June 05--In a move to reposition the Convention Center amid fierce competition, the board of the troubled facility voted overwhelmingly Wednesday to privatize a range of management functions and hire an outside firm to lead it.

The board also voted, 13-2, to hire SMG, a West Conshohocken-based management group that runs arenas and other large facilities in the United States and overseas. The board selected SMG over Global Spectrum, a unit of Comcast-Spectacor.

The decisions leave unanswered what role the Convention Center's current president and chief executive, Ahmeenah Young, will have under the new management structure, said Board Chairman Gregory J. Fox.

In other cities, such as Chicago, where SMG now directs the convention center, the authority's CEO was retained and works closely with SMG.

"I am thrilled that the board today has embraced a bold and bright future for the Convention Center, born of a new management model that sets the stage for future improvements," Fox said after the board voted 12-3 to privatize and before selecting SMG. "It's a willingness to depart from the past and embrace the future."

SMG will assume a range of managerial functions. Fox said the contract with SMG will range from $325,000 to $475,000 per year, depending on what management duties it assumes.

For instance, the facility is one of only two in the country that uses a labor supplier -- Elliott-Lewis Corp. of Philadelphia. The role of Elliott-Lewis has not been determined.

Fox said there were currently 90 employees at the center, a number he wants retained. SMG is expected to bring on some of its own staff, and Fox said anyone who loses his or her job could reapply with SMG.

SMG was awarded the contract despite Global's local connections and clout with unions. Global Spectrum operates the Wells Fargo Center, Citizens Bank Park, and PPL Park.

Peter A. Luukko, president and chief operating officer of Comcast-Spectacor, said Wednesday night, "Although we are disappointed not to be selected to manage the Philadelphia Convention Center, Global Spectrum respects the board's decision and will continue to support Philadelphia's efforts to bring conventions and major events to our city."

With the Pennsylvania Convention Center Authority's customer satisfaction agreement with the unions set to expire June 30, the vote to privatize is considered pivotal.

Philadelphia joins five other U.S. cities that have chosen to privatize their convention centers in the last 30 months, including Detroit as well as Chicago.

"What we're doing here today represents an essential change," Fox said. "But it's just one step to get us to where we want to be."

He said the goal was "to have a convention center that utilizes best practices with respect to all of its operations, and as a result, is able to lower costs and improve service."

Infighting among labor groups, the association representing the city's hoteliers, and Convention Center management over lagging bookings of major conventions began a year ago. The situation centered on the cost and service of unionized labor at the facility.

"We need to improve our array of bookings and re-bookings," Fox said. "We are disappointed with the sales projections for 2014, 2015, and 2016, and recognize the need for change. I am definitely aware that the hotel community is disappointed and concerned, and I share their feelings."

Detroit and Chicago are, like Philadelphia, strong union towns. In choosing to privatize their convention centers, both went with SMG.

Pat Gillespie, business manager for the Philadelphia Building and Construction Trades Council, said his group was looking forward to working with the new manager. Its first meeting with unions is Tuesday.

"We have to better address the customer," he said. "This business has changed. The only certainty in life is change, and we have to do the best we can with it."

Fox said of SMG, "They're a brand, much like if someone gravitates to a Hilton or Marriott hotel and wants to see a consistency of service. Similarly, you have the same thing with an SMG-run facility."

Young said, "The staff is firmly committed to the success of the Pennsylvania Convention Center and to the positive economic growth of the city and the region through job development and entrepreneurial opportunities."

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