By Robert Haugh
The Santa Clara Chamber of Commerce had their management fee suspended a few weeks ago. The Chamber was suppose to “manage” the Convention Center. Except no one knows what they really did for their approximately $145,000 yearly fee. Or how they magically got a major raise without City Council approval.
Tonight at the Council meeting, the City Council may terminate another agreement that the Chamber supposedly “manages” — the $1.5 million in city funds used by the Convention and Visitors Bureau (CVB). The CVB is suppose to promote convention and tourism activity for the Mission City.
But major questions have been raised about the CVB’s performance. Earlier this year, Jones Lang LaSalle (JLL), a consultant hired by the city to evaluate the Convention Center and the CVB concluded that there were big problems. The net expenditures over the last 10 years was negative $10.3 million. Ouch.
That doesn’t include any sales tax that comes back to the city. But even with that, it’s not close to breaking even. And because the management decided to not to spend money on major capital expenditures to inflate their numbers, there’s a long term facility problem now. Double ouch.
The CVB didn’t look so hot when it came to their performance either. JLL said a key metric is the annual goal of 15 “citywide” conventions — gatherings that actually fill hotel rooms. Currently, we have only three a year. Wow. That’s not good.
The CVB seems to admit that they haven’t done much recently. They bought an ad in the Santa Clara Weekly just two months ago promoting how they were responsible for bringing Wrestlemania 31 to Levi’s Stadium. That was a great event and I was there — three years ago!
Yup, they wasted money with an ad in the Weekly — the publication that has few subscribers in Santa Clara. It’s read by even fewer tourists and that’s the group the CVB is suppose to target. That’s really not good.
City staff has found all kinds of problems with the “management” of the CVB. Here’s a paragraph from the staff report:
… preliminary discussions on how the Chamber manages conflicts of interests; absence of Board training for management of public funds and governance oversight of a public facility; absence of policies regarding self-dealing (e.g., use of the Convention Center relative to fee reductions/waivers) along with already surfaced concerns regarding financial protocols and procedures, suggest deficiencies or lose [sic] management controls in protecting the use of a public facility and funds …
Translation: No one is protecting our tax dollars with standard policies. That’s really, really not good.
We’re hearing all kinds of rumors about why the Chamber hasn’t fully cooperated with the City’s request for documents. We think the info will eventually come out and there will be a lot of problems exposed, including stuff like self-dealing and commingling of tax dollars with political funds. That’ll be really embarrassing if the Council has to deal with that and the Chamber is still managing the facility.
We hear the Chamber is hoping that the council members they’ve endorsed will support a 4-month “bridge” contract. Chamber CEO Nick Kaspar sent an urgent email this week to get people to lobby the council.
According to our sources, the Chamber is having an urgent strategy meeting this morning and are inviting some or all of their endorsed candidates. They’ve officially endorsed in past elections: Pat Kolstad, Patty Mahan and Teresa O’Neill.
Even if the Chamber-endorsed councilmembers stick together, there won’t be enough votes for a contract extension. There might have been a 4th vote for the Chamber if disgraced former Councilman Dominic Caserta’s seat was filled. But the Chamber shot itself in the foot (again) by buying an ad on the Weekly website that lobbied the council to leave the seat vacant. Whoops.
Let’s hope the City Council does the right thing and ends the Chamber’s “management” (or lack thereof) of the Convention Center and the CVB. It would be in the best interest of good government and better management of the Convention Center. The Chamber doesn’t seem to know what it’s doing. It’d be foolish to think they’re going to figure it out in four months.
