1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Workshop 10 Tuesday, March 24, 2015 11 10:30 a.m. 12 Commissioners' Courtroom 13 Kerr County Courthouse 14 Kerrville, Texas 15 16 17 18 19 20 21 22 23 PRESENT: TOM POLLARD, Kerr County Judge H. A. "BUSTER" BALDWIN, Commissioner Pct. 1 24 TOM MOSER, Commissioner Pct. 2 JONATHAN LETZ, Commissioner Pct. 3 25 BOB REEVES, Commissioner Pct. 4 2 1 I N D E X March 24, 2015 2 PAGE 3 Commissioners Court Workshop 4 Discussion with Global Spectrum regarding operations, management, marketing, and other 5 related issues at the Hill Country Youth Event Center 3 6 Adjourned 57 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3-24-15 wk 3 1 On Tuesday, March 24, 2015, at 10:45 a.m., a workshop 2 of the Kerr County Commissioners Court was held in the 3 Commissioners' Courtroom, Kerr County Courthouse, Kerrville, 4 Texas, and the following proceedings were had in open court: 5 P R O C E E D I N G S 6 JUDGE POLLARD: And now we got to go into the other 7 session. This is the one on the workshop. We'll hold a 8 workshop at 10:30 a.m. today, March 24th, 2015, in the Kerr 9 County Commissioners Courtroom here in Kerr County 10 Courthouse. I think we ought to go through the prayer and 11 the pledge of allegiance to get that thing started. Who's up 12 today? 13 COMMISSIONER REEVES: I did it yesterday. 14 COMMISSIONER BALDWIN: Okay. Pray with me, please. 15 (Prayer and pledge of allegiance.) 16 COMMISSIONER BALDWIN: Thank you. 17 JUDGE POLLARD: Okay. We have some guests to speak 18 with us here today. You all have had a tour this morning and 19 conversation with them that I haven't had, so anybody on the 20 Court want to -- 21 COMMISSIONER REEVES: Commissioner Letz and I met 22 with Jason Green -- if you'd stand up, sir. 23 MR. GREEN: Good morning. 24 COMMISSIONER REEVES: Jason is from Robstown. He's 25 the manager of a facility owned by Nueces County. And then 3-24-15 wk 4 1 Peter -- Zingoni? 2 MR. ZINGONI: Yep, Zingoni. Very good. 3 COMMISSIONER REEVES: He's from just north of here 4 in Philadelphia, Pennsylvania. 5 MR. ZINGONI: Couple counties up. 6 COMMISSIONER BALDWIN: Is that up there by 7 Junction, around there? (Laughter.) 8 COMMISSIONER REEVES: It's around there, 9 Commissioner. But we had a very good visit out at the event 10 center. They were very impressed with what we have done 11 here, and I believe they've got a presentation. They are 12 representing Global Spectrum, which is a venue management 13 company all over the United States. They do arenas, 14 convention centers, stadiums, ice facilities, exhibition 15 centers, fairgrounds. And I believe they have a little 16 presentation, and I think we can have a Q and A. 17 COMMISSIONER MOSER: You said they represent Global 18 Spectrum? 19 COMMISSIONER LETZ: They are Global Spectrum. 20 COMMISSIONER REEVES: Well, they work for them. 21 COMMISSIONER MOSER: That answered it, okay. 22 COMMISSIONER REEVES: Yes. 23 MR. ZINGONI: Well, thank you guys for the 24 opportunity of having us down. We're very impressed, and 25 Jason, who runs the R.M.B. Fairgrounds out of Robstown, 3-24-15 wk 5 1 Texas, had nothing but great things to say. And it's 2 interesting, because we've just recently run a very similar 3 process by coming in and making a presentation and talking 4 about and discussing the benefits of private management and 5 how we can help the county really manage it in a professional 6 manner. We just ran this process in Lea County, New Mexico. 7 It was a county-owned facility. It happened to include an 8 arena, 5,000-seat arena, a fairgrounds, and a proposed equine 9 center, which would be a joint venture with the local junior 10 college. And same thing, "We have this facility. We feel 11 it's under-utilized. Help us." And we came in; we did this 12 whole presentation, very similar type presentation. A little 13 company background on who we are -- 14 COMMISSIONER MOSER: When was that? 15 MR. ZINGONI: This was -- this process started in 16 about the fall of 2014. 17 COMMISSIONER MOSER: Okay. 18 MR. ZINGONI: It was very similar to this process 19 as well. The facilities were built with tax-exempt bonds, 20 and had to go through a bid process as well, so -- and the 21 RFP process was issued once they felt that the -- the 22 benefits of private management outweighed the current 23 management procedures and policies that they were having in 24 place. And we were selected through a competitive bid 25 process, and we are now -- and we're just making the 3-24-15 wk 6 1 transition. We started February 1st. We have our on-site 2 management team there, and we're very happy and very -- so 3 far, so good. And, you know, looking for new, innovative, 4 creative ways to increase the revenues, increase the 5 operating expenses that come with that, while at the same 6 time just creating a family-oriented customer service 7 operation. So, it's been very successful, and this is kind 8 of the same process, so it's exciting to go down that road, 9 especially with the success that we've had there. I've put 10 a -- just a really brief presentation, very high level, 11 discussing a little bit about our company background, Global 12 Spectrum, and I have also a short video. I hope there's 13 sound. I thought there was going to be sound through the 14 loudspeakers, but why don't we start off with this? 15 (Short video presentation.) 16 MR. ZINGONI: That's just a little intro video. I 17 have to apologize. We actually just hosted the Super Bowl 18 this past year at University of Arizona, so that's an old 19 2008 University of Phoenix stadium, which is one of our 20 stadiums we manage in Glendale, Arizona, and so I apologize 21 in advance for not editing shortly enough. But I'd like to 22 start with a little bit of company background, who we are, so 23 you really understand where we came from, what led us here 24 today. Our company was created in 1967 by our -- our 25 chairman and founder, Mr. Ed Snider, when he created the 3-24-15 wk 7 1 Philadelphia Flyers, a National Hockey League team. He 2 actually bid on a franchise through the NHL expansion and was 3 granted the Philadelphia Flyers. Through the years, Mr. 4 Snider acquired the Philadelphia Spectrum out of bankruptcy 5 court, which was previously owned by the City of 6 Philadelphia, and created a venue management company, and 7 essentially, it was to fill those dark days when the 8 Philadelphia Flyers and the Philadelphia 76ers were not 9 playing. 10 He was really the godfather of private management 11 and professional management dealing with promoters, with 12 agents, and has really a longstanding relationship. And at 13 82 years old, he's still grinding it out every day in the 14 offices upstairs, and really created this company from 15 scratch. And in 1996, another up-and-coming company, 16 Comcast, was growing, a Philadelphia-headquartered company. 17 They were interested in what Ed Snider had created through 18 the television rights. He actually controlled the television 19 rights for the Philadelphia Phillies, the Philadelphia 20 Eagles, the Philadelphia 76ers, and the Philadelphia Flyers. 21 So, Comcast, being a sports and -- you know, a cable giant, 22 wanted a piece of that, and in 1996 they formed a general 23 partnership, which actually ultimately led to the Comcast 24 SportsNet regional sports programming network, so it was 25 pretty interesting how that all worked out. And now, today, 3-24-15 wk 8 1 we are generating over four billion dollars in revenue 2 through all of our Comcast-Spectacor, which we'll get into in 3 a few minutes. 4 So, again, we are ultimately owned by -- Global 5 Spectrum, by Comcast NBC Universal, Comcast being the leading 6 provider of cable TV and internet services, NBC Universal 7 operating a series of network and broadcasting networks, as 8 well as Universal Spectrum motion -- movie studio and the 9 Universal theme parks and resorts. Underneath Comcast NBC 10 Universal is Comcast-Spectacor. I think the simplest way to 11 think of it is as a holding company, and underneath 12 Comcast-Spectacor, there's a series of sports and 13 entertainment entities, including what we're here to discuss, 14 Global Spectrum, which is our venue management company. We 15 currently manage 130 facilities, both internationally and 16 domestic; arenas, convention centers, stadiums, equestrian 17 centers, performing arts centers. Ovations Food Services is 18 a food and beverage provider, and essentially serving food 19 and beverages to arenas, conventions, same kind of concept. 20 They're doing this in 140 facilities in North America. 21 Paciolan is our ticketing company. They currently 22 provide ticketing solutions to over 500 live entertainment 23 venues. They compete very heavily with the Ticketmasters of 24 the world. They're a 500 live entertainment, 121 Division-I 25 collegiate athletics internet-based ticketing solution that 3-24-15 wk 9 1 has fundraising capabilities that come along with it, so 2 that's why it's so attractive to the collegiate market. 