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CITY COUNCIL AGENDA REPORT
City of Anaheim
CONVENTION, SPORTS & ENTERTAINMENT
DEPARTMENT
DATE: FEBRUARY 13, 2024
FROM: CONVENTION, SPORTS & ENTERTAINMENT DEPARTMENT
SUBJECT: AGREEMENT BETWEEN ENCORE GROUP (USA) LLC AND
THE CITY OF ANAHEIM DESIGNATING ENCORE AS THE
PREFERRED AUDIO-VISUAL SERVICE PROVIDER AND
EXCLUSIVE RIGGING SERVICE PROVIDER IN DESIGNATED
AREAS OF THE ANAHEIM CONVENTION CENTER
ATTACHMENT (Y/N): YES ITEM # 12
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion,
1. Approve an Agreement between Encore Group (USA) LLC, (Encore) and the City of Anaheim (City) designating Encore as the preferred audio-visual service provider and the exclusive rigging service provider in designated areas at the Anaheim Convention Center (Convention Center) with an initial term of three years with up to two (2) one-year renewals upon mutual consent; pay to the City a commission of i) 42% of gross revenues on Equipment and 30% of gross revenues on Labor for all audio-visual services on non-national contracted business; and ii) 15% of gross revenues, including labor, for all audio-visual services provided on all national contracted business; and iii) 30% of gross revenues, including labor, for all rigging services provided in the Convention Center pursuant to this Agreement on national or non-national contracted business with a minimum annual payment of $750,000 in year one, $750,000 in year two, and $800,000 in subsequent years;
2. Authorize the Executive Director of the Convention, Sports & Entertainment Department to execute related documents, take any and all actions as are necessary to implement and administer the Agreement, and execute any optional renewals.
DISCUSSION:
The Anaheim Convention Center is a leader in the management and operation of convention centers. To this end, one of the Convention Center’s primary goals is to Agreement between Encore Group (USA), LLC and the City of Anaheim For Audio-Visual Service and Exclusive Rigging Service in Designated Areas of the Anaheim Convention Center February 13, 2024
manage the facility in a financially responsible manner that maximizes annual operating revenues with the goal of equaling or exceeding annual operating expenses. The operating revenues that will be generated as a result of the Agreement with Encore contribute to reaching this goal.
The Convention Center first entered into an Agreement designating a Preferred Audio-Visual service provider in 2003. At the conclusion of the 2003 agreement, Convention Center staff elected to issue a new Request For Proposal (RFP), which identified an additional revenue opportunity, thus seeking an Exclusive Rigging Service Provider for designated areas of the facility. This modification, and additional exclusive responsibility, not only provided a new revenue source, but it enabled staff to ensure that all rigging within the venue was performed in a professional and safe manner. Through additional RFP processes, Encore (PSAV acquired by Encore in 2019) was awarded the Agreement in 2008, 2014 and again in 2019 as the Preferred Audio-Visual service provider and Exclusive Rigging service provider in designated areas of the facility. The current agreement is set to expire in March 2024.
On August 25, 2023, Convention Center staff issued an RFP to 296 self-registered vendors via the City’s Planet Bids system under the categories of Audio Production, Video Production, and Audio Visual Equipment and Supplies seeking qualified vendors for the opportunity to be named the Preferred Audio-Visual Service Provider and the Exclusive Rigging Service Provider in the Ballroom, Meeting Rooms, Arena, ACC North 200 Level, and in Exhibit Halls, ACCN 100 Level during events when the Exhibit Hall does not contain exhibits. The RFP invited all prospective bidders to participate in a pre-bid conference; identify their experience and qualifications to provide audio-visual and rigging services; identify the services to be provided to clients and tenants of the Convention Center; to provide sufficient documentation to demonstrate its financial resources to meet the operating requirements, including inventory and staff; and to prepare a detailed business and marketing plan to support the proposed commission to be paid to the Convention Center.
