City Council approves OVG catering deal after backlash, last-minute revisions

The Palm Springs City Council voted 5-0 Tuesday to approve a revised five-year contract with Ovations Fanfare L.P., doing business as OVG Hospitality, to operate food and beverage services at the Palm Springs Convention Center, following days of debate over labor policy, local business access and the city’s financial exposure.

The vote came six days after the council declined to approve the contract as originally presented at a June 24 meeting, instead directing staff to temporarily extend the existing agreement with longtime incumbent caterer Savoury’s Good Earth Cuisine and explore whether Savoury’s and OVG, a subsidiary of Oak View Group, could collaborate during a transition.

Attorney Seth Merewitz told the council that city staff had continued negotiating revisions to the OVG contract in the days leading up to Tuesday’s meeting.

Merewitz said a comparison prepared for the city projected the proposed management-fee structure would generate about $4 million more over the life of the contract than a commission-based alternative, along with a $2.5 million OVG investment and a conditional $750,000 annual net minimum payment to the city.

The guarantee became a point of discussion before the vote, with Mayor Pro Tem David Ready pressing for clarity on whether the city would still be exposed to operating losses. Contract language was amended to clarify that the $750,000 would be a net amount to the city, though the guarantee would not apply in years when gross receipts fall below $5.6 million. In that case, the parties would be required to renegotiate the minimum commitment for the following year.

Councilmember Ron deHarte, who had driven much of the push to delay the original contract last week, said Tuesday that the revised version reflected significant work by councilmembers, staff and both companies. He said Savoury’s had decided to pursue a collaboration with OVG rather than seek its own long-term contract with the city.

DeHarte also used his final comments to praise Savoury’s, calling the company “much more than a vendor” and crediting it with helping set a high standard for food and service at the convention center over three decades.

“We are grateful to what they have provided to Palm Springs for three decades,” deHarte said.

Before the vote, members of the public raised concerns about the contract.

Dan Gore, owner of Oscar’s in Palm Springs, said OVG had refused to collaborate with his business on events at the adjacent Plaza Theatre and had pressured him to give up business space. Gore said his venue is physically connected to the theater and had previously worked with the Palm Springs Plaza Theatre Foundation on events before OVG took over management.

“My question to this council is simple: Is this the kind of business conduct we want to reward with a million-dollar contract funded by the public?” Gore said.

Phillip Hodges pressed members over a labor-harmony clause that had appeared in an earlier version of the contract without council debate. The names of two specific unions were later removed, but the broader clause remained.

“Where does each of you stand on the labor harmony clause? Who added the clause, and on whose authority?” Hodges said.

Not all public comment was critical. Cliff Young, owner of Coachella Valley Coffee, said his business has worked with OVG at Acrisure Arena without issue and credited the company with helping promote his business.

“They’re always looking for ways to promote my business at other venues they’re working at,” Young said.

The contract approved Tuesday includes several revisions from the version councilmembers declined to approve last week. Among them is language allowing the Palm Springs International Film Society’s International Film Awards & Gala to use an outside caterer during the initial five-year term of the agreement. A third-party caterer would also be allowed to service alcohol for the event under its own temporary permit, rather than through OVG’s license.

Two other elements of the contract — requirements for use of local brands and a framework for nonprofit groups to provide food and beverage service — were not finalized Tuesday. Those provisions are expected to return to the council for further review after its summer break, on Aug. 26.

The agreement also allows OVG to spend up to $150,000 per year on special advisory services, an item discussed Tuesday in connection with a possible transition consulting arrangement with Savoury’s. DeHarte questioned whether the city should have more control over how that money is spent if no final agreement with Savoury’s materializes, but city attorneys advised that OVG had stated on the record that an agreement in principle existed.

Councilmember Grace Garner made the motion to approve the contract as amended, saying the revised agreement gave the city benefits it was unlikely to receive in a future procurement process. She said the city should not try to control every detail of OVG’s business relationships and said Palm Springs needed partners capable of supporting the convention center’s future.

“We are making a huge investment in our convention center, and we need to be working with partners who are able to rise to that challenge,” Garner said.

Ready said he continued to struggle with the contract because it moves the city into a different financial model, with more exposure if convention center revenue drops during the renovation period. Still, he said the city needed to move forward.

The approval resolves the immediate question of who will operate food and beverage service at the convention center, but leaves several politically sensitive details — including local business participation and nonprofit access — to be settled after the council’s summer break.

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