3 Front Row Marketing Services is a company that we probably 4 look to incorporate here. It's a commercial sales company 5 that specializes in naming rights, the sales suites and 6 luxury suiting -- I'm sorry, luxury suites in arenas, but 7 they also do have an analytics division which helps 8 facilities identify any revenue potential for sponsorship and 9 advertising through its facilities. We own the Philadelphia 10 Flyers, the National Hockey League. We also own the Flyers 11 Skate Zone, which is a series of four community skating 12 rings, and ultimately promoting youth hockey participation, 13 and it has been a great feeder marketing tool for the 14 Philadelphia Flyers. 15 The Wells Fargo Center is the home to the Flyers, 16 the 76ers. We hosted over 240 events last year, probably 17 about close to 3 million attendees as well, and it is our 18 home base for Global Spectrum. Front Row Marketing and 19 Ovations will now have a centralized sales department in the 20 Wells Fargo Center; it's where our offices are located. And 21 lastly is our Xfinity Live and our development division. 22 This is a new joint venture that we created with the Cordish 23 Company based out of Baltimore. They are the leading 24 entertainment retail real estate experts in the country. 25 They've created L.A. Live out in Los Angeles, Ballpark 3-24-15 wk 10 1 Village in St. Louis. And what we did here in Xfinity Live 2 in Philadelphia at the old City of Philadelphia Spectrum is 3 we created a 60,000 square foot mixed-use project, including 4 bars, restaurants, retail. It's generating nearly 5 $25 million in revenue a year, and we were fortunate enough 6 to pay it off in two years after we did it. So, it's right 7 in heart of the sports -- the Philadelphia sports complex 8 which houses the Wells Fargo Center, the Citizens Bank Park, 9 which is the home of the Phillies, and Lincoln Financial 10 Field, which is where the Eagles play. It's been a 11 tremendous success. 12 Looking specifically at Global Spectrum, like I 13 mentioned, we now currently manage 130 facilities, both 14 internationally and domestic. We were responsible for 15 creating 15,000 events at all of our facilities last year. 16 We had an average event attendance of over 23.6 million 17 people, generated over $358 million in gross ticket revenue, 18 and over -- and nearly $700 million in gross revenue, and 19 that includes ticket sales, rental fees, all the food and 20 beverage; that all rolls through that. Some part of what 21 makes Comcast Spectacor as a whole is our commitment and our 22 corporate resources that we have in place, with Comcast being 23 our ultimate parent company. But what our individuals can 24 provide is -- is the expertise in these following areas: 25 Marketing, group sales, public relations, and booking the 3-24-15 wk 11 1 operations, which includes the back of the house and the 2 event-day operation, legal, risk management, human resources, 3 and finance. And altogether, these individuals that oversee 4 everything oversee all the Comcast-Spectacor entities and 5 help on just an ongoing basis to provide the nexus of 6 resources that it takes for a venue to be successful. 7 Part of our scope of work that we do when we take 8 over a facility is we provide the scope of work that includes 9 the management, the administration and finance, which 10 includes everything from our on-site staff to our director of 11 finance would help oversee and handle all the event 12 settlement, the budgeting, the event booking, which is the 13 responsibility of a combination of our general manager and 14 our marketing people, once we incorporate a lot of the family 15 shows, sales, marketing, and public relations. We had a nice 16 discussion this morning with Commissioner Letz and 17 Commissioner Reeves regarding what it takes, and we can dive 18 into that a little bit more in the Q and A session, but 19 essentially, we create in-house marketing -- an in-house 20 marketing division, and it's really focusing on marketing the 21 event center, the fairgrounds, the site itself. And then 22 also on an event basis, we work very closely with whoever the 23 promoter is, and we work on really selling these tickets once 24 the event is booked. We work and we put together our 25 innovative strategies that have been successful in other 3-24-15 wk 12 1 markets, and we work on that to put a nice public relations 2 campaign, as well as marketing those events specifically. 3 Our pre-opening services. I know there's been some 4 discussion of some other opportunities throughout the state, 5 and what we do is we offer pre-opening services, so we 6 take -- we work very closely with the contractors and 7 architects who design these, and we really put our operator's 8 hat on and say, "This is what we find to be the most 9 successful from an operator's perspective," learning what it 10 is, everything from roads to storage to build-out of 11 kitchens, and everything that comes along with that. So, 12 it's pre-opening/consultant services. The event management 13 and customer service, every event that comes in, we assign a 14 particular event manager to that particular project or that 15 event, and they handle everything from the promoter that 16 comes in, from marketing to event settlement to just 17 essentially the logistics of -- of how it's going to work. 18 So, we work very closely with all the people involved. And 19 then, lastly, the operations. So, it's back of house, the 20 day-to-day upkeep. We will do a very detailed operational 21 audit when we take over our accounts to make sure that we are 22 accounting for everything that comes into place. 23 I put this slide up here as -- and I'll just fast 24 forward here so you can see a little bit of everything. The 25 advantage of private management. And we spent some time on 3-24-15 wk 13 1 this slide in Lea County, and a lot of our potential clients 2 really see what the advantages of paying a private management 3 company is to bring them in. And we spoke a little bit about 4 this today, and we have the ability to make capital 5 contributions. And a lot of our facilities, we work very 6 closely with our client and identify the needs and concerns 7 that are going to help make this a -- create more revenue as 8 a whole. So, we have the ability to make those capital 9 contributions that we feel would go to the best investment to 10 get the best return for the investment. We risk capital for 11 events. A lot of events, especially in the secondary and 12 tertiary markets, which happen to fall in a lot of our 13 facilities that we manage, do not have the notability of 14 having a major tour come through their particular city, so we 15 go out and we work with promoters and agents to help risk the 16 capital so they're not as -- at as much risk for bringing the 17 facility to work. And we work and we will look to invest 18 capital to attract those events to our facilities in those 19 secondary and tertiary markets. 20 COMMISSIONER MOSER: So you're risking capital on 21 promoting events? Is that what you're saying? 22 MR. ZINGONI: That's correct. Yeah, it's a very 23 good -- 24 COMMISSIONER MOSER: As opposed to capital 25 improvements. 3-24-15 wk 14 1 MR. ZINGONI: So capital improvements would go to 2 the facility itself, in order to -- 3 COMMISSIONER MOSER: Give me an example. 4 MR. ZINGONI: A perfect example right now, and 5 we've spent some time discussing it this morning, is there's 6 no kitchen in the facility, so we're hiring outside catering 7 to come in, and we're giving a catering facility that -- you 8 know, all of the revenues. As opposed to making an 9 investment to build out a kitchen, and we handle all the 10 F & B in-house. 11 COMMISSIONER MOSER: I see, okay. 12 MR. ZINGONI: So, what we would do is, we see that 13 as a very lucrative investment for the best return on your 14 money to make the improvements that are necessary to cater to 15 weddings, to all the events that are coming into those 16 facilities. So, you get to run it; it's in-house type of 17 revenue as well. 18 COMMISSIONER MOSER: Okay. 19 MR. ZINGONI: You know, risk capital for the events 20 is actually essentially purchasing that act to come here. 21 COMMISSIONER MOSER: Right. 22 MR. ZINGONI: So you're attracting them -- you're 23 giving them a little bit of the upside. And a private 24 management company like ourselves, we would have the ability 25 to work -- and it's a very systematic approach. We will work 3-24-15 wk 15 1 very closely with our clients, our contract administrator, to 2 really do the math and say, "Look, we feel that we have the 3 opportunity to make some money on this," so risk a little bit 4 of money to attract this show. 5 COMMISSIONER MOSER: Got you. 6 MR. ZINGONI: Which would be a very systematic and 7 very detailed approach. 8 COMMISSIONER MOSER: Thank you. 9 MR. ZINGONI: Our management uses really best 10 practices in managing our facilities, and learning -- we have 11 weekly and biweekly calls with all of our general managers; 12 "What's coming in town? What's working in your facility?" 13 So, it's really -- think of it as a -- as synergy, and a 14 portfolio and all the resources of 130 facilities that are 15 working together to help maximize their specific facility. 