McCormick’s David Causton Elaborates on MPEA Proposal

RENEE DIIULIO, SENIOR EDITOR
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Chicago, IL – As industry associations and companies grow increasingly vocal about their opposition to the labor reform proposal of the Metropolitan Pier and Exposition Authority (MPEA), Chicago officials are listening but so far, have not retracted any initiatives. “What I’m hearing from customers is they’re concerned that by bringing labor in-house, we are creating a situation where we will mark it up to generate revenue. But that is not the case — we don’t see it as a profit center,” says David Causton, general manager of McCormick Place.

Rather, the goal is to drive down associated costs and increase the efficiency of related services. In addition to the proposed labor changes, the legislation reduces the number of jurisdictions (from four to two) and requests refinancing of the centers’ debt.

The refinance is intended to bring McCormick Place — which offers the largest amount of prime exhibit space in the U.S. — in line with competitors, such as Orlando’s Orange County Convention Center and the Las Vegas Convention Center. Causton believes these venues have an advantage when it comes to holding down costs because they have additional sources of revenue, such as taxes or subsidies. Refinancing will provide the MPEA with needed capital.

Reorganization Rebuttal
The reorganization of labor is also intended to bring costs in line with Chicago’s competitors. Making laborers public employees eliminates their right to strike, which Causton notes can be disastrous for a show, but assures their rights to arbitration. Arbitration provides MPEA the opportunity to negotiate new work rules, while the reduction in jurisdictions streamlines the process as well as show floor services. Modifications may revise even basic definitions, such as those for straight time and standby labor.

Various industry spokespersons have expressed concern, however, that the plan will result as many exclusives do — in higher costs and poor service. Some cite Chicago’s current business model for electrical services as an example, and are dismayed the issue is not directly addressed in the proposed amendment. But changes to Focus One, McCormick’s exclusive utility service, are not off the table. “We will look at that, absolutely,” says Causton, adding that a portion of funds generated from the potential refinance will be invested in this project.

Causton notes MPEA and McCormick Place recognize their role in the middle and their responsibility to help drive down costs. And clients have been receptive to this message. “When we discuss it with our customers, they understand what we are trying to achieve,” says Causton.

 

Will Call
No one has really come out against the idea of reform, however, just the process and proposals. Calls from industry for inclusion in the construction of a solution are likely to be answered. The passage of a bill that reduces the MPEA board from 13 to 7 also requires the proposed amendment be reviewed by the new board and presented before a vote is taken. Appointing members to the restructured board is the next step in the process.

As this group reviews the details, Chicago is reaching out to clients to generate their feedback and support. Causton lists show managers, contractors, industry associations and other stakeholders as those whose opinions will be heard. “It’s a participatory process, and we want to be very upfront about what it is we are doing, why we are doing it and the opportunity to change the business model in Chicago,” says Causton.

Reach David Causton at (312) 791-7000 or dcauston@mpea.com

 

 

Quick facts:

McCormick Place, Chicago, IL: 2,600,000 square feet of prime exhibit space

Orange County Convention Center, Orlando, FL: 2.1 million square feet of prime exhibit space

Las Vegas Convention Center, Las Vegas, NV: 1,984,755 square feet of prime exhibit space

Source: Trade Show Executive’s  2009 directory of the World’s Top Convention Centers