San Antonio City Council voted 10-1 Thursday to award Go Rio San Antonio, a locally owned company working with Houston-based Landry’s, the multimillion contract to operate the City’s new fleet of river barges.
Council voted against City staff’s recommendation to give the contract to Chicago-based Entertainment Cruises, doing business locally as San Antonio River Cruises. But most Council members cited City policies that favor small, local, and minority-owned businesses as justification for their vote.
“I went into this process with an open mind,” Mayor Ivy Taylor said before the vote. “There was no single factor that I consider more important than others. …. [But voting for Entertainment Cruises] would send a contradictory message to the one that we made when we approved those policies.”
Councilman Ron Nirenberg (D8), who is opposing Taylor in the June 10 runoff election, cast the sole vote against awarding the contract to Go Rio because he agreed with City staff’s opinion that Entertainment Cruises was the better, more experienced company.
“There is a reason why Council isn’t involved in these procedures,” Nirenberg said, because the process becomes politicized. He was referring to the mayor’s abrupt halt of the previous round of proposals and the abnormal practice of letting the top two teams out of five give presentations to Council. “I have great confidence” in City staff and the citizen selection committee, which gave Entertainment Cruises overwhelmingly more points for experience and quality of proposal.
Click here to download the presentation composed by City staff for Thursday’s Council meeting.
The vote came after hours of citizen testimony that focused largely on local versus out-of-town management, weeks of aggressive marketing and social media campaigns from various firms that applied for the contract, and years of City processes that have been scrapped, restarted, and debated.
Members and supporters of the local team burst into applause when the vote results were displayed in Council chambers. VIA Metropolitan Transit Chair Hope Andrade, a majority owner of Go Rio along with local restaurateur Lisa Wong, was in tears after the vote.
“Hope and I are long-time San Antonians, we love our city, and we knew with a great operating partner like Landry’s we would be the best team,” Wong told reporters after the vote.
Houston-based Landry’s owns and operates more than 500 hospitality, dining, and entertainment properties nationwide, including the Rainforest Cafe on the San Antonio River and the Chart House Restaurant atop the Tower of the Americas.
The saga isn’t quite over yet. The Go Rio team has 30 days to negotiate with the City specific terms of the 10-year deal that is estimated to be worth more than $100 million. The City wants the new operator to be in the water by Oct.1, replacing Rio San Antonio Cruises‘ operations and barges as its contract expires at the end of September.
“We’ve already got our marching orders,” Wong said, adding that they will be fine-tuning the details of operation and possibly incorporating some new ideas and feedback from the community and Council. “That’s all part of negotiations. … We want to make sure that our programming is consistent with what they want.”
Entertainment Cruises scored one point less than its locally owned competitor on a City contract scoring matrix that gives extra points for small, local, veteran-, or minority-owned businesses.
Entertainment Cruises’ ability to scale, its access to resources and other markets, and overall experience operating in 10 cities for more than 28 years made it the frontrunner for City staff, said Assistant City Manager Carlos Contreras. It’s not the first time that the City has set aside Small Business Economic Development Advocacy and local preference points to favor an out-of-town company in the interests of long term benefits to the city.
Entertainment Cruises was committed to hiring several local partners including Chef Johnny Hernandez, Chelsea’s Catering and Bar Service President Tony Gradney, SWEB Development CEO Magaly Chocano, Tri-starr Personnel CEO Candace Hawkins, and Melissa Aguillon of local public relations and marking firm Aguillon & Associates.
I asked Kenneth Svendsen, CEO of Entertainment Cruises, after the vote if he was surprised by the results.
“You have to be surprised when multiple times an independent committee – two different ones – loud and clear said that when it came to experience, financial capability, and delivering [cruise] experiences … that we are the best ones to operate it,” he said, “of course you have to respect that.”
Despite the loss, he said their company’s participation in the process elevated the competition.
“I think San Antonio won today, even though it wasn’t won by us,” Svendsen said. “Our team … they have pushed and pushed for innovation and everyone has seen it showcased. And today the mayor and the Council have seen what this could be. Shouldn’t that matter more than who gets to do it?”
Go Rio was ranked third out of five companies, according to the matrix, with 53.88 points before the local/minority preference points were applied. Once they were, they received 17.55 additional points for a total of 71.43 points. Entertainment Cruises scored a 70.41 on the matrix without any preference ratings.
The River Walk hosts more than 11.5 million visitors per year, and about 1.4 million utilize the barges that motor up and down the San Antonio River, according to City staff. The City wants to increase the use and enhance the experience for locals and visitors alike, especially when it celebrates 300 years in 2018.
“I was not sent here to be a rubber stamp for the City staff,” said Councilman Joe Krier (D9), acknowledging that he does agree with staff “95%” of the time. When the SBEDA and local preference policies were created, however, “we did not say we will do that unless it’s a really really big contract.”
George Mery, the owner of Elegant Limousine, teamed up with several other local firms, also submitted a bid that came in third place with local preference points to total 65.52. Several supporters of Mery and Associates, also known as Buena Vista Barges, spoke out against the process in which they and two other contenders weren’t allowed to present their proposals to Council.
The current river barge operator’s proposal ranked fourth out of five.
Pat Boone of Rio San Antonio Cruises addressed Council on Thursday, but did not ask for their vote, just that they keep the operation local.
“We have farmed out the design of this boat, we have farmed out the production of this boat, and now we’re getting ready to consider farming out the operation of this boat,” Boone said.
Late Thursday afternoon, both Nirenberg’s and Taylor’s campaign released statements attacking each other.
“It is shameful that politics won out over the public interest today,” Nirenberg stated. “Twice, a transparent and fair process selected the best company and twice Mayor Taylor intervened to rig the process in favor of a political ally. Although I remain hopeful that Go Rio San Antonio will be able to create a quality experience, these actions diminish public trust and have a chilling effect on businesses and individuals looking to invest in San Antonio.”
Taylor’s campaign offered several comments, including:
“Chalk up another failure of leadership for Councilman Nirenberg. He wants to be mayor of our City, but today he said through his vote on the River Barge concession that our people don’t have the talent or skill to handle a major contract. Not surprisingly, Nirenberg was once again the lone ‘no’ vote on City Council.
“Mayor Taylor believes in the ability and talent of San Antonio’s small-, women-, veteran- and minority-owned businesses. That’s a key reason she supported the Go Rio San Antonio team, which a committee of citizens and stakeholders ranked first in the selection process.”