CITY COUNCIL STAFF REPORT
DATE: JUNE 24, 2026 BUSINESS & LEGISLATIVE
SUBJECT: APPROVE CONTRACT SERVICES AGREEMENT NO. 26P118 WITH OVATIONS FANFARE L.P. DBA OVG HOSPITALITY FOR FOOD AND
BEVERAGE SERVICES AT THE PALM SPRINGS CONVENTION
CENTER
FROM: Scott C. Stiles, City Manager
BY: Procurement and Contracting
SUMMARY:
The existing Agreement for food and beverage services for the Palm Springs Convention Center is between the City and Savoury’s Good Earth Cuisine, Inc., as assigned to the City on September 28, 2025, with a term through June 30, 2026. This action will approve Contract Services Agreement 26P118 with Ovations Fanfare L.P. dba OVG Hospitality for an initial 5-year term.
RECOMMENDATION:
1. Approve Contract Services Agreement 26P118 (Attachment A) with Ovations Fanfare L.P. dba OVG Hospitality with a revenue based commission of 7.5% on gross receipts and 15% on net profit for food and beverage services at the Palm Springs Convention Center for an initial 5-year term commencing on July 1, 2026, and continuing through June 30, 2031, with a 5-year optional extension at the sole discretion of the City;
2. Authorize the City Manager or designee to execute all necessary documents.
BUSINESS PRINCIPAL DISCLOSURE:
The Public Integrity Disclosure is included as Attachment B.
BACKGROUND:
On July 21, 2025, City Council, in tandem with the approval of the Convention Center and Tourism Management Services Agreement, approved the assignment of vendor contracts between ASM Global to the City during the transition from ASM Global to OVG for the operations and management agreement for the Palm Springs Convention Center. At that
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time, the food and beverage contract was an exclusive agreement between ASM Global and Savoury’s. This agreement expired on September 27, 2025, coterminous with the expiration of the ASM Global Contract. Encore, the facility’s Audio/Visual vendor, also had a contract expiring on September 27, 2025, and both were assigned temporarily to the City.
The current agreement with Savoury's Good Earth Cuisine, Inc. is a commission-based concession in which the contractor functions as the economic principal of the food and beverage operation, absorbing all operating costs and remitting a tiered percentage of Gross Receipts. The proposed agreement with Ovations Fanfare, L.P. (dba OVG Hospitality) is a management fee structure in which the City is the economic principal:
revenues and Direct Operating Costs are run through a City-controlled account, the City retains Net Profit subject to defined splits, and the contractor is compensated through a fixed Management Fee and a smaller commission. The proposed agreement also reflects the City's resumption of direct contracting authority following the conclusion of the prior SMG management arrangement. Further contract comparison is detailed below.
STAFF ANALYSIS:
Request for Proposals (RFP) Process:
On March 19, 2026, the Procurement and Contracting Department issued Request for Proposals 01-26 (RFP 01-26) for food and beverage services for the Palm Springs Convention Center based on the specifications provided by the Economic Development Department. RFP 01-26 was advertised in the local newspaper, published on PlanetBids website with notification to 56 registered vendors and 500 through Bid Broadcast. This outreach resulted in the submission of 3 proposals.
The following firms submitted proposals for consideration by the April 15, 2026, deadline. Ovations Fanfare, L.P. – Greenwood Village, CO
RKCC Hospitality Group LLC – San Antonio, TX (Non-Responsive) The Magnolia Grille – North Hollywood, CA (Non-Responsive) An evaluation committee consisting of City staff from the City Manager, Economic Development, Human Resources, Finance and Treasury, and Parks and Recreation Departments, as well as external committee members representing Visit Greater Palm Springs, Palm Springs International Film Festival, ESRI, and a local restaurateur reviewed and scored the proposal received against the criteria published in the Request for Proposals. Criteria included the firm’s experience, references, staff’s experience, understanding the scope of work, comparable facility information, retail and cost of food, financials, local branding, local preference, level of investment and cost proposal.
OVG Hospitality has demonstrated a strong track record of successfully transforming and enhancing food and beverage operations at convention centers through strategic City Council Staff Report
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operational improvements, revenue optimization, and elevated guest experiences. At the Arvest Convention Center in Tulsa, OVG redefined the food and beverage program following its 2023 transition by modernizing service delivery, increasing per-capita spending, strengthening local culinary partnerships, and driving measurable event-by- event revenue growth.
At the Palm Beach County Convention Center, OVG led a comprehensive overhaul of the food and beverage program, including a complete redesign of catering operations and the activation of previously underutilized concession opportunities. These initiatives generated sustained double-digit catering growth, increased overall revenues, and further positioned the facility as a premier destination while supporting the local economy.
