Richmond Mayor Dwight C. Jones has extended the management agreement for the Coliseum temporarily because the city doesn't have time to seek bids for a new contract before the current one expires at the end of June.
The administration said it signed the 30-month contract extension with longtime manager SMG on Feb. 2 to gain time to hire a consultant that will help determine what kind of long-term agreement the city will seek for managing the 40-year-old civic arena, which the mayor has proposed to replace.
Garland Williams, senior assistant to Chief Administrative Officer Byron R. Marshall, told a City Council committee on Monday that the city began urgent negotiations with SMG last month after realizing the current five-year extension would expire June 30.
"The last time a contract was negotiated, it took almost 10 months," Williams said in response to questions posed by the Committee on Land Use, Housing and Transportation.
SMG has managed the Coliseum in a joint venture with Johnson Inc. since 2002 but has been involved with the arena's management more than 25 years. Richmond agreed in 2007 to extend the contract for five years, as city officials wrestled with whether to replace or renovate the deteriorating building.
Jones decided early last year to support construction of a $147.1 million replacement a block from City Hall, but the city doesn't have the money or regional support to build it.
Richmond hasn't conducted a comprehensive financial analysis of Coliseum operations since 2001, but Williams said the contract extension through the end of 2014 would allow time to take a detailed look at options.
The administration intends to request proposals to hire a consultant, which in turn will recommend whether to seek a management contract that is based on performance incentives or fee for service.
The administration hopes to hire the consultant by August and advertise for proposals for a new management contract by the following April.
Currently, SMG and Johnson are eligible for a management fee of $140,000 a year if they meet performance measures, but they have not been paid beyond a percentage of gross food and beverage sales because the facility has lost money.
Under the new contract extension, the joint venture would be paid $75,000 a year if the Coliseum loses no more than $750,000 in that year, which Williams said would be an improvement over annual losses he estimated at up to $1 million.
"The aim is to bring (the losses) down," he said after the meeting Tuesday.
The contract extension does not apply to Richmond CenterStage or to the Landmark Theater, which SMG manages under a separate contract reached in 2008 with the Richmond Performing Arts Center.
Dolly Vogt, regional manager for SMG Richmond, attended the committee meeting but had no comment on the contract extension.
"I was just there to help if they needed information," Vogt said later.
Email
Facebook
Google
Twitter
Favorites
More
Advertisement