SMG to Take Over Management of Detroit’s Cobo Center

HIL ANDERSON, SENIOR EDITOR
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Detroit, MI – The new agency overseeing Cobo Center has voted to turn over management of the Detroit landmark to SMG. The pending deal with SMG is part of a turnaround for the building that will keep the North American International Auto Show (NAIAS) as its prime tenant and also bring in new exhibitions to downtown Detroit.

The board of directors of the Detroit Regional Convention Facility Authority (DRCFA) voted August 26 to negotiate a management contract with SMG. The pact will go into effect sometime in the Fall. The DRCFA is a regional agency that includes the City of Detroit, State of Michigan and the three counties that make up the immediate Detroit metro area. The DRCFA took over management of Cobo from the city late last year.

Cobo Center offers 700,000 square feet of prime exhibit space, which places it  No. 20 on Trade Show Executive’s World’s Top Convention Centers (WTCC) rankings of largest exhibition halls in the U.S.

Gregg Caren, SMG senior vice president of business development, said Cobo is the largest convention center ever to be transferred from government control to private management.

The record, however, may not last long. The management of Chicago’s massive McCormick Place, which tops the WTCC at 2.6 million square feet of prime exhibit space, is expected to be put up for bid this Fall.

“Some of the top priorities are rebuilding the service levels and the financials of the facility to bring it up to today’s standards,” Caren said. “The DRCFA  brought in a new food service operation last month, and the next major action was to contract facility management.”

The DRCFA immediately launched a program of various upgrades, repairs and aesthetic improvements to Cobo, which opened for business in 1960 and was expanded in 1989.

The agency’s strategic plan for Cobo recommends adding 25,000 square feet of flex space with more focus on upgrading the existing facility. Despite the fact the NAIAS fills the building to capacity, the center’s overall occupancy rate is about 50% annually and the plan does not consider additional space  to be critical to attracting new business.

Caren said candidates for the position of general manager of the facility would be renewed. SMG is under no obligation to retain or replace the current management.

“It’s about rebuilding their business and getting the facility, along with the city, back into the mainstream,” Caren said. “There is a rebuilding effort underway involving not only Cobo but Detroit itself.”

Caren told TSE that bringing in private management to Detroit and Chicago marked a dramatic change from 2009 for facility managers. “Last year, municipalities were so focused on their core services and budgets that there was only one RFP for any type of convention center, and that was for the Charlotte Harbor Event & Conference Center in Punta Gorda, FL, with 19,000 square feet of prime space,” he said.

“Municipalities are definitely taking a hard look at their facilities,” Caren said. “It is opening doors that I honestly thought would never be open.”

Reach Gregg Caren at (610) 729-7922 or gcaren@smgworld.com; Cobo Center Director Tom Tuskey at (313) 877-8777 or ttuskey@detroitmi.com