STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA SUNSHINE PARKWAY CITRUS, ) INC.; JOE A. CHAMBLISS, )

)

Petitioner, )

)

vs. ) CASE NO. 83-198BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter, after due notice, on May 3, 1983, in Tallahassee, Florida, before Thomas C. Oldham, Hearing Officer.

APPEARANCES

For Petitioner: Ronald C. LaFace and

Jeffrey H. Abrams, Esquires

101 East College Avenue Post Office Drawer 1833 Tallahassee, Florida 32302

For Respondent: Mark Linsky, Esquire

Legal Department

Department of Transportation Haydon Burns Building Tallahassee, Florida 32301

For Intervenor: Philip S. Blank, Esquire

Lewis State Bank Building, Suite 320 Tallahassee, Florida 32301

ISSUE PRESENTED

Whether Petitioners' request to negotiate or competitively bid for a concession for amusement devices at service areas on the Florida Turnpike should be granted, pursuant to Section 340.091, Florida Statutes.

This proceeding arose as a result of Respondent Department of Transportation's denial of the request of Petitioners Florida Sunshine Parkway Citrus, Inc. and Joe A. Chambliss to negotiate or competitively bid for a concession to install and operate video amusement machines at the various service plazas of the Florida Turnpike. Sunshine Parkway Restaurants, Inc. petitioned for leave to intervene in the proceedings and was granted status as an intervenor.

Posthearing submissions by the parties in the form of proposed recommended orders have been fully considered, and those portions thereof not adopted herein

are considered to be either unnecessary, irrelevant, or unsupported in law or fact.

FINDINGS OF FACT

1. On June 1, 1982, Petitioner Florida Sunshine Parkway Citrus, Inc. entered into two agreements with Respondent Department of Transportation under which Petitioner was granted a five-year license to manage and operate the citrus products shops located at the Pompano and Fort Pierce service plazas on the Florida Turnpike, pursuant to Section 340.091, Florida Statutes. The agreements provided that the shops would be used for the sale of products "relating to Florida citrus and/or goods promoting the State of Florida, including but not limited to all Florida products and tropical juices." Petitioner was awarded the contracts as a result of a competitive bidding process. Petitioner Joe A. Chambliss is the president of Florida Sunshine Parkway Citrus, Inc. Chambliss also is a sub-lessee of two Texaco Service Stations at the Fort Pierce and Snapper Creek service plazas. (Testimony of Chambliss; Respondent's Exhibits 10-19, Joint Exhibit 1 (Stipulation))

   
   

2. On November 29, 1978, Respondent entered into an agreement with Intervenor Gladieux Food Services, Inc. and Canteen Corporation (Gladieux) whereby Respondent leased certain portions of buildings at eight service plazas on the Sunshine State Parkway (Florida Turnpike) for a period of ten years to operate and manage food and related facilities at the leased premises. Sunshine Parkway Restaurants, Inc. is a joint venture of Gladieux/Canteen. The lease provided that Gladieux would have the exclusive use of the areas designated as restaurants for the purposes of serving food, nonalcoholic beverages and "related merchandise." The agreement provided that Gladieux would have non- exclusive use, but maintenance responsibilities for parking areas, restrooms, and the lobby and vending areas. The agreement further provided that Respondent would have the exclusive right to approve the items to be sold, and required Gladieux to furnish all vending machines required for operating a vending center in designated vending areas. Gladieux was awarded the contract as a result of a competitive bidding process. (Testimony of Owen, Petitioner's Exhibit 9, Respondent's Exhibit 1, Joint Exhibit 1 (Stipulation))

   
   

3. In addition to the agreements with petitioner to operate citrus products shops, other contracts for such shops at the other service plazas are operated by licensees as a result of a competitive bid process. Similarly, all contracts for the sale of motor fuel at the various service plazas were awarded as the result of competitive bids. Respondent also has an existing license agreement with Florida Folder Distributing Company to operate an information leaflet rack at six of the seven service plazas where informational material promoting facilities and points of interest in the state are made available to the public. This agreement also was entered into after competitive bidding. The information racks are located in the lobby or corridor areas of the service plazas. (Testimony of Owen, Petitioner's Exhibits 5-8, Joint Exhibit 1(Stipulation))

   
   

4. Vending machines are operated by Gladieux at the various service plazas of the Turnpike. They include food and drink machines, machines that produce wax figures, and photograph machines. Most of the vending machines are located in the restaurant areas, but those at the Pompano and West Palm Beach plazas are placed in the "common areas" of the plazas. (Testimony of Chambliss, Owen, Petitioner's Exhibits 5-6, Respondent's Exhibits 2 g and h)

