Tuesday, February 03, 2009

Binge Drinking at the Tavern

In what is going to be another great example of missed opportunities (and an extraordinarily unfathomable mismanagement by several key members of the city administration) the city has set May 1st at the deadline for bids to operate the almighty Tavern on the Green for years to come.

Tavern on the Green, that landmark venue in the heart of Central Park which hosts around 750,000 guests a year and generated $38M in revenue in 2007 has it's lease and revenue sharing contract coming due at the end of this year!

Under the present agreement, the city charges the operator $1M in rent per year. This translates into $83,333 per month, or $3.0864 per month per square foot. We in turn agree to maintain the roadway and "garden" around it in pristine shape and beauty at a cost of tens of millions.

As tax payers we are also apparently entitled to 3.5% of the gross revenue generated by what apparently is the second highest revenue generating restaurant in the nation. According to the restaurants website, their revenue is roughly $34M a year. So if my mathematical skills are still what they were in 4th grade, that should mean the city was due around $1.19M. So for 2008 the city should have collected $2.19M total. Well apparently we only collected $1.268M.

Hmm, I wonder what happened there? Let's make a few assumptions: Assume Tavern on the Green booked absolutely no private parties and lost half of the total revenue they claim to average. So their revenue is now $17M, the city would be due $595k not the $286k it was paid.

Lets make these assumptions even more tragic (to account for the terrible economy) and assume that not only did they not host any private parties, but they also had 50% less patrons and their revenue dropped to $8.5M for 2008. Under this new assumption the city would be due $297k not the $286k it was paid.

I understand that I might not have the exact figures to calculate an exact balance due to the city. However, even under the worst of assumptions I think it is clear that the city is not being compensated appropriately.

I am not suggesting that the city should assume the responsability of operating and managing the day to day business at Tavern on the Green, but considering the torrid financial situation, I do beleive it behooves the city to pay close attention to whoever the new proprietor is, what kind of a deal we grant him, and how transparent his bookkeeping is.

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