In somewhat of
a surprise, Team San Jose, the current manager and
operator of the San Jose (Calif.) McEnery Convention Center and
Cultural Facilities, won the city council’s approval last December
to negotiate a new five-year contract, despite a swirl of
The group has been under scrutiny of
late for failing to meet targets specified in its $60 million
management contract, which began in 2004. Last June, a report from
a civil grand jury recommended that the city issue a request for
proposal to seek a new operator.
Team San Jose has increased revenues by
67 percent since taking over the city-run facilities. However, the
agency’s overall performance was thrown into question when a city
audit revealed an operating loss of $3.3 million -- nearly twice
the amount originally projected -- for fiscal year 2006-’07.
Some city council members also were
concerned about a potential conflict of interest in that Team San
Jose is chaired by Dan Fenton, who also is president and CEO of the
San Jose Convention & Visitors Bureau.
According to Paul Krutko, chief
development officer for the city, “The council requires a clearer
understanding of the nature of the relationship between the two
entities, particularly how one budget affects the other and how
money is flowing through.”
City representatives will examine that
relationship and report their findings to the council in March.
Krutko indicated that one change might be to subcontract management
of the 3,001-seat Civic Auditorium “to someone with more
For his part, Fenton said, “We’re
thrilled with the outcome. We think that the city council and both
boards of directors were very clear in their support of Team San