Developer wins auction

***This corrects an earlier version***

In less than a minute of live bidding, a Newport Beach-based developer offered $56.6 million to win Thursday’s public auction of the Orange County Fairgrounds, which drew a packed house at the Costa Mesa venue.

Craig Realty Group, known for building luxury outlet malls, was declared the winner after edging out Advanced Real Estate Services’ bid of $56 million.

“This is an opportunity to improve what’s here,” said Steven L. Craig, Craig Realty president and chief executive. “I’m happy to keep the fair here, but we’d like to find a way to make it financially viable. Maybe a private-enterprise approach will work.”

Pressed for details, Craig wouldn’t elaborate on how he proposes to make the fairgrounds financially viable. The Newport Coast resident said he was unaware of Costa Mesa’s plan to place the issue of the fairgrounds’ land-use on the June ballot.

At this time, Craig said, he has no specific plan for the fairgrounds site. He wouldn’t give any guarantee that he would keep it as a fairground.

Costa Mesa and the county jointly bid $6.5 million, although county officials said they were willing to reach up to $40 million at the live auction.

A developer winning the bid is what Costa Mesa and county officials had feared the most. Councilwoman Katrina Foley called it “the worst-case scenario.”

“We only have so much money, and we can’t put the taxpayers’ dollars at risk. We already cut $19 million from our budget,” Foley said, referring to how the city was limited in bidding for the fairgrounds.

Tel Phil Enterprises Inc., which runs the weekly swap meet at the fairgrounds, placed a protest bid of $1,000.

“This is a bid on behalf of the people of Orange County,” said Jeff Teller, president of the Tel Phil company. “The fairgrounds is nothing but a jewel of Orange County.”

At least two dozen men in suits — and no women — filled up the two front rows of the auction room. All were bidders or their representatives. The rest of the room was occupied by members of the press. There were also community members in the room, who wore big orange buttons bearing the words “derail the sale” in bold, black letters.

After the auction, Orange County Supervisor John Moorlach said that with a winning bid this low, he hopes Gov. Arnold Schwarzenegger closes this “Pandora’s box” and calls off the sale.

Craig Realty’s live bid falls short of the $96 million to $180 million state officials wanted for the 150-acre property. The fairgrounds are not sold yet, as the state may still reject the developer’s offer.

“The administration is going to review the bid and see if it’s beneficial to the state of California,” Mike Naple, a spokesman for the governor, said Thursday from Sacramento.

Outside the auction room, Brad Shefmire, who was among the people protesting the sale, struck an optimistic note, even though a developer had cast the highest bid.

“I think this is a win for us,” said Shefmire, who runs his equestrian business out of the fairgrounds. “I see this as a win that the state got a low bid. This has given me hope. It’s a push for the sale to be stopped.”

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Initial Bids

 Facilities Management West Inc. — $55 million

 Craig Realty Group — $42.5 million

 Anaheim Sports Holdings LLC — $20 million

 Advanced Real Estate Services Inc. — $17 million

 Joint bid by the county of Orange and the city of Costa Mesa — $6.5 million

 Forde & Mollrich Inc. — $2 million

 Tel Phil Enterprises Inc. — $1,000

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