A firm that has managed Boardwalk Hall and the Atlantic City Convention Center for nearly two decades has filed a lawsuit against the Atlantic City Convention & Visitors Authority, claiming the agency used faulty procurement practices.

SMG, based in West Conshohocken, Pa., filed its lawsuit in U.S. District Court on Nov. 30. Its claims are centered on a request for proposals issued in August seeking a firm to manage the two Atlantic City facilities. SMG, the facilities’ operator since 1992, currently holds a contract for the work, which expires on Dec. 31.

The lawsuit claims that the proposal violates state law because it says that arbitration — rather than the legal process — is the only way to resolve a disagreement about over the process. A letter sent to ACCVA President Jeffrey Vasser goes on to dispute the makeup of ACCVA’s selection committee, which included Casino Reinvestment Development Authority Executive Director John Palmieri and Atlantic City Alliance CEO Liza Cartmell.

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The letter claims the committee is legally flawed because it included individuals who have no authority over ACCVA operations. Legislation passed more than a year and a half ago mandated that the ACCVA merge into CRDA, but that transfer has not taken place.

“The CRDA and Alliance simply have no legal authority — indeed no business — being involved in, much less scoring and influencing the outcome of a public procurement carried out pursuant to ACCVA’s enabling legislation,” Camden-based attorney Christopher Hartwyk wrote on behalf of SMG.

Cartmell’s inclusion on the committee is vetted specifically in the letter, pointing out that as the head of the Alliance, a nonprofit marketing entity, she is not subject to financial disclosure requirements and public official ethics rules.

ACCVA attorney John Donnelly said the proposal process was handled properly. He noted that arbitration is an accepted form of dispute resolution that’s generally faster and more economical than going through the court system.

ACCVA’s board still plans to meet by teleconference Thursday to award the contract, he said.

SMG and Philadelphia-based Global Spectrum, a subsidiary of Comcast-Spector, both responded to the request for proposals, officials have said.

Exactly how CRDA and the Alliance came to be involved in the selection committee remains unclear. Donnelly said he was not familiar with the process and believed the committee was an informal group, as no vendor can be selected without board approval.

Vasser could not be reached Monday. Representatives of CRDA and Alliance declined to answer questions about the process, citing pending litigation. Previously, however, officials pointed to diversity of the selection committee as an example of recent collaboration efforts among the organizations.

Contact Jennifer Bogdan:


Follow Jennifer Bogdan on Twitter @ACPressJennifer

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