Out of Bounds

Trying to land a contract at the Pepsi Center can be a dirty game.

hen the Denver Nuggets trot onto the hardwood floors at the Pepsi Center on November 2 to open the season against the Phoenix Suns, team owner Donald Sturm will be on the edge of his seat.

The newly built, $165 million arena will have already hosted its first blockbuster concert and several Colorado Avalanche games by then, but the dismal Nuggets are still "rebuilding." And Sturm, who bought the Nuggets, the Avalanche and the Pepsi Center on July 27, will be wondering if he put the right players on the court -- Ron Mercer from the Celtics, Nick Van Exel, who re-signed for $55 million, Antonio McDyess and Chauncey Billups.

Sturm probably won't give much thought to the hundreds of security guards, ushers, janitors, stagehands, electricians and other behind-the-scenes employees who will run the show.

All shook up: The Pepsi Center will open on October 1 with a concert by Celine Dion.
James Bludworth
All shook up: The Pepsi Center will open on October 1 with a concert by Celine Dion.

But Cory Meredith, Rick Larson and Scott McDowell will.

The three men bid for -- and lost -- what would have been stable and lucrative contracts with the Pepsi Center: Meredith for Staff Pro Inc., a security company; Larson for Bear Communications, which provides wireless two-way communications; and McDowell for Rocky Mountain Stagehands, which hires people to build and dismantle entertainment and sporting sets.

Unlike Sturm's high offer of $461 million, Meredith, Larson and McDowell were aiming low to try to win their bids. All three, however, claim that their bids weren't fairly evaluated and that the final contracts were awarded in irregular or inappropriate ways. Even if Sturm did choose the right players for the basketball court, they say, the people who now work for him chose the wrong players for the Pepsi Center.

"It concerned us that the bid process did not seem fair," wrote Staff Pro CEO Meredith in a June 9 letter to Barry Fey, the former Denver music mogul and a current consultant for the Pepsi Center. "Especially that the contract was awarded on the basis of friendship rather than ability."

In this letter and an earlier one addressed to Pepsi Center senior vice president Gene Felling, Meredith accused Felling of choosing D&L Entertainment Services over Staff Pro based solely on Felling's friendship with D&L vice president Tom Smith. Smith works at Fiddler's Green Amphitheatre, where Felling was the general manager for ten years until April, when he took the Pepsi Center job. Felling contracted with Smith's D&L to provide security for Pope John Paul II's visit to Denver in August 1993 as well.

Meredith also pointed out that San Diego-based Staff Pro works at almost every major arena and venue in the western United States, while D&L has only one arena contract, at Reunion Arena, in the company's hometown of Dallas -- and he included a letter from the president and CEO of Reunion Arena, who recommended Staff Pro over D&L.

Reached at his San Diego office, Meredith is more diplomatic. "This will be over a million dollars in gross billing a year," he says. "It will be a very busy building. It's a big contract. I've known Gene for twenty-some years. I told him not to [hire D&L]. But they are a private company. They aren't held to the same guidelines that a state or city facility would be under. They can choose who they want for any reason."

Larson, a sales manager for the Denver field office of Dallas-based Bear Communications, raises similar issues; he claims that arena production director Shawn Stokes chose Frontier Communications over BearCom based on Stokes's friendship with someone at Frontier.

"It was obvious Stokes was looking for any and all excuses to not give me the business," Larson says. "He was incredibly rude and he kept bringing up rinky-dink issues. Finally I asked him what he was going to base the decision on. I wanted him to say price because I was prepared basically to give him the radios at cost.

"But a few days later he said he had decided to go with my competitor. I learned he [Stokes] had a best friend or a friend working for [Frontier]. He said he was going to give the business to his friend and then he got very offensive. It was very strange how the whole thing played out."

Larson told Fey that Bear had already done quite a bit of legwork for the Pepsi Center -- all for free. Larson had ordered $6,000 worth of radio equipment, helped the arena obtain FCC licensing and planned to demonstrate everything in mid-June when he found out he had lost the contract.

"It's not illegal, and there is nothing that I can do at this point, but I would have handled it differently myself. I had, like, twenty meetings with these people, I was down there all the time. This guy had no feelings for all that work," Larson says. "He told me to come down and pick up the radios. It really seems like that whole deal down there is going to be snakebitten."

Larson estimates that the contract would have been worth about $100,000 initially, with an additional $30,000 made in the following years.

"I got a letter from the people at Bear. Why me, I don't know," Fey acknowledges. "I did some investigation, and [Stokes] told me that Bear was underbid by, like, thirty or forty thousand."

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