Las Vegas Convention Center.
Centerplate execs are on the ground preparing the transition following award of a 7.5-year contract to provide food and beverage at the Las Vegas Convention Center beginning Jan. 1, 2017. Leading the charge are John Vingas, SVP, convention center operations for Centerplate, who is based in San Diego and will oversee the transition and setup, and Richard Ginzel, district manager, who has relocated from New Orleans to Las Vegas to be onsite GM.
“Richard signed on his house within hours of that vote,” said Diana Evans, Centerplate VP of marketing, referring to the Oct. 24 board vote, 11-0, awarding the contract to Centerplate. “He has a tremendous resume and has been in this industry for many years.”
Hugh Sinnock, VP of Customer Experience, Las Vegas Convention and Visitors Authority, said the new contract calls for Centerplate to pay the LVCVA a commission of 22.5 percent of the first $20 million in gross sales. That goes up 2.5 percent for each $5 million in gross receipts above that benchmark. The contract includes two three-year extensions to be negotiated.
Historically, gross sales for food and beverage have been in the $24-$27 million range annually. “We heard from Centerplate, as well as the others, we could do better here,” Sinnock said. “They clearly feel we could do much more here.”
The average estimated income to LVCVA would be $7.8 million annually. “We want our partner to make money; we want them to be profitable,” Sinnock said. “We’ll do about 8 percent greater off the bat than with Aramark. We’re not going backwards.”
Aramark has had the food contract with LVCVA for 44 years, including the last 15-year contract for which they invested heavily in the South Hall kitchen, among other changes. Aramark and Levy were the other two finalists for this new contract. Sinnock said shortening this contract to 7.5 years is in line with other new business practices for LVCVA, noting the contract with Telcomm is also seven years this round. The extra half-year on the Aramark contract is to avoid renewing Jan. 1 next time, since the first six months are the busiest at the center and they do not want to be transitioning providers at the same time they prepare to host the Consumer Electronics Show in January ever again, Sinnock said.
Centerplate is also investing $21 million in capital improvements and transition expenses, of which $5 million is earmarked for the planned expansion of the Las Vegas Convention Center. Of the $16 million available now, Sinnock anticipated most would not be drawn down until near the end of the first year.
“Centerplate didn’t come in and say this is what we’re going to do,” Sinnock said. “They said we want to work with you over the first few months to see how the building flows, how the traffic flows, how we can improve things. Eventually we’ll agree on it.”
Celebrating at a Centerplate Client Dinner during the International Convention Center Conference in Pasadena are Hugh Sinnock, LVCVA; Chris Verros and Kay Towner, Centerplate; Terry Jicinsky, SVP of Ops for LVCVA; and John Vingas, Centerplate. (VT Photo)
He noted one idea that will come to fruition sooner than later is more use of the plaza. Centerplate has already noted the lines for coffee early in the day inside the doors and recommended permanent stands on the plaza to catch that crowd with snacks and drinks to ease congestion indoors. They also talked about a European-style market stations instead of cafeteria lines at Lucky’s, Sinnock said.
Sinnock is excited about expansion plans. Initial talk of expansion started 10 years ago, but when the great recession hit in 2008-09, they decided to hold off. Now, the footprint has changed dramatically, particularly in acquisition of 26 acres where the Riviera stood, which they refer to as the Diamond Lot.
Two weeks ago, the governor of Nevada signed legislation increasing the room tax one-half point that will generate revenue to bond $1.4 billion for the convention center expansion. The first phase will cost $850 million. The balance will be set aside for renovation of the current building.
The next step is to hire an architect and get into design, which Sinnock projected will take place in early 2017. “We can build a building [on the Diamond lot] without disrupting the shows in this building,” Sinnock said. “We will add 600,000 sq. ft. of exhibit space and a total of one million sq. ft., one story. That will put us at 2.6 million sq. ft. of exhibit space and 4.2 million sq. ft. under roof. We have 144 meeting rooms, 250,000 sq. ft., and we’ll add another 100 rooms easy.”
If it takes eight months to design, they’ll be in the ground the first quarter of 2018, and open late 2019. “Don’t hold me to that. Things change,” Sinnock said.
Centerplate will be a major participant in plans for the expansion. They have already brought ideas for changing food service as it is now.
Evans noted Centerplate has partnered with Elizabeth Blau and Associates, a Las Vegas restaurateur and entrepreneur, on improving the experience at the LVCC. “We do intend to work with her to bring Honey Salt, one of her award winning restaurants, into the center,” Evans said.
“We take great pride in supporting local vendors and community partners. We are reaching out through the Latin Chamber of Commerce and community organizations to look at all concepts and opportunities that would be a fit,” Evans continued.
The result will be a mix of “hyper-local"; a Taste of Las Vegas people would not get if they didn’t step off the Strip. It’s a remarkably global city. There will be the national brands you expect, like Starbucks, but also an opportunity to sample what is unique about the region,” Evans said.
Centerplate has already signed an agreement with the Culinary Union and will retain the current staff through the transition. The total headcount will remain about the same, Evans said.
As to FF&E, Centerplate is assessing the equipment now. Evans said there will be a new POS (point of sale) system.
“We have an advantage in the fact LVCVA invested heavily in its wireless infrastructure last year,” she added. “That’s just great for us and for the folks who will be visiting.”
Sinnock was optimistic that with the expansion, annual food and beverage sales may easily hit the $35-$40-million range. It’s already a moving target, depending on the shows that come in. ConExpo, which will be there in 2017 in its every-three-years cycle, does $3 million in food sales in a five-day show, he said by way of example.
LVCC is largely a trade show convention center, doing very few corporate or public events. Food sales are 55/45 concessions versus catering, unusual for a large convention center like this one. The catering is largely in-booth sales, not banquets.
“It’s an honor, candidly, to be chosen to operate in this facility,” Evans said. “Everyone brought their A-game [to the bidding process]. We were told to do so in the prebid meeting with the consultant (Bill Caruso) and procurement office. I’m sure all competitors took that to heart; I don’t think it was a lay-up at all.”
Interviewed for this story: Hugh Sinnock, (702) 892-7582; Diana Evans, (203) 975-5910