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Mayor warns of larger losses at Augusta Convention Center

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If critics are concerned about the city losing money at the Augusta Convention Center, they should consider the long-term impact of having to cancel conventions, Mayor Deke Copenhaver said Friday.

“If we do not put in place a management agreement, we will start to lose bookings and we will stigmatize the facility, leading to major long-term losses for the city,” the mayor said.

The Augusta Convention and Visitors Bureau, which received $350,000 in city dollars to pre-market the facility, and Marriott officials already have booked 13 conventions at the 38,000 square-foot center, also known as the TEE Center, with the first event scheduled for late January.

Critics, including several commissioners, have taken issue with details included in proposed operating agreements between the city and Augusta Riverfront LLC.

The firm, which shares management with Morris Communications Co., owner of The Augusta Chronicle, runs the adjoining Marriott and was designated at the time the convention center project was approved to become its operator.

With critics speaking out against the agreements last week, a vote to approve the 15-year management agreements failed 5-2, with commissioners Wayne Guilfoyle and Corey Johnson against. The body will reconsider the documents at a meeting Monday at noon.

Guilfoyle, who offered an alternative motion last week for a shorter agreement with Augusta Riverfront, maintained that the documents up for approval Monday offer too few ways to control costs. Under the proposed agreements, the city pays Augusta Riverfront a flat rate to run the convention center and cater its events, but also shoulders all losses, which Augusta Riverfront President Paul Simon said could surpass $900,000 during 2013.

“The reason I made that motion is what it does is give us a snapshot of the 2013 budget to see how the next 14 years could be controlled,” Guilfoyle said, giving no signal Friday he’d become the sixth vote to pass the agreements as written. “I think another workshop needs to be done.”

Among critics’ concerns are that a new kitchen, to be shared between the Marriott and convention center, would be used to prepare food for the hotel, shifting that expense over to the city, or that Augusta Riverfront’s sale of the franchise would leave the city at the mercy of its new owners.

“It’s a lot easier to do any kind of changes now than later,” Guilfoyle said.

While Marriott staffers operated a nearby new parking garage on a month-to-month basis while commissioners similarly haggled over the operating agreement, Copenhaver said the hotel chain was unlikely to agree to the same for the convention center.

“I don’t think that gets any traction,” he said. “On the parking deck, that short-term option didn’t work out too well. What was supposed to be short term... drug on for a year.”

Copenhaver said he was reminded of the North Georgia Annual Conference of United Methodists’ 2002 decision to cancel a conference at James Brown Arena after experiencing poor service and conditions. While arena management has since been turned over to Global Spectrum, a subsidiary of Comcast, the Methodists continue to bring up the decade-old problems for the reason they won’t return.

“The domino effect is a scary proposition,” he said. “It’s basically like Congress on sequestration driving us toward the fiscal cliff. It’s the local equivalent of that.”

Commissioner Jerry Brigham, who supported approving the documents last week, said he expected them to keep coming back until approved.

“In the long run, we want to get into the tourism business,” Brigham said. “I think that’s one of the few things we can do to improve the economy around here, to increase our tourism business.”

Nov. 6 elections could replace four of the commission’s 10 members, so if the agreements aren’t approved by January, the newcomers will be tasked with examining the complex legal documents and making the decisions.

Copenhaver said he hoped the decision came sooner.

“The big picture is the long-term losses, and stigmatizing the facility out of the gates,” he said.

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omnomnom
3964
Points
omnomnom 10/27/12 - 10:29 am
4
0
"And signing a 15 year

"And signing a 15 year agreement with ANYBODY in this day and age is absolutely the DUMBEST thing I have ever heard."

good reason for voters to reject proposed amendment 2 on the georgia ballot.

dichotomy
30650
Points
dichotomy 10/27/12 - 10:45 am
1
1
omnomnom.......No omnomnom, I

omnomnom.......No omnomnom, I see NO relation between the TEE contract and the Charter School amendment.

