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Vendor switch nears reality
YOUNGSTOWN
The city has come to a tentative deal — expected to be finalized in December — to change the food-and- beverage vendor at the Covelli Centre to the company that manages the facility.
City council members met Tuesday to hear details of the deal negotiated for the past several months by the city administration and JAC Management, the organization that runs the day-to-day operations of the center.
Council will consider legislation at its Dec. 7 meeting to approve the contract. Council members said Tuesday they support the plan.
JAC would take control of food-and-beverage services from Centerplate on Dec. 31, said Eric Ryan, the company’s head, who also is the executive director of the city-owned center.
Centerplate and its predecessor, Boston Culinary, have handled these services since the center opened in October 2005 under a 10-year contract.
The proposal would “conservatively” increase the city’s profit on food-and-beverage sales by $50,592 annually, with JAC making $23,784 a year, said city Finance Director David Bozanich and Ryan.
The proposal was based on the sale of food and beverages at the center in 2010.
“We think we can do better than [the 2010 profit] because we’ll have more flexibility,” Bozanich said.
That’s because the center would be able to serve food and beverages for events such as after-work mixers, weddings, birthday parties and graduation parties, Bozanich said.
There also is money to be made doing outdoor events, he said.
“We could open the center two to three more nights a week, which is additional events and additional revenue,” Bozanich said.
The city receives 23 percent of the center’s net food-and-beverage profit with Centerplate. That would increase to 29 percent under the JAC plan. JAC would make 3 percent of the net profit.
Also, Sam Covelli, who owns Covelli Enterprises — a restaurant company that owns the naming rights to the center — has agreed to provide advice to JAC for free, if it’s needed, said Mayor Charles Sammarone.
The center also would permit local food vendors to sell their items at the facility for a fee, Ryan said.
Under a proposal to get Centerplate to leave, the city would pay the company the balance of the $1.2 million owed to Centerplate for equipment and materials Boston Culinary bought and installed when the center was built in 2005, or about $396,000. Centerplate bought Boston Culinary two years ago.
The city currently pays $9,026 a month to Centerplate for that $1.2 million investment by Boston Culinary.
The city would borrow the money to make a lump-sum payment to Centerplate. But the city could borrow that money at a lower interest rate, and could take out a loan for a longer period of time to lessen the monthly expense, Ryan said.
The city signed a 10-year contract with Boston Culinary that expires September 2015.
The city would receive all of Centerplate’s equipment and materials, and be permitted to retain the current staff, Ryan said.
Centerplate also would transfer its liquor license to JAC, Ryan said.
Also Tuesday, council discussed paying $21,483 for roof improvements at the center.
Council members said two weeks ago that the city should consider taking legal action against the ex-manager of the facility to recover the roof expenses before paying the bill.
That’s because the warranty on the roof was invalidated when International Coliseums Co., which managed the center from 2005 to 2007, made roof repairs without notifying the arena’s insurance company. That led to the company’s invalidating the warranty.
Boak & Sons Inc. of Austintown finished $21,483 worth of repairs to the roof to fix problems that were causing water damage to the facility’s luxury suites. The work also reinstated the warranty.
ICC is losing a lot of money, and suing the company would be costly, Law Director Anthony Farris said.
Council members agreed that the city would just pay the bill and not go after ICC. Council is expected to approve the payment at its meeting today.