Can city afford O.C. fair center?

Costa Mesa’s exclusive negotiations for the Orange County Fairgrounds have left some wondering how a city facing a projected $3.7 million budget deficit can afford Sacramento’s price of $96 million to $180 million.

When a live auction for the fairgrounds opened Jan. 14, the city and county’s joint bid of $6.5 million was among the lowest.

They were willing to pay up to $40 million, an amount that would have fallen short of the winning bid.

City officials on Thursday wouldn’t state how much they would pay or how they propose to finance a deal.

County Supervisor John Moorlach, a certified public accountant, offered some advice for the city in its negotiation with the state.

“It’s fine if the city wants to buy the fairgrounds, I just hope that they pay a fair price and don’t get too emotionally involved in the process,” he said.

Moorlach added that the state shouldn’t be selling its assets, nor should Costa Mesa pay for a property that it already owns.

“If the state has fiscal sanity, it would tell the [O.C. Fair] board, ‘Look, you get to run this fair, but you have to pay us $100,000 a month,’” Moorlach said. “Why give up income-producing real estate? Who in the right mind would do that? Would you prefer to own your home or to rent for the rest of your life?

Moorlach also said the potential joint bid of $40 million would have been too high.

“Just because the state is not thinking rationally on its land holdings, doesn’t mean I should not be thinking rationally and paying some outrageous price,” he said. “Business is business.”

While Costa Mesa officials would not specify how much they would pay, they said the money would not come from the general fund, and that it would not be imposed on the public through taxes.

“The direction is not to take away from tax dollars, and to be self-sufficient,” said Becky Bailey-Findley, chief executive of the fairgrounds from 1994 to 2008. Costa Mesa is paying her $100 an hour to serve as project manager in the negotiations.

The state remains intent on getting the highest price possible for the 150-acre property, said Mike Naple, spokesman for Gov. Arnold Schwarzenegger. He added that the state is facing a $20 billion deficit.

“The reason for selling the fairgrounds is to benefit the state and help shore up revenues,” Naple said. “The state is looking for any potential sale that will be beneficial.”

Moorlach’s idea of making the fairgrounds’ board run the fair in exchange for paying a certain amount isn’t new.

Steve Beazley, fairgrounds president and chief executive officer, has said the state can make money by keeping the fairgrounds and taking a portion of its annual revenue.

But community members have criticized the fair board for what they say was instigating the sale and not acting in the public’s best interest.

City officials would not provide details on the fate of the fairgrounds board or Beazley’s position if the city ends up buying the land. However, because the fair board members are appointed by the governor, it’s likely that their positions will be dissolved if the fairgrounds has a different owner.

Beazley said it’s too early to tell if his time with the fairgrounds is up.

“I’ve always looked at my job as a stewardship, and when your stewardship is over, you move onto another stewardship,” he said. “When it’s no longer my time to serve as the steward of the fairgrounds, then I will accept that, whenever that is.”

Kristina Dodge, chair of the fair’s Board of Directors, declined comment on the negotiations. She added that if she were removed, then “it’s out of my hands. So, whatever the city wants.”

Board member David Padilla, who has criticized many of the fair board’s actions and has opposed the sale of the fairgrounds, said, “If that’s what it takes to maintain the Orange County Fair that everyone’s come to know and love, I’m more than glad to stand aside.”

The state on March 17 rejected all bids for the fairgrounds, including Craig Realty’s winning bid of $56.5 million, because they were deemed too low.