CITY COUNCIL STAFF REPORT
DATE: JUNE 30, 2026 BUSINESS & LEGISLATIVE
SUBJECT: APPROVE CONTRACT SERVICES AGREEMENT FOR FOOD AND
BEVERAGE SERVICES AT THE PALM SPRINGS CONVENTION
CENTER
FROM: Scott C. Stiles, City Manager
BY: Office of the City Manager
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 a Contract Services Agreement (Attachment A) for Food and Beverage Services at the Palm Springs Convention Center;
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 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
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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., (Savoury) 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.
On June 24, 2026, City Council considered item, 3.B., Attachment C, for the approval of Contract Services Agreement 26P118 with Ovations Fanfare L.P. dba OVG Hospitality (Ovations) 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. City Council continued this item and directed authority to the City Manager to extend the Savoury Agreement through July 9, 2026, and directed conversations with Ovations and Savoury with the City Manager, BBK, Conventional Wisdom and City Council liaisons (Negotiations Committee) with Savoury and Ovations to discuss opportunities to collaborate.
STAFF ANALYSIS:
Following the conclusion of the June 24, 2026, Council meeting Best Best & Krieger LLP (City Attorney’s firm) have facilitated continued negotiation services with Ovations and Savoury.
Members of the Negotiations Committee had a number of discussions with Savoury’s and Ovations commencing on Thursday, June 25 and continuing through June 29, 2026.
As a result of the above meetings revisions to Contract Services Agreement 26P118 are outlined below and included as a redline in Attachment A.
Modifications to Exhibit “A” Scope of Services:
1. Article 1 Definitions
a. Catering and Concession Services means the exclusive sale and provision of food and beverage services and the other privileges granted to and duties imposed upon Contractor by this Agreement for City for the Convention Center, except for items found in Exhibit D, Buy Out and as otherwise outlined in this Agreement.
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b. Subcontracts and Subcontractors means any person or any entity, other than Outside Caterers, who contracts with Contractor to provide goods or services to Users at the Center. Use of Subcontracts or Subcontractors shall be in accordance with the City’ Local Business Preference Program (Program).
2. Article 4 Services
a. 4.1.1 The Contractor shall provide Catering and Concession Services and Novelty Services, and all other food and beverage services required by this Agreement for City. Such services shall be provided on an exclusive basis, so that no other party shall have the right to provide such services at the Convention Center without the prior written consent of Contractor, except for items outlined in Exhibit D Buy Out and the Palm Springs International Film Society’s International Film Awards & Gala for 2027 and 2028, only (provided that the third parties described on Exhibit D and Palm Springs International Film Society’s International Film Awards & Gala must meet Contractor’s insurance requirements and must not sell or service alcohol except through Contractor).
b. 4.2.6.4 Contractor agrees to use local products and vendors whenever reasonable located in the Greater Coachella Valley area that are unique to Palm Springs and will provide a “sense of place” reflecting the City’s diversity and culture when operated at the PSCC, such as restaurants, food trucks, or other products (“Local Brands”). Local Brands may be operated by their local management teams at the PSCC to maintain the full authenticity of the concepts and brands. Local Brands are very important to the City so that Local Brand cuisines and experiences are featured in the PSCC food and beverage program as subcontractors to the Contractor. Contractor and City agree to execute an Exhibit A-1 to outline the objective requirements for Contractor’s use of Local Brands (to be measured by percentage of annual Gross Receipts) and a reasonable monetary remedy to encourage compliance. This Exhibit A-1 will be negotiated within 30 days of the Effective Date and return to the City Council for consideration.
c. 4.3.1.3 Notwithstanding the foregoing, the provisions of this Article
4.3.1, Published Prices shall not apply to the prices to be charged by Contractor for alcoholic beverages it may offer for sale at the Center. Prior to implementing any price change for any alcoholic beverages, Contractor agrees to Consult with the Facilities General Manager to obtain their input thereto. Nonetheless, the determination of the prices to be Charged for alcoholic beverages for sale at the Center shall rest solely with Contractor. d. 4.4.4.5 Providing quarterly updated statistics on community partnerships with local food purveyors, use of Local Brands, food donation services and sustainability efforts.
