Decision nearer on private Convention Center role

SMG and Global Spectrum are vying for the contract to manage the Convention Center's functions.
SMG and Global Spectrum are vying for the contract to manage the Convention Center's functions. (TOM GRALISH / Staff Photographer)
Posted: May 04, 2013

In the last 30 months, five U.S. cities have turned to private management companies to run their respective convention centers, among them Detroit and Chicago.

Philadelphia and Los Angeles are now looking to do the same.

Requests for proposals to manage the Convention Center are due at 5 p.m. Friday.

Turning to privatization to handle key convention center functions has everything to do with the need to run these complexes as if they were five-star hotels, said some industry experts.

Two regional companies, SMG, of Conshohocken, and Global Spectrum, of Philadelphia, are going head to head to win the contract. Formerly one company, they have been rivals to manage centers in several other cities.

Managing the local facility, where the Pennsylvania Convention Center Authority management, hoteliers, and labor groups have battled fiercely, could be a grueling assignment.

The Customer Satisfaction Agreement between the PCCA and unions, which is meant to define work rules, assure service, and define expenses for conventions that come here, expires June 30.

"We need to start fresh, take the politics out of the center, and continue to live by the rules that are negotiated," said John "Johnny Doc" Dougherty, business manager of the International Brotherhood of Electrical Workers Local 98.

The Greater Philadelphia Hotel Association and the labor groups feuded in 2012 regarding why the city was losing out with key convention groups or not retaining those that had booked for the first time. The hoteliers blamed high labor costs and poor customer experience, while labor pointed the finger at the center's management, led by president and CEO Ahmeenah Young.

It is uncertain how hiring a private manager would affect Young and her role.

"The key is finding the best operations management model for the Convention Center," said PCCA board chairman Greg Fox, "and an important part of that is clearly a movement toward exceptional hospitality service."

Fox said a working group of board members would review the bids. Oral presentations by the competitors will be later in May.

On June 5, the PCCA board will hold a public meeting and vote on whether to hire a private manager. If the decision is to hire, the board will then select between the bidders.

Fox ticked off seven criteria that will be used in evaluating the bidders: experience and qualifications in managing and operating centers similar to the Convention Center; experience and qualifications of the proposed management team; approach and methodology; fee proposal; references; financial capability and stability; and overall plan for physical maintenance of the facility.

Jim Gratton, president of the 91-member hotel association, said: "It should be noted that many other large convention cities . . . are privately managed, and we commend the PCCA board and chairman Fox for exploring this option."

Jack Ferguson, CEO of the Philadelphia Convention and Visitors Bureau, said he was supportive of "whatever it takes to deliver a cost-effective and hassle-free environment."

SMG has managed San Francisco's Moscone Center since 1981, and was selected three years ago for Chicago's McCormick Place. SMG manages 70 convention centers in North America.

Global Spectrum manages 31, including in Cleveland and Hartford, Conn. It counts the 502,000-square-foot Miami Beach Convention Center as the largest in its portfolio.

"These facilities are charged every day with a delicate balance of maximizing revenues, controlling expenses, and at the same time delivering a high level of service," said Gregg Caren, SMG's senior vice president and head of strategic business development. "There are absolute parallels to the hospitality industry."

Peter A. Luukko, president and chief operating officer of Comcast-Spectacor and chairman of Global Spectrum, said it's about "delivering the goods."

"When something's not working ... everybody's at fault and have to find a way to work together and put their egos away," Luukko said.

Center CEO Young said Thursday: "Our staff remains focused on our customers as the board of directors evaluates proposals for the Convention Center."


Contact Suzette Parmley at 215-854-2855, sparmley@phillynews.com, or on Twitter @SuzParmley.

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