The Negotiators


12718282_828821000582522_5838304791018698802_n“The Negotiators” in the title refers to the duo of Doug and Enzo, who negotiated the appallingly bad deal with JAC Management giving them the privilege of “sole, entire, exclusive” control of Packard Music Hall (PMH), one of Warren’s crown jewels. The contract stands on its own as stunningly one-sided, which you can read about in detail here, but one can only fully appreciate what a terrible deal “The Negotiators” cut for the city of Warren when it is compared to the contract Youngstown negotiated with JAC to manage the Covelli Center. Links to both contracts appear at the end of this post.

The JAC-Youngstown contract was signed many months before the Warren contract and is a public record. Either Doug and Enzo couldn’t be bothered to read it before doing their JAC deal, or they read it and still made the deal they did. I’m really not sure which would be worse.

Keep in mind the Covelli Center is more than twice as large as PMH and appears to have more than twice as many events. Both contracts are for a five year period. Let’s compare the terms.

Over five years, Warren will pay JAC $1,000,000 while Youngstown will pay JAC only $496,000 to manage the much larger, much busier, Covelli Center. Call that JAC’s base pay, but this is only part of their compensation.

At PMH, JAC keeps 100% of all receipts from all events, including concessions, minus 25 cents per ticket, which goes into a capital improvement fund — the only revenue we receive.

For example, Jay Leno was at Packard Music Hall last week. It was a sell out, which means the city of Warren yielded about $600 for the city’s cap fund. JAC Management’s share would have been somewhere around $180,000 at an average of $75 per ticket; plus whatever they took in on concessions, less their costs to produce the show.

Youngstown negotiated a very different deal; at Covelli, JAC receives about 14% of the net operating income for the year. That is, all revenues and costs are accounted for, for the entire year, and a profit from all the shows is determined. From this total annual profit figure JAC gets 14% and the city of Youngstown gets 86%.

In summary:

JAC’s base pay in Warren is $1 million, while in Youngstown it is less than half that amount. JAC’s bonus revenue in Warren is 100% of the total revenue at PMH, while in Youngstown it is 14% of the net profit of the Covelli Center. Warren is paying more than double the price for a job half the size.

We have to live with this deal for 3-1/2 more years, but “The Negotiators” are now bringing their prodigious skills to bear on something that will have a much greater impact on the future of Warren than whether or not we make the cut for the next Huey Lewis tour.

Doug appointed Enzo to the board of the Trumbull County Land Bank. Enzo’s brother Mauro Cantalamessa  recently became one of two Trumbull County Commissioners sitting on the board. He replaced Commissioner Frank Fuda. No reason was given for the change. The Land Bank has been operated, under contract, by Trumbull Neighborhood Partnership for the past three years. The TNP contract expired last week. Enzo and Mauro waited until the contract expired before raising “questions” about whether the contract should be renewed for another three years.

Some negotiators would have asked their questions a little earlier in the process, unless maybe their goal was to add stress to the process. At Mauro’s urging the Land Bank Board postponed the vote on the contract last month for 30 days. The follow-up meeting was scheduled for today, but Enzo and Mauro both announced yesterday that they would not attend, forcing the meeting to be cancelled for lack of a quorum.

Meanwhile, the Ohio Housing Finance Agency is evaluating all Land Banks right now, to determine how much each will receive in the next round of demolition funding. The current artificial instability at the TC Land Bank, forced on it by the Brothers Cantalamessa, can not help our cause and may materially hurt it.

Grants written by TNP and awarded to the TCLB since TNP took over LB management have already exceeded $5 million. The TC Land Bank has received national recognition for its efficiency and creativity. We have received funding far greater than TC’s size would warrant, and the grant under consideration right now could be the largest yet, and would be an enormous benefit to Warren’s future.

But in this negotiation, what’s good for Warren and Trumbull County takes a back seat to the Franklin/Cantalamessa effort to strengthen their grip on every government nickel that flows through here. Where else in America could brothers hold two of the seven seats on a public board of this importance to the community? It’s just not right, and we may have another Packard Music Hall contract on our hands if they have their way.

Those are your “Negotiators.”

Warren Packard Music Hall contract: JAC_Agreement

Youngstown Covelli Center contract: Youngstown/JAC/Covelli contract

Posted Tuesday, March 8th, 2016 under Blight, Community organizations, Vacant homes, Warren strategic plan.

Comments are closed.