Fair center plans unfold

Costa Mesa plans to finalize negotiations with one of two groups that are proposing to buy or operate the Orange County Fairgrounds, and present it to the state by May 21, the city’s new deadline.

The two groups, Facilities Management West Inc. and Advanced Real Estate Services Inc., attempted to buy the fairgrounds from the state in the January auction.

“The operator would be on the note for the financing of the fairgrounds,” City Manager Allan Roeder said Wednesday. “They would be the party that is legally obligated to make that annual mortgage payment. The city would not be obligated under any conditions to be making payments.”

But the city would hold the title of the property, Roeder said.

Other groups could shoulder expenses

If the state accepts the city’s proposal to buy the fairgrounds for $96 million, Costa Mesa plans to establish a joint-powers authority that would oversee the operation of the fairgrounds and assume responsibility for making sure the debt is paid.

Costa Mesa has not decided whom it would join in the authority; but Roeder said Coast Community College District, a county equestrian association, or the county could become members.

Advanced Real Estate Services, which bid $56 million for the fairgrounds, partnered with American Fairs and Festivals, a newly formed company made up of the current vendors and operators of the 150-acre property. American Fairs includes Tel Phil Enterprises, which oversees the vendors and operations of the Orange County Market Place. Tel Phil Enterprises Inc. offered the state a protest bid of $1,000.

Fred Armendariz, who represented the partnership between Advanced and American Fairs, told the City Council at Tuesday’s meeting that the company is ready to make a $96-million down payment, run the fairgrounds’ operations and assume responsibility for paying off its debt.

Facilities Management continues to pursue a purchase of the fairgrounds, this time from the city.

In a letter to the council, Guy Lemmons of Facilities Management said, “Put most simply, we are prepared to purchase the fairgrounds, at pricing consistent with the state’s proposal and the city’s response. This transaction poses absolutely no risk to the city of Costa Mesa, now or any time in the future; no outlay of taxpayer funds for purchase, maintenance, improvements or operations; and, no exposure to future municipal liability or costs for staffing and management of the fairgrounds.”

About a month ago, while hurrying to create a proposal for the fairgrounds, Costa Mesa reached out to four of the groups that initially offered to buy the fairgrounds.

Aside from Advanced, Tel Phil and Facilities Management West, which offered $55 million for the fairgrounds, Costa Mesa also reached out to Craig Realty Group, the Newport Beach-based outlet developer that won the fairgrounds auction with a $56.5 million bid.

But in the last few days, Craig Realty has pulled out of negotiations with the city.

Righeimer, others to be unpaid advisors

After receiving much praise from the public for its efforts to save the fairgrounds, the City Council found itself divided and criticized over a decision to bring in city Planning Commissioner Jim Righeimer and two others into the mix to provide “expert eyes” on the real estate negotiations.

Righeimer, Richard Kapko and David Ball will serve as unpaid advisors on the city’s negotiations. Councilman Gary Monahan introduced a motion to bring them aboard and pushed the issue through.

Councilwoman Katrina Foley requested that the city invite Barney Page, director of real estate for C. J. Segerstrom and Sons LLC. to also serve as an advisor.

Other members agreed; however, Foley and Councilwoman Wendy Leece voted against inviting all of the advisors in what turned out to be a 3-2 vote.