State to consider legislation next month
By Marlena Chavira-Medford
At a press conference Thursday afternoon, Oct. 7, Del Mar Mayor Richard Earnest confirmed that the city has struck a preliminary agreement with the state to purchase the Del Mar Fairgrounds and racetrack for $120 million.
Earnest said that the legislation introduced to the state senate Wednesday only authorizes the sale, claiming that early reports of a deal already been inked are "at best, premature."
"This isn't a slam dunk," he said, adding that after reviewing it, the senate has decided to reconsider the legislation next month. "We certainly hope to get approval [of the legislation]."
The fairgrounds account for about 20 percent of Del Mar's acreage, but because the state-appointed 22nd Agricultural Association District governs it, the city council has little power over what happens there. That's a problem, Earnest said, and it's the impetus behind wanting to buy the property.
"It's a regional asset, but we don't have regional control," he said. "We want some control over our destiny."
No money from the city's general fund would be needed to pay for the fairgrounds. The pending legislation authorizes the city to issue revenue bonds to finance a portion of the property purchase - a definite plus in a city that has a Triple-A bond rating, Earnest said. The city would finance $45 million in proceeds from revenue bonds, and raise $30 million from leasing the track and satellite wagering facilities. Financing the remainder would be up for the city and state to negotiate. TV station San Diego 6 is also reporting that a private group of owners have thrown in about $50 million to help finance the deal.
The state is considering selling the fairgrounds, along with other prime properties, in an effort to solve its budget crisis. Though there are reports that the fairgrounds have been valued for as much as $800 million, Earnest said the city decided to offer $120 million because "quite frankly, it's what we could afford."
"Our offer seems to be a number that the governor's office is willing to deal with," he said. "If there's another number the state thinks they should get, they should let us know."
Potential revenue from owning the fairgrounds is yet to be determined, Earnest said.
"We really won't know that until we look at the books and see what's really there."
If the legislation passes, a city-appointed nonprofit corporation would oversee the fairground's operations and maintenance. That would include a panel, which would be comprised of five representatives from the City of Del Mar, plus one each from the cities of Solana Beach and San Diego, as well as someone from the county.
The current fairground employees would likely keep their jobs, as their knowledge is seen as an asset, Earnest said.
"I've bought and sold a lot of companies and I can tell you that the people running it the day before the sale are the people running it the day after. We don't know how to run a fair, but there are a whole lot of people over there who do."