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San Jose City Council Approves New Team San Jose Contracts
Team San Jose announced the City of San Jose's unanimous approval of new contracts to lead CVB services and manage seven venues including the McEnery Convention Center, Parkside Hall, South Hall, City National Civic, Center for the Performing Arts, Montgomery Theater and California Theatre. Following strong fiscal results last October, and a benchmarking study that demonstrated San Jose's strong position in the meetings and convention industry, the San Jose City Council approved direction to begin negotiations to develop new contracts. The unanimous approval today sets in motion new contracts that begin as of July 1, 2014.
"Team San Jose' s partnership with the City of San Jose has generated strong fiscal and economic results in the past few years" said Mayor Chuck Reed. "We expect that Team San Jose will continue to perform admirably in the years ahead, drawing international and national conventions and world-class theater productions which will in turn attract visitors, secure room nights, and generate jobs and tax revenues."
The new agreements reinforce San Jose's pioneering single vendor approach, which provides convention center and theater operations and convention and visitor bureau services, increasing San Jose's competitive edge as a destination. The contract, with an initial five-year term starting July 1, 2014, includes two-five year extensions with the potential for Team San Jose to continue to manage the City's facilities for up to fifteen years through 2029.
"Over the past five years, Team San Jose has literally been rebuilding; now with a sparkling new facility, a high quality industry CEO, and a booming meetings and travel economy we take aim on our fourth consecutive year of record results," said Michael Mulcahy, board chairman of Team San Jose. "Our partnership with San Jose will result in growth in the tourism, convention and meetings marketplace and support our collective goal of maximizing 'heads in beds, feet on the street and butts in seats'. I commend the City and TSJ negotiation teams for their tireless work and perseverance to deliver two new contracts that will help position San Jose for strong future success."
The new contracts continue the previous performance-based model to drive economic development and fiscal management, and goals that align with economic potential and fiscal realities. Other benefits of the contracts include more focus on investing in capital improvement, repair and maintenance, increased flexibility for responding quickly to market conditions and booking business, and investment in promoting San Jose as a destination.
"As a result of the city and hotels $130M investment in the San Jose McEnery Convention Center, capital investment in the City National Civic, Center for the Performing Arts, Montgomery Theater and California Theatre, the city's assets are thriving and clients are enjoying successful events," said Karolyn Kirchgesler, chief executive officer of Team San Jose. "The new contracts provide stability for convention clients. Now our client know that Team San Jose will be here to follow through on their events. We are thrilled with San Jose's position within the meetings and convention marketplace and envision a successful future. Team San Jose would like to thank the City of San Jose for their partnership and dedication throughout contract negotiations."
Team San Jose met or exceeded each of its nine performance measures in FY 2012-2013, most notably growing revenue $12.3M over the original adopted budget and generating $5.3M in Gross Operating Profit. Customer service continued to be strong, with a year-end result of 98 percent overall customer service rating.
In addition to strong fiscal results, the City of San Jose and Team San Jose recently introduced the "new" San Jose Convention Center's $130 million renovation and expansion project, which added 169,000 square feet of additional flexible ballroom and meeting room space. This increased the facility's space to 550,000 square feet, making San Jose more competitive as a meetings and events destination. Team San Jose has already secured 219 new business opportunities using the expanded space, more than a third of which are new to San Jose.
San Jose hotels support convention center and theater operations through a tax on hotel rooms, combined with the revenue generated by Team San Jose. No city funding is used to support the convention center; in fact, positive results help generate revenue to support city services. Last year, the hotel-visitor tax generated $14.7M and over the last five years, this tax revenue has generated $25M to support police, fire and basic city services. More than 1,000 people work for the convention center and theater operations, and San Jose's hospitality industry employs more than 18,000 jobs within the community.
Team San Jose (TSJ)
Team San Jose, Inc. is an economic development organization and San Jose's official Convention and Visitors Bureau, unifying the destination, hotels and venues to deliver an exceptional visitor experience. San Jose offers all you would expect from a big city destination with small town charm and serves as the gateway to Northern California attractions. Our company provides full management services for seven venues on behalf of the City of San Jose including the San Jose McEnery Convention Center, Parkside Hall and South Hall and Arts and Entertainment venues including the California Theatre, the Center for the Performing Arts, Montgomery Theater, and City National Civic. For more information about San Jose, visit www.sanjose.org.
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