2008-26860 ResoRESOLUTION NO. zoos-26860
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, PURSUANT TO REQUEST FOR PROPOSALS (RFP) N0.20-07!08,
FOR THE MANAGEMENT AND OPERATION OF THE MIAMI BEACH CONVENTION
CENTER, COLONY THEATRE AND BYRON CARLYLE THEATRE; AUTHORIZING THE
ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH GLOBAL SPECTRUM, L.P.,
AND SHOULD THE ADMINISTRATION NOT BE ABLE TO NEGOTIATE AN
AGREEMENT WITH GLOBAL SPECTRUM, L.P., AUTHORIZING THE
ADMINISTRATION TO NEGOTIATE WITH SMG.
WHEREAS, on February 13, 2008, the Mayor and City Commission approved the
issuance of a Request for Proposals (RFP) for the Management and Operation of the
Miami Beach Convention Center, Colony theatre and Byron Carlyle Theatre; and
WHEREAS, RFP No. 20-07/08 was issued on February 22, 2008, with an opening
date of April 11, 2008 (the RFP); and
WHEREAS, RFP Depot issued bid notices to 2,206 prospective firms, which
resulted in the receipt of the following two (2) proposals:
• Global Spectrum, L.P.;
• SMG; and
WHEREAS, the City Manager, via Letter to Commission (LTC) No. 146-2008,
appointed an Evaluation Committee (the "Committee") consisting of the following
individuals:
• Fred Berens -Resident;
• Stuart Blumberg -Greater Miami & The Beaches Hotel Association;
• Marlo Courtney -Goldman Properties and Ocean Drive Association;
• Jorge Gomez -City of Miami Beach Planning and Zoning Director;
• Carole Taran -Convention Center Advisory Board;
• Jeffrey Lehman -Miami Beach Visitor and Convention Authority;
• Alan Randolph -Resident;
• Rolando Aedo -Greater Miami Convention and Visitors Bureau; and
• Patricia Walker -City of Miami Beach Chief Financial Officer (Chairperson); and
WHEREAS, on June 20, 2008, the Committee convened to evaluate, score, and
rank the proposals based on the criteria stated in the RFP; and
WHEREAS, the Committee ranked SMG as the first ranked proposer, and Global
Spectrum, L.P. as the second ranked proposer; and
WHEREAS, at its regular meeting on July 16, 2008, the Mayor and City Commission
heard presentations from both proposers and, after extensive discussion and deliberation,
authorized the City Administration to enter into negotiations with Global Spectrum, L.P.
(Global) and, should the Administration be unsuccessful in its negotiations with Global,
then authorizing the Administration to then negotiate with SMG.
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, pursuant to Request for Proposals (RFP} No. 20-07/08, for Management and
Operation of the Miami Beach Convention Center, Colony Theatre and Byron Carlyle
Theatre, hereby authorize the Administration to enter into negotiations with Global
Spectrum, L.P. and, should the Administration not be able to negotiate an agreement with
Global Spectrum, L.P., authorizing the Administration to enter into negotiations with SMG.
PASSED and ADOPTED
AT EST:
~~~ C~.~ ~
CITY CLERK
Robert Parcher
this16th day of July , 2008.
M YO
Matti Herrera Bower
T:IAGENDA120081Ju1y 161RegularlRFP 20-07-08 -Convention Center - Reso.doc
APPROVED AS TO
FORM ~ LANGUAGE
~ FOR EXECUTION
- ~ `~
Date
COMMISSION ITEM SUMMARY
Condensed Title:
Resolution accepting the recommendation of the City Manager, pursuant to Request for Proposals (RFP) No.
20-07108; for the Management and Operation of the Miami Beach Convention Center, Colony Theatre and
Byron Carlyle Theatre; authorizing the Administration to enter into negotiations with the top-ranked firm, SMG,
and should the administration not be able to negotiate an Agreement with SMG, authorizing the Administration
to neootiate with the second-ranked firm. Global Spectrum. L.P.
~ Improve availability and accessibility of major events. ~
Supporting Data (Surveys, Environmental Scan, etc.): The 2007 Community Satisfaction Survey indicated
that about 2/3 of residents say they go to the Convention Center at least once a month and most residents
believe tourism contributes to their quality of life.
Issue:
I Should the City Commission adopt the Resolution? ~
Item Summary/Recommendation:
Request for Proposals (RFP) No. 20-07/08, was issued on February 22 2008, with an opening date of April 11,
2008. APre-Proposal Meeting to provide information to firms submitting a proposal was held on March 13,
2008, which resulted in the issuance of four (4} addenda:
RFP Depot issued bid notices to 2206 prospective firms, while at least 66 prospective firms viewed the RFP
documents, which resulted in the receipt of the following two (2) proposals:
• Global Spectrum, L. P.; and
• SMG
The City Manager, via Letter to Commission (LTC) No. 146-2008, appointed an Evaluation Committee (the
"Committee") that convened on June 20, 2008, to evaluate, score, and rank the two (2) responsive proposals.
