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Food services at Covelli still paying off for Youngstown
YOUNGSTOWN
By having the Covelli Centre’s management company handle the building’s food-and-beverage services, the amount of additional money going to the city remained steady.
The city received $251,567 in profit from food-and-beverage sales for the first six months of the year that is used, in part, to fund the center’s operations.
But of that amount, the city wouldn’t have received $89,078 under a contract it had with Centerplate, the center’s previous food-and-beverage vendor. That $89,078 goes directly to the city’s general-fund budget.
JAC Management Group, the firm that manages the center, took over the food-and-beverage service in April 2012, and reworked the payment formula for the city.
Under the Centerplate deal, which took effect in October 2005 when the center opened, that company gave the city a flat commission based on gross sales and kept the rest for expenses and profit.
The JAC deal gives the city that same commission. But it also gives the rest of the money — minus the company’s expenses and a 3 percent profit — for food-and-beverage sales to Youngstown.
“That we’re able to take [almost] $100,000 a year [more] out of the facility is wonderful,” said Kyle Miasek, the city’s deputy finance director. “I’m grateful the building is generating that additional money. It helps to reduce the debt the city owes on the building.”
During the first six months of 2013, the city received $210,622 in revenue from food-and-beverage sales. Of that amount, the city wouldn’t have received $89,301 under its Centerplate agreement. It finished that year with $92,723 in additional food-and-beverage revenue that went into the general fund.
JAC’s projection for the second half of this year is an additional $14,197 in food-and-beverage revenue to the general fund.
“We expect to be close to that projection or possibly do better,” said Eric Ryan, the center’s executive director and JAC head.
That’s because the projection didn’t include last Saturday’s successful Rod Stewart concert, he said.
A record first quarter of the year, highlighted by an Elton John concert, and about three weeks of having the technical rehearsal crew of “Walking With Dinosaurs” at the center in June helped generate the food-and-beverage surplus, Ryan said. The “Dinosaurs” crew of more than 60 workers ate three meals a day at the center during the rehearsals, he said.
“In the future, we hope to attract more of these types of rentals during our traditionally slow period,” Ryan said.
The food-and-beverage surplus is combined with the center’s overall operating surplus — $382,593 as of June 30 — and a 5.5 percent admission tax the city charges on tickets sold at the center — $132,937 as of June 30 — to offset the city’s debt on the facility.
The city borrowed $11.9 million in 2005 to pay its portion of constructing the $45 million facility.
The city plans to pay $350,000 toward the principal this year, bringing that figure to $10.66 million.
The city is close to finalizing an interest rate on the remaining debt with Key Bank, said city Finance Director David Bozanich.
The interest rate was 1.4 percent last year. Bozanich said he expects the new interest rate, to be determined in the next week or two, to be less than that, but not as low as the 1 percent rate the city paid in 2012. Before that, the interest rate ranged from 5.34 percent to 6.88 percent, he said.