Riverside has changed the management terms of the city’s convention center.
The city council has approved a contract that will require it to pay more to Raincross Hospitality Corp., the company that manages the convention center, according to a published report.
Riverside will also receive all of the profits generated by the facility or be responsible for any losses it generates, according to the report.
For the past 16 years, Riverside has paid Raincross Hospitality an annual $125,000 management fee. Raincross Hospitality also kept the first $125,000 in profits generated by the convention center every year, with the company and the city dividing the rest of the profits.
The new contract mandates a $400,000 management fee, with all profits from the convention center going to the city. Raincross Hospitality will also receive a $100,000 bonus if gross revenues top $4 million in a year, with future increases for inflation and higher revenues included in the agreement, according to the report.
Changes to the operating contract became necessary after the city used $45 million worth of tax-exempt bonds to pay for an expansion of the convention center, which is still underway.
When that action was taken, IRS rules required that the contract be changed, according to the report.
The council vote was 6-0, with Councilman Paul Davis absent. The contract runs through 2023.