The Charter School amendment offers CHOICE and an ALTERNATIVE to parents with children in a FAILED school system run by a local school bureaucracy only concerned with protecting it's turf and it's power. Amendment 2 offers SOME HOPE, in fact the ONLY HOPE, for a CHANGE. Wheras the current system offers NO hope for change...just more of the SAME FAILURE.

The two issues are not related nor are they similar. Vote YES on Amendment 2 and hope our commissioners vote NO on the TEE contract.

omnomnom
3964
Points
omnomnom 10/27/12 - 11:03 am
2
0
i took you for a learned

i took you for a learned person dichotomy.

proposed amendment 2 is "If approved by the voters, the amendment would allow state agencies to sign multi-year leases to rent property for government offices and related facilities. Currently, the state cannot sign an agreement to lease property for more than a year at a time"

But, now that you mention it. I like the idea of charter schools. But the new layer of state beaurocracy so they can authorize schools instead of the local board is unnecessary in my opinion and also removes the local control mechanism. You can find your school board members in the phone book and at worst they are a 15-20 minute drive away.

Try getting some face time with a state board two hours away in Atlanta if you have an issue with the charter school.

Florida also has some pretty funny legislation regarding charter school principal pay, and it is remarkably similar to the nonsense on wall street.

Oh well.

But yeah, TEE is no bueno.

Austin Rhodes
2852
Points
Austin Rhodes 10/27/12 - 11:39 am
5
0
The Mayor sounds like a kid who didn't do his homework...

...now trying to invent excuses...and get the rest of the world to "feel guilty/jump through hoops" to fix his problem.

This business should have been finalized months if not YEARS ago. A lack of planning and intelligent negotiation on HIS part, should not constitute a crisis on the citizen's behalf.

But sadly...because he is the Mayor...it does.

Just like DeVaney before him, Deke is flushing any hope of ever getting elected to office again down the drain by bad behavior in his last two years in office.

Riverman1
79515
Points
Riverman1 10/27/12 - 11:54 am
2
0
Serial Disappointment

Omnomnom, called the TEE fiasco, "The Nightmare on Reynolds."

That is so true. This has been a serial disappointment.

Some tried to tell the public and Commission before this thing got off the ground. Which is an unintentional pun considering the city didn't even own all the ground.

Brad Owens
4102
Points
Brad Owens 10/27/12 - 12:06 pm
3
0
Kudos to Commissioners Guilfoyle, Bowles, Lockett, and Mason

This deal needs to be scrapped. Also, I know the option to use the Global Spectrum is being considered by certain commissioners as the answer to Simon's question of what to do about the bookings that were made.

Under what authority did they MAKE these bookings? The only, and I mean ONLY people that will lose money if the event in cancelled is the Riverfront LLC folks (Marriot).

Better to lose that event and face a "stigma" than sign it and break the tax coffers.

Brad

dichotomy
30650
Points
dichotomy 10/27/12 - 12:19 pm
2
0
omnomnom

omnomnom....my apologies. Clicked on the wrong google article, wrong amendment. Definitely my bad.

I do favor the charter school amentment (1). I haven't decided yet on the long term leasing of property by the state (amendment 2). I know they say it will save money but I have not read the whole thing to see if there are any protections for the state to keep from getting stuck with leased property which becomes obsolete or vacant during cutbacks. I guess you can't have it both ways but I haven't decided yet.

Riverman1
79515
Points
Riverman1 10/27/12 - 12:56 pm
3
0
Questions

Since we have these warnings that the contract must be signed by Tuesday or the first event will go elsewhere, where are the signed contracts for events in our new TEE Center....what do they say and who are they drawn between? Who did they give the deposit to and into whose bank account was that deposit placed? I would like to see the entire agreement.....how many rooms, room rates, meeting space needs, number of attendees, date of booking, etc. The very sparse events scheduled were probably already on the books for the existing convention space so it would be interesting to look at them a bit more closely.

The BIG issue is now revealing itself....that is the now desperate attempt to separate the "new" TEE space from the existing convention space.

