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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur



Pundit’s Pulse Of The Industry —
Meruelo Maddox’s, Michael Bustamante
And Steven London

Jim Prevor’s Perishable Pundit, March 16, 2007

We’ve run several pieces to analyze the situation on the 7th Street Market in Los Angeles. Our first piece, Rats In Los Angeles: The Produce Industry’s Shame, highlighted the report of a local TV station on the horrible conditions in the market. We followed up with Lessons From The LA Market and Pundit’s Mailbag — Beware TV Crews Coming To A Market Near You.

Today we speak with two people both working for the owner of the market to find out what transpired and how things are changing:

Michael Bustamante, spokesman for Meruelo Maddox, which owns market operator Alameda Produce.

Q: As the market owner, what are Meruelo’s responsibilities regarding food safety?

A: Food safety needs to be a team effort, where the health department provides strong oversight and tenants can’t let it get to that point where trash isn’t picked up. From the management company perspective, we have certain obligations, such as making sure bathrooms are suitable. Even though they are vandalized… despite that… we have to find a way to have cold and hot water and to deal better with trash and rodent problems.

We own the property but we are not in the business of produce. We oversee the market, working with Alameda Produce, the market operator. The Department of Health has ultimate oversight of food safety in the marketplace and it needs to exert its authority when there are violations. If a landlord owns an apartment complex and has a tenant playing excessively loud music, sometimes they listen to the landlord and turn it down, and sometimes they don’t. That’s when the police are called in. Similarly, the health department by increasing oversight has certainly gotten the attention of the tenants.

In the past, health department oversight, to be polite, was lax. There were certainly people from the health department on site that saw what was going on and didn’t take action. They had an inspector on site, but he probably felt beaten down and didn’t want to deal. Rotating inspectors is a good move. Each new inspector comes in with fresh vigor and cites problems. Essentially the health department should have raised the red flag, but instead looked the other way with tenants’ behavior that just wasn’t acceptable, and management had responsibilities too. Everyone involved in this was culpable.

Q: What is Steven London’s role?

A: Steven London is a food safety consultant hired by us to understand the process better. He’s retired from the department of health. He’s spent the better part of his life working on food safety, gaining insight into the department that we needed. He’s a really good resource. It may be a terrible analogy but it’s like when a member of Congress retires, and he’s hired as a lobbyist because he understands the ins and outs. Steven London understands the codes, he provides a good set of eyes and ears and a sounding board of what works and the best approach. He’s helped us with the immediate problems but I believe he’ll be there for a while.

Management has stepped up and is taking care of things it needs to. The Health Department through Terrance Powell has really stepped up its game, and tenants are trying to correct their behavior so they can stay in business. Tenants have done a good job of picking up trash, not throwing produce on the grounds and in the bins that we’ve provided for them.

Q: Couldn’t you put certain requirements for trash and rodent services in the tenant’s lease?

A: We do. We have exterminator requirements in the lease, but the issue is not only for the tenant to make good on the rodent problem, but to pay the lease. It’s hard enough to collect the rent sometimes. Whether it’s rodent control or making sure the vendor has sufficient trash cans to accommodate the amount of trash produced on a weekly basis, compliance is the problem. Some people dump their trash in other tenants’ trash cans.

Part of the issue has been that as a management company we did exterior pest control and had traps placed, but they would disappear. Some tenants had rodent companies and some didn’t. The rodents don’t distinguish between companies. How the tenants act on a daily basis is critical. If tenants leave food out during the day and night, and trash all over the place, rodents have a tremendous sense of smell from miles away.

Q: Are there structural or logistical improvements in the market operation that could alleviate some of these problems or encourage tenants to change behavior?

