New bidder wins management contract in Atlantic City
Amid an ongoing challenge from the firm that has operated Boardwalk Hall and the Atlantic City Convention Center for nearly two decades, the Atlantic City Convention & Visitors Authority voted today to award a competing bidder a new contract to manage the facilities.
The ACCVA originally planned to vote on the proposals Dec. 5, but it instead took public comments on the bids during that special session and pushed the vote to its regular board meeting at 10 this morning. During that public comment period, supporters for West Conshohocken, Pa.-based SMG, which has managed the facilities for 17 years, raised concerns about Comcast-Spectacor subsidiary Global Spectrum, the only other firm in the running for the contract. However, the ACCVA board today moved to offer the contract to Global Spectrum.
An SMG spokesman said Global Spectrum's existing operating contracts with major arenas in the Philadelphia region "creates major conflicts to Atlantic City's detriment," as the firm will control concert and event bookings at Boardwalk Hall under its management contract with the ACCVA.
But agency President Jeff Vasser said "the pros of having (Global Spectrum) in Philly outweigh the possible negatives."
"Philly is a huge market for us, so there's something to be said for the power of (Global Spectrum's) database and the opportunities of the Wells Fargo Center, with all of the promotions they can do there on our behalf," Vasser said. "Their incentive will be tied to bringing more events here or more attendants here, so they have an incentive to drive more business here — not to say, 'Ha ha, we got your contract, and now we're going to keep Atlantic City from getting shows.' "
Once the contract is finalized, Global Spectrum COO John Page said the firm will offer its customers at the Wells Fargo Center promotions on events, restaurants and casinos in Atlantic City, which "gives us leverage and gives Atlantic City leverage when you look at those capacities we'll have."
Though the ACCVA still needs to negotiate the contract terms with Global Spectrum —and SMG's current contract is set to expire in less than three weeks — Vasser said "both sides are committed to get this done very fast, and Global Spectrum has assured me that they've done full transitions within two or three weeks before."
While there has been talk of a Jan. 1 takeover, Page said he is "looking to start the transition process with employees as soon as possible," noting the firm typically retains more than 90 percent of existing staff when it takes over facility management contracts from other vendors. Page said the remaining 10 percent usually includes top-level management staff who are legally bound to noncompete agreements.
On Nov. 30, SMG filed a complaint in U.S. District Court and sent a letter to Vasser citing legal flaws in the authority's procurement process for the contract, specifically the inclusion of officials from the Casino Reinvestment Development Authority and the Atlantic City Alliance on the selection committee.
The SMG spokesman said in a statement the company will "pursue its ongoing federal court challenge, as well as all administrative and legal actions available to remedy a clearly flawed authority process."
While Vasser said "it is certainly their right to challenge our award if they choose to do so," he noted "I'm here to bring conventions and events to Atlantic City, so we're moving forward with Global Spectrum's proposal."
"People can always sue, so you can't let that get in the way of doing your business," Vasser said.