Scott Ball / Rivard report
You might never take a ride on one of the barges plying the narrow confines of the San Antonio River, but as a taxpayer and voter you should care about the 10-year, $100 million contract that is now up for grabs. The River Walk tourist concession is quite a lucrative one with a long history of backroom politics deciding the outcome.
Nothing has changed in that regard in this so-called City on the Rise. The wheeling and dealing has only been amplified by the political moment as Mayor Ivy Taylor and Councilman Ron Nirenberg (D8) head into a June 10 runoff election, along with two incumbent council members.
That’s why every San Antonio resident ought to watch as Taylor and City Council cast their votes Thursday to award the contract. In all likelihood, it will be a mere formality, with the fix already in to award the deal to Go Rio San Antonio, whose members have only modest credentials to claim the business.
Go Rio is a partnership of Houston-based Landry’s Restaurants, VIA Metropolitan Transit Chair Hope Andrade, and Lisa Wong, owner of multiple Tex-Mex restaurants, including Rosario’s and Acenar. Landry’s operates one dinner cruise boat, one speed boat, and two shuttle boats in Kemah near Galveston.
Entertainment Cruises of Chicago, doing business here as San Antonio River Cruises, is the bidder recommended not once, but twice by City staff. The company operates a fleet of 36 cruises ships and boats in 10 U.S. cities and is owned by the Pritzker family, regularly ranked as one of the most philanthropic families in the country. If City Council decided to follow staff’s recommendation and Entertainment Cruises were to win the contract, its executives promised to join forces with True Flavors owner Johnny Hernandez.
Landry’s serves 300,000 customers annually, counting its shuttle boats, while Entertainment Cruises serves 1.9 million. What the Go Rio group lacks in river barge experience, however, is more than made up in political pull. The team finished a distant fourth out of four bidders in the first review by City staff, yet somehow maneuvered itself into first place by a single point after Taylor demanded a second review.
In that second review, Go Rio shifted majority control of the partnership from Landry’s, which has limited cruise experience, to Andrade and Wong, who have no experience but qualified for bonus points as minorities and local bidders.
The highly unusual second review was scheduled after Taylor cried foul when former Mayor Phil Hardberger, representing Entertainment Cruises, spoke during that bidder’s presentation to City staff and a citizens committee. Other attorneys representing other bidders did not speak. The assumption was that Hardberger’s popularity as a former mayor tilted the review in his client’s favor when he was actually serving as an unregistered lobbyist.
That’s a debatable, but fair argument to make. The fact that Hardberger’s client is a nationally regarded cruise business and Go Rio’s principals are not even in the cruise business seems like a far more important point of differentiation.
Go Rio is hardly at a disadvantage inside City Hall. The group is represented by San Antonio attorney Frank Burney, and most City Hall observers would say he is a far more experienced and effective lobbyist than Hardberger.
Taylor’s call for a second review gave the three also-ran teams a chance to regroup, shuffle their qualifications on paper, and create an avenue to win political support at City Council, support that they were not winning on the merits with staff and a citizens committee.
The reset also gave a fifth entity the opportunity to jump in and bid. Even conceding the unfairness of Hardberger speaking, the fact is the second staff and citizen review also favored San Antonio River Cruises by an overwhelming margin until questionable points for minority and local ownership were tacked on.
Andrade might be the Go Rio CEO and controlling shareholder on paper, but the former Texas secretary of state and owner of small businesses has no experience in the hospitality or river cruise industries. As the current VIA chair, her involvement is a clear conflict of interest. The new barge contract requires the service to also operate as a river taxi and new transit option for locals. How can the chairwoman of the city’s transit agency operate a for-profit transit business using City-owned boats?
Moreover, who believes Andrade and Wong will run the company when Landry’s, the owner of more than 500 restaurants, casinos, and the Galveston boats, will be involved? Clearly, the Houston company is the main player, a non-minority, non-local bidder.
Awarding Andrade and Wong points under the Small Business Economic Development Advocacy Program (SBEDA) belies the original intent of the ordinance. Wong told City Council that together she and Andrade have a “combined net worth in excess of $30 million.” That might not land them on the Forbes 400 list, but in this city that makes them wealthy beyond the imagination of most citizens. I don’t begrudge them their hard-earned wealth, but please don’t tell me they are the victims of economic discrimination and deserve special consideration.
