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Officials at the Del Mar Fairgrounds in San Diego County say they need Orange County Fair officials to loan them $5 million because the cancelation of their annual fair due to coronavirus concerns has dealt them a severe financial blow.

OC Fair Board Directors are expected to consider the request today at their 9:00 a.m., teleconference meeting.

The request comes just as Orange County officials themselves look out at the future of their own state fairgrounds, considering master plan reviews while community activists call for more balance on the property between commercial uses like the annual fair and community uses and events – such as the annual marathon, equestrian facilities, Centennial Farms, the veterans museum Heroes Hall and emergency response.

Both San Diego and Orange County canceled their annual fair seasons this year.

The difference between the two state agencies — known as District Agricultural Associations (DAA’s) — is how much money each fair maintains in reserves.

Despite implementing “aggressive cost reduction strategies” after canceling their fair, Del Mar officials in a May 22 letter to the OC Fair Board said “the combination of secured funding to date still leaves us approximately $5M short.”

The OC Fair, by comparison, is currently sitting on approximately $54 million in reserves.

“Terms that we are requesting include a $5M loan or line of credit, with deferred debt service, allowing the necessary time for us to move into our recovery phase,” reads the letter, signed by the Del Mar Fair’s CEO Tim Fennell.

One of the most public and vocal groups of community activists that have been actively working on fair issues over the past decade are taking issue with the request.

“This loan is only a stop gap measure…the 22nd DAA (Del Mar Fairgrounds) has not been on stable financial footing for a number of years,” said Reggie Mundekis, who alongside her husband Vincent Pollmeier are among the closest local resident observers of the OC Fair Board and lead the group, Friends and Neighbors of the Orange County Fairgrounds. 

The OC Fair Park Plaza inside the county fairgrounds in Costa Mesa on Jan. 12, 2019. Credit: JULIE LEOPO, Voice of OC

For one thing, Mundekis said the Del Mar Fairgrounds’ financial troubles have been “years in the making” and are more “complicated” than the financial dynamics at the OC Fair, partly stemming from Del Mar’s revenue shortfalls, and costs of operating one of its key landmarks: the horse racing track.

Declining attendance coupled with food and beverage revenue drops at the race track contributed to “a very challenging year financially” for the San Diego County Fair last year, officials said in a 2020 budget report. 

Officials tied the decline in attendance to rainy days and the sport’s growing controversy amid a number of horse deaths at the Santa Anita race track in Arcadia.

On top of that, the revenue shortfalls out of the race track forced officials to pay an extra $1.6 million to its Race Track Authority (RTA), which helps pay down bond debt. In December, fair officials are set to pay $2.5 million into the RTA.

“These are not golden years for horse racing,” Pollmeier said in a Wednesday phone interview.

Total revenues for the San Diego County Fair in 2019 were under budget by more than $3.4 million.

Last year officials also counted $5.4 million in unrestricted cash — money the agency had on hand and could spend freely — compared to $81 million in actual revenue generated that year.

Calls to Del Mar staff went unreturned Wednesday.

Asked whether staff would study the effectiveness of the loan while Del Mar still has debt service and bond payments to make, OC Fair Communications Director Terry Moore said “If directed by the Board, staff will study the situation as requested.”

OC Fair Board member Doug LaBelle declined to comment beyond saying Del Mar  officials will give a presentation detailing their ask at today’s meeting. “I’m just there to listen and see what their request is and beyond that that’s all I can say.” 

Other board members like Robert Ruiz and Ashleigh Aitken didn’t respond to phone messages seeking comment. 

Pollmeier questioned whether the OC Fair would ever get that money back. “It appears to me they’re just deluding themselves into thinking it’s a loan.”

The Del Mar Fairgrounds “may be our brother-in-law,” he added, “but one always has to be careful about loaning to one’s brother-in-law.”

“You may not see that money again,” he said.

Brandon Pho is a Voice of OC staff writer and corps member at Report for America, a GroundTruth initiative. Contact him at bpho@voiceofoc.org or on Twitter @photherecord.

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