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City may dish out $500K to void Covelli food pact
Arena also considers building amphitheater for summer events
YOUNGSTOWN
After some rocky times, the city’s Covelli Centre is seeking to end its relationship with the facility’s food-and-beverage vendor.
But it’s likely to cost the city-owned arena more than $500,000 to break the contract.
City officials have tried for years to get Boston Culinary Group — it’s been Centerplate since late 2009 when that company purchased Boston Culinary — to leave the center.
The company has a 10-year contract and has refused to leave without a full buyout of its deal that expires in September 2015.
Boston Culinary spent about $1.2 million in equipment and materials for the center with its contract calling for the facility to pay about $120,000 annually over 10 years to the company. The company’s contract began in September 2005, a month before the center opened.
“We’ve come to an understanding, and we want to discuss that with [city] council,” said Kyle Miasek, the city’s deputy finance director. “We’ll provide [council] with the details” at a noon Wednesday meeting.
If the center ends its contract with Centerplate at the end of this month, the buyout amount would be about $530,000 if officials with the city and the facility are unable to negotiate a smaller amount.
“It’s up in the air how long they’ll be there, and we have to decide what to do once that date arrives,” Miasek said.
Council members and the city’s administration have wanted to get rid of Boston Culinary/Centerplate for years, complaining shortly after the center opened that the prices for food and drinks are too high.
A review by The Vindicator in 2007 showed that the cost for food and beverages at the center was, for the most part, equal to or slightly lower than other nearby entertainment and/or sports facilities.
Another issue is the contract gives Centerplate the exclusive right to sell food and beverages at all Covelli Centre events.
Covelli Enterprises, which purchased the center’s naming rights in April 2009 for $120,000 under a three-year deal, is a restaurant franchisee for Panera Bread and O’Charley’s.
Covelli Enterprises officials referred comment Monday about the food-and-beverage contract to center officials.
Eric Ryan, the center’s executive director, declined to comment Monday to The Vindicator, saying he would wait until Wednesday’s council meeting to discuss the issue.
Bob Pascal, Centerplate’s corporate vice president of marketing and sales, couldn’t be reached.
Shortly after the 10-year contract with Boston Culinary in September 2005 was signed, International Coliseums Co., then the arena’s management firm, estimated the deal would provide about $2.22 million in annual revenue to the center.
Like most of ICC’s projections, this one was far off the mark.
The center received $193,563 from the sale of food and beverages last year and $275,170 in 2009, according to the arena’s reports.
Also Wednesday, center officials will discuss the possibility of building an amphitheater in the back of the center.
“It would generate additional activity during the summer months, [a time] when it’s proven to be very difficult to bring performers to an indoor facility” when it has to compete with outdoor facilities in the Cleveland and Pittsburgh areas, Miasek said.
The outdoor facility could be ready to open in the summer of 2012, Miasek said.
Ryan has said in the past that an amphitheater is “on my wish list,” but it’s costly to build.