A new global entertainment and sports promoter may come to Bakersfield to take charge of the Rabobank Arena, Theater & Convention Center complex, the San Joaquin Community Hospital Ice Center and Bright House Networks Ampitheatre.
City staffers are recommending that AEG Facilities, which manages the Staples Center in Los Angeles and owns the Amgen Tour of California bicycle race, replace SMG as the manager for facilities. SMG also operates around the world.
It's not a done deal yet. AEG and the city still are working out the financial terms and length of the potential contract, said Rhonda Smiley, assistant to the city manager, on Wednesday. Those details aren't publically available at this point of the process, she said. Once the terms are agreed on, city staff will bring the proposed contract to the Bakersfield City Council for approval, hopefully at its March 20 meeting, Smiley said.
Concern was expressed about SMG's management in 2011, just before general manager Steve Womack stepped down amid a slump in bookings. Bakersfield had lost $2.4 million on the SMG-managed venues in the five fiscal years that ended in June 2011. At the time, Smiley said city staff wanted more bookings at the facilities.
But Smiley was more upbeat Wednesday.
"Overall, we have enjoyed a good relationship with SMG," she said. "We've been satisfied with their performance, but we're looking into the future and we're looking for improvement in terms of two things that are related: the ability to book notable performers and also to help to improve the city's financial bottom line."
Four companies initially expressed interest in managing the facilities when the city issued request for proposals last November. But only two -- SMG and AEG -- continued through the proposal process. A six-member evaluation team of staff from the city manager's office, finance office and the Bakersfield Convention & Visitors Bureau made the recommendation to go with AEG.
SMG's contract was to expire this June, Smiley said.
"It's a matter of being good stewards of the taxpayers' funds to open it up to an (request for proposals)," including from SMG, she said.
Two SMG representatives, one in Bakersfield and one in Pennsylvania, where SMG is based, didn't return calls or emails Wednesday afternoon. Scott Neal, general manager of the facilities since November 2011, also didn't return calls.
The "very favorable" financial terms AEG submitted to the city, plus the company's stature, were factors in city staff's recommendation, Smiley said.
AEG's success in building up the area around the Staples Center with restaurants and retail was another plus, she said. The hope is AEG could do something similar, though on a smaller scale, for empty property at the Mill Creek development. The city has been struggling to attract commercial development to that property.
"The vision for the overall development of the Mill Creek area has been to include restaurants and ... retail that would complement" the affordable housing development at Mill Creek, Smiley said. "It's been a tough sell so far ... AEG does have extensive experience in that."
Michael Roth, vice president of communications for AEG, declined to provide many details about the potential contract with Bakersfield or what plans AEG might have for managing the facilities, though he did confirm Bakersfield city staff's recommendation that AEG be the new manager of the Bakersfield facilities. Roth said AEG is the second-largest live entertainment company in the world in terms of the number of concerts and tours it runs worldwide.
AEG's proposed reach into Bakersfield comes as the company has been put up for sale by its owner, Denver billionaire Philip Anschutz. AEG is part of the Anschutz Co. and owns the Staples Center and has stakes in the L.A. Live entertainment venue, the Los Angeles Kings hockey team and the Los Angeles Galaxy soccer team. AEG also is the force behind a proposed downtown L.A. football stadium.
It was unclear Wednesday afternoon whether Neal would remain as general manager of the Bakersfield facilities if the management contract switches to AEG. Neal moved to Bakersfield for the job in November 2011 from Wichita, Kan., where he was assistant general manager at Intrust Bank Arena, a 15,000-seat venue.
Both Smiley and Roth said keeping current employees was a focus for the future management of the Bakersfield facilities.
"Bakersfield (city staff) expressed a strong preference in the (request for proposals) to whoever was selected in the process to retain the staff," Roth said. "As is the case with other facilities that we're brought in to manage, that is always our strong preference because of their experience with a particular venue."
After a slow 2011, SMG stepped up its bookings with superstar acts such as Blake Shelton, Carrie Underwood, Kelly Clarkson and the best-selling Latin rock band Mana. SMG has managed the arena, theater and convention center since 2000. Before that, the properties were managed by Ogden Entertainment, which SMG bought in 2000. The city signed a new agreement with SMG in 2003 and renewed it in 2008. SMG took over management of ice center in 2003 and ticket sales, marketing and booking of events at the Bright House Networks Amphitheatre in 2007. SMG's current management contract for all the facilities expires on June 30, and a new management contract would start on July 1.