Friday, March 30, 2012YOUNGSTOWN, Ohio – JAC Management Group LLC will take over food service operations at the Covelli Centre beginning April 17, with the Mahoning Valley restaurateur that's the arena’s naming rights partner serving in an advisory capacity.
The consulting agreement between JAC and Warren-based Covelli Enterprises is one of three pacts concerning food service at the city-owned Covelli Centre approved Thursday by the Youngstown Board of Control. Also approved were the contract with JAC Management, with operates the arena for city, and a dissolution agreement with Centerplate, which has provided food service at the building since it opened in 2005.
“This is another big step in furthering the Covelli Centre,” said Eric Ryan, executive director of the Covelli Centre and president of JAC Management. Having the arena’s food service no longer run by a third party “and basically run in house” will provide greater flexibility in booking events, he said.
The food service will run concurrent with JAC’s five-year contract to manage the Covelli Centre, which the city entered into in 2008.
“I don’t think the patrons are going to notice any difference in the food and beverage operations,” said Anthony Donofrio, deputy general law director for the city. Under terms of the agreement, the center will retain most of Centerplate’s employees at the arena.
Changes may not be coming right away but they will be coming, Ryan clarified. “We are looking to revamp the concessions,” he said. The goal is to incorporate food and beverages into the total Covelli Centre experience “so we are going to be looking to make sizable changes,” he said.
As those changes are made, Ryan and JAC will rely on Covelli Enterprises’ “wealth of experience” in the food service industry. The company, which had been the McDonald’s chain’s largest franchisee, is now the largest Panera Bread franchisee and is a franchisee of O’Charley’s restaurants. Covelli Enterprises, which is owned and operated by Sam Covelli, will not be paid for providing consulting services.
Sam Covelli said he “just wants to help,” according to Ryan. “He’s not looking at it to make money here. He wants to help and further take us to that extra level.” Covelli Enterprises’ “wealth of experience in the industry is going to be a huge help to us” in making decisions, changes and the guest experience better, he added.
If his name is on the building, Covelli wants guests “to have the best experience possible,” said Allen Ryan, director of corporate affairs for Covelli Enterprises.
“At the end of the day we, being Covelli Enterprises, want to do what’s best for the city and the center and the guests that go into that building that has our name on it. So if we can be helpful in that process, then we’re going to do it,” Ryan added.
Changes could include offering some more affordable items at concessions and stepping up the food and beverages at the suite level. “The biggest change is that we plan to be a lot more competitive” for nontraditional events for the center such as weddings and parties, Eric Ryan (no relation to Alan) said.
According to the terms of the agreement, JAC will receive 3% of the money from concessions and the remaining 97% will go to the center’s bottom line, Ryan said. With Centerplate, the city received a 27% commission and the company got the remaining 73%.
Having JAC take over the food service operation at the Covelli Centre will save the city approximately $50,000 annually, according to an analysis by the city finance department, Donofrio reported.
The agreement also calls for the city to pay the remaining balance, about $383,000, on a $1.2 million loan for food service equipment in the building.
During the meeting, the Board of Control also approved and executed an environmental covenant between the city and the Ohio Environmental Protection Agency regarding the former Youngstown Building Materials property, 1505 Logan Ave. The city entered into an agreement three years ago to accept an $854,935 revitalization grant from the Clean Ohio Council to clean up the site. The city put up a 20% match.
The covenant is a document that states that the city, as owner of the property, “will utilize the land in a capacity that we were committed to and pledged to, which is for commercial and industrial use,” said T. Sharon Woodberry, city economic development director. Once the city receives a no-further-action letter from the state, it will begin to actively market the 9-acre site for development.
The site is “going to be something sought because it’s vacant land and 9 acres is a pretty decent size parcel,” she added. The city will either sell the property or offer it as a land grant, depending on the project.
The site could be “a bit more difficult” to market than other industrial sites successfully developed over the years “because there is still a lot that has to be done in the surrounding area in terms of other structures that need to be demolished,” she continued. ”That being said, businesses still need to conduct business and if there’s some way that we can pledge to make sure those other things are done, I think we’ll get a good, solid business there.”
Among the properties that need to be addressed is the former Aeroquip site, which the city controls. Testing has shown that “significant work” needs to be done on the site. However, future funding for the Clean Ohio program remains uncertain, and Youngstown and other cities are advocating for continued funding, Woodberry said.
Copyright 2012 The Business Journal, Youngstown, Ohio.