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    Wednesday, June 19, 2024

    New London City Council OK’s short contract extension for Ocean Beach management firm

    A group of students, soon to be graduates, from Mitchell College hang out Tuesday, May 7, 2024, at Ocean Beach Park in New London. (Dana Jensen/The Day)
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    New London ― The City Council on Monday approved the latest – and shortest – contract extension for the firm that’s been managing Ocean Beach Park for the last 25 years.

    After a 20-minute executive session, council members approved extending a contract with Sodexo Live!, the Delaware firm that’s been operating and maintaining the park under different names since 1999. The contract expires Sept. 23, 2026.

    The 28-month extension is the shortest since the group was granted oversight of the park and includes new financial reporting requirements and capital improvement obligations.

    The approval of the relatively brief extension came after years of declining revenue at the nationally celebrated park. The contract keeps intact a compensation agreement in which Sodexo receives 10% of gross revenue from the park and a portion of net profits, with the remainder funneled to city coffers.

    But if the park loses money, the city is responsible for funding the entire loss, including Sodexo’s contractual management fee.

    Mayor Michael Passero said there’s a specific logic to approving a 28-month extension.

    “It seems like a long time, but the park only makes money three months of the year,” he said on Tuesday. “So this gives us nine months to make up the losses.”

    The agreement gives Sodexo and the city three summer seasons to earn revenue and honor bookings made for events.

    The park posted losses of $122,236 in 2019; $100,757 in 2020; $52,693 in 2021; $323,984 in 2022; and $324,921 last year. The city has so far reimbursed Sodexo only $422,236 of the $1.03 million in losses built up over several years.

    Those back-to-back losses have prompted city officials to explore other park management options. Requests for proposals for new park operators will be crafted and issued in the coming months.

    “It’ll be an open process in which we hear new ideas on development opportunities at the park,” Finance Director David McBride said on Tuesday, adding Sodexo will have the chance to submit its own proposal.

    Passero said the “complicated” proposal process will include a community engagement period with the last summer of the contract set aside for possibly transitioning to a new operator.

    New contract language requires Sodexo to meet with city officials monthly, either in person or virtually, to review and discuss “in detail” financial statements. Up to now, the company has provided limited profit and loss information, McBride said.

    “As it stands now, there’s no downside to Sodexo if the park posts a revenue loss,” he said. “The hope is we can have regular discussions and see if we can come up with some recommendations to improve that situation.”

    The contract also calls for Sodexo to spend $250,000 to install an ADA-compliant elevator at the park’s banquet hall. Such an outlay is not without precedent. As part of previous contract extensions, the company was directed to make $1.5 million worth of improvements to the park’s boardwalk and buildings.

    The prospect of Sodexo and its popular park general manager, David Sugrue, not running the beach operation disturbed some residents. Mark Christiansen, who helps stage an annual Corvette car show at the park, on Monday praised the “fantastic job” Sugrue and his company have done.

    “It’s important to us to have consistency, whoever is running the beach,” Christiansen said. “(The park) isn’t something someone can just walk in and take over.”

    Christiansen noted the park faces stiff competition from neighboring state parks that do not charge admission and attendance-busting issues ranging from adverse weather to pandemics.

    “Are there things that need to be done at the beach? Absolutely,” he said. “But who's responsible for that always? Part of it is (Sodexo), part of it is the city.”

    j.penney@theday.com

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