DEL MAR — At least five members of the 22nd District Agricultural Association board of directors are hoping the third time’s a charm in an effort to transform an underused facility at the Del Mar Fairgrounds into a microbrewery.
At the Sept. 9 meeting, directors voted 5-1-1, with two members absent, to release a request for proposals this month in search of a craft brewery operator for Surfside Race Place, an approximately 100,000-square-foot satellite wagering facility built in 1991 to accommodate 5,000 people.
David Watson, as he did in the past, opposed the project.
“I don’t disapprove of the concept,” he said. “But there are so many problems with this RFP. … The process is irreparably tainted.”
Watson, a land-use attorney, said the language makes it “crystal clear” the contract will go to the highest bidder and not a local brewer.
“There’s nothing in there that will allow us to select a local craft brewer,” he added.
Stephen Shewmaker, chairman of the board’s Surfside Race Place Alternative Uses Committee, disagreed.
He said a provision in the RFP that gives small businesses a 5 percent advantage “is fair.”
The process started more than a year ago, when the board issued a request for interest and qualifications for alternative uses for the building, which in its heyday attracted about 2,700 people daily. A decrease in offsite betting has resulted in daily attendance of less than 350.
In response, the 22nd DAA received proposals for a microbrewery, luxury theaters and a family entertainment center with high-tech bowling.
The microbrewery proposal was submitted as a partnership between the 22nd DAA and Premier Food and Beverage, which had opted to go with Blue Moon, a subsidiary of MillerCoors.
Some directors had several concerns. They said Premier, as the fairgrounds’ contracted food and beverage provider, had an unfair advantage and using a large national company over a local brewery did not promote area businesses.
The board opted to terminate the RFI and start over.
In June the release of a new RFP was authorized. But “in an abundance of caution,” Shewmaker said, that was delayed to add language that would prohibit potential conflicts of interest between board members and prospective proposers.
Director David Lizerbram, who recused himself from the Sept. 9 vote, said in earlier discussions that he has friends and clients in the local brewing industry.
The revised RFP states the contractor “may not perform services for any other person or entity that … would result in a conflict of interest” and “may not employee any 22nd DAA director, official, officer or employee in the performance of” the agreement, “nor may any director, official, officer or employee of the 22nd DAA have any financial interest in” the agreement.
The document also states that prospective proposers “are strongly encouraged to document in writing … any known, suspected or potential conflict of interest with a 22nd DAA director, official, officer or employee and their immediate family.”
The wording did little to appease Watson’s concerns.
The language “is so vague that I don’t think the typical responder will understand what that means,” he said.
Shewmaker disagrees.
“I think it’s fairly clear,” he said. “Any prospective proposer will have to (acknowledge in writing) that they in no way, shape or form have a relationship with any board member.”
Applicants must commit to a five-year, $1.5 million total lease, with renewal at the discretion of the state. They must also provide proof of $1 million in commercial general liability insurance and a $1 million performance bond.
The selected brewer will be allowed to provide input for the design but cannot sell its product as a retail item.
The 22nd DAA is also committing funds to improve the facility.
In a best-case scenario, the process to select a brewer will take about three months, Mike Ceragioli, the 22nd DAA’s state contracts manager, said.
Once all proposals are received, qualified bidders will be required to attend a meeting for a site tour and to discuss the schedule and any other details, including potential conflicts of interest.
“I think it’s a good RFP and our people did a good job drafting it and making sure it is open for everyone who’s interested,” Shewmaker said.
Also supporting the release of the revised RFP were Fred Schenk, Russ Penniman, Lisa Barkett and Kathlyn Mead. Directors Adam Day and Ruben Barrales were not at the Sept. 9 meeting.
