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Virginia Beach — The city wants to better compete for tourism dollars and some at City Hall think privatizing its tourism department would put Virginia Beach in the best position to do so.
But the city wants the public to weigh in on it.
Earlier this year, a consultant urged the council to turn the organization into a 501c3 or a 501c6 organization so it could recruit a qualified CEO and other staff with higher salaries than a city salary usually allows, and eliminate public bidding on contracts so marketing projects can get off the ground quicker.
Without barriers of city government protocols, many in the hospitality industry think a private or tourism authority organization would market the city better so more tourists would visit and spend money.
At 6 p.m. on Tuesday, the council will allow the public to say whether it should turn the Convention and Visitors Bureau into a public-private foundation, similar to the state’s Tourism Authority, or create a separate 501c6 nonprofit corporate entity.
Changing the structure will require amending state law. The council plans to decide in January if it would like to ask the General Assembly to make the change.
For the past few months, a 17-member task force made up of tourism industry leaders and local business owners has been evaluating the topic. The group recommended a tourism authority so the city would still have a relationship with the organization and the council would select its board of directors. Council members Guy Tower and Rosemary Wilson co-chair the meetings and represent the council. Both support the recommendation.
If this option was selected, the city would retain ownership of the Convention Center and the staff who operate it. The rest of the Convention and Visitor Bureau employees would work for the new organization, which would contract with the city to provide benefits and retirement plans.
Tower said staffers would serve at-will and would be subject to discharge in the same way private employees are.
“These jobs pay a lot but they are performance oriented,” Tower said.
With less oversight, Councilman John Moss said he worried privatizing the organization could lead to “buddy, buddy contracting.” He said the city needs to spend more time questioning if a new organizational structure is really needed.
“So we’re going to give public money to a group that has very little, very little effectual accountability to us,” Moss said. “... I do not think they have made the case for having public money. ... I would rather figure out why the status quo isn’t working and fix it.”
He was disappointed that the task force recommended not privatizing the Convention Center, which has struggled the most and needs millions of dollars from the city’s operational budget to stay afloat. He also doesn’t support giving the organization city benefits.
“If you want to be a private organization and operate like a private organization, then be one, and enjoy all of the ups, as well as all of the downs that the free enterprise system offers,” Moss said.
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Bill Hanbury, the city’s consultant and former CEO of multiple destination marketing organizations, said the hospitality industry needs to be able to guide, influence and financially support the city’s destination marketing organization, which it cannot do now.
Among 31 destination marketing organizations with more than $20 million budgets, Virginia Beach and Fort Lauderdale, Florida, are the only two with direct government affiliation, Hanbury said.
“The city enthusiastically supports the CVB, but the private sector has either lukewarm or negative impressions of the organization,” Hanbury told the City Council.
Hanbury also said it is impossible to attract the best executive leadership with the pay the city has offered in the past. Councilwoman Barbara Henley said she was confused by how the organization would afford to pay the CEO $400,000, which would be the average going rate.
The last leader of Convention and Visitors Bureau was offered a starting salary of $163,843. He said he resigned for personal and family reasons during the summer of 2019. The city decided not to fill the leadership position until the council makes a decision on the future of the organizational structure.
Alissa Skelton, 757-995-9043, alissa.skelton@pilotonline.com.
Correction: A previous version of this story incorrectly stated the type of organization the Convention and Visitors Bureau Community Task Force recommended. The group prefers the creation of the Virginia Beach Tourism Authority.