5. In 1981, Section 340.091(1), Florida Statutes, was amended to permit the granting of concessions on the Turnpike for amusement machines which operate by the application of skill. Gladieux submitted a proposal to Respondent to install video game machines in appropriate areas under its lease. Respondent's General Counsel advised Mr. C. H. Owen, Deputy Director of Maintenance, in June, 1981, that Chapter 340, Florida Statutes, did not require competitive bidding for such a concession. Respondent's Turnpike engineer advised Owen, in November, 1981, that Gladieux's proposal to install and operate some 35 machines for a 12-month trial period at an acceptable rental fee should be accepted, and that the program should be evaluated at the expiration of the trial period. He further told Owen that if a satisfactory rental fee could not be negotiated at a satisfactory fee at the end of the one-year trial period, the operation should be offered for public bidding.

   
   

6. Respondent and Gladieux thereafter on December 20, 1981, entered into an agreement whereby Respondent was granted the right to install and operate 35 amusement devices at individual locations to be designated by Respondent. The agreement was for one year and provided that Gladieux would pay Respondent 22.51 percent of the gross revenue from the operation of the devices, plus 4 percent tax. The agreement stated that the operation of the amusement devices was on an experimental basis and contained the statement that "Operator is currently lessee of the only space suitable for the installation of such devices and is prepared to cooperate with the department." Respondent's reason for negotiating with Gladieux was due to the fact that it "controlled" the vending machine and foyer areas under the lease, and that the video game machines were "vending" machines within the vending machine provisions of the lease. However, it was recognized that the lease provisions were originally intended only to apply to food and drink vending machines. Further, Respondent's General Counsel had opined prior to the 1981 amendment to Section 340.091(1) that a contract to install pinball machines or other electronic games on the Turnpike was specifically prohibited by that provision. Expert opinion testimony was received at the hearing that a video game machine is a "vending" machine because it is a coin-operated device that dispenses either goods or services. Although Respondent's officials were of the view that the provision of video machines was within the purview of the vending machine provisions of the lease, it entered into a separate agreement because it wanted a one-year trial period to determine the public's acceptance of the machines, and also to determine if they would be detrimental from the standpoint of congestion and noise level. Respondent preferred that the machines be located in the restaurant areas, where possible. This was a major reason for contracting with Gladieux because it controlled the restaurant areas under its lease. Another reason was that Gladieux operated the restaurants 24 hours each day and thus its personnel were always available to handle maintenance problems. (Testimony of Owen, Mizerski, Petitioner's Exhibits 11-12, Respondent's Exhibits 3-4, 8)

   
   

7. Gladieux proceeded to place video machines pursuant to the agreement and with the approval of Respondent in the various service plazas along the Turnpike. Most were placed in the restaurant areas, but in several service plazas the machines were placed in the vending areas outside of the restaurants. (Testimony of Owen, Petitioner's Exhibits 5-6, Respondent's Exhibits 2 g and h, 9)

   
   

8. Chambliss was aware in early 1981 that video games had been placed in several of the Turnpike service plazas, and later became aware that Respondent had a one-year experimental agreement with Gladieux. By letter of September 13, 1982, Chambliss requested that Respondent provide him the opportunity to contract for installing electronic game machines on the Turnpike. Respondent's

   Turnpike engineer informed him that a decision would be made in November, 1982, as to whether to eliminate or extend the current contract, but that he would be kept apprised as to the matter. Also, by letter of October 18, 1982, Gladieux requested that its agreement with Respondent be extended to the termination date of its existing restaurant lease in 1988, and pointed out that it had made a substantial investment of about $135,000 in providing the video machines and game rooms. Respondent thereafter determined that the experimental operation of video games had been successful, and advised Gladieux on November 19, 1982, that it would entertain a formal proposal to continue operation of the machines by an addendum agreement to its existing restaurant lease. (Testimony of Owen, Chambliss, Petitioner's Exhibits 1-2, 10, 13-15)

   
   

9. Chambliss submitted a proposal to Respondent on November 29, 1982, to either compete with Gladieux for a contract to operate amusement devices at all service plazas, or to allow him to operate machines at the Pompano and Fort Pierce plazas where he held citrus shop licenses. On December 17, 1982, Respondent denied the request as being improper because of the provisions in the one-year agreement with Gladieux to extend the period for operation of machines if the one-year trial period proved successful, and also because the restaurant contract with Gladieux included all the areas in the service plazas except for citrus product shops and service stations. The letter informed Chambliss of his right to file a notice of protest within 72 hours. Chambliss proceeded to do so on December 22 and thereafter filed its petition for hearing. On December 29, 1982, Respondent and Gladieux entered into an extension to its one-year agreement to January 20, 1983, pending resolution of Chambliss' protest. However, negotiations with Gladieux are still in progress concerning the percentage of revenues to be paid by Gladieux under any subsequent amendment to its lease with regard to the video game operations. (Testimony of Owen, Chambliss, Petitioner's Exhibits 3-4, 16-20)