3. Article 6 Rights and Obligations of Contractor
a. 6.1.6 Contractor shall have the exclusive right to provide alcoholic beverages at any event held at the Center, including without limitation for City Council Staff Report
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the Palm Springs International Film Society’s International Film Awards & Gala for 2027 and 2028.
b. 6.1.3 Local Brands. Contractor shall provide a variety of innovative facility design concepts at the PSCC create a mix that includes, at a minimum, well know market-tested local or regional branded concepts, or proprietary brands through use of Local Brands at the PSCC in accordance with Exhibit A-1.
c. 6.5 Scheduled Events. Contractor shall serve as the PSCC exclusive food and beverage provider at all scheduled events, except as provided for in Exhibit “D” and the Palm Springs International Film Society’s International Film Awards & Gala for 2027 and 2028 only (provided that the third parties described on Exhibit D and Palm Springs International Film Society’s International Film Awards & Gala must meet Contractor’s insurance requirements and must not sell or service alcohol except through Contractor).
d. 6.7 City Use and Local and Community Non-Profit Group Use. During the Accounting Year, Catering and Concession services are available to the City in the Center for City Use events at actual cost and expense only for labor and food. “City Use” is defined in the Contract Services Agreement 25P206- Convention Center and Tourism Management Services. e. 6.7.3 Contractor and City agree to execute an Exhibit A-2 to outline the objective requirements for provision of food and beverage at the Facilities by Local and Community Non-Profit Groups. The parties will develop Exhibit A-2 to remove exclusivity for Catering and Concession Services up to a certain dollar threshold per event for these groups. Thresholds for this Exhibit A-2 will be negotiated within 30 days of the Effective Date and return to the City Council for consideration.
4. Article 11 Changes to City Policies
a. 11.13.3.2 Such labor organizations may include, but not be limited to, UNITE HERE Local 11, and UFCW 1167. Each Labor Harmony Agreement shall contain provisions under which the labor union, for itself and its members, agrees, at a minimum, to limit the right to engage in concerted economic action at the Convention Center aimed at bringing economic pressure to bear against the City and Contractor, including limitations of activities such as striking, picketing, lock outs, boycotting or any other disruptive labor action.
5. Article 12 Compensation
a. 12.1.5 Contractor agrees that for so long as total Gross Receipts in a given Accounting Year are $5.6 million or more, Contractor commits that the total commissions and other amounts paid to the City from Contractor’s operations from such year shall be at least $750,000 (and if actual commissions and other payments to City are less than $750,000 Contractor shall make an additional payment to the City within 45 days of the end of such Accounting Year to make up the difference). In the event total Gross City Council Staff Report
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Receipts in any Accounting Year are less than $5.6 million, the minimum commitment described in this Section 12.1.5 shall not apply to such year and instead the parties shall engage in good faith negotiations to reset the minimum commitment for the following Accounting Year.
6. Article 13 Accounting
a. 13.3.3.19 The cost of consulting fees paid to third parties for “special advisory services” up to $150,000 per year.
b. 13.4Non-Allowable Expenses. The following expenses shall not be included as Direct Operating Costs. Non-allowable expenses are to be paid by Contractor at its sole cost and expense.
c. 13.4.15 Costs associated with the initial purchase or installation of Enterprise Systems as defined in Article 8; such costs are included in either the amortization expense orf the Conventional Center Replacement Reserve Contribution which are Direct Operating Costs.
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, as outlined in the following tables.
The following tables and comparison details were provided by Chris Morgan, Regional Vice President, OVG Hospitality.
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Table 1 – Commission Deal
Table 2 – Management Fee
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A comparison of table 1 and 2 identify:
-$17.3M return on fee deal v $13.6M return on commission deal -$2.5M investment under fee deal v $1.25M under commission deal -Fee deal has a minimum annual guarantee of $750k while the commission deal has no minimum annual guarantee
Under the commission model, the following changes happen:
-No city use events at cost
-No community or non-profit use exceptions/special arrangements -Pricing decisions no longer made by city
-No reserve fund
REVIEWED BY:
Procurement & Contracting Manager: Tabitha Richards
Best Best & Krieger: Seth Merewitz
City Manager: Scott Stiles
ATTACHMENTS:
A. Contract Services Agreement 26P118
B. Public Integrity Disclosure Form
C. June 24, 2026, Staff Report, Item 3.B.