Let’s not lose sight of the fact that JLL is lead by someone who was a colossal failure at Team San Jose, hit hard by two (2) Grand Jury investigations and terminated for lack of performance. Team San Jose (lead by the now JLL consultant) was an organzation that overspent its budget and covered it up, but this mayor and her minions on the council have spent a huge amount of money for reports that are 100% misleading and inaccurate but what would you expect from a mayor and council that has no idea what the CVB does or how much revenue they bring into the city. The issue is with the Chamber of Commerce, not the CVB, but no one says that because it does not sound pretty. This mayor and council have spent hundreds of thousands of dollars on 2 fruitless audits of the 49ers and stadium, hired a city manager making $800K in salary and benefits (her assistance half that number – its public record), and hired incompetence in JLL. It took Team San Jose many years to recoup the mess that was made there, and it will take a lot longer to recover in Santa Clara. The blame lies squarely on the vindictive nature of the mayor, and those who do her bidding on the council council.
Pay attention Santa Clara voters, because this November you have a choice to remove the mayor and those doing her bidding with the district elections (they fought against). Today, there is no one marketing or selling Santa Clara, and they mayor is fine with the “gap” in lost revenue because of this lunacy. This mayor and council have taken a city that was operating in the black to one now operating in the red!!! Great job looking out for the best interests of Santa Clara citizens mayor and council..
Such an attack on the Council! Sounds like Miles has come out of the witness protection program. The way business keeps coming to SC, it doesn’t seem the city needs marketing! Say all you want about City Hall but residents are happy with the CM and majority council. Thank you, Mayor Lisa Gillmore for standing up for our City!
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Between the very poor management practices and a political stance against the city, they had to go.
My hat is off to Miles Barber for his special influence in the demise of the Chambers excelent management opportunity. I believe there’s a loser lobbyist available for hire.
Good reporting. You note who the Chamber endorsed and who will likely support the Chamber. Can you also list the amount of money the candidates have received? That would be quite interesting indeed.
If we know anything from Watergate to today, votes are “buyable.” It would be good to know how much they had to “pay” for their votes.
The most helpful thing about this article is the link to the previous story that has the chart of the Convention Center’s expenses. It’s operating at a loss. And it’s not investing in the building. Do these people know what they’re doing?
I agree with the author. They’re not going to figure out how to run a business in 4 months if they’ve been so ineffective for a decade. Time to pull the plug.
If the council doesn’t do the responsible thing, it’ll be because of political backscratching.
Hey Robert,
Aren’t the Chamber endorsed candidates the ones who let Mike Sellers spike his pension? Ironic isn’t it since they are suppose to be a business organization that believes in fiscal conservatism. And the candidates they support should believe in it too. But it’s obvious that Kolstad, Mahan, and O’Neill don’t. Let’s hope they know that giving away money to the Chamber is another act of fiscal irresponsibility that the voters will NOT forget.
I agree with you Robert — and I believe it is the Chamber of Commerce that went bad, including the choice of adding their PACT,
Quote from above: :Let’s hope the City Council does the right thing and ends the Chamber’s “management” (or lack thereof) of the Convention Center and the CVB. It would be in the best interest of good government and better management of the Convention Center. The Chamber doesn’t seem to know what it’s doing. It’d be foolish to think they’re going to figure it out in four months.”
I am a micro Santa Clara business, Marketing, Media, Tourism, and Event – I work closely with the CVB and Convention Center since 2000, I know the changes first hand, And frankly, our CVB and Convention Center focus is my bread and water, using their connections for my multiple income sources that is helping me pay for the high cost/rent in our city. I believe we need to drop the Chamber and their PACT, and refresh the CVB and well organized Convention Center.
The economic need is more evident now as many of these hospitality and tourism businesses are simply moving outside our area because of high costs and expenses of our region. Without them, our hospitality businesses in our new Downtown will hurt.
Maybe the City of Santa Clara should definitely change things instead of spending all this money for very,very little and seeing the losses over the years..This city deserves better! Heck, send some of this money into the effort of building the Downtown effort (ROD-Reclaiming Our Downtown promotes this) so that we as a city can do what very other cities such Campbell, Mt. View and Los Gatos….MAKE MONEY. This CVB needs a hit over the head or hire an outside agency to do the job that should be done!