Good morning. >> Welcome to the Mesa City Council study
session for August 13, 2026. Mayor Freeman is out of town and is excused.
All other council members are present, although Council Member Heredia is
attending by Zoom. I don't see him on yet.
» Okay. So, Council Member Heredia is running a few minutes behind, so we'll
just note when he uh he calls in. Item number one is to review the agenda
we have for our Monday, August 17th council meeting. Let's go through that
agenda if council has any questions. Mr. Butler, I know we have presentation
set for 5 A and 5B. >> We do.
» Yeah. Okay. So, we'll skip 5 A and 5B for now. Does anybody have any questions
or comments on the remainder of the agenda?
Seeing none, why don't we start with 5A? All right. So, staff have come up and uh
vice mayor, council, we're uh really excited we're we've made it to this day
where we're bringing um contract forward for your consideration with Legends
Global uh for management of the convention center. And I know u this is
one uh opportunity that we had discussed um as sets the stage for bringing in uh
all the types of uh hospitality and uh maximizing the use of the convention
center in in ways that um we as an independent operator were not uh able to
do. And so um so we're really glad that we've after a competitive process gotten
to this point for your consideration. I'll turn it over to Candace and she can
walk you through everything that's led us to this point.
» Good mayor, good morning uh vice mayor and council. Um I Candace Candace,
deputy city manager, and I'd like to um introduce the team that we have up here
with us today. So to my right is uh Brad Gnner. He is our consultant that we used
on this particular project since this is the first time we've looked into this
type of a public private partnership. He is a a former senior vice president of
AEG um global previously and about and
decades of experience in this industry. So we were very help um glad to have him
on this project. Uh to my left we have uh Harry K. He is the senior vice
president of business development for Legends Global, which is the contractor
we are proposing to enter into an agreement with. Um, and to his left is
Tyler Oin. You, some of you may have remembered him from last year. So, he uh
is with CSL. CSL did the feasibility study for us um when we were looking at
what improvements we would need to modernize the convention center in the
amphitheater. And so, he presented to you last March of 20 um 25. Um so with
that we will start into the presentation.
» All right. And council member Heredia is online.
» Okay. >> Great. Um this just gives an overview.
What we're talking about here is the Mesa Convention Center and the Mesa
Amphitheater. It is all on one campus um situated near center and university.
This is kind of an overview of that. Also gives an overview of the timeline.
So we did put out a request for proposals um back in February. uh we've
worked through that over this last uh over the spring and into into summer.
Now we had the top two proposals come in and give presentations to staff so we
could ask them questions about their management style and how this particular
type of partnership works. Um we are here now proposing to enter into a
contract with Legends Global who was the the top proposal.
Why are we why are we going into this? This is a public private partnership and
I want to explain that a little bit in the fact that the city will still retain
the ownership of all of the facilities. Um we still fund the operations of this.
So this part of it doesn't change. The part of it is coming in with a partner
who has industry specialty and expertise to come in and do the actual management.
Um that management doesn't mean just the daily management but also where we have
access to now their network. So they're an international company. um they have
access to acts and other other entities and um contracts and so forth and so
that can really bring that to it. They'd be coming in with strategic management.
Where do we want to go with this campus? Where do we want to go with these
facilities? Um they would take over the daily operations of it, meaning it would
be their employees [clears throat] who actually work on this site. They would
be responsible for the marketing and advertising um for any type of sales,
ticketing, rentals, um everything that we currently do today. And then we all
they also bring with them um because CSL is an affiliate organization with
Legends Global, they bring that expertise that we already tapped into
last year, which is what do we need to modernize, what do we need to monetize,
um what type of capital improvements would we need to make, how do we really
put a a strategic plan around this particular campus and what we want to
see out of it for our downtown and for our residents.
This is just gives you an overview and I apologize this should be intent of
management contract not contracted. Um but these just gives you a highle view
of what we requested as part of our of the proposals we were looking for and
what we were judging the proposals on. Could they develop and deliver these
particular things? We want to continue to hive have and elevate um the quality
of experiences and the event management we have there. We want to maximize that
utilization. how how can we best maximize that? Are there capital
improvements that we can make that would allow us to extend our season for
example at the amphitheater uh when we know that it gets pretty hot in the in
the summer. Um what is the economic impact? How can we use this campus to
drive people into our downtown? How do we get them here and then get them into
our onto our main street and into our our shops and our hotels?
Also, how do we boost our our effectiveness with all of the other
partners that we already have here in downtown? that includes the visit Mesa,
downtown Mesa Association and the local hotels that we have here
and how do we pull that together and also integrating as we continue to work
on our downtown arts and innovation district. How do we amplify that? Um,
and so that we're all working together. So, those were the things that we asked
for when we went out for proposals is how could you help us with this?
» Uh, yeah. Yeah, please. >> On that slide, um, this is for fun. Is
that the Weezer concert? [laughter] >> I'm pretty sure it is. I just want
everyone know exactly which concert. >> I went to that concert and it was
awesome. >> Berg has confirmed it is it is Weezer.
So >> good. Vice Council member Taylor, you
have very good eyes. If [laughter] you can see who's on stage there. Um
[clears throat] >> it was awesome. It was like Christmas
Weezer. Who says no to that? So anyway, [laughter]
just wanted to throw that out there. >> And I'm glad you enjoyed that.
I know. >> As we move forward, one of the things as
we really kind of talk about what does this partnership look like and what does
this partnership mean? Um, again, the city of Mesa continues to hold the
ownership of the campus. So, it is our campus, it is our facilities. We will
also continue to fund the operations. So, this is not like so it's not similar
to the golf course when we did that where they actually run the entire golf
course for us. Um but it's their operation that they're running. This is
still our operation. They are running it on our behalf. What that means is that
we are still funding the daily operations for everything that happens
on the campus. So that part doesn't change. So when we talk about the cost
cost to the city or cost to the contractor, I want to be very clear that
um the cost of running of actually operating the operating expenses will
still be funded by the city of Mesa. Um and they will be doing it on our behalf.
So, what are the actual costs um out the door costs? The city cost to Legends
Global um as an entity is a monthly base fee for a monthly management fee of
$14,000 a month. Um they will also receive um on food and beverage 4% on
the gross sales and 8% on the net sales. There is an annual performance
incentive. So, each year there will be performance measures that will uh
benchmarks and targets that will be set um with both entities. And at each year
we'll review those to see if they've met those and there's a um incentive fee of
up to $50,000. It is based on each benchmark. There's an annual
quantitative incentive fee. And what that is is in our adjusted gross income
each year, um Legends Global will put together a budget and targets that they
will give to us. We'll review them. We need to approve them. So it'll be
between the city of Mesa and Legends Global what our targets are for next
year, what we hope to accomplish. um if they accomplish those that does not go
into this incentive fee. It's only if they go above and beyond those then they
would receive 20% of the AGI over whatever benchmark we had set for that
year. And then for sponsorship commissions, which is this is an
industry standard um as they go out and receive um advertising sponsorships for
particular things could be possibly be naming rights um they would receive a
20% in essence finders fee or commission on those.
Um, Legends Global has agreed to um help us and and contribute to the capital
portion of this by doing a one front a onetime upfront payment of $500,000 that
would go towards some type of improvement on the campus. Those are to
be determined as we go through and start talking about what is the priority for
us. um what is the the thing we can do right out of the gate um that could help
us increase our revenues or increase our number of shows while we continue to
work on larger plans of the campus what it would look like and maybe a larger
capital improvement. These would be things we could do within the next year.
Um they've also they they are all about community. So they would like to um
contribute $10,000 a year for the five years of the term toward a not
for-profit or a community based organization of the city's choice. And
so that'll be something we would talk about as we move forward where we would
like those funds to go. They will also be covering the transition cost of
actually setting this up. So the way this is organized is there's actually a
two-month transition period where they need to set up all of the infrastructure
in order to take on this management and they would be covering those costs. It
would be no cost to the city for that setup.
Um at this time I'm going to hand it over to Harry so he can talk a little
bit. you can get to know Legends Global a little bit more.
» So, thank you, Candace. First of all, let me start by saying thank you for the
invitation to be here today. Um, very much appreciated. This is a partnership
we are very excited about. We're ready to get going. Um, and again, so thank
you for this opportunity and uh we know it's going to be successful for all
parties moving forward. Um, you've got on your screen there just a quick
overview of Legends Global. Uh we are a worldwide industryleading company that
specializes in much more than just venue management and content and booking. We
provide all of those specialized services a 360 degree suite of services
that you see there on the right hand side. Tyler who will speak here in a
minute represents feasibility and consulting with our with CSL our
affiliate. We provide owners rep um services for uh and project management
services for renovations, expansions, new construction. Um premium sales more
so on the arena stadium side in terms of your your VIP spaces um your suites,
your loies, your club seats. We have expertise in in those sales efforts. Um
partnerships is as Candace just said, naming rights, sponsorship, advertising,
entitlements. Uh we have a whole division on a worldwide scale that
specializes in that area. Hospitality, which is food and beverage,
which will be part of our scope here. Uh merchandise probably not so much, but we
do have the the access to those individuals. We do merchandise for NFL
teams, for the Olympics, for the RDER Cup. So again, worldwide experience with
the sale of merchandise, both uh retail and and online. And then venue
management and content booking are really the core services um that we're
providing here for the Mesa Convention Center, the amphitheater. So what does
this all mean for the city? It means access to um and the support of the
resources and the expertise of all these divisions as we move ahead together um
to grow these venues, to grow the city, and to grow the destination.
