State puts fairgrounds up for sale -- again

COSTA MESA — The state put the Orange County Fairgrounds back up for sale Tuesday in a move that flew in the face of City Hall, which has been working to buy the property with the help of a private developer.

Councilwoman Katrina Foley said she did not believe the state’s decision is in the best long-term interest of the residents or the city, which has been working to finance the sale of the 150-acre property with the Newport Beach-based real estate company Facilities Management West.

Foley referred to the call for offers by the California Department of General Services as a bullying tactic.

“And I don’t like bullies,” she said.

The state announced in a news release that it issued a request for proposals, which allows interested parties to make offers on the fairgrounds through Sept. 30.

Sacramento is asking for a minimum of $96 million in case the Legislature does not pass bills that would allow Costa Mesa to go through with the purchase, the release stated.

In June, the state tentatively accepted the city’s offer for $96 million.

Tuesday’s decision to put the fairgrounds up for sale for the second time within a year coincided with one of the last steps Costa Mesa was taking to finalize its plans with Facilities Management. The City Council, which also acts as the Orange County Fairgrounds Authority, was scheduled to vote Tuesday on a controversial ground lease with Facilities Management.

“To put the property up for sale on the same day is not a coincidence to me,” Foley said. “That is a bully tactic to force us to take whatever is offered in the ground lease.”

The state has previously threatened to put the fairgrounds back on the market during its negotiations. On the night the City Council was scheduled to vote on the initial agreement with Facilities Management, officials from the governor’s office announced that the property would be placed on sale the next morning if the agreement was not approved by the council.

At one time, members of the Legislature’s Latino caucus considered withdrawing support for the plan after Costa Mesa ceremoniously declared itself a “rule of law” city opposed to illegal immigration. That position, at least publicly, appeared to dissipate when a key Orange County caucus member, Assemblyman Jose Solorio, said he supported city control of the fairgrounds and would personally not try to block a deal.

Community activists, who are passionate about preserving the fairgrounds, have also questioned Facilities Management’s ties to Gary Hunt, Gov. Arnold Schwarzenegger’s campaign finance chairman, and the impact the ties might have on the deal with the real estate company. Facilities Management is a client of California Strategies, LLC, a political consultancy and public affairs company that employs Hunt.

Arguing that California should not be in the real estate business, Schwarzenegger urged the state to sell the fairgrounds and other assets to help shore up the ailing state budget. The property was listed in October.

Schwarzenegger’s office and the General Services office want to sell the property before the governor leaves office early next year.

Without the Legislature, the fairgrounds cannot be sold to the city. For Costa Mesa’s deal to be finalized by the end of the year, the Legislature must pass the needed bills to allow the sale by the end of the month, before the end of the legislative session.

As of Tuesday, a bill to allow the city to buy the fairgrounds had not yet been filed.

Solorio, who’s been working with the city to keep the fairgrounds in public hands and has attempted to stop the sale from taking place earlier this year, said he would like to see Costa Mesa buy the fairgrounds. But the Santa Ana Democrat also said that before Costa Mesa can buy the fairgrounds, some of the community’s concerns — like the governance process, public oversight and fate of fairgrounds’ employees — must be improved and addressed.

“The governor is exercising his options regarding how to sell the O.C. Fairgrounds,” Solorio said. “Rather than facing great unknowns regarding what the new highest bidder would want to do with the property, my preference would be to make the deal with Costa Mesa better. I’ve been working with the governor’s office and city of Costa Mesa to strengthen the governance language and address employee transition issues.”

If the state sells the fairgrounds to a party other than Costa Mesa, the property will be sold “as is” for a minimum of $96 million with a $50,000 deposit and a down payment of $20 million, according to the request for proposal. The state is also looking to benefit financially from development on the fairgrounds.

One thing that might still keep the fairgrounds from getting developed is voter-approved Measure C, which ensures that fairgrounds remain for fair and exposition use.