New Facilities Management Contract Will Save City Nearly $1 Million Annually
Mayor Alvin Brown competitively bid the City’s facilities management contract for the first time in 20 years because he wanted taxpayers to receive the best value on their investment. The competition resulted in two bids that contained significant savings for taxpayers.
This afternoon on the steps of City Hall, where he was joined by Jaguars owner Shad Khan, Mayor Brown announced the selection of SMG to serve as the City of Jacksonville’s facilities manager. He unveiled contract terms that will save taxpayers nearly $1 million annually, provide the City of Jacksonville (COJ) with an immediate $1 million capital contribution, establish a $500,000 fund to attract and promote events at COJ facilities, and establish clear benchmarks for SMG’s performance of its facility management responsibilities.
“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.”
“Mayor Brown has achieved big savings for taxpayers,” said Jaguars owner Shad Khan. “This is a win-win for the Jaguars, the City, and all of our City venues. 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.”
“SMG looks forward to continuing its long standing and successful partnership with the City of Jacksonville, and executing on Mayor Brown’s vision to establish the city as a premier tourism, entertainment, and professional sports destination,” said SMG President and Chief Executive Officer Wes Westley. “Jacksonville’s venues and entertainment facilities are among its most valuable assets, and SMG is committed to achieving their maximum economic potential through world-class operation and management services. Our substantial capital investment in Jacksonville is further testament to our belief in the city’s bright future.”
While the parties still must negotiate a final management agreement, they have already agreed to the basic terms and conditions for that agreement. A copy of the Memorandum of Understanding
as to those terms and conditions is attached to this news release. The key provisions are as follows:
- The agreement will be for a term of three (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 COJ with a capital contribution in the amount of $1 million.
- SMG will establish an Event Development Fund in the amount of $500,000 to help attract and promote new events at COJ facilities.
- 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 – meaning that taxpayers will save nearly $1 million annually over the life of the agreement.
- The agreement will contain clear benchmarks to govern SMG’s performance of its facilities management responsibilities – and serve as a basis for the COJ’s decision on whether it will exercise its option to extend the contract.