Major PCH concession expected to be awarded to Bradley backer.

Major PCH concession expected to be awarded to Bradley backer

Sunspot restaurant-motel deal going to Camacho?

The Los Angeles City Council is expected soon to award the city's richest concession -- operating the landmark Sunspot restaurant-motel on Pacific Coast Highway -- to Andy M. Camacho, veteran politico and backer of Mayor Tom Bradley, raising questions about a possible "sweetheart deal."

J. Stanley Sanders, a Bradley insider and president of the city's Recreation & Parks Department board, voted to award the concession to Camacho last January, subject to council approval.

Sanders is a Camacho confidant and attorney.

The Sunspot, to be renamed the "Tides Inn," sits on city parkland at the mouth of Potrero Canyon, now being filled with dirt to make a park.

Sanders, listed on state documents as attorney for a now-defunct Camacho business, asked the Recreation & Parks board to be liaison between Camacho and the parks board, a request which Sanders' fellow commissioners granted.

Robert Morris, the big enchilada at Gladstones-4-Fish, the popular restaurant at Sunset Boulevard and Pacific Coast Highway, is said by Palisades community activists to be a financial backer of Camacho's in the Sunspot, but he did not return calls last week.

Sanders, acting in his role as city commissioner, twice voted to approve Camacho as concessionaire for the Sunspot, according to minutes of board meetings. Fellow commissioner Richard Riordan, downtown lawyer and power broker, last week said he had no knowledge of any private business connections between Sanders and Camacho.

City law requires that commissioners disclose any possible conflicts of interest and abstain from voting on such matters.

Neither Sanders nor Camacho returned phone calls last week.

The Sunspot concession is the latest in a string of controversial deals engineered by Camacho and a select group of other business leaders with close ties to City Hall

Camacho currently is a partner in food and gift concessions at the city-owned Ontario and Los Angeles International airports as well as a concession to operate the El Paseo restaurant on city-owned property on Olvera Street in downtown Los Angeles. The airport contracts have been criticized as enriching Bradley cronies instead of less-connected minority businesses, as intended under minority business set-aside rules.

Camacho is also a partner in a group developing the $250 million First Street Plaza project in downtown Los Angeles and is a principal of another group proposing a major redevelopment of Olvera Street.

Camacho also faces some redevelopment work at the Sunspot, the beige stucco-and-green trimmed structure -- directly across from Will Rogers State Beach -- that has been boarded up since January 1986, when the city booted the former concessionaire, Edward Andrews.

When built in 1938, the Sunspot was one of the nation's first "full-service" establishments to incorporate a motel, restaurant and lounge, gas station and garage space into a single operation.

Andrews, who operated the Sunspot from 1974 to 1986, paid the city 10 percent of the Sunspot's gross receipts under a six-month permit agreement that the city continually renewed.

The Sunspot's gross receipts grew under Andrews' management, which prompted city officials in 1985 to put the concession up to bid for a three-year concession contract.

Andrews participated in that original public bid, which specified that any future concessionaire must pony up $200,000 for construction of a pedestrian overpass linking the Sunspot to the beach parking lot across Pacific Coast Highway.

Andrews didn't or couldn't come up with that $200,000 and was later evicted -- but only after he tore through the Sunspot with a crowbar, destroying its innards, according to police reports.

The concession was then put back up to public bid and five parties, including Camacho, expressed initial interest.

Only Camacho made a formal bid, however, after all other bidders wilted in the face of the $200,000 up-front payment for the pedestrian bridge, and he bid for only a three-year firm concession. The facilities needed a major re-do as well.

Since Camacho was first awarded the Sunspot concession in 1986, however, the once-onerous terms have been eased considerably:

* The $200,000 overpass the city required from potential concessionaires will now be built with city taxpayers' money, said Keith Fitzgerald, concessions analyst and Sunspot top-gun for the Recreation & Parks Department.

* Camacho's concession agreement provides that of $800,000 he is to invest in the Sunspot, $500,000 is fully refundable by the city if Camacho's planned concession doesn't work out.

* While other bidders thought they might be limited to a three-year term, Camacho has succeeded in getting a six-year concession through the immediate exercising of a three-year extension option.

That six-year term would roughly coincide with the completion of a 150-acre public park the city is developing in Potrero Canyon, directly behind the Sunspot. In six years, the Sunspot concession would be put back out to public bid for a 20-year contract, which Camacho would likely stand the best chance of winning.

* Camacho will pay the city just 6 percent of annual gross receipts from the rejuvenated inn, significantly less than the 10 percent Andrews paid.

The new Sunspot concession is projected to generate gross receipts of $2.5 million during its first year of operation, meaning the city would recoup $150,000.

* For the first six years of operation, the city -- not Camacho -- will pay $3,000 a month to lease a 133-space parking lot from the state on land adjacent to the Sunspot. The city will spend $200,000 to build the parking lot, and it appears likely that Camacho will charge patrons for valet parking.

* The city will not appoint a special auditor to the Sunspot, despite its potential to generate hundreds of thousands of dollars for taxpayers.

The city's auditing procedures for determining gross receipts are admittedly feeble -- especially on concessions involving cash, such as Camacho's proposed Tides Inn.

"We try to audit each city concession every three years, but sometimes five or six years go by before we can get to them," said Fitzgerald. "We only have three auditors responsible for auditing our 200 recreation centers and more than 50 concessions, so you can imagine what it's like to get an audit."

PHOTO : Artist's rendering of what the Sunspot will look like after being renovated and renamed the Tides Inn: A sweetheart deal?