Attempt to Halt Rebid on Franchise in Basin Fails : Recreation: The City Council is one vote shy of blocking the plan, which would start anew the bidding process on the miniature golf course concession.

The Los Angeles City Council failed Wednesday to muster enough votes to block a decision by the city Recreation and Parks Commission to reopen bidding for the lucrative miniature golf and video-game concession in the Sepulveda Basin.

The concession is one of the biggest moneymakers for the city Recreation and Parks Department. It generates $3 million a year in receipts for its current holder and has become entangled in a running debate over how to choose a new franchise holder. It is now held by Malibu Grand Prix, which operates three 18-hole miniature golf courses and more than 140 arcade games.

On Dec. 9, after a debate over the bidding by five companies, the parks commission voted to scrap all the bids--two of which promised the city at least $1 million a year--and begin the process all over again, which could take up to a year.

The council, under a new law, had 21 days to intervene in the decision. The deadline expired Wednesday, leaving council opponents of the decision insufficient time to muster enough votes to overturn it.

The most popular council alternative called for limiting the field of candidates for the franchise to the four remaining of the five original bidders. But a council motion to that effect was defeated 7 to 4, one vote short of the eight needed.

Council proponents of a second competition predicted that, in the rebid process, bidders will offer to pay higher franchise fees to the city than were initially offered. The theory is that, in the second round, contestants will top the highest bid in the first round, City Administrative Officer Keith Comrie told the council Wednesday.

Leading the call for a rebid was Councilman Zev Yaroslavsky, in whose district the golf facility is located. But Monday, Yaroslavsky had urged his colleagues to immediately award the bid to American Fun Parks, one of the four firms.

During Wednesday’s debate, Councilmen Ernani Bernardi and Mike Hernandez complained that rebidding the franchise would undermine the integrity of the city’s competitive bidding process. It “makes a farce” of the competitive bid process and will discourage reputable firms from seeking city contracts, Bernardi said.

In fact, two firms involved in the first round of bidding refused to say Wednesday that they would submit second bids, and a third--Camelot Park Family Entertainment Center, which made the offer ranked best by parks department staff members--notified the city late Tuesday that it was withdrawing.

Although it gave no reason for its decision, one of Camelot’s owners was criticized by council members earlier this week about allegations in a lawsuit against his company that it had stolen trade secrets from another bidder for the Sepulveda Basin franchise.

Hernandez and Councilman Richard Alatorre, another Eastside lawmaker, were the leading proponents of the proposal to require the city parks department to simply re-evaluate the existing four bids and select the best of these.

Although the council review seemed futile, Councilman Joel Wachs said that it produced some good: a commitment by parks commission President J. Stanley Sanders to require future bidders to pay the city a one-time cash bonus upon the award of a contract, in addition to franchise fees.

The idea of such a bonus came up during a marathon meeting earlier this week between Wachs and other council members and city parks agency officials, including Sanders.

The bonus is designed to allow the city to recover the revenues it will lose due to the delays in awarding a new franchise. Such losses will occur because the current franchise-holder, Malibu Grand Prix, is paying the city about $400,000-a-year in franchise fees, and yet Malibu and another bidder for the new 15-year franchise have promised to pay the city a minimum of $1 million-a-year under a new agreement.

Payment of the bonus would help bridge the revenue gap due to the delays, Wachs said.

But by late Wednesday, the Recreation and Parks Department staff had prepared a recommendation that the bonus be fixed at $250,000, even though city budget office analysts had predicted the city’s revenue losses due to delays would exceed $375,000--assuming a 10- to 12-month rebid process.

Neither Wachs nor Yaroslavsky could be reached for comment about the cash bonus figure. Both lawmakers had supported rebidding with the proviso that the city also recover its lost revenues.

The parks commission is scheduled Monday to consider for approval its staff recommendations outlining the minimum requirements, including the cash bonus, that must be met by future bidders for the franchise.