Bend Parks & Rec getting into the food business, will use profits for recreation scholarships

(Update: Adding video, BPRD Services Director Matt Mercer comments on future food facility)

BEND, Ore. (KTVZ) -- The Bend Parks and Recreation District plans to get into the food and beverage business at some of its facilities in the near future.

At a park board meeting Tuesday evening, park district staff said that their proposed budget for fiscal year 2023-24 includes funding to create a food and beverage division under the Recreation Department that includes the hiring of a full-time supervisor and up to $30,000 in equipment purchases and improvements.

Bend Park & Rec Services Director Matt Mercer says that fresh food is a priority for a new café.

"We certainly are exploring providing fresher food options and fresh-made options, versus just pre-packaged options," he said Thursday.

The first year start-up will cost $460,000, with $390,000 in revenue and $70,000 in first year subsidy start-up costs.

Mercer talked about why the effort is getting underway.

"One is to enhance people's experience with providing better options than what we currently provide for people. Then the second goal would be to generate revenue and profits that support our recreation scholarships fund and allow us to expand and maintain that program for the future."

Included in the coming year's budget is money to hire staff and up to $30,000 in equipment purchases and improvements.

"The amount of staffing will fluctuate at times," Mercer said. "We will have a full-time supervisor, manager of that area. And the rest will be part-time and seasonal staff, most likely."

Mercer says food prep would take place at the Bend Senior Center, where they have a commercial kitchen already in place. The Larkspur Cafe is one location the district plans to expand that's already in use.

"Some will be in-house, because we already have in-house resources committed to food and beverage," Mercer said. "But we'll also look to see who we can partner with in the community and perhaps contract concessionaires for certain things that we decide to do."

You can read the full board agenda item from Tuesday's meeting below:

The district currently operates simple food and beverage operations at recreation facilities including Juniper Swim & Fitness Center, Larkspur Community Center and The Pavilion. The district has also provided concession operations at athletic fields in the past through concessionaires.

These operations have generally sold over-the-counter, pre-packaged items with the exception of some pre-prepared, warm-food options at The Pavilion.

As a result, food and beverage options have been limited in terms of quality, variety and healthy choices. The operations have also generated very little profit to help support district subsidized services.

The district intended to operate a small café in Larkspur Community Center; however, this was delayed due to the COVID pandemic and has yet to open. The Pavilion concession operations were also suspended during the pandemic and are still operating at a reduced capacity. District staff has used this time to explore opportunities and alternatives for future food and beverage services, including resources, levels of service and contracting versus in-house delivery methods.

The district believes there are opportunities to enhance the experience of users by offering higher quality, healthier and convenient food and beverage options while at the same time developing a significant and ongoing revenue source to support the Recreation Scholarship Program. Staff believes these goals can best be realized by developing an internal food and beverage operation and complementing this with concessionaire agreements.

This will require some investment and an entrepreneurial approach, including the willingness to explore mobile concession operations in some parks and athletic complexes. Several recent district surveys have shown an increasing acceptance and desire for some park concessions.

The operation will require some subsidy (up to $70,000) in the first year due to start-up costs associated with 3-months of planning and development before operations actually start. The expectation is that the food and beverage division will generate net revenue the following year with the goal of providing substantial six-figure support to the Recreation Scholarship Fund in future years.

Although we anticipate success with this program, there are no assurances that we will generate enough revenue to see a sufficient return on investment. Part of the business planning process will be setting realistic financial targets with divestment strategies should the program not meet expectations. Staff will provide additional information during the board work session and seek board input and support for the concept in advance of the budget. Staff also intends to bring a more complete business plan to the board for review once it has been developed.

The 2023-24 Proposed Budget includes resources to support the creation and implementation of a food and beverage division. Expenses are budgeted at $460,000 with revenue budgeted at $390,000. The $70,000 budgeted subsidy in the first year of operations is due to start-up costs including the hiring of a supervisor to develop plans prior to launching operations. The proposed budget also includes $30,000 in one-time capital equipment outlay. As described above the operation would be expected to generate a profit in future years with proceeds supporting the Recreation Scholarship Fund.