A: The health department said the market needed a different staging area and tenants could no longer store produce outside. What they were doing was having trucks pull up, delivering giant stacks of pallets. The health department said you don’t need 1,000 pounds of produce on display. When you have all these tenants in a small area, folks competing against each other, putting out stacks and stacks of pallets, it not only creates traffic and movement problems, but also tons of food sitting out there for rodents to say dinner time. Then customers and people off the street come in and comb through produce, throwing produce trash on the ground, ripe pickings for the rodents. All this produce was co-mingled with trash and receptacles. In addition storing produce next to standing water in pot holes that is clearly bacterial is just not acceptable.

There’s sufficient inside storage for pallets to alleviate this problem. The simple change that has had the biggest impact is no more outside stacking of produce. As soon as it is delivered, it goes inside, and for pickup it’s out for an hour or less. It’s tough work for the tenants and we want to be helpful here.

We presented plans to the tenants for a central pest control and single trash and recycling vendor. That vendor would contract with each of the tenants individually, so each tenant would have a receptacle bin, one for produce trash and one for non-produce trash, and prepay for trash pick up. We have two trash locations now, and accommodation for recyclable materials.

Q: What role does the Health Department have in this process?

A: Before we even went to tenants we met with senior health officials and we’ve been working with them hand in glove. We have a staff person on site talking to inspectors daily.

We’ve already had four or five meetings with health officials discussing what’s reasonable, what we can accomplish. So far, we’ve worked extremely well together. The only way this would work was with ‘buy-in’ from the Health Department. We presented to the Health Department a solution to manage trash and solve the rodent problem. They took a look at our proposal and liked what they saw. They were with us at the tenant meeting; otherwise it would have been difficult.

Q: So the Health Department is not actually mandating specific requirements, such as how many public bathrooms need to be installed?

A: Terrance suggested at least one more bathroom;, we presented in our plan to build two. We had our architects look at the existing spaces. Two former tenant spaces will now be bathrooms. We’ve built the bathrooms in a way that are as vandal-proof as you can make them.

Q: Aren’t there certain procedures and standards that must be followed by law?

A: There are codes in place by the building and safety department, and standards for new construction. I believe every 200 feet in a new facility would require a restroom; this is a 90-year-old facility and doesn’t require the same standards. The state of the art facilities we’ve been building to accommodate the overflow vendors are entirely different than the ones we’re managing at 7th Street Market.

We’re being accommodating because we want the market place open and want tenants to do well. We could shut it down because it’s so old. However, there’s a tremendous need for this market. We made a commitment to vendors to help incubate these small businesses.

Q: What’s your prognosis for the market’s long-term ability to maintain the new food safety procedures you’re implementing now.

A: Whether the market survives going forward is a business decision on the part of companies of how they want to operate. We think given the fact we’ve got this old facility, we’ve been able to put into place corrective measures that others can learn from, such as a single pest control company and a single trash company. Once these new procedures are up and running, it seems to provide the market with the ability to proceed. Up to this point, we just managed the outside of the market and let tenants do what they wanted to do.

The end result is we’ve taken a bad situation and made it 100 percent better, but the issue isn’t over. It’s an old market and change isn’t easy. We’re able to work with Terrance, but you can’t turn a battleship around on a dime. Terrance can be a hardliner but at the same time he understands this takes time and he’s been very reasonable. He could have said we’re closing you down on Monday. This could have been an entirely different situation.

Reading management’s take on the situation, one recognizes the dilemma that always exists between the preferred standards and the practical situation. The 7th Street Market “should” be knocked down. We mean by that only that the facility is so fundamentally dated that it is exceptionally difficult to run a modern, food safety-oriented business, in an antiquated facility.

Yet food safety is just one of many values that compete. The truth is that if you built a new, modern facility, most of the existing tenants would have to leave because their businesses don’t justify paying rents that would probably be many times what they pay now.

So, socially, we confront an issue of what we want to do with people and businesses like this.

And it is not a problem that will go away; indeed it will get worse. As mainstream operators get more rigorous about food safety, costs will increase, this opens the door for an informal sector that is less rigorous about safety to grow. That this will create a bifurcation of the produce industry into mainstream operators following rigorous standards and an informal sector doing much less is predictable.