The Committee based its recommendation on the following Evaluation Criteria stated in Section IV of the
RFP:
• Experience and Qualifications Scoring Weight: 20%
• Quality of the Management Team Scoring Weight: 20%
• Approach and Methodology Scoring Weight: 15%
• Marketing Plan Scoring Weight: 15%
• Fee Proposal Scoring Weight: 20%
• Financial Stability Scoring Weight: 10%
Based on the scores and rankings of the Committee members, SMG received eight (8) first-place rankings
out of nine (9). Each Committee member explained on the record, their reasons for their selected top-ranked
firm. Therefore, a motion was made by Fred Berens, and seconded by Jeffrey Lehman, to recommend to the
City Manager to negotiate an Agreement with the top-ranked firm of SMG and to negotiate with the second-
ranked firm of Global Spectrum should negotiations with the top-ranked firm be unsuccessful.
Adviso Board Recommendation:
N/A
Financial Information:
Amount Account Approved
Source of Funds:
OBPI $275,000 Convention Center Enterprise Fund
Total
Department Director Ass' ant City Manager 'ty Manager
GL MS H JMG
T:\AGENDA12008Uu1y 16\RegularlRFP 20-07-OS - Cof~ention Center Summary.doc V
m MIAMIBEACH
U v
AGENDA ITEM ~~
DATE 1 ~~~'O8
m MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, vaww.miamibeachfl.gov
COMMISSION MEMORANDUM
To: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzales City Manager
DATE: July 16, 2008
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH,
FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER, PURSUANT TO
REQUEST FOR PROPOSALS (RFP) NO. 20-07108, FOR THE MANAGEMENT AND
OPERATION OF THE MIAMI BEACH CONVENTION CENTER, COLONY THEATRE AND
BYRON CARLYLE THEATRE; AUTHORIZING THE ADMINISTRATION TO ENTER INTO
NEGOTIATIONS WITH THE TOP-RANKED FIRM OF SMG, AND SHOULD THE
ADMINISTRATION NOT BE ABLE TO NEGOTIATE AN AGREEMENT WITH SMG,
AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE SECOND-RANKED FIRM,
GLOBAL SPECTRUM, L.P.
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.
• Proposed Base Management Fee = $275,000 (plus incentive which can equal 100% of the base
fee).
Funding is provided to the City by the selected proposer, per contract as follows:
• Capital contribution = $375,000
• Scholarship contribution = $ 10,000.
ANALYSIS
Convention Center
The City of Miami Beach has operated a Convention Center since 1958. The Convention Center was
expanded in 1968, in 1974, and was again expanded and totally renovated in 1987. Since that time, the City
has invested an additional $35 million in capital improvements to the City facilities. The Convention Center
currently has a pending list of capital improvements valued at approximately$16,600,000.
The Convention Center is approximately 1.1 million gross square feet, with approximately 502,000 square
feet of exhibition space. The FY 2007/08 operating budget for the Miami Beach Convention Center is
$9,502,883 (Convention Center operating budget does not include depreciation, management service fee,
or debt service); the Colony Theatre operating budget is $425,799; and the Byron Carlyle Theatre operating
budget is $312,215.
Management Agreement for operafion of the Convention Center.
On September 7, 1990, the City of Miami Beach issued a Request for Proposals (RFP) for the management
of the Miami Beach Convention Center (MBCC) and the Jackie Gleason Theatre of the Performing Arts
Commission Memorandum-RFP 20-07/08 -Management & Operation of the MBCC
July 16, 2008
Page 2 of 11
(TOPA). The contract was awarded to Spectacor Management Group (SMG). On December 19, 1990, the
City of Miami Beach entered into a Management Services Agreement with SMG for the management of the
MBCC and TOPA. The Agreement was for an initial term of three years, commencing on January 1, 1990,
and ending December 31, 1993. On June 30, 1993, the City exercised its option to extend the Agreement
for two successive one-year terms covering the period of January 1, 1994, through December 31, 1995.
On April 19, 1995, the City Commission approved the waiver of formal bidding procedures, thus extending
the Management Services Agreementwith SMG, and approving a newAgreementforthe period of October
1, 1995, through September 30, 1998.
On December 5, 1997, the City of Miami Beach issued Request for Proposals (RFP} No. 5-97!02, seeking
proposals from qualified firms for the management and operation of MBCC and/or TOPA. On April 1, 1998,
the City Commission adopted a Resolution authorizing the Administration to enter into negotiations with
SMG pursuant to the recommendation of the City Manager and the Evaluation Committee. On July 15,
1998, the Mayor and City Commission adopted Resolution 98-22850, authorizing execution of an
Agreement with SMG for three (3) years with two (2) one-year renewals. On September 5, 2001, the Mayor
and City Commission adopted Resolution No. 2001-24573, approving the two (2) one-year extensions
authorized by contract; these renewalsexpired on September 30, 2002.
