09:06 PM PDT on Wednesday, June 2, 2010

Special to The Press-Enterprise

With a June 30 deadline fast approaching, city officials have decided to grant SMG a two-year contract extension to operate the Ontario Convention Center, according to a city official.

The decision comes about six months after officials decided that instead of automatically approving another two-year deal, they would prepare a report that would outline the possible alternatives to SMG operating the facility.

Among the possibilities outlined in December were to have city staff oversee the facility, approve a new contract with its current operator or contract with another company to operate the space.

“In the end, we did an extension with SMG,” City Manager Chris Hughes said. He said once SMG agreed to reduce their annual management fee to $160,000, the city council approved the extension on April 20. Hughes said SMG had agreed to reduce their management fee by $100,000 over the next two years at the 250,000-square-foot facility.

Based in Philadelphia, SMG has operated the facility for the past 10 years. The Ontario Convention Center, which first opened in 1997 and operated as a nonprofit for two-years, operates at about a $1.5 million annual deficit.

Bob Brown, an SMG employee and general manager of the convention center, declined to comment on plans to reduce the facility’s operating costs.

“Our contract terms are extended through June 30, 2012,” Brown said. “The terms of the financial arrangement have not been finalized.”

Former City Manager Greg Devereaux, who resigned his position in January to become San Bernardino County’s chief administrative officer, began the convention center report. Hughes, the city’s former fire chief, took over for Devereaux and oversaw its completion and the contract talks.

“The new city manager is terrific,” Brown said. “He understands our business well and supports the efforts of the Ontario Convention Center to generate economic impact for the city and its shareholders.”

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