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City auditor: Team San Jose met incentive targets, generated $95M impact and qualifies for $300,000 fee
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Summary
The city auditor reported Team San Jose exceeded weighted performance targets for fiscal 2024–25—booking 133,500 hotel room nights and an estimated $95 million economic impact—qualifying the organization for a $300,000 performance-based fee; council asked for additional utilization and benchmarking metrics.
City Auditor Joe Royce presented the annual performance audit of Team San Jose at the Jan. 13 council meeting, reporting that the organization met or exceeded its contract performance measures for fiscal year 2024–25. Royce said Team San Jose booked 133,500 hotel room nights, produced an estimated economic impact of nearly $95,000,000, held numerous events at cultural facilities (leading to a reported 97% customer satisfaction rate) and therefore qualified for the contract’s $300,000 performance-based fee.
Royce told the council his office did not include recommendations requiring a written management response and that feedback received during the audit was incorporated into the report. He described the five contract performance areas used to calculate incentive fees: gross operating results, booked hotel room nights, estimated economic impact, theater occupancy and customer satisfaction.
Councilmembers welcomed the results but pressed for more granular metrics. Councilmember Cohen, Councilmember Mulcahy and others asked staff for clearer measures of convention center and theater utilization, comparative benchmarks with similar cities and explanation of whether targets should be recalibrated when organizations repeatedly exceed them (one councilmember noted a weighted score well above 100% alongside an $11,000,000 operating loss at one facility). Carrie Adams Hapner (Office of Economic Development and Cultural Affairs) said targets are set collaboratively with budget and team staff and that the budget office also moderates revenue projections tied to TOT to avoid overinflating expected receipts.
The council accepted the audit and approved the related motion unanimously. Members asked staff to return with multiyear benchmarking and utilization data to better evaluate facility performance and inform future target-setting.
