Odd Man Out

Ousted Orange County Fair Board member David Padilla. (Photo by: Kenny Rivera)

Kenny Rivera

Ousted Orange County Fair Board member David Padilla. (Photo by: Kenny Rivera)

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Throughout the past year, David Padilla, more than any other member of the Orange County Fair Board, remained steadfast in his opposition to the proposed sale of the county Fairgrounds.

Then he wasn’t a Fair Board member anymore.

Though Padilla was among several of his colleagues on the nine-member board with expiring terms last month, the Costa Mesa resident and Republican precinct organizer was the only one removed by Gov. Arnold Schwarzenegger.

Padilla recently agreed to answer questions about the proposed sale, his feelings regarding the 150-acre property and how he ended up in Schwarzenegger’s crosshairs.

Why do you think Schwarzenegger took you off the Fair Board this month?

Anything I would say would be conjecture. That said, there are a lot of political operators involved with vested financial interests. I don’t believe the governor himself instigated my removal, but it was one of these operators with something to lose or something to gain who orchestrated my firing.

But why remove me now? Most likely because I was questioning the board’s decision to enter into closed-door negotiations with Facilities Management West, apparently to help facilitate the sale. At what was my last meeting, I suggested that the board keep FMW at a distance until the sale was complete because I strongly believed that for the board to do otherwise would be contrary to our responsibilities as trustees [of the property].

What do you think is motivating the governor to push so hard to sell the Orange County Fairgrounds now?

I suspect, the governor is looking for any bold policy victory he can get to bolster his legacy and look like he has been financially responsible. Rightly or wrongly, the governor is perceived to have failed miserably on nearly every front, thus his low 20 percent approval rating. So he is desperately looking for actions that look bold, that he can point to and say he did something. While the sale of the Fairgrounds may look like a bold move, it does nothing to solve the budget crisis. The sale of the Orange County Fairgrounds will barely pay the interest on one day of the state debt. Let me repeat that, the sale of the Orange County Fairgrounds will barely pay the interest on one day of the state debt. And for that, we are losing our fair?

Now, as public policy, selling the Fairgrounds is intellectually bankrupt. It brings hardly any budget relief to Sacramento, and it does long-term economic damage to Orange County, which an independent report produced by the 2004 OC Fair Board estimated at around $200 million a year, if I recall correctly. To further accent the ignorance, remember, the operation of the OC Fair costs the state nothing.

Given that the deal makes no financial sense for the state, and given that the community is overwhelmingly opposed to the sale, many have searched throughout the process to find the governor’s motivation. The focus of the “why” speculation now seems to be on financial payoff to his political supporters, as former OC Fair trustee Frank Barbaro and others have alluded to.

And, given all we know now, there certainly is a pattern of events to justify that suspicion. First we find out that Joanne Kozberg, a partner in California Strategies, one of the state’s most powerful lobbying firms, chaired the governor’s study that first raised and legitimized the idea of selling the Fairgrounds. Then we find out that Gary Hunt, a partner of Joanne Kozberg in California Strategies and the governor’s former chief fundraiser has been representing FMW in what is, I am sure, a very lucrative contract throughout the so-called negotiations to buy the Fairgrounds.

Why have you been against all of the variations of selling the Fairgrounds?

The Orange County Fairgrounds is a community asset that has served the residents of Orange County spectacularly. I believe it must remain as a public asset without the burden of debt or revenue-sharing payments. I am certain the debt and revenue-sharing amounts proposed in all incarnations of the sale will lead to complete destruction of the community aspects that make the Orange County Fair special.

If the property is sold, the OC Fair will be gone, never to return, and a 120-year cultural institution will eventually no longer exist. The change will not be immediate, but done slowly over a few years, while the developer is strategizing how to maximize profits. The finances of the sale deal give them no choice but to make drastic changes to service the debt. Five years from now, the OC Fair will be a distant memory.

Sadly, the governor and those advising him have been cavalier with the interests of many people who have invested their lifetimes making the OC Fair what it is today. Everyone says they love the OC Fair; if so, they should think of the consequences of a potential sale.

