Puerto Rico Convention Center, San Juan.
Peter Brokenshire will be interim manager for AEG Facilities at the firm’s newly acquired management account, Puerto Rico Convention Center, San Juan, beginning July 1.
Concurrently, Levy Restaurants becomes the new food service provider, taking over from Savor. Levy/Compass are a partner with AEG Facilities.
Brad Gessner, SVP, AEG Facilities and manager of the Los Angeles Convention Center, confirmed AEG Facilities was selected to manage the 11-year-old venue, which includes 200,000 sq. ft. of exhibit space, 30,000 sq. ft. of meeting space and a 30,000-sq.-ft. ballroom. It hosts approximately 150-160 events total and Gessner’s goal is to increase the citywide and corporate events attracted to San Juan.
Brokenshire was GM of the Kuala Lumpur Convention Center for AEG Ogden. “I met Peter two years ago and saw the excellent operation there,” Gessner said. “He retired eight months ago but has continued with us doing consulting work.” He will operate the San Juan venue for the first six to eight weeks under the new deal with the Puerto Rico Convention Center District Authority, Gessner said.
SMG, the incumbent management firm which opened the venue, and Spectra Venue Management also bid on the project. Yvonne Villanova, special assistant to the secretary of the PRCCDA, confirmed AEG Facilities was selected upon expiration of SMG’s one-year contract extension.
Gessner said details of the new contract are still being negotiated. It will be for five years with a five-year extension option. It will involve a set management fee plus incentive based on improvement in the deficit and client evaluations. Currently, the center is losing about $1 million a year, Gessner said.
AEG Facilities' bid featured its success in turning around the bottom line at the Hawaii Convention Center, Honolulu, which was losing $3 million a year when AEG Facilities took over in January 2014 and “last year, broke even.” He also cited the firm’s work at the L.A. Convention Center, where the city-run venue was losing $3.5 million annually. “We have now built the reserves to $6 million and have shown a $10-million operating surplus” since taking over Dec. 8, 2013, Gessner said.
“We intend to do the same thing in Puerto Rico,” Gessner said.
An interesting part of the formula is “District Live” in San Juan, an area the authority is planning to develop into an entertainment destination. Currently, it has one restaurant in front of the convention center. Gessner sees potential to help the authority develop an LA Live-type of destination.
Starting July 1, AEG Facilities will be working with the approved budget for the year in Puerto Rico. The type of new business they are seeking takes 2-4 years to book, Gessner added.
AEG Facilities will be staffing up over the next few weeks. Gessner has already interviewed the incumbent staff. Coliseo de Puerto Rico, which is managed by SMG, shares just a few personnel, including the human resources and operations directors with the convention center. Most of the current convention center staff will probably make the transition.
Admittedly facing a fiscal crisis and fighting the Zika virus outbreak, Puerto Rico has its challenges, but “it’s a beautiful island. We believe in the island,” Gessner said.
Interviewed for this story: Brad Gessner, (213) 765-4600; Yvonne Villanova, (787) 722-3309