Hernandez, the wildly successful restaurant operator and chef who is part of the Entertainment Cruises team, is another example of a local, self-made entrepreneur who deserves a lot of credit for what he has built, yet needs no special hand up in life at this point.
The original intent of the SBEDA ordinance was to level the playing field at City Hall for disadvantaged minority contractors who seldom won a fair hearing when competing for contracts. In this instance, the two entities should have been judged equally. There is nothing disadvantaged about any of the local partners, and Landry’s is no more local than the Pritzkers.
See below to review the first round scoring of the four bidders and the second round of scoring of the five bidders.
The process has made a mockery of local government transparency. If you want to see how San Antonio would operate under a strong mayor system, this past week offers a clear picture and it is not a pretty one.
Both of the top two finishers were allowed to make 20-minute presentations to City Council on Wednesday. Two Chicago-based executives and Hardberger spoke for Entertainment Cruises, while Andrade, Wong, and two Landry’s executives spoke for Go Rio.
It was clear as Taylor and council members quizzed senior City staff members afterwards that Taylor and a clear majority had decided to support Go Rio. The mayor sat stone-faced as Hardberger addressed her and council members, warning them, “You are the stewards of our river. You will decide the future of our river and our city…The entire city of San Antonio is watching this vote.”
It was a lecture Taylor and a council majority did not care to hear or heed.
When Assistant City Manager Carlos Contreras attempted to respond to Taylor at one point by referencing the first staff review, the mayor snapped at him, demanding that he stop referring to the first review.
Like Taylor, City Councilman Alan Warrick II (D2) also faces a tight runoff election. He proceeded to try to trap Contreras and other city staff with questions that implied their recommendation did not recognize the need to rectify a record of racism in the city’s history of awarding contracts. No one would dispute that history, but it was ludicrous to try to pin the blame on current City staff or suggest that Warrick and others were finally delivering disadvantaged minority citizens a fair shake.
Several citizens who served on the bid review committee spoke with me in the days following the Wednesday council B session, expressing frustration, and in some cases, anger that their work was being ignored as elected officials vied for votes in the June 10 runoff.
San Antonio operates under a city manager form of government, and despite a tense, sometimes hostile mood in the packed meeting room Wednesday, City Manager Sheryl Sculley and her team stuck to their guns and told the mayor and council members at a special presentation of the two top bidders on Wednesday that staff continued to recommend Entertainment Cruises, even if it had slipped into second place by a single point.
The elephant in the room was the close proximity of Taylor and Nirenberg, separated by a few seats at the table and about 5,000 votes in the city’s May 6 voting. It was evident Wednesday that Taylor has a majority willing to follow her in awarding the contract to Go Rio, and that Nirenberg is in the minority.
Taylor and her campaign team seem less confident that a majority of voters will follow her in the June 10 runoff. Taylor won 42% of the vote to Nirenberg’s 37%, an outcome many did not expect, and it was quickly followed by Taylor’s hiring of political consultant Colin Strother while Christian Anderson remained in the role as campaign manager.
Last week the Taylor campaign launched the LiberalRon.com website and openly took credit for the attempt to ridicule Nirenberg and his service on City Council, painting him as a partisan do-nothing in a nonpartisan election, disparaging his endorsement by former Mayor Julián Castro and others.
It put Taylor at odds with both Hardberger and Castro, her two predecessors in the office, both of whom won multiple terms by comfortable margins and are regarded as having been highly effective in propelling the city forward.
The LiberalRon.com website was accompanied by anti-Nirenberg robocalls, which a number of voters condemned in calls to the media. One former councilwoman described the call as a disinformation campaign in a message to the Rivard Report. Strother disagreed when questioned by an Express-News columnist, but no one I’ve spoken with who received the call agrees with him.
None of these developments seem consistent with the quiet, confident “I am not a politician” profile that Taylor has long sought to project. The tactics are those of an underdog, one bent on turning the city’s nonpartisan city election into a partisan brawl.
It was a week of ugly politics in San Antonio. This week promises more of the same, which suggests City Council cannot be trusted to award major contracts during election season.