The Contentious Saga of the Orange County Fair

 

By Joel Beers

This is day one of a project I’ve decided to launch. I am a free-lance writer based in Southern California and I have been following very closely the saga of the Orange County Fair. While there has been a great deal written about the Fair on a myriad of blogs and websites, the major media in Southern California, such as the Los Angeles Times and the Orange County Register, don’t seem to have focused appropriate attention on such a highly contentious and controversial issue involving one of Southern California’s longest established cultural and social landmarks.

In an effort to understand it better, I’ve taken it upon myself to begin researching the issue and blogging about the information I find.

I am approaching this with a fresh pair of eyes and fueled by nothing more than seeking to understand what has happened before, what is currently happening, and what may happen.

Here is a rough time-line. Most of this information has been pulled from OC Weekly’s political blog, Navel Gazing, a March 17, 2011 cover story in OC Weekly on the complicated legal and political maneuvering over the fate of the Orange County Fair, written by Chasen Marshall, and posts from the website www.voiceofoc.org.

(Oh, and one note. Though I have been a contributor to OC Weekly since its inception in the 1990s, this blog post is in no way connected to that publication. I write mainly about theater. Although admittedly, the fair saga has all the elements of great theater: drama, intrigue, loads of conflict, possible illegality and back-room deals, and lots of pissed-off people…)

Before teh time-line, a very short summary.

In 2009 the property the Orange County Fairgrounds sits upon, which the state claims it owns, was put up for public auction. After the auction and two rounds of other bids–one with the city of Costa Mesa and another through the Dept. of General Services, an Orange County-based real estate investment company, Facilities Management West, offered  $100 million to buy the property.. But before it became official, two lawsuits were filed. One by American Fairs and Festivals Inc. and Advance Real Estate Services , two of the bidders  for the property. American Fairs and Festivals’ principal Jeff Teller is also president of Tel- Phil Enterprises, the owners and operators of the Orange County Market Place, a weekend swap meet that uses the Fair’s parking lot on weekends.  The other suit was filed by four co-plaintiffs: the Orange County Preservation Society, Senator Lou Correa, Assemblyman Jose Solorio and Katrina Foley, a former City of Costa Mesa Council Member

But that summary doesn’t come close to capturing the intrigue and politicking going on. According to reports in the OC Register, and OC Weekly, the board is filled with several well-connected Republicans—led by David Ellis, a high-powered lobbyist.

The Board initially came out in favor of the sale, and even created a non-profit foundation in hopes of buying the fair. However, just last month, the Fair switched its position. It now opposes the sale and has gone on the record that it wants to pursue some kind of revenue-sharing plan with the state.

From what I have gathered, the board has a rather contentious relationship with the community and it has some dubious accomplishments.  From 2006-08, the OC Register reported (in April, 2008) that over a two-year period, board members gave themselves 8,872 tickets worth $376,000 to concerts at the fairgrounds’ Pacific Amphitheatre, most of the tickets snatched up by former board member Deborah Carona, the wife of Orange County’s disgraced former sheriff Mike Carona.

A concern voiced by many people over the past two years is that the Fair Board is serving its own interests rather than the community as a whole.

TIME-LINE

In May 2009, then-Gov. Arnold Schwarzenegger announced that the 150 acres the Fair rests upon would be put up for sale, listing the Fairgrounds as one of the state’s assets that were surplus or underutilized.

On July 15, the Fair board announced that instead of the Fairgrounds remaining publicly run, that it supported selling the property to a local nonprofit entity.

Later that month, articles of incorporation were filed for the Orange County Fair & Event Center Foundation. Six members of the aforementioned board were listed on the foundations’ board of directors.

The fair board’s decision to support selling the property to a local nonprofit, followed only days later by incorporating itself as a local non-profit, galvanized opposition from many quarters, including the fair’s equestrian center, which uses the property year-round, the Orange County Market Place, long-time concessionaires and vendors, and concerned citizens.

On July 29, the Fair Board passed a motion to authorize staff to hire consultants to assist in carrying out the governor’s and the Legislature’s intent.

We’ll return to the timeline in a moment. But first a note about the hiring of consultants…

OC Weekly reported in a cover story on March 17, 2011, that consultants had already been hired before the July 29 decision. Former state senator Dick Ackerman, who left office at the end of 2008, had been working since May for the fair board, apparently talking to local officials and former colleagues in Sacramento. In fact, from May to December, six invoices totaling more than $104,000 were issued by Ackerman’s law firm, Nossaman LLP, to LSA Associates, a land-use subcontractor that works with the fair board. The contracts were filed with the California Construction Authority (CCCA) a joint-powers authority in Sacramento that works exclusively with the state fairs and county fairgrounds. By funneling contracts through CCA and LSA, the fair board was able to deny the existence of a relationship with Ackerman, according to the Weekly.

