99-23356 RESO
RESOLUTION NO.
99-23356
A RESOLUTION AUmORIZING SMG, MANAGING AGENT
FOR THE MIAMI BEACH CONVENTION CENTER, TO
ENTER INTO AN AGREEMENT WITH SMG CLEANING, A
WHOLLY-OWNED SUBSIDIARY OF SMG, TO PROVIDE
SHOW AND BOOTH CLEANING SERVICES FOR EVENTS
AT THE MIAMI BEACH CONVENTION CENTER ON A
NON-EXCLUSIVE BASIS.
WHEREAS, the City of Miami Beach contracts SMG, as managing agent for the Miami
Beach Convention Center; and
WHEREAS, SMG has been approached to provide booth cleaning services to exhibitors and
show managers using the Miami Beach Convention Center and other South Florida locations; and
WHEREAS, SMG proposes to create SMG Cleaning, a wholly-owned subsidiary of SMG,
to provide these services at the Miami Beach Convention Center and other South Florida locations
on a non-exclusive basis; and
WHEREAS, SMG, in accordance with its Management Agreement with the City dated
October 1, 1998, shall receive approval from the City for any related party transactions; and
WHEREAS, the City currently receives no revenues for the aforestated booth cleaning
services, and SMG Cleaning proposes to return twenty percent (20%) of gross on-site sales and five
percent (5%) of gross off-site sales to the City.
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 authorize SMG, the managing agent for the Miami Beach Convention Center, to
enter into an Agreement with SMG Cleaning, a wholly-owned subsidiary of SMG, to provide show
and booth cleaning services for events at the Miami Beach Convention Center on a non-exclusive
basis.
er
, 1999.
PASSED AND ADOPTED THIS 20th DAYOF 0
ATTEST:
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C CLERK
APPROVED AS-;
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CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:\'ci miami-beach.f1.us
COMMISSION MEMORANDUM NO. I t.. 1- ~9
TO:
Mayor Neisen O. Kasdin and
Members of the City C mmission
DATE: October 20, 1999
FROM: Sergio Rodriguez
City Manager
SUBJECT: A RESOLUTION AUTHORIZING SMG, MANAGING AGENT FOR THE
MIAMI BEACH CONVENTION CENTER, TO ENTER INTO AN
AGREEMENT WITH SMG CLEANING, A WHOLLY-OWNED
SUBSIDIARY OF SMG, TO PROVIDE SHOW AND BOOTH CLEANING
SERVICES FOR EVENTS AT THE MIAMI BEACH CONVENTION
CENTER ON A NON-EXCLUSIVE BASIS.
Administration Recommendation:
Adopt the Resolution.
Background:
On July 15, 1998, the City of Miami Beach approved a new Agreement with SMG to provide
management services for the Miami Beach Convention Center and Jackie Gleason Theater. The
current Agreement took effect on October 1, 1998 and runs through September 30,2001, with the
City's option to award two additional one-year extensions. In that Agreement, SMG is required to
obtain City Commission approval in order to enter into any Agreement with related parties to provide
servtces.
SMG has been approached by at least one convention decorating company to provide sub-contracted
booth cleaning services to shows produced by that decorator in the South Florida area. SMG
proposes to start a separate company, SMG Cleaning, which will provide those services at the Miami
Beach Convention Center and possibly other sites as required in Soutll Florida. All direct costs,
including labor, supplies, and capital expenditures required for the operations will be incurred by
SMG Cleaning, with executive level oversight provide by senior level SMG management located at
the Miami Beach Convention Center. SMG Cleaning will remit 20% of gross sales to the City of
Miami Beach for events at the Miami Beach Convention Center, and 5% of gross sales to the City
of Miami Beach for events off-site from the Convention Center. Preliminary estimates would indicate
that approximately $30,000-40,000 in revenues would be realized by the City, with potential to grow
the business upon expansion to other decorators. Additionally, in exchange for storage of the
equipment at the Miami Beach Convention Center, SMG Cleaning would permit the use of that
equipment when available for Convention Center operations at no charge.
AGENDA ITEM
DATE
C1G
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This issue was addressed by the Convention Center Advisory Board at its regular meeting on
September 30, 1999, and was approved by a vote of5-1, with one abstention.
Analy~is:
Approval of this item would result in an additional $30,000-40,000 in revenues to the City of Miami
Beach. Currently, no revenue is realized from other cleaning contractors working in the facility.
Additionally, the use of the equipment by the Convention Center staff would help increase efficiency
at no addtional capital costs to the City. Lastly, by placing this service under the direct supervision
of the City's managing agent, additional control is gained over the complete cleaning responsibilities
for Convention Center events, not just those currently addressed by SMG. The City, by its
Agreement with SMG, is indemnified by SMG, and would also have no exposure to liability from
SMG Cleaning due to this service provision.
Conclusion:
The Administration and Convention Center Advisory Board recommend approval of this
authorization to increase revenues to the City and increase control over Convention Center cleaning
operations.
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