Fairgrounds swap-meet lease open for opinion

Deirdre Newman

After an unsuccessful attempt last year to award a contract for the

lease of the weekend swap meet, fair officials are inviting the

public to give input on a new proposal for bids before it’s

officially released.

The public hearing Monday afternoon at the fairgrounds will give

stakeholders, such as vendors and companies interested in bidding for

a lease, the opportunity to contribute their input on the fair

board’s request for bids before it is released in September.

The bidding process last year was terminated after becoming mired

in controversy. To head off controversy this time, the board decided

to hold a public meeting.

“I can’t say that it’s been done before, but I certainly think in

this case, because of the impact that this contract and lease has on

so many people, that it is a fair, due process to follow,” said fair

Chief Executive Becky Bailey-Findley.

The swap meet was founded by Bob Teller in 1969 and the Teller

family has run it ever since through its company Tel-Phil

Enterprises. Bob Teller’s son Jeff runs the swap meet, which has

evolved into a high-caliber operation, selling everything from fruits

and vegetables to Rolls Royces, under the moniker of the Orange

County Market Place.

Because the swap meet takes place on public land, the fair is

required to open a bidding process for the lease renewal. Tel-Phil

and a subsidiary of Buffalo-based Delaware North Co. were the only

two companies to submit bids when the original request went out in

January 2003. The fair board nixed that bidding process six months

later, after it became tainted by bidding errors and allegations

hurled between the companies.

The fair board considered hiring an outside consultant to write

the second request for proposals, but board members ultimately

decided that the bids from consultants were inadequate and chose to

design the request with the help of legal counsel and staff members.

Both Tel-Phil and Delaware North have concerns about this new

request for bids.

Tel-Phil officials are concerned about some minor errors and

omissions that they thought were resolved in the first request, said

Meg Waters, a consultant for the company. One of their concerns is

that this version mentions that any conflicts that arise as a result

of the bidding process will go to the state Department of General

Services to be resolved, but during the last bidding process, the

agency didn’t have the authority to resolve conflicts, Waters said.

Delaware North officials are concerned about the maximum score

bidders can get for their proposals on how much swap meet revenue

they can offer the fair, said Jeff Flint, a consultant for the

company. Both requests state that the highest score bidders can get

in this area is for offering 40% of gross sales to the fair.

But that means there’s no incentive for bidders to offer anything

above 40%, which is puzzling since the state has recently questioned

whether the fairgrounds property is being used to its full potential,

Flint said.

“It’s incomprehensible that they would limit bidders on the amount

of money we can offer to the fairgrounds” Flint said. “I think it’s a

great asset and think the incumbent operator is paying far below

market value for what that property is worth.”

Waters said the cap of 40% is a good idea since it deters bidders

from offering a lucrative amount to the fair board and then

renegotiating after they are awarded the lease.

“The cap is to keep everyone honest,” Waters said.

Fair officials anticipate the fair board selecting a successful

bidder in early December.

* DEIRDRE NEWMAN covers government. She may be reached at (949)

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