Through profit sharing, the Fair Board would pay the state about $144 million, which includes 3% interest, over 25 years.
Although not a purchase, the profit-sharing agreement would "mimic" a purchase, said Steve Beazley, OC Fair & Event Center president and chief executive.
The Fair Board would offer the state $5 million upfront and a flat $2.5-million annual fee. In addition to the flat fee, the board would pay the state 14% of the fairgrounds' annual gross profits.
Beginning year 26, the Fair Board would no longer pay the flat $2.5-million fee, but it would be paying the state 7.5% of its annual gross revenues until year 80.
Calling it a hasty move, board member David Padilla cast the lone dissenting vote.
Meanwhile, City Hall continues to pursue the fairgrounds with financial help from a Newport Beach-based real estate company.
Costa Mesa Councilwoman Katrina Foley and City Manager Allan Roeder headed to Sacramento on Monday to discuss the sale agreement with the governor's office.
"It's continuing the discussion of the agreement and furthering that and further refining the details of that," said Assistant City Manager Tom Hatch.
The state announced recently that it tentatively accepted Costa Mesa's offer to buy the fairgrounds for $96 million, the minimum amount the state is looking to get for the 150-acre property. In addition to financing the purchase, Facilities Management West will also run the fairgrounds, giving no public oversight of the operations.
Costa Mesa's plan is similar, but it offers the state $19.2 million upfront and pays the mortgage over a 40-year period with 5% interest through Facilities Management. But under Costa Mesa's offer, the state would no longer own the property. The city would also benefit financially from leasing the grounds to Facilities Management.
A profit-sharing agreement would also guarantee the jobs of the fairgrounds' employees, whose fate has yet to be decided.
An earlier attempt by the Fair Board to discuss profit-sharing of the fairgrounds' revenue with the state was struck down by state officials, who directed the board in April to not even discuss that option among its members.
Dodge sent a letter to Gov. Arnold Schwarzenegger last week informing him of Monday's discussion of a profit-sharing agreement.
Although the fairgrounds are owned by the state, it doesn't benefit from revenues the property generates, nor does the state provide any financial support.
The state placed the fairgrounds on sale in an effort to cover its nearly $20-billion budget deficit.