City wants new management for centerBy ANTHONY WARREN,
Jackson’s convention center could soon have new management.
The Lumumba administration announced last week that it was planning to issue a request for proposals for new managers for the Jackson Convention Complex (JCC).
The move comes months after the Sun reported that the center has never lived up to its economic expectations and the same day the mayor pleaded with the council to allocate additional funding to the center to keep it open through September 30.
The center is managed by SMG World. The firm has managed the facility since it opened a decade ago.
In that time, the center has never been profitable, nor has it generated the economic impact for local businesses that supporters of the complex promised years before it opened.
“We are issuing an RFP so we can be certain we have the best management process and best management team going forward,” he said. “This is not to say the current management team won’t make a proposal, but we feel that it is advantageous for the city to review whether the current contract is in the best interest of the city.”
In the meantime, Lumumba requested the council approve a $131,000 allocation to keep the facility’s door’s open through September 30, the end of the fiscal year.
The mayor said the funds were needed to ensure that events already scheduled at the center can go on without interruption.
The council placed the measure in a committee and plans to bring it up at the next regular meeting on September 17.
Ward One Councilman Ashby Foote doesn’t support awarding the allocation. He especially didn’t appreciate that members of SMG were not present at the September 3 meeting to address any concerns the council could have brought up.
“For them to come in early September and say ‘we’re going to run out of money’ … We’re not an ATM. We’re a city council,” he said. “We’ll have a special meeting to decide what to do.”
JCC opened in 2009, years after voters approved a ballot referendum to fund the project’s construction.
Prior to that vote, experts estimated that the center would generate $66 million a year in new spending for the capital city.
However, through 2017 numbers have fallen well short of those projections. According to annual reports posted on the center’s website, JCC’s average annual economic impact has averaged just over $26.6 million, with a high of $34.4 million in 2014 and a low of $18.8 million in 2017.
SMG had still not released center’s 2018 report. However, spending was expected to be down that year as well, with 18 fewer events being hosted at the center than in 2017.
SMG has managed the center since it opened. The group is the largest venue management group in the nation, and currently manages 252 convention centers, stadiums, arenas, theaters, recreational facilities and amphitheaters across the U.S.
“What they have demonstrated over successive years is that they are not a profitable institution,” Lumumba said. “The reality is this: very few convention centers are profitable. That is not why you go into the convention center business.”
In theory, convention centers are designed to generate economic activity by attracting events to an area.
People who attend these events rent hotel rooms, eat at local restaurants, fill up their cars with gas and purchase souvenirs, all of which benefits local businesses and therefore the local economy.
However, the number of events being held at the center also have declined. In 2018, 133 events were held at the center, down from 151 the year before. In 2016, JCC hosted 223 events.
Additionally, many of events being hosted at the center have not been drawing people from outside the area, but rather local events sponsored by the government, educational institutions and local churches.
Council members also voiced their frustrations with SMG. Ward Three Councilman Kenneth Stokes said the National Baptist Convention was unable to have one of its annual meetings there because SMG had scheduled another event for that date.
He said SMG should have held that spot open for the Baptist group, which would have brought about 3,000 people to the center.
Ward Six Councilman Aaron Banks said he would like more transparency with the group and answer why they need taxpayers to bail them out.
Foote also questioned why SMG wasn’t present, when it was asking for the additional funds.
“We go through budget hearings where departments have to come in and say, ‘here is what we’re doing,’” he said. “Here, we’re just getting an emergency order for the convention center.”
In March, the Sun reported that SMG had failed to fulfill at least two reporting requirements under its 2016 management agreement.
The contract requires the Pennsylvania-based agency to submit an annual event recap report, capital improvement recommendation plan and annual benchmarking report to the Capital City Convention Center Commission, the center’s governing body.
Copies of reports received by the Sun had incomplete information or were not completed until after the paper had filed an open record request seeking the information.
Elsewhere, SMG has also come under fire. In June 2018, the city of Rochester, New York fired SMG as the longtime manager of Blue Cross Arena there, citing poor performance, according to the Rochester Democrat and Chronicle.
In November 2017, officials in Corpus Christi, Texas, and Vanderburgh County, Indiana, put the firm on notice that if it didn’t improve numbers at their respective centers, they would be out of a job in those locations as well.
JCC General Manager Al Rojas couldn’t be reached for comment. Commission Chair Fred Banks and commission member Duane O’Neill also couldn’t be reached.