Editor's note: The Journal today continues its countdown of the Top 10 Stories of 2017 in Siouxland, as chosen by Journal editors. The No. 1 story will be revealed on Dec. 30, and the Journal's annual Newsmaker of the Year will be named on Dec. 31.
SIOUX CITY | The city of Sioux City is hoping for some big things in 2018 -- including an additional $270,000 in its pockets.
That's how much Spectra, the Philadelphia-based firm that takes over management at two venues Jan. 1, estimates it will save the city in its first year of running day-to-day operations.
The switch of the city-own Tyson from public to private management is The Journal's No. 5 story of 2017.
The City Council voted 4-1 last week, with Mayor Bob Scott dissenting, to transfer management of the Tyson Events Center and Orpheum Theatre over to the company on Jan. 1 in an attempt to pare down the large subsidy it pays for operations at the Tyson each year.
The vote capped an approximately six-month process in exploring how to move forward with management of the venue. After an audit recommended the city consider private management, the city in mid-2017 sent a non-obligatory request for proposals from venue management companies. For comparison, it also directed staff to propose some changes that could be done if management remained with the city, as it has been for years.
The city received proposals from Spectra and the Ames, Iowa-based VenuWorks, and opted to move forward with either Spectra or continued city management. In October, the council voted to transition to private management, citing the projected savings and the expertise that the large company could provide.
In mid-December, the council then approved the finalized agreements that will transition day-to-day operations at the two venues -- as well as food services at the Tyson, IBP Ice Center and Sioux Gateway Airport -- over to the company.
Under the management contract, Spectra would receive a $110,000 yearly management fee and a fee equal to 25 percent of any reduction in the annual operating deficit at the Tyson Events Center. Spectra also may receive a $25,000 "qualitative incentive" based on customer service scores, achievement of goals and other criteria.
In addition, the company will receive a 2.5 percent commission on revenue from existing sponsorships, suites and other existing ad revenues, plus 17.5 percent for new or increased sales and sponsorship revenue. Spectra also is required to maintain one employee as a city employee until Dec. 31, 2018, which will allow that employee to retire as a city employee.
Spectra will make a $200,000 capital contribution to the city for improvements at the venues and another $300,000 for food and beverage equipment upgrades.
Tourism will fall under Spectra for the time being, with the future of that bureau to eventually be more clearly defined.
The 10,000-seat Tyson has been owned and run by the city since it opened in 2003. The Orpheum is independently owned and jointly operated with the city.
Spectra believes it can lower the city's subsidy by $500,000 in three years, a number that factors in its fees and incentives.
Employees have been in the process of transitioning to Spectra employment, with the firm agreeing to offer each current employee a spot on its new team. The vast majority are making the transition. One employee, who plans to retire within the next year, will remain with the city to allow him to retire as a city employee.
Spectra has approximately 150 venue clients and runs the Wells Fargo Center, home to the Philadelphia 76ers and Flyers, and Citizens Bank Park, home to the Philadelphia Phillies. It also runs the Iowa Events Center in Des Moines.