Atlantic City’s approach to attracting convention sales will change drastically in the coming weeks as the state moves to create a new nonprofit organization financed by taxpayer money but unencumbered by state laws.
Officials say the move will make Atlantic City more competitive against other major convention destinations but, like other state-driven Tourism District initiatives, has taken longer than many had hoped.
It took more than two years for the Atlantic City Convention & Visitors Authority to merge with the Casino Reinvestment Development Authority as mandated under the 2011 Tourism District legislation. Now, under the CRDA’s latest plan, the convention sales function will be merged back out of the CRDA and into a separate nonprofit entity known as Meet AC.
The CRDA on Tuesday authorized the group’s creation and gave approval for a partnership agreement between the entities.
“We’ve struggled long and hard to get this thing together,” CRDA Vice Chairman Robert Mulcahy said, adding that the entity’s creation has been in the works for several months. “We’re looking for significant improvement.”
Officials say the nine-member convention sales staff absorbed by the CRDA has been hamstrung by state regulations that require advanced approval for travel and forbid some of the most competitive compensation packages for sales positions. State legislation provided some additional travel and entertainment freedoms for the ACCVA, but those were lost when the entities merged, officials said.
Meanwhile, the city’s convention sales have not increased at nearly the pace the state once hoped they would. With 91 conventions, trade shows and public shows booked in 2013, bookings were down 15 percent over 2010 levels in an industry officials say could drastically increase the resort’s midweek business.
While the funding stream for the organization will continue to come from taxpayer dollars, creating a nonprofit allows additional freedoms to the sales teams as they seek to attract conventions to the resort. The move, however, comes as the CRDA has less than two years remaining on the state’s timeline for improvements.
“We understand the urgency,” Mulcahy said later in Tuesday’s meeting regarding the overall pace of progress in the resort. “Sometimes we don’t always exhibit it, but we understand it.”
The ACCVA, criticized by Gov. Chris Christie as irresponsible and inefficient, derived its budget from Atlantic City’s luxury tax levied at 3 percent on the sale of alcoholic beverages and 9 percent on other retail sales. With the merger a year ago, the CRDA became the recipient of the luxury tax revenues as it took over the convention sales staff as well as other marketing.
The CRDA plans to keep a portion of those revenues within the authority and use the remainder to provide an $8 million budget for the new nonprofit. The move will leave the CRDA fully financing the new organization, which will be required to seek approval for its budgets and marketing plan from the authority.
Dan Fenton, principal of Strategic Advisory Group, which is consulting with the CRDA on the process, said 98 percent of convention sales organizations are set up as nonprofit entities.
This is not the first time in recent years that a new entity has been created with marketing purposes in Atlantic City. Tourism District legislation stripped marketing and promotion functions from the then-ACCVA and placed them with the newly created Atlantic City Alliance, which heads the “Do AC” campaign.
The alliance, however, has faced criticism for a lack of transparency. While the alliance was created by state legislation, its $30 million annual budget is required to be funded by casinos’ private funds. As a result, the alliance is allowed to meet privately, and state court has ruled the organization is not subject to the Open Public Records Act.
That means the organization does not have to disclose its spending patterns, meeting minutes or details of its project considerations, among other things.
That will not be the case for Meet AC. The five-member board will meet publicly and will be subject to OPRA. The board will be made up of one CRDA member, one local business or tourism official, and three representatives of the hospitality industry, with at least two of those members coming from casinos, Fenton said.
Meet AC is expected to have its first meeting within 60 days.
Joe Kelly, president of the Greater Atlantic City Chamber, praised the move, saying the organization could not be created soon enough.
“I’m glad to hear that the expectations will be set high, because they have to be,” Kelly said.
Contact Jennifer Bogdan:
@ACPressJennifer on Twitter