That relationship is important. It happens to be illegal for a politician to lobby former colleagues for a year after he or she leaves office. If Ackerman was indeed lobbying on the fair board’s behalf, it could raise a very red legal flag.

The fair board would later admit it had, in fact, contracted with Ackerman, but it claimed to have paid no more than $19,000.

(In October 2010, An Orange County District Attorney investigation cleared Ackerman and the board of any conflict-of-interest charges. However, on Feb. 24, 2011, a local political website, voiceofoc.org, reported that the D.A’s investigation was anything but thorough. That sparked the state’s Fair Political Practices Commission to look into the issue of whether Ackerman’s conversations with legislators were, in fact, illegal lobbying.)

Now back to the time-line:

In August, 2009, the fair board’s nonprofit foundation announced it would submit a bid for the fair.

In the fall of 2009, according to OC Weekly’s March 17 cover story, “the foundation continued to try to establish itself as a viable contender to assume control of the fairgrounds. The Weekly obtained a letter from then Fair Board President Kristina Dodge dated Oct. 15, 2009, addressed to then-Costa Mesa Mayor Allan Mansoor. In it, the foundation invited the city of Costa Mesa to appoint two “non-elected individuals” to its board of directors. Dodge called the governor’s decision to sell the fairgrounds a “once-in-a-lifetime opportunity for local control of the property” and said the foundation’s bid to control the property would “be the ‘community’s’ offer to protect the property from future state budget deficits or political whims.”

If a private foundation were in control, it would be free from all the laws and oversight that prevent the fairgrounds’ land from being used as a money-making enterprise. Without being held accountable to the government and the public, lucrative vendor and consulting contracts could be handed out to friends, decisions could be made without any regard for public interest, and in many instances, the public would never know, since open-meeting laws would no longer apply”

On October 9, 2009 the state’s Department of General Services put the fair up for auction, giving interested parties until January to file bids.

On Dec. 1, the Attorney General’s office, which usually represents all state agencies, resigned from representing the 32nd District Agricultural Association. In a letter addressed to the fair board’s then-chairwoman Dodge, the AG’s office explained that “given the seemingly intertwined and potentially conflicting interests of the district, the district board members and the nonprofit,” its office had to withdraw its services. Interestingly, the AG at the time happened to be a guy named Jerry Brown.

In the months that followed, OC Weekly reported, the attention around conflict-of-interest allegations increased, in part because of a letter from Assemblyman Jose Solorio to the governor. The public outcry increased, and the foundation fell apart. In December, Fair Board Members, who were also  foundation members, Dale Dykema, Joyce Tucker and Gary Hayakawa, resigned from the foundation, followed by Dave Ellis. By the beginning of 2010, the foundation was a non-player—clearing the way for others to make bids on the fairgrounds.

In January, 2010, OC Weekly reported, again in its March 17, 2011 cover story, two days before final bids could be submitted, assemblymen Jose Solorio and Van Tran—a Democrat and a Republican, respectively—approached the capitol building in Sacramento, pushing a wheelbarrow that was overflowing with post cards and petitions, totaling more than 50,000 signatures against the sale. Following closely behind was a crowd carrying signs reading, “Super Un-Fair,” “The Only Safe Sale Is No Sale,” “Once It’s Gone . . . It’s Gone Forever!” Among them were state Senator Lou Correa and former Costa Mesa City Council member Katrina Foley.

Two days later, after the final bid was read, Craig Realty Group, a Newport Beach-based private realty firm, increased its initial offer from $42.5 million to $56.5 million, surpassing the top bid by an Orange County-based investor group, Facilities Management West, which had bid $55 million.

In March 2010, the $56.5 million bid was deemed to be too low, and the Department of General Services rejected the sale, citing in a letter to the governor that it was “not in the best interest of the citizens” and did not “contain the highest and most certain return for the state.”

In April 2010, soon after the auction bids were rejected, the city of Costa Mesa teamed with a few of the bidders and offered the state $96 million in hopes of keeping the fairgrounds in local hands.

