By Kathy Bergen | Recommendations
on how to cut exhibitors’ costs for labor, food and electrical service
at McCormick Place began to take shape at a marathon session Sunday,
with a vote on a roster of issues expected late Monday afternoon.
The interim board of the Metropolitan Pier and Exposition Authority,
the state-city agency known as McPier that owns and operates the
convention center and Navy Pier, later in the week will forward its
recommendations to a state legislative panel that is examining how to
make McCormick Place more competitive with cheaper rival cities.
Here’s what’s likely from the McPier board:
– A request that Springfield approve a restructuring of its expansion debt and an annual operating subsidy of about $20 million.
– A commitment to slash its profit margins on food and electrical service, and potentially to give customers a choice of providers. Talk of privatizing electrical service hit a wall.
– Support for extracting work-rule concessions from the unions, either by making workers public employees or by pressuring the unions and their private employers to go back to the bargaining table. The board was divided on this, as well as on whether contractors should be required to document that they pass along any labor cost savings to customers.
– Suggested changes in governance structure. The idea of splitting up governance of McCormick Place and Navy Pier came up, as did a potential reworking of the relationship between the board, which is led by a mayoral appointee, and the chief executive, who is named by the governor.
– A call for beefed up marketing of McCormick Place, with greater state financial assistance. A pitch for McPier to take control of the Chicago Convention and Tourism Bureau’s McCormick Place sales team stalled.
Did anyone check with Rosemont yet? Or do we really just not want to know? How do they make all the money that they do with the exact union contracts that McPier finds to be such a problem? Instead, Lets make the workers pay and ignore the antics of GES, Freeman, the managers and patronage workers that are the real cause of lost shows, and force more concessions out of the workers. Then, lets give them a subsidy so even more money can be scammed. I guess the rich just keep getting richer…
$20 million a year to subsidize the corruption? No. Cut to the bone you dirtbags.
By the way, the $20 million a year is just the beginning. They will be looking for at least twice that once their bogus “reforms” fail to fix the broken white elephant.
This obviously is the Daley/Quinn interim board, which includes current Chairman Gates. No wonder they are asking for the state handout, which Madigan already opposed.
The headline “Cost-cutting taking shape” is less than accurate, it seems:
* Talk of privatizing electrical service hit a wall.
* Support for extracting work-rule concessions from the unions. The board was divided on this, as well as on whether contractors should be required to document that they pass along any labor cost savings to customers.
* The idea of splitting up governance of McCormick Place and Navy Pier came up, as did a potential reworking of the relationship between the board (apparently this, too, went no further).
* A pitch for McPier to take control of the Chicago Convention and Tourism Bureau’s McCormick Place sales team stalled.
Cost cutting is taking shape? Seems to me the only thing taking shape is the Daley/Quinn, Gates-run interim board asking for a $20M handout. That’s better than making the working man and woman at McCormick Place the scapegoat. Let’s get a McPier Board in place that understands conventions, let’s combine McPier marketing with the Convention Bureau, and let’s focus on the biggest problem of all — the contractors — and their significant markups.
Pressuring the unions? Seriously? And then, at the bottom, there is the strategy to beef up marketing. What are they going to hype – the contents of this article?
Since the mayor and the governor are the geniuses managing this by way of appointees, how about initiating good old fashioned market analysis?
The analysts would make a spreadsheet comparing Chicago with, say, Rosemont, Milwaukee, Las Vegas and Orlando. The sheet would peg costs and give a rating system based on user experiences. Apparently, this has never been done before.
Then, put this information in a file and hang on to it until the unions have officially run McPier into the ground. Later, when McPier is resold, retitled or otherwise resurrected it from its ashes, create a new business plan from the information that is gathered.
The sooner the unions finally shovel McPier under, the better. Experienced McPier users may be tempted to sign on with its reincarnation but are not likely to take another beating from its current operation – especially if they have read this article.
With all of the conventions, why is state paying anything. This should be a self sufficient operation paying it’s debt from profits, not taxpayers. Something is out of whack in the budget and costs.
I don’t see “cutting costs” anywhere in their proposal.
Just “give us more money” and “less profit…whatever that means when you’re a non-profit to start with”.
Typical Illinois thinking…don’t reduce costs, just shuffle and churn and beg for more money to stuff under the little shells.
What does the Trade Show Management companies, Freeman and GES want?
They want to compete against McCormick Places Focus One and McCormick Places catering businesses.
