Logo horizontal ruler

Vending Cart Controversy Rolls On

By Olin Ericksen
Staff Writer

November 11 -- With most Promenade vending cart leases set to change hands November 29 and the lucrative holiday season fast approaching, the City Attorney’s office is still investigating whether several vendors were turned down by their new management company because they complained about the terms of the new program with City staff.

Instructed two weeks ago by the City Council to investigate allegations of abuse leveled against Provenzano Resources Incorporated (PRI) -- the company selected by the City and Bayside District Corporation to manage the vending cart program -- City Attorney Marsha Moutrie reported back Tuesday night that there is no definitive evidence of retaliation by PRI, but that the investigation rolls on.

“I think the record is unclear and there are conflicting versions and explanations of the rejections,” Moutrie told the council at a meeting that lasted well into the night.

“The record is less than crystal clear,” she said. “Though again, that said, I certainly see why someone who was terminated after attending a meeting with (City staff)…thought it was (the) cause for their termination.”

Council members directed Moutrie to continue her investigation and directly contact the vendors, who have hired an attorney and sworn statements under perjury that PRI rejected their applications out of spite for meeting with Miriam Mack, the City staff member working with PRI on the new program.

“When Provenzano discovered that these individuals attended a meeting with Miriam Mack and had complained about PRI’s visual merchandising fee and the rent increases, immediately PRI informed those four individuals that their applications were no longer valid,” said Tracey Green, attorney for several of the current vendors.

At the last council meeting in October, some vendors said they were approved to join PRI’s program and then promptly rejected by the company after the meeting with Mack. One vendor, Daniel Gannon, said he had even signed check for start-up costs when he got a call telling him his application was denied.

According to Green, it was Mack who forwarded the information to PRI about which vendors attended the meeting. Green and her clients, however, have said they do not plan to file any action against the City, which is a signing party to the current contract with PRI.

“There are no threats in there against the City,” said Green of the reams of documents she turned over to the City Attorney. “We are looking at it as asking the City to require (PRI) to cure the breach of contract (with) the existing cart operators who are third party beneficiaries.”

Whether PRI breached its contract with the City by not giving “preferential” treatment to current cart operators during the application process was another contention the City attorney was directed to investigate.

The preferential clause in the contract allows all cart operators to apply and give preference to their current operators provided that they “meeting qualified criteria,” said Moutrie.

“So this is not an absolute preference, it is qualified in a limited way,” she said. “Reading the contract carefully, it is a little difficult to understand what the minimum criteria of PRI are,” said Moutrie.

She added, however, that having read the entire contract and other documentation it is “fairly easy to see what the criteria are.”

Green and her clients, however, believe PRI did not give preference to the current vendors.

“They thought they were going get preference,” Green said. “They didn’t get it. They didn’t realize they were going to get retaliated against.”

Green asked that, at the very least, her clients be allowed to stay on the popular retail walk street until after Thanksgiving, one of the busiest shopping weeks of the year.

“I think we need to take it step by step, that way at least you’re insuring that PRI hasn’t breached the existing contract,” she said.

PRI, according to Moutrie, maintains that many of the applications were not delivered in a timely manner or with the merchandise line they were looking to bring to the Promenade, which some have described as more upscale.

There were even reports of personal threats made by vendors against PRI, although Moutrie said PRI reported those allegations only after the investigation was launched.

As to the City’s involvement in the tangled affair, Moutrie flatly asserted that the City could not be at fault even if it passed along the names of those who attended the meeting with City staff to PRI because PRI did not consult with the City about what applications they would be rejecting.

“I have no reason to believe the City staff participated in any (alleged) retaliation,” Moutrie said.

How much of a hand the City had in crafting criteria for the new program and determining the type of merchandise sold and how it was chosen are questions that many of the vendors are still asking the City.

“There are a great many different kinds of allegations made,” said Moutrie of charges leveled by the vendors against City staff, including “lying” to the City Council and not “effectuating” council policy of preferential treatment to existing operators.

The most “serious charge” was that of retaliation by PRI itself, and not the City, a charge that made some on the council bristle.

“My real concern here is the validity of the public process and that people need to feel that they can come to the their local government for redress without fear of being retaliated against,” said Council member Kevin McKeown.

In addition to investigating the allegations, Moutrie reported on the ways that the City may exit the contract with PRI.

The City may cancel the contract with or without clause, she said, though that may be problematic with new vendors set to take over on the Promenade.

“We do have the right to terminate for cause if an unsecured default occurs or if two defaults occurred,” said Moutrie, although she did not elaborate on what qualifies as a default.

The City may also cancel the contract without cause, although not without a price: 180 days notice must be given by the City and it must reimburse PRI any “unamortized capital investment,” which may just be the cost of the carts, Moutrie said.

City Manager Susan McCarthy, however, said it could be interpreted to mean the cost of sublicenses of new vendors -- a much more pricey endeavor.

With the holidays just around the corner, current vendors carts are being stored in a City Parking Garage, and job fairs are being sponsored by the City to hook cart employees up with the new vendors.

Meanwhile, attorney Tracey Green is planning her next step -- working to show the City that her clients were indeed retaliated against.

One thing is for sure, she said. “If (PRI) thought there was some kind of misunderstanding or miscommunication, they haven’t done anything about it.”

Lookout Logo footer image
Copyright 1999-2008 surfsantamonica.com. All Rights Reserved.
Footer Email icon