A company that was fired by convention center officials in Columbus, Ohio, received unanimous support by the Las Vegas Convention and Visitors Authority on Monday and will become the new food service contractor for the Convention Center and Cashman Field next year.
The authority’s board of directors voted 11-0 to approve a 7½-year contract with two three-year options with Volume Services Inc., doing business as Centerplate LLC, a British company with U.S. offices in Stamford, Connecticut.
The contractor is expected to gross $25 million to $30 million a year and, based on an escalating commission percentage in the contract, the LVCVA should receive an average $7.8 million in revenue a year.
The contract takes effect Jan. 1 — days before Southern Nevada’s largest annual convention, CES, brings more than 170,000 conventioneers to the city.
Chief financial officer Rana Lacer said the staff and board were aware of the company’s controversies in Columbus where the Franklin County Convention Facilities Authority terminated its contract with Centerplate.
Lacer said the LVCVA thoroughly investigated the matter and determined it was an isolated incident that involved wrongdoing by a public official. She said the LVCVA conducted numerous reference checks and determined that contracting with Centerplate would not be problematic after receiving high marks from other customers.
Three companies were selected as finalists for the contract, including the current vendor, Aramark Sports and Entertainment Services LLC, which has held the contract for 44 years.
Former Clark County Commissioner Bruce Woodbury, an attorney representing the other rejected bidder, Levy Premium Foodservice LP, told the LVCVA board in a public comment period that the board needed to consider “ethics, character and reputation” in its decision and that the Columbus matter “speaks for itself.”
Centerplate sued the Ohio authority in May for wrongful termination and said the authority board damaged the company’s reputation with accusations that it conspired with board members to win the contract.
The Columbus incident stemmed from allegations of collusion in the bidding process and eventually led to an admission of guilt by powerful Columbus lobbyist John Raphael, who was sentenced to 15 months in federal prison earlier this year. Centerplate had hired Raphael to help it win the Columbus food service contract unaware that he was under federal investigation for extorting campaign contributions for former members of the Columbus City Council.
The LVCVA board did not discuss the Columbus matters prior to the vote.
The approved Centerplate contract guarantees the LVCVA more than $58 million in revenue over the life of the contract as a part of its share of the contractor’s gross receipts.
Under terms of the contract, Centerplate would be required to invest $21 million, including $16 million in improvements to existing facilities and $5 million for equipment for a new exhibition hall planned in the Convention Center’s $1.4 billion expansion.
Lacer said the $16 million in improvements would occur over time and involve upgrades to kitchens, preparation areas and equipment. Centerplate also is expected to develop new pop-up food vending facilities that won’t disrupt traffic on trade show floors.
The deal enables the LVCVA to receive commissions based on tiered percentages of gross receipts ranging from 22.5 percent on the low end to 40 percent if total receipts hit more than $45 million. Lacer said the contract is expected to generate 8 percent more revenue to the LVCVA than under previous contracts.
John Vingas, senior vice president of operations for Centerplate, and Richard Ginzel, vice president of operations and general manager, will be the top executives for the company in Las Vegas.
Contact Richard N. Velotta at firstname.lastname@example.org or 702-477-3893. Follow @RickVelotta on Twitter.