REPORT TO COUNCIL
SUBJECT
Title
Action on the Santa Clara Convention Center FY 2022/23 2nd Quarter Financial Status Report
Report
COUNCIL PILLARS
Promote and Enhance Economic, Housing and Transportation Development
Enhance Community Engagement and Transparency
Promote Sustainability and Environmental Protection
BACKGROUND
On February 5, 2019, the City approved an agreement with Global Spectrum L.P. dba Spectra Venue Management (Spectra) to operate the Santa Clara Convention Center (SCCC). Spectra began management of the SCCC on March 18, 2019. In November 2021, Spectra merged with Oak View Group (OVG) but continues to operate under the same legal entity.
Staff is transmitting OVG’s, formerly known as Spectra, SCCC status report to Council for compliance with agreement terms.
DISCUSSION
This report transmits for Council information, the SCCC Financial Status Report for the 2nd quarter ending December 31, 2022, as submitted by OVG. This report is unaudited and, therefore, subject to change.
As OVG’s 2nd quarter report indicates, there were 56 events hosted at the SCCC, 45 less than the budgeted 101 events. There were 25 events in October 2022, 17 events in November 2022, and 14 events in December 2022.
Historically the 2nd quarter activity is strong. However, November and December were not as robust as previous years. Holiday parties that used to be a staple in December did not materialize to the pre-pandemic activity level. Event planners were reluctant to book events in late 2022 based upon the COVID surge experienced during December 2021. Based on event needs, OVG staffing levels varied from 24 to 26 throughout the quarter.
As discussed in the Quarterly report, budget to actual financial results are as follows:
|
Financial Summary - 2nd Quarter Ended December 31, 2022 |
|
|
|
Projected in Budget |
Actual |
Budgeted Overage (Underage) |
|
Gross Revenue |
$3,990,335 |
$3,664,200 |
($326,135) |
|
Total Expense |
$3,764,452 |
$3,306,462 |
($457,990) |
|
Net Income |
$225,883 |
$357,738 |
$131,855 |
For the 2nd quarter ending December 31, 2022, OVG reported a net operating gain of $357,738. Total revenues were $3,664,200, or $326,135 less than the budgeted revenues of $3,990,335. Total expenses for the quarter were $3,306,462, or $457,990 less than the budgeted amount of $3,764,452. Additionally, OVG recognized $69,530 of other revenues in the 2nd quarter primarily from cancelation fees.
As of December 31,2022, OVG reported a year-to-date net operating income of $710,255, which consists of $6,422,061 in revenues and $5,711,806 in expenses.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
The net operating gain incurred by the Convention Center for the 2nd quarter of FY 2022/23 is $357,738. This amount does not include any fiscal impact related to TOT, TID, and/or sales tax activity.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Note and file the Santa Clara Convention Center Financial Status Report for the 2nd Quarter ending December 31, 2022, as submitted by OVG.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Office of the City Manager
ATTACHMENTS
1. SCCC Activity Report for Second Quarter FY 2022/23