What’s the Stadium Dealio?

The public/private partnership — or “P3”— is the ad nauseum catchphrase of Alvin Brown’s nascent mayorship. But as a swirl of special friendships, hurt egos and exclusive restrictions gets thicker around the Brown Administration’s first big contract award, some are raising questions about what other ingredients are going into the P3 soup.

“There is some funky stuff going on with this contract,” says longtime City Councilmember Bill Bishop.

The deadline for companies interested in placing bids to manage the city’s sports and entertainment venues — EverBank Field, Veterans Memorial Arena, the Times-Union Center and four others — is May 16. There are basically only three major players on the national and international scene — companies with the financial wherewithal and the combination of promotion, booking and management skills to do the job: SMG, Global Spectrum and AEG. All three have expressed an interest in submitting bids to the city. Once they do, a procurement subcommittee will open all the bids, dismiss those that don’t qualify, rank the rest and forward those rankings to Mayor Brown to pick a winner. He isn’t required to choose the highest-rated company, only the one he thinks will be the best. That’s how professional services contracts are handled. Neat, clean, decisive. No messy vetting by the City Council.

The exclusion of the legislative branch doesn’t sit well with local lawmakers, however. Councilmember E. Denise Lee was on the council when it awarded the original management contract to SMG in 1992, and subsequent councils have given SMG four no-bid contract extensions, totaling 20 years. Lee notes that the City Council originally recommended privatizing city facilities, and helped rank the bids for then-Mayor Ed Austin. She believes the council should have a voice in the current contract

“I’m not opposed to bidding out the contract,” says Lee. “But I am definitely opposed to taking the legislative branch out of that process, when it was the legislative branch that made the decision to privatize [management of city facilities] in the first place. … [We need to] make sure it is fair, and that it is a good deal.”

Most other councilmembers who spoke to Folio Weekly agreed. But concerns about the contract process go beyond the lack of a public vetting. One worry is the fact the people who will make the decision appear to have conflicts. The most glaring is the longtime and close friendship between Mayor Brown and William Gray III, a congressional lobbyist for Comcast, the company that owns Global Spectrum.

According to lobbying reports filed with the U.S. Senate, Comcast paid Gray’s companies GrayLoeffler and Global Gray Advisors between $330,000 and $440,000 annually since 2009.

Before he was a lobbyist, Gray was an influential Democratic congressman from Pennsylvania, who served as Majority Whip and chair of the House Budget Committee. He later headed the United Negro College Fund and served as co-chair of the $20 million Bush/Clinton Katrina Interfaith Fund. Alvin Brown worked as the fund’s executive director. Gray and his family later donated $2,000 to Brown’s mayoral campaign, and Brown recently invited Gray to be the keynote speaker at his Interfaith Celebration on April 20.

Locals may recognize Gray’s name for being linked to a Florida Bar investigation of Alvin Brown regarding $27,600 in donations that Alvin Brown made between 2005-’10 to various political campaigns. The campaign records listed him, erroneously, as attorney for the Law Office of William Gray. Neither man is an attorney. (The Bar dismissed the complaint last July, saying there was “insufficient evidence” that Brown deliberately impersonated a lawyer, a felony offense.)

Gray isn’t registered as a lobbyist with the city of Jacksonville, nor does Comcast or Global Spectrum appear as a client of any registered lobbyist, but some critics wonder if Comcast needs to hire a lobbyist at all when Gray already has an inside track.

“That doesn’t pass the smell test,” Bishop tells Folio Weekly. “There may be nothing to it … but it does make people wonder.”

City Councilmember Richard Clark, who is running for the U.S. Congress, was more circumspect, but also concerned. “I would never say anybody made a decision based solely on a friendship,” he says. “I think that’s not how it works. But we have to make sure the decision is beyond reproach … especially on something of this magnitude.”

Another issue of concern is a seemingly arbitrary contract restriction that cuts the competition from three companies to only two. As Folio Weekly reported on April 3 (“In It To Win It,” http://bit.ly/Hei1Cq), the bid documents stipulate that qualified bidders must have managed a “professional football stadium” in the past three years. That disqualifies AEG, which, although it built and owns the STAPLES Center in L.A. where the Lakers play, and manages musical tours as diverse as Justin Bieber and Leonard Cohen, does not manage an NFL facility.

