Hyatt City Mum On Site Deal As Miami Funds Drain Away
Written by Yudislaidy Fernandez on July 29, 2010
By Yudislaidy Fernandez
It’s unclear whether the Hyatt Hotel and City of Miami are still in negotiations for the hotel tenant to take over the city-owned conference space within its downtown complex, as city and hotel officials are mum about the deal.
The city and the Hyatt have until December to reach a proposed agreement regarding the 23,000-square-foot conference space with event-style auditoriums and 26 meeting rooms — a facility at which the city continues to lose money.
The Knight Center complex adjacent to the hotel at 400 SE Second Ave. comprises a performing venue with 4,646 seats, the 23,000 square feet of conference space previously run by the University of Miami and a 28,000-square-foot convention center.
After 26 years of the university leasing and running the conference facilities downtown, the city took them back in December to bring in a new partner.
The University of Miami Conference Center at the James L. Knight Center in Downtown Miami was rebranded the Miami Conference Center.
Global Spectrum already managed the performing venue and convention center at the complex for the city and, in February, the company announced the city had also hired it to manage the conference space.
Since Global took over, the facility management company has booked 74 events, 40 of them ticketed and 34 non-ticketed, said Daniel Newhoff, the city’s assistant director of public facilities, via e-mail.
Another 42 events are in the pipeline to be booked pending promoter deposits, he said — 20 ticketed, 22 non-ticketed.
The facilities host events such as concerts, stage productions, conventions, conferences, consumer shows and corporate events, Mr. Newhoff said.
Under its new management, the conference space is expected to yield $1.6 million in revenues this year, he said.
But that’s not nearly enough to cover the growing losses that the city has to fill.
For years, the city has been losing money on the 5.7-acre Knight Center complex downtown, subsidizing it by $2.8 million in 2009, $2.5 million in 2008 and $1.9 million in 2007, the city has reported — $7.2 million over three years.
The city was also working on a separate proposal last November to let its main tenant Hyatt Regency Hotel pay $2.5 million upfront to replace the complex’s aging cooling system, with the hope that the city and the hotel would reach an agreement that would allow Hyatt to operate the conference space.
Since 2007, Hyatt Equities LLC — Chicago-based management office for the Hyatt Regency — has voiced interest in leasing the adjacent venues to attract more groups to book events at those facilities and stay at the Hyatt.
Hyatt Equities’ Megan Schmollinger didn’t return calls.
Under this proposal, the city would reimburse the Hyatt $1.25 million if by December 2010 the hotel hasn’t taken over operating the conference space. Otherwise, the Hyatt would operate the space and the city would be off the hook for its share of the repair costs.
The city’s Mr. Newhoff, Public Facilities Director Madeline Valdes and Chief Financial Officer Larry Spring didn’t returned calls regarding the status of this deal.
And when Mr. Spring was asked to give an update on city-hotel negotiations for the conference space, his response via e-mail was: "I don’t have any updates at this time."