Um just real quickly, uh drilling down on venue management, we manage 450
venues worldwide. About 70% of those are North America. Uh we do have a fairly
significant international footprint as well. Um the majority of our um uh
venues that we manage are municipally owned. Um so we are in essence a
government contractor. We understand the basic tenants of public administration
and transparency and bidding requirements and all those things that
are important to our municipal partners as you over oversee and manage these
venues on behalf of the taxpayers. So that's our wheelhouse. We do manage some
very large um a market uh venues, seven NFL stadiums, large convention centers.
But if you look at our resume, we really specialize in smaller venues, whether
it's convention centers, arenas, theaters, um equestrian centers, um
conference centers, um whether they're in a secondary market, a tertiary
market, or in a very crowded a market where Mesa sits here in in the Phoenix
market. Um, and we've had tremendous uh success using our resources, our
visibility, our branding, our best practices to elevate the operations of
those venues. Um, and many of our clients have been with us for a long
time. We've we've succeeded in achieving their goals. We've earned renewals and
we're hopeful that'll be the path here with the city of Mesa moving forward.
The other thing I'll say before we leave this page, Candace, this is kind of our
wheel of resources. We have over 100 people um just in the venue management
silo of our company that support the operations of our local staff here or
will be supporting day in and day out um across all these disciplines and more
all these departments. To me this is the real value of our company is um you know
I've been doing this a long time. Brad's been doing this a long time but we don't
know everything. And operating in this in this world this specialized world for
almost 50 years. You live and learn trial and error. You take everything
that we're learning every day and what we do is condense that and distill it
down into usable programs and systems and best practices um to elevate the
operations and the support for our local staff and achieving your goals. That is
the real power of our company is that shared worldwide experience from doing
this for for many many years. And on the local level, while we are a
large international company, we have a presence here in the market already. Um
um I'm sure you're all familiar with State Farm Stadium, Desert Diamond
Arena. We also have some food and beverage operations um in the market. We
run the the uh the food and beverage at Talking Stick, the amphitheater uh for
Live Nation. So um so we're coming into this engagement with the Mesa Convention
Center and the amphitheater in the city which is a perfect complimentary venue
to uh the footprint we already have in the market. Existing relationships and
understanding of the market, community relationships, business relationships,
um operators and programmers that sit in this market that know it very well. Um
again to support our operations here, no learning curve. Um and we're ready to
hit the ground running. I'll turn it over to Tyler.
» Great. Well, excited to be back here. Um, excited to remain a part of the
planning of of these facilities, the convention center and amphitheater. Um,
some of you may remember me probably from a year and a half ago as we
concluded our feasibility study. Um, fortunate timing from the CSL side, our
organization became uh uh joined with the former ASM uh organization. We are
now Legends Global. We are now the global planning arm for Legends Global.
And the great news here is we have a wealth of data and research that we
conducted over the course of the second half of 2024, first half of 2025,
looking at the opportunities for the convention center and amphitheater to
increase business, to increase economic impact. um both in terms of of what can
we do capital investment wise, but there's also opportunities to think
strategically about those buildings and diversify and increase the programming
that that go to those facilities. This is a recap of the work that we did um
looking at your building versus the 50 potentially competitive facilities
throughout the valley. Uh benchmarking you against similar facilities around
the nation. We also collected input from 65 event planners representing more than
300 events. we have the real world data uh about what we could do here from a
marketing standpoint, from a scheduling standpoint and capital investment
standpoint uh to help guide the future of of this facility and downtown Mesa.
Um on the next slide is just a quick recap of what we saw as as as key
opportunities and issues for the the convention center. Um there has been
increased convention activity and meetings activity certainly following
the COVID pandemic in in the valley area and at the same time we're dealing with
a very competitive field of hotel conference centers, various ballrooms
that are that are around the the area. This is a building that has been used
for local shows, public consumer shows, and but has increased conventions uh in
recent years. How do we build on that momentum? not necessarily by uh trying
to be the next Phoenix Convention Center and and greatly expand our footprint,
but by differentiating and by thinking strategically of what types of groups
and meetings could fit here. And then over time thinking, okay, what can we do
uh uh uh from a physical investment standpoint to increase that business and
support that growth because I think there's an exciting opportunity for this
building and the amphitheater to be a big part of a really exciting future for
downtown. We certainly talked about that in the report last year. Um similar for
the amphitheater. Um I think what what Legends uh brings to the table is is the
network um relationships not just with Live Nation but a number of promoters
nationally and regionally uh to help bring a diverse set of programming to
this building. They also bring a lot of creative thinking and ideas for how can
we use the amphitheater, not just for concerts and performances, but in unison
with the convention center. So, I think there's synergies that we're we're going
to work together to to identify to to greatly maximize the use of that
building and again think of the future um over the next 5 10 years. How can we
improve the experience of that not just for attendees but for the artists and
make sure that we're we're growing our calendar of events that that are going
to the facility. um CSL, you know, our our role here is
is to continue uh uh to look at the future of these facilities to advise the
legends team and provide real market data. You know, that's what really sets
this relationship apart in in this world of live sports and meetings and
conferences and entertainment. We're here to actually give them the voice of
the consumer. We're here to give them data on competitive venues. And we're
here to think strategically about from an economic and financial perspective
what are the the wisest moves we can make with both of these facilities over
time. Over on the right are just some of the trends we identified in the report
last year. But immersive experiences, technology, local and authentic food and
beverage. also looking at the amphitheater and thinking of when from
when you get there to when you leave, you know, engaging the the attendee and
and giving them the best experience possible and creating as many
opportunities for for revenue generation as possible for for major concert
concerts that are going there. So, we we are here to be an ongoing adviser. um
look forward to to working with you all in the future and working with Harry and
the team um to help think uh uh not just of of near-term planning and
strategizing in these venues, but starting to think also, okay, what's a
schedule of of projects we can think about over the next five years and what
gives us the greatest return. So, very excited to continue to be here. Um and
uh I think I'll pass it back to Candace.
» Facility improvement planning. you sorry >> uh facility improvement planning um um
you heard Tyler talk about that a little bit those are that that's the expertise
that they bring right is what is it that we can monetize what is the best effort
that we can put forward in the next year two years five years um in order to
really um elevate that entire campus and so we'll be working together all three
you know two entities but CSL is is part of legends global now as we really go
through those so they will be providing that expertise to us similar to what
they did with the feasibility study taking it to that next level, that next
step. Um what is the first priority, the second priority, and what is it we're
actually trying to drive to? Um and how do we implement that over this time?
Um the transition itself. So the transition the the contract we have
proposal for you is a 62-month initial term. The reason why it's 62 is so that
there's a full 5-year management period um following the two-month transition
period. Um, so transition period right now we are looking for a September 1st
start to the transition period and a November 1st start to the actual
management. That's when they would then be the on-site managers effective on
November 1st. Um, there are three uh five-year renewal administrative
renewals that we could do for a total of 20 years on this and it would go through
our normal administrative processes for that. Some of the things that we do want
to talk about is that um there have been questions about our staff and the
transition and how does that work because these will again these will be
legends employees that will be on this campus. Um all of our employees have
known this. We have been very transparent over the last year that this
was a a direction we were going in. Um, and once we do have a signed contract,
we'll be working with each employee to see if they would like to move over to
the Legends Global team and continue on that site or if they would like to stay
with the city of Mesa and we will assist them in finding another location within
the city for them to work. So, it'll be an employee by employee basis. No
employees will be laid off as part of this process. they will all have a home
and it's up to them where that home is um on what side if they want to continue
in that industry which we have some who are very industrydriven and this would
be a great opportunity for them and there are others who are long-term
employees and like to stay with the city of Mesa and we'll and we will make space
for them as well so they will all be taken care of. Um there will be a
general manager on site that would be our prime contact for the the city side.
So we'll have a city contracts administrator that will be the contact
on our side and the general manager will be the contact on their side. Uh we will
continue to have access to all financials uh into the financial records
as well as monthly reports, quarterly reports, uh projections, those types of
things. So this is truly a partnership between the city of Mesa and Legends
Global in their management of that. So we will be in every step. This isn't
something that at the end of the year we find out how they did. Um, this is being
with them at every step, knowing what's happening this month, what's in what's
coming up in the next few months, how are bookings going, how are shows going,
um, and those types of things, as well as the feedback that we have on, um,
surveys, whether it's artist surveys or, um, customer surveys, those types of
things. So, this is truly an integrated partnership u between the city of Mesa
and Legends Global. And with that, I will
» I think that was the smoothest presentation that has ever gotten
through council. Well, >> however, I'm sure there are questions at
this part. Mr. Adams, would you like to begin?
» Well, thank you, Vice Mayor. Uh, thank you for that presentation. Um,
I am I'm just curious about a couple things. Um, as as you have had a chance
to look over our venue, what do you see as its limitations
and in in comparison to uh venues in similar size cities and what are your
plans to try to address those? I mean, I I won't repeat what we've heard from
different sources as limitations, but I'd [clears throat] be curious to know
how you see it. How do you think we move beyond those?
