To preserve an amateur volleyball tournament amid a coronavirus pandemic that has devastated the region’s tourism industry, Orange County cut the rental fee for its convention center by more than 90 percent and agreed to refund more than $60,000 worth of deposits, according to the contract for the event that formally began Tuesday.
Altogether, the contract shows that Orange County has reduced the convention center’s rental rates by more than $1 million for the Amateur Athletic Union, which is organizing the tournament for preteens and teenagers.
The pact shows that the AAU will pay just $100,000 in rent — $50,000 of which is coming from state taxpayers via a separate economic-development grant.
The AAU volleyball tournament is the first major event at the convention center since the mammoth meeting facility was forced to shut down in March as COVID-19 spread across the country. The event is expected to draw about 17,000 people to tourist-starved Central Florida over the next two weeks.
Through a spokeswoman, Orange County Mayor Jerry Demings declined to answer whether he thinks the revised deal is a good one for taxpayers. Hotel, restaurant and attraction companies, who make money selling to convention attendees, have been urging county leaders to get the center up and running again despite the pandemic.
Representatives for the AAU did not respond to requests for comment. The organization is requiring tournament attendees to sign waivers in which they agree not to sue the organization if they end up contracting COVID-19.
The Orange County spokeswoman also would not answer any questions about the event contract, which the county released in response to a public-records request by the Orlando Sentinel.
Instead, she issued a written statement from convention center Executive Director Mark Tester in which he said that publishing details of the contract with the AAU “will harm the public far more than benefit it” and will undermine the Orange County Convention Center’s ability to compete for group events against publicly owned centers in states that aren’t subject to Florida’s broad public-records laws.
“Releasing details of these negotiations allows competitors to undercut OCCC rates, puts at risk contract renewals, and adversely affects long-time relationships with some of the largest global convention and trade show businesses,” Tester said. “Ultimately, the loss of convention business translates to the loss of thousands of jobs for citizens in Orange County and Central Florida.”
The meeting planners and corporate executives who decide where to hold big events already know plenty about the discounts, subsidies and other incentives that convention centers offer, said Heywood Sanders, a professor at the University of Texas at San Antonio who has been studying the meetings and convention industry for many years. That’s because they make sure to shop around every time they plan an event, he said.
“They do what any savvy shopper would do. They take one venue’s offer and they go to its competitors and they say, ‘Gee, we’d love to come to San Diego. Can you beat this?'” Sanders said. “Your competitors know exactly what you’re doing because meeting planners are playing you off against them. That’s the name of the game.”
Sanders said convention centers and their consultants try to keep the terms of their deals secret in order to keep both voters — and the elected officials who represent them — in the dark about the true costs of a business they are subsidizing with public money.
Orange County, for instance, is expected to spend more than $100 million this year on the convention center between mortgage payments, maintenance and construction costs, and operating subsidies.
“The folks who are ignorant and uninformed about the market realities aren’t the meeting planners. And they certainly aren’t the convention center management officials. They are the general public. And they are, to a large degree, the public officials,” Sanders said.
Convention centers around the country were discounting long before the COVID-19 pandemic shut down global travel and left tourism-dependent places like Orlando desperate for business.
For instance, before the pandemic, the AAU was scheduled to use a portion of the Pentagon-sized convention center from June 12 through June 29, according to an earlier version of the event contract.
As part of that deal, the contract shows that Orange County had agreed to reduce the convention center’s standard rent by 72 percent — from just over $1.5 million to $420,100. (The deal includes some other perks, such as a commitment by Orange County to provide, install and dismantle 38 Teraflex volleyball courts at no cost to the AAU.)
The revised agreement, which was signed last week, calls for the AAU to use a smaller footprint but over a longer period. Though the volleyball tournament formally began Tuesday, the AAU has been occupying the convention center since July 8 and will continue to do so until July 30, according to the contract.
Under the new deal, the contract shows that Orange County has cut the rent by 92 percent — from just under $1.2 million to a flat $100,000.
And because the AAU had already paid $161,310 in deposits — $50,000 of which came from a state grant — Orange County has agreed to refund the organization $61,310.
In his written statement, Tester, the convention center executive director, said COVID-19 and the recession demonstrate the importance of the convention center to Central Florida’s economy.
“The current pandemic has highlighted how critical this work is for our community,” Tester said. “The OCCC wants to be in the best position possible and generate as many jobs as possible when this pandemic is over.”
jgarcia@orlandosentiinel.com; @Jason_Garcia
