Will private management solve convention center labor problems?

    Does this sound familiar? Philadelphia’s hospitality industry is threatened by labor problems at the Convention Center, but its leaders are on the verge of a courageous, groundbreaking solution.

    Cue the “Groundhog Day” theme.

    I’m old enough to remember the site selection battle for the Pennsylvania Convention Center, then the opening, the fights over labor costs at conventions, and solutions that somehow always come unravelled.

    Here we go again

    The Pennsylvania Convention Center board meets Wednesday and is expected to complete the process of handing the management of the center’s operations over to a private company. It will be either SMG or Global Spectrum, two regionally based firms that manage other centers around the country.

    UPDATE: The convention center board voted Wednesday to contract with SMG of Conshohocken to take over operations of the center. Mayor Nutter’s two appointees to the board voted against the move.

    But Heather Steinmiller, one of Mayor Michael Nutter’s appointees to the center board, will be voting against the contract award.

    “I remain unconvinced that private management will fix our No. 1 problem, which is our inability to deliver show services to our customers,” Steinmiller told me.

    Steinmiller said the Convention Center is in a crisis, and that “anybody who doesn’t see that that’s in the hospitality industry needs to see it and wake up.”

    The beautiful center, recently expanded to the tune of $700 million tax dollars, is a hit with visitors. They come and they love the building, the city, its history, its cheesesteaks, its great people, the Reading Terminal.

    But too many big conventions simply aren’t coming back, and bookings in the next few years are frightfully sparse.

    The reason, simply put, is that while conventioneers love their experience here, the people who book and pay for conventions feel ripped off.

    Nobody says it much out loud, but of the six building trades providing labor for the shows, the carpenters generate the most complaints, from heavy overtime to too many foremen on jobs (at a rate of $77.88 wages and benefits on straight time).

    But they expense it

    Ed Coryell, the business manager of the carpenters union, didn’t return my call. He usually doesn’t talk to reporters, which is too bad, because the couple of times he has spoken to me I thought he made his case impressively. Maybe he chooses to talk when there’s a case to make.

    Pat Gillespie, business manager of the building trades, was available. He said the complaints are overblown, and that his members are handy scapegoats for problems at the center.

    He said he doesn’t believe labor costs are such a big deal to those who put on big trade shows because, in effect, money is no object when you’re on the convention circuit.

    “I think that the whole business is financed through expense-account financing,” Gillespie told me. “It’s a show business kind of culture. It’s as if people aren’t spending real dollars. They’re spending someone else’s money.”

    There are consultant reports that say customers are indeed put off by high costs. Gillespie said a recent report from Public Financial Management was “unprofessional” and “done with an objective in mind.”

    So what now?

     The last time labor problems created a crisis at the Convention Center, it was resolved with a customer satisfaction agreement that was supposed to settle all the problems. Somehow it hasn’t, and the fact that a private firm, Elliot Lewis, is managing the union labor hasn’t stemmed the difficulties either. The 10-year labor agreement expires at the end of this month.

    Convention Center board chairman Gregory Fox told me the center is working on a new labor agreement. Fox said private management isn’t a panacea — just one step that, along the new labor deal and some other measures, will help. And he’s not prepared to say there’s a crisis at the center.

    “I think a better word to use to describe it is that we have a challenge,” Fox said. “And it’s a challenge that we’re going to meet and meet successfully.”

    I’ve always been something of a skeptic about the economic promise of the hospitality industry. But the fact is that the city and state have put a fortune into the center and new hotels, and it would be a shame to see hotels start laying people off next year because the building is going dark.

     Ed Grose, director of the Greater Philadelphia Hotel Association, said we should all be worried about this.

    “It’s not just our members, it’s the entire region,” Grose told me. “Eighty percent of hotel employees are Philadelphians. We need that Convention Center to be operating at full capacity.”

    Kelly Lawler contributed to this report.

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