16 So, running into some issues of attracting events, you know, 17 it's a very collaborative work effort, working with all the 18 general managers on a weekly, biweekly basis called 19 entrepreneurial orientation. Our founder, like I said, 20 created the Philadelphia Flyers, risked everything, and, you 21 know, very systematic. We have a very entrepreneurial 22 approach to how we run this, very business-oriented, very -- 23 I mentioned corporate support a few slides earlier. You will 24 have a very comprehensive support system in place through all 25 the details that we mentioned earlier; event booking 3-24-15 wk 16 1 leverage, which leads to more shows and better deals. 2 Essentially, it's teaming up with our facilities in the 3 region and working together with shows, as opposed to being 4 on an island by yourself and trying to attract those shows. 5 We help working with agents and promoters to work deals out, 6 so we're essentially bulk buying some of the concerts to 7 attract them to your facility. 8 COMMISSIONER BALDWIN: Are you talking about, like, 9 getting somebody on a tour? 10 MR. ZINGONI: Correct. 11 COMMISSIONER BALDWIN: Where they go from Kerrville 12 to Richard's place, and -- 13 MR. ZINGONI: Mm-hmm. 14 COMMISSIONER BALDWIN: -- that kind of thing? 15 MR. ZINGONI: Correct. Essentially, that's exactly 16 right. So, instead of going out and buying that act for a 17 certain amount, we would guarantee them a certain amount of 18 dates; three, four, five, in particular, and say -- and 19 really work a deal out with the agent and the promoter to 20 say, you know, we -- we'll give you -- we're going to 21 guarantee you the five shows, but really the client would 22 essentially be getting the value out of that. 23 COMMISSIONER BALDWIN: That's a pretty cool way to 24 do it. 25 MR. ZINGONI: Yeah. Yeah. And, you know, there is 3-24-15 wk 17 1 a particular case where we see the most success, to be quite 2 honest, in the arena world, where you're dealing with a lot 3 of agents, promoters. But, you know, we were mentioning some 4 additional events today that we can find some synergy along 5 with the -- the operation down at Robstown as well, and doing 6 some of the events -- 7 COMMISSIONER MOSER: For example, what? 8 MR. ZINGONI: For example -- I think Jason could 9 probably speak a little bit more directly. What's the 10 peddler show? 11 MR. GREEN: Yeah, we do the Country Peddler show 12 that they're based in Austin, but they tour different cities 13 in Texas. I guess they -- Commissioners mentioned that they 14 have some interest maybe in doing a show. They come to our 15 facility four times a year. Very, very successful. We're 16 right now one of their most successful on their tour. I 17 think Fredericksburg is pretty successful, too. 18 COMMISSIONER MOSER: Okay. 19 MR. GREEN: And then also team roping events. We 20 have some team roping clients. One of them's out of San 21 Antonio, so possibly some synergy there. And then this 22 Friday night is a good example; we have the Gala of the Royal 23 Horses event, which Global Spectrum helped get, and it is 24 playing some of our facilities in New Mexico and Texas, so 25 they kind of created a tour there. You know, maybe we could 3-24-15 wk 18 1 get them to come up here and play here. So, there's a lot of 2 possibilities, and a lot of the shows, when we're talking to 3 them, "Hey," you know, "can you play Kerrville? Can you come 4 to Robstown? Can you go to New Mexico?" 5 COMMISSIONER MOSER: Okay, thank you. Good 6 example. 7 MR. ZINGONI: And comprehensive marketing, we 8 touched a little bit more on how we would approach that. 9 Some of the misconceptions of private management include the 10 following: Loss of control by client, which is one of the 11 largest misconceptions, that the company comes in and takes 12 over everything. Ultimately, the client is the owner. We 13 work on -- like I say, we work as the agent on behalf of our 14 client, so all of the policies and procedures that you 15 impose, we just follow those through and implement those. 16 The employees losing their jobs is a big one. Usually -- and 17 in this case, there's a very low -- a low staff on-site here. 18 There is generally -- with a lot of our arenas and convention 19 centers, we're literally dealing with 15 to 25 to 30 20 employees that are currently managed or employed by the city 21 or county. But, you know, one of the misconceptions of those 22 employees, we have a 90 percent retention rate when we take 23 over a facility. We go through a very detailed transition 24 process where we interview and just look at the roles and 25 responsibilities, really just give our proposal and our 3-24-15 wk 19 1 procedure on how we feel to be successful. 2 The private manager focusing on their own profits. 3 You know, the profits are all going to go back to the 4 facility. It's going to stay with the owner; we just manage 5 it. We do our best to book the additional events to increase 6 the revenue and decrease the expenses, but ultimately, all 7 the revenue on the bottom line is going right back to the 8 client. We don't see any of that profit. Lack of community 9 access. We, as Global Spectrum, as a company, take 10 tremendous pride in our sense of community. We encourage -- 11 we expect all of our on-site general management to be part 12 of -- a part of the community, attending Rotary events, 13 Chamber of Commerce events, working very closely with the 14 C.V.B.'s, and really, for this purpose of lack of community 15 access, making sure that the facility is available for those 16 -- for the children, for the community events, for the 17 nonprofits. And we work together on identifying what those 18 event dates will be, and we work very closely with that, and 19 making sure that the community is a part of it, because in 20 the end, this community -- or this facility was built for the 21 -- you know, the quality of life of the people that are 22 living in the community, and the economic benefit. So, we 23 want to make sure that everyone knows and identifies that. 24 Management fees exceed benefits is always a common 25 misconception. But what we're getting is all this revenue 3-24-15 wk 20 1 generation; we can identify that as well. And then possible 2 conflicts with other managed facilities that are in our 3 network. Luckily enough, there is no other facilities or 4 anything. That's going to just grow on the synergies that 5 we've created in Robstown, the R.M.B. Fairgrounds and all of 6 our facilities, like Jason just mentioned New Mexico as well. 7 So, retained owner rights. I talked about the slide before 8 of the owner having control of the facility. Well, here's 9 another example of the retained owner rights. They, the 10 client -- you -- will have the ultimate approval of booking 11 and all of the scheduling policies, so when we take over the 12 management services, we'll sit down and have a very detailed 13 meeting over where we perform all of the scheduling policies 14 put in place. We just discussed in the slide prior of the 15 community action, so we want to make sure we're identifying 16 that, we're not double-booking, and that we're working 17 together on a very close basis. You'll have the approval of 18 the rental rates, fees, and lease terms. We, as the experts 19 of professional management, will come with our -- our 20 suggestions of what we've done in comparable facilities, but 21 at the end of the day, it's your ultimate decision on how we 22 do it. We just help implement and put the best procedures 23 possible. 24 The approval of the general manager. We will come 25 to the table with a few general manager clients -- candidates 3-24-15 wk 21 1 that have success in this specific type of venture, of 2 running this type of facility. It's a very specific type of 3 facility, so we want to make sure that we're identifying the 4 right person, and you will have the ultimate approval of 5 that. The approval of the annual operating and capital 6 budgets, this is also a very big one. So, what we do is we 7 submit an annual operating budget which will have the 8 ultimate approval of how we feel that the facility should be 9 run, and we'll be following up on a monthly basis with our 10 contract administrator, keeping up the speed with everything 11 that's going on, all the revenues, all the events that are 12 going to be coming in, where we see the expenses and where we 13 see any capital budgets coming in. We'll work very closely. 14 That kind of goes hand-in-hand with the capital investment as 15 well. Approval of all material third-party contracts. So, 16 this is outside vendors that are coming in, making sure that 17 it's still falling in line with the goals and objectives that 18 the Commissioners set in place. And the receipt of 19 comprehensive management financial -- sorry, "financial" cut 20 off -- financial reports every month. And that goes along 21 with, you know, approval of the operating budget on a fiscal 22 perspective. 23 So, lastly, why Global Spectrum? Our clients hire 24 Global Spectrum for five summed-up reasons. We create more 25 events. We'll come in and we'll put our policies and 3-24-15 wk 22 1 procedures that we have found successful in our facilities, 2 and we'll help generate the revenue and creating more events 3 that come with it. Once we generate more events, increased 4 revenue will follow. We've already identified one major 5 revenue increase through the food and beverage, which I think 6 is something to seriously consider. And then that's also 7 including different opportunities, whether it be sponsorship. 