Swap meet operators await fair board’s ruling

Deirdre Newman

The two companies vying to run the Orange County Marketplace have

ratcheted up their public relations campaign.

The Orange County Fair Board is contemplating considering a

competitor to Tel Phil Enterprises, which created the weekly swap

meet and has run it for 34 years.

American Park ‘n Swap submitted a bid in April but that bid was

deemed incomplete because American had omitted a document. Having

submitted the document since then and buoyed by a favorable

recommendation by the state Department of General Services, American

is plugging its ability to upgrade the swap meet and provide more

revenue to the fair board.

On Thursday, the board will decide whether to consider American’s

bid. The state suggested it should and called American’s omission

“immaterial.”

Tel Phil President Jeff Teller touts his company’s expertise from

three-plus decades of experience and emphasizes the camaraderie that

results from a family-owned and -operated swap meet.

He reiterated his opinion that American’s omission is indicative

of its inattention to detail. He also expressed concern that American

won’t be able to provide the same level of service Tel Phil does. He

compared Tel Phil’s management of the swap meet to the

standard-bearers of the aviation market -- Boeing and Lockheed.

“It’s like [American] saying, ‘I can build a fighter jet,’” Teller

said. “But Boeing and Lockheed can. If [American] can build one,

fine. But [customers] don’t want something that’s inferior.”

American officials contend they just want a fair shot at the

bidding process. They say they don’t understand why Tel Phil, with so

much experience running the Marketplace, is trying to discredit them.

“I don’t quite understand the huge lobbying effort that the

incumbent is putting on to have the bid disqualified and [not] let

fair play go through,” said John Fernbach, group president of

contract services for Delaware North. “All we want is the chance to

have [the board] score our bid, to be able to tell our story, to be

able to tell all the things Delaware North does on a national basis.”

Jeff’s father, Bob, started the Marketplace in 1969, renting

spaces for $1, while giving out coupons for the same amount to

potential vendors. It grew at an average compounded rate of 42% the

first 20 years, Jeff Teller said. It paid the state almost $5 million

last year and has paid the state about $110 million since it started,

Teller added.

It has evolved to an event of enormous variety where you can find

cars like Rolls Royce’s kitty corner to a market selling fruit and

vegetables. It typically draws 40,000 to 50,000 people a weekend. The

Marketplace prides itself on providing top-notch customer service,

Teller said.

“If you’re not satisfied with something you buy, I will refund the

money,” Teller said. “It’s kind of like Nordstrom. We don’t

advertise, but we do it. The customer feeling secure is critical.”

American is a subsidiary of Delaware North, a privately-owned

company based in Buffalo, N.Y., that specializes in the service

industries. Delaware North owns the Boston Bruins National Hockey

League team and operates hospitality and event venues at large-scale

tourist attractions like the Kennedy Space Center and Yosemite

National Park.

Fernbach said he considers the Marketplace to be well-run under

Tel Phil. But he believes American could improve upon it. While he

called American’s bid “comprehensive,” he said he was not able to

provide any details because the bids are sealed under a court order.

American runs swap meets in four locations around the country --

Phoenix, Little Rock, Memphis and Myrtle Beach. But Fernbach said

none of them is comparable to the operations at the Marketplace and

therefore it is unfair to compare them. While Teller has compared the

Phoenix swap meet to the Marketplace, Fernbach said the analogy is

not appropriate.

“The Phoenix market is a very apt and capable, probably three-star

market,” Fernbach said. “[Orange County] is a five-star market. It’s

not comparable and the same analogy I would take is ... we’ve won the

contract at Yosemite National Park ... and if you were to look at our

operations at Yosemite, at the one-star level, you’d go down to the

tented villages and you’d say, ‘How can the people who run the tented

villages run the Ahwahnee Hotel? And it’s us, providing a wonderful

experience in a one-star, two-star or five-star setting.”

Tel Phil attorney Stuart Suchman pointed out that American started

a swap meet at the Los Alamitos Racetrack about seven years ago but

it closed after 10 months.

American officials also assert that they will give the fair board

more revenue while not raising the vendors’ rates.

“The vendors are going to cry that [we’re] going to raise [their]

rates, but that’s not true,” said Tim Paone, an attorney representing

Delaware North. “Everyone can win in this.”

Teller said maintaining a family atmosphere is just as important

as making a profit.

“Any good business is one that makes money, but for us, it’s more

than just profitability -- it’s a sense of family,” Teller said.

Tel Phil’s bid includes some major investment in the fairground

properties, including a joint-use commissary and food preparation

area, Teller said.

If the fair board decides to consider American’s bid, it will use

a scoring process with “experience” as one of the categories. The

process gives all applicants equal consideration, fair board

president Ruben Smith said.

Smith said the board was looking for guidance on how to deal with

American’s original omission in the bidding process “and now we have

it.”

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

574-4221 or by e-mail at deirdre.newman@latimes.com.