MODESTO -- City Council members gave approval Tuesday to negotiating an outsourcing contract for Modesto Centre Plaza, despite a wave of public sentiment for keeping the convention center under the city's control.
With the 6-1 council vote, city management and legal staff will hammer out a five-year agreement with the DoubleTree Hotel and bring it back for council approval. Councilman Dave Lopez was opposed.
Most council members said they needed to make a hard economic decision, which is expected to result in eight city staff members and 20 part-time workers losing their jobs.
They said the city no longer can justify a $650,000 annual general fund subsidy for the center.
"We would be remiss with the taxpayers' money if we did not pursue this further," Councilwoman Stephanie Burnside said.
About a dozen business owners and nonprofit groups that hold events at the center urged the council to reconsider having a contract with the DoubleTree Hotel, which adjoins the downtown center.
Mike Mason of the ShadowChase Running Club said the Centre Plaza staff was great help with staging the Modesto Marathon this year.
"We have had a very positive experience working with the Centre Plaza," Mason said. "Will we get the same service that we've had in the past?"
Steve Anthony, whose business runs the Modesto Home Improvement Show and Home & Garden Show at Centre Plaza, said the hotel's food service was "terrible," but that the shows run smoothly because of relationships built with center staff.
"The hotel has had a revolving-door management for eight years," said Todd Aaronson, a marketing professional who made an unsuccessful bid for a council seat last year. "They have never spearheaded a destination marketing program for Modesto."
Fear of losing key events
Other groups said the center could lose events that bring hundreds, even thousands, of people to rent hotel rooms and spend their dollars in Modesto if they can't get discounted rates or the same service from a private operator.
Tuesday's decision completed a competitive process that saw the DoubleTree and unionized city employees make proposals to run Centre Plaza. An evaluation panel composed of city and county staff and an expert on the subject matter gave a higher score to the DoubleTree.
City officials will negotiate a detailed contract for management, operation, maintenance and promotion of the 25-year-old convention center.
Councilman Dave Cogdill Jr.'s motion approving the DoubleTree's proposal stated that a much-maligned 2009 concession contract with the hotel will run concurrent with the contract. The proposed agreement would be for three years, with options for two one-year extensions.
The concession deal gave the hotel exclusive catering rights for events held by for-profit entities at Centre Plaza, but officials have wanted to see additional food options.
Cecil Russell, Modesto Chamber of Commerce president, said the outsourcing decision wasn't about city staff's performance in running the center.
"It's an economic issue," he said, adding that he'd never had a bad meal served by the DoubleTree.
The DoubleTree wants an annual management fee from the city averaging about $130,000, plus incentive fees possibly based on revenue enhancement, customer satisfaction or good maintenance. The incentives could total $150,000 over the five years.
No one from the DoubleTree spoke at Tuesday's meeting.
Council members said they believed that seeking proposals again would produce the same two bidders. Several companies that manage sports arenas and convention centers initially expressed interest in the Modesto center last year, but did not submit formal proposals.
Mayor Garrad Marsh said eliminating the Centre Plaza subsidy will help the city with the current budget and budgeting for next year, when there may be $3 million to $5 million of red ink to deal with.
Wants concerns addressed
Councilman John Gunderson said he was giving tentative approval to outsourcing. He wanted to see the concerns of nonprofit groups addressed in the contract and more assurances that the community will benefit from privatization.
"I am very skeptical that they can negotiate something that Modesto feels good about," he said. "When I talked with (DoubleTree representatives), I did not get the sense they understood our community very well."
Bee staff writer Ken Carlson can be reached at firstname.lastname@example.org or (209) 578-2321.