The latest fight over the Fresno Convention Center appears headed to an amicable end.
The Fresno City Council on Thursday morning approved four pages of proposed amendments to the contract with center manager SMG.
The amendments will serve as a guideline to City Attorney Doug Sloan, who is charged with negotiating a formal deal with SMG officials. The council is expected to vote on Sloan's handiwork on Nov. 7.
The amended deal, if approved, would be effective Jan. 1.
Council Member Lee Brand, who led the months-long negotiation with the Philadelphia-based company, said SMG executives and City Manager Bruce Rudd have expressed tentative satisfaction with the changes.
The council decision was unanimous, though Council Member Sal Quintero made it clear he didn't like receiving the term sheet and accompanying report at the last minute. Brand and Rudd apologized, saying talks with SMG went into Wednesday evening.
The council, Brand in particular, has worried about the city-owned Convention Center's operations for several years.
The nearly 50-year-old facility was never intended to be a money-maker. City officials in the 1960s built it to serve as an economic spark to downtown and a gathering place for community activities. Taxpayer subsidies have always been part of the plan.
But the city's recent budget woes combined with a persistently hefty subsidy (as much as $8 million a year, including a big debt service) goaded Brand into taking a closer look at center operations and the SMG contract.
SMG has managed the four-building center since 2004. Its contract ends in 2019. Brand, chairman of the council's Finance and Audit Committee, convinced his colleagues to let the three-member group dig into convention center details.
Those details were complex, ranging from the size of employee compensation to growing competition in the local entertainment/meeting world. The city's goal was to reduce the taxpayer subsidy, whether by cutting center expenses or boosting center revenues.
Brand at one point wondered if the best course would be to cancel the SMG contract. He said the company broke the deal by failing to meet its budget benchmark. This drew veiled threats of legal action from SMG.
Thursday's action all but buried the hatchet.
Among the term sheet's proposals:
- A $50,000 annual cut in SMG's management fee.
- A 5% cut in SMG's employee-related expenses.
- Creation of an advisory board to oversee convention center operations that includes city officials and executives from the local entertainment/meeting industry.
- Increased efforts to sell naming rights on center buildings and generate more concerts.
Brand said the cost-cutting and money-makers could produce $500,000 to $1 million a year. He recommends that the money, at least for five or so years, be reinvested in a center showing its age.
Brand said his goal is to "make the convention center a first-class facility that can compete in the marketplace."
Convention Center General Manager Bill Overfelt said SMG is "happy with the terms."
City Hall hair-pulling over the convention center is hardly new. Just getting government officials and the public to agree to build it required years of often-angry debate. It was the same scenario each time the council over the years wanted to borrow millions to remodel or expand the center. The effort a decade ago by then-Mayor Alan Autry to outsource the center's day-to-day control to SMG caused a minor civil war.
The reporter can be reached at (559) 441-6272 or firstname.lastname@example.org. Read his City Beat blog at news.fresnobeehive.com/city-beat.