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Home My WebLink About5. WRMC FB Exclusivity 081721 FINALWill Rogers Memorial Center (WRMC) Food and Beverage Exclusivity Presentation to Mayor and City Council August 17, 2021 Today’s Presentation •WRMC F&B is part of a wider conversation about how we choose to invest Hotel Occupancy Tax (HOT) dollars •Every new HOT dollar generated in operations of venue facilities is a dollar that can be reinvested in the venues •Moving to an exclusive provider arrangement for F&B at WRMC is an opportunity toward: •Improved revenue results •Improved customer service and consistency •Improved utilization of both local and business equity firms •More investment in our public event facilities 2 WRMC is a deficit-funded business 3 6-Year Average HOT Subsidies: $4,196,480 WRMC has significant capital needs 4 FY18 Spike: Cattle Barn Renovation ($12M) 5-Year Average Capital Expense: $7,236,600 WRMC Future Capital Needs: 5 5-Year CIP Average: $4,287,000 WRMC will be competing for C&T Fund Resources •FWCC Expansion: $400M-$500M •Sheep and Swine Barn Renovation: $20M-$30M •In partnership with FWSSR (FY TBD) •FWCC Annual Capital: $1.9M annual average, FY22-26 •Future funding of Visit Fort Worth 6 Culture and Tourism Resources are tight… 7 The opportunities to improve revenues at WRMC are limited •Rental: Currently pushing on rates, but need to maintain price -competitiveness for planners •Parking: Committed to Parking Fund and debt •Services (RV Sales, Shavings, Internet, Utilities): Currently pushing on rates, but need to maintain price competitiveness for attendees •Food and Beverage: The next opportunity to improve 8 So, when improvement opportunities arise, we have to take advantage •Current State: WRMC requires approximately $8M in Occupancy Tax Support •Reducing the operating deficit by $2.0M creates approximately $34M-$36M in debt service capacity 9 WRMC F&B: Current State •44 Weeks of Operation (due to FWSSR agreement) •FWSSR –Fort Worth Stock Show and Rodeo •Overall Satisfaction with Catering: 4.23/5.00 •Avg Commission Revenue: $590,768 (<10% of Total Revenues) •F&B Revenue Per-Caps: $1.86 •Like Venues: $3.14-$21.85 10 Why exclusivity? •Consistency in customer experience •Accountability for customer experience & maintenance of City Assets •Economies of Scale create improved revenues •Increased commissions/profit-sharing •Motivation to sell F&B services •Improved Opportunity for Business Equity Firms •Potential for greater financial flexibility with groups: •Venue more involved in making deals work 11 Exclusivity may be more inclusive… •Potential for broader Business Equity partnerships •Local flavor partnerships •Opportunities for both Caterers, Purveyors, and Service Providers •Catering volume (or lack thereof) promotes partnership arrangements 12 Exclusivity –Consulting Perspective •Dedicated Catering sales effort •Increased profitability •Quality Control •Local Business Involvement •Pricing Flexibility •Reputation 13 WRMC Catering Participation 14 FY17 FY18 FY19 Avg % Coburn's 48 40 58 49 47% Reata 11 20 18 16 16% Other (15 Vendors)24 20 18 21 20% Other-BE (5 Vendors)9 8 6 8 7% Buyouts 10 12 10 11 10% Total 102 100 110 104 100% WRMC Catering Revenues 15 FY17 FY18 FY19 Avg %Avg/Evt Coburn's 93,854 85,510 105,712 95,025 44%1,953 Reata 47,076 49,174 40,968 45,739 21%2,800 Other 35,447 33,076 32,315 33,613 15%1,626 Other-BE 7,957 8,615 6,856 7,809 4%1,019 Buyouts 29,350 48,032 29,815 35,733 16%3,350 Total 213,684 224,407 215,667 217,919 100% Local Competitors –F&B Exclusivity •Dickies Arena •Dallas Conv Ctr •Cowtown Coliseum •Bass Hall •River Ranch •Irving Conv Ctr •Hurst Conv Ctr •Arlington Conv Ctr 16 •Arlington Conv Ctr •Plano Conv Ctr •Fair Park •Majestic Theater •Texas Trust Credit Union Theater •Texas Hall @ UTA •Fort Worth Zoo Equestrian Competitors –F&B Exclusivity •Tulsa •Oklahoma City •Las Vegas •Scottsdale •Lexington •Louisville 17 •Ocala, FL •Wilmington, OH •Columbus •Los Angeles •Reno-Sparks •Guthrie, OK RFP Selection Criteria 18 •Business Terms Proposed 37% •Experience in like or similar venues 12% •Demonstrated innovation 12% •Improvement in service in like facilities 12% •Local Flavor Commitment 12% •Business Equity Commitment 15% Options for Not-for-Profits •The market will dictate pricing, but more flexibility when F&B and facility are tied together •The F&B vendor will be incented to drive event volume and revenue •Potential tools to address not-for-profit concerns: •Waive rent for NFP banquet events at WRMC •Sliding scale: Discount rent based on F&B spending as a percentage of venue rental 19 Timeline •RFQ Solicitation:April 8 •Shortlisted Firms Receive RFPs:June 20 •RFP’s Due: August 20 •Respondent Interviews: September •Council Update & Next Steps:October 20 Questions / Discussion 21