Council Contracts with JAC for Amphitheater, Arena
YOUNGSTOWN, Ohio – City officials believe they can quickly wrap up naming rights and other sponsorship agreements for the proposed riverfront park and amphitheater once new contracts with JAC Management Group are finalized.
City Council, on a pair of five-to-two votes, approved allowing the Board of Control to enter into agreements with JAC for operational food-service management for both venues during a special meeting last night.
Casting the dissenting votes were 3rd Ward Councilman Nathaniel Pinkard and 6th Ward Councilwoman Anita Davis.
“It will allow us to start to sit down with interested parties to talk about naming rights and sponsorship opportunities for the amphitheater project,” Mayor John McNally said.
McNally and Finance Director David Bozanich have met with several interested parties over the past year, many of whom expressed hope that JAC, based on its success operating the Covelli Centre, would be involved with the adjacent amphitheater as well.
“They’re sitting on the sidelines right now waiting to write the check. We have to find a way to allow them to write the check,” Bozanich said.
The finance director noted that parties interested in making “significant donations” to the project – in excess of $3 million – were waiting to see how the city proceeds. “We believe we are pretty close to being able to get significant financial contributions based on our ability to say who’s going to run the facility and this is how it’s going to be done,” Bozanich said.
The city loses “significant economic benefit” by going a different route, he added. “It’s like running three different households when you could have one household under one roof. It’s the spreading of the fixed cost structure that you’re unable to do with two management companies,” he said.
Under the agreement approved by Council, JAC would be paid $106,000 per year to manage the Covelli Centre and $1,000 per month to manage the amphitheater. The company would receive an incentive fee of 15% of net operating income above $100,000.
Under the food service agreement, JAC would receive 3% of gross receipts up to $599,999 per month; 5% of gross receipts between $600,000 and $1.2 million; and 6% of gross receipts in excess of $1.2 million.
The agreements will take effect in 30 days, per council rules. McNally said.
The proposed agreements were attached to the legislation. Should there be any changes to those agreements, the administration would have to bring them back before council for approval.
Councilman Julius Oliver, 1st Ward, said he had been in contact earlier in the day with “a very prominent” foundation in the area that was waiting for the outcome of yesterday’s meeting.
Councilwoman Basia Adamczak, who represents the city’s 7th Ward, said she was confused at earlier meetings as to why the contracts needed to be in place before the amphitheater was built. The benefit became clearer as she did more research, she said. Having JAC on board now would allow them to do bookings for next year.
Pinkard, who ran the meeting in the absence of Council President Chuck Sammarone, also questioned the need to rush into the contract when the existing agreement with JAC wasn’t due to expire yet. He said he had only seen the food service contract at yesterday’s meeting.
“I certainly don’t like voting on things that I haven’t seen,” he said.
Pinkard added that is uncomfortable voting on something the city hasn’t broken ground on yet, although he said he supports the amphitheater project. Davis also questioned the need to enter into the agreements now with JAC.
Site work is under way for the amphitheater and riverfront park project, which is expected to be completed in 2018.
“We have to let these people know that we have a project and this is how the project is going to proceed. They need to plan the expenditure of those types of funds,” Bozanich said.
Waiting until next year to approach those parties runs the risk of those funds being otherwise committed. Asked by Davis whether those parties would pay for naming opportunities before the amphitheater is built, the finance director said he believed they would “substantially commit beforehand.”
The agreements run from Jan. 1, 2018 to Dec. 31, 2022, with an automatic five-year renewal unless the city or JAC provides written notice on or before Sept. 1, 2022 of its intent not to renew the agreement.
The management agreement also contains a clause stipulating that if Eric Ryan, JAC’s president and executive director of the Covelli Centre under the contract, withdraws as principal of the company, the city can terminate the agreement with a 30-day notice.
Copyright 2017 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
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