What do you think of the current negotiations — the latest FMW-state deal?

It is a horrible deal. FMW is getting one of the most valuable pieces of property in Southern California for a fire-sale price.

I believe properly zoned in a normal economic conditions, the property is easily worth $300 million. The California Performance Review, a commission set up by the governor and headed by Joanne Kozberg in 2004, estimated the value of the Fairgrounds at $243 million. The current sale price is $100 million, with the state financing the deal over 40 years, taxpayers will not see the full $100 million for 40 years. The budget relief is a pittance, and the long-term damage is substantial.

As I pointed out, the original conception of the sale — that was put forth by a commission headed by a lobbyist appointed by the governor — is very questionable. And then, a partner of that lobbyist is surely being well paid to make the sale happen. It is just not right.

Furthermore, what is the coincidence that the enabling law to sell the OC Fair and the board’s resolution to purchase were executed within a week of one another? And why did this board choose not to fight the sale as the previous board and the San Diego board is now doing, but instead chose to use the money of the OC Fair to hire Nossaman and Platinum Advisors to promote the sale to an entity they would control. Your readers are smart. They can draw their own conclusions.

I have been skeptical from the moment Dave Ellis first pitched his suggestion that the Fair Board support the sale of the OC Fair and try to purchase it themselves for the ridiculous price of $30 million. It seemed to me as if someone was trying to leverage their political connections to unfairly acquire something for an unrealistic price. This skepticism has only grown as the full dimensions of what is going on have become apparent.

What did you think of the district attorney’s report on the investigation into the dealings among the Fair Board to buy the Fairgrounds? Were you contacted?

That is a very interesting question. Here I was, the only member of the Fair Board to oppose the sale and to speak out against the sale. I was the only member who did not join the nonprofit that was attempting to buy the property. And yet, the District Attorney’s Office never contacted me. They didn’t write, they didn’t email, they didn’t call. If the District Attorney’s Office was seriously investigating this deal, you would think that they would have contacted the one board member who had questioned this deal from the beginning.

As I see it, how can you be a trustee for a public asset and operating with that authority and that public trust try to sell that public asset to yourselves? Every decision made from that point would affect the value of the asset attempting to be purchased. The definition of a conflict. The state attorney general thought so. It’s bewildering that the district attorney’s report did not even reference the fact that the California Attorney General’s Office, which for years has been the legal representative of the Fair Board, found that the violations were manifest enough to remove state legal representation from the district, a highly unusual move. Yet the district attorney didn’t even reference it and seemed to ignore the state attorney general’s findings.

There have been questions raised about who owns the title to the Fairgrounds. Who do you think owns it?

I think a good case can be made that the 32nd Agricultural District is at least a partial owner of the property. At the last board meeting I attended, I urged the Fair Board’s legal counsel to pursue this. Four days later, I was removed from the board.

This you may find most interesting: According to the Orange County Clerk’s Office, neither the state, nor any other entity has done a title search. The only effort to locate the title was done by Sandy Genis from the OC Fair Preservation Society. She has been to the Clerk’s Office on numerous occasions and has yet to locate the title deed. So how does the governor plan to complete a 14-day escrow, assuming the current injunction is lifted, if no official title can be verified? Who will issue the title insurance? There is an obvious effort to take short cuts to complete the sale no matter what before the governor leaves office, even if it leaves basic issues unresolved.

What do you think about how the Fairgrounds are governed now? By a board appointed solely by the governor?

This organization has run spectacularly for 60 years or more. No matter how trustees are appointed, if they don’t make the effort to understand what they are doing there, or if they don’t take seriously their responsibilities to manage the public asset in the best interests of the community, there will be problems.

The first thing needed is stop this sale. Period. Once the OC Fair is saved, then there will be time to unravel how this terrible situation happened and what kind of governance reforms need to be enacted to make sure this never happens again.


An earlier version of this report misspelled the names of the law firm Nossaman and of the lobby group Platinum Advisors.

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