MAYOR BOARD OF DIRECTORS George B. McGill Ward 1 – Keith Lau Ward 2 – Andre’ Good CITY ADMINISTRATOR Ward 3 – Lavon Morton Carl Geffken Ward 4 – George Catsavis At-Large Position 5 – Robyn Dawson CITY CLERK At-Large Position 6 – Kevin Settle Sherri Gard At-Large Position 7 – Neal Martin AGENDA Fort Smith Board of Directors SPECIAL MEETING & STUDY SESSION June 25, 2019 ~ 12:00 Noon Fort Smith Public Library Community Room 3201 Rogers Avenue THIS MEETING IS BEING TELECAST LIVE AT THE FOLLOWING LINK: http://www.ustream.tv/channel/XqbsvFPFApS SPECIAL MEETING ROLL CALL PRESENTATION BY MEMBERS OF THE BOARD OF DIRECTORS OF ANY ITEMS OF BUSINESS NOT ALREADY ON THE AGENDA FOR THIS MEETING (Section 2-37 of Ordinance No. 24-10) ITEMS OF BUSINESS: 1. Resolution authorizing limited term rental agreement with Fort Smith Mall, LLC for flood relief office space ADJOURN STUDY SESSION CALL TO ORDER 1. Discussion with the Oak View Group to manage the Convention Center 2. Review preliminary agenda for the July 2, 2019 regular meeting ADJOURN June 25, 2019 Special Meeting & Study Session 1 June 25, 2019 Special Meeting & Study Session 2 SM1 RESOLUTION NO. ________ A RESOLUTION AUTHORIZING LIMITED TERM RENTAL AGREEMENT WITH FORT SMITH MALL LLC FOR FLOOD RELIEF OFFICE SPACE _____________________________________________________________________________ BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FORT SMITH, ARKANSAS, that: SECTION 1: The attached rental agreement (License Agreement) with the Fort Smith Mall LLC for office space for the City of Fort Smith and other agencies involved in 2019 flood relief for the months of July, August and September, 2019, at a rental of $5,000.00 per month, is hereby approved. SECTION 2: The Mayor, his signature being attested by the City Clerk, is hereby authorized to execute the rental agreement authorized by Section 1 of this Resolution. This Resolution adopted this _____ day of June, 2019. APPROVED: ____________________________________ Mayor ATTEST: _____________________________________ City Clerk Approved as to form: ________________________________NPR City Attorney June 25, 2019 Special Meeting & Study Session 3 June 25, 2019 Special Meeting & Study Session 4 June 25, 2019 Special Meeting & Study Session 5 June 25, 2019 Special Meeting & Study Session 6 June 25, 2019 Special Meeting & Study Session 7 June 25, 2019 Special Meeting & Study Session 8 June 25, 2019 Special Meeting & Study Session 9 Fort Smith, Arkansas COMPANY BACKGROUND OVG Facilities is a young and dynamic company that provides venue owners and operators with customized services that addresses the specific needs of their entertainment, sports, performing arts, conference and expo, civic, and city venues. OVG Facilities provides strategic planning and consulting services to ensure a project's long-term viability by providing comprehensive strategic planning work in collaboration with facility owners. We have a unique perspective on the industry, as we are currently the managing partners developing new National Hockey League (“NHL”) arenas in Seattle, WA and Belmont Park, NY, as well as in Austin, TX, where we are partners with the University of Texas at Austin for the creation of their new campus arena. We think like owners - always looking for ways to provide optimum service at the best prices. Our corporate support team is comprised of some of the industry’s most seasoned executives, who, in their tenure, have helped build other venue management companies including SMG, Global Spectrum (now Spectra), and AEG. In fact, OVG Facilities Co-Chairman, Peter Luukko; President, Hank Abate; and Senior Vice President, Sims Hinds, were all instrumental in the early success and establishment of SMG, later having brought their expertise to Global Spectrum. Luukko’s responsibilities with Global Spectrum also included the creation and oversight of a food and beverage service provider, Ovations Food Services (now Spectra Food Services & Hospitality) and serving as the lead executive for the Philadelphia Flyers of the NHL and 76ers of the National Basketball Association (“NBA”). Senior Vice Presidents, Doug Higgons, Tom Paquette, and Shura Garnett also worked for Global Spectrum, as the company was beginning to grow and expand, and were major contributors to the company’s development. Furthermore, OVG co-founder, Tim Leiweke, served as President and CEO of AEG from 1996 to 2013. Leiweke led the development and operation of AEG’s many sports and entertainment venues during his tenure. Oak View Group Facilities is prepared to offer a full-service management solution for the Fort Smith Convention Center. We have the experience, resources, programs, and the talent to ensure that the FSCC will operate efficiently OVG will provide operational oversight and management of the FSCC, under the direction of City staff. The City will establish all policies and standards for the venues including a Standard User