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Having the center’s management firm run the food-and-beverage services has increased profits



Published: Fri, August 16, 2013 @ 12:10 a.m.

With JAC, food-and-beverage revenue jumps $89K in first half of 2013

photo

Ryan

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

Having the Covelli Centre’s management company take over the facility’s food-and-beverage services is proving to be a financial boon for Youngstown with more money collected in just the first half of 2013 compared with any other entire year.

As of June 30, the center generated $210,622 in food-and-beverage sales for the city.

If the city had retained Centerplate, the center’s vendor from its opening in October 2005 to its buyout in April 2012, during the first six months of this year, the city’s food-and-beverage share would have been $121,321.

That’s according to figures provided by Eric Ryan, the center’s executive director and head of JAC Management Group, the firm that runs the facility’s day-to-day operations.

But a deal with JAC Management Group provides additional income to the city from the sale of food and drinks.

Through that agreement, the city made an additional $89,301 through the first six months of the year.

“Operating the food-and-beverage department in-house is proving to be a great move by the city,” Ryan said. “The money is in addition to the [operating surplus and admission tax] and is truly extra money for the city as all of this would have gone to the former operator.”

Under the Centerplate deal, the center received a 30 percent commission based on gross sales. Centerplate kept the rest of the money for expenses and profit, Ryan said.

The JAC deal, which took effect April 17, 2012, has the same language on the gross sales and keeps money for its expenses as well as a 3 percent profit. But the remaining balance — $89,301 for the first six months of this year — goes to the city.

“It’s proven to be the right decision,” said Mayor Charles Sammarone.

Also, with Centerplate as the center’s food-and-beverage vendor, the company decided when it would provide those services, Sammarone and Ryan said.

“The big thing is we now control it and we can pick and choose so we can do more events,” Sammarone said.

It’s led to an increase in business, Ryan said, such as having a United Way of Youngstown and the Mahoning Valley dinner and a beer festival at the arena this year.

From April 17, 2012, to the end of that year, the money the city received for food and beverages under the JAC deal went from $175,090 to $196,416, an increase of $21,326.

The sale of food and beverages at the center is typically better during the first six months of the year than the last six months, Ryan said.

JAC had expected to give the city an additional $51,000 through the first six months of this year, but has done better than anticipated, providing $89,301 to the city, Ryan said.

“We’re extremely happy with the numbers,” Ryan said. “Our pitch to the city was if we eliminate a third party selling food and beverages, we could bring a lot more profit to the center and the city.”

JAC had budgeted an additional $10,000 for the city during the second half of the year. The company expects to at least meet that amount, Ryan said.

The city paid $355,935 in April 2012 to Centerplate for the balance of the $1.2 mil- lion that company was owed for food-and-beverage equipment and materials it bought 61/2 years earlier, and still uses.

So far this year, the center has seen a $266,093 operating surplus plus $144,532 from a 5.5 percent admission tax on tickets sold for events at the facility for the first six months of the year.


Comments

1walter_sobchak(1910 comments)posted 1 year, 1 month ago

If I read the figures correctly, the city received $21,326 additional in 2012 and $89,301 for the first half of 2013 for an increase in city income of $110,627 for which they paid Centerplate a buyout agreement of $355,935. This leaves a balance of $245,308 that the city still has to recoup but no term is mentioned as to length of the original agreement. It is possible that I am missing something like some expenses that the city is no longer incurring that makes this a better deal. While Ryan's management appears to be doing better (and I believe they are!), the numbers must be critically examined so there is a sound basis for comparison. I'm always suspicious when large numbers are thrown around indiscriminantly as someone is usually throwing up a smoke screen, especially when politcal leaders start patting themselves on the back.

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