Date: November 9, 2005
SMG has been awarded a $1.9 million, five-year contract to manage two facilities in Tulsa, Okla.
The company will manage the new $141 million BOK Center arena and the adjacent Tulsa Convention Center, which is now run by the city. The first 18 months will primarily be consulting work, with management duties coming into play as the new arena prepares to open in 2008.
SMG, Global Spectrum and the city’s Convention Center Management Group submitted bids for the contract, but SMG was the only company to offer a three-option proposal. SMG bid on managing each facility separately as well as managing both. Global Spectrum submitted only one bid, to manage both venues, while the Convention Center Management Group bid only on the convention center’s operation.
“We are confident that having one management team for both the convention center and the arena will have numerous efficiencies,” Tulsa Mayor Bill LaFortune said at a Nov. 4 news conference. “Those include savings in operation costs, staffing, marketing and building services. These buildings will work together as one team, ensuring consistent high levels of customer service. Both national firms showed us savings of a minimum of $700,000 a year with single management of both facilities, and both firms, in their expert opinions, recommended single management as opposed to split management for the facilities.”
SMG, after the first full year that both facilities are open, shows at least $1 million a year in combined operating profit.
Naming rights for the arena were sold to BOK, which owns Bank of Oklahoma and other financial institutions, for $11 million two weeks ago. Tulsa voters this year approved four economic development propsals, including funding the new arena and renovation of the adjacent convention center, under a plan marketed as Vision 2025.
Employees of the Tulsa Convention Center would have protected job status, wages and benefits, a situation Sims Hinds, SMG senior vice president, Sales and Development, said SMG had handled before. He said the company would spend considerable time reviewing existing staff, including John Scott, the convention center manager. SMG has worked with existing convention center staffs in Denver, Jacksonville, Fla., and Salt Lake City, Utah, all of which Hinds said were comparable to the Tulsa situation.
Steve Alter, president of Tulsa-based Matrix Architects, Engineers and Planners, heads the team that designed the arena. Alter said a nine-city tour of arenas helped convince him that SMG was the right company. “When we did the tour, several were managed by SMG,” Alter said. “We did see a definite difference in what they were able to book and get taken care of.”
Alter said SMG offered assistance early in the project. “In the very early design phases, they actually assisted us with operator input in the programming stage. They did that through Tulsa Vision Builders and their input was very helpful.” Hinds noted SMGÂ’s Brian Kabatznick has taken the lead in the Tulsa project from the beginning.
The arena will seat 18,000. Voters also approved a $42 million face-lift for the neighboring convention center. Tulsa’s key tenants – the Central Hockey League’s Oilers and the Talons of the Arena Football 2 league – are expected to move from the convention center to the arena when it opens.
SMG has a similar contract in Oklahoma City, a 90-minute drive from Tulsa. There, SMG manages the 3-year old, 19,000-seat Ford Center and the Cox Business Services Convention Center across the street. Hinds said the company saw the two cities as very different markets and would operate the facilities under that premise.
Interviewed for this story: Steve Alter, (918) 587-4747; Sims Hinds, (215) 592-6628