Can city afford O.C. fair center?

Costa Mesa’s exclusive negotiations for the Orange County Fairgrounds have left some wondering how a city facing a projected $3.7 million budget deficit can afford Sacramento’s price of $96 million to $180 million.

When a live auction for the fairgrounds opened Jan. 14, the city and county’s joint bid of $6.5 million was among the lowest.

They were willing to pay up to $40 million, an amount that would have fallen short of the winning bid.

City officials on Thursday wouldn’t state how much they would pay or how they propose to finance a deal.

County Supervisor John Moorlach, a certified public accountant, offered some advice for the city in its negotiation with the state.

“It’s fine if the city wants to buy the fairgrounds, I just hope that they pay a fair price and don’t get too emotionally involved in the process,” he said.

Moorlach added that the state shouldn’t be selling its assets, nor should Costa Mesa pay for a property that it already owns.

“If the state has fiscal sanity, it would tell the [O.C. Fair] board, ‘Look, you get to run this fair, but you have to pay us $100,000 a month,’” Moorlach said. “Why give up income-producing real estate? Who in the right mind would do that? Would you prefer to own your home or to rent for the rest of your life?

Moorlach also said the potential joint bid of $40 million would have been too high.

“Just because the state is not thinking rationally on its land holdings, doesn’t mean I should not be thinking rationally and paying some outrageous price,” he said. “Business is business.”

While Costa Mesa officials would not specify how much they would pay, they said the money would not come from the general fund, and that it would not be imposed on the public through taxes.

“The direction is not to take away from tax dollars, and to be self-sufficient,” said Becky Bailey-Findley, chief executive of the fairgrounds from 1994 to 2008. Costa Mesa is paying her $100 an hour to serve as project manager in the negotiations.

The state remains intent on getting the highest price possible for the 150-acre property, said Mike Naple, spokesman for Gov. Arnold Schwarzenegger. He added that the state is facing a $20 billion deficit.