Agreement, Booking Policy, and rules and regulations by which OVG Facilities will manage the venues on behalf of the City. Our standard scope-of-services could include: Booking and Event Solicitation Marketing and Public Relations Finance and Administration Management of Third-Party Contracts Sponsorship and Premium Sales Box Office Management Food and Beverage Management Operations Maintenance and Custodial Services With the customized OVG Facilities full management solution, we will bring our knowledge and expertise into every element of facility management of the FSCC. OVG Facilities will be contracted by the City to represent the facilities’ owner as an agent and as such, we work at the direction of our clients and under the restrictions of a client approved budget. We will make a comprehensive effort to customize our programs based on the true needs of the FSCC. We do not have pre-conceived solutions and will use our vast experience operating venues to establish best practice operating procedures that are most beneficial to the City. 1 June 25, 2019 Special Meeting & Study Session 10 MEETING SUMMARY SHURA GARNETT MEETINGS SUMMARY Shura Garnett met with Carl Geffken on Wednesday, April 17th in Fort Smith, AK. The meeting was very productive and allowed her to introduce Oak View Group to Mr. Geffken. He shared the average annual revenues and subsidy amounts for the convention center. They talked a little about some industry standards regarding operations and food and beverage. He asked her to review their 2017 annual report and provide her observations back to him. They also have an amphitheater that he asked her to look at. The following morning on the 18th the Center’s General Manager, Tim Seeberg took her on a short tour of the venue. The Fort Smith Convention Center has 40,000 square feet of partitionable exhibit hall. It offers eight versatile and flexible meeting rooms that can be customized to add five additional breakout rooms for a total of 13 useable meetings spaces. The 39,000 sq. ft. ArcBest Performing Arts Center features comfortable theatre-style and ADA seating for 1,331, cast & company backstage facilities, and full state-of-the-art sound, lighting and electrical. There are 230 to 250 events annually and of those 25 are Jehovah Witnesses events. The Convention Center was constructed in 2000 with the ability to expand doubling the space. It is averaging $800K loss each year without tax subsidy that is funded by the general fund. The number of events grew in 2018 to 264 from 248 in 2017. Of the 2018 revenue, $734,131 was from convention center rental and $99,415 was from beverages, catering and concessions. The beverage revenue was down 6% from 2017. Though revenues continue to grow, they are not surpassing expenditures. In 2018, the convention center had $1.6 million in expenses, up 10.2% from 2017’s almost $1.5 million. The public spaces surrounding the exhibit halls have recently been re-carpeted and it looks nice. The meeting rooms are basic and could use touch up paint and décor enhancements to make them more visually appealing. The exhibit hall is nice and big with high ceilings. The flooring is standard concrete that works fine for trade and consumer shows. Although they own roll carpet, it appears worn out, stained and dirty with cobwebs covering it. Roll carpet is challenging in an exhibit hall space as maintaining it stain free is impossible. It is also very heavy and challenging to install and remove without risking injury to the staff. I recommend the purchase of carpet tiles that can be easily installed and removed on an event by event basis, stored in less space and easily maintained by simply replacing individual tiles as they become damaged. Given that there is no dedicated ballroom space I would also recommend the installation of a cable system to easily and temporarily install draping that would allow the transformation of the exhibit hall into a ballroom. Additional décor enhancements could also be added to build on this concept as demand for the space increases. The convention center has a “warming” kitchen that includes a dishwasher, hood, maybe four carter hoffmans/warming boxes. There is a storage room that opens into the existing space. In Shura’s opinion, the two combined would be sufficient for a small efficient kitchen and small wares storage. We need to get an estimate of what it would take financially to build out a full kitchen. Based off the estimated $500K annually that the center generates in gross catering (derived from using 18% commission that nets about $90K to the venue) and the ability to increase net profit margin and increase events and attendance, the investment to build out a kitchen would likely pay for itself over a two to three year period. The GM said they will do $25K in concessions on a really busy concert night but most times average around $8K. They are using a contract company to provide the bartending services.