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Transfer of Covelli food operations delayed
YOUNGSTOWN
City officials want it done now, but the transfer of food-and-beverage operations at the Covelli Centre to its management company is delayed until May 1.
A tentative deal, reached by both sides in December, would change the food-and-beverage vendor from Centerplate, which has handled that responsibility since the city-owned center opened in October 2005, to JAC Management, the facility’s day-to-day management firm.
The plan was for JAC to take over Dec. 31. Then the date moved to March 1.
Centerplate has agreed to the change, but its board of directors hasn’t given final approval.
Anthony Donofrio, an assistant city law director handling the vendor contract, said a Centerplate attorney called him last week requesting the transfer occur May 1.
Because the switch can be called off by Centerplate before it gives final approval, the city doesn’t have much of a choice but to agree to the delay, he said.
“We don’t want them walking away from the deal,” Donofrio said. “But in fairness to the city, we want them to stand by their obligations and commitments. We have an agreement in principle, but Centerplate threw a monkey-wrench into things with the May 1 change.”
JAC first proposed the switch in April 2011.
In a prepared response, a Centerplate spokesman said the company “is committed to ensuring a smooth and orderly transition to a new hospitality provider at the Covelli Centre. Throughout this process, our focus has remained on maintaining the high standard of hospitality our guests deserve. Centerplate is working closely with the city of Youngstown to complete the transition process in the very near future.”
Donofrio said a Centerplate attorney told him the delay is because the company wants to be in compliance with federal law on employee separation issues and wants give its workers enough time to inform them about the change.
“But the employees are staying there [and will work for JAC] so I don’t see that as an issue,” Donofrio said. “I don’t want to accuse them of delaying it. It’s easy to speculate, but I don’t know definitively.”
Donofrio and Mayor Charles Sammarone said the center had some good shows recently, generating revenue for the food-and-beverage vendor there. That includes the Feb. 18 Miranda Lambert sold-out concert, and an April 16 Sugarland concert is also expected to do well.
“We’ve done everything we can do,” Sammarone said. “Now we have to wait for Centerplate.”
The delay will have “no impact” on the April 21 Big Tap-In Real Craft Beer Festival, said Eric Ryan, head of JAC and the center’s executive director.
“Centerplate has agreed in writing to let the beer festival still go on without any objection, and they won’t be selling beer during the festival,” Ryan said.
Transferring the food-and-beverage services was going to increase the city’s profit on that item by about $50,000 a year, city officials say. But that would be for a full year, and the first few months of a year are the center’s busiest.
The city’s profit on food-and-beverage sales was $168,554 last year, $166,549 in 2010 and $179,319 in 2009, Ryan said. The city receives 23 percent of the center’s net food-and-beverage profit with Centerplate receiving the rest. The city’s percentage increases to 29 percent under the JAC plan.
Under the proposal to get Centerplate to leave, the city would pay the company the balance of the $1.2 million it is owed for equipment and materials bought by Boston Culinary, Centerplate’s predecessor at the center, when the facility was built in 2005. That’s about $370,000. Centerplate bought Boston Culinary in 2009.
In the deal, the city would receive all of Centerplate’s equipment and materials, and will retain the current staff.
The new deal would break the 10-year exclusive contract the city signed with Boston Culinary that expires in September 2015.