New Ford Park management contract finally a ‘done deal’

New Ford Park management contract finally a ‘done deal’

Ford Park Entertainment Complex, the Jefferson County publicly subsidized event center, costs taxpayers roughly $2 million every year, but elected officials are hoping new management can cut the amount of support needed from county coffers to run the facility and breathe life into the underutilized venue.

Monday, Jan. 23, Jefferson County Commissioners and Judge Jeff Branick approved a fully negotiated contract for management of Ford Park, with former contracted management firm SMG general manager John Hughes and new management team Spectra representatives on hand for the event.

Tom McDonnell, Spectra director of business development and venue management, has been trekking back and forth to Jefferson County during the contract negotiation process. According to McDonnell, he is confident the deal struck between the two will be beneficial to taxpayers hoping for a revitalized Ford Park.

“We’re done,” McDonnell told The Examiner about the contracting process. “All that’s left now is to get a new general manager in place,” and Spectra will begin the transition of leadership.

“Our goal is to be here in the middle of February,” McDonnell said. The first day of the contract isn’t until April 1, but McDonnell said the plan is to be ready well before then.

“We’ve already started,” he said. “We want to set ourselves up for success.”

Jefferson County leaders are hoping to set the community up for success, as well. County officials have already learned a few things from the former contracts held between the public entity and SMG when it ran Ford Park. According to County Commissioner Everette “Bo” Alfred, the county did not have any stipulations in the management agreement with SMG to allow for performance reviews and monetary compensation based on the quality of job performance. Additionally, it was difficult to track much of SMG’s management productivity and value as requests for certain information were deemed by SMG officials to be “proprietary” and confidential in nature.

As part of the new contract with Spectra, Jefferson County officials will be privy to “reasonable financial information relating to the facility,” and the manager “shall use all reasonable efforts to manage and operate the facility in accordance with the operating budget.” Additionally, the county will have the right to audit and inspect Spectra’s independent records related to Ford Park’s revenues and expenses by venue and event, and will require a monthly summary submission.

Two factors will go into figuring how much Spectra, a Philadelphia based company, will be compensated for managing the entertainment complex. The first is a quantitative component, which will be 2 percent of revenue up to the agreed benchmark, and 15 percent of revenue in excess of the benchmark. The second component is qualitative, paying up to $10,000 the first year, and up to $20,000 the second year.

The qualitative segment of the agreement allows for monetary compensation pursuant to Jefferson County Commissioners’ review of facility operations under the management team. Up for performance review each year, Spectra’s qualitative compensation will be provided by the elected county officials on the basis of “customer satisfaction, maintenance/upkeep, community involvement, user satisfaction, (and) marketing.”

Spectra will get a pass the first year, but if in any subsequent years the management team fails to meet or exceed the bottom-line net operating income projected in the approved annual operating budget, the company will forego – dollar for dollar – any anticipated incentive bonus, both quantitative and qualitative.

In addition, Spectra will offer an aggregate $700,000 toward capital improvements at the aging facility, and, according to McDonnell, it will be projects mutually agreed on by the county and event facility managers. According to the contract, the dowry can also be used “to fund and attract events at the facility.” The intent stated in the agreement is to have at least 25 percent of the funding expended by the end of this year, with the balance to be invested before the end of the fourth year in this five-year contract.

Spectra will also bring in its own concession and catering, but in contrast to Jefferson County’s contract with prior management provider SMG, all food and beverage sales will be reported as revenue. In the county’s contract with SMG, the management provider was required to pay the county a portion of the profits, without reporting the income as revenue.

Should Spectra decide to contract any services, such as ticketing and food and beverage services, to any affiliate of the company’s, the terms and prices agreed to must be “competitive with those obtainable from any unrelated parties rendering comparable services.”

Operating cost, according to the contract, “does not include debt service on the facility, capital expenditures, transition costs, property taxes, or the ‘incentive fee,’ all of which costs shall be borne by (Jefferson) County.”

Transition costs up to $50,000 will be Spectra’s responsibility, but anything over that amount can be attributed to operating costs.

Spectra’s contract with Jefferson County will run for five years and six months, expiring on Sept. 30, 2022, but may by mutual agreement be extended an additional five years, through Sept. 30, 2027.

Jefferson County will get rent-free use of the facility, less cost of expenses, for meetings, seminars, training classes or other non-commercial use, and for use as a disaster shelter if need be.

As for staffing the facility, McDonnell said that the new firm is keeping most of Ford Park’s current staff – but not general manager John Hughes, who has a no-compete contract with SMG. While Spectra will be selecting its own choice for a general manager, county commissioners must approve the appointment – and in the contract, the county’s position is clear that it will require an experienced professional to fill the post.

McDonnell said he plans to bring the company’s proposed choice for general manager for Commissioners Court review in the coming weeks, but was reluctant to name names prior to approval.

McDonnell said Spectra’s first priority, aside from getting its general manager in place, is to perform a facility audit, “going over everything with a fine tooth comb.”

All along the way, McDonnell promised, Jefferson County stakeholders can be certain of two things: “We’ll do what’s best for the county, and we will be accountable and transparent.

“That’s our form of management.”