Competition for Miniature Golf Concession Dwindles to 1 Bidder

Because five firms eagerly competed last year for the right to run a miniature golf concession in a Sepulveda Basin park, Los Angeles city officials figured they had struck gold. After a complicated wrangle, the city turned them all down and called for new bids, expecting even richer offers.

It didn’t work out that way.

Only one firm bid again, it was learned Wednesday--and its offer was less than one of the previous bids and perhaps less than two of them.

The sole bid on the 15-year contract came from Malibu Grand Prix, the current franchise holder, which offered to pay the city at least $1.1 million a year. It would still be one of the Recreation and Parks Department’s most lucrative franchises.

Under its current contract, Malibu Grand Prix paid the city $485,701 in franchise fees last year on gross revenues of slightly less than $3 million taken in by the 54-hole miniature golf course, 140 arcade games and food concessions it has operated in the Sepulveda Dam Recreation Area since 1984.

A preliminary analysis shows Malibu’s current bid, while higher than its previous one, is still less than the city would have taken in by accepting the best bid last year, said Denise Plato, a management analyst for the parks department.

It has not been determined how much better last year’s top bid was than Malibu Grand Prix’s offer this year because the analysis is incomplete, Plato said. But even the second-ranked bid last year may have been more lucrative than Malibu’s new offer, she said.

Plato’s boss, Ann Kerman, who supervises park concessions in the San Fernando Valley, said she was surprised that only Malibu submitted an eligible bid.

American Fun Parks of Santa Monica, a bidder last year, tried to submit another offer, but the city attorney’s office ruled it ineligible for consideration because it arrived an hour after the 3 p.m. deadline June 2, she said.

At a conference with potential bidders before the bid opening, it looked as if half a dozen firms would actually compete, Kerman said.

However, the firm that submitted the highest bid last year, Camelot Park Family Entertainment Center of Solvang, told parks officials later that it did not want to go through the city’s fractious and drawn-out contract process again.

Two other firms that participated last year said they dropped out because of financial difficulties or a belief that they could not compete, Kerman said.

The bids require careful analysis for comparison purposes because they contain many complicated clauses and differences.

Malibu Grand Prix currently pays the city 17.5% of its gross revenues. In its bid last year, Malibu proposed to pay the city a minimum of $1 million annually, and increased the bid in its current offer to $1.1 million. Last year, it proposed to pay the city 27.7% of its gross receipts up to $4.5 million, and 30% over $4.5 million; now it is proposing to pay 41% of gross receipts over $3.3 million, but only 20% of gross receipts on food sales.

In December, the Board of Recreation and Park Commissioners voted to throw out the original five bids, believing it could get better ones.

The board’s action was contested by some Los Angeles City Council members, including Zev Yaroslavsky, in whose district the facility is located. Initially, Yaroslavsky contended that it would not pay to delay the awarding of a contract because all the bidders proposed to pay the city more than it was getting from Malibu at the time.

However, a council motion to accept one of those bids, instead of seeking new ones, was defeated. Yaroslavsky, in a change of heart, also voted against the measure.

Yaroslavsky said Wednesday he was “very shocked” that only one company bid and that he has asked parks department General Manager Jackie Tatum to explore the possibility of a third round of bidding. “I’ve raised the possibility with the general manager that we might throw out this bid and go out for new bids,” Yaroslavsky said.

Parks board President J. Stanley Sanders said Wednesday that Malibu’s new bid “redeemed” the board’s controversial decision to seek new bids. “This is a superior bid,” he said.

But when told that parks department officials were saying that Malibu’s new bid still did not measure up to those of at least one previous bid, if not two, Sanders said he was surprised.

“Oh really?” he said. “That’s not what they told me when they opened the bids. In that case, I should probably reserve comment.”