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No blue ribbon on sale of fairgrounds

O.C. officials hope to prevent today's auction but will also submit a bid as a backup plan.

January 14, 2010|By Catherine Saillant
  • Ashley Lang, 9, rides a pony Wednesday at the Orange County Fairgrounds, which the governor hopes to sell to ease the state's budget problems. Some local officials originally supported the plan but changed their minds.
Ashley Lang, 9, rides a pony Wednesday at the Orange County Fairgrounds,… (Allen J. Schaben/Los Angeles…)

Gov. Arnold Schwarzenegger's much-ballyhooed plan to ease the state budget crisis by selling off landmark properties is facing a surprisingly tough first test in Orange County, a place where public officials regularly talk up free markets and privatization of government.

A rare bipartisan wave is rising to block the governor's proposed sale of the beloved Orange County Fairgrounds, including conservative politicians who at first backed their Republican governor but are now urging him to call off today's auction and keep the land in public hands.

The fairgrounds, in Costa Mesa a few miles from South Coast Plaza, holds a special place in the hearts of Orange County residents, who flock each year to its decidedly old-fashioned fair to hear dated music groups, ride the Ferris wheel and devour deep-fried everything.

In the collision between political ideology and nostalgia, nostalgia is winning, said Orange County Supervisor John Moorlach, a conservative Republican. Privatizing public lands makes sense in some situations, he said, but not this one.

"In normal circumstances, we're all for that," he said. "But this is a property that has significance for everybody in Orange County."

The opposition to the auction doesn't bode well for the proposed sale of such high-profile properties as the Los Angeles Memorial Coliseum, Del Mar racetrack and San Quentin State Prison.

The Cow Palace in Daly City, fairgrounds in Ventura and San Diego and even the site of the state fair in Sacramento were also listed in the governor's May budget proposal as properties the state might unload. The sales were supposed to raise $600 million to $1 billion for the general fund. But legislators balked at most of them, agreeing only to sell the Orange County Fairgrounds, a 150-acre parcel that includes a concert amphitheater, exhibition halls, an outdoor swap meet and an equestrian center.

Orange County supervisors and city leaders have pushed back aggressively. Both agencies have passed resolutions urging the governor to drop the plan and the city of Costa Mesa is threatening a June ballot measure that would require a public vote before anything is built, potentially reducing the land's value. Costa Mesa officials personally pleaded with Schwarzenegger to back off. He refused.

As the fairgrounds heads to the auction block, government leaders here have adopted a "if you can't beat 'em, join 'em" stance.

"We tried everything to get the governor to rescind the sale," Moorlach said. "Plan B is for the county and Costa Mesa to become co-bidders."

Schwarzenegger was successful in winning expanded powers to sell and lease back 11 large state office buildings, including the Ronald Reagan building in downtown Los Angeles, and those sales are expected to begin in a few weeks, administration officials said.

But a governor's spokesman was vague when asked if Schwarzenegger intended to make another attempt at selling off the highest-value properties in this year's budget session.

"The governor has said time and again that the state shouldn't be in the real estate business," spokesman Mike Naple said. "We should continue to look at opportunities to maximize the value of available real estate assets."

The real estate push came as the state was looking to cut $45 billion from the budget. It has completed those painful reductions but is projecting an additional $20-billion shortfall this year.

The governor said last year that he was thinking from a business standpoint in pitching the real estate sales. He also asked for broader powers to enter into long-term leases on state-owned property. The Legislature agreed, giving the administration authority to extend leases beyond five years.

That gives the state's Department of General Services more flexibility to enter into decade-long leases at properties where the state holds acreage it's not using, said Jeffrey Young, a department spokesman. In its first effort, the state will seek long-term partnerships with developers interested in acreage surrounding Chino State Prison, with the state sharing in the profits of any development.

General Services is also finalizing plans to market 11 large state complexes, including the Reagan building in downtown Los Angeles, the Franchise Tax Board campus in Sacramento and the Public Utilities Commission building in San Francisco. The plan is to offer to lease the buildings for a set number of years, guaranteeing income for investors, Young said.

Those sales could raise up to $660 million, according to state estimates.

"Our intention is to lease for up to 20 years," he said. "But the market is going to tell us what buyers want."

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