Tag Archives: Chicago

McCormick Place Unveils Phase II Reforms

22 Nov

McCormick Place officials recently unveiled Phase II reforms for the convention center complex designed to cut costs and provide greater flexibility for those doing business at the Chicago venue.

This latest round of reforms is part of a series of changes that will be phased in as a result of the historic legislation passed by the Illinois General Assembly in May.

“Our Phase I initiatives drove down costs and offered greater flexibility to our customers and exhibitors, allowing them to do much of the booth work themselves,” said David Causton, general manager of McCormick Place. “Phase II is more about long-term stability, additional changes and new customer initiatives.”

As part of the second round of reforms, a Request for Proposals (RFP) for a management company to run McCormick Place was released Sept. 15. Prospective companies toured the facilities on Oct. 5 and interested parties were to submit first phase proposals by Nov. 9. A short list will be developed by Dec. 14 and the final selection for the new management company will be made by April 29 of next year.

McCormick Place is currently owned and operated by the city’s Metropolitan Pier and Exposition Authority (MPEA). In addition, completion of the refinancing of MPEA’s debt will provide greater financial stability for the convention center, while funding an expansion of the on-site Hyatt Regency McCormick Place Hotel.

The venue borrowed $1.1 billion in a bond deal, with the bulk of the money funding the hotel’s expansion. This includes the addition of between 400 and 450 rooms, which are expected to help subsidize the project, in addition to a plan that will renovate the Hyatt’s existing 800 rooms.

TVS Design will assist in preparing the design and development documents. Construction is expected to begin in early 2012 and the hotel expansion to be completed by December 2014.

In addition, $200 million of the funds will replenish the convention center’s reserve balance, while part of the money will be allocated to cover operating deficits.

The convention center’s new customer initiatives include the immediate availability of free WiFi, which is available throughout the venue, including all common hallways, exhibit halls, and meeting rooms. With 2.6 million sq. ft. of exhibit space, McCormick Place is the largest convention center in the U.S. to provide this amenity.

“In Phase I, our work was focused on driving down show organizer and exhibitor costs. We hadn’t addressed show attendees. People want to check e-mail while out of the office. It’s a convenience factor,” Causton said.

The Phase II reforms were unveiled in a webinar hosted by the International Center for Exhibitor and Event Marketing and hosted by Causton. It was attended by more than 100 companies and organizations, including exhibit managers, event marketers, organizers, suppliers and tradeshow press.

A 23-member Advisory Council has been created to oversee and advise
the implementation of McCormick Place’s reforms. The Council includes show organizers, exhibitors, labor, service and exhibitor contractors and MPEA and the Chicago Convention and Tourism Bureau (CCTB) management.

According to the CCTB, the McCormick Place reforms have already resulted in nearly a dozen tradeshows either recommitting to host their shows in Chicago or committing to bring their business to Chicago for the first time. Collectively, those commitments represent more than $1.6 billion in estimated direct expenditures for Chicago during the next decade.

“These Phase II reforms will provide even greater cost savings for our show organizers, exhibitors and attendees,” said Causton. “We received positive feedback about our Phase I reforms and anticipate that our existing and
prospective customers will welcome this next round of reforms, as well.” — Lisa White

Interviewed for this article:  David Causton, (312) 791-7000.




Labor Law Overhaul at McCormick Place Gets High Marks

12 Oct

The 2010 International Manufacturing Technology Show was one of the first shows to operate under new labor rules at McCormick Place.

Chicago’s McCormick Place convention center’s newly-implemented labor laws were put to the test at the Association for Manufacturing Technology’s (AMT) International Manufacturing Technology Show (IMTS).

The changes were implemented Aug. 1 to make Chicago more competitive with lower-cost rival cities.

This was the first major show to operate under a new state law aimed at giving exhibitors greater leeway to do their own work and thereby reduce labor costs. The new rules also reduce crew sizes and the potential for overtime billing by McCormick Place union labor. In addition, the convention center has reduced prices for its food and electrical service.

IMTS, which ran from Sept. 13-18, spread over all four convention center buildings. It included approximately 1,200 exhibitors setting up more than 40 million pounds of machinery, or roughly 4,000 truckloads. There were about 85,000 attendees representing companies such as Boeing, Caterpillar and Harley Davidson.

Peter Eelman, vice president, exhibitions and communications for AMT, which is based in McLean, Va., has been involved in labor talks at McCormick Place as a committee member for the past 20 years.

“The new labor agreement is common sense,” Eelman said. “The former rules didn’t fit the way we do business.”

In fact, the association would not commit to future shows at McCormick Place until the changes became law. The venue has hosted the show since 1970. After the rule changes, AMT signed a three-year contract for the show to run at the convention center in 2012, 2014 and 2016.

