City Picks New Cinergy Canter Management Firm

Negotiations with Global Spectrum will Begin for Contract

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. October 14, 2008

CINCINNATI, OH, March 3, 2006. City Manager David E. Rager announced on Feb. 27 that Global Spectrum, a subsidiary of Comcast-Spectacor of Philadelphia, one of the largest sports and entertainment companies in the world, will enter into negotiations with the City for a three-year contract to manage the maintenance, security, event coordination management, and event marketing and sales of the newly expanded and renovated Cinergy Center. Responding to a Request for Proposals (RFP), Global Spectrum was chosen by a seven-member selection committee for their entrepreneurial approach to operate the center at a cost-savings, their local and national marketing focus, and their commitment to the City's Small Business Enterprise (SBE) program. "Global Spectrum demonstrated their commitment to the success of the Center and this region by putting their 'money where their mouth is'," said Rager. "They are the right company to build on the City staff's work in marketing and efficiently operating the newly expanded Cinergy Center."

It is expected that contract negotiations should conclude as early as mid-March and Global Spectrum could assume management responsibilities by May 1, 2006. The grand opening for the $160 million renovated and expanded Cinergy Center is scheduled for the end of June. City departments routinely contract out the management of services to deliver the most efficient customer service with available resources; and with the expanded convention center facility, the management resources that Global Spectrum can bring to the Center exceed those of the City's.

In making the business case for the contract, the following were chief among the considerations:

. Global Spectrum's approach to managing the convention center is based not only on generating revenue for the facility, but also on generating larger-scale economic impact for the region by bringing in high profile conventions that fill Cincinnati hotels, restaurants and retailers with out-of-town visitors.

. Global Spectrum's fee structure puts a minimum of 50 percent of its management compensation at risk if performance-based criteria aren't met. Success will be measured on a number of goals benchmarked by economic impact, revenue generation, customer service, and building maintenance.

. Global Spectrum will deliver an estimated 6-7 percent operating cost savings versus the City's operating cost, over the life of the proposed contract. The City's current 2006 budget for the Cinergy Center is $5 million.

. Global Spectrum would bring streamlined facility management with its sister company, Ovations, which just won the Cinergy Center food and beverage contract through a separate RFP process.

. The Cinergy Center's size and location would make it one of the centerpieces of Global Spectrum's client roster, and therefore the firm would be fully committed to delivering outstanding results.

. Global Spectrum does not manage other convention centers that compete with Cincinnati USA for regional or national customers.

. The firm has a proven corporate commitment to diversity and a strong SBE program. It also has corporate marketing resources in place for which the City will not pay additional fees.

"The Greater Cincinnati Convention and Visitors Bureau (CVB) is very pleased to see both the City and Global Spectrum place emphasis on driving economic impact for the region," said John T. Taylor, Chairman of the Board of Directors of the Greater Cincinnati Convention and Visitors Bureau. "We fully support the City's decision to pursue Global Spectrum and agree that while revenue generation is important, big-picture economic impact to the region is the ultimate measure of success for the Cinergy Center. We look forward to the final selection of a management firm and the high standard of service it will bring."

Global Spectrum will work with the City to transition the current 30 full-time City staff either to the company or to other funded, vacant positions within the City. The decision to enter into contract negotiations with Global -Spectrum does not affect an earlier proposal by the Convention & Visitors Bureau to merge their operations with City staff. Should the financial, legal and operational issues associated with that proposal be worked out, and the stakeholders in the Cinergy Center including the City, Hamilton County, and the Convention Facilities Authority, decide to turn oversight of the facility over to the CVB, then the Global -Spectrum contract could be turned over to the CVB for oversight as well.