Team San Jose — the long-troubled collaboration of hotels, businesses, unions and arts groups that runs the downtown convention center and theaters — had a lot of work to do to reform its management and rebuild the trust of city leaders. Under the stewardship of board president Chuck Toeniskoetter and CEO Bill Sherry this year, it has turned things around.
The City Council will hear the nonprofit’s 2010-11 results today, and they are impressive: It beat its revenue goal by $4.8 million and added $1.8 million to its reserve fund.
Now, it wants the council to put away the ax hanging over its head: a request for proposals from other management companies to take over the downtown facilities. The council approved a search for new management in December amid poor financial results and problems with transparency and oversight. But it should agree to postpone the request for proposals until the current contract runs out in 2014. In return, Sherry and Toeniskoetter need to make permanent changes to Team San Jose’s structure so smooth operations can be sustained once they’ve left.
It’s not just a matter of rewarding the turnaround. A possible change in management is deterring potential customers from booking space, particularly as a $120 million convention center renovation gets under way.
Under former CEO Dan Fenton, Team San Jose cost millions of taxpayer dollars and lost the trust of city leaders. Fenton was forced out late last year amid frustration about overspending, decisions made without consulting his board and his lack of cooperation with city officials.
Once Toeniskoetter and Sherry took over, they shrunk their ineffective board from an unwieldy 28 members to 15 while increasing oversight. They’ve reduced labor leaders’ outsize influence on decision-making while increasing their participation in sales discussions to better meet customers’ needs. And they’ve narrowed Team San Jose’s focus to a core mission: bringing business to the convention center and theaters, rather than bidding for outside work. That has allowed employees to focus entirely on meeting performance targets that were neglected under Fenton.
Toeniskoetter and Sherry have built a stronger relationship with the city by sharing information rather than hiding it. Mayor Chuck Reed likes what he’s seeing so far. “It’s now operating the way I thought it would from the beginning,” he said of the unique partnership.
But Reed and others worry these reforms could vanish without Sherry, who expects to leave when the remodeling is finished in 2013, and Toeniskoetter, who plans to remain chairman just one more year.
Sherry thinks it’s a reasonable worry, so he’s compiling a list of completed and planned changes to Team San Jose’s bylaws and articles of incorporation. Written job descriptions will be added, and the working relationship with city staff members will be clarified. It should satisfy concerns.
The City Council was right to authorize the request for proposals back in December; it pushed Fenton out and woke up the Team San Jose board. But pursuing new bids now that things are running well would be a waste of time and money.