Under the new law, McCormick Place will charge exhibitors and show management the “at-cost” rate for all labor provided by electricians. This rate will also apply to work done by plumbers and telecom workers. Exhibitors will save about 20 percent over previous rates for straight time, overtime and double time.

In addition, the venue will no longer charge for the time required to install or remove electrical services smaller than 208 volts. For 208 volt and larger services, McCormick Place will charge a minimum of one hour of labor for installation and one half hour of labor for tear-out service using the “at-cost” rate.

Also, McCormick Place will no longer charge for the tear out of booth work performed by McCormick Place electricians (excluding rigging). For theatrical and stage productions including rigging, and general session or stage work, McCormick Place will continue to charge for tear-out labor.

Finally, exhibitors and show management can now perform a variety of tasks that were previously only completed by labor. This includes performing work within their own booths using their own ladders or hand tools, cordless tools, power tools and other designated tools. It also includes delivering, setting up, plugging in, interconnecting and operating the exhibitor’s electrical equipment, computers, audio-visual devices and other equipment.

Chicago Restaurant Partners, in conjunction with McCormick Place, implemented a 10 percent price reduction on catering and exhibitor catering menu items. A larger reduction was enacted on certain high-volume items, including coffee, soda and bottled water. In addition, Chicago Restaurant Partners eliminated its delivery charge on orders totaling less than $250 and instead has enacted a $35 minimum order.

A 20 percent price reduction has taken effect at certain non-branded concessions throughout McCormick Place. While this change does not include facilities such as Starbucks, Au Bon Pain, McDonald’s, Manny’s, etc., it will include Chicago Restaurant Partners operated locations in the Food Courts, and Exhibit Hall Food Pods. This will reduce the price of a standard meal — consisting of an entrée, side, and 16 oz. fountain drink – in main food courts by $3.05 including sales tax. Examples of meals that are now available for less than $9.50, before sales tax, include a one-third-pound Angus cheeseburger, French fries and coleslaw; pizza with side; crispy chicken sandwich with sides; hot panini sandwich served with kettle chips; and beef and broccoli served with steamed rice or noodles.

Chicago Restaurant Partners will continue its policy of not increasing prices on orders placed during the weeks immediately preceding a show. It is a common practice at many competing facilities to increase catered food and beverage prices inside of a specified period from the start date of a show. At one national competitor, bottled water normally priced at $60 per case increases to $66 within a 30-day show window. At another facility a case of soda that was $72 becomes $83 dollars if ordered less than 21 days prior to the start of the show. Chicago Restaurant Partners at McCormick Place offers the same pricing regardless of when the order is placed.

McCormick Place has also enacted an exhibitor personal consumption policy, allowing outside food into the facility.

This represents the first phase of changes in the policy regarding foodservice, and more changes will be in place for 2012.

IMTS exhibitors reported higher levels of satisfaction and flexibility as a result of these changes.

At the last IMTS two years ago, John Memmelaar, Jr., vice president of Oakland, N.J.-based Royal Masters Grinders, had issues while attempting to move a box in his booth.

“We felt pressured to use union workers for even simple tasks,” Memmelaar said.  “We also were forced to use McCormick’s laborers to set up our machines, which we would have to redo afterwards ourselves. We paid money for jobs that were made harder and took longer to accomplish.”

Exhibitors are now able to set up and tear down booths quicker. Under the old rules it could take up to two days for labor availability.

“We are pleased with the feedback regarding the Phase One implementation at McCormick Place,” said David Causton, the convention center’s general manager. “These changes are designed to provide the greatest flexibility and cost effectiveness to our show organizers, exhibitors and attendees.” — Lisa White

Interviewed for this article: David Causton, (312) 791-7000; Peter R. Eelman, (703) 827-5264; John Memmelaar, Jr, (201) 337-8500

Lollapalooza Gets Green with Gaga

13 Aug

The entrance to Lollapalooza at Grant Park in Chicago

REPORTING FROM CHICAGO — With one of the most musically diverse festival lineups of the summer, Lollapalooza took over Grant Park in Chicago for the sixth year in a row on Aug. 6, 7, and 8. With 115 acres, 35 more than last year, Lollapalooza attracted 80,000 attendees per day. By adding acreage, the festival was said to have increased its selling capacity by 10 to 15 percent.

The 152-artist weekend included the likes of soul singer Raphael Saadiq, Eighties throwback DEVO, Austin indie darlings Spoon along with The xx, Metric, Kaskade, MGMT, Nneka, Erykah Badu and Cypress Hill. Headliners played simultaneously on the Budweiser and Parkways Foundation stages, which were at opposite ends of the park. Over a mile separated the two stages, so attendees were faced with tough decisions each night. Friday headliners were rockers The Strokes and dance-pop queen Lady Gaga; Saturday’s were the upbeat French group Phoenix and veteran punk band Green Day, and Sunday’s were the orchestral indie Canadians Arcade Fire versus 90s grunge band Soundgarden.

