Another heavyweight woos city entertainment venues
HAMILTON’S DOWNTOWN entertainment facilities have attracted another solid-gold suitor.
SMG, a global sports, entertainment and venue management player, has notified city officials it’s also interested in bidding for the rights to manage the city-owned arena, concert hall and convention centre.
“If the city is going to have a competitive bidding process for the entertainment facilities, SMG would be interested in looking at the opportunity,” Harry Cann, SMG regional vice-president of Canadian operations, said in an interview,
The company’s interest comes fast on the heels of a similar unsolicited offer from the Hamilton-based Carmen’s Group and its new partner the Oak View Group, a major Los Angeles-based event booking, venue management and development company.
Both proposals arrive as the city is wrestling with contract expirations and renewals at the three buildings.
Spectra, a multibillion-dollar venue, hospitality and sports and entertainment
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company based in Philadelphia, holds the existing five-year management contract for FirstOntario Centre and FirstOntario Concert Hall. Carmen’s holds the contract for the convention centre but is now making a play to run all three venues.
Both the Spectra and Carmen’s contracts expire Dec. 31. The city needs to notify them if it intends to renew the contracts no later than Aug. 3.
This sudden eruption of new proposals means city staff will have to present recommendations to council as soon as possible. Options could include simply rolling over the existing contracts for another five years or opening them up to a full or limited competitive bidding process.
SMG, which manages more than 200 facilities worldwide, is headquartered in Philadelphia but owned by Onex Corp., a Canadian firm based in Toronto. The company is no stranger to the Hamilton venues. SMG unsuccessfully took part in the original 2013 process, which saw council scrap the city agency HECFI and turn management of the former Copps Coliseum and Hamilton Place over to Spectra and the Convention Centre to Carmen’s.
Back then, SMG partnered with Hamilton’s Sonic Unyon and Forum Equity, a Toronto development company. Sonic Unyon is an independent record label with organizing links to the award-winning annual Supercrawl festival downtown.
Cann says SMG doesn’t know if this time around they would bid by themselves or partner with others. “We’d have to look at the scope of the procurement and the goals of the city for the venues.”
Mayor Fred Eisenberger is “delighted” by this rush of interest from the heavyweight companies. He says it speaks well for the standing of the facilities and city as a whole.
“They see opportunity and that opportunity bodes well for the city in terms of our subsidy and facility management, as well as future development.”
Council privatized management of the three venues in 2013 to reduce swelling taxpayer subsidies. Between them, Spectra and Carmen’s have now saved the city an estimated $5 million.
Under the current contract, Spectra still receives an annual $1.4 million subsidy from the city. Carmen’s, having eliminated its subsidy, suggests it can provide “improved financial arrangements” if given the chance to run all three facilities.
Spectra regional vice-president Tim Murphy says his company is pleased with it’s track record in Hamilton, its partnership with concert promoter Live Nation Canada, and the prospect of having its contract renewed for another five years.
“We’re confident we can do a better job than anybody,” he said.
If council, however, opts for a new competitive process, Murphy says Spectra is open to bidding for management rights to all three venues. “If it does go out to bid and there’s an opportunity to bid on other facilities, we certainly would do it.”
That potentially puts Spectra, SMG and Carmen’s in a threeway battle, essentially a rematch of the 2013 contest. This time around, however, Carmen’s has another card up its sleeve.
Although the company is willing to take part in any process council chooses, a Carmen’s-led consortium also plans to present the city with a proposal for a public-private partnership aimed at redeveloping the aging facilities and surrounding lands.
That means, as Eisenberger notes, council may soon be deciding what’s best for the venues in both the short and long term.