8 When there's more events, there's more attendees, sponsorship 9 value rises, so that's just another example of how we would 10 look to increase the revenue. Managing our costs. We can 11 manage our costs through several different ways. 12 Essentially, it's the most -- simplest fashion would be just 13 controlling the expenses, but it's also through our 14 purchasing power through F.F.& E. purchasing. Obviously, 15 there's some things that need to be purchased in the facility 16 through our walk-through this morning. We have the ability, 17 with our leverage and our support and the synergies that 18 we've created through our F.F.& E. purchasing power, where we 19 can get discounted F.F.& E. 20 COMMISSIONER MOSER: What's F.F.& E.? 21 MR. ZINGONI: Furniture, fixtures, and equipment. 22 COMMISSIONER MOSER: Okay. 23 MR. ZINGONI: So that includes anything from carpet 24 tiles to -- you know, we talked about the potential of 25 building out a kitchen. A lot of that, we have the 3-24-15 wk 23 1 purchasing power through our network of buyers that are 2 sellers, and we can buy that. Whereas if you were to go out 3 on your own to go purchase those... 4 COMMISSIONER MOSER: Okay. 5 MR. ZINGONI: 'Cause we're buying for 130 6 facilities. Customer experience. Again, we have an 7 award-winning customer service program called, "How are you 8 doing?" Actually, at R.M.B. Fairgrounds, it's, "How are 9 y'all doing?" So, we put a little twist from the Philly. 10 But all it really does is -- is encourages, you know, great 11 customer experience in our employees to the attendees that 12 come through the doors, and everyone knows you're going to be 13 treated with a, "How you doing?" or "How y'all doing?" down 14 here. And -- and it just -- it's going to repeat business. 15 A customer is going to have a great experience, and it's 16 going to continue to grow. And then lastly is the 17 partnerships. I mentioned earlier that we take a tremendous 18 amount of pride in our partnerships in the communities. 19 We're going to work very closely with the County Commission, 20 the C.V.B., the Chamber of Commerce, Rotary clubs, and all 21 the tenants and the people that come through that are using 22 this facility, and giving them the best experience possible. 23 And that's what I have. 24 COMMISSIONER MOSER: Do you have an example of some 25 of your facilities that you're managing that existed before 3-24-15 wk 24 1 you came on the scene, and then what the results have been -- 2 MR. ZINGONI: Absolutely. 3 COMMISSIONER MOSER: -- some "X" number of years 4 afterwards? 5 MR. ZINGONI: Absolutely. That's a great question. 6 We have a number of case studies where -- where Global 7 Spectrum comes in, through -- most of the time, I would say 8 90 percent of our accounts that we take over are through a 9 competitive RFP process. And we were able to reduce the -- 10 you know, the bottom line deficit in most cases, because a 11 lot of these facilities do lose money. It's there for the 12 quality of life. It is there for the community and the 13 economic benefit. So, we've -- there's a number of case 14 studies, and I can get further material for you. 15 COMMISSIONER MOSER: Okay. 16 MR. ZINGONI: To identify some similar markets, 17 even, where we've come in, taken over and made a tremendous 18 impact, not only in the bottom line, but just the community, 19 the customer service aspect, job creation. So, there's been 20 some great examples that I'd be more than happy to share 21 that. 22 COMMISSIONER MOSER: But you don't have any of that 23 off the top of your head? 24 MR. ZINGONI: Not off the top of my head, quoting 25 numbers. 3-24-15 wk 25 1 COMMISSIONER MOSER: That's fair enough, okay. 2 MR. ZINGONI: So, without further ado -- I mean, I 3 could -- I don't know how you propose to -- 4 COMMISSIONER LETZ: Well, let Jason talk a little 5 bit about the Borchard facility somewhat; it's fairly 6 comparable. It's big, but comparable. And also maybe a 7 little bit about Lea County, which is very comparable. 8 MR. GREEN: Well, good morning, and thank you very 9 much for having us come here. I've lived in Corpus Christi 10 for eight years now, but I've never actually been able to 11 come to the Hill Country, so it's beautiful. Glad to be up 12 here. Background on the Richard Borchard Fairgrounds in 13 Nueces County. It opened in January of 2007, and that was 14 with their Nueces County Junior Livestock Show was the very 15 first event. That's really why the facility was built, 16 because they were operating a facility that was called Nueces 17 County old show barn. They called it the old show barn. It 18 was a facility that was like 50 or 60 years old, and the 19 County basically has shut that down once the new one was 20 built. But before -- during the construction phases, 21 actually, Global Spectrum was hired, so this was a case where 22 they were actually in on the pre-opening, was already working 23 hand-in-hand with the county before the facility opened. 24 I actually started there about a year and a half 25 after it opened, so I'm actually going on seven years there. 3-24-15 wk 26 1 Now, in the beginning, it was -- it was difficult to get the 2 building going. And Corpus Christi -- the facility sits in 3 Robstown. Robstown has, like, 15,000 people. Corpus 4 Christi -- city of Corpus Christi has about maybe 300,000; if 5 you look at the area, maybe 350,000 to 400,000 people in a 6 certain radius of Nueces County. But Robstown is its own 7 city, but it sits in Nueces County. And this facility, you 8 know, in the beginning was hard to -- you know, you got to 9 get the word out there's a new facility, and it's -- and it 10 took a couple years, but we've had some really tremendous 11 success. You know, the last five or six years have just been 12 really on an upward, by revenues and -- and keeping expenses 13 in line. 14 We do about 300 events a year. The facility has 15 two exhibit halls that are 50,000 square feet each, and they 16 attach to an arena that can hold about 3,000 to 4,000 people. 17 It has 1,800 seats, but you can fit more with the floor seats 18 and for different types of events. So, we have an arena -- 19 small arena, then, that attaches to the exhibit halls. We 20 have a 20,000 square foot ballroom. We have two small 21 meeting rooms; each of those are like 700 square feet. And 22 then we have an equestrian center and we have 100 horse 23 stalls -- barn where we have our horse stalls, 154 R.V. spots 24 on the property, and then we also have a -- about six and a 25 half acres of parking. So, we -- with parking for, you know, 3-24-15 wk 27 1 a few thousand people there. So, we really -- with the 2 different types of facilities, we really run the gamut in 3 terms of types of events. 4 I'll give you an example. This weekend, I 5 mentioned Friday night in the indoor arena, and they're 6 putting down mats, and the horses perform. It's similar -- 7 if you ever saw the show that used to be out there called the 8 Royal Lipizzaner Stallions, well, that show performed for 78 9 years. They stopped performing a couple years ago, and now 10 this is the Gala of the Royal Horses that's out there. So, 11 Friday night, Saturday and Sunday, we have our gun show. The 12 gun show draws about 4,000 people to that for Saturday and 13 Sunday, and then Sunday, back in the arena Sunday, we have a 14 big cheerleading event, regional cheerleading event. 15 Actually, that group is called Fun Cheer; they're based out 16 of Austin, and they come down and do three cheerleading 17 events a year. We also have a -- I think it's a quinceañera 18 that's in our ballroom, so we have, like, four or five events 19 on the property this weekend. 20 The property also consists of a baseball stadium 21 that holds about 4,000 people. The county basically manages 22 that. There used to be a minor league team there; we had 23 some involvement, but they moved to downtown Corpus Christi 24 years ago, the Corpus Christi Hooks baseball. You might have 25 heard of them. Nolan Ryan is the owner of that team. They 3-24-15 wk 28 1 went in and kind of -- it kind of hurt the single-A team that 2 was out there, and they are an independent team. But the 3 county is basically renting out the stadium themselves to 4 different groups, you know, community groups, or even having 5 some popcorn and football there. They have baseball 6 tournaments coming up in May. They'll have a few weeks of 7 high school, 'cause the high schools have the play-offs on a 8 neutral field. So -- so, the stadium's being used, but we're 9 there to support -- we do support them if they get something 10 maybe that might be bigger, or that they need staffing for, 11 this and that, where we're there and support their efforts at 12 the stadium. There's a beautiful county library on the 13 property. Again, we don't do very much with the library, but 14 it's really nice. 15 And then you might have heard, alongside our 16 property, they're building a very big outlet mall, just like 17 you see in San Marcos and down in Mercedes in the valley, so 18 that will open next March. It's under construction. They're 19 still clearing the land, and that's going to be going right 20 alongside our property. And that's going to be a big 21 game-changer for the area, I mean, with this outlet mall. 22 It's going to drive a lot of people to the area, so we think 23 that a lot of our public events, like the peddler show and 24 the gun shows and all those, a lot of our festivals are free 25 events that are put on, say, by the radio stations or that 3-24-15 wk 29 1 kind of thing. We should see higher attendance, and maybe 2 see some synergy with some of those companies. We envision 3 us doing a lot of marketing and promotion efforts with the 4 outlet mall. We're not managing the outlet mall. No, we 5 don't do outlet malls, but they -- there's a company that 6 does do them that's going to be managing that one, and so 7 we've been kind of working with them. So, it's interesting 8 there on the property. 