Penn Square Partners (PSP) received a ‘sweet heart’ contract from the Convention Center Authority, in part because board members were not given the opportunity to read the terms as requested by the minority county appointiees or, according to a city appointee, did not consider reading to be necessary since it had been reviewed by counsel.
The concession contract calls for PSP to only pay a commission of 5% rather than the usual 25% to 30%.
Last year’s the revenue from food concession came to $180,000 based on 5%. Had it been even 25%, there would have been an addition $720,000 to apply against the anticipated current million dollar shortfall for the year.
The 2011 audited Cash Flow indicated a loss of $1,224,017, and this was before setting aside any allowance for replacement which is standard practice.
With a normal reserve for replacement which is missing from the report, the deficit would balloon by a million dollars and likely more. It will not be long before wear and tear on the facility will require major expenditures. And the costs of renovation and replacement will get greater year after year.
Nevertheless, if all of the terms and conditions were established by an outside arbitrator based on standard industry norms and the contracts adjusted accordingly, the anticipated million dollar current deficit, before any reserve for replacement, would disappear.
Any effort by the County Commissioners to assist the Convention Center Authority should be in part conditioned upon revisions of the Authority’s contracts with Penn Square Partners.
EDITOR: The above is a revision to the original posting which gave a lower concession revenue figure and incorrectly reported that the concession contract was with a subsidiary of S. Dale High rather than with PSP.
In the words of Star Trek’s Captain Picard………”County Comissioners…..Make it so”!!!!!!!!