Arena Backer Seeks Anaheim Stadium Concession Pact

The company hoping to finance construction of the city’s $85-million indoor sports arena wants to be granted the lucrative Anaheim Stadium concession contract as a hedge against any losses, a company official said Thursday.

The Ogden Corp. of New York would be “taking an enormous amount of risk for construction of a facility of this type,” said Douglas G. Logan, Ogden’s vice president for facility services and a party to the arena negotiations with the city of Anaheim.

Proceeds from the stadium concession contract “are possible revenues that could offset those risks,” he said.

The contract, which grossed $21.8 million through the first 11 months of 1989, is held through the end of the year by ARA Leisure Services, a Philadelphia-based firm.

An ARA spokesman said Thursday that his company is seeking to renew the concession pact with the city when the current contract expires Dec. 31.

But renewal may not be a cinch for ARA.

Moreover, Mike Rubin, Anaheim’s outside legal consultant, said Thursday the city is not required to put the concession contract out to bid.

“It’s not a public works contract, it’s a service contract,” said Rubin, who advises the city in legal matters. “That kind of contract is not subject to” laws requiring competitive bids.

Logan said Thursday that the stadium concession contract “has been discussed. It is a part of the total negotiations.”

But David Flaherty, spokesman for ARA, said his firm is “definitely interested in the contract when it comes up (for renewal) at the end of the year, and we have certainly made that known to the people at the city.”

Flaherty said ARA has had preliminary discussions with the city about renewing the contract.

At Anaheim Stadium, ARA concession manager Darrel Knudson said he had no knowledge of Ogden’s interest in the contract.

“I’m sure (ARA) would be unhappy losing the contract, but I don’t know if that’s a possibility,” Knudson said.

The stadium concession contract is believed to be one of the nation’s largest in sales volume.

In the 11-month period ending Nov. 30, there was a net profit of $9.7 million on gross revenue of $21.8 million, said Bill Sweeney, Anaheim Stadium finance administrator.

ARA Leisure Services received $972,000 of that and the city got $8.7 million, which it divides with the Rams and Angels, Sweeney said. The Angels received $4.47 million and the Rams about $734,000, he said.

Under its agreement with the city, ARA is paid a management fee equal to 3% of gross receipts, plus 10% of net proceeds. The city gets 90% of net profits, which it divides with the teams. The Angels receive two-thirds of the profits from sales at their games and the Rams get half of sale profits at their games, Sweeney said.

Ogden’s Logan declined to say whether the concession contract is an absolute condition that his firm has imposed in the arena negotiations.

“Like with other negotiating points,” Logan said, “it’s always been my practice to let the negotiations take place face to face.

“We seem to be progressing in a rather positive fashion,” he said.

Ron Rothschild, Anaheim administrative services director, said that by contract the Rams and Angels would have something to say about awarding of the concession contract, such as their shares of the revenue and the quality of services to be provided.