How do we attract um maybe some more A-list acts, that type of thing? So,
that's that's my my first question. And second part is um can you describe
similar venues in other municipalities that you've stepped into and what have
the result what have the challenges and the results been there?
» Do you want to grab that? Mhm. >> Physical.
» Let's go. >> From from you know the the facility
standpoint and you know some things that put a ceiling I think on on potential
for for the facilities. You know from the convention center side it it is it
is dated. Um the hotel package could be grown. Um that's probably a longer term
issue. um technology um and some of the services that certainly some of the
corporate sector and and some higher value associations are looking for out
of venues. We we don't have those currently. So that's certainly the
something to look at over time. From the amphitheater standpoint, um we've talked
about similar issues, things with the modern attendee experience, uh premium
seating, more points of sale for food and beverage aren't aren't quite up to
standard. Um maybe there's opportunities to expand capacity over time as well. Um
it's a great unique boutique experience. I I love that that venue. Um but is
there potential to slightly tweak it? Um you know to to maximize the value that
that we get from the community. Um and then I think just thinking strategically
and and you know just just even even looking at the calendar and maximizing
the value of the events that we get with the facilities we have today. I think
there's still potential uh uh you know to to grow the event calendar um even
before we begin the physical planning. But I I'll let Harry speak to just
similar venues that they've been a part of.
» Yeah, just to piggyback first on on what Tyler said regarding the amphitheater.
Um and and we al also had some recommendations for the convention
center, but we certainly during the course of this RFP process, we we we
shared some aspirational uh thoughts around um where these venues could go.
Realize a lot needs to come together with the financing end and how that we
all pull that together. But um again I mentioned we've got a a pretty good
knowledge of this market and we we we drew upon that experience of operating
the market to drive kind of our recommendation specific to the
amphitheater. If we can get to the point where we can increase capacity, make an
investment into that amphitheater both in the back of house and the front of
house. increase the the the rigging capacities. U I think Tyler mentioned um
the event experience, food and beverage, right? Points of sale, meeting and
exceeding customers expectations in today's world. Um it's great to get the
events, but then you want to maximize the experience as well as maximizing
revenue with a commercial mindset. But um it's all about the event experience
at the end of the day, right? Every event is an opportunity to to wow
people, right? And create cheerleaders and ambassadors for the venues and for
the city. you don't want to you don't want to people leaving with a terrible
experience. So, it's managing every step in that process from the time they leave
home to the time they get home and making sure that that experience um as I
said creates those ambassadors for for the venues in the city. um in terms of
maximizing I mean I I think of again we manage so many venues I think of Grand
Rapids I think of Baton Rouge I think of Florence um Sagenol Michigan um theaters
in in Ohio Toledo Ohio where operating at a significant deficit we've turned
that turned those into profitable buildings or significantly decreased um
the required subsidy each year um Tyler touched on a little bit which I didn't I
don't didn't think we had time in this in this session but to drill too deep um
But the shared data and analytics that we have as our company again pulling all
that information together >> to inform our local staff to help them
do the best deals right and doing the shows to help them advance the shows
properly. Um if we know there's a tour that's played six other of our venues we
have all that shared information from those events
um what people like to eat, what people like to drink so we can plan effectively
again maximize their experience and maximize revenue. So what we're doing in
that world with a program we have workday and AI down the road and all of
that technology and and shared data um um again drives that experience and
drives more revenue um to the venue. But um you know we've grown to the size we
have because we've achieved our municipal partners goals and that's
that's financial and otherwise. Yes. the the mission and the goals for many of
these venues the same bottom line performance economic impact right
quality of life for residents attracting new residents bringing people downtown
um as a complimentary venue to the other assets that's in the community all those
things but they vary a little bit it's not cookie cutter every every city every
state every county authority they have different goals working within those
broader u set of of typical objectives and and missions so we customize to our
individual municipal partners goals which we will
do here um with a demonstrated track record and again I I go back to using
the scale of the company and the experience and the data that we have and
the information um but maximize the opportunities and the events when we get
them also the marketing the branding the vis visibility in two separate
industries the live entertainment industry and and the convention meeting
hospitality industry uh which these venues play in and having those
relationships on a national level on a regional level um and a comfort level
for users um and and our partners that if they come to a a Legends Global
Managed building, they're going to receive great service and u there's a
level of expectation that they have comfort with.
» Good. I appreciate that. Just one other quick question. How many outdoor venues
similar to ours do [clears throat] you currently manage or operate?
» We manage I think 20 some amphitheaters. >> Okay.
» Um Council Member Adams. Um various sizes. We just opened uh the Aquaore
Amphitheater in Grand Rapids. That's about 12,000 seats.
» Okay. >> Um just a few months ago. Uh we managed
down to boutique amphitheaters, 5,000 capacity, 7,000 seat capacity capacity
in Raleigh, North Carolina and Kerry right outside of Raleigh. Uh 15,000 seat
uh amphitheater in Syracuse, New York. Um so we have a a fairly significant
footprint um in the amphitheater world. So I imagine you face the uh the
opposite seasonal problem in Grand Rapids that we face here. So okay, good.
Thank you so much. >> Yeah, thank you.
» That actually works out because once they're done over there, they can come
right over here and book. >> But I think ours is only 5,000
» 5,000 capacity. So it's on the smaller end.
» Council member Duff, I know you've been waiting. Thank you.
» Yeah, I have quite a few questions. Um apologize for the long list. it took a
little while for all the information to be uploaded.
» [clears throat] >> Um so a couple of years ago we did a
whole visioning of the convention center and look at at capital improvements and
I think there was two or three selections depending on how much we want
to invest and what the ROI is this related or is this a separate exercise
or I mean it is that work related to the future of what Legends is working on.
So, Vice Mayor and Council Member Duff, it is um it is related in the fact that
this is the next step towards trying to achieve those goals, right? So, what we
came to council with a year and a half ago was this is the feasibility of the
the actual facilities themselves, like what would we need to do physically at
the campus in order to elevate the n the artists, the the acts we get, the things
that we book at the convention center, the food and beverage, that type of
thing. So, that was a feasibility study and it left us with some really great
ideas. Um and the next question is how do we fund those? How do we how do we
invest? We know we want to invest in this campus. How do we go about doing
that? So this is that next step of actually bringing in an international
partner um in this industry who has done this before and can figure out how to
elevate what we currently have and monetize it in a manner that allows us
to invest then back in all of those revenues back in to larger capital
improvements which then increases our revenues and allows us to invest again.
So the goal of this is actually to monetize as much as we can as it sits
today. Um doing some minor modifications as much as we can and then reinvesting
and reinvesting so that we're constantly reinvesting back into the campus. It is
it is investing the revenues from the campus back into the campus and not
asking in the future for general funds in order to fund a capital improvement.
The capital improvement would be funded by the revenues coming from the campus
itself. So that is the goal. This is this is the step one into that
[clears throat] goal which is to bring in a partner who has that expertise and
that breadth of experience and resources that allows us to truly maximize what we
can do on this campus. So this is really that it's this is that next step from
that feasibility study. And and maybe I can just add, vice mayor and council
member. Um that's why I'm so excited this morning because um I love seeing
Tyler this morning in this perspective because now we have a path forward to
actually make some of that those visions that um we had when you were presented
uh their findings a year and a half ago an actual reality that's not going to
burden our overall uh taxpayers. Because what what this partnership uh allows us
to do is maximize revenue that's generated on site by bringing um more
lucrative shows by by maximizing our return on investment uh that we make
both in the amphitheater and the convention center to bring high value
acts and bring highv value conventions and others that will uh further revenue
that then we'll be able to invest back into the infrastructure and the capital
side of this program. I mean, we sat here a year and a half ago with the
vision of what it was going to take to uh modernize our facilities, but we had
no path forward on how we were going to pay for for those as Candace just said.
And so, this partnership because of what um Legends Global brings to the table
will allow us to maximize revenue at these centers that can be reinvested
back in them. So the users will be paying for the capital improvements of
these facilities and not shifting the burden onto any of the general city
taxpayers. And that is uh a fantastic development that we could not have
foreseen if we had stayed with the status quo. And uh and we we have
excellent staff. U to Harry's point about um other venues that might have
been operating in the red, we're we're fortunate um and and maybe unique in
some ways that we we paid for ourselves. We were break even, but we weren't
maximizing the opportunities. Uh, and it wasn't for lack of great staff. It's
we're not part of the network that Harry just described. If you're a convention
planner, um, you're taking the path of least resistance. You're not reaching
out to independent venues to schedule your conventions. You're calling Legends
Global because you have a relationship with them and you're saying, "I want to
schedule my next four years. I want to be in the Northeast. I want to be in the
Pacific Northwest, in Florida, and then in in the Southwest."
Where where are you going to put me, Legends Global? Where where are your
venues? What makes sense for my um for my um conference or or my uh touring
artist or whatever it may be? That's just access and opportunity that we
haven't had. and that these uh industry experts know how to maximize, know how
to bring in that high value um into both the amphitheater and the convention
center, which will then allow us to invest back into um into those
facilities so that we can continue to um to elevate it um to to a modern facility
to uh a high value facility like the amphitheater to bring in uh those
experiences like Harry um had described earlier.
with um all the modern amenities and high value FnB and other uh
opportunities that just reflect the reality of the market today and that um
we we current we currently can't provide without substantially burdening the
taxpayers um in a way that I I know brought a lot of hesitation to probably
all of us and so uh this partnership will give us a path forward and that's
one of the reasons I'm I'm so excited about because it was a daunting prospect
of how are we going to get there. So we had to change the model. We had to do
something uh different to maximize private sector expertise and investment
and so that's why this partnership is is a real I mean it's a it's a big deal.
