REPORT TO THE CITY COUNCIL
FROM: RUTH F. QUINTO, CPA, Assistant City Manager
Office of the City Manager
BY: BRIAN BARR, Director
General Services Department
SUBJECT
Title
Approve a Service Agreement with Pardini’s Inc. of Fresno, California, to provide catering and concession services at the Fresno Convention and Entertainment Center, with tiered revenue-sharing and concession management payment terms, for three years with two optional one-year extensions (Bid file 12400335)
Body
RECOMMENDATION
Staff recommends Council approve a Service Agreement with Pardini’s Inc. of Fresno, California, to provide catering and concession services at the Fresno Convention and Entertainment Center for three years with two optional one-year extensions.
EXECUTIVE SUMMARY
On August 29, 2024, Council approved the award of catering and concession services to Pardini’s Inc. at the Fresno Convention and Entertainment Center, which includes Selland Arena, Valdez Hall, Saroyan Theater, and the Convention Center. The award was approved with the condition that the Service Agreement be returned to Council for final approval. Pardini’s was selected based on their ability to offer diverse cuisines and simultaneously accommodate multiple events occurring on the same day. They employ over 200 staff members and have invested in mobile equipment to support special event demand needs.
BACKGROUND
The Office of the City Manager is responsible for administering the services agreement for catering and concession services at the Fresno Convention and Entertainment Center. This includes Selland Area, Valdez Hall, Saroyan Theater, and the Convention Center.
On August 29, 2024, Council approved the award of catering and concession services to Pardini’s Inc. at the Fresno Convention and Entertainment Center, which includes Selland Arena, Valdez Hall, Saroyan Theater, and the Convention Center. The award was approved with the condition that the Service Agreement be returned to Council for final approval.
During the evaluation of the RFP, Pardini’s demonstrated their capability to provide catering and concession services for large conventions to small meetings and large public events to small private affairs. The Fresno Convention Center and Entertainment Center offers a variety of flexible spaces which requires a food service contractor with the ability to provide multiple types of cuisines at once. This is critical to the success and appeal of the Convention Center.
The Request for Proposals was published on Planet Bids on April 25, 2024, and advertised in the Business Journal on May 3, 2024. Subsequently, there were 290 potential proposers notified by Planet Bids, five of which downloaded the RFP documents. Proposals were received from Pardini’s, Inc. and SMG Food and Beverage, LLC dba SAVOR by the May 16, 2024 deadline. Council approved the award of catering and concession services to Pardini’s Inc. on August 29, 2024.
The City Attorney has approved the contract as to form.
Catering Services
Pardini’s is provided with the exclusive right to provide catering and concession services, however the City does reserve the right to allow the City limited special modifications in coordination with the negotiated approval of Pardini’s, including but not limited to Third-Party Service Providers.
For catered wedding events, customers may contract directly with third-party catering services for ethnic foods such as, but shall not be limited to: Hmong, Indian, Armenian, Mexican, Chinese, and Filipino cuisines. Under this Agreement, Pardini’s will provide wrap-around services, which includes the labor, bartenders, smallware, glassware, refrigeration, food prep equipment, warmers, and serving line equipment needed for a catered function. Pardini’s is responsible for holding and maintaining the alcohol license for catered events. As required by the Alcoholic Beverage Control, alcoholic beverages must be served by the license holder.
The customer will contract with and pay Pardini’s directly for the catering services provided at the event. Pardini’s will then remit to the Convention Center operator the portion of the proceeds that represents the City’s agreed-upon share of the proceeds as summarized below along with financial reports to support payment to the City. These net proceeds will be reflected in the operator’s Annual Operating Budget as “ancillary income.”
The fee paid to the City is to be calculated from percentages of Gross Sales, excluding sales tax, gratuities, employee sales, refunds, and pass-through rentals.
• 25% of Gross Sales of zero to $1.5 million from catering food and non-alcoholic beverage sales for all catering events serviced;
• 30% of Gross Sales of $1.5 million and greater from catering food and non-alcoholic beverage sales for all catering events serviced;
• 32% of Gross Sales from sale of all types of alcoholic drinks for all catering events serviced;
• 5% of Gross Sales from backstage catering for all catering events serviced;
• 0% of Gross Sales for City of Fresno sponsored catering events.
Pardini’s shall provide the City with a 25% discount on all services, food, and drink provided for City of Fresno sponsored events upon written approval by the City Manager.
Pardini’s will also provide a 5% discount on food and non-alcoholic beverages for all Fresno residents. This discount shall only be applied upon presentation of a current City of Fresno Utility Bill matching the customer’s name and address and prior to the agreement with the Customer. This discount does not apply to business functions.
With prior written approval, Pardini’s may request additional charges to a customer such as convenience charges, surcharges, service changes (non-gratuity), corkage fees, facility charges, etc. An explanation of the request for additional fees/charges shall be reviewed and considered on a case-by-case basis by the City Manager. Any fees approved by the City Manager shall be included in the Gross Sales calculation.
Concessions Services
Pardini’s will provide concession management and services for the Fresno Convention and Entertainment Center. Concession management services include dedicated onsite staff managing day-to-day operation, purchasing and management of food and beverage inventory, revenue collection and sales tax remittance, etc. Pardini’s will also hold and maintain the alcoholic beverage license for concession services. Pardini’s will be paid $5,500 per month directly from the Convention Center operator.
Pardini’s will remit to the Convention Center operator the concession sales proceeds less 6 1/2% of the Gross Sales as a management incentive fee supported by the applicable financial reports. Gross Sales refers to the total revenue (excluding sales tax and gratuities) generated from the sale of food, beverages, merchandise, and other goods or services offered at concession stands, kiosks, or mobile units before any deductions for costs, expenses, or allowances. These net proceeds will be reflected in the operator’s Annual Operating Budget as “ancillary income.”
Convention Center Revenue
The City’s net revenue to the Fresno Convention and Entertainment Center from catering and concessions is estimated at $500,000 annually.
ENVIRONMENTAL FINDING
By the definition provided in the California Environmental Quality Act (CEQA) Guidelines Section 15378, the award of this contract does not qualify as a “project” as defined by CEQA.
LOCAL PREFERENCE
Local preference is not applicable to this action; however, local preference was considered during the evaluation of the RFP. Pardini’s Inc. is a local business as defined in the Fresno Municipal Code.
FISCAL IMPACT
The funding has been included in the department’s line-item budget as part of the FY2025 adopted budget to cover the cost of catering and concession services.
Attachments:
Service Agreement