Should the OC Marathon Have to Open Its Books?

A battle is brewing on the Orange County Fair Board over whether owners of the now for-profit OC Marathon should have to disclose their financial records and charitable contributions.

On the board’s agenda Thursday is a five-year, $500,000 lease agreement between the Orange County Fair and Events Center and the OC Marathon for the annual run.

Fair Board member Nick Berardino wants OC Marathon owners — who include local Republican Party Chairman Scott Baugh — to open their books before any lease is signed.

“This is a public property, and we’ve never entered into a multi-year rental agreement before,” said Berardino, who is general manager of the Orange County Employees Association. “And if this is the first year we are going to do it, we need to do it right and ask proper questions.”

Baugh and other investors say they are being singled out.

In a letter to the Fair Board dated Monday and quoted here verbatim, Gary Kutscher, one of eight marathon investors, argued: “No other renter for a single weekend have ever been asked to share their financials or share what percentage of their proceeds will go to charity.”

That response has Berardino wondering what they have to hide. He wants to know how the marathon is administered for profit after being a nonprofit for so many years. He also wants to know how the charitable foundation works and how much in contributions charities can expect.

“The fact that the marathon refuses to be forthcoming makes me even more suspicious,” Berardino said. “And I’m sure the taxpayers of the 32nd District Agricultural Association [the official name of the fairgrounds governing body] will be equally suspicious.”

Berardino’s demands drew a vigorous response from Baugh.

“Nobody’s making a killing here, and nobody is taking any money out,” Baugh said. “All we’re asking for is an ability to invest back in the marathon.”

Baugh described difficult times over the last few years as the nonprofit lost money because of changes in routes, city fees and law enforcement.

But over the past three years, the marathon has been partnering with the fairgrounds and perfecting the route for runners. Baugh said that a long-term rental agreement would enable the organization to have up to 20,000 participants, which would then open sponsorships.

“We’ve been struggling for seven years to make it work, and we finally have a model,” Baugh said.

Yet that strategy depends on more parking, which means the marathon would need all the parking space usually used by the Orange County Market Place swap meet on weekends.

Baugh stressed that the fairgrounds are getting a better deal than if the swap meet was operating on the site. The marathon pays $100,000 rent for the weekend, more than double what the swap meet would pay.

“We don’t need special treatment for this,” Baugh said. “We’re offering them a deal.”