Still, the management company could do more. When it comes to things like exterminators, the lease could include these things rather than mandate them. This assures they get done because the management company then has the responsibility to do them.

The interview is also too quick to blame the tenants. The television cameras that caught the market in such disrepair were mostly shooting in the public, common areas, such as parking lots, not inside the tenants’ facilities. Even if the tenants behave like pigs, it is still a landlord’s responsibility to keep those areas clean.

It is obvious that the Health Department was negligent but there is no evidence that the owner of the market was beating down the door begging the Health Department to take action.

It is obvious that progress has been made and that some permanent improvements, such as new bathrooms, are being built. Yet, in the end, it will still be a sub-par facility — there are not enough bathrooms to meet modern standards and leases with the tenants aren’t being altered to make sure that the management company covers exterminators.

Right now everyone is on best behavior, yet nothing said here really persuades that in two years without a TV report, things won’t be right back to where they were.

Steven London
Health and Safety Consultant
for Meruelo Maddux
which owns Alameda Produce Inc.

Q: What is your background in food safety issues?

A: My experience is in a number of areas. I spent 25 years with the Los Angeles County Department of Health Services, and within that the vector rodent control area. My primary responsibly was dealing with rodent problems as well as consulting on other vector issues where bacteria transmit from one form to humans. In the hazardous waste department for a year, I dealt with spills, cleanups, structural requirements, and industrial inspections.

The last 15 years, I oversaw inspections as chief environmental health specialist in food and housing and general environmental health issues. Delivery services included inspection of restaurants and grading, I held hearings when places were out of compliance. In charge of the housing task force, I dealt with slum lords, working with the building department, the fire department, the city attorney and district attorney’s office.

I had retired, but when I saw the feature regarding the 7th Street Market, and the problematic picture it painted of public health, I initiated a call to the management company because I thought I could be of help. I had both an advisory role and enforcement responsibilities at the 7th Street Market in the produce area in the 1990’s.

Q: What was the market like at that time? Are today’s issues parallel to what you were trying to address in the 1990’s?

A: There was a transition that took place when ownership changed in the market and Alameda Produce took over. Prior to the 1990’s, food storage issues were a problem. In some cases food sat outside overnight. My concern was that all storage could be in an enclosed facility so it could be pest proof.

Alameda Produce, with the recommendations of the health department, took actions to eliminate that outdoor storage problem. We worked with the building department for changes, issued licenses to vendors and did structural work at that point. Then I left and went on to housing inspections and wasn’t involved with the market for a period of years.

Q: Are you saying that when you left the conditions reverted back?

A: I won’t say the market reverted back, but what happened… I can only assume because I wasn’t in charge… was that the Health Department had one person assigned to produce inspections in the downtown area and he was expected to do both inspections and administrative work for the Health Department. So he spent less time in the market. I have to assume tenants let things get out of control and that the market was not as focused on food safety issues as it is now, and conditions got significantly worse.

The basic issue was that the tenants got very lax because the Health Department wasn’t there to remind them of the things they should be doing. It wasn’t the Health Department’s responsibility to be there every day for the tenants to do the right thing. With the volume of business, the tenants were concerned about the bottom line getting product in and out and public health issues went by the wayside. Nobody accepted responsibility.

Q: How does this differ from the 1990’s when you were there?

A: In the 1990’s, there was one inspector, the same inspector. He was on the premises generally twice a week. I would come in with him on an infrequent basis.

Q: Does the Health Department have the resources and number of inspectors necessary to do the job?

A: When you look at all the restaurants and housing units that are being inspected, it’s clear the department doesn’t have enough staff to make all those inspections. This is a distinct problem. Unfortunately for the health department, they still have many vacancies.

Q: What’s changed now? Why won’t the problem eventually surface again when time elapses and the issue isn’t so glaring in the public light?

