A spanner in the works for the deal Costa Mesa made with Facilities Management West to finance the sale of and manage the OC Fairgrounds for the next 55 years. Remember American Fairs and Festivals from my earlier articles? The group helmed by the OC Marketplace’s Jeff Teller who had put together a great deal that offered maximum public control of the property, as well as a generous percentage of profit-sharing, but they were shunted aside in favor of the profiteers of FMW? Well, they are appealing that decision on the grounds that… well, read the letter their lawyer just sent to Allan Roeder, Costa Mesa City Manager. (This should make the meeting 4:30 Tuesday at CM City Hall to discuss the Fairgrounds deal – at which I plan to speak – even MORE interesting!)
Re: Appeal contesting the sale of the OC Fairgrounds
Dear Mr. Roeder:
Our firm represents American Fairs and Festivals Inc. (“AFF”) in connection with AFF’s proposal dated May 3, 2010 (“Proposal”) to assist the City of Costa Mesa (the “City”) in acquiring the Orange County Fairgrounds (the “Fairgrounds”) from the State of California and ground lease the Fairgrounds from the City.
In response to the City’s request for proposal dated April 7, 2010 (“RFP”), our client submitted a Proposal that satisfied all of the City’s Objectives and requirements as requested in the RFP. However, the City elected to enter into an exclusive negotiating agreement with Facilities Management West (“FMW”) and rejected AFF’s Proposal. In doing so, it is our contention that the City acted improperly by failing to follow its own criteria and setting its stated Objectives aside during the RFP process. As such, we intend to protest this decision as unfair and procedurally flawed.
The City established eight Objectives in its RFP that it asked to be included in a proposal to the City, but the final proposal accepted by the City only arguably satisfied 1 of the 8 (“Objectives”). The Objectives are as follows:
- Retain local control over the site,
- Preserve the OC Fair and Event Center activities and the community programs currently operated on the site,
- Creating an open and transparent govemance plan,
- Securing the acquisition without expenditure or risk of public funds,
- Ensuring a smooth transition for existing state employees,
- Future development must be compatible with the City’s General Plan designation,
- Ensuring that additional or intensified uses would be compatible with existing uses,
- Potential for economic benefit to the City
The only Objective that was arguably satisfied in the memorandum of understanding (“MOD”) between FMW and the Orange County Fairgrounds Authority was that of Objective 8 (“Potential for economic benefit to the City”). However, even that Objective is suspect, as stated by Orange County Supervisor John Moorlach who believes that the transaction is not fiscally sound and it is only a matter of time before the transaction falls apart. This was also confirmed in our meeting with your own financial advisor whose numbers mirrored our numbers and concluded that the Fairgrounds could not generate substantially more revenue without major changes to the Fairgrounds. Our client was on numerous occasions told that no significant changes would be allowed on the Fairgrounds.
The MOU with FMW does not satisfy any of the other Objectives required by the City. There is no process for local control or input. FMW is free to operate in whatever fashion it deems appropriate within the terms of its lease and does not have to consider public opinion or even the interests of the City. With respect to Objective 2 (“Preserve the OC Fair and Events Center activities and the community programs currently operated on the site”), there is no procedure in place to assure that the OC Fair and Event Center activities and the community programs remain in place. While the City may meet and make recommendations to FMW about their business plan, FMW is not obligated to implement any recommendations from the City.
The City ignored Objective 3 (“Creating and open and transparent governance plan”) by rendering any govemance plan meaningless. There is no citizen or City oversite committee. The City’s only recourse wil be to make recommendations to FMW about its business plan and the recommendations are not binding on FMW.
The City’s Objective 4 (“Securing the acquisition without expenditure or risk of public funds”) is very much in jeopardy because the financial terms of this transaction are not close to the real value of the Fairgrounds. As stated by Supervisor Moorlach:
“If FMW does not remit its payments to the State in full, then the City may have to pick up the slack. This would be untenable at this time in the City’s history. If FMW chokes on this deal and walks, then the residents of Costa Mesa will have to deal with this alligator. An alligator, in real estate terms, is a property that consumes more in debt and operating payments than it spins off in rental income.” (See Moorlach Update, July 8,2010.)