On January 8, 2003, the Mayor and City Commission adopted Resolution No. 2003-25107, which authorized
the issuance of a RFP for the management and operation of (1}the MBCC and TOPA; or (2) TOPA only,
with an option to manage and market other City Cultural Facilities to include but not be limited to: the Byron-
CarlyleTheatre, the Rotunda, the Acorn Theatre, the Bandshell and/or the Colony Theatre. On October 15,
2003, the Mayor and City Commission approved Resolution No. 2003-25381, approving and authorizing the
Mayor and City Clerk to execute a Management Services Agreement between the City and SMG for the
management, promotion, and operation of the MBCC and TOPA. Subsequently, on July 28, 2004, the City
Commission approved Resolution No. 2004-25645, amending the Agreement between the City and SMG to
include additional management oversight of the Byron Carlyle Theatre, the Colony Theatre, and the Little
Stage Theatre. On May 10, 2006, the Mayor and City Commission approved Resolution No. 2006-26202,
approving Amendment No. 2 to the Agreement which exercised both one-year renewal options provided for
in the current Agreement, and further amended the incentive criteria and added termination provisions for
the TOPA. The final renewal term expires September 30, 2008. (Please note that Management of the
TOPA, renamed the Fillmore Miami Beach at the Jackie Gleason Theatre, was awarded to Live Nation June
2007 and SMG no longer manages that facilit)~
On February 13, 2008, the Mayor and City Commission approved the issuance of a Request for Proposals
(RFP) for the Management and Operation of the Miami Beach Convention Center, Colony Theatre and
Byron Carlyle Theatre (the "City facilities"), in anticipation of the pending expiration of the term of the current
management agreement for these City facilities.
The current management agreement provides for a base management fee, and an incentive fee that is
based on the management company achieving specific performance benchmarks (financial, customer
service, etc), but can be no more than the value of the base management fee. This incentive fee has been
amended during the most recent contract renewal to reflect the priorities established for the facility, which
were developed with the input of the Convention CenterAdvisory Board. The management company assists
in the development of an annual budget for the facility, as well as the capital budget. In addition, the
management company is required to monitor the food and beverage concession contract (current contract is
with Centerplate).
Convention Center Booking Process
The Convention Center booking is not solely managed by the convention center management company.
The City of Miami Beach has an Interlocal Agreement with the Greater Miami Convention and Visitors
Bureau (the"Bureau"}, for the joint promotion and booking of the Miami Beach Convention Center to the
Commission Memorandum- RFP 20-07/08 -Management & Operation of the MBCC
July 16, 2008
Page 3 of 11
convention, conference, and meeting market. All convention bookings are typically the direct result of the
Bureau, while the convention center management company may also identify potential convention
opportunities. These two entities work closely to identify opportunities, coordinate facility availability, and
promote the facility to potential users. The City of Miami Beach has an adopted booking policy for the Miami
Beach Convention Center that states that reservations for events occurring in more than twenty-four (24)
months are normally handled through the Bureau. As a result, the Convention Center management
company focuses on rental opportunities occurring within the next twenty-four (24) months. Most of this
short-term business is typically meetings, events, or consumer or trade shows. With a change to the
booking policy to allow social catering, the convention center Management Company also works closely with
the Food and Beverage concessionaire to promote the facility for social catering events.
Other managed facilities
The convention center management company has been responsible for management of the Colony and
Byron Carlyle theaters since July 28, 2004. This responsibility includes all day-to-day management,
including back of house operations and maintenance. Booking was added as an additional responsibility at
no additional charge to the City in November 2007 when the City's Cultural Facilities Manager resigned.
The Colony Theatre, located at 1040 Lincoln Road, first opened in 1934 as part of Paramount Pictures'
movie theater chain. The Colony was transformed into a performing arts theatre in 1986, and later added a
new lobby and a cafe. Now owned by the City of Miami Beach, the Colony has recently emerged from a
three-year, $6.5 million renovation/restoration. The interior now features a new, larger stage house,
additional lighting, and state-of-the-art theatrical rigging and sound systems. The completely refurbished
auditorium has a seating capacity of 440, which includes disabledaccessible seating.
The Byron Carlyle Theatre, located at 500 71st Street, originally opened in December 1968 as twin cinemas
hosting first run movies in the heart of north Miami Beach. In the mid-1970's, the Theatre was re-developed
into a multiplex cinema and continued to operate until it was sold by its owner, Wometco Enterprises, when
the City of Miami Beach purchased it for refurbishment as a performing arts venue. The Byron Carlyle
Theatre was purchased by the City of Miami Beach in 2002 for a price of $1.7 million dollars and was been
refurbished at a cost of $1.7 million dollars. The total seating capacity for the Theatre is 304, with 152 seats
in the orchestra level and 138 seats inthe mezzanine level, in addition to seating that is ADA accessible.
