Merchandise Mart Properties Inc. (MMPI), which built and developed the venue, and Cuyahoga County, Ohio, made the joint announcement this morning.
The convention center, which took several years to get off the drawing board, opened under MMPI management on July 15. Although the real estate management company had been involved with development of the venue since 2007, the company and county officials came to an agreement earlier this year that another management company should take it over.
MMPI’s parent company, Vornado Realty Trust, has been steadily moving out of the business of managing meetings venues and tradeshows and focusing more on office buildings and shopping centers. With the decision to transfer management of the Cleveland venue, its only related business will be Chicago’s Merchandise Mart.
SMG, however, seems pleased to take it over.
“The Cleveland Convention Center has quickly established itself as a great place to host a tradeshow,” says SMG Executive Vice President Greg Caren. “It has put Cleveland back on the map as a convention destination.”
Global Center Opens
The $465-million facility with a 225,000 square foot exhibit hall is adjoined by the Global Center for Health Innovation, which will have a ribbon-cutting ceremony celebrating its opening tomorrow that both MMPI and SMG executives are expected to attend. There will be more phased openings of that center—which primarily will feature permanent showrooms for health care companies—through the end of 2014.
SMG manages 72 convention centers throughout North America, but this will be the first time it has managed anything similar to the Global Center. However, Caren told the Cleveland Plain Dealer that he expects the center to be a magnet for health care shows and conferences interested in using both it and the convention center.
Once it became clear that MMPI would be exiting Cleveland, it interviewed potential successor management companies and then passed its recommendation that SMG would be the best fit on to county officials. The Cuyahoga County Council still needs to officially approve the new arrangement.
Also still to be determined is how the contract between the county and MMPI will be resolved. Currently, MMPI is promised $9 million a year for managing the center, plus any revenue it would generate from the Global Center.
Specific details of SMG’s agreement with the county have not been disclosed, but officials say the arrangement will be a more conventional professional management contract. Caren says that is the case with virtually every convention center SMG does business with.
Jeff Appelbaum, an attorney representing Cuyahoga County, would not identify the other two candidates to manage the center. However, other sources have told Expo they were Global Spectrum and the owner of one of the professional sports franchises in Cleveland.
After suffering through decades with a dilapidated Cleveland Convention Center, the city seems primed to become a player in the national—or at least regional—tradeshow and convention market. A 650-room convention center hotel adjoining the venue will be completed by 2016 and the nearby 484-room West Cleveland Downtown will complete a $64-million renovation by this coming spring.