The Pennsylvania Convention Center Authority board will hold a special meeting in two weeks to determine whether all management of the center will be outsourced.
During Wednesday’s board meeting, PCCA Chairman Gregory J. Fox said the authority is reviewing outsourcing management of the center because of concerns about sales of meetings and conventions to fill the center for 2015 and 2016.
“The issue is, we’re in a very competitive environment in terms of bookings. The booking reports for future years are not where we would want them to be. The question is can that issue be at least partially alleviated through private management, as opposed to public management,” said Fox.
Last year, PCCA awarded a consulting-services contract to Public Financial Management Inc., to study privatizing or outsourcing the center’s management.
Board member Ryan Boyer raised questions about the viability of outsourcing management.
“The biggest problem is the problem of labor relations - and the labor broker is a private manager, so privatization hasn’t worked so far, so why would we double down on privatization when it hasn’t worked in the labor scope?” Boyer told the Tribune.
Heather Steinmiller said she opposes privatization because many of center’s problems stem from labor concerns and sales – two areas that have already been contracted out. Steinmiller said PCC customers have identified the center’s inability to deliver cost-effective labor as a problem. The labor situation has been hampering efforts to book potential conventions.
“There are men and women whose livelihoods depend on this building. There is a real urgency in addressing the problems that are preventing us from filling this building,” Steinmiller said in an interview with the Tribune.
The convention center impacts Philadelphia’s hospitality workforce of about 50,000.
Jack Ferguson, president and CEO of the Pennsylvania Convention and Visitors Bureau said labor commitments made with PCC customers are not being honored.
“The challenges for Philadelphia have been with the promises that were delivered in the center – regardless of what they are,” Ferguson told the board members.
The upcoming vote on whether to outsource management is likely to split along partisan lines with the Republican majority of the board in favor.
The possibility of outsourcing center management comes as Gov. Tom Corbett’s administration has undertaken efforts to privatize the Pennsylvania state lottery and liquor stores.
During the meeting, the PCCA board voted to ban the Carpenter’s Union from working in the center unless they comply with the center’s drug-free workplace policy. The drug-free policy, which was adopted in March 2011, requires everyone working in convention center to report for drug and or/alcohol testing in accordance with state law. All of the unions signed an agreement indicating compliance with the policy.
Testing went into effect on Jan. 7. The board said staff and members of the other five unions have all undergone drug testing in recent weeks, however, the Carpenter’s Union has not complied.
The PCCA board passed a resolution calling for all labor unions to comply with the policy by Saturday or risk being barred from working in the center.
Ed Coryell, head of the Carpenters Union, did not return calls seeking comment as of the Tribune’s deadline.
During the board’s discussion, members said labor supplier Elliot-Lewis should be held more accountable.
The Pennsylvania Convention Center Authority board of directors voted to seek proposals for privatizing the management of the center.
“Our goal is to ensure the newly expanded Pennsylvania Convention Center meets its full potential as an economic driver for the city of Philadelphia, the region and the state,” said PCCA Chairman Gregory J. Fox.
“We look forward to reviewing proposals from the industry’s leading building managers on how they would improve cost and service issues, and place the center in a position where we will compete more effectively for major shows, meetings and conventions.”
A news release issued by PCCA said that Fox was concerned about lagging bookings for 2014, 2015 and future years.
“We need to look to the future and fulfill the economic promise of the newly expanded center for our industry partners, stakeholders and taxpayers,” said Fox.
During Thursday’s meeting, the board voted 13-1 to approve the measure. Board member Ryan Boyer was absent for the meeting. Heather Steinmiller was the only member who voted no.
“I’m afraid that this RFP is going to confuse the marketplace and also confuse the union partners that we have in the building on what the future will hold for them,” Steinmiller said during the meeting.
“We are in a crisis in this building. We need to make immediate changes, but I think this is not the change that is necessary. I think that we need to get serious about negotiating with our unions and holding people accountable that deliver services in this building. We are currently 85 percent privately managed - the problem is not who’s doing it, it’s that we don’t hold those contractors accountable and that’s why I’m voting against this RFP,” said Steinmiller.
Fox said it’s too soon to determine how the role of PCCA President and CEO Ahmeenah Young would be impacted. Young was out of town and not available to comment on the board’s decision by The Tribune’s deadline.
Last summer, the Greater Philadelphia Hotel Association (GPHA) wrote a letter to the PCCA board saying that the convention center’s costs and customer experiences need to vastly improve or else the city’s hotel industry would be adversely impacted.
“The convention business is critical to the success of our hotels and unfortunately our convention booking base in upcoming years is behind target. We are already seeing some conventions cancel as a result of dissatisfaction with the convention center,” GPHA Executive Director Ed Grose told The Tribune.
“We are very happy that they are looking at ways to fix it and we look forward to seeing what the results are. We depend on that center. The convention center is an economic engine for the city and provides lots of jobs. The Philadelphia hotels agreed to raise their hotel tax to get the convention center expanded and we need to see a return on that investment.”
The facility impacts the region’s hospitality workforce of about 50,000.
“Convention business is critical to those employed in the travel industry who live in every neighborhood in the city,” said Jack Ferguson, president & CEO of the Philadelphia Convention and Visitors Bureau, the long-terms sales and marketing arm for the convention center.
“There is much at stake for our customers and we applaud the PCCA board of directors for exploring ways to improve the customer experience, so that the engine of our industry can deliver its greatest economic impact for the city and the commonwealth.”
The board plans to formally issue the RFP in mid-March with a deadline for the submission of proposals in early May. If the board approves the award of a contract for private management of, a contract could be signed by the end of June.
Last August, the board voted to examine other options for operating the center. The board hired Public Financial Management, Inc. of Philadelphia to assist in reviewing responses to privatize certain functions of the center.