Let's Play Ball!
Back in '96 Drayton McLane and the Astros were recruiting community heavy hitters to support a referendum to build the downtown baseball stadium now known as Enron Field. The team's owner promised that minorities and women would receive 30 percent of the stadium revenues, including the food and drink concessions.
That pledge won McLane the allegiance of black ministers and civil rights leaders and a narrow victory in the referendum. It even helped get him over a bad public relations patch when a Hispanic television executive accused him of making racially tinged off-microphone remarks about Hispanic baseball fans.
Last week the Astros owner's promise came true. Legal papers were signed carving out a third of a 15-year stadium food service contract for minority investors, although many of the beneficiaries are better known for cooking political deals than hot dogs.
Of course the ubiquitous City Hall insider lawyer Zinetta Burney is in the mix, as is City Hall lobbyist and former HISD board member Paula Arnold and Metro board member Olga Moya, an environmental law professor. They are participants in a group called Women Stadium Investors. Former city councilwoman Gracie Saenz leads a group of Hispanic investors. Merida's operator Rafael Acosta, an electrical engineer who once sat on the Metro board and ran a losing race for Harris County judge, is teamed with banker Ben Ho as a general partner in Houston Limited Partnerships. Melanie Wong, the daughter-in-law of former city councilwoman Martha Wong, heads an Asian-American group. Then there's attorney Tony Chase, son of architect John Chase, a fixture in Mayor Lee Brown's inner circle. And then there's well, you get the picture.
As in previous affirmative action controversies at City Hall, the question arises as to who is really benefiting from the stadium food deal -- the "minority" community that is under-represented in local business ventures, or a select crew of political insiders taking advantage of their connections to win a place at the table?
In case you're worried about whether any of these folk can cook a lick, keep in mind that food service giant Aramark will sell the popcorn and peanuts, boil the wieners and tote the kegs at Enron Field. After the referendum barely passed and stadium construction began, the Astros negotiated a contract with Aramark that included strict investment guidelines.
"Since that goal was stated and out front, we felt it was necessary in the concession agreement," recalls Mike Puryear, senior vice president of operations for Enron Field. "When we sat down with the concessionaires, we said, 'Look, we've made this goal and commitment of a 30 percent minority community participation in this facility, and we feel like this is something you need to do.' "
For Aramark, it was no problem. The Urban League leader who helped prevail on McLane to make the original commitment was Darryl "Chicken Man" King, the food concessionaire who also happens to be a partner with Aramark in other ventures.
The next sticky question became how to apportion the food services at the stadium among Aramark and its new partners.
"Do you designate this stand or that one as a minority stand?" asks Puryear, whose rolling Southern accent transforms the word to "my-nority." "Then you get into the situation of 'Well, the minority stand is either right behind home plate or it's way up there in the upper deck. Now which stand do you want?' So we thought, look, that's not the way to do this."
Investor Arnold describes the dilemma more succinctly. "Location's everything. If you're behind home plate at field level, you're in great shape. If you're in right field and it's a slow day, you're screwed."
After mulling over the options, the Astros and Aramark "felt like the fair way to do this thing is, let's not give 'em a stand to operate, let's give 'em the whole business," Puryear says. "If they're going to participate, they're going to own 30 percent of the whole business."
It became a much simpler proposition. No getting the hands dirty running a food stand or the hassle of hiring staff for intermittent employment. Aramark would do the work, while the minority investors would feed money into the stadium machine, and hopefully take more money out in the future. Presumably the abstract "minority community" would eventually benefit if a few well-known members profited from the stadium sales.
Restaurateur Acosta says that the more he studied the proposal, the more he and his partners liked it. "If we had the concession there, we'd have our restaurant's name there," reasons Acosta. "But then you have to find people to run it and operate it, and try to make a profit. I feel, having a business background, that this is a much better deal for us.It takes a lot of the risk out, I believe."
Aramark set a minimum buy-in of $100,000 for investment candidates. Since Aramark paid the Astros nearly $20 million for its portion of the build-out at the stadium, the minority investors as a group were expected to put up more than $5 million in total capital. Of course, once an investor was included in a lucrative long-term stadium contract, financing for his or her share of the deal would be much easier to secure. One source says Aramark was also willing to make loans to favored investors.
Having figured out the how, Aramark hired the minority law firm of Wickliff & Hall to take care of the who. Firm attorney Suewan Johnson supervised the selection process, which involved requests for proposals from minority firms and individuals. The process began in earnest a year ago, when officials of the Astros and Aramark held a spring training session to acquaint minority hopefuls with the rules of the game. The first was that Aramark would handle all the food and beverage operations. This caused some initial grumbling from participants who owned restaurants, but it didn't take long for the advantages of the proposal to become apparent.
"One of the special things about stadiums is you can only have one liquor license for the venue," says Arnold. "The [concession] money in stadiums is in the alcohol. That's a problem in terms of cutting it up into little pieces." Since Aramark would hold the license, the investment arrangement allowed the minority investors to share in that stream of liquid profits.
Aramark then selected the final group of investors. An Aramark representative did not return an Insider call seeking a complete list of the participants. Puryear says he doesn't know the full roster, but that the investors -- as well as a complete sampling of stadium chow and drinks -- would be accessible to the media this week at an open house at Enron Field.
For Arnold, induction into the Enron Hall of Minority Investors worked this way: To become an investor, at least one member of each group had to have attended the initial meeting at the Astrodome. Arnold had already recruited four other women friends, including Moya and Cheryl Creuzot, the wife of Frenchy's operator Percy Creuzot. Since Burney had been at the initial meeting, her inclusion in Women Stadium Investors made the group eligible for the deal. Aramark further bundled Tony Chase and the black-owned LaTrelles food service together with Women Stadium Investors for a 7 percent piece of the contract.
Arnold says no one is expecting to get rich quick, but Enron Field is a sound and prestigious investment.
"I wanted to participate in it because it's the stadium, and it's a big deal in town. We all thought it would be a fun investment. Not something we're going to make boatloads of money [on], but not a bad investment with a reasonable return."
Arnold takes issue with the notion that she and others used their political connections to get in on the contract.
"It was an open RFP," says the lobbyist, referring to requests for proposals. "It wasn't an inside deal. The meeting was open, and they put out notices." She says Aramark made the decision and adds, "I doubt the mayor has any idea who is participating."
Acosta agrees that the process was open and anyone who wanted to get in had an opportunity. "There were a lot of people at the first meeting," he says. "Some people decided this was a good deal, and some people may have decided this wasn't for them. At no point did they say, 'You have the second option, and the first option is for people connected with the city.' I didn't feel that was the case."
Puryear says his boss, Drayton McLane, made good on his campaign promise to give minorities their fair share.
"From my understanding and from the representation that I have seen," Puryear says, "it is a group that is representative of the minority community here in Houston."
And perhaps more than representative of the members who can deliver the votes.
Aramark is for hot dogs, the Insider's for hot news tips. Call him at (713)280-2483, fax him at (713)280-2496, or e-mail him at email@example.com.
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