A little competition is a good thing, especially when it comes to negotiating a new contract for the South Okanagan Events Centre.
After a months-long request for proposals process, Penticton city council voted Monday to award the next contract for operating the SOEC to Global Spectrum, who have operated it since it opened in 2008. Remembering the concerns of the early years of the SOEC, Coun. John Vassilaki expressed surprise to find himself voting to renew the contract with Global.
“No one, anywhere, has gone through as much criticism as we received over those five or six years since the event centre started,” said Vassilaki. “If someone was to ask me two years ago would we hire Global to take over again, my answer would have been absolutely not. But the differences between then and now are as different as night and day.”
Besides Vassilaki, Garry Litke is the only other current councillor that was in office when the SOEC was brought into being.
“The first months were filled with criticism and problems,” said Litke, explaining that the city had been trying to create a new economic driver, only to watch their hopes and vision fizzle out almost immediately.
While the first couple of years under Global’s management were shaky, Global has worked hard to change the situation, according to Mark Ziebarth, chair of the SOEC committee. Ziebarth said that with Global knowing other competitors were bidding for the contract encouraged them to make a submission that was much more favourable for the city and expertise on the evaluation committee helped identify the best deal.
“I think the city is much better off with this contract. Global Spectrum worked for this, earned this and the city benefits, Global benefits,” said. “Without that competition, we wouldn’t have that deal we got today. Without the expertise the city now has, that didn’t exist five years ago, we wouldn’t have got this deal. Everybody wins.”
The operating deficit for the complex is continuing to decline from the $2.2 million it was at prior to Global changing their management team at the SOEC. It’s expected to hit the $1 million mark in 2014, which city manager Annette Antoniak points out is near to the $750,000 deficit the Trade and Convention Centre operated at prior to the building of the SOEC.
“In the last three years there has been a significant difference in SOEC management and subsequent performance,” said Antoniak. “We believe the new terms represent a significant improvement from the previous contract.”
Those terms, Antoniak explained, include lower performance and management fees, along with terms that are more incentive-oriented to Global.
Much of the improvement comes from consolidating the contract with Global, rather than separate contracts for management, food and other services.
The only service not covered under the umbrella of the new agreement is ticket sales, which will require a secondary contract with New Era Ticketing, another Global Spectrum subsidiary.
“There is an event fund we have managed to negotiate — it was never achieved before — to the tune of $150,000,” said Antoniak. “It will be used to motivate and entice different events coming to the city of Penticton and will constantly be replenished.”
The City of Penticton received five submissions in response to the RFP, which closed on April 30. Two were from companies only offering ticketing services, while the other three — Global, RG Properties and SMG Canada — were all four parts of the RFP: food, management, marketing and ticketing. Global’s submission came out ahead on the evaluation committee’s rating system.
“There is nothing to suggest that SMG wouldn’t have done a good job, or RG. Global had a better rating according to the scale we were looking at,” said Antoniak. “And I do believe past experience plays a part. I think overall we have managed to see substantial savings to the bottom line for the citizens of Penticton.”
