Bidders Battle Over Miniature Golf : Concessions: The city-owned Sepulveda Basin amusement park grosses nearly $3 million a year.
A major battle is brewing at City Hall over miniature golf.
At stake is who will run a 54-hole miniature golf course complex--and its attendant amusement activities, including 144 video games and nine batting cages--at the Sepulveda Basin, an operation that’s pint-sized in name only.
The Sepulveda Basin miniature golf course complex grosses nearly $3 million a year and has generated $500,000 annually in revenue for its landlord, the city’s Recreation and Parks Department. “I would classify it as one of our more lucrative concessions,” said Jackie Tatum, an assistant general manager with the parks agency.
The contract for the concession has expired, prompting, among other things, a bidding war between rival amusement firms, lobbying by former City Councilman David Cunningham and a former mayoral aide, and a lawsuit in which one bidder has accused another of stealing trade secrets.
The controversy bloomed when parks department officials recommended in October that the concession contract be awarded to a Sherman Oaks-based joint venture, Camelot Park, one of five companies that submitted bids. But on Monday, the Recreation and Parks Commission voted to reject that recommendation and seek new bids.
Meanwhile, Malibu Grand Prix Corp., one of the five bidders and the current concessionaire, is seeking--with the help of its ally, Councilman Richard Alatorre--to bar the commission from seeking new bids and to award the contract from the bids now before it.
On Tuesday, lawmakers will vote on an Alatorre motion to invoke Proposition 5, a measure passed June 4 by voters that allows the council to review the actions of city commissions.
Alatorre’s chief of staff Al Avila said the councilman wants to prevent further “loss of revenues to the city,” explaining that putting the contract out to bid again will only cause more delays that have already cost the city about $1.2 million. The original concession agreement with Malibu expired two years ago and the firm continues to operate under the lenient terms of that old pact.
“We’re getting a nice ride now,” conceded Gary Rudolph, Malibu senior vice president. Under the terms of the pact, the city is receiving only 17.25% of Malibu’s gross receipts, which last year amounted to $493,051.
In its new bid, Malibu proposes to guarantee the city a minimum of $1 million a year in rent from the five-acre site. The other four bidders are guaranteeing anywhere from $600,000 to $1 million annually.
A budget analyst for the city’s parks department agreed with Alatorre’s view that in the short term the city is losing money. But in the long term, seeking new bids will benefit the city, analyst Rick Sessinghaus said. “You’ve got to keep in mind this is a 15-year agreement,” he said.
Parks agency staff urged the new bids after two of the bidders--American Fun Parks and Castle Park Associates--said they were confused by the bid process, Sessinghaus said. “They claimed confusion about the capital improvements section,” he said.
As part of their bids, each firm was required to provide capital improvements worth at least $400,000 to the golf course and other facilities constructed in 1974. By requesting new bids on the concession, the city should be able to get “more responsive bids,” Sessinghaus said.
Joseph Guerra of American Fun Parks agreed that it was “clearly a benefit to the city to rebid.”
Guerra said the rival firms probably will agree to pay more to the city in new bids because everyone would know what their competitors offered in the first round. American Fun Parks is a joint venture 75% owned by David Price, the head of Santa Monica-based American Golf Corp., a huge firm that manages golf courses around the nation.
Meanwhile, the bidding battle has attracted several well-known City Hall lobbyists and a lawsuit.
Cunningham, the councilman who resigned under a cloud of controversy in the mid-1980s, has joined the American Fun Parks team. And Art Gastelum, who resigned as Mayor Tom Bradley’s liaison to the parks department in 1990 amid reports he had embarrassed Bradley with a plan to develop the Chatsworth Reservoir with 5,000 housing units, has been working with Malibu Grand Prix.
Malibu Grand Prix recently sued Camelot, claiming the firm stole Malibu’s trade secrets and incorporated them into its bid. The lawsuit alleges that Lamont Lavert, the former manager of Malibu’s Sepulveda complex concession, gave away these “trade secrets” to Camelot. Lavert later was fired by Malibu and is listed on bid documents as one of Camelot’s business partners.
Prior to Monday’s parks commission meeting, Malibu had also presented the parks department staff with a report--prepared by Coopers & Lybrand, a major accounting firm--that called Camelot’s bid “unrealistic and based on questionable assumptions.”
Camelot principals William Rameson and his brother, Ronald Rameson, could not be reached for comment.