9 One thing we talked about, we don't have a hotel on 10 the property. And -- but that might be in the plans after 11 the outlet mall gets going. We have hotels that are a mile 12 or two away, but with a lot of the events that we host, it's 13 difficult. But our equestrian center, we have -- which will 14 be more similar to Kerr County here, you know, we do barrel 15 racing, team ropings, some rodeos, some bull-riding events. 16 We use it -- we rent it out for some of the riding clubs or 17 individuals with -- if they want to ride over there, because 18 there's also two warm-up rings that are outdoor that are 19 there to be used. But the equestrian center itself is nice, 20 because it's open-air, but it has a cover over it, which is 21 really nice. So, basically, you know, we work hand-in-hand 22 with the county. I mean, it's a team effort. We're all in 23 this together, and, you know, we're a very -- Nueces County 24 is a pretty big county with 350,000 people, so we're actually 25 like a -- really, kind of a small part of what they have to 3-24-15 wk 30 1 deal with. They deal with the hospital district. They have 2 several county buildings that they have things go on. They 3 have a lot of county parks that they maintain. 4 Now, they do maintain the outside grounds. What 5 they do is when they're mowing some of the other county 6 parks, they'll bring their crew over to mow the stadium and 7 then mow -- you know, keep up the outside grounds, but 8 basically we operate the entire facility in-house. We -- we 9 handle all the sales and marketing, all the finances, all the 10 bookings, all the maintenance and repairs. And unless it's 11 something that's become a big major repair -- 'cause our 12 budget that the county gives us is an operating budget, so 13 it's more for routine maintenance. It's to operate it. If 14 something bigger comes into play, you know, the county will 15 be involved. I report to -- besides somebody that's a 16 regional vice president with Global Spectrum that's actually 17 based in Loveland, Colorado, I report also to the director of 18 the Commissioners Court. He helps -- you know, works with 19 all the commissioners. That's his title. So, I report to 20 that gentleman, and so, you know, it's a team effort. And 21 like I said, we've had a lot of success. You know, we're 22 doing, you know, 300 events a year. 23 Just to give you some idea, our total revenue was 24 about 1.3 to 1.4 million dollars that we bring into the 25 facility, so it helps with the funding of it. The county 3-24-15 wk 31 1 does fund us, you know, every month to operate it. But, 2 again, it's a big economic -- it's been a big economic 3 factor, because that area is what they call the western part 4 of Nueces County, and that needs some revitalization. The 5 Robstown area, and with a lot that's going on there, between 6 the -- not only the fairgrounds; there's some industry that's 7 going in there, and this outlet mall that's really kind of, 8 you know, coming along and making, you know, kind of a 9 comeback area. We sit in a good location right off of 10 Highway 44 and Highway 77. I welcome all of you, and anybody 11 in -- anybody that would like to come down to visit. 12 Actually, the folks that were in Lea County, New Mexico, that 13 recently hired Global, that's the Lovington/Hobbs cities 14 of -- of New Mexico, they chose our facility to come for a 15 site visit. So they came down; we gave them a tour. We sat 16 in our conference room. They -- actually, there was a couple 17 people from Global Spectrum came in; Peter was there, and we 18 sat and we talked to everyone and we answered all their 19 questions, and, you know, it was nice. 20 So, you know, we'd like to have you come down. And 21 -- and actually, we also had one of the county commissioners 22 and the director of the commissioners court came as well for 23 Nueces County to that meeting. So, you know, if you'd like 24 to take a trip down and tour our facility and meet with some 25 people, and you can meet also the junior livestock show. We 3-24-15 wk 32 1 don't have a county fair. Nueces County has never ever had a 2 county fair. We do have a very, very large Nueces County 3 junior livestock show, and it runs for five days. But it's 4 like a good two weeks of setup, five days of the show, and 5 two week -- two weeks to really clean up and everything to 6 get out. So, it's a really very large show. But the weekend 7 before -- here's a good example. We developed with them a 8 kickoff weekend, so there's a barbecue cook-off. We might 9 have a concert. They do -- they did a team roping, and they 10 did do a horse show, so that all this -- and the carnival. 11 They actually have a carnival that comes in for, like, a -- 12 you know, for about a 10-day period, one of the carnivals 13 that travels around. This particular carnival's been coming 14 there for many years, Crabtree Amusements, if you've ever 15 heard of them. So, it's really nice. So we actually have a 16 kickoff weekend, and there's, like, a day or two break and 17 then the show starts, you know, so it's kind of a nice setup 18 there. 19 COMMISSIONER MOSER: Two questions. Give some 20 trend of the events you had -- the number of events you had 21 when you started -- perhaps when you started, and how it's 22 gone per year, just a trend. 23 MR. GREEN: Sure. 24 COMMISSIONER MOSER: And then the next question is, 25 what is the business arrangement? I mean, does the county 3-24-15 wk 33 1 contract with you, so much a month, or do you get a 2 percentage of the revenue, or how's that work? 3 MR. ZINGONI: Start with the trend, and then 4 I'll -- 5 MR. GREEN: We started there -- when we were 6 getting the building going, it was under 100 events a year, 7 and then we went to kind of 150. 8 COMMISSIONER MOSER: Okay. 9 MR. GREEN: And then we went to 200, and now we're 10 getting close to 300 events. 11 COMMISSIONER MOSER: So you've gone from 100 to 12 300? 13 MR. GREEN: Yeah, from 100 to 300. 14 JUDGE POLLARD: Under 100 to 300. 15 MR. GREEN: Under 100 to 300. And then we've even 16 increased their revenue from basically around this $600,000, 17 $700,000 mark to 1.3, 1.4 million dollars in revenue that 18 we -- 19 COMMISSIONER MOSER: Okay. 20 MR. GREEN: -- we generate. So, we've actually 21 decreased them in terms of the -- tremendously, the amount of 22 money that they have to fund us every month. And -- 'cause 23 basically what happens is we -- we develop a budget, and -- 24 and it's approved by our corporate office. They look at it; 25 several people look at the budget, and then the way it is in 3-24-15 wk 34 1 Nueces County, we submit the budget to them, and if they have 2 any questions... But, you know, I was mentioning to the 3 commissioners on the tour, we've been up about eight years 4 now, so we really have a good pinpoint, with the history of 5 us being there, of what the expenses are going to be and what 6 the revenue's going to be and what events we can do, what we 7 can get, so there really haven't been too many questions. We 8 have to submit the budget before -- before July 1st, 'cause 9 they start October 1st as well like you do. And, you know, 10 if they have any questions -- but then they basically plan on 11 that. But that bottom line number, you know, they're not 12 going to fund us, you know, anything above that, so we got to 13 keep to that number or less. And luckily, over the last 14 five, six years, we've kept to less than that number. 15 COMMISSIONER MOSER: Okay. 16 MR. GREEN: So, again, they come in with their 17 funding and their cash flow, and just -- it helps overall. 18 But we -- you know, we do a lot. Now, just another point to 19 what Peter said. We're -- there's a lot done on customer 20 service. We really -- we really cater to people. We do -- 21 the company has a great customer service program and, you 22 know, we're real friendly. We try -- we try to make 23 everybody happy, you know, so we do have a really good 24 customer service program. And we're out in the community, 25 you know. We're not like that company that's just out there 3-24-15 wk 35 1 and doesn't do anything. We're members of all the Chambers; 2 we're members of all the -- we do things with the Convention 3 and Visitors Bureau. We're members of a lot of things, so 4 we -- you know, we do an awful lot out there to get involved. 5 I'll let Peter answer any questions. 