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San Diego
Saturday, May 18, 2024

Delaware North’s Sales South of Projections

Plaza del Pasado or Dry Gulch?

Nearly three years and four general managers after taking over what was once the state’s most lucrative concession at Old Town San Diego State Historic Park, Delaware North Cos. is fulfilling its promise of spending $12 million refurbishing and repairing historic properties, including a couple of restaurants.

The concession that the food giant operates as Plaza del Pasado has not done nearly as well as the company originally projected.

It had gross receipts of about $10 million in 2007, says Lance Wellwood, the current general manager.

That’s a far cry from the $25 million that Bazaar del Mundo says it averaged.

The money for construction, along with a guaranteed minimum of $2 million in rent or 8.5 percent of gross sales up to $18 million and 9 percent of gross sales after that, along with an offer of educational programs on the area’s history, gave the Buffalo, N.Y.-based company the edge over other contenders, including Bazaar del Mundo, which had operated the concession for 34 years.

Obviously, Plaza del Pasado’s minimum rent has kicked in. Even so, the state isn’t losing out. Bazaar del Mundo’s rent amounted to 7.3 percent of its revenue, or less than $2 million.

“I can’t imagine why Delaware North bid this amount of money, because it doesn’t make financial sense on a 10-year lease,” said Diane Powers in October 2003, after learning she’d lost the concession bid.

Bazaar del Mundo unsuccessfully challenged the California Department of Parks and Recreation’s bid decision on grounds that it was flawed, and the protracted legal battle delayed Delaware North’s takeover until late May 2005.

Looking Ahead

Powers subsequently moved some of Bazaar del Mundo’s shops to property she owns on Taylor Street in Old Town near the concession. She moved her Casa de Pico restaurant to Grossmont Center in La Mesa.

Powers was out of town last week and couldn’t be contacted, however Mike McLaughlin, Bazaar del Mundo’s director of government relations and special projects, says she would have nothing to say about Delaware North.

“We’re looking forward, not backward,” McLaughlin said. “Our business is in a new location, and more and more of our longtime customers are finding us and shopping.”

In keeping with the parks department’s big-picture plan, Delaware North said it would focus its three restaurants and 11 shops on replicating the cuisine and trade of the area during the 1800s.

“They’re (the state) trying to re-create the feeling of what was there in the very early period, but my question is, ‘Is that what the public wants?’ ” Powers said in 2003.

According to an early projection, Plaza del Pasado expected first-year sales of about $20 million, climbing to $28 million within the next three years.

Cautiously Optimistic

Wellwood gave a revised version last week.

“We project to be flat in 2008,” he said. “Our cautious forecast is to be up by 4 percent in 2009.”

Last week, renovation work on the Jolly Boy Saloon and Restaurant, named after the original saloon that opened on the site around 1854, was going full steam ahead. It closed in June. A reopening is scheduled for March, and Plaza del Pasado expects that a menu of steak and seafood along with libations that include absinthe, long outlawed in the United States, will be a draw.

Also under renovation is the Cosmopolitan Restaurant and Hotel, built in 1830 as a single-story home by San Diego pioneer Don Juan Bandini. It was converted to a restaurant with a small hotel on the second story in 1869. When archaeologists finish poking around , recently a layer of the stucco exterior had been removed to expose the original adobe bricks and river rock foundation , construction will begin. The property was closed in January and is expected to reopen in April 2009.

State To Help

In addition to what Delaware North will spend on renovations, the state is going to pony up $1.8 million from grants it has secured, Wellwood says.

Some new retailers are also coming on board, including Hacienda de las Rosas, a Ramona winery. Consuelo Miller, who owns El Fandango restaurant in Old Town, is returning to operate a bakery she’d long run in the concession, and the Temecula Olive Oil Co. plans to open soon.

While many local residents have said they boycotted the concession after Powers’ departure, others stayed away simply because they thought the new operation was drab compared with what used to be, according to news stories and blogs.

The state parks department’s mission is “to establish a connection with the development of early San Diego,” said Ronilee Clark, superintendent of the department’s San Diego Coast District.

That won’t change.

Educational tours and historical interpretations will attempt to spoon-feed the public a dose of history. Hopefully, the new retailers and restaurants will add spice. And for everything else, there’s absinthe.


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