Palm Springs City Council Approves Oak View Group Convention Center Takeover

The Palm Springs Convention Center is officially changing hands. The City Council approved Oak View Group's five-year management contract Monday night, ending AEG's tenure and ushering in what Mayor Ron deHarte calls "a generational investment in Palm Springs' economic future."

The $3.6 million agreement will see OVG360 (Oakview) take over operations when AEG's contract expires September 27, 2025, bringing the company's growing footprint in the Coachella Valley to include the Convention Center alongside Acrisure Arena in Palm Desert and the historic Plaza Theatre.

Financial Structure Built on Performance

Under the performance-based contract, Oakview will receive a base fee of $250,000 annually, increasing by $19,250 each year. But the real opportunity lies in incentives - the company can earn up to 150% of their base fee through performance metrics.

"Therefore, it is possible that in addition to the base fee of $250,000, Oakview could earn up to an additional $375,000 in incentives for a total all-in fee of $625,000 annually," according to the staff report.

The incentive structure splits 60% toward quantitative measures like gross revenue and event bookings, with 40% based on qualitative factors including client surveys and facility inspections.

$1.8 Million Capital Commitment Upfront

Perhaps most significantly for Palm Springs residents, Oakview has committed $1.8 million toward capital improvements over five years, with "$1,200,000 within 15 days of the Effective Date" and "$300,000 on or before the first anniversary."

This investment comes as the city prepares a massive $125 million renovation project that includes "the Convention Center facility along with the development and construction of connectors," according to city documents.

"With this partnership and our proposed $125 million renovation, we're modernizing our Convention Center, boosting tourism, and bringing millions in new spending to our hotels, restaurants, and businesses," deHarte said following Monday's approval. "This is a game changer not just for Palm Springs, but for the entire Coachella Valley."

Economic Impact: Jobs and Revenue Growth

The numbers paint a picture of significant economic potential for Palm Springs. A 2024 study by Convention Sports and Leisure shows "the current annual direct spend of attendees of the PSCC is $44M annually," projected to increase to $66.6 million with full master plan implementation.

More importantly for local workers, the facility currently supports 892 jobs with $31.1 million in annual wages - numbers expected to grow to 1,302 jobs and $46.5 million in wages post-renovation. Tax revenues would jump from $5.1 million to $7.6 million annually.

"We're honored to have been selected by the City of Palm Springs to manage the operations of the Palm Springs Convention Center and Bureau of Tourism," said Greg O'Dell, President of Venue Management at Oak View Group. "Our team is committed to building on that tradition by enhancing the guest experience, driving economic impact, and ensuring that the Palm Springs Convention Center is a premier venue for meetings, conventions, and community events."

City Subsidy Continues Despite Growth

Despite the optimistic projections, taxpayers should know the Convention Center will continue requiring city subsidization. The FY26 budget shows total operational expenses of $7.68 million with a city subsidy of $3.42 million, as the facilities "do not generate enough revenues to pay for all expenses."

The contract does include provisions for the city to use facilities rent-free for events, including the Palm Springs International Film Festival, city shredding events, and governmental purposes.

Transition Timeline and Workforce Changes

The transition will involve reassigning existing vendor contracts for catering, audio-visual equipment, security, and parking management. "During the transition, Oakview will interview and hire two positions, the General Manager and the Director of Finance, both of which have City review and veto provisions," the staff report states.

Following a "competitive and transparent bidding process," according to the city's press release, OVG was selected based on its "lower cost proposal, higher capital contribution, and ambitious plan to increase convention occupancy and visitor spending."

The city expects to finalize the contract within days, with transition services beginning immediately. Renovation and planning efforts will continue into 2026, marking what officials describe as the start of a new chapter for Palm Springs' tourism and business travel economy.

The Bottom Line

For Palm Springs residents, this agreement represents both opportunity and continued financial commitment. While the projected job growth and increased tax revenue could benefit the broader community, taxpayers will continue subsidizing Convention Center operations at over $3 million annually.

The success of this partnership will ultimately be measured by whether OVG can deliver on its promises to increase occupancy, visitor spending, and convention bookings while managing the facility's ongoing operational challenges in a competitive tourism market.