
opportunities. It should be noted that a preferred vendor is not required to be utilized by show
managers, but it would be afforded the first opportunity to secure MBCC business, and would
typically perform a great majority of the work.
Based on our review of security schedules and conversation with contractors, we feel that
there is available approximately $1.25 million in gross security billings for events at the
MBCC annually. Our experience at the SMG-managed Broward County Convention Center
shows that the preferred security contractor in that facility pays a 10% commission to the
venue. Assuming a similar percentage, this could return an additional $125,000 toward
operating revenues for the facility.
Conclusion
In conclusion, the above opportunities for revenue enhancement present the ability to reduce
MBCC operating deficits by nearly an estimated three quarters of a million dollars. We look
forward to discussing these issues in working toward fulfilling our mission of efficient
operation of the City's largest and most recognizable asset.
. Page 5
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Present:
Absent:
SMG Staff:
City Staff:
GMCVB:
Ex-Officio:
Guest:
Miami Beach Convention Center
Advisory Board Meetine
April 27, 2d6.f. C E \ V EO
12:00 iou~~Y 20 M'I 9: 36
Minutes ... "1'""," OFFICE
elT '( M t,,,, ,., lit-to"
Mr. Joe Fontana, Chairman B '( _ -'- --..
Mr. Edward Levinson
Ms. Bernice Martinez
Ms. Carole Taran
Mr. Ivor Rose
Mr. Victor Boo
Mr. Norm Litz
Mr. Doug Tober, General Manager
Mr. Bob Papke, Director of Marketing
Ms. Kay Hollander, Director of Sales
Mr. Jeffrey Iserson, Director of Finance
Ms. Melissa Gaffuey, Director of Event Services
Ms. Ileana Garcia, Sr. Sales Manager
Ms. Georgina Muniz, Executive Assistant
Ms. Christina Cuervo, Assistant City Manager
Ms. Ita Moriarty
Ms. Eva Barretto (absent)
Mr. Bram Bottfeld, Andy Frain Services
Ms. Maria Mendez, Tri City Electric
Mr. Gordon Marin, Accurate Event Services
Mr. Carmine DeSena, Accurate Event Services
Ms. Linda Kroll, Accurate Event Services
Ms. Josephine Figuereo, Accurate Event Services
Mr. Michael Breslow, Jewelers International Showcase
Mr. Rick Bredenberg, Edlen Electric
Mr. Rob Haynes, dmg world media
Ms. Andrea Canady, dmg world media
Mr. Chris Price, Graphics ofthe Americas
Mr. Louis Molnar, NMMA-MiamillBEX Boat Shows
Mr. Bob Goodman, Art BaseVGarber & Goodman
Ms. Judy Stein, Swimwear Association of Florida
Ms. Beverlee Maier, Shoe Market of the Americas
Ms. Jom Alonso, Edd HeIms Electric
Mr. Leon Manne, Consultant
Mr. Ron Harand, GES/TSE
DD.;,. ^F.' T
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COMMENTS AND MOTIONS:
1.) Chairman Fontana requested an approval of the March 22, 2004 minutes. Ivor Rose made a motion
to approve the minutes, seconded by Bernice Martinez. The motion passed unanimously.
2.) Item #2 - Story Theater - CBC Grant Request - Doug is requesting that this grant request be
deferred at this time due to the review ofthe current CBC report which shows that ticket sales are
lagging behind and that the fund is declining more rapidly. Doug would like to make a suggestion
which would require commission approval to chan&e the funds reimbursement from 80/20 to $10
per ticket purchase $25 from the fund and would mclude surcharge increase from $1 to $1.50.
Surcharge has not been changed since 1983. This would stop regular downward trend. Bemice
Martinez made a motion to approve the increase, seconded by Ivor Rose. The motion passed
unanimously.
3.) Item #3 - Walk of Stars Induction of Frankie Avalon - Doug informed the Board that Frankie
Avalon will be performing at the Jackie Gleason Theater in the production of Grease on June 18
and 19 and that we were seeking approval from the Board to induct Mr. Avalon into the Walk of
Stars. Joe Fontana made a motion to approve the induction, seconded by Ivor Rose. The motion
passed unanimously.
