Under the proposed five-year contract, the city will pay JAC Management a management fee of $250,000 annually to operate the music hall. JAC shall be responsible — in a deductible format — for any and all maintenance obligations under $3,000, which will not exceed $20,000 in any calendar year.

The proposed agreement will stabilize the amount the city pays annually to the management company through the duration of the contract. The previous contract was for three years, with the company and the city having the opportunity to opt out during each of the final two years. During its first year, the city paid JAC Management $300,000 to operate the music hall.

The contract, as originally written, had the management fee reduced by $50,000 per year in each of the following years throughout the life of the contract. If JAC had agreed to renew the contract for the fifth year, it would have been paid $100,000 in management fees.

However, JAC opted out of the fifth year, telling city officials it could not operate with only a $100,000 management fee. City council approved allowing the company to earn another $50,000 in the fifth year. The city agreed to increase the amount of its subsidy or management fee by $50,000 in the final year if the contract would remain.

Under the current contract, the city did not earn any money from the ticket sales of commercially promoted shows. While JAC could have charged for parking under the current contract, the company did not charge for parking anytime during the contract period.

“We will determine how much to charge for parking depending on the show,” Jim Bugos, the hall’s general manager, said.

“There are some shows that parking will continue to be at no cost and other shows that parking can be as much as $25. It depends on the show and the demand. We charge $20 per show at the Covelli Centre,” said Eric Ryan, owner of JAC Management.

When questioned how much the city could earn with the ticket sales, City Auditor Vince Flask estimated as much as $10,000 per year.

Councilman Eddie Colbert, D-at Large, said he supports the proposed contract language, saying the $250,000 annual management fee is significantly lower than the $400,000 during the highest year the city paid in subsidies for Packard Music Hall prior to JAC taking over management duties.

“The $250,000 management fee can be reduced by $10,000 because of the percentage of ticket sales and another $35,000 to $40,000 because of the splitting income earned in parking,” Colbert said. “That’s getting the amount the city will pay to about $200,000 a year.”

Colbert emphasized that JAC has proven its ability to bring in acts that people will pay to attend.

Councilman Eugene Mach, D-7th Ward, also is generally supportive of the contract proposal for the music hall.

“I think the contract is generally good for the city,” Mach said. “It is a step in the right direction. The money we will earn in ticket sales and parking can be used for repairs in the hall and on the parking lot.”

Mach said the city has to be careful not to chase away JAC from the operation of the hall.

In a discussion about the Old Avalon Golf Course, most council members agreed to support the administration’s decision in hiring Scott Karabin’s M2 Management LLC to be the next company to operate the city-owned public course. Council also asked the administration to place the contract for downtown parking, including the management of the Franklin Street parking deck, out for bid in January. The contract now is held by Warren Parking Systems, which is operated by Anthony Iannucci, executive director of Warren Redevelopment and Planning.