This is a real gamecher uh and will have a ripple effect. I I appreciate that the
Delta uh hotel is here because again we're um this this will have a ripple
effect into what we're seeing in downtown throughout the hospitality side
of things. I know you've received a letter from Visit Mesa um with their
support. Um you know, the mayor I think I think the mayor left something with
the vice vice mayor uh to express his support, but the mayor's been a big big
champion of this because again, if we were going to change the status quo, if
we were if we were going to find funding, we had to go out and and
harness the private sector opportunities of partnership. And that's what um the
Legends Global team um brings to the table. That's why it's a big deal.
» Yeah, I appreciate that and I'm very excited about it. But I'm still trying
to pull everything together because we've been on this road for quite a
while. I was trying to decide what we're going to do with the convention center
and I didn't know if Legends was involved at that time. Sounds like it
was a separate feasibility study which led us to Legends. We're no longer
looking at a bond opportunity in order to do improvements. But I do say and
you're you're experienced at this. It's kind of a chicken and egg thing, right?
In order for you to get the revenue that you need to to improve the building, you
have to have investment. But you can't get the investment until you, you know,
until you do the improve. I'll leave that to you. Um, it's kind kind of
tricky. Um, are we expecting any revenue from this at from to the city or this is
» I imagine there's so much investment that needs to go on from the feasibility
study that we saw. identified like at the bottom level is like $30 million. Um
so are we paying for you said operations I don't know what that is and then do we
expect revenues? >> So vice mayor and council member Jeff
this is um so again they are operating on our behalf. So it is still city funds
that are funding all of the operations. So anything operational on that campus
is still a city funded operations. >> So we're see keeping all the revenue and
city >> keeping all the revenue. Right.
» And then the commission base and all that. That's where you're right
» getting your revenues. Okay. >> Correct. So Legends Global would receive
exactly what was on that list. Anything above and beyond that are everything is
city revenues. The only thing that comes out of those city revenues are exactly
what's on that list based on formulas. >> Okay. Then looking at the way we
envisioned [clears throat] our arts and innovation district is a lot of
development over property that is around the convention center on the convention
center especially a lot of parking lots maybe could be built over or anyway we
need to do some visioning on that. Is there anything that prohibits us from
you know development? We wanted to do the lightw walk and have development
vertically along that up to the convention center making that connection
from the convention center to downtown to activate our downtown from the
convention center. Is there >> So we're still on the grounds. We have
» vice council member de we the ownership doesn't change. Um all of the plans that
we've done with the the future lightwalk and the partnerships with ASU and the
rebuilding of that kind of post office area, the Serin House improvements that
we're going to do, the natural history museum which is downtown. Anything that
we do at the MAC, all of that stays the same. So all of the planning that we're
putting in um with Jack Mufay's team and and JDonnell's team about how to really
lift and boost the downtown, all of that is still in play. All of that is still
continuing. This actually elevates um by bringing another another team to the to
the to the group, right? And another set of expertise about what we could we
could do on campus. How does that fit into the lightwalk? How do we make that
connection between because that's what the lightwalk is for, right? is to make
that connection between the convention center and Main Street because we want
people who come to a concert, we don't want them to get back in their car. We
want them to go to Main Street, right, and continue their festivities for that
day and then um and then leave the downtown, right? We want people to come
early and we want people to stay late. And so this all um all of this still
continues. What this does is bring expertise to the table for this
particular campus. >> Yeah. And we have on the campus of the
convention center, we like I said, we have a lot of land that's not really
producing anything and reworking that. We still have that opportunity within
the campus of the convention center to continue that vision of utilizing the
property. Okay. Um we have um existing contracts especially
with Mesa AMP and stuff like that. Does that all terminate or do you work with
like I know Danny Leco? >> No. So yeah, Vice Mayor and Council
Member Duff, all contracts um will continue. So this is a seamless
transition at the end of the day. Um we hope that our customers um just have a
seamless transition with us as we work through the next two months in that
transition period. Those are all the things that would be um identified. Yes,
this is an industry that books out one, two, or sometimes three years ahead
depending on how large um either the concert or the convention is. And so
those would just be seamless transitions. The contracts would remain
in place. Any contract signed on behalf of the city of Mesa is still in place
when Legends Global comes in to manage that particular contract.
» Um there may be some uh different subcontractors, those types of things.
So they will have people who have contracted with us for a convention,
let's say for next year. um they would now have um access to the new food and
beverage um selections that they could work from, but the contract itself would
remain in place. >> Food and beverage. Yeah, we need to work
on that, especially when it comes to the Mesa AMP. And I I love that you had the
elevated food concepts there. and like to encourage
where appropriate using some of our local restaurants and beverage providers
that are you know especially in the beverages they make their own products
and stuff like that and do distribution to grocery stores they have the capacity
to um sell and it keeps it unique kind of like airports right you go to
airports and it's boring now if you go to an airport and they have the standard
whatever you know you want to see some local fair
» I um Vice Mayor, Council Member Duff, um that is foundational to how we operate
our food and beverage operations. um incorporating technology, speed of sale,
proper points of sale, graband go, all those things, elevated VIP club
experiences, premium experiences, but um foundational is the use of local
products, local vendors, local brands, local suppliers, giving local community
businesses and entrepreneurs an opportunity um to elevate their
operations, turn jobs into careers, right? And providing them an opportunity
that that's central to how we operate municipally owned buildings. I mean that
to me that's a core mission is providing opportunities for local businesses and
from an event experience standpoint I think whether it's a convention a
meeting a concert um the locals are are they go to a show they want to
experience brands and products that they're familiar with that they're
comfortable with it's a feeling of this is our venue right a sense of equity in
that venue and people coming from out of town and visitors um they want to
experience Mesa right they want to experience local products and brands and
um as part of the food and beverage operation which is central to the event
experience as we all know um and revenue generation. I mean that is that is core
to to the success of any any venue. >> I appreciate that. It helps our
businesses and our community by keeping those dollars invested locally, but it
really helps us brand downtown as well as being that uniquely local experience
by having it extended into the auxiliary um building so we have more of a
presence. So, thank you for for that. Um,
I just wanted to um put in there the arts and innovation
district. Of course, we're working with ASU and the creative technologies
and um you know, augmented reality, virtual reality,
filming, gaming, all these kinds of things. And I I saw in your
presentation, which I like very much, is being able to do hybrid events as well
as immersive events. And um I think that could really put us on the map for our
convention center is being highly specialized to being able to do that,
especially when we have so much talent that we'll even more with more ASU
schools here. um being able to integrate and be have that identity do for the
arts and innovation district, being part of that, having that unique um venue
that can do a gaming thing or things like that that really are kind of new in
the space. And it helps us again with our identity and what we're trying to do
in the economic development um the job creation side of it for the downtown
area. Um, oh, and we're doing a a music scene and trying to get that going in
downtown. I'm sure you've met with DMA. And so, again, that's an extension of
it. Now, um, we do use the convention center for city events, whether the
grounds um, events and community events, United Food Bank, we usually do our
turkey drives or whatever, those kind of things. Are we looking at continuing
that? Do we have access and rights to >> working through those? Because it is
kind of a >> vice mayor and council member Duff. We
actually have highlighted um as we go through the contract, we've proposed
specific events that will continue um whether they're date specific like
Celebrate Freedom, which is state specific, or if they're um dates that we
can work in conjunction with Legends Global to find the right date, which is
what we do with our our convention center staff today, is looking for
whether they're revenue options versus an event that we need to do. we have
highlighted the United Food Bank uh food distribution, those two particular um
uses of the parking lot on those days. So, there's those particular state of
the city um um those types of things that we do on an annual basis. Um and
also our departments use um a lot of the rooms and so forth for events or
meetings and so we would continue with a fee structure for our department city
use separate from the commercial use. >> Okay. Okay. um you've touched upon it
but you know do you have a vision over all of the evolving you know what that
is you've t we've talked a lot about what's wrong with it not I'm not saying
through you but over the years we've like realized we have some things that
need to be remedied um but as you look forward and with your experience and
knowledge working nationally with so many venues do you what's your vision of
how this can fit into the national offerings and how we could stand out
uniquely. >> Yeah. Um, Vice Mayor, Council Member
Duff, I I the vision is this is an asset. It's a centerpiece asset for the
community, right? Um, and in many way, shapes, and forms, right? It's um you
obviously there's the financial end of it that's driving the e economic impact,
but in many respects these venues help shape or detract from the image of a
downtown, right? And we've seen that if they're well booked, if the service is
good, um they are ingrained as part of the community, it elevates, it lifts all
boats. Um if the event schedule is down, right, the facilities are not taken care
of, uh they're in poor condition, it just not only detracts from that
individual um operation and venue, but it reflects
on the whole city. So um they're centerpiece assets, right? They they
impact the brand, the image of the city as well as financially. So in my mind
it's um establishing venues that are um setting the trends or ahead of the
trends of what's going out there um in going on out there in the industry. Uh
which we feel we are we have our finger on the pulse of and in many cases we're
actually setting those trends. Um again two separate industries. Um but the
bottom line is um having a venue and having it operated in a way that it is a
complimentary centerpiece asset to all of all the assets and all the new stuff
and improvements and investment and technology that's going on in the city
of Mesa so that it's complimentary. It lifts all boats and we're all working
together to do that. Um you know and it comes down to collaboration it comes
down to knowledge. comes down to um again bringing that that experience from
a worldwide scale of managing v many venues just like this driving people
downtown keeping people here as Candace I think mentioned for two or three days
not just coming to a show and leaving but can we give them um a destination
experience that is enjoyable that's going to bring them back that's going to
spread positive word of mouth um and that that's goes beyond as I think we've
touched on today just the venues the district around that the opportunities,
the attractions, the safety, the security um um you know, the traffic
flow, pedestrian and vehicular, does it all make sense? Is it all coordinated?
