May 21—NEW LONDON — The city council on Monday approved the latest — and shortest — contract extension for the company that has managed Ocean Beach Park for the past 25 years.
After a 20-minute board meeting, council members approved the renewal of a contract with Sodexo Live!, the Delaware company that has operated and maintained the park under various names since 1999. The contract expires on September 23, 2026.
The 28-month extension is the shortest since the group gained control of the park and includes new financial reporting requirements and capital improvement obligations.
The approval of the relatively short expansion came after years of declining revenues at the nationally renowned park. The contract keeps intact a compensation agreement in which Sodexo receives 10% of the park’s gross revenue and a portion of its net profits, with the rest funneled into city coffers.
But if the park loses money, the city is responsible for financing the entire loss, including Sodexo’s contractual management fee.
Mayor Michael Passero said there is specific logic in approving a 28-month extension.
“It seems like a long time, but the park only makes money for three months of the year,” he said Tuesday. “So this gives us nine months to make up for the losses.”
The agreement gives Sodexo and the city three summer seasons to generate revenue and honor event bookings.
The park posted a loss 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 only reimbursed Sodexo for $422,236 of the $1.03 million in losses accrued over several years.
These back-to-back losses have prompted city officials to explore other park management options. Requests for proposals for new park operators will be prepared and issued in the coming months.
“It will be an open process in which we hear new ideas about the development opportunities in the park,” chief financial officer David McBride said on Tuesday, adding that Sodexo will have the opportunity to submit its own proposal.
Passero said the “complicated” proposal process will include a period of community engagement, with the final summer of the contract reserved for a possible transition to a new operator.
The new contract language requires Sodexo to meet with city officials monthly, in person or virtually, to review and discuss the financial statements “in detail.” So far, the company has provided limited profit and loss information, McBride said.
“As it stands now, Sodexo will not be disadvantaged if the park experiences a loss of revenue,” he said. “The hope is that we can have regular discussions and see if we can come up with some recommendations to improve that situation.”
The contract also requires Sodexo to spend $250,000 to install an ADA-compliant elevator in the park’s banquet hall. Such an expenditure is not without precedent. As part of previous contract extensions, the company was contracted to make $1.5 million in improvements to the park’s boardwalk and buildings.
The prospect of Sodexo and the park’s popular general manager, David Sugrue, not running the beach operation alarmed some residents. Mark Christiansen, who helps organize an annual Corvette car show at the park, praised Monday the “fantastic job” Sugrue and company have done.
“It’s important for us to have consistency, no matter who manages the beach,” Christiansen said. “(The park) is not something that someone can just walk in and take over.”
Christiansen noted that the park faces stiff competition from neighboring state parks that don’t charge admission and attendance issues ranging from bad weather to pandemics.
“Are there things that need to be done on the beach? Absolutely,” he said. “But who is always responsible for that? Part of it is (Sodexo), part of it is the city.”
j.penney@theday.com
