Fair Board evicts swap meet operator

COSTA MESA — The Orange County Fair Board on Thursday voted to evict the weekend swap meet after 42 years at the fairgrounds.

Members of the Fair Board majority said declining revenue and repeated clashes with the company that owns the event spurred the decision.

The 6-3 vote will terminate in 18 months a lease with Tel Phil Enterprises, which operates the Orange County Market Place, better known as the O.C. swap meet.

Fair Board members used words like "difficult" and "deteriorating" to describe the board's relationship with Tel Phil and its president, Jeff Teller.

But Teller remained defiant.

"We will do whatever we need to do to protect our business interests," Teller told the board, calling the action a "terrorist threat." "The swap meet does not belong to you, the parking lot does. The swap meet belongs to my company."

Fair Board Chairman David Ellis, however, flatly said the relationship between the board and Tel Phil is "beyond broken."

Board member Joyce Tucker, who voted with the majority, said Teller's business model for the Market Place didn't offer anything that could turn the financial tide.

Teller argued that the decision was political. Bad blood remains since 2009's proposed sale of the Orange County Fairgrounds, which Teller publicly opposed.

"This is what I anticipated," Teller said, calling the vote retaliation.

The two parties' relationship in the last few years have declined with Market Place revenue.

The swap meet has seen about 50% drop in vendor spaces rented, rental revenue, attendance and admission revenue since 2007, with no clear indicators that the trend will reverse in the long term.

For use of its property about 46 weekends out of the year, Tel Phil Enterprises pays the fairgrounds a portion of its revenue from the weekend event.

From 2005 to 2009, the fairgrounds collected 35% of the Market Place's annual gross revenue — or a minimum of $3.5 million.

In 2009, Teller asked for a break in the rent because of the economy, so the contract was renegotiated to 25%, or $2 million.

Teller had to give up one weekend of the swap meet as part of the deal, which paved the way for the Barrett-Jackson classic car show's introduction to Orange County. The last two classic car auctions were called successes, and some fair officials expressed support for more events like it.

Board members Kristina Dodge, Nick Berardino and Gerardo Mouet dissented.

Berardino, who was recently appointed by Gov. Jerry Brown, said he was concerned for the more than 1,500 vendors who sell their good at the swap meet and what this means for their futures.

Dodge said because Tel Phil Enterprises had not defaulted on its lease, she couldn't side with the majority.

There will likely be a swap meet when Tel Phil departs. The board is putting out a call for other swap meet vendors to submit bids to take over once the Market Place is gone.

The staff is tasked with coming back at the next meeting with ways to generate revenue in the swap meet's absence.

Legal action appeared possible.

As Teller and his attorneys gathered their things to leave the meeting after the vote, Teller stopped and turned to Ellis.

"What was that?" Teller barked at Ellis.

"I said, 'Let the lawsuits begin," Ellis said.


Twitter: @JosephSerna

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