Auditor hits lax control of swap meet

The state auditor said the Stadium Authority has failed to provide leadership over the stadium’s popular swap meet, its largest revenue source, according to a report released Thursday.

Auditor Marion Higa released the report after completing an investigation prompted by complaints from swap meet vendors alleging unfair dealings by Centerplate, the company contracted to manage swap meet operations, and the Stadium Authority. In the report, Higa also pointed out the authority has yet to obtain federal approval to operate the swap meet.

More than half of the stadium is former federal property that was deeded to the city in 1967 by the U.S. Department of the Interior, stipulating the land be used as a public park or for public recreational use. The land was transferred to the state three years later.

Concessions are allowed, but nonrecreational commercial activities are prohibited on the property. The swap meet began four years after the stadium opened in 1975.

"This violation of the original deed restrictions could lead to the land being reverted to the federal government," Higa said in the report.

Higa also criticized the stadium manager for ignoring his responsibilities to ensure Centerplate is effectively managing swap meet operations. The report said almost one-third of the top 450 vendors did not file general excise tax returns for 2007, 2008 and 2009.

Centerplate General Manager Davy Mura­yama could not be reached for comment.

In a written statement, the Stadium Authority said the board disagrees with the findings. "As a pro-active board, we are fully engaged in all areas of stadium operations and have made decisions that are in the best interest of the state, our guests, our client users and the facility itself." A written statement by Stadium Manager Scott Chan echoed the authority’s remarks.

In a March 1 letter to Higa, Stadium Authority Chairman Nelson Oya­do­mari and Vice Chairman Kenneth Marcus responded to the report, saying the authority is operating the swap meet in full compliance of the deed requirements. Authority officials said they received approval from the Department of Interior in 1977 to operate a swap meet for two years. In 1979 the federal agency approved swap meet activities indefinitely as long as activities did not conflict with regularly scheduled stadium events.

They added the authority has provided all reports that disclosed swap meet activities.

"Not once has the (Department of Interior) or any other federal agency provided any communication or notice, either expressed or implied, to the authority that the swap meet activities violate the terms, conditions and/or restrictions of the deed," said Oya­do­mari and Marcus in the letter.

They noted Centerplate has performed satisfactorily and that the authority and stadium manager executed its duties and responsibilities. Officials did acknowledge that Centerplate was inconsistent in enforcing requirements for all vendors to keep current with and display permits and general excise tax licenses, but pointed out that alone does not constitute a default by the company.

The authority, stadium manager and Centerplate do not condone any illegal activity, said Oya­do­mari and Marcus, adding Centerplate has updated procedures to ensure greater compliance by vendors.

The state auditor’s report is available at www.state.hi.us/auditor/Reports/2012/12-02.pdf.