RFP SCOPE OF SERVICES
The Request for Proposals sought to identify a management company to be responsible for the complete
management and operation of the MBCC and the Colony and Byron Carlyle Theatres. The selected
proposer will furnish all management, supervision, labor, and services consistent with generally accepted
operations of afirst-class Convention Center and/or Theatre, and will be responsible for the maintenance of
the buildings and equipment; marketing of the facilities; management of various product and service
providers; coordination of facilities utilization; and scheduling.
The City has established certain goals and objectives to guide the management and operation of the City
facilities. In addition, the City has established specific standards of operation, which constitute a framework
for the management of the Facilities by a private management firm. The Scope of Services includes the
following sub-sections:
• Goals and Objectives
• Management
• Operation
• Maintenance and Repair
The City of Miami Beach will negotiate a management agreement with the selected proposer for an
Commission Memorandum- RFP 20-07/08 -Management & Operation of the MBCC
July 16, 2008
Page 4 of 11
agreement term of three (3) years, with an option for two (2) additional one-year periods, at the City's
discretion.
The selected proposer will coordinate its management and operation under the direction of the City
Manager of the City of Miami Beach, or his designee, and vull work closely with the following:
1. The City of Miami Beach Mayor and City Commission.
2. The Greater Miami Convention & Visitors Bureau.
3. The Miami Beach Convention Center Advisory Board. This Board acts in an advisory capacity to the
City Commission on matters regarding operations of the Convention Center.
4. City of Miami Beach Concession Contractors including
a. the exclusive Food and Beverage contractor that is the exclusive on-site contractor for all
catering and concession services at the Convention Center.
b. The exclusive on-site contractor for the Colony Theatre restaurant/cafe. Please note that a
Request for Proposals (RFP} has been issued for that facility.
c. The non-exclusive concessionaire at the Byron Carlyle Theatre (Please note that the
Commission agenda includes an item requesting approval to issue an RFP for the Comprehensive
Management and Operation of the Byron Carlyle Theater. The proposals received from that RFP will
be separately evaluated and may yield additional revenue for the City.)
5. The companies responsible for various maintenance contracts for equipment or other services
required for the Center and the Theatres (including labor groups).
6. Fillmore Miami Beach at the Jackie Gleason Theatre, managed and operated by Live Nation.
Goals and Objectives:
It is the goal of the City to develop and operate a high quality, state-of-the-art convention center to meet the
needs of conventions, trade shows, consumer shows, meetings and community events. The City
established multiple objectives that the proposers had to successfully address:
^ to efficiently operate the MBCC, while minimizing the net cost to the City;
^ to properly maintain and safeguard the City's capital investment in the facilities through the exercise
of the highest standards of maintenance and preservation and, as the need arises, make or
recommend capital improvements;
^ to control and minimize the amount of funding from the public sector through a strong financial
management system that controls spading and increases revenue;
^ manage day-to-day operations of the Convention Center in a cost efficient, high quality and effective
manner;
• to provide superior services to users of the Facilities and patrons and visitors attending events at the
facilities, thereby maximizing customer satisfaction as exhibited by an industry-wide positive image
of the Facilities and re-bookings;
^ achieve the greatest possible profit, consistent with other City objectives, including the primary
business goal of the facility, which is to generate incremental room nights;
^ actively to solicit, promote, or co-promote bookings in the theaters;
• to consider and implement innovative ways to generate revenue and penetrate new markets, attract
new events and promote the Convention Center and the Colony and Byron Carlyle Theatres to
maximize usage and financial returns;
^ create a comprehensive strategic plan for the future of the Convention Center, with a special
emphasis on marketing of the facilities;
• assist the City in the negotiation of various contracts and agreements involving facilities, products
and services related to the proposed Convention Center;
^ achieve all objectives with the least possible disruption to the City and its citizens;
^ achieve all objectives in a professional manner, consistent with best industry practices and all
applicable laws and ordinances;
^ work cooperatively with the Greater Miami Convention & Visitors Bureau (Bureau) in attracting
conventions, tradeshows and meetings to the Convention Center and Miami Beach hotels, and to
better compete in the domestic and international marketplace.
Commission Memorandum-RFP 20-07/08 -Management & Operation of the MBCC
July 16, 2008
Page 5 of 11
• provide input to the City and its consultants regarding the design of any expansion of the
convention;
• to respond to the ever-changing needs of the community and users of the facility with
recommendations for expansions, renovations and upgrades of services;
• to provide additional management and marketing expertise, if the City elects, for other City owned
cultural facilities and attain operational efficiencies; and
to procure all necessary on-site equipment and replacement items of major capital equipment in
accordance with the City Code.
The RFP delineated that the City is responsible for the following:
• to work in mutual accord with facility manager to ensure the highest quality of services and thereby
enhance the use thereof.
• to provide operating funds based on a budget created by the City and successful proposer and
approved by the City Commission.
