Title
AUTHORIZATION TO EXTEND THE AGREEMENT WITH SMG FOR THE MANAGEMENT OF BEVERLY/MORGAN SPORTS COMPLEX
SPECIFICATION NO. P-15018
BODY
To the Honorable Board of Commissioners of the Chicago Park District
I. Recommendation:
Pursuant to Chapter XI, Section D.1.b.(2)(e)(iv) of the Code of the Chicago Park District, it is recommended that the General Superintendent and CEO or their designee (the “General Superintendent”) temporarily suspend competitive bidding and extend the agreement with SMG for the Management of Beverly/Morgan Sports Complex (“the Agreement”) beyond the current end date of December 31, 2025 to March 31, 2028.
II. Contract Information
Company: SMG
300 Conshohocken State Road
Conshohocken, Pennsylvania 19428
Company Type: a Pennsylvania general partnership
Majority Interest: Legends Global (parent company of SMG)
Original Contract Initial Term: September 1, 2016 - December 31, 2020
Original Contract Renewal Terms: Five (5) one-year extensions executed January 1, 2021 - December 31, 2025
Recommended Additional Renewal Term: January 1, 2026 - March 31, 2028
Original Contract Management Fees: $1,146,489 ($530,914 Initial Term + $615,575 Renewal Terms)
Recommended Additional Management Fees: Not to exceed $298,536.00
Compliance Goals: The Minority and Women Owned Business Enterprise participation for this contract includes 46% MBE and 5% WBE
Scope of Services: The management and operation of the facilities, including: (i) keeping the facilities in a clean, safe, and attractive state at all times by providing all maintenance and custodial services both indoors and outdoors; (ii) marketing, permitting, and booking events; (iii) programming and staffing the ice rink and gymnastics area; (iv) operating the concessions; (v) providing all administrative services; and (vi) providing all personnel and subcontractors necessary for the management and operation of the facilities. The description of Services is intended to be general in nature and is neither a complete description nor a limitation on the services that SMG is to provide under the Agreement.
Authorization: Authorize the General Counsel to include other relevant terms and
conditions in the Agreement. Authorize the General Superintendent to execute the Agreement and the Secretary to attest as to the signing of the Agreement and keep an original copy of the Agreement on file.
III. Procurement Information
Pursuant to Chapter XI, Section D.1.b.(2)(e)(iv) of the Code of the Chicago Park District, advertisement and competitive sealed bidding may be suspended if the public interest is better served and where, because of other special circumstances, the advantages to the Park District of selecting a particular contractor on a noncompetitive basis outweigh the likely benefits of selecting by competitive procedures. These conditions exist for reasons detailed in the Explanation section below.
IV. Budget and Financial Information
Budget Classification: Operating
Fiscal Year: 2026-2028
Source of Funds: 001.9310.9310.626065.00001.01.01.00001
V. Explanation
Of the Park District’s staffed locations, there are only two indoor ice rinks - Morgan Park Sports Center and McFetridge Sports Center. They similarly feature unique recreational facilities (the only indoor tennis/pickleball courts at McFetridge and a gymnastics center at Morgan) along with typical park amenities like club/meeting rooms and restrooms, etc. The agreement to manage McFetridge Sports Center also includes management of the Baseball Stadium at Devon and Kedzie (“BSDK”). The McFetridge and BSDK management agreement reflects renewal terms that extend through March 31, 2028.
Currently, Morgan Park Sports Center, McFetridge Sports Center and BSDK are managed by SMG through two separate agreements. The Park District benefits from the operational efficiencies gained by having one firm managing all three locations, including shared resources which result in savings to the taxpayer such as ice equipment, lead specialty staff (sponsorship, marketing, IT) and security along with other subcontracted services.
Temporarily suspending the competitive bidding process as called for in Chapter XI, Section D.1.b.(2)(e)(iv) of the Code of the Chicago Park District and extending the agreement with SMG to March 31, 2028 will allow that Park District to align the Morgan Park Sports Center, McFetridge Sports Center and BSDK contract term dates, thereby affording the opportunity to advertise them together when the agreements end. The Park District may then leverage economies of scale as the Request for Proposals will seek to have one firm manage all three locations. This will encourage proposing firms to offer competitive pricing and estimate expenses that reflect maximum efficiency. By advertising the Facilities together, the Park District will achieve the best possible deal terms. The Park District also locks in budget certainty and minimizes the risk of operating expenses increasing in the near term by maintaining shared resources.
SMG has been managing Morgan since it opened to the public in 2016. Under SMG’s administration, expenses have been managed prudently while revenues have been maximized. Revenues at the facility have increased nearly $220,000 over the last three years alone. The center is routinely in the Park District’s top 4 in enrollment (around 1,900 per session). They added gymnastics sessions throughout the summer this year in order to meet customer demand. Around the region, hockey programs are showing enrollment declines, however Morgan’s “Horned Frogs” continue to grow and currently have a record 110 players across 8 teams. A leader in the field locally, nationally and internationally, SMG has maintained its status in good standing as a contractor with the Park District and performed its duties in an efficient and timely manner.
Therefore, it is recommended that the Chicago Park District temporarily suspend the competitive bidding process in the best interest of the public and extend the agreement with SMG for the Management of Beverly/Morgan Sports Complex beyond the current end date of December 31, 2025 to March 31, 2028.
VI. General Conditions:
1. Conflicts: No agreement authorized herein shall be legally binding on the Chicago Park District if entered into in violation of the provisions of the Public Officer Prohibited Activities Act, 50 ILCS 105/0.01 et seq.
2. Ethics: This agreement is subject to Chapter III of the Code of the Chicago Park District (“Governmental Ethics”).
3. Contingent Liability: Any agreement lawfully entered-into for a period of more than one year shall be executory only for the amounts for which the Park District may become liable in succeeding fiscal years pursuant to 70 ILCS 1505/17(i). The agreement shall contain a clause that any expenditure beyond the current fiscal year is subject to appropriation in the subsequent fiscal year budget.