HomeMy WebLinkAboutItem 3B - Presentation (Part 1)City Council Meeting | Monday, July 21, 2025
Office of Economic Development and Procurement
Palm Springs Convention Center
Management Agreement
Presentation Summary
OVG Transition03 ●Implementation timeline
●Staffing plans
●Service continuity measures
Contract Overview02 ●Detailed terms
●Compensation structure
●Capital investments
●Operational requirements
Background01 ●Current management agreement
●O&M RFP process
●Selection criteria & rationale
Section I. Background
Staff Recommendation
1)Approve Contract Services Agreement No. 25P206 with Oak View Group
for convention center and tourism management services
●Base amount: $1,442,500 plus applicable incentive fees
●Not-to-exceed amount: $3,606,250
●Initial five-year term: September 28, 2025 -September 27, 2030
●One five-year extension option by mutual agreement
1)Authorize the City Manager or their designee to execute all necessary
documents, including assignment agreements, subject to confirming and
clarifying changes acceptable to the City Manager and City Attorney
Management Scope
Facilities Under Management
●Palm Springs Convention Center
(PSCC)
●Visitor Center
●Welwood Murray Memorial
Library (WMML)
●Bureau of Tourism (BoT)
Strategic Goals
●Increase exposure as a world-class
leisure and business destination
●Create awareness of Palm Springs'
unique offerings
●Educate visitors about local
attractions and amenities
●Drive economic impact through
tourism and events
Management Background
Current Agreement COVID Extension Approaching Expiration
ASM Global (via AEG)
currently manages the
Convention Center and
related properties
On May 6, 2021, the City
Council approved an
extension of the ASM Global
contract through 2025 due to
pandemic disruptions
Current contract expires on
September 27, 2025,
necessitating action for
continued professional
management
Selection Process
RFP Issued
-Request for Proposals issued in March 2025 for convention center and
tourism management services
Evaluation
-Two respondents: ASM Global and Oak View Group (OVG)
-Thorough evaluation of proposals, presentations, and qualifications
Authorization
-Staff recommended Oak View Group
-City Council authorized negotiations with OVG in May 2025
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Section II. Contract Overview
Scope of Work (Section 2.1)
Visitor Services
Operation of Welwood
Murray Memorial Library
and the Visitor Center
●Staffing and
programming
●Visitor resources and
information
●Community
engagement
Convention Center Operations
Complete operation and
maintenance of the Convention
Center building and related
exterior grounds
●Facility management
●Event booking and
coordination
●Maintenance and repairs
●Marketing and promotion
Bureau of Tourism
Management and oversight
of Visit Palm Springs tourism
operations
●Destination marketing
●Tourist information
services
●Stakeholder
coordination
Contract Terms (Section 3)
Initial Term
●The initial agreement will run for five
years, beginning on September 28,
2025, and continuing through
September 27, 2030.
●This timeframe provides stability for
operations while allowing periodic
evaluation of performance.
Extension Option
The contract includes one five-year
extension option that can be exercised:
●At the request of the City
●By mutual agreement with OVG
●Based on performance during initial
term
Compensation Structure (Section 28)
Base fee starts at $250,000 annually with a fixed annual increase of $19,250 beginning in year 2. Performance
incentives can reach up to 150% of the base fee, creating a performance-driven compensation structure.
Capital Investment (Section 4)
Total Capital Contribution
Transition Services
For smooth handover from
current operator
Over the initial five-year term
Year 2 Investment
By the first anniversary of
Effective Date
Initial Investment
Within 15 days of the Effective
Date
$1.8M
$300K$1.2M $300K
City Use Provisions (Section 18)
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Palm Springs
International Film
Festival
Well in the Desert
and FIND Food
Distributions
City Council meetings
or other governmental
purposes as needed
City of Palm Springs
Shredding and E-
Waste Events
Non-Profit Use (Exhibit G)
Guiding Principles
Local and community non-profits' use
of the facilities will be based on the
principles outlined in Exhibit G of the
Agreement, ensuring balanced access
while maintaining financial
sustainability.
Scheduling Protocol
●Events must be scheduled within 12
months or less of the planned date
●Dates become set within 3 months
of the event
●Exceptions require City Manager
approval based on financial
justification
Bureau of Tourism Budget (Section 26(A)(9))
The agreement establishes a total budget of
$2,650,000* for the Palm Springs Bureau of
Tourism (Visit Palm Springs):
●$2,100,000* allocated for marketing
campaigns, promotions, and
advertising
●$550,000* dedicated to management
and operations of the Visitor Center
and Welwood Murray Memorial Library
*Will be updated relative to the 25-26 budget
Bureau of Tourism Operations (Section 26(A)(9))
Library Collaboration
-Staffing of Welwood
Murray Memorial Library
in coordination with the
City’s library department
-Integration of tourist
information with historical
and cultural resources
Leadership Structure
-Director of Tourism will be
an employee of Visit Greater
Palm Springs and create an
advisory committee
-Final interviews for this
position are scheduled for
the end of July
-Director will oversee all
tourism promotion activities
Visitor Center
-OVG responsible for
programming and staffing
the Visitor Center
-Focus on creating engaging
visitor experiences
-Serving as the front-line
information resource for
tourists
Vendor Contracts (Section 7)
Interim
Assumption Existing contracts between current manager (ASM Global) and
vendors will be temporarily assumed by the City during transition
Joint
Evaluation The City and OVG will collaboratively evaluate each contract for
continuity, value, and alignment with future goals
Case-by-Case Decisions Based on evaluation, City may either continue to hold
contracts or assign them to OVG for extension or renegotiation
Future Procurement Going forward, OVG will procure, manage, and
administer contracts on behalf of the City
PSCC Employees (Section 23(a-c))
Hiring Process
OVG will share information about their hiring
process, including:
●Transition plans for current employees
●Recruitment strategies for any new
positions
●Training and development programs
●Wage and benefit structures
Labor Harmony Agreement (Section 23(d))
Collaborative Development
Labor harmony language was
developed in consultation with:
●Inland Empire Labor
Council, AFL-CIO
●International Alliance of
Theatrical Stage Employees
(IATSE) Local 122
Performance Incentives
Incentive Structure
The contract includes performance-
based incentives with a potential
maximum value of 150% of the Base
Fee:
●Year 1: Up to $375,000
●Increases proportionally with
base fee in subsequent years
Performance Categories
Incentives are tied to measurable
outcomes in two categories:
●Quantitative Metrics:Occupancy
rates, revenue targets, and financial
performance
●Qualitative Metrics:Customer
satisfaction, community
engagement, and service quality
Incentive Breakdown
Quantitative
Metrics
Up to $225,000 in Year 1
60%
Qualitative
Metrics
Up to $150,000 in Year 1
40%
●Client Survey -up to $56,250
●Asset Inspection -up to $37,500
●Construction Coordination –up to $18,750
●Annual Business Plan –up to $37,750
●Gross Revenue -up to $150,000
●Facility Occupancy -up to
$75,000
Total Possible Earnings (Years 1-5)
Base fee starts at $250,000 annually with a fixed annual increase of $19,250 beginning in year 2. Performance
incentives can reach up to 150% of the base fee, creating a performance-driven compensation structure.
Section III. OVG Transition
OVG Introduction
Next, we welcome representatives from
Oak View Group to provide information on:
1.Their strategic vision for enhancing
convention center operations
2.Specific plans for the transition period
Transition Timeline
July 2025
City Council Final Approval and Contract Execution
July-September 2025
60-day Transition Period with knowledge transfer, staff interviews,
and operational planning
September 28, 2025
Contract Effective Date with OVG assuming full operational control
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