Council wants final say on Chevy Centre contract

By David Skolnick

The deal can be finalized in two to three weeks.

YOUNGSTOWN — City council is allowing the Mayor Jay Williams administration to negotiate a contract with a company to help manage and promote the Chevrolet Centre.

But before a deal is finalized, council wants to see it.

Williams said he has no objection to that provision.

Council approved an ordinance Wednesday permitting the city’s board of control to enter into a five-year-plus contract with SMG, a Philadelphia company.

The original legislation, sponsored by Williams, didn’t require the board to get council to sign off on the proposed contract.

The board consists of Williams, Finance Director David Bozanich and Law Director Iris Torres Guglucello.

Council will have the opportunity to approve or reject a deal with SMG, a company that operates more than 200 facilities worldwide.

But it won’t have the authority to “adjust the contract provisions,” Williams said.

The legislation also calls for JAC Management Co., a Struthers company run by Eric Ryan, to subcontract with SMG to run the city-owned center’s day-to-day operations.

Ryan’s company has handled those responsibilities since October when the city hired him to replace Global Entertainment Corp., an Arizona firm that ran the center for two years. Ryan will continue to report directly to the city.

SMG would provide support to the center with marketing services, event booking, risk management and insurance, administration and financing.

When Williams recommended SMG to council last week, its members said they wanted to take some time to look at the proposal and weren’t going to rush.

Some council members expressed concern Wednesday about questions from their constituents as well as backlash from newspaper editorials and on talk radio, if they agreed to permit the board to approve a deal without knowing the details.

Williams reiterated that the request was reasonable. But he added that “we don’t make decisions fearful of criticism or praise.”

Williams spelled out most of the contract’s provisions to council last week.

A contract with SMG should be finalized in the next two to three weeks, Bozanich said.

SMG would waive its monthly fee through Dec. 31 and be paid only for travel expenses pre-approved by the city.

The city wanted a three-year deal with SMG but agreed to negotiate a five-year contract when the company agreed to waive its fee through 2008, Bozanich and Williams said.

Effective Jan. 1, SMG would receive $80,004 a year. JAC receives $108,000 annually for its services. That will drop to $96,000 beginning in January.

SMG and JAC would receive a percentage of net operating income above the $100,000 mark.

Neither company would receive commissions.

Global Entertainment received $150,000 a year from the city to manage the center as well as about $200,000 annually in commissions on the sales of advertising, club seats and luxury suits.

Also, the city paid a Global Entertainment employee between $85,000 to $95,000 annually in salary to be its executive director, Williams said.

Under the management of Global Entertainment, the center lost about $280,000.

If the center loses money with SMG and JAC running it, the city is responsible for those costs, Williams and Bozanich said.

skolnick@vindy.com