Council Approves CVB’s Transition into a Private Entity

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The view of the Tower of the Americas from the Henry B. Gonzalez Convention Center. Photo by Scott Ball.

Scott Ball / Rivard Report

The view of the Tower of the Americas from the Henry B. Gonzalez Convention Center.

City Council approved an agreement Thursday that solidified the Convention and Visitors Bureau’s (CVB) transition from a City department into a private entity.

A five-year, $23,330,624 Destination and Marketing Services Agreement authorizes the newly-formed nonprofit Visit San Antonio (VSA) to assume the travel and tourism promotion duties of the City’s former CVB. Like the CVB, VSA’s main goal will be to accurately market San Antonio as a “major meeting destination” to a national and global audience.

Most cities in the United States have a similar, privatized setup. San Antonio’s CVB, in fact, was the only one out of the top 50 U.S. cities to operate as a City-governed structure. The CVB’s gradual transition into a 501(c)(6) organization is meant to give it greater flexibility with its marketing dollars and maximize its business opportunities. Advocates of the new structure say it will make San Antonio more competitive with similar cities and diversify its funding resources while it undergoes rapid growth in the coming decades.

Under the agreement, which is effective Oct. 1 and features a one-time five-year extension to 2026, the City will provide 35% of its total Hotel Occupancy Tax funds to VSA, a percentage of which may be adjusted during the annual City budget adjustment sessions according to changes in the local economy and other factors. The VSA also is required to present quarterly and annual reports, performance targets, and a revenue enhancement plan to the City.

The City also will own all of the intellectual property, such as trademarks and logos, previously used by the CVB, but VSA will own all intellectual property developed in the future.

To view the draft agreement, click here.

The organization’s board of directors will help with the strategic direction of the group and serve in an advisory role for the Convention & Sports Facilities Department. More than 60 members applied to be on the board, said Michael Sawaya, Convention & Sports Facilities Department executive director, which includes individuals from a variety of industries as well as City representation.

“This board will ensure the proper image of this city is pushed out,” he said.

The CVB’s transition to a nonprofit was initially recommended by Mayor Ivy Taylor’s 13-member CVB Structure Task Force in December 2015. The process was initiated in February, and in January 2017 the CVB staff will transition to VSA. The entire process is expected to be completed by October 2017.

The CVB is working to maintain transparency with its staff throughout the entire process, said CVB Executive Director Casandra Matej.

“Staff can choose to stay with the City of San Antonio or choose to go with Visit San Antonio, so everyone is guaranteed a job,” she said.

Councilman Rey Saldaña (D4) voted against the agreement, citing his concern that the new entity will lack accountability and adequate oversight by elected officials regarding the overall image portrayed of San Antonio.

The idea of increasing resources and being more nimble is terrific, but if we’re going to continue to send the same message … it doesn’t suit me to say that that’s a great objective (to increase money, but continue to sell the city in an) old fashioned way,” he said, citing a previous failed element of the “unforgettable” ad campaign developed for the CVB by an Austin firm.

Councilman Ron Nirenberg (D8) also voted against the measure, making the vote 7-2. He cited similar concerns as Saldaña regarding accountability and wanted more information about VSA’s revenue enhancement plan.

Matej said that the organization will work to keep City Council involved in its efforts and will give an annual briefing on the progress of all of its campaigns.

Mayor Taylor praised the progress that has been made thus far, saying that the agreement “protects tax payer dollars being invested and includes a diverse management structure and also a transition pan to protect City employees that have been involved.”

Still, she agreed that presenting an accurate representation of San Antonio and all that it has to offer is necessary. She looks forward to continuing that discussion as the CVB transitions, she said.

“I do think it’s important that we put our best foot forward as far as presenting the diversity that is San Antonio, while still highlighting our community’s history and culture,” Taylor said.


Top image: The view of the Tower of the Americas from the Henry B. Gonzalez Convention Center.  Photo by Scott Ball. 

Related Stories:

Commentary: The Case for a Public-Private CVB

Council Committee Backs CVB’s Pursuit of Independence

CVB Headed for Nonprofit Status

Getting Real with the San Antonio Visitor Economy

City Considers Independent Convention & Visitors Bureau

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