Market Watch: Controversy in South Pasadena

As farmers markets and their sales have burgeoned in Southern California, the rights to sell at them — at least at the more successful venues — have become increasingly valuable, and in several cases, matters of contention. Witness the recent squabbles at the South Pasadena market, where slots for vendors, fees, integrity and management are at stake. It’s a story of more than local interest, because the same issues, typically below the radar of the general public, frequently come into play at other markets.

PHOTOS: At the South Pasadena farmers market.

Under state rules, a certified farmers market can be sponsored only by a farmer, a nonprofit organization or a municipality. Founded 11 years ago this week, the South Pasadena market was originally sponsored by the Mission West Assn., a nonprofit local business group that suddenly disbanded last autumn, leaving the market in the lurch. For a few weeks the market operated under the certificate of Jaime Farms, a vendor.

To keep the market from going dark, the city of South Pasadena brought in a temporary operator, Raw Inspiration, which manages about 17 local markets. The city then solicited proposals for a five-year contract to run the market, said Sergio Gonzalez, the assistant city manager, who handled the process. Several operators, including Raw Inspiration, Sustainable Economic Enterprises of Los Angeles (which runs the Hollywood and other markets), and the South Pasadena Chamber of Commerce submitted bids.

The city’s main goals for the market, Gonzalez said, include increasing local participation from vendors and nonprofit organizations, and raising money for the city by requiring the new operator to cover the $20,000 annual cost of street closures, and to contribute 7% of gross revenues to the city, for a total of approximately $40,000 yearly. “In this economy, anything you can save is great for the local municipality,” he said.

To evaluate the proposals, the city selected a committee of three farmers market vendors and two city commissioners, which voted unanimously to recommend the chamber’s bid; this in turn was approved May 5 in a 5-0 vote of the City Council.

The chamber linked its bid with Greta Dunlap, who also manages the very successful Beverly Hills farmers market. She had previously managed the South Pasadena market for just less than a year soon after it opened; she had also organized events for the city and owned a garden goods shop on Mission Street in the 1990s.

In addition to fulfilling the city’s mandate, the chamber is seeking to offer a broader selection of fruits and vegetables and an increased ratio of farmers to food vendors, said Scott Feldmann, the group’s president. Local restaurant owners had complained about competition from prepared food vendors at the market, who made up more than half of the venue’s approximately 60 stalls; the chamber intends over time to shift this ratio to 70% farmers, Feldmann said, adding that he hopes to do this by increasing the number of farmers.

In order to raise money to satisfy the financial requirements of its contract with the city, when it took over direction of the market on June 3, the chamber increased fees for prepared food vendors from 10% to 12% of sales, with a minimum of $75. This latter provision, in particular, set off protests from small vendors, who complained that they would be driven from the market.

A group of five vendors refused to pay the increased fees, offering instead to pay according to the previous rates, but the new operators refused to accept this, and told the vendors they couldn’t return unless they paid up. On June 10, the five vendors showed up anyway, and one of them, Peter Theodoropoulos, owner of Eliki Olive Oil and Aliki’s Greek Taverna, which sold at 17 markets, asked customers to sign a petition in protest, and handed out a leaflet urging them to boycott the market.

“The $75 is wrong, because it’s killing the small business,” he said at the time, adding that his stand at the South Pasadena market typically sold just $250 to $300, and the increased fees would greatly reduce his profit or even cause him a loss.

“All this in order to cover the fat salary of their inconsiderate and incompetent manager that does nothing!,” read the leaflet, although Theodoropoulos acknowledged that he did not know the amount of Dunlap’s salary.

Enough vendors protested that on June 25 the chamber issued a press release announcing the reduction of the minimum fee for prepared food vendors to $40. (As before, there is no minimum fee for farmers.) Currently the five vendors are not selling at the market, and they will not be allowed back because they flouted the market rules, Feldmann said.

According to the terms of the chamber’s contract with the city, for an interim period of 30 days, the new operators were to keep intact the market’s roster of farmers, but at the end of that period had the option to choose which ones to invite to continue selling at the market.

Dunlap and the chamber wish to ensure market integrity, they said, by getting rid of peddlers who violated market rules or found loopholes to sell produce bought from other farmers or wholesalers, and to bring in high-quality vendors who grow what they sell. Over the years Dunlap has developed a reputation as one of the most vigilant of managers in keeping cheaters out of her markets.

Such integrity is not always immediately evident to customers, but is crucial to authentic growers trying to survive. One farmer who sold at South Pasadena until last year, Felice Apodaca of Brian Ranch, wrote in an e-mail last Saturday, “I have stopped going to farmers markets, since the big boys from up north seem to be squeezing out the smaller growers like me who can’t compete for volume or duration, even with lower pricing.”

Even before the expiration of the interim period, Dunlap acted to correct egregious violations of market rules, resulting in the exit of one vendor, Kirby Wyllie of Tulare, who managed four stalls at the market, and who had had his certificate revoked by the state for 17 months in 2007 and 2008 for falsifying documents. “The violations were so apparent that they had to be corrected,” Dunlap said.

At the end of the 30-day period she disinvited three other vendors, including Annie Florendo of Sweet Tree Farms, who lives in downtown Los Angeles and sells fruit at eight markets from 40 acres she leases in Dinuba.

“I am truly upset because my small farm depends on the sales that we generate from that market,” Florendo wrote on June 30 in an e-mail message.

She also objected that a letter that the chamber sent out to vendors on May 27, as it prepared to operate the market, stated, “Our plan is to keep all the best aspects of the market just as they are, including the inclusion of 100% of current farmers and vendors.” This contrasted with market rules, also sent out to vendors, which stated clearly that farmers would be required to apply annually for readmission to the market.

Feldmann, president of the chamber, acknowledged that the May 27 letter should have specified that it referred only to the 30-day interim period. “The language could have been clearer,” he said on July 1.

In recent weeks Dunlap has brought in several new vendors, generally highly regarded in the market community, including Tenerelli Orchards, Avila and Sons, Capay Organic, Pudwill Farms, South Central Farmers, Vang Family Farm and J&J Grassfed Beef.

It remains to be seen how this drama will play out. Meanwhile, a new adage may be aborning: “There are two things you should never watch being made: sausages, and farmers markets.”

South Pasadena farmers market, El Centro Street at Meridian Avenue, 4 to 8 p.m. Thursdays (4 to 7 p.m. during standard time).

food@latimes.com