Convention Centers Look to P3s to Become More Competitive Globally

The PPP Bulletin recently reported that the city of Los Angeles is considering forming a public-private partnership with a private-sector entity to manage the Los Angeles Convention Center. We recently discussed the advantages of using P3s for large government projects, and a Los Angeles official quoted in the article nicely sums up the benefits of market-driven, as opposed to wholly government-run, management of large government projects:

“In the private sector if you’re the most aggressive in your field and you bring in the top convention … then you see that benefit in a bonus or some kind of compensation. We’re government. We don’t do that.”


PPP Sought for Miami Beach Convention Center

Fortunately, we in South Florida are ahead of the curve when it comes to P3s related to convention centers. The City of Miami Beach earlier this year initiated a competitive process for the selection of a private partner for the re-development of the Miami Beach Convention Center, the Miami area’s primary convention center, and the surrounding district.

The RFQ solicitation document repeatedly emphasizes the City’s desire to form a PPP with the selected private partner and notes that “the City seeks to maximize private investment and minimize public investment in the overall proposed development.” In addition to the benefits of market-driven management, as explained in the above quote by the LA official, it is the access to private funding that makes a P3 structure so compelling, particularly during a time when local governments are required to do more with fewer dollars than ever before. Miami Beach is not in as bad a position as many cities, as its status as one of the world’s top tourist destinations guarantees it one source of funding favored by its voters: taxing the non-voting tourists. (“Don’t tax you, don’t tax me – tax that fellow behind the tree.” – Russell Long)

Indeed, in this year’s August election, the Miami Beach voters approved by ballot initiative an increase to the City’s resort tax of up to 1 percent to help fund improvements to the Convention Center. Through the desired P3 structure, however, the bulk of the funding will, no doubt, come from private sources.

The Convention Center’s Significant Past

Although it has become, perhaps, a little long in the tooth, the Miami Beach Convention Center has an incredible history and has hosted some of the nation’s most significant events, including the 1968 and 1972 Republican National Conventions, kicking off Richard Nixon’s two successful presidential election campaigns (the Convention Center played no part in what happened next), and the 1964 Heavyweight title bout between Cassius Clay and Sonny Liston. Clay won the fight, along with Liston’s title, and went on to become the most important and recognized athlete in history (Clay, by the way, changed his name to Muhammad Ali shortly after taking Liston’s title).

Plans for the Future 

The City’s ambitious RFQ leaves no question that the City’s goal for the Convention Center is to, much like Ali (and unlike Nixon), increase in importance and desirability in the years ahead. Gone, however, are the public budgets of the 1960s, and only a public-private partnership, designed to capitalize on the strengths of both partners, can make that goal a reality.