When Folio Weekly asked Chief Deputy General Counsel Karen Chastain why the pro football language was inserted into the Request for Proposals, she claimed that the city’s Gator Bowl contracts with the universities of Florida and Georgia require it. In fact, the contracts only require that the stadium be managed by a “nationally recognized sports facility management company.”

The battle for the multi-million contract may also become a battle for dominance between two heavyweight lobbyists — the nationally influential Gray and local puppet master Paul Harden. Harden works for both SMG (the company that manages the football stadium) and the Jacksonville Jaguars (the company that uses it). As it happens, the two corporate entities have had a mutually beneficial business relationship dating back to 1991 — before the NFL awarded a team to Jacksonville and before SMG won the facilities management contract. That year, SMG loaned $300,000 to the ownership group Touchdown Jacksonville, Inc. so that they could woo the NFL. In return, the local powerhouses behind Touchdown Jacksonville promised to open doors for SMG to help it get the lucrative facilities management contract.

The deal worked, and ever since, SMG has shown its gratitude by giving 15 percent of its annual contract revenues to Touchdown Jacksonville. (The money initially went to repay the $300,000 loan, but as recently as 2005 the Jags gave Touchdown Jacksonville’s principals about $130,000 a year, according to documents obtained by Folio Weekly. It was not clear if those payments have continued since Shahid Khan bought the team in November, but Harden remains the team’s lobbyist.)

While SMG has been in the catbird seat for the past 20 years, that could change. City Chief Financial Officer Ronnie Belton has an acrimonious history with the Jags ownership — and, by default, SMG — that could hinder that company’s bid aspirations. In 1990, Belton joined Touchdown Jacksonville, Inc., the original group formed to bring an NFL team to Jacksonville. He and another member of that original group filed two lawsuits in 1995 saying they were squeezed out when the other owners, including Tom Petway and Wayne Weaver, formed a new company, “Touchdown Jacksonville Limited.” (The parties settled out of court, the court records were destroyed in 2006, in accordance with state policy.)

Belton apparently didn’t know about the payments that SMG made to his former business partners. When asked about the annual payments at bid meeting in March, he replied “I’d find that most interesting.” But he denies that his acrimonious relationship with his former investment partners would affect the current bid process. Even though he helped write the RFP and sits on the subcommittee that evaluates bidders, he told Folio Weekly, “I don’t have anything to do with that.” Belton said he was rushing to a meeting and would call back, but he did not call, and could not be reached for comment, despite numerous attempts.

There is final cross connection among the various players. William Gray’s son, Justin Gray, is president and CEO of his father’s lobbying firm, Gray Global Advisors. He is involved in the redevelopment of Laura Street Trio, a signature historic mixed-use project in downtown Jacksonville, which Jaguars owner Shahid Khan has offered to help finance.

Asked about the apparent conflicts, Mayor Brown’s director of communications David DeCamp declined to address the matter directly. In an email response, he wrote, “Whichever qualified bidder provides the best return on investment for taxpayers will win.”

Bishop, Clark and councilmembers John Crescimbeni and Bill Gulliford have also questioned the rush to award a contract. When the city first put out the Request For Proposals, companies had 30 days to respond. The deadline has been extended to May 16, which is still tight. But the RFP also requires the winning company be up and running by July 1, in time for the NFL preseason game against the New York Giants on August 10. It would seem only SMG, who understands the specifics of this job and is already on the ground, could manage that.

“No way can a company come in and perform in that amount of time,” says Clark “I don’t care who you are or how much experience you have.” Of course, Clark himself has a more-than-cordial relationship with stadium folk; his janitorial service company holds the contract to clean the Jags corporate offices.

Given all the drama, Councilmember Bishop said he expects the City Council to do something to insert itself into the decision, though he doesn’t know yet what that might be.

“The whole thing can become a soap opera,” predicts Bishop. “You are talking a lot of money a lot of big egos.”

Susan Cooper E

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Twitter @SusanE

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