Palm Springs City Council approves new convention center food service contract

PALM SPRINGS, Calif (KESQ) - The Palm Springs City Council has unanimously approved a new contract putting OVG Hospitality in charge of food and beverage service at the Palm Springs Convention Center for the next five years.

Council members approved the agreement during a special meeting Tuesday. OVG Hospitality, a division of Oak View Group, already manages the convention center under a separate agreement approved last year, along with the Palm Springs Plaza Theatre and Acrisure Arena.

The vote came one week after council members postponed a decision, directing city staff to continue negotiations with OVG Hospitality and the current food service provider, Savoury's.

Mayor Naomi Soto said that extra week of negotiations ultimately resulted in a stronger agreement.

"What you see on this council is that we have a variety of expertise, perspectives and I think that makes the business we do at the City of Palm Springs stronger," Soto said.

One of the biggest concerns raised during last week's meeting was whether local restaurants and independent vendors would still have a place at the convention center under a single food service operator.

City officials say the contract now requires more opportunities for Coachella Valley restaurants and vendors to participate in convention center events and creates a separate process for local nonprofit groups to provide food at certain events. Staff will return to the council within 30 days with additional details on how those programs will work.

"We are so excited that within this new contract with our new management fee structure we are able to get a lot of bells and whistles that are confirmed and secured in this contract and working with local brands is a key part of that," Soto said. "Now we have direct promises from OVG that they're going to make that Palm Springs feel real in the building."

The agreement also changes how the city will receive revenue. Instead of collecting a percentage of food and beverage sales, the city will now collect the revenue directly while paying OVG Hospitality a management fee.

According to city staff, the agreement guarantees Palm Springs at least $750,000 annually and is expected to generate more than $17 million over the next five years—about $3.4 million more than the previous payment structure.

City leaders say the agreement isn't just about food service. Soto said having a long-term operator in place gives meeting planners more confidence when booking events years in advance, helping attract more conventions, visitors and tourism dollars to Palm Springs.

"People want to book conferences and events and experience and travel when they know what to anticipate, especially for conferences," Soto said. "The fact that we have a five-year contract with a globally known company able to do food and beverage at the convention center means that planners and conferences are able to book out saying, 'Wow, I'm excited for what's happening at Palm Springs.'"

OVG Hospitality is expected to take over food and beverage operations at the Palm Springs Convention Center beginning July 1.

Oak View Group declined News Channel 3's request for an on-camera interview following Tuesday's vote.

Stay with News Channel 3 for more.