A changing of the guard at the Cleveland Convention Center complex was the first official step in a deal that might save Cuyahoga County $3 million to $4.5 million a year.
SMG, a convention center management company, took control of the event facilities in mid-November. The full transition still requires approval from the Cuyahoga County Council and, for the next month or so, SMG will operate the buildings through an agreement with Merchandise Mart Properties Inc., a Chicago-based real estate business that developed and opened the $465 million public project.
The county, which financed the development, will pay Merchandise Mart Properties Inc. $3 million to walk away from a 15-year management deal. A deeper look at the numbers, to be presented to council today, shows that the county expects significant savings -- and better results -- with a new operator. Under the current deal, Merchandise Mart Properties Inc. is set to receive between $9 million and $11 million in annual rent payments from the county. After expenses, Merchandise Mart Properties Inc. expected potential profits of $5 million a year, not counting any gains from renting space at the Global Center for Health Innovation, a medical showplace attached to the convention center.