Um to provide the best experience, right? And it's all about, as I said,
it's all about lifting all boats and working with stakeholders to to elevate
the entire destination of which these are centerpiece assets for the
destination. >> And yeah, I'll I'll add to that a little
bit. Um, just kind of uh adding to a lot of the points Harry made. Um, I think
we're we're at at a time in both the live entertainment and convention
industry where planners, promoters, attendees, they're looking for something
more unique, more authentic. We know there's certain lines of businesses and
in certain cities we're not going to compete with in terms of size, but we
can very much differentiate in terms of experience, technology. um throughout
the the uh report writing process. I mean, I was really excited, genuinely
excited for for the f future of downtown Mesa. So, there's paths we could go um
in in terms of planning this this downtown, certainly for a city that
continues to grow and the convention center and amphitheater could and should
be a major anchor to to what does happen here. So aligning with uh these goals
regarding technology um the the the lightwalk and and various public
improvements we want to make throughout downtown. Also aligning with economic
development and going after highv value tech and other industries that can come
to town. This can be the welcome mat, the showroom for those various
industries. We're not going after 10,000 attendee conventions. We're going after
meetings, gatherings, conferences, and certainly leveraging what Arizona State
has here and other labor that we have here that's in the world of immersive
experiences, which I think we're just, you know, starting to get past the tip
of the iceberg about opportunities for there. Um, we're excited for that and
it's a moving target. You know, I we made that report last year and we can't
fully predict what this facility could and should look like 10 years from now,
right? But that's why we're excited to be part of the team uh to provide just
data for decision-m on an ongoing basis as we plan this out in phases over the
coming years. >> Well, I I appreciate your expertise. I
look forward to working with you and also continuing the engagement with the
entities in in the surrounding area with economic development. I could see this,
you know, having a great convention center in that museum being a cat
catalyst along with the ASU schools for the economic development and job
creation that we want to do um along the lightwalk and have, you know, um those
opportunities. We have a great downtown, but we need the jobs. We need the
professional jobs here, and that's what we're lacking. And that could really
help. but working with economic development and visit Mesa, we want to
be the destination and our downtown and ASU so that we holistically leverage all
the assets that we're all bringing to the table to um make each partner
better. So, thank you. >> Do we know off top of our heads how many
days the convention center is booked for the amphitheater
currently? >> I do. Uh, Vice Mayor, we have that data,
but I don't have it in front of me, but we can provide that data to the council.
We are we are heavily utilized, I will say, um, in that. And so, what we're
really looking at is how to elevate what we're already doing. How do we get that
next tier convention, the ones who stay for a few days, not just come in for the
day and back out again? How do we get the people who travel for that artist,
not across town, but across the state? um you know how do we do so it's really
it's not necessarily a utilization it's the type of acts and the type of
conventions that create the bed bed nights
» yeah and you absolutely nailed where I was going with that because I was
curious the second followup was going to be how many of those are multi-days as
we want them staying at the delta so the delta could also continue to do the
investments that they want to make >> right
» to upscale this uh at the same time >> yeah and vice that's exactly what we're
looking at and for. So, it's it's really never been a point of are we not
utilizing the rooms? Are they not being booked? They are being booked. It's this
it's not necessarily overnight stays. We're not. And that's what we're looking
for is how do we encourage people to come to downtown for more than just the
day, right? We want them to be here for the weekend or the week or um those
types of things. >> And I appreciate the discussion of the
Mesa Celebration of Freedom because that's going to continue to be a a
marquee event for our community. Uh, I see Chief Camelly in the background and
one of the events I was thinking about is the Arizona Fire School comes in and
that's a multi-day event that utilizes that facility.
Beverage sale should be interesting, Mary
as they improve. And you had a comment, Mr. Butler.
» Well, no, I mean, Vice Mayor, you you nailed it. It's again it's back to to
high value utilization of the facility because because we we do as I stated
earlier we start off at a better spot than a lot of smaller convention centers
or maybe Harry could maybe tell me even larger convention centers that we don't
have to subsidize these facilities. They break even. But so that's great. That's
a good starting point. But the reality is it it wasn't those high value
conferences and shows that generate room nights that that allowed people to stay.
It it's great that we can book the venue and um people would get in their car in
their morning in Glendel and drive to Mesa and be at a conference for four or
five hours and then get back into their car and drive back to Glendel all
without frequenting a downtown restaurant, without putting a head in
bed at the Delta. Um so those were just opportunities that we know with this
partnership we'll be able to maximize for high value um opportunities that can
generate that revenue and have that ripple effect not just through the the
revenue that the facility brings in but what that means for restaurants and
hospitality and and businesses in downtown Mesa. I mean, we've we've all
been to conferences, overnight conferences, and you know that impact
that it has when people are going out at night and going to the restaurants and
and getting up in the morning and going to the coffee shops and and and having
those type of experiences. And so, that's what we um hope to generate
through through this partnership. Well, not only that, I think about how many
conferences we go to and by the time we're starting to wind down, the next
one is starting to wind up and and it's just an exchange. And that's the kind of
thing that we want to see is just one right into the other.
» Um, where do we see our naming rights? At what point we might be be able to
generate some revenue from naming rights? I'm Arizona Financial Theater,
Desert Diamond Arena, State Farm. Um, Tempe Stadium is apparently sponsored by
the devil. [laughter]
» Maybe not that one, but >> Well, you know, depends on the check.
Depress on the check. Well, I don't know. The White Socks did the Pope thing
the other day. That might be closer to our kind of flavor around here.
» Um, Vice Mayor, we will be um we will be looking into those types of of things.
All sponsorships to me are on the table. Um, there are certain ones that would
come back if it's name, not the devil. Um, but um unless it's the Sunundevil.
Um, but it's uh naming rights, those types of things would come back to
council. Something of that magnitude. any type of a naming rights. We already
have a policy in place for any naming rights would come back to council for
approval. Um but we'll be pursuing those as well as just general sponsorships and
advertising and things. How can we monetize the campus?
» All right. That's good to hear it come back. There are a few I think that we
would probably want to shy away from. I've never
» Sure. We we would obviously be very cognizant of a public venue and and um
wouldn't just Yeah, that would that would be forefront of our thinking and
partnership. And I know Legends Global is very uh in any market that they're in
dealing with a public private partnership. They're everyone would be
cognizant >> and I I think the mayor is going to very
much appreciate how many times he's heard elevate in this conversation. So
» maximize >> and maximize well it's mostly elevate
me. So fantastic questions from my left side. No pressure on the right side, but
that's where we're going to head with >> I don't think there's anything left.
[laughter] >> It was well done. Um really and truly
they you know Council Member Duff and Adams covered most of my questions but I
just do have a couple comments which you know I appreciate that we've set the
stage here on um telling us where we are right now. I I didn't remember that we
break even. So, I'm glad that you mentioned that, Scott, and that the what
the point and the goal and objective of this is for, which is to
capture more of that economic value around downtown Mesa from the events at
the convention center and amphitheater as well as generate revenue to reinvest
in improving those facilities because I think to go out and to ask folks um to
pay for that is is a lot there's a lot more risk and in this way. We we sort of
uh we prove that um we we do a test case and we prove that that it's necessary.
And I think people are are a little bit more um apt to buy in and support um a
capital improvement um program later on when we've shown um the increase in
improvement that we can make by using what we have now. And I think that
that's fantastic. I think we'll be able to do that with your expertise and your
network is to improve upon what we already have uh and then build on that
with uh adding funding investment in at a later date.
» And and let me be clear, Vice Mayor and Council Member, I I do believe um and
and we've you know, we've been working with with Legends on on this and and um
Mr. Kennington and others. We um we believe again that the revenue generated
on site will produce uh enough that's going to allow us to make those capital
investments. And so when we talk about proving it up for um the rest of the
community, we we want to take the burden off the rest of the community. We want
this to be userdriven and and that's what this partnership will allow us to
do. So I assume there's been discussions about what those targets are
» over and I over the five years um of the contract the initial five years. Uh and
» I I I don't I mean I see some some incentive in there but there's no quotas
or anything like that. Do we have any we just have targets and we have some
incentives. >> Is that correct?
» We have Vice Mayor and Council Member Go forth. Those will be um negotiated each
year when we put together the annual budget and annual plan. Okay.
