Friday, July 31, 2015

SMG leads Comcast unit in race to run Philly's Pa. Convention Center

Suburban, GOP votes favor a privately-run Convention Center

SMG leads Comcast unit in race to run Philly's Pa. Convention Center

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Signage and exterior of the Arch St. side of the expansion of the Pa. Convention Center, Feb. 21, 2011. (David M Warren / Staff Photographer)
Signage and exterior of the Arch St. side of the expansion of the Pa. Convention Center, Feb. 21, 2011. (David M Warren / Staff Photographer) DAVID M WARREN / Inquirer

 

It's not a done deal, and the Pennsylvania Convention Center board's next formal meeting isn't until June 5, but members of the bipartisan "study group" of board members who have been reviewing proposals for private managers to take over the management of the Pennsylvania Convention Center, have told other board members they are leaning toward supporting SMG, the West Conshocken-based manager of the convention centers in Chicago, Detroit and other big cities, over rival Comcast Spectacor's Global Spectrum, which manages the Wells Fargo Center in South Philadelphia and other sports and resort city facilities.
Directors Joshua Shapiro, the Democratic chairman of the Montgomery County commissioners; Greg Fox, the Philadelphia attorney and Republican who chairs the Convention Center board; John McNichol, a Delaware County Republican and member of the Harrisburg lobbying firm Greenlee Partners; and Marian Tasco, a Democrat and Philadelphia City Councilwoman, have been active in the study group, which has delved into presentations by the two groups last week and financial materials submitted afterwards to board advisor Public Financial Management of Philadelphia.
At a meeting Wednesday, members of the group have told other directors that SMG is their leading candidate. That followed the companies' presentations in which representatives had addressed questions about their ability to bring new business to the center, deal with labor issues and ensure African Americans and women get a share of Convention Center work. Three board members who attended Wednesday's meeting -- speaking privately because members had agreed not to comment to reporters -- stressed that the board is still collecting information before making a final decision. 
The center, like other big-city convention centers, has been struggling to book shows and help keep city hotels full in the years ahead. Funded by Pennsylvanians through public borrowing that taxpayers will be repaying for years to come, the Convention Center spends more than it brings in from fees each year, balancing its budget with additional income collected from a tax on city hotel rooms.
If the board agrees to pick SMG, the firm would take control of the vast facility in Center City Philadelphia later this year, displacing the administration of executive director Ahmeenah Young and contractors hired to oversee labor contracts and other key management duties.
Board sentiment isn't unanimous. Citing past consultant reports that showed Young's administration is efficient and the Convention Center has gained market share, the small group of board members allied to Philadelphia Mayor Michael Nutter have been skeptical that any change is needed and concerned that private management will be less likely to ensure women and African Americans win Convention Center work.
        But privatization opponents weren't able to block past votes to put the center's management out to bid, and it's not clear where they would get the votes to block final privatization if Republican and suburban votes on the board continue to support hiring an outsidecompany.

It's not a done deal, and the Pennsylvania Convention Center board's next formal meeting isn't until June 5, but members of the bipartisan "study group" of board members who have been reviewing proposals for private managers to take over the running of the Pennsylvania Convention Center, have told other board members they are leaning toward supporting SMG, the West Conshocken-based manager of the convention centers in Chicago, Detroit and other big cities, over rival Comcast Spectacor's Global Spectrum, which manages the Wells Fargo Center in South Philadelphia and other sports and resort city facilities.

Three board members who attended Wednesday's meeting -- speaking privately because members had agreed not to comment to reporters -- stressed that the board is still collecting information before making a final decision. 

The study group includes Rob Wonderling, the former GOP State Senator who runs the Greater Philadelphia Chamber of Commerce; Joshua Shapiro, the Democratic chairman of the Montgomery County commissioners; Greg Fox, the Philadelphia attorney and Republican who chairs the Convention Center board; John McNichol, a Delaware County Republican and member of the Harrisburg lobbying firm Greenlee Partners; and Marian Tasco, a Democrat and Philadelphia City Councilwoman. 

At a meeting Wednesday, members of the group told other board members that SMG is their leading candidate among the applicants. That followed the companies' presentations last week, in which representatives had addressed questions about their ability to bring new business to the center, deal with labor issues and ensure African Americans and women get a share of Convention Center work. The applicants also sent financial information to the board's consultant, Public Financial Management.

The center, like other big-city convention centers, has been struggling to book shows and help keep city hotels full in the years ahead. Funded by Pennsylvanians who are repaying more than $1 billion used to build and expand the center -- the state's most expansive single facility in its history, accoridng to Pa. Dept. fo General Services spokesman Troy Thompson -- the Convention Center spends more than it brings in from fees each year, and balances its budget with additional income collected from a tax on city hotel rooms.

 If the board agrees to pick SMG, the firm would take control of the vast facility later this year, replacing the administration of executive director Ahmeenah Young and contractors hired to oversee labor contracts and other key management duties.

 Board sentiment isn't unanimous. Citing past consultant reports that showed Young's administration is efficient and the Convention Center has gained a larger share of a shrunken national convention market, members of the small group of board members allied to Philadelphia Mayor Michael Nutter have been skeptical that a change over to private management is needed.        

But privatization opponents weren't able to block past votes to put the center's management out to bid, and it's not clear where they would get the votes to block final privatization if Republican and suburban reps on the board continue to support hiring an outside company.

There will be separate votes: first, on whether to privatize; and, if the board agrees on privatization, a second vote on which firm to hire.

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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