Chatham-Kent to seek shorter convention center contract extension

Chatham-Kent will be looking to change the terms of a contract extension clause with the operator of the municipality’s John D. Bradley convention centre.

A staff report to council June 5 had recommended politicians adopt the five-year extension option included in the current contract signed with Compass Group Canada in June 2018.

But council backed South Kent Coun. Anthony Ceccacci’s motion to see if there’s potential to negotiate a shorter extension or include a clause allowing the municipality to opt out of the contract extension earlier.

“It’s a matter of making sure we’re making the most prudent decision moving forward,” and looking at all options to see which makes most financial sense, Ceccacci said.

He pointed to the “potential for some significant growth” in the municipality, with future development of the former Navistar truck plant across the street from the convention center and other investments in the community that could generate more bids to run the center in future.

Chief financial officer Gord Quinton said he has no concerns taking the issue back to Compass, noting there is time for discussions before the current contact expires at year’s end.

When Postmedia contacted Compass Group for comment, the company relayed the request to Quinton, who said: “It is not appropriate for any of our contractors to comment during an ongoing contract negotiation.”

“Chatham-Kent appreciates the great service provided by Compass Group and we look forward to continuing our discussions,” he added.

The staff report noted administration has worked with Compass Group on the potential five-year extension with both sides agreeing to existing terms and conditions, and a series of adjustments to the management fee, pending council’s approval.

The deal calls for the management fee to increase 2.5 per cent annually after 2024 for the balance of the renewal.

That represents a 0.5 per cent annual increase from the previous deal and staff supported the change given financial pressures facing the industry, the report said.

Chatham County. Michael Bondy asked Quinton if he has any concerns if a shorter extension could negatively impact the municipality.

“The real concerns are the recent inflation escalations in both food and wages to run a convention centre,” Quinton said.

Compass Group has held the convention center contract since May 2011, before it officially opened.

Quinton said the last contract only included an option for a five-year extension, but staff can approach Compass to see what they are open to.

Quinton agreed anticipated growth could encourage more bids in the future, but cautioned, “We could end up with no bids and be searching for an operator.”

“I do recognize with inflation there might be some challenges, (but) I just feel giving someone a five-year contract (extension) without consideration might not be the best way to move forward,” Ceccacci said.