6 MR. ZINGONI: Yeah. And in regards to the way we 7 are compensated, we get paid a base management fee, and then 8 we'll also have the opportunity to earn incentives. So, the 9 base management fee will be an agreed-upon number based on 10 comparable facilities and, you know, the scope of work that's 11 going to be included in that. And then the incentive piece 12 would be predetermined incentive benchmarks, so it could be 13 from revenue, it could be from customer service 14 opportunities, quality of the food and beverage. It can 15 be -- you know, so -- and that's how -- so it's kind of 16 twofold. We get a base management fee, just to recap, and 17 then we have the opportunity to earn incentives on a 18 predetermined basis. 19 COMMISSIONER MOSER: Okay. 20 COMMISSIONER LETZ: Let me just add a little bit 21 there. I asked a question about how much, and the 22 Borchard -- which it's really hard to compare this, but the 23 monthly fee there is 13,000 that the commissioners court pays 24 them. 25 COMMISSIONER MOSER: Mm-hmm. 3-24-15 wk 36 1 COMMISSIONER LETZ: So -- 2 COMMISSIONER MOSER: But that's a fairly complex 3 facility. 4 COMMISSIONER LETZ: Yeah. 5 MR. ZINGONI: It is. And we're -- and the food and 6 beverage, it's very complex. 7 COMMISSIONER LETZ: But the revenues, from our 8 standpoint -- I asked them the question point-blank. I says, 9 "Can -- will it work here? Can y'all come in, and within a 10 reasonable amount, make this thing work?" And their answer 11 is yes, they think they could do it. And it's something 12 that's -- and they know; they've seen the budget. They know 13 that we spent 226,000 out there last year, so they know what 14 it's costing us to operate it, and they think that they, you 15 know, could come up with a budget that we could afford and 16 they could afford. 17 COMMISSIONER MOSER: Okay. 18 COMMISSIONER LETZ: And do all the work. It would 19 all work. 20 COMMISSIONER REEVES: I'd like to point out, 21 talking with the facility in Robstown -- and Mr. Bauer 22 probably will be interested in this -- that y'all work very 23 closely with the livestock show realizing their points in 24 Nueces County; is that correct? 25 MR. GREEN: Yeah. Yeah, I'll touch on that a 3-24-15 wk 37 1 little bit, 'cause it's similar, 'cause you guys have a 2 livestock show too. You know, I've seen -- when Global 3 Spectrum first came in, there were a lot of concerns. They 4 were operating for many years -- the livestock show's been 5 running, like, 80 years; it's been a long history. So, you 6 know, we basically, you know, worked things out. And, you 7 know, what they were doing at the old facility, what we were 8 doing in the new, and, you know, we have a great relationship 9 with them. We work hand-in-hand with them, you know, 'cause 10 we have a -- you know, a fairly large staff. There's only 11 about six or seven of us that are full-time, but we have, 12 like, 75 to 120, 100 people part-time. We do a lot of 13 part-time labor, 'cause it's so event-specific, especially 14 the food and beverage. Then we need security officers. Then 15 also we have a whole operations department. We do all the 16 set-up and clean-up from events and all that. So, we touched 17 a lot upon the operations of it, but yeah, you know, it wound 18 up working out really well. And we actually, over the years, 19 have instituted a lot of things. We deal with the livestock 20 show hand-in-hand to improve the show, and their show has 21 really grown tremendously. I think they have 1,300 or 1,500 22 kids, you know, entries. Rabbits have gone up. I guess it's 23 an easier animal to raise; lots of kids with rabbits. So, 24 anyway -- no, it's been a good thing. 25 COMMISSIONER MOSER: Okay. 3-24-15 wk 38 1 JUDGE POLLARD: We have a pretty big livestock 2 show, too. 3 MR. GREEN: I've heard. 4 JUDGE POLLARD: It's a big one. 5 MR. GREEN: Good. 6 COMMISSIONER LETZ: We do a lot. They looked at -- 7 we looked at a lot of things that we need, and most of them 8 we're aware of, everything from a partition to tables and 9 chairs and all that. One of the interesting things is that 10 on some of those items -- and they mentioned briefly what 11 capital investment they're willing to make. Because of their 12 size, for example, they may have carpet squares that they're 13 buying new ones in Philadelphia, that they don't have a use 14 for the old ones, but they're still okay. They could just 15 ship then down here. And, you know, so they could accomplish 16 some of this with minimal investment. 17 COMMISSIONER MOSER: Yeah, and their buying 18 power -- 19 COMMISSIONER LETZ: Buying power is a lot better. 20 COMMISSIONER MOSER: Buying power's got to be huge. 21 COMMISSIONER LETZ: So there's a lot there. 22 COMMISSIONER REEVES: And I'd like to point out, 23 both of them have said that they want to work with -- with 24 the community, and they understand the purpose that the 25 facilities were built, and I feel good that they understand 3-24-15 wk 39 1 that there was purposes behind why the facilities -- whether 2 it's in Kerr County or Clovis, New Mexico, they understand 3 why they were built. 4 COMMISSIONER MOSER: I wish the Convention and 5 Visitors Bureau had been here. 6 COMMISSIONER LETZ: They know Charlie. 7 COMMISSIONER MOSER: Oh, they know Charlie? Okay. 8 MR. ZINGONI: Some of our senior colleagues have 9 a -- 10 COMMISSIONER LETZ: That's how we found them. 11 COMMISSIONER MOSER: Okay. 12 COMMISSIONER LETZ: The other thing which is 13 interesting just to bring up -- and this kind of goes into 14 how things work. I mean, obviously, they need to get 15 revenue. We asked them about nonprofits, what do they do? 16 And they basically -- we give a little bit away. They don't 17 have anything like half rate. It's pretty much everyone pays 18 the same amount. They may get free tables and chairs; they 19 may get something here, but overall, they don't do what we 20 do. But if we did, we still have the ability to do that, but 21 it's just going to cost us more. 22 COMMISSIONER MOSER: Right. 23 COMMISSIONER LETZ: In our monthly fee. And so, I 24 mean, it's all -- basically, we set up how we want it to 25 operate. We keep it the same, or we can modify it. I think 3-24-15 wk 40 1 Peter said he doesn't mind being the bad guy; we can blame it 2 on them. (Laughter.) But there's -- you know, we told -- 3 COMMISSIONER MOSER: You're in charge. 4 COMMISSIONER LETZ: We said that, you know, 4-H -- 5 JUDGE POLLARD: I have to be reelected. 6 MR. ZINGONI: Or run the campaign. 7 COMMISSIONER LETZ: But they -- they understand the 8 stock show and our relationship with them. They understand 9 4-H gets it when they need it, and there's no -- they 10 don't -- we just pay for that. That's just part of the 11 thing; it's free. 12 COMMISSIONER MOSER: Right. 13 COMMISSIONER LETZ: So -- 14 COMMISSIONER MOSER: Just less revenue for us. 15 COMMISSIONER LETZ: Right. You pay one way or the 16 other. I mean, you know, you -- they -- we can figure out 17 ways with them to help figure out how to increase revenue, 18 which decreases our monthly contribution, or we can give it 19 away for every event free. And, you know, -- 20 COMMISSIONER MOSER: Sure. 21 COMMISSIONER LETZ: And pay more. So -- but either 22 way, it's -- but it gives you flexibility. We're the ones 23 that set those parameters, not them. 24 MR. ZINGONI: Exactly. 25 COMMISSIONER MOSER: Sounds very good. 3-24-15 wk 41 1 MR. GREEN: And Commissioner Letz asked me -- 2 JUDGE POLLARD: Are you talking about taking over, 3 you know, the polo grounds, Flat Rock Park, the whole 4 facility? 5 COMMISSIONER LETZ: We showed them everything. 6 And, you know, we told them how we're currently operating. 7 We said Flat Rock is an open, public park. We could -- they 8 could use it for events; we can charge for events there, but 9 we can't -- there is some public aspect of it that needs to 10 stay open as well. River Star, we showed them that. 11 COMMISSIONER MOSER: Okay. 12 COMMISSIONER LETZ: They immediately thought that 13 the venue down at Flat Rock is great for concerts. 14 COMMISSIONER MOSER: Mm-hmm. 15 COMMISSIONER LETZ: So they looked at it all, and 16 we just said, you know, it can be all, part, whatever works 17 out best. 18 COMMISSIONER MOSER: They looked at the Little 19 League -- 20 COMMISSIONER BALDWIN: That's the point I wanted to 21 make, is make sure that you guys saw the whole picture. I 22 think our new buildings are fantastic, and indoor/outdoor 23 arenas, but when you couple that with that river frontage 24 down there in that park next door, I don't -- is there 25 another facility on earth that pretty? 3-24-15 wk 42 1 COMMISSIONER MOSER: Of course they're going to say 2 no. 3 MR. ZINGONI: Of course not. 4 COMMISSIONER BALDWIN: Well, they better. 