City, Jaguars choose SMG to manage venues
Updated On: Dec 22 2012 11:10:00 PM EST
Mayor Alvin Brown and Jaguars owner Shad Khan stood on the steps of City Hall Saturday afternoon to announce a deal that the city of Jacksonville will keep SMG on board as Jacksonville's facilities manager. Mayor Brown said the new deal will save taxpayers close to $3 Million over its lifespan and provide the city with an immediate $1 million capital contribution.
The city has used SMG, a large Pennsylvania company officially known as Spectator Management Group, for its seven entertainment venues for years, but considered other companies, like Global Spectrum, to take over after the last contract expired.
Jacksonville officials said after careful consideration, they felt the best idea was to stay with SMG.
"Our hard working taxpayers deserve savings and accountability,” said Mayor Brown. “This agreement provides both. It will help us make Jacksonville one of the top sports and entertainment destinations in the nation and world. I am very proud to have worked with Shad Khan to make this achievement possible. Today is a great day not only for taxpayers and fans but also for the partnership between the City of Jacksonville and the Jacksonville Jaguars.”
Jags owner Shad Khan says the deal is a win-win for the city and the Jaguars. He told Channel 4 the deal is part of his plan to enhance the fan experience at football games.
"I want to commend the Mayor for his leadership on this issue. The Jaguars and the administration have worked jointly to meet our goals on this matter. I look forward to working with the City to further develop our partnership in the years ahead,” said Khan.
SMG executives said they made drastic cuts in cost because they understand times our tough and they believe in the city of Jacksonville.
"Our substantial capital investment in Jacksonville is further testament to our belief in the city's bright future," SMG President and CEO Wes Westly said in a news release.
Details of the new agreement, according to a memo outlining the terms and conditions:
- The deal will be for a term of 3 years starting October 1, 2012, with the City having the option to exercise up to two one year extensions depending on SMG’s performance of its facility management responsibilities.
- SMG will provide the city with a capital contribution of $1 million.
- SMG will establish an Event Development Fund of $500,000 to help attract and promote new events in Jacksonville.
- SMG will reduce its annual management fee from $934,252 to $100,000 and reduce its annual incentive fee from $246,081 to $100,000.
A spokesman for the city said the agreement has not been finalized but both sides have agreed to the terms. The agreement will have performance benchmarks which will determine the city's decision on an option to extend the contract.
Global Spectrum released the following statement regarding the city's decision:
"We are very disappointed with today's announcement. We were informed that we had been recommended as the best management company for the venues in Jacksonville as suggested by the selection committee. It does seem strangely peculiar to reward a company who has been significantly overcharging the city and tax payers for years. Since we were only informed of this change approximately 10 minutes before the announcement, we are exploring our options as it relates to today's announcement while we await an explanation."
The announcement comes a day before the Jaguars' final home game against the New England Patriots.
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