The California Department of General Services placed...

The California Department of General Services placed the Orange County Fairgrounds on sale today, a move that flew in the face of Costa Mesa, which has been working nonstop to come up with a financing and operating plan to purchase the property from the state.

Councilwoman Katrina Foley called the state’s decision a bully’s tactic.

“They are trying to force us to accept terms that are not in the best interest of the long term of the residents and the community of Costa Mesa, and I don’t like bullies,” she said.

The state announced in a news release that it issued a so called request for proposals, which allows interested parties to come forward and make an offer on the fairgrounds. The sale will take place for a minimum of $96 million in case the state Legislature does not pass the necessary bills to allow Costa Mesa to go through with the purchase, the release stated.

In June, and after a few months of exclusive negotiations, the state tentatively accepted the city’s offer for $96 million. Costa Mesa has been working with Facilities Management West, a Newport Beach-based real estate group, to come up with a financing and operating plan.

Today’s decision to place the fairgrounds on sale for the second time within a year coincides with one of the last steps Costa Mesa is taking to finalize its plan with Facilities Management. The city is scheduled to vote today on a controversial ground lease with Facilities Management, which outlines the dos and don’ts of the agreement between Costa Mesa and the private operator.

“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 the city 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.

Community members have also questioned the relationship Facilities Management has with Gary Hunt, Gov Arnold Schwarzenegger’s campaign finance chairman and the impact it might have on the deal with the real estate company. Facilities Management is a client of Hunt’s California Strategies, a government relations company.

Schwarzenegger’s office and general services have had a goal of selling the 150-acre property by the end of the year, before the governor leaves office. The state first placed the fairgrounds on sale in October in an effort to shore up funds for its ailing $20 billion budget deficit.

But without the Legislature, the fairgrounds cannot be sold to either the city or any other bidder. 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 Friday, before the end of the Legislature’s session. As of Tuesday, a bill to allow the city to buy the fairgrounds had not be filed yet.

Assemblyman Jose 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 buying the fairgrounds. But he also said that before Costa Mesa can buy the fairgrounds, some of the community’s concerns like the governance process, public oversight, and the fate of fairgrounds’ employees must be improved and addressed.

“The Governor is exercising his options regarding how to sell the OC 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.”

The fairgrounds saga is not without competing interest. On the one hand, the state is looking to make the most money it can from selling it; on the other, the city is looking to preserve it but without being able to afford it on its own, its agreement with Facilities Management takes away day-to-day public oversight; and the much criticized fair board that once formed a nonprofit organizations that compromised the same members, is now lobbying the state and the Legislature for a profit-sharing agreement to keep the fairgrounds as is.

If the state sells the fairgrounds to someone 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 general services’ release. 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 the voter approved Measure C, which locks-in the fairgrounds uses and ensures that it remains for the fair and exposition use.

Interested buyers have until 5 p.m. Sept. 30 to submit their proposal for the property