5 MR. ZINGONI: No, but in all seriousness, you know, 6 the outdoor programming component is something we -- and 7 myself, in business development, is coming across. From a 8 national perspective, more and more cities and counties are 9 looking to privatize their park systems because of the -- 10 everyone wants to go outdoors. You know, the music festivals 11 are huge right now. We just took over up in Buffalo, New 12 York, a 20-acre site. It is owned by the -- it's called the 13 Erie Harbor Development Corp., which is a subsidiary of the 14 Empire State billion-dollar investment up in New York. So, 15 it's a 20-acre site. They've actually built an 16 infrastructure to freeze the canal for ice skating in the 17 wintertime, to melt it in the summer to do paddle-boarding 18 and water sports. And it sits right along the river up 19 there. It sits right at the heart of the H.S.B.C. Arena, 20 which is the home of the Buffalo Sabres, where they play. 21 It's just park programming. We started a summer 22 concert series last year, and it's been just a tremendous 23 amount of success. We're controlling the food and beverage, 24 the ticketing, all the commercial aspects to it, so it's -- 25 we've got a naming sponsor. I don't recall off the top -- it 3-24-15 wk 43 1 wasn't something that -- may even have been a pretty large 2 substantial figure for just the naming rights of the 3 concerts, the summer concert series, and it's a sponsored 4 name, presenting name. And it's just, again, another revenue 5 stream, but it's been a fantastic success. And -- and, 6 again, the outdoor programming is -- that's attractive -- 7 certainly attractive to us having that there. 8 COMMISSIONER MOSER: How familiar are you with just 9 the general area here? The fact that there's Austin and San 10 Antonio and some of the other things, but this area is pretty 11 unique to all those. 12 MR. ZINGONI: It is unique. 13 COMMISSIONER MOSER: Because it doesn't have all 14 the congestion and everything else, and it's got the -- 15 JUDGE POLLARD: People like to come to the Hill 16 Country. 17 COMMISSIONER MOSER: What's your -- with your 18 knowledge, what's your general feeling of this and the 19 potential for it? Maybe that's not a -- that's an unfair 20 question. You may not have had a chance to -- 21 MR. ZINGONI: Yeah. No, I think this is really the 22 first step of kind of looking under the hood and 23 understanding the market, is us getting down to the market, 24 meeting with you guys. 25 COMMISSIONER MOSER: Okay. 3-24-15 wk 44 1 MR. ZINGONI: And really understanding -- you know, 2 we have a general understanding of the area, of just the 3 large regional presence. You know, I think the next step, 4 and I'm going back to Philadelphia and meeting with our 5 regional vice president and getting more and more people 6 involved, from our regional marketing people to our booking 7 guys, so I can really start to take a look now that we 8 understand what it is. 9 COMMISSIONER MOSER: Okay. 10 MR. ZINGONI: And -- and how you -- you know, I 11 know there's probably going to be some more steps as we move 12 forward here. 13 JUDGE POLLARD: Did you take a lot of pictures? 14 MR. ZINGONI: I did. I did. 15 JUDGE POLLARD: Okay. 16 MR. ZINGONI: And I think there's going to be a lot 17 of take-away to come back from the trip, specifically. 18 COMMISSIONER MOSER: Okay. 19 MR. ZINGONI: You know, I think this time we will 20 certainly be prepared to come with a very detailed strategy. 21 COMMISSIONER MOSER: Okay. 22 COMMISSIONER LETZ: One of the things that is an 23 issue potentially on the revenue side -- and I'm looking at 24 you, Commissioner Moser, 'cause it's an important issue to 25 you -- is the ability not to sell alcohol in your precinct. 3-24-15 wk 45 1 And that does have an impact, 'cause alcohol sales are 2 obviously -- they're profitable. They're aware of that. And 3 they may be another -- if we were to enter the deal with 4 them, they may help try to get that passed. 5 COMMISSIONER MOSER: Bottom line, it takes $5,000 6 to get it passed. That's it. Need a bunch of people to 7 knock on doors, and it will get done. 8 COMMISSIONER LETZ: But anyway, we were very 9 up-front. We told them, you know, as much as we can think of 10 in the area and the facility. 11 COMMISSIONER MOSER: Right. Good point. 12 COMMISSIONER LETZ: Here it is. 13 COMMISSIONER MOSER: Excellent point. 14 COMMISSIONER LETZ: But, you know, revenue is key 15 to how much we end up paying, whether it be beer, wine, 16 whatever is part of that. 17 COMMISSIONER MOSER: I don't think we can get it on 18 the May ballot. 19 MR. ZINGONI: Just to make one -- just to further 20 that comment, it could affect the ability to attract events 21 as well, the alcohol sales. 22 COMMISSIONER MOSER: That's an excellent point. 23 MR. ZINGONI: So -- and that's just something to 24 consider. I mean -- 25 COMMISSIONER BALDWIN: What? Say that again? 3-24-15 wk 46 1 MR. ZINGONI: It would affect -- promoters will not 2 come to certain facilities if they cannot sell beer and 3 alcohol, because they will see a percentage of that sales. 4 COMMISSIONER BALDWIN: There's also people that 5 won't show up because you do sell alcohol, probably. 6 MR. ZINGONI: That's a safe argument, yeah. 7 COMMISSIONER BALDWIN: Let me ask you a question, 8 though. Immediately -- do you see hiring a general manager 9 like Jason immediately to come in and take over the reigns, 10 and -- 11 MR. ZINGONI: Yeah, as soon as -- I mean, it would 12 be from day one. 13 COMMISSIONER BALDWIN: From day one? 14 MR. ZINGONI: When we start our management. 15 COMMISSIONER BALDWIN: And then a staff -- 16 MR. ZINGONI: Correct, yeah. 17 COMMISSIONER BALDWIN: -- as well? 18 MR. ZINGONI: Yeah. And typically, our transition 19 arrangements would look something like this, is we would be 20 selected to be the management; we would go through contract 21 negotiations, and during that time there would be a 22 transition period for our regional vice president, our 23 finance to come down and really identify and interview 24 potential G.M. candidates. And when we start, that will be 25 through a transition period, and then we would have an 3-24-15 wk 47 1 effective date at the start. We would have that full staff 2 on board once we started our contract. 3 COMMISSIONER BALDWIN: Jason, how would you like to 4 live in Kerrville? 5 MR. GREEN: Thank you. Thanks. 6 COMMISSIONER MOSER: I don't see how you had time 7 to come up here today. 8 MR. GREEN: Yeah. I did want to just add -- 9 Commissioner Letz asked me to talk a little bit. You know, 10 Global Spectrum -- and Peter can add to this. It's a very -- 11 you know, very large company. We have 130 buildings, but we 12 have very small buildings, midsize buildings, and large 13 buildings in all different kinds of towns, cities, and 14 counties. So -- you know, so in many respects, you know, 15 Kerr County and even Nueces County are maybe on a smaller 16 scale, but we have quite a few of those buildings. Kerr 17 County is very, very similar, I think, to Curry County Events 18 Center, which is in Clovis, New Mexico. What is interesting 19 in that market is we also manage the convention center which 20 is down the street. That convention center is city-owned, 21 and the county owns this. So, we actually have two buildings 22 and manage two contracts there. We manage it, but, -- 23 COMMISSIONER MOSER: Piece of cake. 24 MR. GREEN: -- you know, they get along most of the 25 time. Anyway, I just wanted to point out there's a whole 3-24-15 wk 48 1 network. I'm talking to a lot of the buildings that are 2 smaller and mid-size buildings, but then I also get ideas 3 from bigger buildings, so there's constant communication. 4 There's a lot of conference calls; you can reach out to 5 anybody at any building or anybody at the corporate office at 6 any time, and it's just this network to get information and 7 -- and to do things. So, the fact that this is a smaller 8 market, I -- I wouldn't be too concerned about that, 'cause 9 we have lots of them. 10 JUDGE POLLARD: What would you envision as the size 11 of the staff here? Not part-time people, but -- 12 MR. GREEN: We talked a little bit about it. Not 13 quite -- really sure yet, but I think -- like, Curry County 14 has, I think, four or five full-time people, and then several 15 part-time people, because you do a breakdown in different 16 departments. You have to have a general manager, and then 17 you have, say, an event manager and a finance director and a 18 marketing person. So, there -- there are different 19 departments that even -- 20 MR. ZINGONI: Probably F & B. 21 MR. GREEN: Operations. You have to have somebody 22 for operations. 23 MR. ZINGONI: You're looking at between four to 24 six, you know. Four to eight, you know, on the heavy side. 25 COMMISSIONER MOSER: Mm-hmm. 3-24-15 wk 49 1 MR. ZINGONI: And a lot of -- you know, the general 2 manager will be a lot more hands-on, you know, as opposed to 3 a larger facility where they're just controlling booking. 4 You know, the general manager in this particular case would 5 probably do much more hands-on from an operations 6 perspective, and he would -- it would all come down to what 7 is the operations that he may be responsible for handling? 8 So, I mean, it's really identifying the scope of work, is the 9 first step, and then kind of backing into a full staff. 10 COMMISSIONER LETZ: How many other companies do 11 what y'all do? 12 MR. ZINGONI: There are about -- we compete with 13 about three to four companies that are in this space. One of 14 the companies we used to own, S.M.G., which stands for 15 Spectacor Management Group. They're also Philadelphia-based. 