» And so part of the contract is that each annual plan is approved. They will they
will propose one and we will have to approve it. So there'll be some
negotiations on what our targets are for that year and the following year. So
everything we set up is because we have already put together targets before the
year begins. >> Okay.
» And and this is you know Harry Harry's got a business to run, right? And I
appreciate that we can build into this the opportunity that the more business
that's brought and the higher value business and the more FNB sells, they're
going to win and we're going to win. And that's that's what's great about this is
that they have those connections and those relationships that can bring that
in. And the the better they do, the better they'll do financially and the
better we'll do financially. So it is it really is that that partnership
incentive that um is is great about this relationship.
» Yeah. I was a little surprised about the five years, but is that sort of
standard? Is that you know that I'm not in this industry obviously, so maybe it
is, but when I saw five years, I was just a little surprised at the length.
» Um Vice Mayor, Council Member Goforth, um that is a fairly common term. Um
without getting too much in in depth um you know tax code kind of plays a role
in when a when a facility is um uh built or expanded renovated with taxfree
bonds. There's certain regulations that come into play with regard to how deal
structures um um can be put together in terms of term and calculations of
incentives. So um this is somewhat of a traditional um uh deal structure. It's
performance-based to Scott's point. 100% performance based. Yes, we get a base
fee, but um we're incentivized to maximize quantity, quality, diversity of
events in both venues. Um uh which if we're making more money than the city is
much better off than we are. So um it aligns our goals, it aligns our
interests. Um so again, this is a fairly common structure that we see with many
of our municipal clients. Um, >> so um it's it's pedal to the ground
every day to to maximize opportunities and to maximize revenue with a
commercial mindset >> and and vice mayor um council member Go
forth and and we also have to avoid the whiplash as as well. Obviously we are um
we are working with our employees to um to relocate those employees whether they
choose to continue in the hospitality industry or whether they um want to move
to another position within the city. But this isn't something that can be done
lightly, right? You can't stand up your own operations and then ratchet it down
um you know overnight. And so that's why five-year terms really um reasonable.
They they have to staff up. they have to make their assumptions of their ROI um
on on a relationship like this and and smaller terms would be difficult for us
and for them to really make pencil out and and practically be able to to ramp
up hiring and and everything that's needed to sustain that operation under
shorter term. though. And that's why I I think, you know, as as Candace, we're
we're very proud of this relationship now that we're entering into with with
Legends. But this was a competitive process and I I think that speaks to the
market. Um some of their major competitors in this space were um
competed for this and and again, so I think that really shows I mean they're
this is their business. They know what they're doing and and and their
competitors know what they're doing. And so the fact that they looked at these
venues, uh, they toured the facilities, they they saw the good and the bad of of
these facilities, and yet it was a very competitive process, I think, speaks to
the opportunity that's there. We've got facilities with good bones. That good
opportunity well situated in this metro area that can be better maximized with
with these strategic strategic investments on the capital side, but
strategic partnerships on the type of users that we're bringing into to these
venues. Well, I for me I think given the age of the
facility and what we've experienced and what we know we want it to be having a
partner willing to be here for five years, they need the longer runway to to
make put the heartbeat back into this place.
» So, you know, it's performance-based, which is important, but also it doesn't
let them escape us. So, they're they're dedicated to us at this point. Yeah, I
think this is I'm I am excited for this. I think this is the right first step in
in the long future of these facilities is to um partner with you all who know
what you're doing um who have the expertise in the network. I think this
is a great first step and again like I said to to make the case that we should
invest um more financially um and make huge in capital investments. So, I I I
am happy that we're going this route first, and I'm excited because I think
we all knew there was there was room for improvement. Um, not that,
» you know, it was okay, but there was definitely there's definitely room for
improvement. You obviously see it as well um in its existing state with a few
with a few tweaks um before we get to some of the bigger investments. So,
anyway, appreciate it. Thank you for the um presentation. I look forward to
seeing all the great things. I going to more concerts. [laughter]
» More wheezer. >> Yeah.
» Council member Taylor, your button cleanup.
» All right. >> Thank you. Thank you for the
presentation. Thank you for the time that you've spent answering all of our
questions. Um I understand the pretty high level goal. Correct me if I'm
wrong, but really what we're looking to do is refresh these spaces. The hope is
that we'll obviously drive more business into downtown Mesa and hopefully
encourage additional businesses to look at opening up in downtown Mesa. Really
activating the entire area is what I know activating is like the new buzzword
everywhere. So, I get that, but I tend to be a little more socratic, so I ask a
lot of questions. The technical details just help me understand the bigger
picture more and it highlights it generally for the general public. So, um
I know that you have all of your projects listed, at least the big ones,
in the presentation. So, thank you. That actually answered quite a few questions
of where else do you have Arizona locations that you're currently doing
business in? >> Um, are those in the feasibility study?
Did we use those additional locations that they're doing business in to help
bolster their their bid for this project? You know, the success rates
that you have in Tempe or the Diamond um uh stadium or the State Farm Stadium,
like have you presented those so that you don't I can get that information?
» Um, yeah. uh Vice Mayor and Council Member Taylor, part of the request for
proposals did require that they give us case examples of areas, things that they
do that are similar in our size and nature.
» Um also, um just, you know, what is their history over time? What are their,
you know, what have they what have they driven? So, it might not be the the
examples they used in their proposal might not be the ones that was in
Arizona. They might be ones that were more comparable, okay? uh number of
seats and and square footage and ballroom size and so forth because those
are more comparable. But those those were all provided as part of the
proposals from all proposers were required to bring that in. They were
required to have expertise in this industry um you know multi-year
expertise in this industry and and prove it up through their proposals as well as
talk to us about anything that may have gone ary in the past. Were there
anything that were cancelled um and those types of things? So those that
type of background was part of that proposal and part of what we reviewed as
a team um for the selection committee >> and have the have you experienced with
more boutiquesized locations? I know our amphitheater is
obviously not huge but I think it's pretty cool but per capita our city is
quite large. So that's a weird kind of tenuous relationship with how many
people we have here, how many people we want to bring in on top of how many
people we have here. and the culture of our city is very unique in that I'd say
Mesa is very very family friendly. So that would kind of form and shape the
types of events that we may offer um additional to events that we might want
to draw people in from outside cities or locations. So do you have experience
with that very unique relationship between the per capita size, the size of
the venue and then the culture of the city?
Um, yes. I mean, there look, there's um Philadelphia comes to mind, Pittsburgh
comes to mind, Grand Rapids comes to mind. Um, you fairly larger markets,
maybe not top tier, but that that next tier where you have to find the right
niche, right, in in that marketplace. Um, as I mentioned before, this this
venue, this venue size is kind of in our wheelhouse. Um
» uh if you look at our network and in some cases um it is the main centerpiece
venue in that community. Um in other cases it's in a very competitive market
where you've got to find that niche, you've got to establish that niche. And
that's part of what we talked about with the city during the process um in terms
of the types of events, in terms of things we could do with improvements to
position us a little bit better um within that marketplace. But um every
situation's different. Um we've been doing this for 45 47 years I think now
» just a little bit of experience. >> So it it's um you know again it it's a
situation where we've worked hard to achieve the goals of our municipal
partners. It's finding that right niche. Um it's it's utilizing the resources we
have customized to their needs. um the cities, the states, the counties we work
for um all have different goals um objectives and um it's our job to be
kind of the day-to-day worker bees to use our our resources to maximize those
venues while um in this case the city of Mesa sets the miss and sets the goals,
approves the budget, approves major contracts as Candace said. Um so yeah, I
mean we've got we come in here with thoughts out of the gate as to what we
can do right away. um sharing of of leads and opportunities given the other
venues we have in the marketplace, business relationships that we have with
with premium seat holders at the other venues or sponsors where they might be
look looking to do a meeting or a conference and we could rotate that into
Mesa. So, it's that sharing of of opportunities and leads um that's
central to our thinking here that are a good fit for this venue. Um, so yeah,
preconceived thoughts, what we can do right out of the gate, a little bit of
living and learning over time as we're on the ground here working with
stakeholders, um, learning more about the venue. Um, so but confidence we can
» Thank you. >> We can be successful here.
» That's very helpful. Thank you. Um, so [clears throat]
I had a few other questions. Uh, I was curious to know just I'm just
going to trail off that one. What would you consider a premium act of
entertainment coming to the Mesa Amphitheater that might also share over
to the convention center for this particular size? Because I I was
thinking about I was thinking about Glendale Swift City as everyone called
it. And I'm like, man, that brought in literally hundreds of thousands of
people. It was wild. And I was I was trying to imagine that's huge
entertainment. What would that look like here in our I know that's not who I'm
thinking of, but just what would something like that look like? Is that
even feasible? >> Well,
um, Vice Mayor, Council Member Taylor, um,
look there the if you're talking about live entertainment in the amphitheater
events and concerts, um, you've got to focus on what makes economic sense,
right, for for the tourists, for the artists. Um certainly there's a niche
that a 5,000 seat amphitheater has in in that industry.
