REPORT TO COUNCIL
SUBJECT
Title
Action on the Santa Clara Convention Center FY 2023/24 3rd 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 of Santa Clara 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 SCCC status report to City Council for compliance with agreement terms.
DISCUSSION
This Report to Council transmits OVG’s SCCC Financial Status Report for the 3rd quarter ending March 31, 2024 (attached). This report is unaudited and, therefore, subject to change.
As OVG’s 3rd quarter report indicates, there were 52 events hosted at the SCCC, 1 less than the budgeted 53 events. There were 13 events in January 2024, 14 events in February 2024, and 25 events in March 2024.
The third quarter followed its historical pattern of a slow start in January gradually increasing toward the end the quarter. Based on event needs, OVG staffing levels varied from 31-32 employees throughout the quarter.
Financial Summary
|
|
Quarter Ended March 31, 2024 |
Quarter Ended March 31, 2023 |
|
|
Budget |
Actual |
Overage (Underage) |
Budget |
Actual |
Overage (Underage) |
|
Gross Revenue |
$3,511,801 |
$4,198,314 |
$686,513 |
$3,603,992 |
$3,754,579 |
$150,587 |
|
Total Expense |
$3,638,745 |
$3,821,187 |
$182,442 |
$3,521,344 |
$3,211,082 |
($310,262) |
|
Net Income |
($126,944) |
$377,127 |
$504,071 |
$82,648 |
$543,497 |
$460,849 |
For the 3rd ending March 31, 2024, OVG reported a net operating gain of $377,127, compared to a net operating gain of $543,497 for the 3rd quarter of FY 2022/23.
Total revenues for FY 2023/24 3rd quarter were $4,198,314, or $686,513 more than the budgeted revenues of $3,511,801. Total expenses for FY 2023/24 3rd quarter were $3,821,187 or $182,442 more than the budgeted amount of $3,638,745. Additionally, OVG recognized $83,528 of other revenues in the 3rd quarter primarily from cancellation fees and interest income.
Compared to the 3rd quarter of FY 2022/23 there was an improvement in gross revenue, however expenses were higher in the current year which led to a lower net operating gain of $377,127 compared to a net operating gain of $543,497 in FY 2022/23.
As of March 31, 2024, OVG, reported a year-to-date net operating income of $1,562,511, which consists of $13,293,617 in revenues and $11,731,106 in expenses.
ENVIRONMENTAL REVIEW
There is no discretionary action being considered under this Report to Council; therefore, there is no “project” within the meaning of the California Environmental Quality Act (“CEQA”) and no further environmental review is required pursuant to section 15060 (c) of Title 14 of the California Code of Regulations.
FISCAL IMPACT
The net operating gain incurred by the Convention Center for the 3rd quarter FY 2023/24 is $377,127. 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 3rd Quarter ending March 31, 2024, as submitted by OVG.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. SCCC Activity Report for 3rd Quarter FY 2023/24