Board tosses swap meet bids

Deirdre Newman

The Orange County Fair Board on Thursday rejected two proposals to

run the Orange County Market Place for the next 10 years and will

reopen the bidding process.

With the process becoming mired in controversy, the board said it

acted in the name of fairness.

The two companies that had submitted bids are Tel Phil

Enterprises, which created the concept for the high-end swap meet

back in 1969 and has been running it ever since, and American Park ‘n

Swap, a subsidiary of Delaware North, a privately owned company based

in Buffalo, N.Y. that specializes in the service industries.

At its meeting, the board decided to follow the unanimous advice

of its scoring committee to start from scratch and issue a new

invitation for proposals after hearing presentations from both

companies, public comment that heavily favored Tel Phil and advice

from legal counsel. The board voted 7 to 1, with member Emily Sanford

dissenting and Frank Barbaro abstaining, to reject the bids. Barbaro

abstained to prevent the appearance of a conflict of interest since

he owns 51% of the stock of a corporation that has a booth at the

Market Place.

The board then voted 8 to 0 to issue a new request for bids, with

Barbaro again abstaining.

The decision is a blow to Tel Phil President Jeff Teller, who had

adamantly argued that American Park ‘n Swap should play by the

initial rules of the bidding process. It is a measured victory for

American Park ‘n Swap, whose proposal was initially rejected on a

technicality. American Park ‘n Swap’s appeal of the rejection

prompted Thursday’s decision. American Park ‘n Swap officials had

hoped the board would decide to consider its bid along with Tel

Phil’s.

Board president Ruben Smith said his personal feeling was that the

process was tainted by various allegations and so it was better to

halt it and start over again.

“From day one, the goal was to make this a fair and open process,”

Smith said. “There were issues alleged by both sides. So I felt if it

went forward, it was just wasting time because it would end up in

litigation one way or another.”

Teller expressed satisfaction with the fair board’s decision.

“I think the board did what it felt was in the best interest of

the board, citizens of Costa Mesa and the fairgrounds,” Teller said,

adding that he didn’t want to speculate on what Tel Phil’s new bid

would contain.

Jerry Jacobs Jr., executive vice-president of Delaware North, said

the outcome did not surprise him.

“Certainly, it’s right from the board’s perspective and the

taxpayers,” Jacobs said. “Based on the history [of this process], the

board has to maintain the integrity of the process.”

Sanford said she dissented because she thought integrity could

best be maintained by working with the two bids already submitted.

The district originally issued an invitation for bids on the lease

for the outdoor, retail marketplace at the fairgrounds in January,

said Becky Bailey-Findley, fair and exposition center president. Tel

Phil and American Park ‘n Swap submitted their bids by the April 2

deadline. The fair board’s scoring committee deemed Tel Phil’s

proposal complete and American Park ‘n Swap’s non-responsive because

it omitted one document.

A notice of the proposed award was issued to Tel Phil on April 10,

but American Park ‘n Swap appealed that decision to the state

Department of General Services. The state issued its recommendation

in June, suggesting that the board consider American Park ‘n Swap’s

bid because its omission was “immaterial.”

Tel Phil filed a temporary restraining order to keep the bid

proposals under wraps until the fair board made its final decision.

The Orange County Superior Court granted the order.

Delaware North owns the Boston Bruins National Hockey League team

and operates hospitality and event venues at large-scale tourist

attractions such as the Kennedy Space Center and Yosemite National

Park.

During his presentation, Jacobs emphasized the company’s family

roots. The company was founded by Jacobs’ grandfather and his

grandfather’s two brothers almost 100 years ago, Jacobs said.

“We trade on our name -- the Jacobs’ family name. That’s how we

get our business,” Jacobs said.

The company views itself as a caretaker of “special places” around

the country such as Yosemite National Park, the Grand Canyon and

Niagara Falls, Jacobs said.

At the board’s request, Jacobs clarified information on its

operation of the now defunct Los Alamitos swap meet and a felony

conviction against Delaware North.

He said the owners of the Los Alamitos racetrack had tried running

a swap meet, which wasn’t doing very well, so it asked Delaware

North, which had a concession contract, to try its hand. The company

obliged, but as it was trying to revive the swap meet, the owners

decided to sell the land, Jacobs said.

The felony conviction occurred during his grandfather’s term and

involved the company that preceded Delaware North, Jacobs said.

American Park ‘n Swap President John Fernbach urged the board to

open its bid and score it, along with Tel Phil’s.

“We think the best decision is not made in an atmosphere of

intimidation and misinformation, but in an open process,” Fernbach

said.

Robert Currie, an attorney with Latham & Watkins, spoke on behalf

of Tel Phil. He paid tribute to the Tellers’ evolution of the Market

Place. Teller’s father, Bob, started the event in 1969.

“I have great admiration for American Park ‘n Swap and Delaware

North,” Currie said. “I’ve been to the Grand Canyon -- gorgeous;

Yosemite -- gorgeous; Niagara Falls -- gorgeous; and Yellowstone --

gorgeous. I’ve also been to the Orange County Market Place. God made

the first four places, not Delaware North. The Tellers made the

Orange County Market Place, and that’s meaningful, very meaningful.”

He urged the board to abide by the requirements in its request.

“The fact that you, ladies and gentlemen, set forth a requirement

in unambiguous terms of what people must do -- [American Park ‘n

Swap] didn’t do it -- and it doesn’t make much sense to go back to

square zero,” Currie said. The majority of public speakers favored

the incumbent.

“I live in College Park and have dealt with previous fair boards

and the Tellers on many occasions,” former Costa Mesa Mayor Linda

Dixon said. “One time, we butted heads, the Tellers responded, met

with the community, made changes and have truly won the respect of

the community.”

Although no one spoke in favor of American Park ‘n Swap during the

public comment session, the company submitted a slew of letters to

the fair board supporting its management.

“We find that from top to bottom, Delaware North, and our local

operators of American Park ‘n Swap are more than competent, very

helpful and very willing to work with their vendors,” wrote Mocha and

Glenn Faller, vendors at American’s Phoenix Park ‘n Swap. “We would

highly recommend them to assume management and control of any other

operation.”

The next step is for the fair staff to draw up a new invitation

for proposals. Smith said he didn’t know when that would be done

since the fair board just made its decision.

In general, requests for proposals involve analysis, advertising

requirements and giving notice, Bailey-Findley said. The original

request had eight amendments. The staff will focus on making the new

request more concise and consider questions such as: What does the

fair really want? and How does it make it fair and equitable?

Bailey-Findley said that by fast-tracking the process, board

members hope to be able to award a contract by the beginning of next

year.

* DEIRDRE NEWMAN covers Costa Mesa and may be reached at (949)

574-4221 or by e-mail at [email protected].