On September 19, 2023, representatives from 13 firms that provide audio-visual and rigging services attended the pre-bid conference. Following the pre-bid conference, two Addendums to the RFP were distributed through the City’s Planet Bids bid portal. On October 27, 2023, bids were due and a total of four (4) bids were received.
The Convention Center established an Evaluation Panel and assigned this group the task of reviewing each proposal in accordance with the requirements identified in the RFP. The Evaluation Panel was comprised of the following persons: Mindy Abel, Deputy Director Sales & Services Anaheim Convention Center; Dan Lee, Deputy Director Administration & Operations; and Michelle Henry, Event Services Manager Anaheim Convention Center.
Agreement between Encore Group (USA), LLC and the City of Anaheim For Audio-Visual Service and Exclusive Rigging Service in Designated Areas of the Anaheim Convention Center February 13, 2024
The proposals were evaluated based on the four weighted areas defined in the RFP and listed below:
Proposed Service and Inventory (25%)
Financial Proposal (35%)
Qualifications and Experience (30%)
Business Plan and Marketing Strategy (10%)
The Evaluation Panel found all four (4) proposals responsive and was pleased with the conscientious effort made by each of the bidders. Proposals were received from the following and ranked as listed below:
Encore Group (USA) LLC
ON Site Services, LLC DBA On Site
Projection Video Services Inc. DBA Presentation Technology Pro Audio Video Inc.
The decision to award the proposed Agreement to Encore was based on the following strengths:
Proposed Service and Inventory:
Over the past fifteen (15) years, Encore has provided exemplary service not only to the Convention Center’s clients and exhibitors but has also served as a valuable partner for the provision of these services to various internal city meetings held in the Anaheim Convention Center. Their inventory of equipment and technical expertise continues to fully meet the needs of the Convention Center, its clients, and exhibitors.
Financial Proposal:
Encore submitted the strongest overall financial proposal. While all providers would be required to pay an annual minimum guarantee, beginning at $700,000 in Year 1 and Year 2 then escalating to $800,000 by Year 3, Encore’s proposal commits to paying the Convention Center a commission of i) 42% of gross revenues on Equipment and 30% of gross revenues on Labor for all audio-visual services on non-national contracted business; and ii) 15% of gross revenues, including labor, for all audio-visual services on all national contracted business; and iii) 30% of gross revenues, including labor, for all rigging services on national or non-national contracted business. As the current Preferred Audio-Visual Service Provider and the Exclusive Rigging Service Provider in designated areas of the convention center over the past fifteen (15) years, Encore has generated over $14.8 million in revenues at the Convention Center.
Agreement between Encore Group (USA), LLC and the City of Anaheim For Audio-Visual Service and Exclusive Rigging Service in Designated Areas of the Anaheim Convention Center February 13, 2024
Qualifications and Experience:
Encore is a total solution provider. Encore is the leading provider of in-house technology service globally for many large scale convention centers, convention & meeting hotels and resorts. Encore brings a national support structure consisting of trained audio-visual technicians, riggers, rigging supervisors, regional rigging managers and a national director who oversees all property operations for safety and consistency.
Business and Marketing Plan:
Encore presented a strong business and marketing plan, including a customized local sales plan for the Convention Center known as CoPilot, which is an overall process and strategy for effective sales engagement with customers and aligns its sales process with that of the Convention Center to optimize revenue growth. Encore also uses COMPASS, a companywide Customer Relations Management (CRM) tool to research prospective and confirmed customers buying behavior, historical spending and discounts, satisfaction scores, and many other variables, to enhance the interaction with each customer.
The length of the Agreement will include a base term of three years and at the end of the third year, the City, at its option, may renew for two additional one-year terms.
There is an annual minimum guarantee as follows: Year 1 is $700,000; Year 2 is $700,000; and Year 3 and future years are $800,000.
IMPACT ON BUDGET:
Revenues generated from this Agreement, estimated at $2.2 million annually, will be used to support the Convention, Sports & Entertainment’s departmental operations.
Respectfully submitted,
Thomas Morton
Executive Director
Convention, Sports & Entertainment Department
Attachment:
1. Encore Group (USA) LLC Agreement