Judge rejects fairgrounds lawsuit claims

SANTA ANA — An Orange County Superior Court judge ruled in favor of the state on Wednesday to sell the Orange County Fairgrounds to a private investment group for $100 million.

But the fate of the 150-acre Costa Mesa property is not yet sealed.

Judge Michael Brenner extended until 4:30 p.m. Tuesday the temporary restraining order granted to the petitioners.

“I’m like everyone else. I want the fair to stay, but I have to rule on the evidence,” he said.

Brenner’s decision allows the plaintiffs — who include community members; a group of local businesses led by Jeff Teller, the president of Tel Phil Enterprises, Inc., which runs the fairgrounds’ swap meet; and state and local officials, who filed a lawsuit to block the sale of the property — an opportunity to petition the appellate court for a rehearing. The plaintiffs originally filed two separate lawsuits, but they were consolidated earlier Wednesday.

If the appellate court accepts the case, the temporary restraining order would remain in effect until the court makes a new ruling.

The appellate court recently granted a chance to hear the case of another group of petitioners trying to block the sale of 11 state properties. The court’s decision to hear that case could be a sign of hope for the opponents of the sale of the fairgrounds, said Wylie Aitken, the lawyer representing State. Sen. Lou Correa (D-Santa Ana), Assemblyman Jose Solorio (D-Anaheim), outgoing Costa Mesa Councilwoman Katrina Foley and the Orange County Fairgrounds Preservation Society.

On each claim of the case, Brenner concluded that the state Department of General Services (DGS), which is in charge of selling the property, is likely to prevail in its attempt to sell the fairgrounds.

Gene Livingston, the attorney representing Tel Phil, described the state’s process as a “sham.”

“Sham is a strong word,” Brenner said. “I’m interested in hearing how it was a sham.”

The petitioners argued that Tel Phil’s bid on the property was rejected because the state favored Newport Beach-based Facilities Management West. The petitioners also argued that due process was not given to all bidders because DGS constructed its second call for bids to fit the terms Facilities Management had set during its negotiations with Costa Mesa City Hall.

But each one involved in the case has been part of the process since Gov. Arnold Schwarzenegger decided to sell the state-owned property the first time, so due process was not an issue, Brenner said.

Brenner also ruled that the Legislature was given adequate notice when DGS declared Facilities Management the winning bidder.

The petitioners also claimed that the state violated its constitution because it identified the fairgrounds as surplus property — meaning the property is no longer needed — but then planned to pump revenue from selling it into the state’s general fund. They argued the sale is unconstitutional because funds from surplus properties must go toward paying off state debts.

“It’s hard to find that unfairness, your sham,” Brenner told Livingston. “You haven’t suggested any reasons for a sham.”