• to provide, through the Bureau or selected marketing arm, an effective marketing program for events
outside of the 24 month current time frame.
• to provide Capital funding for renewal and replacement items for the existing Facilities, which
include the Miami Beach Convention Center and Colony and Byron CarlyleTheatres.
^ to provide all initial facilities in good working order and existing equipment (to be inventoried at time
of management agreement).
• to make periodic inspections of the facilities and equipment to determine that they are being
maintained in a neat and orderly condition by the convention center manager.
Management Requirements:
The selected proposer will manage and operate the City facilities in accordance with policies approved by
the City Manager. The selected proposer is responsible for all day-to-day functions and operations of the
City facilities, and will operate the facilities at all times in the public interest and in accordance with the
highest professional and ethical standards.
The selected proposer is responsible for recommending to the City all rates fees and charges for services
provided throughout the Facilities. The selected proposer's marketing responsibilities will consist primarily of
those activities performed to attract events within a current 24 month time frame. The selected proposer will
be responsible for performing public relations functions concerning the City Facilities and, when appropriate,
the facility manager will seek guidance and or approval by the City prior to releasing information or
responding to inquiries.
The selected proposer will establish proper operating and financial systems of controls forthe facilities. The
selected proposer will prepare and submit annual budgets for the City Facilities' operation. The selected
proposer will also establish a system of internal controls to provide reasonable assurance that the City
Facilities' resources are used in an effective and efficient manner. The managerwill keep full and accurate
accounting records relating to its activities at the facilities in accordance with generally accepted accounting
principles. The selected proposer's responsibility also encompasses preventive and remedial maintenance,
to include minor and emergency repairs. The selected proposer is further responsible for taking all actions
necessary to maintain the validity of all warranties and for ensuring that repairs to any part of the facility, its
equipment, or FF&E which is under warranty is accomplished under the warranty. They are required to
make any improvements in cleaning or maintenance methods as required by the City. Any expenditure for
capital improvements made by the selected proposer in any of the facilities must have prior written approval
by the City Manager, and Mayor and City Commission. At the conclusion of the term of the negotiated
agreement, the selected proposer is responsible for returning the facilities and FF&E to the City in the same
condition in which they were provided, except for normal wear and tear and depreciation.
The selected proposer will report and provide regular reports to the City Manager or designee
Commission Memorandum-RFP 20-07/08 -Management & Operation of the MBCC
July 7 6, 2008
Page 6 of 71
Operational Requirements:
The responsibilities of the selected proposer include such services as are needed to operate, manage,
maintain and promote the City facilities. The selected proposer will operate the facilities and provide all
services that are required under Lease Contracts between the City of Miami Beach and the event Lessees.
It is the intention of the City that service at the facility is of the highest quality attainable. The selected
proposerwill maintain the standard of operations, quality of service, maintenance and physical appearance
of the Facilities as a first class international convention and exhibition center. The selected proposer will
constantly endeavor to improve the operation of the facilities with a view toward developing the most
efficient and highest quality of service to the lessees, minimizing the cost to the City, increasing the quality
of maintenance and security, and maximizing gross receipts.
The City Facilities will be operated by the selected proposer personally or by a competent manager capable
of and empowered to conduct all normal day-to-day operations of the facilities and be responsive to the
desires and directives of the City in the areas of contract enforcement, scheduling, personnel relations, and
other matters pertinent to the operation of the facilities. It is expressly understood that the manager of the
facility will be located on site.
Maintenance and Repair
The selected proposer is responsible for preventative maintenance and maintenance and repair of all
facilities under the management and operation agreement. The physical facilities provided to the selected
proposer for the term of this agreement will become the responsibility of the selected proposer and will be
returned to the City upon completion of the contract agreement in the same condition in which they were
provided, except for normal wear and tear and depreciation. The interior, exterior, and infrastructure of the
physical facilities will be maintained by the selected proposer. This includes repairs, maintenance, and/or
renovations with the selected proposer being responsible for informing the City of degraded conditions and
assisting the City with minor and emergency repairs.