A: We have jumped to more surveillance. The last couple of months the Health Department has been in the market daily. This is atypical. The goal is more routine inspections, two a year, and follow up on those, then oversee the market and make sure things don’t deteriorate.

Imagine what would happen if you didn’t have trash pick up for a month. That’s what happened. Tenants didn’t pay for trash disposal and expected it to disappear. People weren’t washing hands because fixtures broke, and homeless people were bathing in the sink. We now have security in place to make sure this doesn’t happen.

Q: Could the management company voluntarily decide to pull back on the security measures agreed upon now, for one reason or another as time goes on? Is there any legal requirement attached to the trash and rodent control systems being implemented now to alleviate the problems? Does the Health Department have the authority to enforce these actions, and to mandate they continue?

A: The state and county laws and ordinances direct the Health Department for enforcement. If a tenant is dumping trash and the Health Department observes the violation, it tells the responsible party to clean it up. The Health Department has the legal standing to say you’re in violation of the law. The Health Department could pursue a legal process that could include criminal penalties.

The landlord I represent has contracts with each of the tenants to transfer much of that responsibility directly on to them. They’re dealing with the produce and they need to be responsible for what is occurring because of their business. Part of the problem management had was their view that tenants were responsible and they didn’t have to address the issues. This has changed to a cooperative approach between the Health Department, the tenants and the owners, who are working together to be sure that requirements are being adhered to and laws are being followed.

If you have a restaurant and the employees doen’t wash their hands, who is responsible? The employees and the restaurant operator. The Health Department is responsible for tracking the illnesses, but the public is the one that suffers.

In every guideline distributed by the Health Department, the primary focus is on hand washing because that is the number one way to protect food. I can’t overstress that, and that’s why hot water and soap are critical. Beyond that, since we don’t know what happens through the chain of commerce, it is critical to wash properly. Produce comes out of the earth, it’s out in the open where birds fly overhead and it continues to be exposed to all kinds of food safety risks until it reaches the end user.

Q: At the wholesale market level, where should the focus lie? What changes in procedures should other markets look at implementing so these problems don’t occur again?

A: Education was a step that I think was missing, enforcement was a step also missing, and action was a step missing. Educating tenants on handling food, enforcement when appropriate for food safety violations, and physical action, keeping food away from garbage, in storage areas, up off the ground, seal the openings, make sure bathrooms have hot water and soap, etc.

Alameda Produce has taken some actions, cleaned up the market, added security, contracted for additional services, worked on a comprehensive trash and rodent program.

When an employee urinates in the parking lot, you and I assume people would know better than to do that. In some cases you have to assume the worst. Somebody has to act as a deterrent and follow through with enforcement in the health department. Unfortunately it falls on them.

Q: How important is the inspector’s role in this scenario?

A: I go through the market daily and remind the operators with my presence if not my words what they should be doing, I’ve seen a lot of cooperation.

The inspector points to areas of concern and makes sure they were taken care of. But how many times can the inspector say don’t dump trash next to the produce? Human nature comes into play. Some people are on their best behavior when everyone’s watching.

Q: That being the case, what is your assessment of how safe the market will be a couple of years from now?

A: I think problems will fluctuate up and down, based on the continuing concern on the part of the Health Department and management that we will act to provide ongoing reminders. I have my own personal views. I agree that you can’t do the job if you don’t have the staff. I believe the Health Department needs additional staff, yes, they need assistance in recruiting so they can be a presence.

There was an inspector that had tried to have a presence, and as he got pulled away for other responsibilities, it slid and that contributed to the problem.

Q: What factors should people take into account when building a new market? What changes in procedures should other terminal markets be looking at to insure these types of problems don’t happen again?

A: If you build out the problems, then it makes it easy to only take the right path.

If you have an old wall with holes in it, it’s harder to maintain than one with a smooth clean finish.

It’s important to create an environment that makes it easy for tenant compliance. We hope the trash disposal plan we are implementing will have a major impact. Management handles disposal now at no charge and provides large community dumpsters. We’re going to a new plan to reduce waste generated, separating all the garbage and food product from cardboard. And tenants will be displaying by weight and cardboard will be disposed of free.

