SMG Invests in F&B at DCU

The Civic Center Commision of Worcester, Mass., has extended by five years its contract with Philadelphia-based venue management firm SMG to run the DCU Center and, as part of the deal, will get some needed capital improvement funds.

SMG has had the contract to manage the DCU Center, which includes a convention center and an arena, since each part opened. With the extension, SMG will continue to oversee the convention center through August 2012, and the arena through June 2012.

During the negotiation process, Worcester City Manager Michael V. O'Brien brought up the need for better food and beverage services in the center. As a result, SMG's food and beverage division, Savor Catering, will take over those operations and the company will invest $300,000 in concessions equipment and portable kiosks.

Gregg Caren, senior vice president of strategic business development for SMG, said this type of deal is often struck during venue management contract negotiations.

"Every deal is a little different," Caren said. "For traditional F&B providers, based on how they're getting compensated for providing service, it's not uncommon for the provider to make an investment based on what's needed, and it's amortized over the life of the contract."

If the end of the contract is reached and the investment isn't completely amortized, he added, the facility may reimburse the manager for the amount that remains.

According to Caren, these kinds of deals make sense because "if an investment will help increase sales and service for the venue, it betters things not only for the owner, but for us."

He described the DCU Center as a busy facility in the suburban Boston marketplace. The convention center has found its niche with regional and consumer shows, he added.