A special meeting to award a management contract for Boardwalk Hall and the Atlantic City Convention Center turned into a stage for supporters of the current operator Thursday when officials opted to postpone the vote until next week.
The Atlantic City Convention & Visitors Authority, despite calling a special meeting to make the award, put off plans to select an operations team for the two event venues. Instead, the board used the time to hear from city emergency management personal and event organizers in the longest public comment period this year.
Overwhelmingly, speakers called for the authority to retain its current operator, SMG, which has managed the properties for 17 years. The West Conshohocken, Pa.-based firm was one of two respondents to a request for proposals issued in August. The other firm vying for the contract is Global Spectrum, a Philadelphia-based subsidiary of Comcast-Spectacor, which also owns the Wells Fargo Center.
The firm chosen will handle the day-to-day management of the venues and control the bookings for Boardwalk Hall concerts and other events. While officials will not discuss the decision-making process, many who spoke at the meeting were under the impression that the authority was leaning toward a change in operators.
A number of city emergency management personnel spoke on Thursday about the strong working relationships built with SMG and the importance of those relationships as the venue served as a shelter as well as a base for the Federal Emergency Management Agency in the wake of Hurricane Sandy.
"If change is needed, change should be done within the organization," Atlantic City Fire Department Capt. Angelo DeMaio said. "It's critical that you develop and stay with the relationships that you have. I really (hope) that you would re-look at this and assure that SMG stays on board."
The similarities between the names of the companies competing for the contract are no coincidence. Both were started by Ed Snider, who founded the Philadelphia Flyers and led the Spectrum out of bankruptcy in the 1970s. Snider later helped to create SMG, but sold his interest in 1997. After waiting out a two-year non-compete clause, he started Global Spectrum in 2000. Today, he's the chairman of parent company Comcast-Spectacor, his partnership with the cable powerhouse.
While some feared a change would sever relationships that have aided in scheduling events and coordinating emergency management, Global Spectrum's Chief Operating Officer John Page, said that’s not the case. He said that the firm typically retains the vast majority of employees when taking over from another vendor. However, the company may be prevented from keeping certain higher level employees with non-compete agreements, he said.
"Based on our experience in other markets and what we've been able to accomplish, we know we can do what's right for Atlantic City," Page said, later adding that the firm would be able to take advantage of its relationships with ticket holders from other venues to promote shows in Atlantic City.
Others, however, saw some of those relationships as a negative.
Richard Helfant, executive director of the Save Lucy Committee dedicated to the preservation of Lucy the Elephant in Margate, talked about his positive experiences with SMG in hosting events at the city's venues. He was concerned that a management change could leave Atlantic City overlooked.
"Global also runs the Wells Fargo Center in Philadelphia, and that's their flagship," Helfant said. "I would think that if it ever came down to an instance where an artist was looking at playing perhaps Philadelphia, perhaps Atlantic City, Global's going to favor their flagship. I would hate to see a scenario where Boardwalk Hall became their stepchild."
Page said that's not an issue as the firm manages several venues in close proximity of each other, pointing to the Sun National Bank Center in Trenton and Temple University's Liacouras Center in Philadelphia. Artists are often willing to play multiple venues in a region, he said, pointing to Madonna's appearance in both Atlantic City and Philadelphia this year. However, only a handful of acts have played both the Wells Fargo Center and Boardwalk Hall on the same tour in recent years, a comparison of their lineups shows.
Thursday's conversations took place against a backdrop of legal issues surrounding the contract award. Earlier this week, SMG filed a lawsuit in U.S. District Court alleging that the authority engaged in faulty procurement practices when issuing its request for proposals. At issue was a clause in the proposal stating that an arbitration process, closed to the public, was the only means of settling a disagreement over the process. SMG argued that the clause violated state laws that call for an open hearing process followed by legal action, if needed.
On Thursday, an order by Chief U.S. District Judge Jerome Simandle stated that the inclusion of the clause did not impair the the bidding process and the court would not stop ACCVA from awarding a contract. However, the order states that once the contract is awarded, the authority must follow procedures allowing for a hearing to take place should a dispute arise.
John Samerjan, a consultant for SMG, called the arbitration clause “highly unusual” and said the firm was pleased that the court has established a “transparent procedure following any presumed action next week by the board.”
A letter sent from SMG to ACCVA last week suggests that the firm might challenge the award based on the composition of a selection committee used in the process. The committee included Casino Reinvestment Development Authority Executive Director John Palmieri and Atlantic City Alliance CEO Liza Cartmell. Neither have formal influence in ACCVA decisions, leading SMG to call their inclusion "unlawful" as refer to the selection process as one cast with a "specter of impropriety."
ACCVA President Jeffrey Vasser and legal counsel John Donnelly both declined to comment on anything related to the vendor selection process Thursday, citing the litigation.