If someone dumps trash someplace they’re not supposed to, what can you do? You can try and hold them accountable. That’s why you need additional security.

In terms of the rodent problem, there are rats and there will always be rats. They are all over, not just in our market, in commercial buildings, in people’s homes. You do everything you can to rodent-proof, make sure there’s not standing water or leaking pipes. Don’t make trash available and keep food in storage. What can we do to keep rodents under control? Keep food sealed, off the ground, and institute an aggressive plan for control through an exterminator.

Q: How long will you continue your consulting role at Mereulo? What happens when you leave?

A: If I’m not here doing the things I do, I feel reasonably assured someone representing management will be overseeing conditions in the market. I might be talking myself out of a job, but the reality is you don’t have to have 35 years of experience to make sure the place is clean.

There are things everyone can do. As people accept responsibility, we have security overseeing operations, and keep meeting with the Health Department to make sure we approach things together for a cooperative vision. This wasn’t happening in the past. Before, everybody had their own perspective. My background with the Health Department makes me a good liaison between the tenants, Health Department and management.

Q: How did your recent meeting with the tenants go?

A: It was our responsibility to prepare for the meeting. The presentation was made by the president of Meruelo. Management used the presence of the health department to distribute information, educational materials and guidelines to all the tenants explaining their responsibilities. Representatives from the trash company and exterminator company were there. Materials were given to the tenants on the changes being made in their rental agreements with rodent control and trash disposal contracts.

At the end of the meeting, discussions were held on a one-to-one basis for tenants that had questions. Many of the tenants are Spanish-speaking so the meetings were interpreted. We emphasized that it is important for the tenants to communicate with us and that we have an open door to them. We wanted them to know that these are the things we decided in everyone’s best interest, and set the date for another meeting.

Steven London seems like a knowledgeable guy whose heart and head are in the right place. What is missing are two things: First, any commitment from the owner of the market to keep him on once the heat is off, and Second, any authority.

What gives a Quality Assurance Director at a company power is that, in a company that values food safety, the QA has the power to override a buyer’s decision to buy from someone.

Right now Mr. London is being effective because everyone’s listening to him. The market’s owner knows that his resignation in a huff, claiming lack of cooperation, would probably result in the closing of the market.

But, long term, Mr. London won’t be there. Some staffer in the management office will take his place and past history indicates that this person won’t have the heft in the organization to get bathrooms built or report things to the Health Department.

On the other hand, he reports positive news in explaining that the market has taken over trash disposal and is providing that free to each tenant. Once again, however, the permanency of these steps is unclear.

We really want to hear the owner say that leases are being rewritten so that rent is inclusive of extermination and trash removal and security. In other words, that things are being done to create legally enforceable obligations against the landlord.

Mr. London makes two very important points: First, that many of these problems can be designed out of a facility if one is starting from scratch. Second, that sufficient staffing is going to be required for the Health Department to effectively carry out its role. His mention of vacancies in the department carries a larger message for any mandatory regulatory scheme — governments don’t have the flexibility to adjust pay scales to keep employees. So any mandatory regulation for the larger industry should look to government certification of third-party auditors and not try to staff up to have a government do everything itself.

Much appreciation to Michael Bustamante, Steven London and Meruelo Maddux for sharing with the industry their efforts to make things right on the 7th Street Market in Los Angeles.

They seem well meaning; the question is if it is even possible to do what needs to be done. You have an old facility that does not have food safety designed into the facility and no real way to update it to modern standards. You have an operator culture that can live in filth and a clientele that found it perfectly acceptable as well.

You also have small businesses that probably could not stand the price of a high quality food safety program.

The question may be less what the market management is going to do than what society is going to do about this informal produce sector. Safeway, Kroger, McDonald’s are not going to be buying here — but do we want to allow anyone to buy here?

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