RFP PROCESS
RFP No. 20-07/08 was issued on February 22 2008, with an opening date of April 11, 2008. APre-Proposal
Meeting to provide information to firms submitting a proposal was held on March 13, 2008, which resulted in
the issuance of the following four (4) addenda: Addendum 1 -March 6, 2008; Addendum 2 -March 21,
2008; Addendum 3 -March 28, 2008; and Addendum 4 -April 7, 2008. RFP Depot issued bid notices to
2,206 prospective firms, while at least 66 prospective firms viewed the RFP documents. This resulted in the
receipt of the following two (2) proposals:
Global Spectrum, L.P.; and
SMG
The City Manager, via Letterto Commission (LTC) No. 146-2008, appointed an Evaluation Committee (the
"Committee") of nine members that convened on June 20, 2008, to evaluate, score, and rank thetwo (2)
responsive proposals. The Committee consisted of the following individuals:
• Fred Berens -Resident;
• Marlo Courtney- Goldman Properties and Ocean Drive Association;
• Alan Randolph -Resident;
• Carole Taran -Resident; Convention Center Advisory Board Vice-Chair; event planner
• Stuart Blumberg -Greater Miami & The Beaches Hotel Association;
• Jeffrey Lehman -Miami Beach Visitor and Convention Authority representative; hospitality industry
representative
• Jorge Gomez -City of Miami Beach Planning and Zoning Director,
• Rolando Aedo -Greater Miami Convention and Visitors Bureau; and
• Patricia Walker -City of Miami Beach Chief Financial Officer (Chairperson)
Commission Memorandum- RFP 20-07/08 -Management & Operation of the MBCC
July 76, 2008
Page 7 of 19
Gus Lopez, Procurement Director, provided guidance to the Committee relative to process and procedure in
evaluating proposals received from the two (2) firms. Max Sklar, Tourism & Cultural Development Director,
provided a brief background of the purpose and scope of services expected from the successfulfirm.
The Committee members based their recommendation on the following Evaluation Criteria stated in Section
IV of the RFP:
• Experience and Qualifications
• Quality of the Management Team
• Approach and Methodology
• Marketing Plan
• Fee Proposal
• Financial Stability
Scoring Weight: 20%
Scoring Weight: 20%
Scoring Weight: 15%
Scoring Weight: 15%
Scoring Weight: 20%
Scoring Weight: 10%
Both proposers were invited to make a presentation to the Committee.
The Committee's final scoring was as follows:
--
Firm Fred
Berens Stuart
Blumberg Marlo
Courtne Jorge
Gomez Carole
Taran
_ SMG 93 (1) _90 (1) 94 (1) _ 90 (2) 85_(1)
Global_Spectrum _89 (2} 75 (2) 89 (2) 91 (1) 75 (2)
Firm Jeffrey
Lehman
__. Alan
Randoleh Rolando
Aedo Patricia
Walker
__SMG _ __ ___
_ 84 (1 }
___.84_(1)
94 (1)_
. _.___
93 (1)
Global Spectrum 63 (2) 70 (2) _.
. _.
80 (2) _., _ __
88 (2)
Based on the scores and rankings of the Committee members, SMG received eight (8) first-place rankings
out of nine (9). Each Committee member explained their reasons for their selected top-ranked firm. Each
Committee member also confirmed for the record his or her approval of the rankings. A motion was made by
Fred Berens, and seconded by Jeffrey Lehman, to recommend to the City Manager to negotiate an
Agreement with the top-ranked firm of SMG, and to negotiate with the second-ranked firm, Global Spectrum
should negotiations with the top-ranked firm be unsuccessful.
The City Manager concurs with the Committee's recommendation, but has invited both firms to make a 10-
minute presentation to the Mayor and City Commission.
SMG
SMG has managed the Miami Beach Convention Center since 1991. Since that time, SMG has consistently
delivered strong financial performance in their management of the Convention Center, maintained the
facilities to a high level, as verified by independent reviews, and created a positive business environment
with organized labor in the City. In fact, in a study of nine (9) major convention centers done by a third-party
consultant, the MBCC ranked the lowest in staffing costs per dollar of revenue, at 47% below the average.
During SMG's management tenure, Facilities and Destinations Magazine has awarded the Miami Beach
Convention Center its `Prime Site Award' eleven times, including each year since 1998. Additionally, last
year, SMG garnered 27 Prime Site Awards for its managed venues. They have also developed a strong
local management team with five full-time Vice Presidents (with more than 150 years of combined
convention center management experience), and ten corporate regional managers (each with more than 15
Commission Memorandum- RFP 20-07/08 -Management & Operation of the MBCC
July 16, 2008
Page 8 of 11
years of industry experience).
SMG began in 1977 and currently is the leading convention center facility manager in the United States,
Canada, Puerto Rico, Mexico, England, Northern Ireland, China and Germany, with 212 facilities currently
under its management. Of the 212 facilities, sixty-four (64) are convention centers in active convention
cities, such as San Francisco, Denver, Houston, Salt Lake City, Honolulu, and Long Beach. They also have
a long term consulting contract with the Pennsylvania Convention Center in Philadelphia. Of the 64
convention centers SMG operates and manages, six (6) are of equal or greater size to the Miami Beach
Convention Center. SMG also has a strong international reach in Latin America (San Juan, Mexico City)
and now in Asia with the operation of the National Convention Center in Beijing, China
SMG also has the industry's only international convention center sales program and will be expanding their
co-op programs to include new advertising and tradeshow opportunities to capitalize on the national
association market, which has been a focus for the Miami Beach Convention Center. This, coupled with
their ability to supply prospects to the GMCVB from their proprietary database, gives them the ability to
create a referral network that has the potential to increase international bookings at the Convention Center
and, subsequently, generate additional revenues. SMG's growth into Latin America, with five major Centers
in the region, offers new opportunity for the Miami Beach Convention Center. The ability to develop a
cooperative relationship with other SMG venues in the region can prove beneficial to Miami Beach in
retaining a key position in the Latin American market. SMG's proposal focuses on this approach.