Festival sponsor F.Y.E. hosted an autograph tent on the northern end of the park, and organized autograph signings for fans with 49 of the weekend’s artists. F.Y.E. was brought on as a sponsor in 2007 when the local Virgin Megastore closed and now handles all CD and DVD sales for all bands in addition to doing the autograph sessions.

“Our lineup for signings has been incredible this year. Sales-wise, this is our best year so far,” said Shaun Smith, events supervisor at Trans World Entertainment, which operates F.Y.E. stores. Smith noted that the most popular meet and greet session was MGMT. Other favorites included The National, Phoenix and Spoon, who each attracted over 300 people.

Other festival sponsors included Sony, which set up the Bloggie Borrow Bar, where attendees could rent an HD camera for free and upload their videos online. H2O was Lollapalooza’s official water sponsor, chosen because of their product’s sustainable packaging. Rather than petroleum-based plastic bottles, h2O uses paper from managed forests and water-based ink in its packaging.

Chicago Chef Graham Elliot Bowles, owner of the local restaurant Graham Elliot, was culinary director for Chow Town, Lollapalooza’s two-street food court. Food vendors included local restaurants such as Big Star, The Southern, and Kuma’s Corner. Big Star offered elote (corn-on-the-cob) for $5, tostada de panza ($7), and coctel de frutas ($5). The Southern offered hush puppies with buttermilk ranch ($6), sweet potato fries with spicy ketchup ($6), and shrimp cocktail with peach sauce ($8); and Kuma’s Corner offered the Kuma Burger (bacon, cheddar, and a fried egg), Judas Priest burger (bacon, bleu cheese dressing with apples, walnuts and dried cranberries), and Iron Maiden burger (avocado, cherry peppers, pepper jack, and chipotle mayo), for $10 each. The most popular of the food booths at Lollapalooza, Kuma’s, cooked over 2,000 pounds of bacon within the three-day period. While many vendors had to undergo an application process, Kuma’s was personally invited by Graham Elliot and selected from an online reader’s poll of favorite Chicago restaurants.

“I think there was a benefit in terms of being exposed to a wide variety of people that haven’t heard of us or haven’t been able to make it out to the restaurant,” said Executive Chef Luke Tobias. “We were busy from noon to close, all three days. We sold a lot of burgers.”

Festival organizer C3 Presents implemented a number of environmental initiatives throughout the park. In addition to having h2O as a sponsor, there were eight water refill stations at Lollapalooza where attendees could refill any container with cold, fresh water. The stations were provided by Event Water Solutions, and cost $2,000 per unit, per day.

Emily Stengel, the Green Street production manager working for C3 Presents, explained that the refill stations were a last-minute addition to the festival, but were ultimately very effective.

“It was a huge step for greening Lollapalooza, even though it was added late in the game,” said Stengel. The refill stations filled enough water bottles to save 204,200 bottles. Near the main entrance of the festival, C3 Presents set up Green Street, a strip of vendors and booths dedicated to the themes of sustainability and fair trade. C3 also favored Chicago-based vendors in their selection process. Chicago-based clothing company Demographic and jewelry vendor Beads of Hope Africa were two companies at the event, whose owners both agreed that the large scale of the event and amount of exposure benefited them. “Nothing can touch this,” said John Ritter, co-owner of Demographic. “A normal street fair in Chicago will probably be between 2,000 and 5,000 people, so the sheer number of people [at Lollapalooza] is incredible.”

Since 2005, Lollapalooza has teamed with Parkways Foundation, the philanthropic partner of the Chicago Park District to raise over $5 million. This year, 10.25 percent of the event’s gross revenue will go to the foundation, and in 2009, C3 Presents and Parkways Foundation signed an agreement that will continue this alliance at least through 2018.

“It’s not just coming in as a large-scale music festival and then pulling out and leaving everything to be repaired. Rather, the idea is that Lollapalooza comes to town and it leaves Chicago a better place,” said Brenda Palms, executive director of Parkways Foundation.

To get attendees more involved with the “greening” of Lollapalooza, C3 Presents set up Rock and Recycle centers where patrons could get bags to fill with recyclables such as aluminum cans and plastic bottles. One full bag could be redeemed for a Lollapalooza T-shirt and a chance to win an Origin 8 bicycle. In order to operate the program, C3 designated 85 of its 300 Lollapalooza volunteers to run the booths and give out about 3,000 T-shirts.