Similarly, following its 2025 transition at the Pasadena Convention Center, OVG rapidly stabilized and enhanced food and beverage operations by improving service quality, restoring client confidence, and implementing a structured concessions program that created new revenue streams. Through effective staff retention, operational activation, and client-focused service delivery, OVG achieved measurable growth across key events within its first six months of management.
Collectively, these convention center engagements demonstrate OVG’s ability to successfully transition operations, increase food and beverage revenues, enhance customer experiences, and create scalable, community-focused programs that deliver measurable financial and operational results.
The evaluation committee and City staff recommend approval of Contract Services Agreement 26P118 with Ovations Fanfare L.P. dba OVG Hospitality with a revenue based commission of 7.5% on gross receipts and 15% on net profit for food and beverage services at the Palm Springs Convention Center for an initial 5-year term commencing on July 1, 2026, and continuing through June 30, 2031, with a 5-year optional extension at the sole discretion of the City.
Agreement for Food and Beverage Services:
This Contract Services Agreement (26P118) makes changes from the prior Agreement form, previously held by the Palm Springs Convention Center Operations and Maintenance Operator, AEG Management Palm Springs, LLC (AEG). First, this Agreement shall be between the City and Ovations Fanfare L.P., providing the City with direct oversight and control of the operations, while still allowing day to day activities to be managed by the Operations and Management (O&M) operator, OVG360, for the Convention Center.
Additional key changes include:
Transition from a percentage based fee approach to a management fee contract. Shifts focus from controlling costs for increased profit to Contractor to increasing sales for increased profit.
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Risk is shared between O&M operator and Food & Beverage (F&B) operator under management fee, rather than F&B Operator assuming all risk in the percentage based model, and allows:
oFlexibility on pricing
oMore control of menu offerings
oFocus on staffing levels, service and food quality
oIncreased availability of food service during non-peak times, i.e., early morning, late evening, event move-in/tear-down periods. oEliminates chargebacks for F&B services for client site visits and other hospitality uses
Provides the contractual vehicle to use local products, branding and vendors Addition of annual contribution to a Capital Replacement Reserve in the amount of $350,000/year
Investment into the PSCC
Capital Contributions
Ovations has agreed to give the City $2,500,000 as a Capital Investment, with up to $250,000 dedicated to transition services and $2,250,000 toward any improvements to the PSCC. The $2,250,000 (and any possible remaining funds from the $250,000) can be used at the City’s sole discretion but with “close consultation” with Ovations. Some options for the use of the $2,250,000 could include using the funds immediately to buy down the costs of the larger renovation project, specifically the kitchen improvements, or hold the funds in reserve for any ongoing maintenance that may arise before or after construction, but during the term of the Agreement. The City may also amortize the contribution over 5 years; however, the use would remain the same.
Local Brands:
Ovations will use local products and vendors whenever reasonable. This shall include vendors located within the Greater Coachella Valley that are unique to Palm Springs and will provide a “sense of place”, reflecting the City’s diversity and culture when operating at the PSCC. Local Brands may be operated by their local management teams at the PSCC to maintain the full authenticity of the concepts and brands.
Ovations has developed Neon Palm Local, a platform designed to bring the best of Palm Springs and the Coachella Valley into the PSCC in a way that is flexible, visible, and built to perform. This program will provide portable kiosks during larger conventions, smaller focused activations for targets programs, and flexible, strategic concession points designed for rotation.
Staffing:
The majority of the staff currently employed by Savoury’s will retain their jobs. Both Savoury’s and Ovations will work together to interview and onboard staff to ensure a City Council Staff Report
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smooth transfer and continuation of employment.
Similar to the operations and management agreement, this agreement includes a labor harmony clause outlining that for the duration of the term of the Agreement, the food and beverage services at the PSCC is a source of tax and other revenues to the City, and that the City has an interest in ensuring that the operation of the food and beverage services at the PSCC are not disrupted by labor disputes. As a result, Ovations agrees to enter into one or more labor harmony agreements, each of which shall be subject to the parties mutual agreement, each acting in its sole discretion if labor organizations which represent workers in Palm Springs that have indicated or may indicate their intent to organize operation and food and beverage workers at the PSCC.
Ovations has presented six candidates to fill the two essential positions of General Manager and Executive Chef for the food and beverage services Agreement. Following approval of this Agreement, interviews are scheduled to make such selections. It is staff’s intent to have representatives from the City, Visit Greater Palm Springs, and the PSCC to oversee these selections. The City Manager will update the Council accordingly as these selections are made.
Term:
The proposed Agreement includes an initial five-year term with an optional five-year extension option at the sole discretion of the City.
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Compensation:
Table 1 (Sample Management Fee Calculations)
The following table, Table 2, outlines costs and commissions to be debited against Gross Receipts, along with authorized operating expenses to following these debits.
