10/23/2024
Item# 4.D
Santa Clara Stadium
Authority
Second Amendment to the
Concessions Operating
Agreement with Levy Premium
Foodservice
SCSA October 22, 2024
ARACAR CAN AUTHORITY
Item #4.D, RTC # 24-925
1 Agenda
• Introduction and Parties Involved
• Service Standards and Requirements
• Payment Structure and Calculations
• Joint Operating Costs - Current and Proposed Changes
• Impact of Net Receipts and Financial Implications
• Rationale for the Second Amendment
• Staff Analysis
• Next Steps
• Staff Recommendation
SCSA
SANTA CLARA CADILM AUTHBRITY
2 POST MEETING MATERIAL 1
10/23/2024
Introduction and Parties Involved
• Agreement Overview
• Initial Agreement: Signed on February 20, 2018 - Agreement is between Levy Premium Foodservice (Concessionaire) and Forty Niners Stadium Management Company (Stadium Manager)
• First Amendment: Signed on June 1, 2021 - Stadium Manager granted the Concessionaire the right to provide certain food, beverage and catering services at Levi's Stadium
• Roles of the Parties
• Stadium Manager: Responsible for overseeing operations at Lev's Stadium • Concessionaire: Responsible for providing food, beverage, and catering services at Levi's Stadium
SCSA
SAT CLARA STEEN ANTHORNY
3 Concessionaire Service Standards
and Requirements
• First Class Service Requirement
• Concessionaire is required to deliver all Food & Beverage services to a "First Class" standard
• Definition of First Class
• Highest quality of service in comparison to three top NFL stadiums • Compliance with the terms of the Agreement, legal requirements, and Stadium Manager's standards
• Includes health, safety, quality, customer satisfaction, and design standards set by the Stadium Manager
SCSA
SANTA CLARA STADIUM AUTHORITY
4 2
10/23/2024
Concessionaire Service Standards
and Requirements (cont.)
• Sufficient Inventory
• Concessionaire must ensure enough stock of refreshments at all sales points throughout the Stadium during events
• Key Products
• Required to maintain inventory for the top five revenue-generating items in:
• Food
• Alcoholic Beverages
• Non-Alcoholic Beverages
Products determined by previous year's sales or as directed by the Stadium Manager SCSA
SANTA CLARA STADIUM ANTHORUTY
5 Concessionaire Payment Structure
and Calculations
• NFL Events
• Concessionaire's payment based on StadCo's share of Net Receipts • Net Receipts = Gross Receipts from NFL Events minus certain costs (operational, joint, and management-related)
• Non-NFL Events
• Payments calculated on a percentage of Gross Receipts from events organized by the Stadium Authority
• Proposed Second Amendment
• Revises the definition of "Net Receipts" to change the allocation of Joint Operating Costs, increasing StadCo's share
SCSA
SANTA CLARA STADIUM AUTHORITY
6 3
10/23/2024
Joint Operating Costs -
Current and Proposed Changes
• Current Joint Operating Costs
• Fixed 51% of Joint Operating Costs
• Costs related to non-attributable NFL or Non-NFL Event operations of Food & Beverage services, including: office supplies, computer systems, utilities, cleaning services, pest control, costs of uniforms, smallwares, and necessary licenses or permits • Proposed Second Amendment
• A pro rata Variable Rate using the percent of Gross Receipts from NFL Events over the total Gross Receipts from both Stadium Authority Events and NFL Events for such Fiscal Year • New pro rata share for Fiscal Year 2024
• 70% for NFL Events
• 30% for Stadium Authority Events
• Future years will have estimated and settled costs in a similar fashion SCSA
SARTA CLARA STADIUTY
7 Impact on Net Receipts and
Financial Implications
• Net Receipts Definition
• After-amendment definition includes the shift in Joint Operating Costs • Net Receipts = Gross Receipts minus StadCo Operating Costs, Joint Operating Costs, preference payments, renewal funds, and other stipulated fees • Impact on Costs
• Forty Niners SC Stadium Company (StadCo) will assume a larger share of Joint Operating Costs, reducing the financial burden on the Concessionaire • No impact on the Stadium Authority's revenue, as their share is based on Gross Receipts • The Concessionaire's service standards remain unaffected by the amendment SCSA
SANTA CLARA TO TADIUM AUTHORITY
8 4
10/23/2024
Rationale for the Second Amendment
• Reason for Proposed Change
• Adjust Joint Operating Costs to better reflect the financial responsibilities tied to NFL and Non-NFL events. Ensures StadCo covers a proportionate share of costs related to NFL event revenues
• Pro Rata Allocation
• The 70% NFL / 30% Non-NFL event cost split more accurately reflects the revenues and activities taking place at the Stadium
SCSA
SANTA CLANA STADIUM AUTHORITY
9 Next Steps
• Council/Board Questions on Staff Presentation
• Public Comment
• Council/Board Deliberations
• Council/Board Action
SCSA
SANTA CLARA STADIES AL THORIT
10 5
10/23/2024
Staff Recommendation
• Approve the Stadium Manager's request to execute a Second Amendment to the Concessions Operating Agreement with Levy Premium Foodservice Limited Partnership on the terms presented.
SCSA
SANTA CLARA STADIUM AUTHORITY
11 SCSA
Santa Clara Stadium Authority
12 6