Amphitheater management bids rejected; city goes back to drawing board

BY PRU SOWERS

KONK LIFE STAFF WRITER

The effort to find an effective and profitable way to manage the new amphitheater at Truman Waterfront Park took a step back recently when city commissioners voted unanimously to reject bid proposals from three outside companies.

City staff had recommended the bid be awarded to We’ve Got the Keys, a Key West travel and events company, to manage the new amphitheater, including booking musical acts and local organizations wanting to rent the facility. But that bid came in at $200,000 — $150,000 as an annual management fee with a requested $50,000 marketing budget to promote the amphitheater – and the city just doesn’t have the funds, according to City Manager Jim Scholl. While the fiscal 2019 budget has not been finalized, over $7 million in expenses incurred as a result of Hurricane Irma last year have not been fully reimbursed by FEMA, putting a foot on the throat of budget planners and leading the city’s director of engineering, Jim Bouquet, to recommend the amphitheater bids be rejected and the request for proposals (RFP) be cancelled.

“The intent of this RFP was to solicit proposals that would manage the facility without requiring capital outlay on behalf of the City,” Bouquet wrote in his recommendation to Scholl. “Unfortunately, all received proposals required significant City funding in addition to firms receiving revenue from sponsorship, etc. Additionally, respondents failed to provide detailed financial management plans for the facility.”

Scholl said the original idea was that an independent manager hired to oversee amphitheater operations would receive a percentage of revenues generated by ticket sales and sponsorships, and not require any direct payment from the city. However, all three bids proposed being paid an annual fee by the city plus a percentage of ticket and sponsorship sales.

Scholl said he wants to resubmit the project to outside firms as a Request for Qualifications (RFQ) because there is no money in the city budget to pay $200,000 or more to an outside manager.

“The opinion and expectation is if we do an RFQ, we’ll be able to negotiate a percentage contract. That’s what our vision is at this point. Or… get somebody in-house,” Scholl said, adding that managing the amphitheater with city staff will likely require more than one person, resulting in additional salary costs.

We’ve Got the Keys came in first in a staff ranking of the three bid proposals, ahead of Frameless Creative LLC and Klass-Ex LLC. Klass-Ex, based in Miramar, FL, came in second, proposing to be paid a $75,000 management fee annually while also collecting an unspecified amount from each ticket sold at public events. Frameless, based in Miami Beach, proposed a $150,000 annual management fee plus 22 percent of the gross revenue in excess of $300,000, 30 percent of the gross receipts from selling event sponsorships, and the city paying for management insurance.

In addition to the $150,000 management fee proposed by We’ve Got the Keys, which manages Fantasy Fest, the group also wanted 20 percent of all event sponsorships and a percentage of all merchandise, membership and memorial fee revenue.

Jim Gilleran, a member of the Truman Waterfront Advisory Board (TWAB), said he had heard “a lot of public input” from residents worried about an outside firm managing the amphitheater. If the facility is privately managed, how would that affect a local group such as the Little Conch baseball league when it wants to hold an event at the amphitheater, Gilleran asked. Would they have to talk to somebody in Miami if an off-Keys group won the contract?

Gilleran also raised the larger question of how the new waterfront park itself will be managed going forward. TWAB is leaning towards recommending hiring an overall parks manager or management board, he said.

“It’s a very large facility. It’s going to require some form of management and that’s going to come back to you all as far as how are we going to budget that,” Gilleran told commissioners.

In other news from the commission’s Aug. 7 meeting, Commissioner Sam Kaufman put forth a resolution asking that a proposal be put on the Nov. 6 election ballot to explore whether portions of Duval Street should be closed to vehicles at certain times. But the resolution failed when he couldn’t find a second. Commissioner Jimmy Weekley was the only commissioner to offer an opinion before the resolution died, saying he didn’t want to lock city officials into having to act if voters agreed to look into the idea. He proposed that the closure idea be researched by a committee and any recommendation be brought to the commission for its decision.

“We’d have the ability then to be more flexible as how we do [it], whereas a referendum, if it passes, you have to follow that referendum,” he said.

Kaufman said after the meeting he was disappointed his idea didn’t even garner a discussion. The idea of closing parts of Duval Street to vehicular traffic has been brought up for years but no decision has ever been made. Kaufman said he was hoping to build on the momentum from the commission’s recent decision to let a private business group permanently close the 1400 block of Duval to traffic, turning the block into a pedestrian park with food service offered by the group. In return, the business partnership will foot the bill to build the pocket park and will also pay the city a percentage of its food sales revenue in return for the lease. There were several speakers at the Aug. 7 commission meeting against the proposal, which ultimately passed by a 5-2 vote.

“Given the controversy regarding the 1400 block, it will make it increasingly difficult to garner the support from some in the community for any [Duval Street closure] plan developed. As you can see, this is an incredibly difficult endeavor to embark and we have very little momentum, as I see it now. This is why I’m disappointed,” Kaufman said.

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