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 has hired a private management firm.
The PCCA board voted on Wednesday to select SMG to manage the center’s operations.
Based in West Conshohocken, SMG is regarded as a world leader in venue management. The firm has more than 30 years of managing 200 facilities and 70 convention centers.
“The Pennsylvania Convention Center Authority looks forward to working with SMG to enhance the experience of our customers and increase the number of events we host on an annual basis, which will have a significant impact on the Philadelphia region’s economy,” PCCA Chairman Gregory J. Fox said in a press release.
“The meetings and convention industry has become much more competitive in recent years which is why we are undertaking a number of strategic initiatives designed to improve our ability to compete with other venues on a national and international level.”
Fox said the decision to bring in a firm to privately manage and operate the Pennsylvania Convention Center is the first step in a targeted effort to modernize operations, reduce costs and improve future bookings at the center.
“The staff is firmly committed to the success of the Pennsylvania Convention Center and to the positive economic growth of the city and the region through job development and entrepreneurial opportunities,” said Ahmeenah Young, PCCA president and CEO.
The center has seen a slump in booking for large conventions and shows and has been plagued by labor union issues.
SMG has extensive experience working with organized labor in Pittsburgh, Providence, Chicago and Detroit.
“We see collective bargaining units around the country as business partners. There are two sides to any business relationship and we really need sort of a philosophy of constructive engagement. One of the best things about Philadelphia and about labor is that we have an incredibly skilled and capable workforce here in Philadelphia which is critical to the success of the center,” said Gregg Caren, senior vice president, strategic business development, SMG.
“The key for us will be to really address the factors that will really drive exhibitors and shows back to Philadelphia and give people less reason to consider any obstacles to doing business here. At the end of the day, if the focus is on the customer and running it like a business, then there has got to be a positive way forward for management and labor.”
Caren said SMG has partnered with Synterra Ltd., which is a minority-owned firm headed by Bill Wilson, to assist its efforts in recruitment, training, purchasing and subcontracting for the Pennsylvania Convention Center.
“Bill and his group already have a team established that has shown a proven value to the community in making sure that any projects — whether it’s a short term or long-term project — reflects the diversity of the community,” said Caren.
Caren said SMG has beat national averages within the hospitality industry for diversity on every level in the facilities it manages.
By bringing in a private management firm with extensive experience managing and operating convention centers across the country, the authority is looking to SMG to implement industry best practices, achieve operational cost savings and enhance the center’s ability to compete with other major facilities in the increasingly competitive trade show and convention industry.
SMG will assume responsibility for managing the operations of the Pennsylvania Convention Center within the next three to four months. SMG was awarded the contract over Global Spectrum, a subsidiary of Comcast Spectacor.
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.
The work stoppage at the Pennsylvania Convention Center has ended.
Trade union members who went on strike over proposed work rules, reached an agreement with the center’s officials Thursday night. The union members returned to work Friday morning.
Elliott-Lewis, the center’s labor supplier and the labor unions agreed to a one-year collective bargaining agreement extension. The settlement includes a 2.5 percent raise for one year and the extension of a customer-satisfaction agreement between the unions.
“I am very optimistic about the dialogue between the center, SMG and the labor unions that emerged during these negotiations,” Pennsylvania Convention Center Authority board chairman Gregory Fox, said in a statement announcing the agreement.
“I believe we all share the same goal of working cooperatively together to deliver our customers the best possible experience and make the center successful.”
The agreement enabled the convention center to save the American Association of Diabetes Educators convention which will have a $22 million economic impact for the region.
“Organized labor has stated that they look forward to working with SMG as the convention center’s contracted management firm and ensuring the success of the center as an economic driver in the city and region,” said Fox.
“Building on the progress that has been made, SMG and union leadership have established a standing committee comprised of each respective Union’s principal to work together to ensure the Center accomplishes transparency and provides an excellent experience for its customers.”
The strike got underway Thursday morning after Carpenters Union President Ed Coryell Sr. allegedly walked out of negotiations and ordered his union to strike. The carpenters, stagehands, teamsters and riggers unions opted to strike. The electricians union honored the picket line. The strike got underway just as the American Association of Diabetes Educators were setting up for a convention that will be held August 6-10.
Coryell did not return calls seeking comment as of the Tribune’s deadline. Coryell was appointed to the convention center board last month. He took the seat controlled by Democrats in the Pennsylvania State Senate.
The strike came at a time when the center has faced labor issues and a dwindling number of convention bookings for future years.
Thursday’s strike had come at a complete surprise to the center’s management, “which has been acting in a good-faith effort to generate increased work opportunities for union members by attracting more shows and conventions to our facility,” Fox said in a written statement before the agreement was reached.
The center board voted in June to hire SMG, a West Conshohocken–based management group to take over the center’s managerial functions. The decision was the first step in a targeted effort to improve future bookings at the center, reduce costs and modernize operations.