In addition to building upon SMG's Latin America presence, the proposal also includes other sales and
marketing initiatives geared toward increasing revenues. Those initiatives include, but are not limited, to the
following:
o Reinstate the Marketing Manager position to, among
through advertising and sponsorship;
o Produce new marketing collaterals;
o Implement Website enhancements;
o Implement Online ticket sales for public shows;
o Implement an integrated event booking program and
o Develop new meeting room business; and
o Coordinate an MBCC 50~h Anniversary Celebration.
other things, expand revenue opportunities
SITEPAS;
SMG's proposal included a detailed operating plan that covers quality, service and maintenance, with a
focus on maximizing efficiency and customer satisfaction, while minimizing operating deficits. In addition,
the plan also includes energy management and green initiatives in order to develop a sustainable
convention center and reduce operating costs designed to achieve LEEDS certification for the Center.
SMG's vision for the facility includes maintaining a strong presence in the trade and public show business,
which has experienced steady growth over that past five (5) years, and complements the facility's other
business. The renovations of the Fontainebleau and Eden Roc resorts will provide additional hotel room
inventory critical to the success of convention business in the next year. This allows SMG to further partner
with the GMCVB to solicit new, future business. Increasing meeting room and corporate business is also a
part of SMG's future vision of the facility and a key focus of their proposal. They propose to work closely
with the City to identify capital improvements that will make the facility competitive in today's market and
consistent with industry trends.
SMG's Fee Proposal was as follows:
o Base Management Fee: $275,000 per year; subject to annual CPI adjustments. This fee includes
the management of the Byron Carlyle and Colony theaters for no additional fee.
o Incentive Fee: SMG will work with the City to create an incentive fee structure that best meets the
City's needs and provides full flexibility, providing the City with ultimate discretion over SMG's
Commission Memorandum-RFP 20-07/08 -Management & Operation of the MBCC
July 76, 2008
Page 9 of 71
incentive fee. The total incentive fee available and/or awarded will not exceed the amount of its
Base Management Fee in any given year.
v Capital Investment: SMG will make a $375,000 capital contribution to be used for mutually agreed
upon projects the city deems necessary, which will be amortized on a straight-line, non-cash basis
over 5 years. SMG has also proposed an additional capital contribution of $375,000 in return forthe
City's agreement to allow the investment to be amortized over 10 years on a straight-line, non-cash
basis. Please note the subject RFP is for an initial term of three (3) years, with fwo (2) one-year
options.
n Scholarship Fund: SMG proposed to contribute $10,000 annually toward the City of Miami Beach
Tourism and Hospitality Scholarship Fund.
GLOBAL SPECTRUM
Global Spectrum began operations in 1994 as Globe FacilityServices, of Tampa, FL. In January 2000, a
majority interest in Globe Facility Services was acquired byComcast-Spectacor. Global Spectrum is among
the fastest growing venue management firms in the world, providing management and consulting services
for public assembly faalities.
Global Spectrum's parent company, Comcast-Spectacor, is the Philadelphia-based sports and
entertainment firm which owns the Philadelphia Flyers of the National Hockey League, the Philadelphia
76ers of the National Basketball Association, the Wachovia Center, the Wachovia Spectrum and Comcast
SportsNet. Comcast-Spectacor also owns Ovations Food Services, New Era Tickets and Front Row
Marketing Services.
Global Spectrum's proposal includes a partnership with Messe Schweiz, which is the Swiss exhibition group
that manages, operates and promotes Art Basel and Art Basel Miami Beach. The proposal describes
Messe Schweiz's role as one that provides support in overall management through their services on the
proposed Executive Management Committee. The Committee would meet quarterly to review all phases of
management, operation and marketing of the Center. The proposal also states that Messe Schweiz would
serve as a sales representative in Europe. Essentially, Global Spectrum would manage daily operations of
the Convention Center, and Messe Schweiz would serve in an advisory capacity and provide supplementary
marketing and sales resources in the international areas, specifically focused in Europe as well as Central
and South America and the Caribbean, and in targeted luxury-sector exhibition programs. As a large
exhibition organizer and event services provider, it is expected that Messe Schweiz would also assist in
enhancing customer service.
Although Global Spectrum is a fast growing company with a management team that has a combined
experience exceeding 100 years, the company currenlty only manages twenty-one (21) convention centers.
