Outside view of the MBCC

Miami Beach Convention Center : Kicking It Into High Gear

Article by Susan Askew

MIAMI BEACH, FL – (November 16, 2019) During the past four years, the Miami Beach Convention Center has gone through a transformation from an outdated building with more trade shows than conventions to a high-tech facility that is getting the attention of planners for some of the larger, more lucrative events. Through it all, Art Basel has been one of the constants. Its importance to Miami Beach’s economy was evident as each November construction came to a halt and unfinished areas were masked so the show could go on. Intermittently, other events were held if they could be accommodated.

As Art Basel comes back into town, Spectra, which manages the Convention Center for the City, and the Greater Miami Convention and Visitors Bureau (GMCVB), say things are kicking into high gear as the number of events, attendees, and economic impact ramp up.

In FY 2017-18 (October 1, 2017 through September 30, 2018), there were 12 events at the Convention Center with the building fully under construction. Those events attracted 147,200 attendees, contributing $6,395,000 in gross revenue to the Convention Center. The local economic impact of those events is estimated by the GMCVB to have been $28 million.

This past fiscal year, FY 2018-19 (October 1, 2018 through September 30, 2019) during which time the Convention Center mostly reopened, there were 37 events with 415,600 attendees and $16,335,000 in gross revenue. The local economic impact is estimated to have been $52 million.

As FY 2019-20 begins, there are 52 events on the calendar with an estimated 426,920 attendees. The projected gross revenue is $21.7 million with a projected local economic impact of $75 million.

Spectra’s Freddie Peterson is the Convention Center’s General Manager. Last year, with just three months on the job, he oversaw his first Art Basel event. It’s been non-stop ever since.

This year, he said, “We’re like a shot out of a cannon. We’ve really hit that fifth gear when it comes to the event side. We’re clocking in at north of 50 events this fiscal year alone compared to 60 events over three years… It’s exciting, it’s thrilling.”

“Employees are really supercharged up and energized,” according to Peterson though, he jokes, “There’s no sleep this year.” Show organizers are also excited about the new facility, he said. “[They] absolutely love the beauty of the venue. I think it’s also the ease of loading in and loading out” now that there are loading docks on each side of the facility.

Meanwhile, he said, “Centerplate continues to elevate the food and beverage experience here” with what they’re calling “unconventional cuisine” at a level that has “amazed” organizers.

One of the promises of the new Convention Center was a higher quality of convention business. Peterson says that transition is already starting to happen and will get stronger when the new 800-room Convention Center hotel comes online.

The marketing team is focused on four key verticals – technology, finance, education, and medical conventions. “Medical’s our sweet spot,” he said.

Miami Beach CFO John Woodruff said it’s hard to compare the contribution of the old Convention Center to the new one. Even when it was fully in use, he said, the convention business “was pretty weak. There’s a reason why we spent a lot of money to renovate the Convention Center.”

“We’ve never really depended here on convention impact,” he said. “If you think about it, for this community this is going to be a whole new impact.”

“To me, we’ve always been a leisure market. Our convention business in the past has always been minor so, now, as we’re getting ready to hopefully have the new Center really kick in at a full capacity, to me that’s an exciting prospect," Woodruff said. "There’s going to be an economic impact that I’m not sure anybody here has really seen before.

" Over the last four years, resort tax receipts which include bed taxes and food and beverage taxes have grown about 1.5%, Woodruff noted. “That’s pretty slow growth for this kind of market.”

“With the Convention Center really kicking in and eventually the Convention Center hotel… we’ll be able to see events that we’ve never been able to have in the past,” he said. “These new events are made up of really high-end type conventioneers” who spend more money locally than shows the City has typically attracted. He cited the recent Million Dollar Roundtable show during which the Nike store on Lincoln Road ran out of inventory and local restaurants asked for a heads up the next time a large event was coming to town as they, too, ran low. Walking through Macy's after the show, Woodruff said, "It kind of looked like Black Friday.”

Conventioneers “tend to do a lot of shopping. That’s the big impact… When we have a full event mix of those kinds of events, we will definitely see an economic impact from that but it takes time to ramp up," Woodruff said.

He predicts “2020 will be better. 2021 will be more normal and when we get the new Convention Center hotel online, we’ll have a new normal after that so we have a lot to look forward to.” He expects the Convention Center hotel will be online toward the end of 2023.

It hasn’t always been smooth-going for the $620 million project. In fact, finishing touches are still being done and the rooftop parking deck has yet to open. The City and contractor Clark Construction continue to dispute outstanding claims and a notice of default was issued with a cure plan for achieving a temporary certificate of occupancy (TCO) by September 15th, substantial completion by November 15th, and final completion by January 17, 2020. As of November 6, City Manager Jimmy Morales wrote in the latest Convention Center update to Commissioners, “Clark has failed to achieve TCO and has further notified the City that Clark will not be able to meet the substantial completion and final completion milestones provided in the Cure Plan. Accordingly, Clark’s default continues to be unabated.” To move toward completion, the City has engaged directly with the fire alarm contractor and “continues to do everything within reason to assist Clark in bringing the Project to Final Completion,” Morales wrote. For now, each event in the Convention Center operates with a Special Event Permit. As of August 13, the City was holding back $16.8 million for correction of any defective or non-conforming work and punch list items along with $4.8 million in liquidated damages.

Peterson and his team juggle events with final construction. It’s “striking a balance of our clients’ needs… while having construction working in certain areas of the venue.

” The punch list is “fairly large” and includes testing the fire alarms which can be difficult to coordinate with a heavy event schedule though “There’s predictability on our end,” he said, as schedules are set well in advance. “We know when they’re moving in, moving out. There’s no mystery there. It’s just that surgical coordination and collaboration we have to do with the construction teams.”

This week, Art Basel Miami Beach takes over the facility once again as the team begins the lighter work of marking the areas for participating galleries. Load-in begins the following week.

Four days after ABMB completes its moveout, America’s Got Talent will be onsite for one day of casting on December 17th and, a month later, the Super Bowl comes to town as move-in begins for the Super Bowl LIV Experience. Source: RE:MiamiBeach