California rejects all bids for O.C. Fairgrounds

The state has rejected all seven bids for the Orange County Fairgrounds in its first attempt to sell off state property and landmarks to help reduce California’s budget shortfall.

Bids for the 150-acre Costa Mesa site came in far below expectations.

In a letter to Gov. Arnold Schwarzenegger on Wednesday, state Department of General Services Acting Director Ronald Diedrich said it would “not be in the best interest of the citizens of California” to accept the bids. However, state officials vowed to continue looking for a buyer.

The state auctioned off the property in January but the winning bid, $56.5 million from Newport Beach-based outlet mall developer Craig Realty and partner Dwight Manley, a former sports agent, came in far short of the $96-million to $180-million price range officials had expected.

In Costa Mesa, activists and politicians who had opposed the sale declared a victory of sorts, saying they were more hopeful the fairgrounds could be taken over by a public entity, like the city or county.

“We are thrilled,” said Brian Lochrie, spokesman for the Orange County Fairgrounds Preservation Society, a group that formed to oppose the sale of the property. “This is an important first step in maintaining the fairgrounds as the public treasure that they are.”

Schwarzenegger initially proposed a list of state assets that could be sold, from the Del Mar racetrack in San Diego to the Coliseum in Los Angeles. The fairgrounds in Orange County, though, was the only property to go on the block.

“The governor remains committed to selling the fairgrounds because he believes that the state shouldn’t be in the real estate business,” Schwarzenegger spokesman Mike Naple said.

tony.barboza@latimes.com