“I think this year we took some major strides, and they proved to be successful so I’m really excited to see what the future brings and how we can become more environmentally friendly,” said Stengel. — Linda Domingo

Interviewed for this article: Shaun Smith (518) 452-1242; Luke Tobias (773) 604-8769; Emily Stengel (512) 294-1752; Brenda Palms (312) 742-4804

Marketing Conference Kicks Off with Lively Contrast of Views

10 Jun

The EAMC state of the industry panel included columnist Jim DeRegotis, Jim O'Neil of the Chicago Bulls, Nederlander's Alex Hodges and Rich Krezwick of the Devils Arena Entertainment.

REPORTING FROM CHICAGO — The Event & Arena Marketing Conference got off to a rousing start Wednesday during a spirited debate at the opening “State of the Industry” Panel.

Music critic and Columbia College of Chicago professor Jim DeRogatis prodded and occasionally poked a panel of industry experts that included Alex Hodges of Nederlander Entertainment, Joe O’Neil of the Chicago Bulls and Rick Krezwick of Devils Arena Entertainment and dipped heavily into the impact of the Ticketmaster/Live Nation merger.

“We were all waiting for something to happen, and nothing has really happened,” said Krezwick. “I think the big advantage now is that there’s another major ticketing company about to blossom with AEG, which is good for all of us with a building contract that is about to come up to bid.”

Krezwick said the biggest change is the shift in the rebate structure between the facilities and Ticketmaster over service fees. Instead of a percentage of fees, facilities will now be charged a flat fee per transaction (between $2 – $2.50), and the building will keep the remainder of the money.

That puts the fate of Live Nation’s No Service Fees promotion in question, especially since rental rates have been static for 20 years.

“The only way you make money is off the ancillaries. If we lose the four or five bucks per ticket, it’s just going to become a lot harder to make buildings work and I don’t see buildings giving it up that easily,” he said

Where does that leave independent promoters, a group DeRogatis called “a rarer breed than a healthy pelican in the Gulf not covered in oil,” like Nederlander or Chicago’s Jam Productions?

“We’re fortunate that we have a few must-play venues in our market,” said Hodges. “Being an independent, we have to work harder to sell our building. We have competitors who can buy an entire tour, and we try to buy a handful of cities, so our model has been adjusted.”

Even more challenging is that the Greek Theatre’s competitor is part of its ticketing company (and represents many of the artists who play the facility), and despite reassurances from Christine Varney at the Justice Department that government-monitored firewalls will be put in place to block the sharing of certain information, what’s to stop “a Live Nation representative from yelling at the Ticketmaster guy three cubicles down,” said DeRogatis, “and asking him what [the Greek] just offered for the Eagles concert?”

Hodges was stoic in his answer, simply replying “that’s yet to be seen.” He later added “for them to have that type of absolute knowledge would concern anyone. We’re already fighting for the shows and the price we pay for shows.”

An even bigger challenge is determining the correct price for a ticket; brokers are marking tickets up while discount sites like Goldstar and TravelZoo are flourishing. Many facilities are finding themselves making money from the scalping of their own tickets.

“About three years ago, we had this writing on the ticket that said the resell of Chicago Bulls tickets above face value is expressly prohibited,” O’Neil said. Now, the company has a deal with Ticketmaster to resale Bulls seats on TicketExchange “so we have the same thing, but it says it’s expressly encouraged,” later adding, “Everybody is selling to everybody. You can go to my website and buy a ticket I just sold to another guy, selling them back and forth, all print at home. They’re like invisible paper airplanes flying all around the city, and I don’t know who the hell is in my building.”

DeRogatis said as a consumer, he despised resale, promised to perpetually refer to the practice as “scalping” and noted that not all musical groups are driven by money or fans trying to flip tickets to make a buck.

“There’s an ethic in the Flaming Lips community and there’s an ethic for bands like Wilco and Dave Matthews where people don’t do that. They want the tickets to go to the fans,” he said, pointing out that many kids today couldn’t afford $350 tickets to go see Paul McCartney, although it was an inexpensive Little Richard show over a half decade ago that inspired the Fab Four crooner.

Regardless of how the industry evolves, it’s clear that venues aren’t necessarily in the driver’s seat and it will be agents and managers who shape the direction of business.

“The problem from my perspective is that we’re overbuilt. There are just too many facilities,” Krezwick said. “Even if there aren’t two arenas in close proximity, a band will play Detroit and skip Chicago. There are only 35 dates on the tour and they’re not going to take your nonsense. If they don’t want to play your building, they will skip you.

But all is not lost. DeRogatis pointed out that demand for live entertainment certainly hasn’t subsided. Live music is still the only industry “where people pay money to be in the same room as another person, despite many the escort business.” — Dave Brooks

Interviewed for this article: Jim DeRogatis, (773) 775-1093; Joe O’Neil, (312) 455-4103; Alex Hodges, (323) 468-1710; Rick Krezwick,rkrezwick@prucenter.com