Management Contact Negotiation
Components: 405-room Hotel; 60,000 sf Meeting Space
SAG represented the City of Norfolk, the Norfolk Redevelopment and Housing Authority, and the Norfolk Convention and Visitors Bureau in their renegotiation of the Norfolk Waterside Convention Center management contract as part of the sale of the hotel between private parties. The convention center and 405-room Marriott was originally developed as a single asset under a public-private partnership with the private sector investing in the hotel and the public sector investing in the convention center. The hotel management company managed both the hotel and convention center. SAG’s advisory services encompassed a variety of related agreements, including the Operating Agreement, Catering Agreement, Hotel Room Block Agreement, and other transaction related documents, and addresses issues such as general terms and conditions, allocation of profits/deficits, capital reserve funding, operational control, room block parameters, service standards, insurance, budget process, financial reporting, termination, non-compete provisions and others. The original management contract required the City to fund operating shortfalls and a reserve fund for capital replacements. SAG was able to renegotiate the management contract with the new hotel management company limiting the City’s exposure to capital replacement funding only. The private sector assumed responsibility for all operating shortfalls.