Tag Archives: McCormick Place

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.



Cobo Center Cuts a Deal with SMG; Thom Connors To Be GM

20 Oct

Cobo Center, Detroit

The 700,000-sq.-ft. Cobo Center, Detroit, may be the largest convention center to privatize to date and, if the trend continues, the 2.6 million-sq.-ft. McCormick Place, Chicago, is on track to be the second and take that designation for its own in 2011.

On Oct. 1, the Detroit Regional Convention Facility Authority (DRCFA) selected SMG to manage Cobo Center, the nation’s 20th largest convention center. Gregg Caren, SMG senior vice president of strategic business development, said it’s a traditional deal other than the size factor. While SMG already manages some larger convention centers, those grew after privatizing, not before.

Thom Connors

Thom Connors has been tapped as the general manager at Cobo Center. Connors was most recently GM for SMG of the new $133 million Irving (Texas) Convention Center at Los Colinas, which opens in January 2011. Connors grew up in the Detroit suburbs and is an alumni of Michigan State University.

The deal is for five years with a five-year renewal option. Based on IRS-regulated municipal deal rules, it calls for a base fee of $250,000 a year and an incentive capped at that base. SMG and the authority are working from a memorandum of understanding at this point, but Caren said the incentive will be both qualitative and quantitative.

The new multi-governmental authority now in charge of Cobo Center was formed last fall with representatives from the city, state and three counties. Its bylaws require that every decision be unanimous and it has been a united effort, Caren said. Their mission is to improve financial stability and customer service, and reestablish Cobo Center’s standing in the national convention and trade show marketplace.

With that goal in mind, SMG worked with Olympia Entertainment as a strategic partner in its bid to manage Cobo Center. The cross marketing of Olympia properties, including its arena, stadium and theaters, and its sports celebrities, will help in turning Detroit into a destination again, Caren said. Cobo Center is already home to the North American International Auto Show.

Caren said the transition of employees from city to SMG employ would probably occur Jan. 1.

The privatization of major convention centers is a hopeful sign for companies like SMG. Last year, because of the economy, there were very few RFPs on the street from convention centers. Caren could only think of one – the 20,000 sq. ft. center in Punta Gorda, Fla.

“I used to use McCormick Place as part of my sales presentation as an example of some buildings that will never privatize,” he said. “I’ll have to change that story now.” Besides Detroit, now done, and Chicago, which has RFPs on the street, there are other major markets looking at privatization, he added.

So, maybe it is a trend. — Linda Deckard

Interviewed for this story: Greg Caren, (610) 729-7922

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