Layoffs take effect at financially crippled Del Mar Fairgrounds

Layoffs this month at the Del Mar Fairgrounds left just 62 of the formerly 158 employees there and threw further into question the future of the state-owned property.

Without its largest annual event, the San Diego County Fair, and with little hope of returning to normal operations anytime soon, the 22nd District Agricultural Association that runs the fairgrounds continues to lose money.

“We find ourselves in a different world because of COVID and the financial crisis it has caused us,” 22nd DAA board President Richard Valdez said at the board’s meeting last week. “We have to look at everything and how it will work in the future.”

Some fairgrounds events, such as the annual Halloween Scream Zone underway through Oct. 31, have continued with modifications to accommodate COVID-19 safety restrictions. This year, all Scream Zone visitors are driving, instead of walking, through the mile-long horror show of actors, props and themed haunts. The event been a huge success, by all accounts, with tickets sold out every night since opening Oct 1.

Scream Zone is on track to gross $580,000 on admissions alone and net about $185,000 in profits after paying the costs of the show this year, said Katie Mueller, the fairgrounds business services officer.

Fairgrounds officials have found other creative ways to make money during the crisis, such as leasing parking space over the summer to car rental companies with surplus inventory. Another first-time venture was the Fair Food Fix, in which people could buy take-out versions of favorites such as corn dogs, turkey legs and kettle corn. Also attracting drive-in visitors is an ongoing series of parking lot concerts.

Still, income from the modified events is hardly enough to cover the fairgrounds’ ongoing expenses. The 22nd DAA depends almost entirely on revenue from things such as tickets, food and beverage sales, parking and a few long-term leases. Unlike cities, counties and states, the agricultural district receives no money from property, gas or sales tax revenue to pay the bills.

Total revenues from Jan. 1 through Aug. 31 were down 87.58 percent, according to data presented at the 22nd DAA’s board meeting. The district’s annual budget anticipated revenues of more than $74 million for the eight-month period, but it received only $8.7 million.

Cost-cutting reduced expenses to $21.6 million instead of the budgeted $67.6 million over the eight months. But despite the cuts, the fairgrounds had a net operating loss of $19.7 million through August.

The recent layoffs will further reduce expenses in the months ahead. But with fewer employees, it also will be harder to host money-making events, especially when and if large gatherings are allowed to return.

In June, the fairgrounds notified 115 employees of the potential for layoffs, said Carlene Moore, interim chief executive officer and general manager of the fairgrounds. At the time, the plan was to lay off 92 employees, and the additional notices allowed people to consider retirement, lateral moves or other options.

After the notices were issued 18 employees retired and 15 others found other jobs with the state or in the private sector, she said. Six who were scheduled for layoffs were able to keep their jobs by moving to a lower position.

“At the end of the day, we were left ultimately laying off 58 people with no other options for them at this time,” Moore said.

About 40 of the 62 remaining full-time staffers work in essential maintenance and security jobs to keep the fairgrounds safe, Moore said. The property has a number of older buildings that require upkeep and oversight whether or not they are occupied.

Fairgrounds administrators wrote to Gov. Gavin Newsom in April to ask for $20 million in emergency funding to help keep the fairgrounds afloat. That request went unanswered, but the governor did include money in this year’s budget to help all the state’s agricultural districts, including the 22nd DAA, cover the expenses such as the unemployment payments that go with layoffs.

The 22nd DAA asked the Orange County Fair Board for a $5 million loan in May, but after thoughtful consideration Orange County politely declined.

Director Joyce Rowland commended Del Mar staffers for their work so far despite the dire financial circumstances, and asked how much longer the fairgrounds could stay open without government assistance or a return to large mass gatherings.

“There comes a point in time when it has to be clear to all of us and to the community that our platform is burning,” Rowland said. “There’s a short wick on this.”

Moore declined to be specific, but said “sooner rather than later.”

Fairgrounds officials are looking for grant money to help get them through the crisis, Moore said.

“We are looking at a future that is more local support for agencies such as the fairgrounds,” she said.

Del Mar fair board directors said they hope to hold the county fair next summer, but it’s unclear how the fair might look with the COVID-19 threat still looming.

Fairgrounds officials are watching for clues in the recently issued state guidelines for reopening large theme parks such as Legoland, SeaWorld and Disneyland, which also have been shut down for seven months by the pandemic.

—Phil Diehl is a reporter for The San Diego Union-Tribune