Objective 5 (“Ensuring a smooth transition for existing state employees”) is not discussed anywhere in the MOU. As such, there should be no expectation there wil be a smooth transition for existing state employees working at the site; there may in fact be no transition if employees are laid off to cut costs.
While on its face the MOU addresses Objectives 6 (“Future development must be compatible with the City’s General Plan designation”) and 7 (“Ensuring that additional or intensified uses would be compatible with existing uses”), these Objectives pose serious challenges to FMW. It is clear from even your own financial advisor the Fairgrounds cannot generate revenues necessary to pay the State and the City without a substantial change in use, intensity of uses and intrusive impacts. Costa Mesa residents should expect FMW to develop a business plan which will bring substantial change to the operation of the Fairgrounds. Recently, Orange County Supervisor John Moorlach suggested that “FMW will have to implement a number of interesting ‘business’ maneuvers’ in order to abide by its agreement to the Fairgrounds lease.” Moorlach suggests that this could include increasing ticket costs to the fair, adding additional fairs year-round, providing concerts year-round, building a smaller convention center than the one already available in Orange County, decreasing staff, changing the approach to the weekend swap meet or negotiating new contracts, and finding other ways to rent out its facilities.
Before any lease of the Fairgrounds or any other use or activity can be properly authorized by the City, the contemplated intensified uses most certainly would require a comprehensive environmental review under the California Environmental Quality Act (“CEQA”). If any City should be aware of this requirement it is the City of Costa Mesa. This requirement is clearly outlined in the Califomia Supreme Court’s decision in Concerned Citizens of Costa Mesa v. 32nd District Agricultural Association, 42 CaL. 3d 929 (1986).
The MOU clearly shows that the City’s only priority was to make as much money as possible at the expense of all of its other Objectives. Yet we were told time after time that local control and the other Objectives were the main priority. This misinformiation is a clear violation of the RFP process, a process which Costa Mesa itself established.
The purpose of competitive bidding is to “guard against favoritism, improvidence, extravagance, fraud and corrption; to prevent the waste of public funds; and to obtain the best economic result for the public.” Graydon v. Pasadena Redevelopment Agency, 104 Cal.App.3d 631,635 (1980); see also, Domar Electric Inc. v. City of Los Angeles, 9 CaL. 4th 161, 173 (1984). We do not see how the City’s decision to choose a proposal that maximizes profit for Costa Mesa but sacrifice all the other important Objectives that the City itself established for the residents of Costa Mesa can ever be the best decision for the public.
Furthermore, in choosing to set aside certain Objectives, the Council gave a preference to FMW that provided them with an unfair advantage. If our client would have been aware that certain Objectives set out by the Council would be ignored, while others were placed on a pedestal, we would have had an opportunity to submit a more favorable proposaL. In effect, the deviation of the Council’s Objectives for the other party gave them an advantage that our client did not have. As such, we are left with no other recourse but to appeal the Council’s decision.
Please consider this letter as putting the City of Costa Mesa on notice that our appeal contesting the sale of the OC Fairgrounds is submitted. Additionally, please forward us a copy of any administrative procedures the City of Costa Mesa intends to adhere to when processing our appeal contesting the sale of the Orange County Fairgrounds. Please also note that given the information we have regarding FMW’s proposed intensified uses on the Fairgrounds, we believe that the City’s lease with FMW is a violation of CEQA. If you have any questions, please contact me at the number provided above.
Thank you for your attention to this matter.
Sincerely,
ADORNO YOSS ALVARAO & SMITH
A Professional Corporation
Raul A. Salinas, Esq.
The Swap meet guy going to sue to keep his riches? Do Tell (er)! He has a goldmine of a deal and won’t go away without a fight.
Sure, look at it that way if you want. But the deal American Fairs offered is a hundred times better for us citizens who care about keeping the Fairgrounds a public treasure.
Or are you a sheep who will follow the Costa Mesa Council right to the slaughter with those nice butchers at FMW? BAAAAAAAAAAAAAAA
second best solution – blow up the FMW deal and go back to American Fairs.
best solution – blow up the FMW deal, call state’s bluff, wait for a new Governor, keep the status quo with the state in charge, get a new Fair Board that’s not a buncha saboteurs.
