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22nd DAA supports sale of food service provider

DEL MAR — In a move that results in a major change for the 22nd District Agricultural Association, but one that will not likely be noticed by visitors to the Del Mar Fairgrounds, the board of directors at the May 13 meeting approved a stock purchase agreement between Premier Food Services and SMG Corp.

Premier has provided food and beverage services to the state-owned facility, which is governed by the 22nd DAA, since 1990.

It has been purchased by the Pennsylvania-based business that was founded in 1977.

SMG needed the approval to take over operations of the food and beverage service during the annual fair and horse racing season, as well as other fairgrounds’ events.

The proposal was presented at the April meeting, but Director David Watson, one of several attorneys on the board, requested a formal report and recommendation be made this month.

Before the 5-0 vote approving the transfer, Watson said everything in the documents he reviewed is consistent with the contract between Premier and the fairgrounds.

He said he’s seen “a lot of public officials get in trouble because they didn’t dot their i’s and cross their t’s.”

He said he felt comfortable approving the transfer, especially since the current contract expires in a year-and-a-half.

“You have 18 months to prove yourselves,” he told SMG representatives.

There were two conditions to the transfer, both of which were agreed to by SMG.

There can be no changes to key management staffing without 22nd DAA approval, and the value of the performance bond was increased to $1 million for the remainder of the agreement.

The performance bond for Premier had been reduced to $500,000 because of the longtime relationship with the fairgrounds.

The transfer has no financial impact on the 22nd DAA.

George Karetas, Premier’s chief executive officer, will work as an advisor to SMG for three years, and Mark Anderson will continue as the onsite operations manager.

Board President Fred Schenk also received assurance that the transfer would be seamless to Premier employees and fairgrounds visitors.

I expect that all employees will find their jobs to be the same type of work and that they will be appreciated for their work, he said.

“The essence of food service is the employees,” he added.

I also want the public to receive the same high quality they are used to, Schenk said.

“Those are my two expectations,” he said.

“We’re very excited to be here,” Shaun Beard, senior vice president of SAVOR, for which SMG is the parent company, said, adding that he is obligated “to earn your business every day.”

Efaon Cobb, in-house counsel for the San Diego County Hotel and Food Service Workers’ Union, told board members the Local 30 supports the sale.

Sharilyn Bisson, a 13-season food and beverage employee at the fairgrounds, said she and her co-workers were “looking forward” to the new management.

“We would like to continue our high standards that our guests enjoy,” she said.

Fairgrounds staff also supports the deal.

Money from food and beverages sold at the fairgrounds has increased significantly since Premier contracted with the 22nd DAA in 1990.

That year gross revenues were slightly more than $6.8 million. In 2013 they were $19.9 million. During that time the district’s net return went from $2.2 million to $5.6 million.

Schenk thanked Premier representatives for their commitment and leadership. “The community has benefited from your vision and support,” he said.

“It’s been a great marriage, to say the least,” added Director Lisa Barkett, chairwoman of the 22nd DAA’s Food and Beverage Committee.