Gov. Arnold Schwarzenegger is ready to put the Orange County Fairgrounds back out to bid if the state Legislature doesn't approve a deal to sell it to Costa Mesa. (Photo credit: Rich Pedrocelli/AP)

Tuesday, August 24, 2010 | With legislation stalling in the statehouse that would finalize the deal to sell the Orange County Fairgrounds to the city of Costa Mesa and a private company, the Schwarzenegger administration announced today that it is prepared to slap another “for sale” sign on the 150-acre property.

“In the event the Legislature adjourns without passing this necessary legislation, the Department of General Services will work to find new buyers to purchase the fairgrounds on terms that will result in the highest, most certain return to the state,” said a surprise news release put out by the department.

The administration’s announcement made the ticks on the $96 million deal’s clock ever louder as the current legislative session is just days from ending and significant issues have yet to be hammered out.

State Assemblyman Jose Solorio — who has been carrying the legislation to authorize the current sale — was trying to remedy the situation today and even downplayed the governor’s announcement.

One senior staffer called the General Services request for proposal “a natural course for everyone to cover their bases and run down parallel paths.” “It doesn’t imply that anything is falling apart,” the staffer added.

Yet the legislative language to authorize the sale is “still being drafted,” legislative sources said. There are still outstanding concerns from organized labor in Sacramento about how to ensure a smooth transition for Fairgrounds employees.

And Latino caucus members still have concerns about the anti-illegal-immigration resolution that the Costa Mesa City Council passed earlier this year.

Meanwhile, the City Council is meeting tonight to begin ground lease negotiations with Facilities Management West on the property. And there are indications that those talks are breaking down, with FMW refusing to accept certain terms in the lease that bolster public uses.

If this deal can’t get done, the General Services news release provides insight into what could happen to the property if it goes back out to bid. One possibility is that the OC Fair would no longer call Costa Mesa home.

The department “will sell the property ‘as is’ and is encouraging bidders to include “value added” elements (e.g., profit participation) in the event that any portion of the property is ever developed or used for anything other than its current use as a fair and event center.”

Such a direct sale could leave the 32nd Agricultural District — the state entity that owns the OC Fair — with the trademark of the fair but without a property to put it on. Some sources close to the sale have already wondered whether this means that the fair could be headed for the Great Park in Irvine.

Now, Costa Mesa did pass a ballot initiative that restricts the uses of the Fairgrounds. But history is full of ballot initiatives that were nullified by new ballot initiatives. And if a developer could get title without restrictions, the property, which lies between the 405 and 55 freeways, could be worth a lot more than the $96 million Costa Mesa is trying to get it for.

The recent developments have left some city officials wondering whether they should have been more focused on legal research than dealing with FMW.

City Councilwoman Katrina Foley had already hinted at this option at the last council meeting. She asked openly whether the city had looked into its legal options to potentially oppose a state sale of the property.

“I’ve said all along we need a back up plan. Apparently we did,” Foley said after seeing the request-for-proposal announcement on Tuesday.

Foley characterized the rebidding as “a bully tactic by the governor’s office for us to accept whatever terms FMW wants,” Foley said.

“We shouldn’t give in,” Foley said.

Solorio is urging city officials to stick with the current negotiations.

“Rather than facing great unknowns regarding what the new highest bidder would do with the property, my preference would be to make the deal with Costa Mesa better,” read a news release issued by Solorio’s office.

But the plot continues to thicken.

Sources close to the governor’s office confirmed Tuesday that two new Fair Board members will soon be appointed, replacing the seats left vacant long ago by the departure of Debbie Carona and Julie Vandermost.

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