Letter From City Manager Chi Regarding LA PartyWorks

In his weekly update, City Manager Oliver Chi said an email he sent to staff regarding the recommendation that the city terminate its contract with LA Partyworks was leaked, so he decide to release the email generally. Here it is:

From: Oliver Chi
Sent: Sunday, August 2, 2015 4:25 PM
To: All Employees; Police All
Subject: Friday Night Family Street Fair Issue

Good afternoon everyone, 

I hope that this email finds you doing great!

It was recently brought to my attention that there has been quite a bit of discussion occurring in our community regarding an item the City Council will be considering next Tuesday, August 4, 2015, regarding the potential termination of LA PartyWorks, Inc. (LA PartyWorks) as the operator of the Friday Night Family Street Fair Event.

Given the amount of dialogue that is happening regarding the issue, I thought it would be a good idea to share with our team here at the City some of the background details related to the issues at hand, and to articulate some of the reasons why I am recommending that the City Council move forward in a different direction with regard to the management of the overall Friday Night Family Street Fair (Street Fair).

After nearly 23 years of operating the Street Fair, the City Council on April 28, 2015, formally decided to end its relationship with Family Festival Productions, Inc. (FFPI), and instead, approved an Exclusive Franchise Agreement with LA PartyWorks to operate the Street Fair.

During the 3+ months that we have partnered with LA PartyWorks, I believe that the City has done everything we can to set the new company up for success.  However, during that time, LA PartyWorks has engaged in activities and behaviors that have illustrated an inability to be an effective partner for the City in coordinating the Street Fair. 

Outside of the operational and procedural issues regarding the production of the Street Fair, the more concerning development for staff has been the fact that there are ongoing reliability issues with LA PartyWorks which point to a fundamental values misalignment between how the City operates and how LA PartyWorks operates. 

More specifically, since the contract was approved with LA PartyWorks, the City has had to intervene and mediate multiple conflicts each week that have arisen between LA PartyWorks and our Old Town Merchants / Street Fair vendors.  These continual conflicts between the operator and the Street Fair stakeholders is indicative of the first values misalignment that the City has identified with LA PartyWorks.  While we expect to work collaboratively with our partners in an effort to find solutions, LA PartyWorks employs a different approach that can be characterized as unilateral and one-sided.

In addition, during the assessment process prior to awarding LA PartyWorks with the contract to manage the Street Fair, representatives from LA PartyWorks shared that their business plan for making money to operate the event involved the following three primary revenue streams:

1.       Fees paid by the Street Fair vendors

2.      Tickets sold for the Kids Play Area

3.    Outside sponsorships (LA PartyWorks specifically mentioned Vans, Miller Brewing Company, and Coca-Cola as event sponsors)

However, almost immediately after the contract was awarded to LA PartyWorks, representatives from the company informed staff on several separate occasions that the actual business model that they were employing to make money off of running the Street Fair involved the following four separate revenue streams:

 1.     Fees paid by the Street Fair vendors

2.     Tickets sold for the Kids Play Area

3.     Becoming the exclusive vendor to sell kettle corn at the Street Fair

4.    Becoming the exclusive vendor selling water / soda at the Street Fair

This particular issue highlights several additional values misalignments between the City and LA PartyWorks.  First of all, and perhaps most importantly, the City strives to be as transparent as possible in our intentions and actions.  LA PartyWorks has shown that a willingness to provide inaccurate and conflicting representations regarding their intentions and actions. 

In addition, the fact that LA PartyWorks would willingly engage in direct competition with our Old Town Merchants by trying to make themselves the exclusive vendor of kettle corn and drinks at the Street Fair – in direct violation of their contract with the City – demonstrates a complete and total disregard for the not only the rules and regulations that we all agreed to operate under, but also for the City. 

Finally, with the City prohibiting LA PartyWorks from selling kettle corn and drinks at the Street Fair, we have legitimate concerns regarding the ongoing financial viability for LA PartyWorks to continue producing the event.  Given the way that the company has operated to this point in time, it would be logical for the City to think that LA PartyWorks has developed some other mechanism through which to make the venture financially viable that they have yet to share with us.

One additional reliability issue that we have experienced with LA PartyWorks relates to the private discussions and interactions that City staff has had with company representatives.  On multiple occasions, LA PartyWorks has told the City that unless we allow them to engage in activities that are in violation of their contract, they would be unwilling to continue as the operator of the Street Fair.  While the firm has not carried through on their statements to not coordinate the Street Fair event, these types of interactions have elicited a genuine concern about the commitment that LA PartyWorks has to the Street Fair.  

Given these overall issues that the City has identified with LA PartyWorks as a partner, we are recommending that if the City Council does terminate the contract with LA PartyWorks, that we enter into an interim agreement with a company known as Green Leaf Events, Inc. (GLEI), to produce the Street Fair.  GLEI is a company that was recently formed by an individual named Jerry Diaz. 

Mr. Diaz has significant experience managing street festivals, special events, and car shows, and in fact, was the event manager for Monrovia’s Street Fair for a number of years when the event was managed by FFPI.  Currently, GLEI has been engaged to produce the Rosemead Farmer’s Market and will also be coordinating the Monrovia Kiwanis’ Taste of Monrovia event this year.  Additional information regarding GLEI can be found on the internet at www.greenleafevents.net. 

It is also important to note that Mr. Diaz did work for the former operator of the Street Fair (Dave Gaymen, owner of FFPI), and furthermore, the City has confirmed that GLEI has no ongoing connections to FFPI. 

I have included as an attachment to this email a copy of the staff report and attachments that was prepared for the City Council’s consideration about this particular matter.  The issue will be addressed next Tuesday, August 4, 2015, and if you should have any questions, please feel free to let me know!

I hope you have a terrific rest of the weekend, and do look forward to seeing everyone next week!

Best regards,

Oliver