City in talks with groups about operating fairgrounds

Costa Mesa is negotiating with Facilities Management West Inc. and advanced Real Estate Services Inc. — two groups that offered to buy the Orange County Fairgrounds from the state in January — on an agreement to run the operation of the 150-acre property if the city ends up buying it from the state.

Costa Mesa City Manager Allan Roeder revealed Tuesday that about a month ago the city reached out to four of the groups that initially offered to buy the fairgrounds from the state during January’s live auction.

The four groups are:

Facilities Management West, which offered the state $55 million;

?Advanced Real Estate Services, which offered $17 million;

?American Fairs and Festivals, which is made up of several interested parties, including Tel Phil Enterprises, the company that runs the OC Market Place; and

?Craig Realty Group, the Newport Beach-based outlet developer that came away as the winning bidder after offering $56.5 million to the state.

In the last few days, Craig Realty has pulled out of negotiations with the city, and Advanced Real Estate has partnered with American Fairs and Festivals in its negotiations with the city.

The two groups are not looking to buy the fairgrounds, but are negotiating with the city to run its operations, according to the staff report.

If the state accepts the city’s offer of $96 million, the City Council plans to establish a separate entity — a joint powers authority — that would oversee the operation of the fairgrounds and assume responsibility for paying its debt.

The city has not revealed yet who it will join with to form the powers authority.