By Robert Haugh
The two biggest items from last night’s meetings were the Stadium Authority Board unanimously approving a new stadium concessionaire, and a study session telling us the Santa Clara convention center is an asset, but needs a makeover.
The company has a large footprint in the sports and entertainment industry. They agreed to the City’s worker retention ordinance. Board Chair Lisa Gillmor asked for a regular report to determine if workers are being retained or dismissed by the new vendor.
During 49ers VP JimMercurio’s presentation, we learned the new concessionaire will invest $22 million over the 12-year term on capital investments such as updated signage and equipment. They also pledge to work with the Mission College hospitality program and engage local Santa Clara restaurants. We’ve heard this story before, so let’s hope this vendor and the team keep their promise this time.
Mercurio admitted the current concessionaire, Centerplate’s customer satisfaction was spiraling downward. From 2014 to 2017, the “excellent & above average” ratings went from 67 percent to 52 percent, while the “average” and below average & poor” ratings increased by six percent and nine percent.
The 49ers agreed to pay a yearly $100,000 ($150,000 in year one) bonus to Levy if they meet performance goals. But the council — and the public — still doesn’t know how much the city general fund makes from stadium concessions. The 49ers haven’t given the city detailed information in their previous annual budgets. Let’s hope the new city management can pry this information from them.
The not-so-surprising news during a study session presentation by consultant Jones Lang LaSalle (JLL)was that the Convention Center really needs a makeover.
Here’s a quick summary:
- The Convention Center, managed by the Santa Clara Chamber of Commerce, has operated in the red for the last ten years. Total losses exceed $10 million dollars. Wow.
- The losses come out of the city’s general fund. Ugh.
- Last year, the losses were $2.3 million, including almost $1.5 million that was paid to the CVB for management and staffing. An additional $145,292 is paid to the Chamber for a “management fee.”
- In the immediate short-term, $5 million is needed for Convention Center upgrades.
- $64 million is needed in the short to mid-term.
- There are many urgent needs in the aging convention center, including HVAC, lighting and electrical updates.
- There’s no funding source for capital budget for improvements or renovations
- The convention industry is rapidly changing.
- The majority of current clientele are from the hi-tech sector and most are local.
JLL did not evaluate how much of the transient occupancy tax (a.k.a. “TOT tax” or “hotel tax”) is generated by the Convention Center. Councilwomen Patty Mahan and Debi Davis requested that it be presented to the council at the next discussion.
JLL is working with the Convention Center staff to set up sales metrics or targets which didn’t seem to exist before.
JLL also stated that a key metric is the annual goal of 15 “citywide” conventions — gatherings that actually fill hotel rooms. Now, we have only three annually. Davis asked if it’s feasible to meet that metric with the current staff, operations and model.
JLL will evaluate different models and the council is likely to make a decision around November. From the information that was presented and the questions that were raised, it’s clear that the council needs and wants to do something different than the status quo.
Councilman Pat Kolstad and Councilwoman Teresa O’Neill were absent from both meetings and the study session.
March 13 – Study session on Stadium Authority budget and marketing report
March 19 – Ad-hoc audit committee meeting
March 27 – Final Stadium Authority budget adoption
Editor’s note: We corrected a statement about management of the Convention Center. It is managed by the Santa Clara Chamber of Commerce, not the CVB.