» Um we've talked about expansion a little bit that's come up. Again, we've got a
live entertainment one of our uh Ralph Marquetta who's an industry veteran
who's based here in in the Phoenix market, knows all the venues, knows the
market very well, what genres work, um what doesn't work. um and he and others
in our live entertainment division were central to our focus on um some
thoughts, initiatives, aspirational thinking that we brought to the table
during this process. Expanding capacity of the amphitheater if we can get to
that point is central to it. um adding another couple thousand seats, elevating
the premium experiences, addressing the back of house positions you much better
um with the key decision makers in that world, artists, agents, promoters,
managers um to bring a higher level of act to to the venue. So um look, we've
got we've got our relationships. We've got um our successful promoter partners
um Live Nations, the AGs of the world, but also the smaller independent
regional promoters. Um, we operate all of our amphitheaters with an open venue
policy. We don't want to turn away opportunities. Um, some some don't
operate that way where they're more exclusive to one promoter. Um, but we
want to work with all promoters. Um, and we have proven success doing that,
bringing all genres opportunities to the table. U, but it's got to make economic
sense all the way around. And that's why you've engaged us to be a voice in the
room as we plan for the future and the phasing and what's most important. What
can we do out of the gate? what's going to take a higher level of investment, a
little bit more time to plan out. Does that lead to naming rights
opportunities, other opportunities? So, um
um so we're we're you know, we're we're looking at all that and and look to work
work with the city moving forward. But I think there's also just maybe this
doesn't answer your question. There's the opportunity to do events that
utilize all the spaces, right? You maybe do those already. Um where you've got a
convention or a meeting that's going to have a trade show element, it's going to
have a banquet element. It's going to be there's going to be a VIP party or that
element that could be hosted at the amphitheater. There could be a live
entertainment or speaker, a comedian that could be part of that convention
that you utilize the whole >> and what can we do going forward whether
it's outdoor spaces or other opportunities again working with other
stakeholders to elevate that destination cell for those types of groups so that
they're not yes they can use the whole campus. we're providing the technology,
the space, the service, the food to meet their expectations, but are there
broader opportunities outside of the outside of the complex that would appeal
to the meeting planners and the decision makers? Um, and the live entertainment
side, not to kind of ramble here, is no >> there's very few decision makers. It's
not it's a pretty tight ecosystem of people
» that determine what shows go where and how they're routed. Um, and we're
ingrained in that world. We're we're at the table in that world. So, um, but you
got to have the ammunition and the and the, uh, the arrows and the quiver to
shoot to land those shows. Um, so our our thoughts are around, yes, we can
elevate what you have now, but we also need to be thinking about the future and
where we see a niche in this marketplace that we can take advantage of
» and that's part of that five years. >> Yes.
» Yeah. >> Okay, that's helpful. Um, will the
targets and goals that they're setting, will that come to council or that will
remain just with staff? Vice Mayor and Council Member Tenner, that would be
with staff. That's the administration of the contract.
» Okay. And I hate to be like the Debbie Downer, but if they fail to meet their
targets and goals within that 5-year period, what does that look like for us
as a city? Do we have an out in the contract? If it's just not
» the engine is running, but we're not [snorts] going anywhere.
» Mayor and Vice Mayor Chandler, we have we have the out. We always have an out
in contracts if they're not going the way we want them to go. Um, and we're
not talking about just the overall normal contract of of default on either
side type of a thing, but if just the partnership is not working um, going
forward with with pri proper notice and so forth and obviously we would have
worked on it for a long time before we would have made that decision. Um, but
there's always that opportunity um to make sure that we are protecting
ourselves, our staff, our our facilities and so forth. So, we always have that in
every any contract we negotiate. >> Okay. It's a big pitch to the public,
you know, and I think it's wonderful that we're looking at obviously using
the revenue to reinvest in those facilities. That's excellent. I was
super excited to hear that. Um, and that it's not displacing the burden of all of
this refreshing onto the taxpayer in general. So, that was wonderful. I just,
you know, I have to think through all the moving pieces. Um, I'm skipping some
of these were already answered, which was wonderful. Uh,
I did have one important [clears throat] question on slide eight. I know this
might be part of your in-house operations. Um, I'd love to hear what
you consider DEI uh in human resources.
» Yeah, I think it's um you look we have specialists in DEI in our in our human
resources department. So um that could go into greater depth than I can but um
you know as a baseline our focus is on developing our people right um we have
training programs we have over 120 different training programs different
languages from customer service training leadership training um online training
that all of our full-time people um and in some cases some of our contractors
will be uh will be expected to participate in. Some are some are
required, some are more optional, but developing our people um is central to
to our approach here. We've got um you know, we talked about the transition
here. What we've seen over the years um is a track record of
um you we talked about the transition and coming in here and we expect that
some of the employees are going to stay on as our employees. We give them more
tools, more resources to help them do their job better. Um, and I'm sure that
will play out here. Um, you know, people want to be a part of something special.
People want to be contributors. They want to be part of a team that's
successful and contribute to it. So, um, you know, we will provide them that
opportunity. Um, so I'm not sure I'm answering your question, but um,
» do you receive ESG funds? >> I don't know if I can answer that
question, but I can get that answer for you. Councilman
» Taylor, >> thank you. Yeah, I'm excited to see
where it lands. I think it's going to be great for the space. I I think the
public will be excited to see the amphitheater and the convention center a
little more lively. I do get asked quite frequently, do we use our convention
center? Like, yeah, we do. We do. I I think the east side doesn't tend to
traverse over to this area frequently. >> I'm here.
» Okay. Do you go to the convention center often?
» Uh I used to go for fire school. Yeah. [laughter]
» Okay. So, not for a while. >> Um I think it'd be good to see some more
events happening there. I'm I'm I'm imagining big events and I'm hoping we
get to that point at the end of that maybe fiveyear period because I've been
to some pretty cool events at some pretty awesome convention centers and I
can see where it can go. >> So, thank you so much. Thanks for
answering my questions. I appreciate it. >> Great. Also, the state of the city is
also fun to come to. >> Nice. Yeah. So, so Vice Mayor, I I do as
as we're wrapping up on on this, uh, it seems I I just wanted to thank Brad
Gestner, who's gotten off easy this morning. He hasn't had [laughter] it,
but when you when you go into something and you don't know what you don't know,
um, you have to go out and find people who can shepherd you through that. Um
Brad Brad's history um has been in this industry uh on the other side of the
equation, but we went out and and Brad's been working with us to to help us
navigate and understand this process because we needed that uh we we needed
someone who understood that that side of the industry to help us guide our RFQ,
our negotiations, our understandings of industry best practices and norms as we
had our our conversations um with with all the folks who applied for this and
so just want to thank thank Brad. He's he he's been indispensable in this
process and so we've we've appreciated his uh stewardship throughout all this.
So thank you. You >> okay [sighs] Mr. Heredia suggested the
Purina Pro plan convention center. [laughter]
That was me. It was me. Mr. Heredia, do you have any questions?
» It's always finding the mute button that's the hardest.
No, appreciate it, Scott. No. >> Um, no, this is exciting and appreciate,
uh, all the questions have been asked. Uh, great. I I I also look forward to,
um, you know, great events happening there at the amphitheater and the
convention center. So, thank you. >> Agreed. I think the fact that we've been
talking about this for an hour and 20 minutes shows the importance of of
[snorts] this for the heartbeat of downtown.
uh but as an asset that we really want to maximize. So, thank you so much for
your time. >> Thank you.
» Look forward to working with you. >> Thank you.
» Anybody need a break? Are we good? >> Buckle up.
» I think we just have one more and then we have
» one more and then we have an e session. So, we can let's see uh
» we can plow through. >> Yes, sir. I have 9:30
meeting offite. >> Okay. Mr. Adams has a hard stop at
» Sure. And and I I think Jay can be very brief on this. It it's um so we can run
through this very quickly and then um it it's really just answer any questions
that council may have about um about the agreement with Canon Beach and and um
» Okay. Glad to answer that. >> Uh so Mr. Adams has to leave at 9:30. he
has a hard stop. >> Okay.
» What does that mean for the e session? >> We we can continue. I I I also think if
we can plow through this, uh, you know, the e session probably shouldn't be very
long, um, either. So, I I think we'll be in good shape.
» We'll we'll see how that works. We will miss council member Adams if he does
have to leave but I think we can [laughter]
vice versa economic development director for the city of Mesa and joining me
today is Sarah Steedman assistant city attorney attorney and then on my right
is Ben Snow deputy director for the office of economic development. The
purpose uh of what we're doing today is to talk about the Canon Beach Hotel
project, which is an upscale hotel project with a minimum of 130 rooms and
various amenities including a rooftop deck, an event space, ground level, hot
tub, and lawn area, a bar and lounge connected to an outdoor terrace
overlooking the surf pool with a fullervice upscale restaurant. This is
something that we've been very anxious for in Southeast Mesa. So, we'll be
discussing the major terms of the development agreement, but we'll go
fairly quickly. So, if you have any questions at the end, there will be time
for that. Um, the location is just south of Warner Road on the east side of of
Power. The total site for the entire development is 35 acres and the hotel
site is just over 1.3 acres. The proposed development area uh development
agreement project area again is only for the hotel development and it's a
property that's owned by Canon Beach Hotel. We also have a member of their
executive team in the audience today, Joe Codddle here. So if you have
specific questions for the developer, he's happy to pop up and answer those.