   
   

   CONCLUSIONS OF LAW

   
   

10. Section 340.091, Florida Statutes, provides pertinently as follows:

    
    

    340.091 Certain sales prohibited.--

    (1) The Department of Transportation is specifically prohibited from granting concessions or selling any services or products along the project covered by this act or subsequent projects, except the sale of motor fuel with attendant towing and maintenance facilities; the sale of food with attendant nonalcoholic beverages; the granting of concessions for amusement devices which operate by the application of skill, not including games of chance as defined s. 849.16(1)(a) or other illegal gambling games; and the sale of Florida citrus or goods promoting the state, including information centers on the plazas, but not including other advertising media . . . (Emphasis added)

    
    

11. The term "project" is defined in subsection 340.011(2) to include "service areas." The separate exception for granting concessions for amusement devices was added to Section 340.091(1) by Chapter 81-116, Laws of Florida. The

    amendment thus provided clear authority for Respondent to grant concessions for amusement devices at the various service plazas along the Turnpike.

    
    

12. The question in controversy is whether or not Respondent is obliged to grant such concessions by the process of competitive bidding. Although all of the other commercial operations authorized under Section 340.091 have been the subject of contracts awarded after competitive bidding, Section 340.12(1) requires that only facilities for motor fuel and food must be "publicly offered." That provision provides in pertinent part as follows:

    
    

    340.12 Revenues.--

    (1) The department is hereby empowered . . . to contract with any person, partnership, association or corporation desiring the use of any part thereof for the purpose of providing any of the facilities comprehended in the term "turnpike project" as defined herein, when, in the opinion of the department, such facilities are necessary or desirable, and to fix the terms, conditions, rates and charges for use; provided, that facilities for motor fuel and food shall be publicly offered for the operation thereof under rules and regulations to be established by the department. . . (Emphasis added)

    
    

    Although the amendment to Section 340.091 was enacted subsequent to Section 340.12(1), in terms of legislative intent, it is assumed that whenever the legislature enacts a provision, it has in mind the previous statutes relating to the same subject matter. 2A Sutherland, Statutory Construction 51.02(1973); Stanfill v. State, 360 So.2d 128 (Fla. 1st DCA 1978). It is thus concluded that Respondent had the discretion to determine whether to negotiate concessions for amusement devices or submit them to the competitive bidding process. It has elected to negotiate with its present restaurant lessee for valid reasons as shown by the evidence. It is considered, however, that any contract for the installation and operation of amusement devices properly should be made the subject of a separate agreement, and not tied to the existing lease which does not specifically authorize amusement devices. It is further considered that they do not properly fall within the scope of the "vending machine" provisions of the lease.

    
    

13. Petitioner contends that Respondent is obliged to competitively bid the amusement device concession because of restrictions contained in Section 340.06(13), Florida Statutes, which make it mandatory for the agency to competitively bid all contracts involving an "expenditure" of more than $2,000. However, it seems clear that such restriction deals only with contracts involving purchases of supplies or services by the Department and, even if applicable, would be modified by Section 340.12(1), as heretofore mentioned.

    
    

14. It is therefore concluded that Petitioner's request to negotiate or competitively bid for the right to operate video games at any or all of the service plazas on the Florida Turnpike may be denied as not being legally required. Respondent has established valid policy reasons for not electing to competitively bid the said concessions despite its erroneous assumption that the awarding of such a concession would be validly embraced within the provision of its lease with Gladieux and that Gladieux exercises "control" over the "common areas" of the service plazas under its lease.

RECOMMENDATION

It is recommended that Respondent deny the amended petition of Petitioners Florida Sunshine Parkway Citrus, Inc. and Joe A. Chambliss.

DONE and ENTERED this 9th day of June, 1983, in Tallahassee, Florida.

THOMAS C. OLDHAM

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 1983.

COPIES FURNISHED:

Honorable Paul A. Pappas Secretary, Department of

Transportation Haydon Burns Building

Tallahassee, Florida 32301

Ronald C. LaFace, Esquire Jeffrey H. Abrams, Esquire

101 East College Avenue Post Office Drawer 1838 Tallahassee, Florida 32302

Mark Linsky, Esquire Legal Department

Department of Transportation Haydon Burns Building Tallahassee, Florida 32301

Philip S. Blank, Esquire

Suite 320 - Lewis State Bank Building Tallahassee, Florida 32301

Docket for Case No: 83-000198

Orders for Case No: 83-000198