SMG Gets Arena Food Contract

April 28, 2006
Print
Text Size:
A A

GRAND RAPIDS — After 10 years of serving nachos and beer, Centerplate will be out of the food and beverage business at Van Andel Arena on June 30.

After 10 years of managing the arena, SMG will be in the food and beverage business there on July 1.

“We’re really doing this because of our faith in (SMG General Manager) Rich (MacKeigan) and his staff. There is some risk in doing everything with SMG,” said Steven Heacock, Convention and Arena Authority Chairman.

The comments from Heacock came after the board unanimously awarded the arena concessions contract last week to SMG, a “faith-based” decision that was also driven by finances, as SMG offered the CAA a bigger slice of the food and beverage revenue than Centerplate.

Starting on July 1 — the first day of the board’s new fiscal year — the CAA will begin receiving 53 percent of the gross arena concession sales and 19.5 percent of the gross catering and suite concession sales from SMG Food and Beverage LLC. Centerplate offered 50 percent and 17.5 percent, respectively.

The difference between the two is expected to return an additional $350,000 to the board over the three-year life of the contract, which also includes a two-year option that the CAA controls. The CAA expects to receive $8.25 million overall from the agreement with SMG. If the board had stayed with Centerplate, that return was estimated to be $7.9 million.

SMG also agreed to drop $50,000 from its basic management fee for running the arena, which will lower that figure to $300,000, and to give the CAA $50,000 to fund a study to determine whether an outdoor amphitheater would be a feasible summertime concert venue.

But Heacock said a study wouldn’t be done unless an appropriate and affordable site was found for the venue. About 40 acres would be needed, and the CAA is hoping that Kent County will make some inexpensive land near Millennium Park available.

SMG and the CAA are also looking into converting part of the arena into a sports bar, an effort that is expected to cost between $535,000 to $850,000. A couple of locations in the arena are being considered, including the street-level banquet area. Heacock said the bar would only be open during events should the project go forward.

“We don’t want to compete with neighboring businesses; we want to help them,” he said.

The CAA will be responsible for capital improvements to the concession areas and for maintenance of those areas. Current concession products and prices will be frozen for the next year, unless the board determines changes are needed. But some menu changes are more than likely to pop up in the future.

“The hope is we will have some innovation in the food offerings at the arena. With this contract, we will have a better ability to do that,” said Heacock.

Chris Bigelow of The Bigelow Companies, based in Kansas City, served as a consultant to the CAA during the evaluation process.

“I think he opened our eyes to areas that might have taken us longer to discover. But that’s why we hired him,” said CAA member Joseph Tomaselli.

“It was a thorough process, and Chris Bigelow was a great help,” added Lew Chamberlin, board member and chair of the Operations Committee.

Centerplate began serving at the arena in October 1996 when the building opened, and when the company was known as Volume Services America.    

Recent Articles by David Czurak

Editor's Picks

Comments powered by Disqus