CALGARY — The Keystone Centre has served notice to hotel chain Canad Inns that it will terminate its catering contract with the firm and will go it alone as of Aug. 1.
The contract that was in place allowed for the Keystone Centre to end the agreement by giving 30 days notice and by paying a termination fee. Canad and the Keystone Centre signed the deal in 2005 and the seventh year of the contract had been completed.
Keystone Centre chairman John Macialek said they have been working on the details to determine whether cancelling the contract was a viable business decision. He would not reveal how much the Keystone Centre paid to get out of the catering project, citing privacy concerns of third party.
“It’s a very significant amount but it was a business decision and a great one to make,” Macialek said. “For our bottom line, it will be a positive impact for our future. As you are well aware, for the past few years we have been looking for options to generate additional revenue streams. As we looked into that, we decided to go ahead with that and for dollars and for a little control and ease of booking events. …It makes a lot of sense.”
Macialek said the potential revenue for the Keystone for running its own catering operations would be in the five-to-six figure range and that he expected the centre could make enough in a year to override the cost of paying the termination fee. Provisions in the contract allowed the Keystone Centre to end the agreement — the terms for doing so, including the termination fee, were set out in the deal signed by both parties.
The Keystone Centre is in the process of speaking with prospective chefs to head the new catering operation and already had use of between one-third to one-half of the existing kitchen facilities at the centre while Canad had the rest of the facility.
“It was where our old kitchen was and it had been renovated a few years ago,” Macialek said.
“There was some things added that will still certainly work for us. We will have to do some renovations, such as adding major kitchen appliances such as stoves, ovens and we have already priced that out. Within the next 30 days, we should be up and running.”
Macialek said once the chef and staff are hired, then the menu plans can be developed.
“There probably won’t be a large change,” Macialek said. “Probably in the next week or two, we will have hired the chef and then we can go forward and fill the other spots. We needed to do our due diligence and find out if we could get the people in place to make this happen and with 30 days, it’s a pretty short time.”
The Keystone Centre is governed by three parties, the provincial government, the City of Brandon and the Provincial Exhibition of Manitoba.
Brandon Mayor Shari Decter Hirst noted all three parties were aware of and supported the decision to cancel the contract.
“Anything that enhances the customer experience at the Keystone Centre is good for the city because it will improve the bottom line of the Keystone Centre,” Decter Hirst said. “I think allowing choice along with services is a good idea.
“We were very much working with the Keystone Centre to make this happen.”
Decter Hirst said the Keystone Centre’s plan will open more doors for the centre to book more events and opens the possibility for some Lt.-Gov. Winter Festival pavilions that had vacated the Keystone Centre grounds to consider going back.
“Bringing in those cultural dishes that make the Winter Festival is something the larger community of western Manitoba would be excited about,” Decter Hirst said. “This is something the Winter Festival will certainly have to take a look at when they are making their plans for the 2013 festival.
She noted that the choice of caterers will help make the Keystone Centre a competitive option for holding those events.
Decter Hirst said the contract cancellation was not a precursor to a plan for a casino on Keystone Centre grounds, adding: “First we need to get the licence and then we get the location. So there are no plans for a location yet.”
Attempts to contact Canad senior officials in Winnipeg were not successful.
Republished from the Brandon Sun print edition June 30, 2012