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Ruling blocks fairgrounds sale

Only successful appeal to state Supreme Court could revive the hotly-contested deal for the property in Costa Mesa.

June 07, 2011|By Joseph Serna, joseph.serna@latimes.com

COSTA MESA — An appellate court ruling Tuesday blocked the sale of the Orange County Fairgrounds to a private investment group.

The decision all but kills the state's deal to sell its 150-acre property to Newport Beach-based Facilities Management West (FMW).

Only a successful appeal to the state Supreme Court can revive the deal that's been a source of intense debate in Costa Mesa, home to the fairgrounds.

"The court's decision today is a great victory for the residents of Orange County," said Assemblyman Jose Solorio (D-Anaheim), a sale opponent who introduced legislation seeking to keep in public hands the storied site of the popular Orange County Fair. "I hope the governor lets us keep our fairgrounds public and does not put the fair out to bid again."

The buyers said they may challenge the three-judge ruling by the state Court of Appeal, 4th District.

"We disagree with the appellate court's decision," said Guy Lemmon, FMW's spokesman. "We are weighing our options and considering an appeal. The sales process was open, fair and in full compliance with the law." 

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The state Department of General Services cannot sell the property to a private developer without restarting the entire sale and bidding process, the justices ruled.

In the 21-page opinion, Presiding Justice William Rylaarsdam wrote that General Services erred last year by not having an outside appraisal of the property done before striking a deal with FMW.

"The Legislature reserved for itself the opportunity to veto the sale if it was not satisfied with the terms of the sale in comparison with the fair market value of the fairgrounds," Rylaarsdam wrote. "It never got that opportunity … any future sale must begin at square one."

In October, the state agreed to sell the fairgrounds to FMW for $100 million, with a $20-million down payment and a 35-year note, after rejecting earlier bids that priced the fairgrounds at about half that amount. In 2009, former Gov. Arnold Schwarzenegger put the Orange County complex and other state properties up for sale to help reduce the state's budget deficit.

His successor, Gov. Jerry Brown, hasn't issued a public opinion on the sale.

"I think what this does is the inevitable — it puts it in the hands of the governor," said O.C. Fair President and Chief Executive Steve Beazley. "There's many who thought this was going to be his final decision the whole time."

"The ball's in the governor's court," said Orange County Fair Board Chairman David Ellis.

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