In June, a “visibly tired, frustrated and exhausted” Costa Mesa City Council, according to a voiceofoc.org report, voted 4-1 to enter into a private-public sector partnership with Facilities Management West, an Orange County-based investment group, to buy the Fairgrounds from the state for $96 million. However, before the deal between the city and FMW could officially be drawn, legislative approval was required. But city officials were unable to garner support from the legislature or to find a legislator to author a bill necessary for the sale to go forward. As the city deal with FMW was gasping its last breath, Gov. Schwarzenegger  authorized the Department of General Services to issue a new RFP for the sale of the property. The new RFP did not include a public auction, rather a minimum bid of $96 million was set and bidders submitted sealed proposals with their offers.

In August, the Fair Board, which had stayed relatively silent since the city’s decision to enter the bidding, sent a letter to Gov. Schwarzenegger proposing a revenue-sharing agreement between it and the state. to operate the Fairgrounds.

The next month, the Fair Board announced that the fair wasn’t actually owned by the state, but the 32^nd Agricultural District (which is operated by the Fair Board), which purchased it from the Department of Defense  shortly after World War II for $160,000. This effectively put the fair board, which operates the 32^nd AA, against the governor who, by all accounts, was demanding the fair be sold before his term expired.

In October, 2010, without announcing publicly who the bidders were and their offers,  Department of General Services deemed the successful bidder to be FMW and  approved the sale of the fairgrounds to Facilities Management West for $100 million. That prompted Assemblyman Solorio, to issue a statement saying that he would introduce legislation in December to block the transaction.

Like nearly everyone involved in the fair, there are interesting people connected to FMW. In a blog post on Oct. 20, 2010, Jeff Teller, who runs the Orange County Market Place through Tel-Phil (and helped found the Orange County Fair Preservation Society, a local group opposed to privatizing the fair), told the Weekly’s Matt Coker that Gary Hunt, Schwarzenegger’s former campaign finance chair, had been hired by FMW to help facilitate the sale. (Also, the former Fair President, Becky Bailey Findley is a consultant to FMW, and previously was a consultant for the City of Costa Mesa when it was attempting to land the property by seeking financial partnership with a private company, including FMW.

On Dec., 15, 2010, two lawsuits were filed concerning the legality of the sale, one by Teller, under the name American Fairs and Festivals and Advance Real Estate Services, both of them bidders in the RFP Process, and the other by the Orange County Preservation Society against the California Department of General Services, which had authorized the sale in the first place. Co-plaintiffs included Solorio, Senator Lou Correa and Costa Mesa council member Katrina Foley.

The Fourth District Appellate Court agreed to hear the case, which would prevent the sale of the property until at least Jan. 10, 2011. In effect, it was a restraining order, and gave hope to anti-sale advocates, since a new governor would be in place by that time.

But then something really fishy happened.

On Dec. 23, Voiceofoc.org reported that the Schwarzenegger administration was “scrambling to transfer title to the property from the 32^nd Agricultural Association (which is controlled by the Orange County Fair board) to a shell entity. In order to complete the transfer, the state would need approval from the Fair Board, which included three new Schwarzenegger appointees. That meeting was scheduled for Jan. 1.

Observers say what is happening constitutes a last-minute political push by Schwarzenegger and other proponents of the sale to save it from an almost certain death at the hands of the incoming Brown administration.”

            (An intriguing aspect about the timing of that meeting is that 10 days before it was scheduled to occur, Schwarzenegger, in his final days as governor, made a slew of last-minute appointments and re-appointments to the board. Dodge and Tucker, whose terms were scheduled to end on Jan. 15, 2011, were re-appointed and Douglas La Belle was appointed to fill an empty slot as was Ali Jahangiri. Ellis, whose term was also supposed to end Jan. 15, was appointed to a new four-year term but vacated his original position, which was given to Alexander Vellandi who will, in effect, serve 30 days before that term expires.)  However board member Mary Young, whose term expired Jan. 15. 2011 did not receive a reappointment and is current serving until replaced.

However, on Dec. 29, the meeting was scrapped after attorneys involved in the dual lawsuit threatened to seek contempt of court if the board met.

Most recently, the Weekly’s Marshall reported that the Fair Board on Thursday, March 24 had officially reversed its position, pledging to prevent the sale of the Fairgrounds. Dave Ellis, the board’s chair said the move was a “reiteration of our previous position,” alluding to a revenue sharing proposal that had been announced on Jan. 27.

As of now, the legal stay is in place and a court date has been scheduled for May in which the plaintiffs are seeking a permanent injunction.  If Gov. Brown decides to kill the sale beforehand, that court hearing will become moot.

Stay tuned for the next turn in this highly intricate, fascinating story…