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Albuquerque Convention Center to become private

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Albuquerque Convention Center to become private

Dennis Domrzalski

NMBW Staff

It is an effort that has been six years in the making, but on Feb. 1, the Albuquerque Convention Center, long cited as an under-used venue that failed to live up to its billing as a key to Downtown's revitalization, will go private.

Philadelphia-based SMG, one of the world's largest operators of convention centers, stadiums and other entertainment venues, will take over the management and operation of the troubled center under a three-year contract with the city that will pay SMG a base fee of $175,000 a year. SMG, which operates 165 convention centers and entertainment venues, will also be able to keep the profits it makes from booking the center.

The privatization of the convention center, which, in recent years, has been booked at 20 to 30 percent of capacity, is being hailed as a positive move that could help the city's hospitality and tourism business.

City-wide convention bookings are down for 2004, and city hotel managers say the 2004 convention season will be worse than the 2003 season.

Albuquerque Convention and Visitors Bureau spokeswoman Tania Armenta says the Bureau has booked 10-city-wide conventions for 2004, down from the 17 that were booked last year. But, she adds, bookings for 2005 and 2006 are looking better, with seven bookings so far for 2005, and eight for 2006.

A city-wide convention is one that books at least 500 room nights.

The weakened economy and the tourism slump that followed the 9-11 terrorist attacks left all convention centers in the nation with a falloff in business, and centers in larger cities have slashed their prices in order to get business from centers in smaller cities, Armenta says.

"We are looking forward to working with SMG. They have a proven record of success, and the partnership will give us new leverage to market and sell the destination," says Dale Lockett, the new executive director of the Albuquerque Convention and Visitors Bureau.

The Convention and Visitors Bureau is charged with helping fill the convention center, and has come under criticism in recent years for the center's low usage.

One person who is thrilled at SMG's arrival in town is Karl Holme, general manager of the 395-room Hyatt Regency Hotel in Downtown Albuquerque and just across the street from the Convention Center.

"We are a convention hotel, 70 percent of our business is convention related, and when you don't have a convention base, it makes it tough," Holme says.

"SMG is the largest convention and arena management company in the country, and so you have to believe that they have a pretty good system down, although, we expect that good things will take a while."

Cindy McGill, vice chair of the Greater Albuquerque Chamber of Commerce, says SMG's presence should be a boost for the Convention Center and all of Albuquerque.

The Convention Center has lost nearly $9 million over the past six years, and that is a lot of money, and we need to turn it around and give it to somebody who has a background and who has a track record in managing convention centers," McGill says. "We are hoping they can turn it around and bring some new events to the city, which will help economic development."

City Hall's Chief Administrative Officer Jay Czar says it's hard to say that the Convention Center has "lost money," over the years.

"The Convention Center has always been subsidized. The philosophy has been that it helps bring new business to town. When somebody comes here for a convention, there are certainly many times when they come back with the family on vacation," Czar says.

"We have never looked at it as losing money, but certainly it can be more efficient, and we want it to become self-sufficient."

SMG's Tom Morton, the Convention Center's new general manager, says he'll spend January hiring people to fill the jobs of 37 city employees who ran the Center. "We'll be up to 32 to 35 staffers," Morton says.

The city employees who worked at the Center were given other city jobs, Czar says.

"The month of February, though, will be a deep cleaning month. We will go into all the nooks and crannies and ceilings and vents from the front of the house to the back of the house. We will take mops and brooms and make it all shine," Morton says.

SMG has a three-year contract with the city, with an option for a three-year extension.

The effort to privatize the Convention Center began in 1997 during Mayor Martin Chavez's first administration. City employee unions fought the idea, saying it would lead to the privatization of other city services.

"It was very controversial, but it finally came to fruition in 2003. We feel that convention centers are better operated by the private sector," Czar says.

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I used to work in ABQ and have been to the convention center many times. IMO, DT ABQ is too small and boring to be a major convention city. Santa Fe talked of building one, but while I think they would have had greater success, I don't think they ever built it. Maybe the indian casinos can draw conventions, but some of indian casinos have their own convention faciliites, so I doubt they will help.

IMO ABQ is a very conservative city with little in the way of entertainment. It isn't warm enough, big enough, or unique enough to become like orlando or las vegas.

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