Amphitheater management contract postponed again

BY PRU SOWERS

KONK LIFE STAFF WRITER

The process of finding an outside company to manage the amphitheater in Truman Waterfront Park isn’t getting any easier, although it does seem to be slowly moving ahead.

After rejecting three bids to manage the amphitheater last August, Key West City Commissioners voted unanimously this week to postpone a vote that would have started contract negotiations with Rams Head Promotions of Key West, a local company that produces concerts at the Key West Theater and on the lawn space at the 24 North Hotel on North Roosevelt Boulevard. The vote will now take place at the next commission meeting on April 2, when commissioners have requested a presentation from city staff over the criteria used to recommend Rams Head Promotions.

Rams Head was one of two companies that responded to a Request for Qualifications (RFQ) to manage all events at the amphitheater and was ranked on top at 85.4. The only other responding company, We’ve Got the Keys, was ranked at 70.6. But Nadene Grossman Orr, We’ve Got the Keys President and CEO, made a last-ditch effort at the March 20 meeting to convince commissioners to reject the staff recommendation and select her company instead. Grossman Orr and several officers from her production partner, AAG Live, argued their qualifications are more extensive than Rams Head because AAG Live has produced concerts and television events around the world and would bring that experience to management of the amphitheater. In addition, We’ve Got the Keys produces two annual local events, Fantasy Fest and the Key West Songwriters Festival.

“My end goal is to make [the amphitheater] the legendary, bucket list, must-play venue for musicians and artists of all kinds,” she told commissioners.

Jason Atwell, CEO of AAG Live, complained that the RFQ committee, made up of five city department heads from engineering, utilities, community services, risk, and port and marina services, only spoke with one of the several client references included in his proposal.

“They [references] were called once. They actually returned calls and were not called back,” Atwell said. “The [ranking] scores we received truly don’t make sense to us.”

Several commissioners also had questions about the ranking process after hearing Atwell and Grossman Orr speak. Commissioner Mary Lou Hoover asked why AAG Live’s extensive experience was not communicated to the ranking committee. She also asked why city staff were not at the commission meeting to answer questions.

“I don’t feel very comfortable right now talking about this to anyone because I don’t feel I have enough information to say I think this is the great deal,” she said.

Commissioner Greg Davila worried about several unanswered questions in the RFQs, including how local organizations including schools and nonprofits will have access to the amphitheater once a manager is hired, and how much money the city stands to make from the production contract. While the RFQs were focused primarily on the experience and qualifications the two production companies would bring to the table, both contained short proposals on how a contract could be crafted. We’ve got the Keys proposed to give the city 25 percent of the gross revenues from ticket sales, sponsorships, vendor fees and parking. Rams Head would give the city $1 from every ticket sold, plus 20 percent of the net profits from each concert or event.

Davila pointed out that in projected first year budget – the contract would be a three-year production deal – Rams Head estimated total revenues at $2.334 million but the 20 percent net profit to the city would be only $4,800. That would increase to an estimated $39,400 in year three of the contract.

“I just have a concern that projected revenue from [Rams Head] is over $2 million. It costs us $150,000 or whatever to run the amphitheater for a year, to maintain it, and we’re going to get a check for $4,800 and maybe a picture and a thank you,” Davila said.

City Manager Jim Scholl said the details would be worked out in contract negotiations with the production manager selected. He agreed that a net revenue percentage deal is not what the city wants because it would be difficult to ensure the production company was efficiently managing concert budgets. He advocated for a flat fee from ticket sales and other revenue-producing add-ons to a concert.

“There needs to be a direct revenue stream to the city that will obviously enhance the value to us,” Scholl said.

The three bids received last August were rejected because each requested an annual payment from the city to the promoter. We’ve Got the Keys was one of the three bidders and received the highest ranking from city staff at that time. But its proposal came in at $200,000 — $150,000 as an annual management fee paid by the city with another $50,000 marketing budget, also to be paid by the city, to promote the amphitheater. Scholl said at the time the city couldn’t afford it and there was no guarantee that money would be recouped through ticket and other concert activity sales.

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