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Penticton council to vote on renewing Spectra contract for SOEC

Staff recommend renewing contract, saying RFP process likely not to produce better deals
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A packed house at the South Okanagan Events Centre last year for the Sublime with Rome and Offspring concert. Dustin Godfrey/Western News

Staff are recommending the City of Penticton renew its contract with Spectra Venue Management, as its five-year deal is set to run up in June 2019.

In a report to council, staff wrote that Spectra has gotten to know the community through its operation of the South Okanagan Events Centre campus, which offered a benefit to renewing a contract with the group. However, staff suggested a few changes to a renewed contract.

Currently, the city pays $272,000 annually for Spectra’s services, but staff suggested adding inflation to that price, starting at $272,000 to be increased annually by a maximum of three per cent.

The current contract also offers a bonus or penalty based on how well or poorly Spectra performs, which staff are now suggesting be capped at $100,000 for the bonus and killing the penalty altogether.

The marketing fund the city has paid to Spectra to help attract new events to the area, staff wrote, has gone unused, and Spectra has asked that the funds be used for work on capital projects at the SOEC campus.

City staff wrote that about $150,000 currently in the marketing fund will released to the city by July 31 this year, while the city-funded marketing purse would be replaced with cash contributions “to be used for any purpose directly related to operation of the SOEC.”

Spectra first took on operations of the SOEC in 2008 and won its current contract in a request for proposals process in 2013.

Over the course of the current contract Spectra has brought consistently increasing numbers of events to the SOEC, from 192 in 2014 to 245 in 2017. The net operating income has remained relatively stable operating at a $1 million loss each year. That ranged from $1.115 million lost in 2016 to a $1.041 million loss last year.

In food and beverage, the gross income complex-wide has steadily increased, from just over $2 million in 2014 to nearly $2.9 million last year.

Staff also point to the economic impact the SOEC has had during Spectra’s tenure, with an estimated $25 million in direct spending in the city related to SOEC events.

Staff also suggested the city could run a new RFP process for the contract or forego a third-party operator in favour of running the complex directly.

However, staff said running a new RFP would likely not produce a better deal for the city, and said the city does not have expertise or resources to operate the facility.