Daily Journal file photo
Permits for the Mavericks big wave surf contest may be up for auction, however, locals aren’t expected to let the beloved event go without a fight.
There’s a battle for the famed Mavericks big wave surf break, and it’s not who can catch the best ride.
Permits for the contest may be up for auction with the minimum bid listed at $1 million; but locals aren’t expected to let the beloved event go without a fight.
Since Los Angeles-based Cartel Management and Titans of Mavericks filed for Chapter 11 bankruptcy in January, the fate of the locally beloved and world renowned event has been in turmoil. On June 1, the companies led by Griffin Guess are looking to auction off assets and settle its multi-million dollar debt.
It’s not yet clear exactly what will be offered to the highest bidder as scant details have been released about what is considered for sale as part of the Titans brand. But one of Cartel’s most prized assets may be a multi-season permit issued by the San Mateo County Harbor District to host contests through 2021.
Local organizers who comprise the company Mavericks Invitational, say they are the rightful holder of the permit and the rights to host the contest shouldn’t be up for auction.
“Let the Harbor District decide the fate of that permit, not [a Los Angeles] bankruptcy judge,” said Brian Overfelt, a local business owner and member of the Mavericks Invitational. “That permit should stay with our local government.”
According to documents filed in federal bankruptcy court last week, Cartel said it spent nearly $3 million over the last 18 months on the contest — including branding and obtaining permits — while facing significant political and legal hurdles. Now, the company said it has received interest from nearly 70 parties in its proposal to auction off the Titans brand and its assets. Internet companies, national television networks, a handful of “ultra high-net worth individuals” and sports brands have shown an interest, according to Cartel’s filing.
The auction slated to take place in Los Angeles has locals up north frustrated as the issue has been in limbo since Cartel entered bankruptcy.
On Monday, the Harbor District filed an objection to Cartel’s auction proposal, which will be considered by a federal bankruptcy judge Wednesday. The district notes the fast-paced proceedings do not provide adequate time for a review by the public and the Board of Commissioners. Although not explicitly protesting the auction structure, the district is asking for additional time to review whoever wins the bid during the commission’s June 23 meeting, according to its court filing.
Ultimately, hosting a Mavericks event requires a litany of regulatory approvals and the Harbor District’s permit is just one of many that needs to be secured. Whether the local permit is even transferable is also up for debate, as the document signed by staff in late 2015 indicates it’s not assignable without the Harbor District’s prior consent.
Insurance requirements, safety measures, traffic regulations and environmental protections are just a few of the issues for which potential contest sponsors must be responsible, said Harbor Commissioner Sabrina Brennan.
“It doesn’t appear to be in the district’s best interest, or the best interest of the public and the athletes to allow an unfit individual, organization or company to purchase the Harbor District permit,” Brennan said. “It would be very speculative on anybody’s part to spend $1 million for literally nothing tangible.”
Cartel partnered with local organizers in 2014 to rebrand the big wave surf contest that brings 24 of the world’s bravest athletes to Pillar Point Harbor to compete on Mother Nature’s stage. Since 1999, events have been intermittently held when conditions align. Cartel and locals jointly hosted one event, but last season’s open window closed quietly March 31 without a contest. Now, local organizers say they’ve been cheated out of what’s rightfully theirs and want to regain control.
Mavericks Invitational, comprised of local organizers that led prior contests, originally agreed to work with Cartel’s CEO Guess. That group includes Mavericks maven Jeff Clark, the first to surf the local break, his wife Cassandra and Overfelt.
Attorneys representing the trio say Mavericks Invitational was wrongfully removed from the permit, which Cartel was only supposed to be added to for insurance purposes, according to a letter sent to the district.
“Our name was surreptitiously dropped from the permit,” Overfelt said, before reiterating a description he recently gave of Guess as a “wolf in sheep’s clothing” during a World Surf League event.
World Surf League interest
There are rumors of the World Surf League, a group that runs the international Big Wave World Tour, potentially being encouraged to bid on the contest. Prior attempts to have Mavericks become a stop on the tour were thwarted by local organizers, while a showdown between Cartel and WSL manifested when both sought Harbor District permits. Clark previously said Mavericks should be a standalone event in explaining why earlier attempts to work with WSL fell flat.
Overfelt said Mavericks Invitational leaders are prepared and equipped to take back full control of the event, noting they have a history of hosting contests and recently settled outstanding litigation.
“This is an event that affects our community so much that it should be run within the community, and there’s no reason it should be taken away from Mavericks Invitational,” Overfelt said, adding the contest serves as inspiration for youth and stimulates the local economy.
But neither the Harbor District nor a bankruptcy judge have final say over who runs an event off the San Mateo County coastline. Hosting the contest hinges on approval from a variety of local, state and federal agencies. The California Coastal Commission will also weigh in, and used its permitting authority last year to require for the first time that women be included in the contest.
Brennan, who noted she didn’t vote to give Cartel a multi-season permit, said the district unwittingly created an asset. She said the Coastal Commission thankfully also has a role in deciding who leads the contest. But in the meantime, due to Cartel being at the discretion of bankruptcy court, the permits and assets have been frozen.
“It’s a very difficult situation because as much as I want a great organization to show up and run the event professionally for the athletes and fans and for the community, we’re just sort of in limbo,” she said.
An attorney representing Cartel did not return a request for comment. However, according to documents filed in court, the auction is proposed for June 1 at the attorney’s Los Angeles offices.
Cartel has created a “data room” containing customary information about its business, access to which is only granted after a potential bidder signs a confidentiality agreement and proves they have the financial means to participate in an auction. A $50,000 deposit is required to place a bid that starts at a minimum of $1 million. The bids would increase in increments of $100,000, according to the filings.
At the time of announcing Cartel would work with local organizers including Clark and Overfelt, Cartel’s CEO Griffin expressed enthusiasm while saying he’d keep Mavericks authentic to Half Moon Bay.
“I thrive off their energy, I thrive off their loyalty and community and frankly, just really respect what they’re doing,” Guess told the Daily Journal in 2014, adding he’s excited to “collectively make this thing great, because this is a big project.”
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