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City nears decision on Covelli Centre vendor plan
YOUNGSTOWN
City officials should have a decision by the end of the week as to whether to change the food-and-beverage vendor at the Covelli Centre, Mayor Charles Sammarone said.
Centerplate and its predecessor, Boston Culinary, have handled food-and-beverage services at the city-owned facility since it opened in October 2005.
City officials and Eric Ryan, the center’s executive director, say having the operations run in-house by JAC Management, Ryan’s company, would not only make more money for the facility, but also would provide more flexibility — such as $1 beer and $1 hot-dog specials for certain events — and the use of local vendors to sell their food items there.
Under a proposal to get Centerplate to leave, the city would pay the company the balance of the $1.2 million owed to Boston Culinary for equipment and materials installed when the center was built in 2005, or about $414,000. Centerplate purchased Boston Culinary in November 2009.
The city currently pays $9,026 a month to Centerplate for that $1.2 million investment.
The city would receive all of Centerplate’s equipment and materials at the center as part of the deal, and it could borrow the money it owes Centerplate and repay that loan on a monthly basis.
“The deal with Centerplate is in place,” Ryan said. “It’s a matter of how the city wants to move forward. We’re waiting for the city to get back to us on finalizing it.”
City officials are reviewing the financial numbers and should have a decision in a few days, Sammarone said.
If the deal goes through, JAC could take over food-and-beverage operations Nov. 1, Ryan said.
City council members initially were hesitant about the switch when Ryan’s company proposed it in April.
Council members later supported the proposal in June after speaking with an official with SMG, the center’s national management consultant.
At the time, SMG, which operates SAVOR, its own food-and-beverage subsidiary, planned to help JAC run that aspect of the center.
But Centerplate “specifically states in its separation agreement that SMG can’t be involved,” Ryan said.
Centerplate is willing to leave if the vending is handled in-house with no assistance from a competitor, such as SAVOR, Ryan said.
“I’d like to have SMG involved, but we can’t because of the competition clause,” Sammarone added.
In the proposed deal, Centerplate would agree to allow JAC to hire all of its current employees at the center, Ryan said. There are five full-timers and about 100 people who work part time for Centerplate at the center, he said.
The city signed a 10-year agreement with Boston Culinary to handle food and beverages at the center that doesn’t expire until September 2015.
If a deal can’t be reached, Centerplate would continue to be the center’s vendor until the contract ends.
The center received $194,563 from the sale of food and beverages last year and $275,170 in 2009. The center could make more money — at least $25,000 more annually, according to an SMG official, and as much as $100,000 more a year, according to Ryan — with JAC in charge.
International Coliseums Co., the arena’s original management firm, had estimated in 2005 that the Boston Culinary deal would provide about $2.22 million in annual revenue.