By Joe Tash
Opinions are flying in the wake of last week's news that the city of Del Mar and the state have reached a preliminary agreement for the city to buy the county fairgrounds for $120 million.
Supporters of the plan say it will give the city much more say over how the fairgrounds is developed and operated, improving the quality of life for city residents. Critics question whether the city has the expertise to run such a large operation, and if the city would use its newfound clout to stifle development of the 406-acre property, which comprises 20 percent of Del Mar's 1.8-square-mile footprint.
"I think it will transform this town. It's one of the most extraordinary things that's ever happened in Del Mar. It will take what's been an adversarial relationship and turn it into a win-win," said Bud Emerson, a columnist for the Del Mar Times who has worked as a business consultant.
But others take a completely opposite view.
"Once people do their due diligence, they will learn that the purchase of the fairgrounds by the city of Del Mar will not be in best interest of the people of San Diego County, the fairgrounds, the fair, the horse racing, the 300 other events at the fairgrounds and especially not in the interest of the people of Del Mar," said Tim Fennell, general manager and CEO of the fairgrounds.
Much has to happen before the deal could be finalized, including passage of state legislation authorizing the sale, which could come before the state Senate for consideration next month. City officials also plan an in-depth analysis of the fairgrounds' books to make sure the deal would pencil out financially. Some Del Mar residents have even called for a public vote, although Del Mar Mayor Richard Earnest said a public vote is not legally required and he would not favor putting the matter before city voters.
The tentative deal between Del Mar officials and representatives of Gov. Arnold Schwarzenegger calls for a nine-member board to oversee the fairgrounds and Del Mar racetrack. Under this scenario, Del Mar would appoint five members to the board, which would also include representatives from the cities of San Diego and Solana Beach, the county, and the San Dieguito River Park joint powers authority.
Currently, the fairgrounds is operated by the 22nd District Agricultural Association, a state agency whose board of directors is appointed by Schwarzenegger.
The purchase would be financed primarily through bonds issued by the city of Del Mar, pre-payment of racetrack lease payments by thoroughbred racing interests, and some state financing, according to Earnest.
While some are questioning whether the city had enough information about the fairgrounds' finances to make its $120 million offer, Earnest said city officials have spent months poring over financial documents, and have created models that show the fairgrounds would generate enough income to cover the annual debt service.
"There's enough revenue to more than satisfy the debt service for the bond," said Earnest in an interview Monday. "We wouldn't do it if it didn't."