Recommendation to authorize an advance of payment expected to be owed under Management Agreement No. 21667 to ASM Global for operational expenses at the Long Beach Convention and Entertainment Center due to COVID-19 impacts.  (District 2)
Mean. Thank you. Now we move to item 17. Clark, would you please read the item. Report from economic development recommendation to authorize an advance payment expected to be owned owed under management agreement to as and global for operational expenses at the Long Beach Convention and Entertainment Center due to COVID 19 impacts. District two. Yes. You have a first and second on this. Councilman or Vice Mayor Andrews. This is Councilwoman Price. I'm happy. 2 seconds. Thank you. You have a first and second. Would you please as well. Can we on this one? Can we get a stop before. You want to? Okay, fine. We'll get a staff report on this, please. Yes, John Keisler will get the staff report. Good evening, Mayor, and members of the City Council. This item pertains to our operating agreement with SMG Global or formerly SMG. This is an agreement that's been in place for for a couple of decades now. And typically what happens each year is that there's a revenue share component which results in about a $500,000 surplus that is paid to the city. However, in years where operating costs exceed operating revenue, there might be a deficit. And it's very rare. But because of COVID 19, many, many events have been canceled. And as a result, there are still costs associated with utilities taking care of the building, maintenance, security, etc.. And so the convention center is reporting an operating loss to date. This action allows for us to advance some of the funds that we anticipate that we will be paying out toward the end of the year, because there are issues with cash flow for those things that are described, utilities, maintenance, etc.. So by taking this action, the Council will allow for city management to move forward with advancing some of those funds ahead of time. Currently, the projected deficit could be as high as 4.7 million by the end of the fiscal year. Right now, we're just requesting authority up to $3 million cash advance so that we can keep SMG solvent in helping to manage the building until that time. I'm happy to answer any questions and thank you for your support. Fine. Do you have any public comment on this item? Oh. Vice Mayor, I have some questions. Oh, excuse me. It's kind of a big item. I just wanted to hear from staff. What happens if we don't? And then also understand what other cities are doing with their convention centers. I'm just so we can have an understanding on that before we vote on it. So if we don't, we would be in violation of our agreement. It would be a legal dispute and it is clearly spelled out in the operating agreement. We have to do this. We haven't looked at other cities. Every city has different agreements with how they do this. This agreement is about 25 years old and it is nearing expiration. So we would certainly look at it going forward, maybe some different models. But, you know, it is something we're contractually obligated to do. All right. That's all I needed you to say for sure. Support. Brian Levin in public comment on this. There's no public comment on this item. I think we did well. District one. I. District two i. District three i. District four. All right. District five. It's District six. By. District seven. District eight. District nine. All right. Motion carries.