TITLE
Recommendation to authorize final reconciliation payment to SMG/ASM Global under Management Agreement No. 21667 for operational expenses for Fiscal Year 2020 (FY 20) at the Long Beach Convention and Entertainment Center (Convention Center), due to COVID-19 pandemic impacts;
Authorize an advance of payment expected to be owed under Management Agreement No. 21667 to SMG/ASM Global for operational expenses for FY 21 at Convention Center, due to COVID-19 pandemic impacts; and
Increase appropriations in the Tidelands Operating Fund Group in the Economic Development Department in the amount of $3,900,000, offset by funds available and/or reserves to cover the FY 21 operational deficiency of the Convention Center. (District 2)
DISCUSSION
The Long Beach Convention and Entertainment Center (Convention Center) has experienced a major reduction in events and operations due to COVID-19 pandemic related economic impacts and state and local operating restrictions. The resulting loss of operating revenue has severely impacted cashflow available for even minimal maintenance and operation at the Convention Center.
SMG/ASM Global (SMG/ASM) operates the Convention Center under contract with the City. SMG/ASM has taken measures to minimize operating costs at the center. Staffing has been reduced to 15 positions, and major systems at the Convention Center are run at minimal capacity. The central plant at the Convention Center must remain operational, as it supports utilities at the center and at the Hyatt Long Beach. Additionally, staff must continue to provide minimal maintenance and security at the center during the COVID-19 pandemic shutdown.
Under the Management Agreement (Agreement), which governs the SMG/ASM operation of the Convention Center, SMG/ASM must remit a portion of the profits to the City of Long Beach (City). The Tidelands Operating Fund Group normally receives approximately $500,000 annually from Convention Center profits. However, per the Agree...
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