Why....because for years the ARLLC has made millions of dollars of profits on their food and beverage sales in that portion of the city owned space and they have kept every cent....the owner of the building has made nothing. What if the owners of the Augusta Mall didn't ask Macy's to pay any rent....or didn't ask the Apple Store to pay any rent.....just because we are glad we have those stores in Augusta? NO WAY.

Now there are some issues surfacing because of the nature of the tax exempt financing of the new section. IRS rules have restrictions on a privately owned for profit entity making a profit in a municipally owned tax exempt financed space. That’s why something called a "catering agreement" appeared in the "paperwork" just a few weeks ago. That agreement calls for them to be the "catering management company"..... Working for the city. Didn’t that seem strange when it popped up?

But here's the rub.....they are NOT going to give up the best deal on earth that they have enjoyed since day one which is to get the free use of great banquet and meeting space as well as kitchen space and equipment to generate millions of $$$$ in sales and profits for themselves. Now we have a conundrum that they sure as heck don't want to discuss....an issue on top of an issue....the definition of what gets served in what space?

Talk about complicated.....they will agree to act as a management company in the new TEE space because they don't intend to serve much if any food in that space (so they don't have to share their profits with the city)..... Watch this closely.....they want to continue to serve the food in the original space and probably have the people "meet" only in the new space.

They have deemed to call the space the "Convention Center" combining it with the existing space and since they have had the city pay for a new $1.4M kitchen that will serve both areas (you know...to save the city money, ha). I believe under the new IRS requirement - that would mean they could act as a management company but the city....the OWNER.....would be entitled to the profits on the sales generated. Right now all the city is guaranteed to get are the LOSSES. And certainly the city is entitled to 100% of any space rental fees.....in this contract they are trying to push, the city gets only 5%......5% ......5%......of whatever fees they collect on the rental of the city's building. This is totally insane.

And for Joe Bowles...I have a question. Didn’t you work at the Civic Center as "Director of Finance?" Aren’t you aware of the type of contract that real business uses to operate a convention center as well as a catering agreement?

Tullie
2930
Points
Tullie 10/27/12 - 01:36 pm
2
1
Renting a Room?

Riverman said: Tullie, what do I have to do, rent a room downtown?

Why do you want to rent a room downtown? You kinda lost me on that one.

When I asked if you moved, it was because of your use of "our mayor" in your post. That was all, just was curious.

Jake
31681
Points
Jake 10/27/12 - 02:59 pm
3
0
The Music Man

All of this reminds me of a song from "The Music Man".
"Oh, we got trouble,
Right here in River City,
Thats trouble with a TEE,
And that rhymes with P,
And that stands for Profit."

OpenCurtain
10049
Points
OpenCurtain 10/27/12 - 05:17 pm
2
0
For months taxpayers have been venting about this mess

Mayor, don't even expect an Fire siren to get a lot of excitement out of the taxpayers.

Too many people understand lost venue bookings mainly hurt downtown business not the taxpayers that much more than the $1.2m a year we are already on the hook for.

Way too many Taxpayers know they have already gotten the short end of this stick, years ago. The South Side Taxpayers even know they will help pay for something they will never a dimes worth of return on investment for.

One heads up:
Unless the downtown area has a larger population than the rest of the county, consider any future SPLOST's to revitalize Downtown, are likely to fail. Too many of us have learned the 7 to 10 year next great newest save the city project game cycle.

Little Lamb
43876
Points
Little Lamb 10/27/12 - 06:01 pm
0
0
TEE Center

I don't think it will happen, but the best thing for the Commission to do this week is to

1. Deny the contracts with Riverfront LLC.

2. Authorize the Coliseum Authority to work with the current renters of the TEE Center and provide them the services they need for the rent they will pay. Commission to authorize a base amount of money to Coliseum Authority for personnel and materials. Extra expenses should be submitted to commission for approval or denial.

3. Request assistance from the Convention & Tourism Bureau to advise on reasonableness of expenses.

4. Contract with a management contract expert to write a bid proposal for TEE Center managment for a five year deal and bid it out. Award to the lowest bidder.

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