At the hearing on April 7th, John Gates stated Focus One made $16,000,000 profit last year, and the catering business made $6,000,000.
McCormick Places uses these profits to pay its operating expenses.
McCormick Place / McPier is projecting a $28,800,000 loss in the current fiscal year, plus the lost tourism taxes.
Without the profits from Focus One and catering that turns into a McPier annual loss of $ 50,800,000, plus the lost tourism taxes.
This is why McCormick Place now needs State subsidies, so Freeman and GES can run Focus One and make those profits instead of McCormick Place using those profits to pays its bills.
This is why the electrical and catering charges at McCormick Place have been in the news. This represent 4 percent of exhibitor complaints.
Here is an exhibitor survey.
In your opinion, what is the single most inflated tradeshow cost?
Response ratio
Materials handling (drayage)
50%
Exhibit space
30%
Furniture rental
7%
Electricity
4%
Telecommunications
4%
Exhibit transportation
2%
Installation and dismantle
2%
Booth decor
2%
Do you feel that we have been lied to and manipulated?
Where do the exhibitors want to exhibit?
The Trade Show Exhibitors Association, 2009 Exhibitor%u2019s Choice Awards went to McCormick Place for best Convention Center, and Chicago received an Honorable Mention for best Convention City.
How can that be, when we have heard all of these negative stories about McCormick Place?
Why are some shows happy at McCormick Place, while a few are not?
Are these shows managed in different ways?
What are the exhibitors complaining about?
Are these complaints with McCormick Place or at McCormick Place, during a show that is managed by Freeman or GES?
If you buy a suit at a store leasing space from Woodfield Mall, and there is a problem, is it the store’s problem or is it a problem with Woodfield Mall?
What is cost-shifting?
What is exhibitor transparency?
Make sure you read this article and learn about the trade show industry.
http://www.tradeshowlogistics.com/images/ConveneSept08_CSTrans.pdf
Where are the Trade Shows going?
http://www.chicagotribune.com/business/ct-biz-0407-trade-shows–20100406-7,0,4262028.story
While Chicago is singing the convention business blues, its two biggest rivals, Las Vegas and Orlando, Fla., have reasons to howl even louder, according to attendance data for 2009, when the deep recession kept many conventioneers tethered to their home bases.
Attendance at McCormick Place conventions and trade shows tailed off by nearly 7 percent last year, to 893,068 individuals, according to data released Tuesday. The same year, the Las Vegas Convention Center experienced a 30 percent dive, to 1.1 million attendees, and the Orange County Convention Center in Orlando took a 21 percent fall, to 781,740. The two Sun Belt facilities also saw a decline in number of events, while Chicago saw a rise last year.
The sky is not falling, but thank God we are not in Orlando or Las Vegas.
Where are the Trade Shows going?
http://www.tradeshowweek.com/article/CA6697389.html?q=ASCO signs McCormick
Dr. Allen S. Lichter, ASCO CEO, said in the past, his group typically would hold its springtime meeting two years in a row in Chicago and then an alternate city in the third year. However, he added, the oncologists group decided there was a benefit in making a long-term commitment to Chicago.
Over time, our strongest and most positive feedback has been associated with Chicago, Lichter said. I think our members are telling us something.
How do you explain ASCO%u2019s $780,000,000 decision to make McCormick Place their home for the next ten years, after their previous show was in Orlando.
Didn’t ASCO experience those same huge 3 X cost variances and work rule problems?
No, they did not.
ASCO said they got a better value in Chicago, but then, they are not managed by Freeman or GES.
Obviously, the McPier interim board are being treated like mushrooms.
They are being feed compost and kept in the dark.
Someone needs to educate these people on the real issues that are facing McCormick Place.
How can the National Restaurant Association charge $28.50 per square foot for its show, when Pack-Expo is only charging $24.50 and including drayage?
Why did the SPI-NPE Plastic Show charge $19.50 – $22.50 per square foot for its show, when Pack-Expo is only charging $24.50 and including drayage?
It is the same convention center, same labor, same work rules, but exhibitors at Pack-Expo are happy.
Why does the NRA and the SPI-NPE Plastic Show charge its exhibitors thousands of dollars extra for drayage?
Why is Pack-Expo growing, while the SPI-NPE Plastic Show and the NRA shows are in decline?
The difference is the management of the shows, NOT the work rules.
The difference is Freeman and GES have a virtual monopoly, and they want MORE, MORE, MORE.