Battle of the Bazaar Heats Up as Merchant Sues, Alleges Intrigue

For three decades, Diane Powers has been the creative force behind Bazaar del Mundo, a collection of restaurants and Hispanic-themed boutiques set amid a festive profusion of greenery at Old Town State Historical Park.

Through Powers’ business savvy, artistic flair and promotional drive, Bazaar del Mundo has helped make Old Town the most popular state park in California. Hordes of tourists and local residents are drawn to the dining, shopping and strolling at the site of what was once just a rundown motel.

Now the state Department of Parks and Recreation wants Powers and her creation out.

As one of its last acts, the administration of Gov. Gray Davis took the contract for the state-owned property away from Powers and awarded it to an upstate New York company whose lobbyist has been one of Davis’ top fund-raisers, Darius Anderson.

This week, Powers struck back. She filed a federal lawsuit against the state and also alleged that she had been victimized by political intrigue.

Among other things, she accused the former governor’s chief of staff, San Diego attorney Lynn Schenk, of exerting unfair influence to take the contract from her.

“I know she did not look upon our participation in this favorably,” Powers said at a news conference.

In hopes that Gov. Arnold Schwarzenegger will overturn the decision awarding the contract to Delaware North Cos., the Buffalo, N.Y.-based firm that runs concessions at Yellowstone and Sequoia national parks, Powers has appealed to several San Diego legislators and to Bob White, longtime chief of staff to former Gov. Pete Wilson.

White and Powers are close friends from their days attending San Diego State in the 1960s. White, a consultant to Bazaar del Mundo in the past, was one of the top strategists in the Schwarzenegger campaign.

White and Schenk did not return repeated phone calls seeking comment.

But a spokesman for the parks department said the contract had been awarded to Delaware North because a three-person committee of state employees had found the Delaware bid both more lucrative and more artistically attractive than Powers’.

Department spokesman Steve Capps said the accusations of political influence were “absolutely false.... The people on the board were not influenced by anyone.”

Powers has filed a protest with the state over the bidding process. The issue will be assigned to an administrative law judge in a process liable to take months and delay Powers’ removal from the Bazaar del Mundo site.

She filed a lawsuit Wednesday in U.S. District Court in San Diego alleging that Delaware North was guilty of trademark infringement for having predicated its bid on the continued use of the names Casa de Pico and Casa de Bandini, two of the four restaurants in the complex.

The lawsuit alleges that by using those names, Delaware North would be able to capitalize unfairly on three decades of goodwill that Powers has accumulated. In its bid, Delaware North vowed to pay a minimum of $2 million a year in rent. Powers’ bid had a minimum amount of $1.5 million.

Capps said the trademark issue had been a source of contention between Powers and the state for several years. The state maintains that the names are historic, recalling two of the Mexican leaders who founded San Diego.

Last year, Bazaar del Mundo’s four restaurants and 16 shops grossed $25 million; the restaurants served an estimated 686,400 margaritas and 12.4 million tortillas. The contract is considered one of the most lucrative in the parks system.

“We feel this process allowed a deep-pocket corporation to literally buy the lease,” Powers said.

State records indicate that lobbyist Anderson was paid $280,000 by Delaware North, which also runs the concession at the state’s Asilomar conference center on the Monterey Peninsula. Anderson could not be reached for comment.

The Bazaar del Mundo saga is a tangled one, involving several of the city’s most prominent political figures. In San Diego, the personal and political are often the same.

Powers received the contract at Old Town in 1971, when her mentor and business partner was San Diego financier Richard Silberman.

Silberman later was a political advisor to Schenk before marrying former City Councilwoman Susan Golding and helping Golding defeat Schenk for county supervisor in 1984 in one of the bitterest political campaigns in county history.

Schenk sued the Golding campaign over alleged dirty campaigning.

Golding was later elected mayor. She and Silberman divorced after he was convicted and sent to prison on charges linked to an FBI money-laundering scam. Schenk served one term in Congress but failed to win reelection.

In a document supporting her protest, Powers alleges that a “high official” of the Davis administration was heard to say Powers would retain the contract “over my dead body.”

Asked if there was a personality conflict between her and Schenk, Powers answered, “There possibly is, and I don’t know why.”

Vince Harris, deputy chief of staff in the Davis administration, called the allegations of political influence “an insult to Lynn, Darius Anderson and Gov. Davis.... We had nothing to do with the competitive bidding process.”