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ITEM DESCRIPTION Percentage
(Rate)
1 Capital Replacement/Reserve Amount (over contract
Term)
$1,750,000
2 Capital Replacement/Reserve Amortization over 5
years
$350,000
3 Gross Receipts Commission to City 7.5%
4 Gross Receipts Commission to Contractor 7.5%
Table 2
The following table, Table 3, outlines commissions afforded to the City and Ovations to be calculated against Net Profits, as demonstrated by the Sample Management Fee Calculations.
ITEM DESCRIPTION Percentage
(Rate) of Net
Profit
1 Net Profit to City (Level 1 = Below $5,000,000) 85%
2 Net Profit to Contractor (Level 1 = Below $5,000,000) 15% 3 Net Profit to City (Level 2 = $5,000,000+1 to
$10,000,000)
85%
4 Net Profit to Contractor (Level 2 = $5,000,000+1 to
$10,000,000)
15%
5 Net Profit to City (Level 3 = above $10,000,000+1) 85% 6 Net Profit to Contractor (Level 3 = above $10,000,000 +1)
15%
Table 3
The table below summarizes the differences between the current contract and the newly proposed contract:
Element Current Vendor Agreement 2026 OVG Hospitality (Proposed) Counterparty & model SMG (Convention Center Manager);
concession/commission — contractor is
principal and bears all operating costs
City of Palm Springs, directly; management
fee — contractor is agent, all revenue and
Direct Operating Costs flow through a
Catering & Concession Account
Contractor compensation Tiered commission on Gross Receipts:
26% under $4M; 28% on $4–5M; 30% over
$5M; plus 10% of rental services
Annual Management Fee of 7.5% of Gross
Receipts commission and 15% of Net
Profit.
City revenue capture $25,000 annual catering credit; 2% of contractor's Gross Receipts to a joint
marketing fund
7.5% Gross Receipts commission; 85% of
Net Profit; $350,000 annual deposit to
Convention Center Replacement Reserve
Fund, City catering services to be provided
at cost and to be debited against net profit
share.
Operating cost risk Borne entirely by contractor Borne by City through the Catering & Concession Account; OVG funds Net
Losses only in the first three months
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Contractor capital
investment
$50,000 total ($25K in 2014; $25K in 2015) $2,500,000 ($1.75M by Dec. 1, 2026; $500K by Year 1; $250K for transition),
amortized over 5 years; all resulting capital
is a City asset
Term & extension option 5-year term with one 5-year option 5 years (Jul. 1, 2026 – Jun. 30, 2031); one 5-year option held by City
Termination for
convenience
Manager could cancel without penalty after
the 3rd anniversary on 180 days' notice
City may terminate at any time, with or
without cause, on 30 days' notice; on
termination, City pays unamortized Capital
Investment ("Buyout Amount")Either party
may terminate the Agreement for an Event
of Default if the other party fails to make
required payments within 45-days, or fails
to cure a material breach within 30 days,
after written notice.
Performance security &
insurance
$50,000 surety bond; $5,000,000 GL per
occurrence plus $500K excess umbrella
$4,000,000 per occurrence and $5,000,000
aggregate General Liability, $1,000,000
Business Auto Liability, $1,000,000
Employer Liability, and $1,000,000 per
occurrence and $2,000,000 aggregate
Liquor Liability
Buy-Out-Fee:
A Buy-Out-Fee is a fee payable by the user to Ovations to use an outside caterer at the PSCC for the users event. An example of this use could be for a religious event that may require food and beverages to be prepared in a manner that Ovations may be unable to deliver or at the request of the user. The City through its Facilities General Manager of the PSCC shall have the right to require a Buy-Out-Fee from the user.
ENVIRONMENTAL ASSESSMENT:
The requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The requested action is to approve contracts for the above-mentioned services, and is exempt from CEQA pursuant to Section 15378(b), in that a “Project” does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the following City Council Strategic Plan Broad Goal: Economic Development.
FISCAL IMPACT:
The proposed agreement repositions the City from passive royalty recipient to operator- in-economic-substance. In exchange for assuming Direct Operating Cost exposure, the City secures (i) a $2.5 million contractor capital investment with City ownership of City Council Staff Report
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resulting improvements; (ii) a dedicated $350,000 annual replacement reserve; and (iii) 85% of Net Profit and a 7.5% Gross Receipts commission. Additionally, as demonstrated in the Sample Management Fee Calculations Table, the City would anticipate receiving an estimated annual revenues of $1,686,250.
REVIEWED BY:
Procurement & Contracting Manager: Tabitha Richards
Director of Finance and Treasurer: Kristopher J. Mooney City Manager: Scott Stiles
ATTACHMENTS:
A. Contract Services Agreement 26P118
B. Public Integrity Disclosure Form