16 We sold them in 1998, and so they're in this space -- 17 professional managing space. You have a smaller company 18 called VenuWorks which is based out of the midwest, so it's a 19 midwest presence, a little smaller. Much smaller scale of 20 number of facilities managed. And then the big player -- 21 another big player on the west coast is A.E.G., which also 22 has a promotions department. I have heard Live Nation is the 23 largest promoter for concerts, and then A.E.G. is the -- is 24 the promoter's division of that. And they probably -- I 25 assure you that they would not have an interest. They do not 3-24-15 wk 50 1 have any equestrian centers. They are a very large market -- 2 they own the Staples Center in L.A. They -- you know, 3 they're more risky. They don't like to go into secondary, 4 tertiary markets. 5 COMMISSIONER LETZ: Timeline-wise, I told them that 6 our goal is to have -- basically, because this is 7 budget-driven, we have to have a decision by the end of July. 8 COMMISSIONER MOSER: Good. 9 COMMISSIONER LETZ: What timeline would it take to 10 get there, do you think, from our standpoint if we -- to 11 issue an RFP? 12 MR. ZINGONI: Would you have to have a decision by 13 July? 14 COMMISSIONER LETZ: Yes. 15 MR. ZINGONI: Now. (Laughter.) I'll give you 16 another -- we just received an RFP in Nampa, Idaho, which is 17 a little bigger, 8,500-seat arena, a major horse park, an 18 outdoor amphitheater, and that contract will go into effect 19 on October 1, and the RFP was just last week. 20 COMMISSIONER LETZ: So we need to do it. 21 MR. ZINGONI: A decision will be made by July, and 22 they're allowing about two months of contract negotiations, 23 and another month of transition. 24 COMMISSIONER MOSER: You have a draft RFP? 25 COMMISSIONER LETZ: Yes, they've already given it 3-24-15 wk 51 1 to us. 2 COMMISSIONER MOSER: Okay, good. 3 COMMISSIONER REEVES: What do we look like on a 4 legal time frame with an RFP like this? 5 MS. BAILEY: I don't think there's going to really 6 be a whole lot of time involved in that. You now, RFPs are 7 pretty straightforward. I suspect they've had their legal 8 team, over 130 times of doing this, go through it pretty 9 well, and I would be surprised if we would find anything in 10 it that was problematic for us. You have to look at the 11 basic things, like we can't indemnify, but I'm sure they're 12 familiar with those kinds of legal issues. 13 COMMISSIONER LETZ: They're also very familiar with 14 the I.R.S. rules related to tax-exempt bonds and things of 15 that nature. 16 MS. BAILEY: Yes. So, I don't anticipate it being 17 lengthy from the County Attorney's point of view. 18 COMMISSIONER REEVES: Steve, do you have any 19 questions? 20 MR. BAUER: No, sir. 21 COMMISSIONER REEVES: You've been real quiet. 22 MR. BAUER: I was glad to hear that they're tied 23 into the stock show already and familiar with that type of 24 operations. I think it could work very well with us, 25 allowing us to expand our operation and grow our show by 3-24-15 wk 52 1 having a management team like that in place to help us 2 market, and help with some of the volunteer setup and stuff 3 that, you know, we're taxed with as far as labor. So -- so 4 it sounds really good. Really interested. 5 COMMISSIONER MOSER: I bet Jeannie's got some 6 questions. 7 MS. HARGIS: No. It's exciting. I think it would 8 work. I mean, you know, but I agree that an RFP -- I mean, 9 it's a two-week process. We have to publish; we have to be 10 sure that we have all the Texas requirements, which are a 11 little different from the other states. But, you know, it's 12 the contract negotiation time frame. But as long as we have 13 an amount to stick in the budget, you know, you take the 14 upper level of it and stick it in the budget, you can still 15 be working on this contract -- 16 COMMISSIONER LETZ: Right. 17 MS. HARGIS: -- until you know. But it's the 18 number we need. We need a number. 19 JUDGE POLLARD: I don't think we have to rush that 20 deadline. 21 COMMISSIONER LETZ: Right. Well, we have to have a 22 budget number by the end of July, and then we can -- you 23 know, and worst case, pull the plug at the last minute, you 24 know. 25 COMMISSIONER MOSER: Right. 3-24-15 wk 53 1 COMMISSIONER LETZ: Go a different direction. 2 COMMISSIONER MOSER: Go back to standard 3 operational procedure. 4 COMMISSIONER REEVES: You -- in Robstown, you 5 mentioned the part-time staff is security. What -- do you 6 coordinate with the local law enforcement to make sure 7 everything is up to -- 8 MR. GREEN: That -- yeah, we do with some of our 9 events, 'cause of the large -- if they're a larger scale, 10 we'll use the city of Robstown police department, and we'll 11 use city of Robstown EMT and fire for some events. There's 12 one or two events that we use the county sheriff's 13 department; they do some stuff for the livestock show, 14 especially the day of the auction, the sale. The Nueces 15 County Sheriff's Office handles some of that security that 16 comes in, but we -- yeah, we coordinate a lot. Basically, we 17 operate the entire facility in-house, but yeah, we use, you 18 know, the law enforcement from the city, and then on occasion 19 for our bigger banquets or bigger events, we'll go to a temp 20 service to bring in some extra people for banquet serving -- 21 banquet serving or bartending or concession stand. We have 22 quite a few people on our staff, but again, when -- like, a 23 weekend -- this coming weekend, when we have so many events, 24 sometimes we have to, you know, contract that out. But 25 otherwise, we're basically, you know, operating everything 3-24-15 wk 54 1 ourselves. 2 MS. HARGIS: I do have one question. What is the 3 term of contract that you're going to require? 4 MR. ZINGONI: It's up to the clients. It's up to 5 the County. 6 MS. HARGIS: Okay. 7 MR. ZINGONI: Yeah, it could be -- generally 8 speaking, there's -- it would be -- the shortest term would 9 be probably three years. And, you know, with the new -- 10 there's new I.R.S. regulations that have come out that have 11 been able to extend it to five. 12 MS. HARGIS: Okay. So, I just want them to be 13 aware that when you're doing this, you're signing up not for 14 one year, but for three. 15 COMMISSIONER MOSER: Mm-hmm. 16 COMMISSIONER BALDWIN: Of course. 17 MR. GREEN: A lot of them -- in Nueces County 18 it's -- it's five years, but it's three years and then 19 there's an optional or automatic kick-in there for a two-year 20 extension. 21 COMMISSIONER MOSER: Right. 22 MR. GREEN: To where -- so, yeah, so then there's 23 really five years covered without having to go out to bid. 24 MS. HARGIS: That would be pretty much -- with 25 their putting capital into it, they've got to be able to -- 3-24-15 wk 55 1 JUDGE POLLARD: Sure. 2 MS. HARGIS: -- level that out. 3 COMMISSIONER MOSER: Very good. 4 MR. GREEN: Thank you. Thank you very much. If 5 anybody has any questions, you know, we're around for a 6 little bit longer here. And then also we talked a little 7 bit -- as we proceed in the process, we talked about maybe a 8 couple other people from our company actually coming here. 9 We have -- our general manager in Lea County is a guru when 10 it comes to equestrian and horse events and all these types 11 of events, so we'd like him to come look at it, and probably 12 my boss, who's based in Colorado, who Peter works closely 13 with too, does some of those events, county fairs and those 14 kind of things. So, probably want a couple other people from 15 our company to come down and take a look at it as well. 16 COMMISSIONER MOSER: Sure. 17 COMMISSIONER REEVES: Thank you. 18 MR. GREEN: Thank you. 19 COMMISSIONER MOSER: Thank you very, very much. 20 MR. ZINGONI: Absolutely. Thanks for the 21 opportunity. 22 COMMISSIONER MOSER: Outstanding. Good 23 presentation. 24 MR. ZINGONI: Thank you. 25 COMMISSIONER LETZ: All right. 3-24-15 wk 56 1 JUDGE POLLARD: Is that all we have? 2 COMMISSIONER LETZ: That's all we have. I guess 3 the -- we can't make a decision, certainly, today on 4 anything, but is it probably the direction to do an RFP at 5 our next court meeting? 6 COMMISSIONER MOSER: Right. 7 COMMISSIONER LETZ: 'Cause we don't meet for two 8 weeks -- three weeks. 9 COMMISSIONER MOSER: We can have a special. 10 MS. BAILEY: We could certainly get started on 11 whatever paperwork is necessary so that when you do make that 12 decision in Commissioners Court, -- 13 COMMISSIONER LETZ: It's already ready. 14 MS. BAILEY: -- we could just go out. 15 MS. HARGIS: Probably could do that. 16 COMMISSIONER MOSER: This sounds really exciting. 17 Very good. Just shows -- well, very good, yeah. Lots of 18 potential. 19 MR. ZINGONI: We're excited. 20 JUDGE POLLARD: Okay. I'll entertain a motion to 21 adjourn. 22 COMMISSIONER MOSER: So moved. 23 COMMISSIONER LETZ: Second. 24 JUDGE POLLARD: Any discussion? Being none, those 25 in favor, signify by raising your right hand. 4-0, 3-24-15 wk 57 1 unanimous. Thank you. 2 (Workshop adjourned at 11:53 a.m.) 3 - - - - - - - - - - 4 5 6 STATE OF TEXAS | 7 COUNTY OF KERR | 8 The above and foregoing is a true and complete 9 transcription of my stenotype notes taken in my capacity as 10 official reporter for the Commissioners Court of Kerr County, 11 Texas, at the time and place heretofore set forth. 12 DATED at Kerrville, Texas, this 1st day of April, 2015. 13 14 REBECCA BOLIN, Kerr County Clerk 15 BY: _________________________________ Kathy Banik, Deputy County Clerk 16 Certified Shorthand Reporter 17 18 19 20 21 22 23 24 25 3-24-15 wk