Background

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The City of Santa Clara owns the Santa Clara Convention Center has historically provided public funding to promote convention, tourism and visitor activity in the City of Santa Clara through three separate legal Agreements. The funds for all Agreements have been administered by the Santa Clara Chamber of Commerce/Convention-Visitors Bureau (Chamber/CVB)

Management Agreement for the Santa Clara Convention Center (Management Agreement)

The Management Agreement provides the Chamber/CVB with oversight and implementation responsibilities for all services necessary to direct, manage all Convention Center operations including marketing, advertising and promoting the center; booking of events; hiring of staff; and, daily operations of the center including accounting, catering, security, janitorial, and maintenance.

Key Provisions:

Expiration:  No expiration date.  Agreement can be terminated upon 180-day notice.

Fiscal: City keeps all revenue generated by the operation of the Convention Center and is responsible for all expenses. 

Management Fee: Although the City has historically paid a fee to the Chamber, there are no provisions in the Management Agreement for the payment of a fee. Payment of a fee has been City Council discussion topic (see below). Payment of a management fee has been suspended. The FY17/18 budget showed a $145,292 fee amount.

Convention-Visitors Bureau Agreement (CVB Agreement)

The CVB Agreement was an annual agreement with the Chamber/CVB that provided convention and visitor services through the Chamber’s Convention-Visitors Bureau operation. These services included marketing and sales of the Convention Center and Santa Clara to large groups and citywide events; visitor marketing and communication; and, operation of a City Store.

Key Provisions:

Expiration:  Annual contract. Contract FY 2017/18 expired on June 30, 2018.
Fiscal: FY 2017/18 contract $1,461,601.

 Tourism Improvement District (TID)

On January 11, 2005, City Council adopted Ordinance No. 1797 the Tourism Improvement District (“TID”) to  fund activities such as marketing campaigns to attract travelers, tourists, cultural groups, and conventions to Santa Clara.  Hotels located within the boundaries of the TID levy a $1 per hotel room night fee to fund this effort.

Nine hotels near the Santa Clara Convention Center are located within the TID boundaries and levy the fee:  Avatar Hotel, Biltmore Hotel & Suites, Embassy Suites, Hilton Santa Clara, Hyatt House, Hyatt Regency, Marriott Santa Clara, The Plaza Suites, and TownePlace Suites by Marriott.

Other Background

During Redevelopment Dissolution there were significant questions and discussion about the ownership and future of the Convention Center. In an effort to minimize its liabilities, on April 22, 2015, the City delivered the Chamber a 180-day notice of termination of the Convention Center Management Agreement. This letter was followed by a June 4, 2015 letter advising that the Management Agreement would be terminated effective as of June 30, 2016 unless the City was able to maintain ownership of the Convention center and the City approved an extension of the Agreement. Concurrently, the Chamber advised the City of its desire to separate from the management of the Convention Center.

In January 2016, the City entered into a Settlement Agreement with other taxing agencies on Redevelopment Dissolution issues in which among other items the parties agreed that the ownership of the Convention Center belonged to the City of Santa Clara.

In January 2017, the City contracted with Jones Lang LaSalle (JLL) to provide general information about Convention Center management and operating models throughout the country. On April 18, 2017, the City Council approved an amendment to the JLL contract adding additional services to: 1) engage stakeholders and recommend an operating model for the Convention Center and 2) based upon Council direction, develop and implement a new management and operating model.

Following several presentations to the Economic Development Committee and the City Council on potential Convention Center operating models, on February 27, 2018, City Council held a study session regarding the status of Convention Center and policy issues for future Council consideration.


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