Authority Not Pursuing Revenue from Naming Rights; Board Members Say Booking Pace on Target
At their board meeting, Thursday night, NewsLanc again raised concerns about contracts between the Convention Center Authority and Penn Square Partners – issues with which the Authority has seemingly refused to deal.
Past contracts between the developer of the hotel and the public authority stated that S. Dale High shall have the right of first offer with respect to naming rights, and that proceeds from the sale of naming rights would be shared 50/50 between the authority and Penn Square Partners (PSP).
Confronted with the issue, Chairman of the Board Art Morris declared Thursday night that the board is “not pursuing, actively, naming rights as a revenue source.”
Morris has previously said that the board does not expect naming rights revenue to be substantial for the first year or two of operation.
Confronted with further contractual provisions stating that future state grants shall be shared 50/50 between the authority and PSP, Morris said that this issue is “not off the table,” that the discussion would be better raised with the Finance Committee, and that negotiations will continue to take place between the Authority and PSP as part of discussions with State Senator Gib Armstrong about state grants.
The Authority is expecting to receive $3.2 million as part of the recently-passed state budget. That money may not be available until later in the year.
When the reporter asked how many opening-year events have been booked so far, no one on the board had the figures at hand.
In his last report to the Public Relations, Marketing, & Hospitality Committee of the LCCCA, Josh Nowak of Interstate Hotels & Resorts (who was not present at Thursday night’s meeting) had said that no new bookings were confirmed during the month of June.
Also, according to Nowak’s July 17 report, 13 events have been booked for 2009, reflecting $183,600 in revenue. This amount is 36.3% of the $506,077 Interstate Hotels & Resorts anticipates the Center will generate in 2o09.
Nevertheless, Kevin Fry, who chairs that committee, and LCCCA Executive Director Kevin Molloy remain optimistic.
The reporter asked whether the booking pace so far has been disappointing or in line with expectations. Fry replied, “The progress has so far has been what we expected” even though “some of the smaller events are booking more slowly.”
“The effort of the sales team has been excellent,” said Fry.
He went on to say that the marketing team has a lot of prospects and repeated, “we’re very close to where they expected us to be, percentagewise.”
Molloy shared that, in his experience, many meeting planners, particularly nonprofits, become more confident about booking once drywall is installed.
“Those nonprofits cannot risk their financial viability by booking a convention center before it has drywall,” Molloy said.
NewsLanc will, of course, continue to pursue and seek further clarification on these issues, and we will continue to file timely reports.