Bid contract and demand open books
City leaders must stand strong in continuing to reduce the public subsidy of Packard Music Hall, despite claims by JAC Management, the private company managing the hall, that $100,000 in city funds is insufficient.
And if JAC is unwilling to proceed at that rate, then the city must publicly bid the contract — and demand more transparency.
During its tenure here, JAC Management has demonstrated what type of big-name acts can be booked at Packard Music Hall. That has included or will include big-name acts like Jay Leno, Josh Turner, Ted Nugent, Chicago, Blondie, Dwight Yoakam, Easton Corbin and more.
But it’s disappointing that the company now is questioning whether it will be profitable enough to keep operating it when taxpayer subsidies decline.
We have pointed out often in this space that Packard Music Hall has enabled the residents of Warren to enjoy entertainment and cultural events close to home, but at the same time, it should not cost the taxpayers an arm and a leg to keep it afloat.
For years, city taxpayers subsidized operations at the music hall by hundreds of thousands of dollars annually. Specifically, Warren taxpayer subsidies totaled $3.34 million over the 10-year period that ended in 2013, including the high-water mark of $550,000 in 2008.
Then, beginning in 2014, the city of Warren signed the contract that turned operation of the 2,200-capacity venue over to JAC Management team, the company that also operates Youngstown’s Covelli Centre.
The city granted JAC a no-bid three-year contract and gave JAC a free pass on reporting specific profit and loss financial information. By comparison, Youngstown requires this data to be reported quarterly from the company about Covelli Centre operations.
The Warren taxpayer subsidy has declined by $50,000 per year from $300,000 granted the first year, and JAC Management is now approaching the start of its fifth year, an optional year that would put the subsidy at $100,000.
The company now is balking at the amount and believes it won’t be able to operate profitably at that level of public help.
It’s worth noting that if JAC were to complete the five-year deal, Warren would have paid the company $1 million. Also under Warren’s contract, JAC paid the city 25 cents per ticket sold at Music Hall events. In year three, the fee increased to 35 cents per ticket and now it stands at 50 cents per ticket in years four and five.
It’s impossible for city leaders or residents to know about the challenges that JAC may be facing or the so-called need for this public subsidy because the contract does not require the books to be opened.
What is most baffling to us is why city officials seem to be folding under the pressure, rather than standing strong on their goal to continue to reduce this hefty public support.
Now some city leaders serving on the committee are considering asking council to increase the budgeted subsidy to $200,000.
Councilman John Brown, D-3rd Ward, a member of council’s health and welfare committee, voted against increasing the amount made available for the Packard Music Hall in the 2018 budget from $150,000, which is in the contract, to $200,000. Councilman Dan Sferra, D-at Large, and Helen Rucker, D-at Large, voted to support the increase.
Council is scheduled to vote on the city’s 2018 budget at an upcoming meeting.
City leaders and the Packard Board must oppose increasing the public subsidy and instead open the management contract up for bid.
They should seek other private operators — perhaps right here in Warren — who are willing and able to operate the facility and who can do it without a million dollars from the taxpayers.
And the next contract that is inked must require that the operator open his books for public scrutiny. At the very least, they should carry the same requirement that Youngstown’s Covelli Centre requires of the same management company — open the books each quarter.