By Ted Schnell • BocaJump | Nov. 2, 2011
More than six months after approving an interim contract for the management the restaurant at Bowes Creek Country Club, the Elgin City Council will be asked tonight, Nov. 2, to extend the deal for two full years.
Carlucci Hospitality — as Porter’s Pub Payroll PPP LLC — took over operation of Porter’s Pub in the spring after the first vendor to operate the facility failed to meets it obligations under its contract with the city. As a result, city officials ended that contract late last year.
The deal with Carlucci was an experiment — the contract the council approved in April runs through December, and operates under a different business model than that with the prior vendor, Twelfth Night Catering LLC, which failed to pay the city and provided little voice in its menu and service offerings.
The contract with Carlucci Hospitality gave the city greater say in the operation by making Carlucci a manager of Porter’s Pub. The city pays Carlucci $52,500 a month as a management fee that includes the salaries of all management, cook and wait staff at Porter’s. That gives the city a greater say in the menu and control over revenues. The city wants to Porter’s Pub to provide a high-end dining experience that golfers expect at the city-owned Bowes Creek Country Club.
The City Council’s approval of the contract in April came unanimously but reluctantly, reflecting a growing unease over the city’s budget. At that time, city officials predicted a $4.5 million deficit in 2012, but that estimate nearly this fall as officials learned of an unprecedented drop in property values couple with declines in other revenue sources.
Still, the city’s golf fund has been showing a profit, Elgin Chief Financial Officer Colleen Lavery said Monday, and in April, City Manager Sean Stegall has reassured the council that even if Porter’s Pub failed to show a profit, the golf fund would have enough positive revenue to cover any losses. At that time, Stegall also expressed confidence Carlucci Hospitality would succeed where Twelfth Night had failed.
Freshmen Councilwomen Anna Moeller and Tish Powell both indicated in April that they would want to take a closer look at Porter’s Pub if Carlucci had failed to turn it into a money-making operation.
The staff memo to the council in advance of Wednesday’s meeting makes it clear the pub has lost money, although the golf fund can absorb the loss.
According to the memo, Porter’s revenues totaled $50,090 in May, a monthly average of $90,025 from June through September and the “cost-of-goods sold margins meeting the expected 35 percent. In August, however, the pub showed a of $49,782 loss.
Lavery said Monday the pub was not expected to show a first-year profit, but changes to the contract are expected to help the restaurant break even in 2012 and post a profit projected at $93,000 in 2013.
Under the new contract, the monthly payment to Carlucci would drop to $48,333 a month, an average that reflects a lower cost of operating the restaurant in the winter months, the staff memo states. That brings the value of the annual contract to $586,600.
Because the contract requires an exception to the city’s procurement ordinance, a two-thirds vote of the council is necessary to approve the contract.
Bowes Creek Country Club has nearly 100 members, and the membership includes high-end dining opportunities. Stegall said in April that without Porter’s, members would have a bona fide reason to seek a refund of their membership fees.
