Among the mistakes made by the Department of General Services (DGS), which administered the sale process, was a failure to give the Legislature the opportunity to review, and, if necessary, veto the sale before accepting an offer from a bidder.
The Legislature voted in July 2009 to put the fairgrounds on sale, following an initiative by then-Gov. Arnold Schwarzenegger to sell high-valued state properties to plug a hole in California's ailing budget.
Allowing losing bidders to protest the state for accepting FMW's offer was also bypassed by DGS, in addition to failure to provide an appraisal of the Costa Mesa property.
"Neither flaw is fatal," said the petition, which was filed Wednesday to the state Court of Appeal, 4th District, the same court that blocked the sale.
In his ruling, presiding Justice William Rylaarsdam said the state must start over before selling the fairgrounds. The decision was welcomed by Assemblyman Jose Solorio (D-Anaheim), one of the state and local officials and residents who joined in a lawsuit to challenge the sale.
FMW has been pulling out all the stops to buy the fairgrounds since the state placed it on sale the first time in October 2009. The group came in second after offering $55 million for the property during a live auction in January 2010. Then, the state declared the highest bid — $56.5-million from a mall developer — too low and started over.
FMW then placed a bid for $100 million, with a $20-million down payment and the rest over 35 years with a 6% interest rate.