Board Raises The Bar

January 26, 2007
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GRAND RAPIDS — Enhancing the food and beverage experience of its patrons is a reason the Convention and Arena Authority has decided to build a VIP club on the lower level of Van Andel Arena for holders of premium-seat and suite tickets.

“I think we’re looking for any type of traffic we can get. But I think what we’ll get is pre-event and post-event traffic. During the event? Absolutely, that would also be the case,” said Rich MacKeigan, SMG general manager and CAA executive director.

“We’ll have people who are dropping off their kids and give them a chance to get a bite to eat. So that would be an option. But I think we’ll get most of our traffic from functions that will be event related.”

But another reason behind the bar is to bring more revenue to the CAA from food and beverage sales and to the building’s major tenants, the Grand Rapids Griffins and Rampage, through marketing opportunities with sponsors. Arena concession sales at the halfway mark of the fiscal year were $70,000 higher than for the same period last year, and that hike comes after seven years of mostly stagnant sales.

“It has been well received by the tenants,” said MacKeigan of the pub that would feature food and drinks not available at the concession stands.

“The intent is for this not to be a ‘pitcher of beer’ place. We are looking at premium labels. The menu would be something new, something different.”

The idea for the bar emerged from the arena food and beverage contract talks held last spring between the CAA and SMG, which oversees daily operations at the arena. The CAA awarded SMG that pact last July, which has SMG Food and Beverage running the bar for the CAA.

As it now stands, the CAA will get 30 percent of the bar’s take for the first year with the contract being reviewed and possibly renegotiated each year. SMG has estimated the board’s net revenue ranging from $48,000 to nearly $110,000 a year, depending on traffic to the club.

A proposal made by Pioneer Construction Co. was selected over two others to turn arena Banquet Room A into the bar. MacKeigan said it would cost about $350,000 to do that. The work will start next Monday and take about two months to complete, so the club will open in April or May.

“Pioneer came in with a plan that met all of our needs, and financially was the best of the three,” he said.

The bar is tentatively called the Van Andel Arena Bar, but that could change as naming rights are being discussed. The plan is to open the pub before an arena event and close it a few hours after. If there isn’t an event at the arena, then the club, which will seat 100, wouldn’t open.

CAA Chairman Steven Heacock said he didn’t want the board’s bar to directly compete with downtown pubs, especially ones in the arena district. He also said having a bar inside an arena wasn’t a new idea. He pointed to the Palace of Auburn Hills as one that has had such a business there for a long time.

MacKeigan echoed Heacock’s sentiment about not wanting to compete with downtown pub owners.

“They view this as a continuation of what we’re doing,” he said of the owners he spoke with. “My hope is that the local bars and restaurants would see the opportunities the arena has created for them.”

The opening of the arena was largely credited with bringing about $25 million worth of private investment downtown, as two dozen taverns and restaurants opened in the sector after the arena debuted at Fulton and Ottawa, and many of those are still in business.

At least from the start, the CAA is looking at the VIP club as an amenity for those who purchase higher-priced tickets for events held in the building, like premium seat holders who pay a fee to have first shot at buying tickets to all events.

“It really does add great value to the premium seats, and those are selling well,” said Heacock.

“Initially, we’ll be looking at it as a ticketed space, but that is still being determined. If demand is not there with a ticketed event, then we may open it up,” said MacKeigan.

“(But) even if it’s made available to the general public, there won’t be much availability. There are only about 100 seats.”    

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