4.) Item #4 - Update on Expansion - Doug informed the Board that Phase 1 had been completed and
that a revised scope of work was being prepared to look at lot behind JGT and Preferred Lot. This
has all been given to the City Manager and we are awaiting his decision on how to move forward.
5.) Item #6 - Memorial Weekend - Doug informed the Board that at present there has been a contract
issued for a party on Sunday night with a company associated with Allen Iverson of the
Philadelphia 76ers. The contract and deposit are due back this Friday.
6.) Item #8 - GMCVB - Ita Moriarty informed the Board that the bureau had just confirmed SAP for
January 2005. Another major booking was American Choral Directors Association which is a
multiple facility user with over ten thousand delegates and an economic impact of over ten million
dollars to the city. Several sales people are out on the road trying to bring in business.
7.) Item #9/10- Convention Center Bookings - Doug informed the Board that space continues to be
torrid. Added another show in January next year with VNU. Coconut Grove business is up in the
air; expect to see more business coming this way from there if City of Miami decides to close next
year. Monthly event reports are included in your packets.
8.) Item #7 - Gleason Monthly Reports - Bob informed the Board that reports were included in the
packets.
9.) Item # 11- All reports are included in the packets. Closed fIrst half of year fInancials behind
budget. Seeing a lot of effects from the living wage ordinance which has had a sizeable effect on
our facilities budget. We will continue to manage and review this closely.
10.) Item #5 - Revenue Enhancements - Doug informed the Board that we were looking towards the
future in preparation for our budget next year. A lot of expenses are affecting the bottom line. As
operators for the facility it is our job to turn every rock to try to enhance the buildings revenue.
#1. Rental Rates have not been increased at the facility in six years. Last increase was
September 9, 1998. After 9111 there were signifIcant changes that stopped growth of business and
caused shows to hold back. Looking back three years and looking forward we have since incentives to
seen revenues to be flat. Exhibitor spending has declined, ancillary revenues from electric and phone
along with F &B have seen declines. Rental increase request includes a survey of 18 different facilities
in our competitive set, which shows that we rank last applying published rate for 6 day and10 day
sample show. Proposed 6 day base rate increase from $0.65 to $0.70. Proposed extra days to go from
$0.07 to $0.08 per sq. ft. Non exhibit rates would go from $6000 to $6500 per hall per event day, and
from $3000 to $3250 per hall per move-in/move-out day. This would have to go to the City
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Commission for approval. We will continue to work with current clients. Some shows have guarantee
rates for a set period of time. Those would be honored. Still with new rates, we would still be near
the bottom of the survey in price.
#2. Electrical Contractors are hired by the show. We have a list of approved contractors. At
current time they remit 30% of gross sales as commission to the City. h11996 we chose to go from
20% to 30% commission. Currently about 74% of buildings in the country have exclusive in house
electrical. We operate with preferred contractor for audio visual. This option would also be open to us
in the electrical area.
#3. Event Security is a similar situation. Two fIrms are represented here. Buildings with
exclusive security get paid a commission. Preferred is also an option. These are the only two services
that we would ever consider looking at for revenue enhancements.
Several Board members as well as exhibitors and contractors expressed their opinions regarding the rental
increase and possible implementation of exclusive electrical and/or security contractors. Most of the
show managers were concerned with the rental rate increase due to budgets that have already been
submitted for their shows. Exhibitors and contractors both expressed a negative reaction towards the
exclusivity of electrical and security contractors.
Carole Taran made a motion to approve the rental rate increase as proposed by SMG and that SMG also
have the flexibility to negotiate with each client regarding implementation, seconded by Ed Levinson.
The motion passed unanimously.
Ed Levinson made a motion that both electrical and security not be exclusive and remain status quo,
seconded by Ivor Rose. The motion passed unanimously. Further discussion indicated a willingness to
review other options available, however.
NEW BUSINESS:
Motion to adjourn was made by Ed Levinson, seconded by Carole Taran. Motion passed unanimously.
The next regular Advisory Board Meeting is scheduled for May 25, 2004.
APPROVED BY:
ATTEST:
Joe Fontana, Chairman CCAB
Date:
Georgina Muniz, Executive Assistant Date:
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