None of those facilities is of comparable size to the Miami Beach Convention Center; the largest managed
facility is the Duke Energy Center in Cincinnati, Ohio with 298,672 square feet of exhibition space, as
compared to 502,000 square feet of exhibition space at the MBCC. Global Spectrum's presentation did,
however, highlight potential cross-marketing benefits associated with their relationship with corporate
parent, Comcast-Spectacor, owned by the Comcast Corporation. In addition to potential marketing benefits,
other affiliated companies in the Comcast-Spectacor family of companies include companies that focus on
sponsorship development and sales, and in-house, customized ticketing.
Global Spectrum's proposal suggested they would be able to generate over a $1 million improvement to the
Convention Center's bottom line. According to their proposal, this would be achieved by booking 175 more
events days, primarily small social and corporate food and beverage oriented functions. The revenue shift
also includes proposed advertising signage and sponsorship sales, added event and other ancillary
revenue, and expense savings of approximately $100,000. This expense savings would be achieved
primarily through a reduction in the current labor force at the Convention Center of fourteen (14) employees.
Commission Memorandum- RFP 20-07/08 -Management & Operation of the MBCC
July 16, 2008
Page 10 of 11
This reduction primarily focused on employees in the operations and maintenance division of the Center's
operation, a concern with the utilization rates proposed and the known impact on the facility that such use
imposes from an upkeep perspective.
Global Spectrum's Fee Proposal was as follows:
n Base Management Fee: $280,000 per year; subject to annual CPI adjustments. This fee includes
the management of the Byron Carlyle and Colony theaters for no additional fee.
n Incentive Fee: The total incentive fee would be capped at an amount equal to the fixed fee in any
given contract year. Sixty percent (60%) of the incentive fee would be determined quantitatively by
paying Global Spectrum twenty percent (20%) of the gross revenue generated each contract year
from the MBCC and the Theaters overthe verified average of the last three completed fiscal years.
The remaining forty percent (40%) of the incentive fee potential would be determined qualitatively
and awarded solely at the City's discretion based upon Global Spectrum's performance in the
following suggested areas:
• Up to twenty percent (20%) of overall financial responsibility including ability to meet the
City's financial objectives for budget control, financial reporting, reduced subsidies and
balancing financial consideration with the broader economic interests of the City.
• Up to ten percent (10%) shall be awarded based upon the results from customer satisfaction
survey results.
• Up to five percent (5%) shall be awarded based on Global Spectrum's successful marketing
and promotion of the three (3) managed facilities.
• Up to five percent (5%) shall be awarded based upon Global Spectrum's care and custody
of the City's facilities, including facility maintenance, energy conservation, greening
initiatives, technology upgrades, and capital improvements program.
o Capital Investment: Global Spectrum will make a $350,000 capital contribution payable to the City
for the Convention Center. This contribution will be amortized on a non-cash basis over five (5) year
term of the management agreement. Global Spectrum has also offered the City an additional
$350,000 capital loan to help fund mutually agreed revenue generating improvements. Repayment
of the loan would be at the amount of $87,000 (principal and interest) per year for five years.
v Scholarship Fund: Global Spectrum proposed to contribute $12,500 annually toward the City of
Miami Beach Tourism and Hospitality Scholarship Fund.
CONCLUSION
Both SMG and Global Spectrum are industry leaders and presented strong proposals. Each entity proposed
expanding their outreach for potential venue users to international markets, with SMG using their unique
international sales program, while Global Spectrum partnered with Messe Schweiz, who is known for their
success in European event production. However, in their consideration of the proposals, and in making a
unanimous recommendation for SMG, the Committee members focused on, among other things: SMG's
greaterexperience inmanaging and operating larger and/or comparable convention centerfacilities; SMG's
lower base management fee; SMG's greater capital investment; and concerns that Global Spectrum's
proposal to reduce maintenance staff while proposing additional bookings would impact facility
maintenance.
SMG has a positive history inefficiently managing the Miami Beach Convention Center, with consistently
high customer satisfaction survey results and performance reviews. Independent reviews of the
maintenance of the facility have been consistently good or excellent under SMG's management. The
Convention Center's utilization rates under SMG's management have been steady, with recent high
utilization rates that are considered optimal based on industry standards. The extensive national and
international network of SMG-managed facilities provides additional opportunities for new or expanded
business. They have also been involved with major expansion projects at facilities they manage.
Commission Memorandum-RFP 20-07/08 -Management & Operation of the MBCC
July 16, 2008
Page 11 of 11
Based on the aforementioned, the Administration recommends that the Mayor and City Commission accept
the recommendation of the City Manager pursuant to Request for Proposals (RFP) No. 20-07/08, for the
Management and Operation of the Miami Beach Convention Center, Colony Theatre and Byron Carlyle
Theatre, and authorize the Administration to enter into negotiations with the top-ranked firm of SMG, and
should the Administration not be able to negotiate an agreement with SMG, authorizing the Administration to
negotiate with the second-ranked firm, Global Spectrum, L.P.
T:IAGENDA120081Ju1y 161RegularlRevised 20 RFP 20-07-08 -Convention Center MEMO (2).doc