Convention Center board votes to seek privatization proposals

The board of the Pennsylvania Convention Center Authority voted Thursday in favor of seeking proposals from companies to privatize certain functions of the Convention Center.

The 15-member board hired Public Financial Management Inc. (PFM) in late November as a consultant to review responses to the board's request for qualifications from companies that provide services for the convention business, including handling facility operations, maintenance, and management.

Thursday's affirmative vote of 13-1 for PFM to issue a request for proposals from such companies was the next step, board chairman Gregory J. Fox said.

He said the goal was to enhance the competitiveness of the expanded Convention Center in attracting new conventions, meetings, and trade shows.

"The authority's board is looking at all the Convention Center's operations, and this particular initiative is based on the board's desire to hear from the top convention center managers in the country on how we can compete in the most effective way to attract additional and larger conventions."

Board member Heather Steinmiller was the lone "no" vote Thursday. Ryan Boyer was absent.

The management of the Convention Center has been criticized by the region's hoteliers for not booking more large conventions, and hotel operators point to high labor costs at the center as one of the chief reasons. Tensions mounted last summer when the Greater Philadelphia Hotel Association made public a letter sent to the PCCA board about its concerns over labor issues.

Fox, who was reelected board chair last month, acknowledged ongoing tensions in an interview earlier this week.

"There is some concern about the rate of future bookings, and that is the reason the board is undertaking a number of initiatives to review operations and better understand how to best bring costs down and quality of services up for our customers," he said. "It is such a competitive industry that only by continuous improvement can we hope to stay competitive."

Timing was a clear impetus for the top-down review.

Collective-bargaining agreements and the 10-year customer-service agreement are set to expire in the next few months.

"This is a good time to undertake this sort of review," Fox said.

He said it was too soon to determine the impact on current PCCA president and chief executive Ahmeenah Young, who was out of the country Thursday.

"As a public agency, federal tax rules prevent us from fully privatizing with a for-profit venture," Fox said. "There are some limitations.

"There is always going to be [a need for] someone to manage the contract with the private manager," he said, referring to Young's position. "Yes, it would impact the role of the CEO, but in what way we don't know yet."

Fox said he expected the board to vote in early June on whether to hire a private manager.

Chicago went to a private manager last year to run the McCormick Place Convention Center. In doing so, it maintained that center's current chief executive.