This is a sales tax reimbursement for public infrastructure that's related to
the hotel and restaurant. So, the overview of the DA structure is as
follows. It again, it's a reimbursement of the taxes up to $950,000
for dedicated public infrastructure if the developer completes all of the
following conditions. 18 months from the DA effective date, they will obtain
building permits for the public infrastructure. 36 months from the
effective date, they'll complete the public infrastructure, which must be
designed, bid, and built per applicable law. and they'll dedicate the public
infrastructure as well as the right of way to the city. Um, plus they will also
construct the upscale upscale hotel which is currently a planned tapestry by
Hilton and they must complete construction of that and be open to the
public within 36 months of the effective date of the DA. So reimbursement for the
public infrastructure is using uh construction sales tax that's generated
from the project and a portion of the retail sales tax generated by the hotel
and restaurant. And I'll turn it over to Sarah. Oop, excuse me. Um, one more
slide. Uh the proposed property again the the p the public infrastructure
that's on Warner Road will include all of the public improvements which is
pavement, turn lanes, curbon gutters, sidewalks, driveways, storm drains,
signing and striping and and staking and testing. And now Sarah will go through
the construction tax incentives specifically. And just looking at this
to reiterate, the portions of dedicated sales tax for public safety, quality of
life, and streets is not included in this deal.
» Correct.
» Good morning, council. As Jay mentioned, the public improvements that developers
required to install along Warner Road are eligible for reimbursement. The
maximum amount of reimbursement the city would pay is $950,000.
um that's based on the current estimate of the cost to install the public
improvements. If it ends up costing the developer less to put in those public
improvements, um the actual cost of the public improvements would be the cap
that we would reimburse. And the reimbursement comes from the transaction
privilege tax that this project generates the which as you said, Vice
Mayor, um it's at a 2% rate only the 1.2 to non-dedicated and unrestricted amount
could be used for the reimbursement. The first portion of that TPT that we could
reimburse from is the construction sales tax. Um 100% of that 1.2% can be used to
reimburse the developer for the public infrastructure. So, and that would
happen as a one-time payment after all of those conditions are met and the city
has accepted the public improvements. The second portion that of the TPT that
we can reimburse from is the elig um the retail sales tax and we would reimburse
50% of that non-dedicated 1.2%. This these reimbursement payments would
happen over the course of the development agreement which has a
10-year term although we anticipate they will reach the reimbursement cap in the
first eight years. And Ben will cover the economic impact
analysis. see my light coming on here.
» There we go. Thank you. So, there are four statutory requirements. Um, and I
will share those with you quickly here per Arizona statute section 9-5001.
Council must find that the proposed sales tax incentive of the project will
raise more revenues than the amount of the incentive reimbursement during the
term of the agreement and that the development [clears throat] would not
locate in Mesa in the same time, place or manner in the absence of said tax
incentive. The second uh requirement is the statute requires an independent
third-party review of the council findings. Third is that ARS section
42-610 requires that construction and sales tax
incentives offered to retail businesses be provided only as reimbursement for
public infrastructure dedicated to and accepted and controlled upon completion
of the project by the city which which Jay had mentioned a couple minutes ago.
And there are also a requirement for there to be two city council meetings
which include a notice of intent resolution and resolutions for approval
of the development agreement and council findings requiring a two-thirds vote of
our council. >> I feel like we've been done this before.
» So the third party economic analysis was performed by applied economics Sarah
Merley as principal. It includes an economic analysis and impacts uh summary
with projected sales tax, city st city tax revenues, public improvements, total
economic impact, job creation, annual labor income and construction activity.
And the revenues to the city are forecasted that this project will
generate significantly greater amounts of sales tax revenues than the total
amount of this rebate that's being proposed um on the order of 10 times as
much over a 10-year period. and the final analysis report will be a
companion document with the the resolution uh with the with the
development agreement. So the next steps in the process here is
on Monday there will be a notice of intent resolution that will be placed on
the agenda for Monday's council meeting and then on September the 14th that's
when the development agreement resolution and the city council findings
resolution will be placed on the agenda. >> Okay. So, next meeting's notice of
intent. There are any questions or concerns? We have plenty of time to
answer those. >> Vice Mayor, just wanted to amplify one
point that Ben said because >> I kind of glossed over more than more
than [laughter] >> that's all I that's all I
» Well, it's upscale luxury hotel first and
foremost. This is the type of hotel development I know council is anxious to
see. So we appreciate the partnership with Canon Beach on on bringing a high
quality luxury brand high upper level. I'm not sure of the industry term, but
uh we would call it upscale. Sometimes people will refer to it in the four the
fourstar arena. Those mean the same thing.
» Yeah. So so that's great. And again on the tax incentive side that this will
generate more than 10 times the amount of of this uh investment that we're
allowing back into this. So it's it's a great ROI. It's going to make a lot of
money for the city and uh and and the hospitality industry um when this hotel
comes to fruition. So that's it's this is exactly the type of quality
development we need >> same time period.
» Yes. >> I I'm Joe I know Joe's out somewhere. Um
I I'll I'll tell you if you're going to back somebody uh it's Canon Beach.
They've been putting their shoulder into bringing a higher level of quality here.
I think they did. They steal First Friday from downtown or they just do a
new one. >> We could do a D see who has a better uh
First Friday and we're going to have a competition on First Friday.
» No, they they stole from Phoenix, which is even better, you know. So, so uh the
the level of restaurants are bringing in are all sit down restaurants, which is
what's people in the entire city have been asking for, but particularly on the
east side, you know, we've been asking for more of these things. And we have
somebody that's just been running full full steam ahead on on delivering some
of that. Sometimes a little faster than you [laughter]
perhaps you should, but I've really been impressed with what's been going on
there. So when you when you look for a partner, um this this is one I think we
would want to pick up on. >> Thank you, Vice Mayor.
» Any questions or comments from Yes, ma'am.
» I don't have a question, but I just I wanted to say I was looking up the
Tapestry hotels and they are so cool. I was like, I want to go stay in all of
these. Like all of them have such unique looks and designs to them. You can tell
they're pretty immersive. You get a different experience depending on where
you are. So I'm I was just excited to see that that's going to be the style
coming in. I think it's going to draw in a lot of excited visitors both locally
and even from out of town. I mean, Canon Beach, it's pretty cool. We've been a
couple times. So, just to look at a fake beach is awesome. [laughter]
» Have a beach. >> That's a I'm going to sit on that
rooftop and like I don't know, eat some French fries,
» live the life. >> Mr. Adams, I know you have a question.
» Yes. Thank you, Vice Mayor. Uh I would just comment I think this is a great win
by economic development the team there and uh what I'm recalling is probably
somewhere between five and seven years ago when I was a member of the visit
Mesa board and I believe it was Cole Cannon who came and presented his
concept of what Canon Beach and the surrounding development would be and um
I would say that from what I've observed is he has surpassed
the vision vision that he presented at that time and um um I think Adam Saxs
was uh I think Adam's still affiliated with that. He was a very productive
member of the visit Mesa board and continue to forward that vision. So I'm
I'm very supportive of this. I think it's a great win for us and I think uh
these these are folks who delivered above and beyond what which doesn't
always happen and folks come and paint a picture for you. It doesn't always fill
in, but this one is colored in really nicely.
» And I hear they have an absolutely perfect safety record for shark attack.
» Good point. >> Seeing no other questions,
uh, >> how many people
» by sharks? >> I don't know. That's uh information I
think they can gather and come back with.
» We we believe that number is zero. But we did run some recent numbers and since
Canon Beach has been open, I know today's topic is specific to this hotel
project, but since Canon Beach has been open over the last 20 months, there have
been nearly 1 million visits to the Canon Beach campus
» over that period. We need to get these hotels up. Yeah.
» Mr. Heredia, >> did I hear you or
» No, >> no, I'm good. Thank you.
» All right. Thank you, Mr. Thank you so much for the presentation.
We'll see you later in the week. Um, I'm going to fly through this because I know
we're short on time. Item 2A, appointments to various boards and
commissions. Do I have uh council member Duff, Council Member Adams? All in favor
say I. >> I. Item 3A is acknowledge receipt of
board minutes. Do I have a motion? >> Council member Adams and Council Member
Duff. All in favor say I. I. >> I. Any oppose? Hearing none. Motion
carries. Did you get those? Yeah. Okay. Uh we we will talk about what we've been
doing over our council break maybe at the next meeting on Monday so we can get
through this. And um with that, I'll con u look for a motion to convene an
executive session to discuss with the city attorney potential to engage uh
with a lawsuit. So, Council Member Goforth and Council Member Taylor. All
in favor? >> I. Any opposed?
Ignoring anybody that said no, we're going into executive session.
Mr. [music] Smith, do you have my motion?
» I know you wanted me to memorize it, but >> I can I'll just read it and say just
read it if you want. >> Okay, I'll just say that we're uh we are
reconvened. We are minus uh council member Heredia was not able to uh
was not able to rejoin us. So there's and mayor's uh absent excused.
So with that, is there a motion to direct the city attorney to file a
lawsuit and pursue litigation on behalf of the city of Mesa against the fire
apparatus manufacturers the city has purchased from and to retain legal
counsel for that purpose as discussed in the executive session? Do I have a
motion from council member Adams, a second from council member Duff? All in
favor, please say I. >> I. Any opposed? Seeing none, the motion
passes unanimously with council member Heredia and the mayor absent. Very good.
With that, do I have a motion to adjurnn? Council member Adams, council
member Duff, all in favor say I. I. Any opposed? I didn't think so. We are
ajourned.
[music]