City approves fairgrounds lease

Costa Mesa, developer still have to iron out some items like community use.

August 25, 2010|By Mona Shadia, mona.shadia@latimes.com

COSTA MESA — After hours of debate, the City Council voted 4 to 1 Tuesday night in favor of a ground lease agreement with a Newport Beach-based real estate company that will finance and operate the Orange County Fairgrounds for the city, if the state Legislature permits Costa Mesa to buy the landmark property from the state.

Calling the process flawed, Councilwoman Katrina Foley dissented.

The city and its chosen partner, Facilities Management West, still must work out community use and other terms of the $96-million agreement to buy the fairgrounds.

And perhaps more importantly, the lease cannot be finalized unless the Legislature passes laws allowing the sale — an issue that is now in question since the state put the fairgrounds back up for sale this week.

In order for escrow to close by the end of September, a goal the state and the city set during their negotiations, the Legislature must sign off on the sale by Tuesday.

So far, no legislation has been introduced in Sacramento. Assemblyman Jose Solorio, D-Santa Ana, committed to helping city and county residents get the best deal out of the sale while keeping it in public hands. However, he said he first needs to ensure that all areas of concern are addressed.

Meanwhile, the state's recent move to put the fairgrounds back on the market has intensified the process and it's no longer clear whether the fairgrounds will remain in public hands at the end of the day.

The California Department of General Services, the state agency in charge of selling the fairgrounds, issued a second call on Tuesday for offers, this time making the city's offer of $96 million the minimum starting point for bids.

Those interested have until Sept. 30 to turn in bids. The state plans to choose a buyer by mid-October.

But even if legislation is passed in time to finalize the sale to the city, it's not certain whether Costa Mesa and Facilities Management will end up agreeing on key issues of the 55-year ground lease. Tuesday's joint meeting with the City Council and the Orange County Fairgrounds Authority, a body that consists of the five council members, focused mainly on the unresolved issues between the city and the company.

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