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HomeMy WebLinkAbout3B - PresentationCity Council Staff ReportConvention Center ManagerMay 28, 2025Office of Economic Development and Procurement PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT RECOMMENDATION 1.Authorize staff to enter into contract negotiations with Global Spectrum LLC dba OVG360 for convention center and tourism management services; 2.Authorize the City Manager to transfer subcontracted services for the Palm Springs Convention Center Agreement for Tourism and Management Services from AEG to the City, and execute Assignment, Assumption, & Consent Agreements as needed. PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT OVERVIEW Management Services: Palm Springs Convention Center (PSCC), Visitor Center, Welwood Murray Memorial Library (WMM), and Bureau of Tourism (BoT) Goals: Increase exposure as a world-class leisure and business destination, create awareness, and educate visitors PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT BACKGROUND Opened: 1970s, expanded in 2005 Facilities: 92,500 sq ft exhibit space, 20,000 sq ft ballroom, 15,000 sq ft meeting space Adjacent Hotels: 410-room Renaissance Hotel with additional meeting spaces PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT BACKGROUND Current Agreement: ASM Global (via AEG) Extension: COVID extension on May 6, 2021, extending through 2025 Expiration: September 27, 2025 PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT RFP DEVELOPMENT: Authorization: Council authorized RFP issuance on October 10, 2024 Team: City staff, Conventional Wisdom, Best Best & Krieger (BBK) RFP Issued: March 17, 2025 Responses received by: April 23, 2025 Proposals Received: ASM Global Convention Center Management LLC & Global Spectrum LLC dba OVG360 (Oak View Group) PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT REVIEW PROCESS Evaluation Committee: City staff and external members Submittal: Based on proposals and interviews held in person Process: Interview panel met throughout the process and advised by consulting team Panel Recommendation: Authorize contract negotiations with Global Spectrum LLC dba OVG360 PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT SELECTION: A word from Visit Greater Palm Springs: “The convention center remains a driving force for jobs, economic growth, and city revenue. As we move forward with the Oak View Group 360 team, we are optimistic about the expertise and positive industry reputation they bring, including their success at Acrisure Arena and their innovative approach to customer service. This is a pivotal moment for the convention center as the city undertakes important steps to modernize this essential facility. Tourism continues to be the leading industry for our valley and the City of Palm Springs, generating over $9 billion in economic impact and enhancing the quality of life across the region. We look forward to continued collaboration as the convention center enters this exciting new chapter.” -Scott White, CEO, Greater Palm Springs PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT Retained Features From Current Agreement: •Base Management Fee •Variable Incentive Fee based on performance factors •Capital Contribution by facility management (FM) company •All employees work for facility management company •FM 100% responsible for sales and marketing of Facility •FM controls booking calendar for all dates and spaces •FM Identifies capital needs as part of budgeting process PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT New Contract Performance Goals: •Increase Occupancy Establish and measure occupancy goals Prioritize events bringing economic impact •Build revenues through increased event activity Economies of scale PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT New Contract Performance Goals: •Measurable and Verifiable Incentive Fee Targets Fiscal performance and future bookings User surveys – facilities, staff, vendors, destination Maintenance, repairs, improvements & upgrades to City Assets PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT Evaluation Committee’s Observation: •Identified four new markets to build occupancy •Provided a marketing plan to attract quickly new and short- term business •Example facilities runs with an operating profit •Example facilities works jointly with its local DMO PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT Evaluation Committee’s Observation: •Example facilities competes within a high-occupancy/high- rate visitor and tourism season like Palm Springs •Discussed a potential new market to fill “shoulder” seasons •Provided examples of how occupancy was improved •Example facility is largest convention venue in a large population center PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT Begin Negotiations City Council Final Approval July 2025 Execute Contract Begin Transition Plan Contract Begins September 28, 2025 TRANSITION: PALM SPRINGS CONVENTION CENTERMANAGEMENT AGREEMENT