I’m okay with either of those scenarios. So is Jeff Teller.
This has been an unfolding series of scandals that make the shenanigans in Bell look straightforward.
Piratizing our public assets doesn’t get us anywhere.
The Fairgrounds deal was sunk by the cities debt. While the city council was merrily placating all the fairgrounds supporters with words like “public over sight” and “maintaining existing uses”, the back room negotiators were selling it for thirty pieces of silver. During the same period, the city was having Budget negotiations to deal with a $16 million dollar deficit…..tell me that tail wasn’t wagging the dog.
The facts are in the financials and the FMW financials are made up on a lot of “what ifs”, and “could we’s”. Four fairs a year? Selling the name? Sidestepping Measure C? Yep. Yep. And yep!
We still don’t know why at the 11th hour and 59th minute the council flipped from a community supported deal with AFF to the privatized version from FMW.
We do know that what we got was not what we were promised.
I wouldn’t trust the Tellers any more than I would trust Facilities Management West. Teller negotiated rent relief with the Fair board then complained about having a gun to his head. Was he really expecting the Fair board to give him $1.5 million out of the goodness of their hearts? At the end of the day, the Fair is a business responsible for its own bottom line. They cannot give the Tellers something without getting something back. Even the Tellers know that that would be bad business.
At this point, the Fair board is our only hope. The fact that we are in the midst of the best Orange County Fair ever proves they know what they are doing.
And, if someone could remind me of the facts, despite all the rumors and accusations to the contrary, where is the proof that the Board was trying to do anything but save the Fair? People keep talking about land grabs and swindles but where is the proof. I assume Vern has some memo or documentation of this crime?
The city’s conflict of interest is beyond apparent!
They need money for the general fund (to cover their excessive salaries and benefits), so they are effectively “re-selling” our fairgrounds. Roeder watched Arnold do it, and then decided he could do the same thing. It’s a win-win situation for the state, and the city. Who loses?
ALL of the fair going public, and the taxpayers lose. Shame on Costa Mesa. Handing that 150 acres over to developers is NOT “saving the fairgrounds”. All it’s saving is their bloated salaries and pensions.
http://docs.google.com/?hl=en&tab=wo#all
half full of info……have you actually read the American Fairs and Festivals Proposal?
I know they have been feeding you a lot of mis-information over at the fairgrounds….like who actually started this ball rolling and all…..
You should pay particulat attention to page6, City Objective 5 Ensuring smooth transition for state employees working at the site and conveyance of assets.
It was the best proposal offered to the employees from everything else that has been out there. Too bad , you never heard about it.
For those who may be confused, there are at least 3 sides here:
Those (very few) who like the city’s deal with FMW, or at least (like the PotStirrer and most of the Council) insist it’s the best deal we can get;
Loyalists of the Fair Board such as “Half-Full” and “Bootsie” who somehow trust this little group of Schwarzenegger appointees, without whose secret lobbying last year this property wouldn’t be in danger at all (and I’ll get around to answering Half-Full’s question soon if nobody else does)
The rest of us who distrust FMW and the Fair Board equally, and would like to either have no sale or go back to the American Fairs proposal which at least continued public ownership of this treasure our grandparents paid for with their tax dollars for us and our grandkids to enjoy.
Not an employee (or a faux artiste, either) but you still didn’t answer my question: where is the proof that the fair board was up to anything underhanded?
http://taxdollars.ocregister.com/2009/11/23/district-attorney-to-investigate-fair-board-allegations/44565/
http://taxdollars.ocregister.com/2009/11/17/county-lawyer-oc-fair-board-violated-law/43655/
http://taxdollars.ocregister.com/2009/12/07/help-wanted-lawyer-for-the-oc-fair/45965/
http://blogs.ocweekly.com/navelgazing/breaking-news/orange-county-fair-privatize-a/
Where’s the proof they weren’t?
All the state attorneys representing them felt that there was enough conflict of interest that they could no longer represent them…I tend to agree.
Speaking of conflict of interest, not only does the city have a conflict over their purchase of the fairgrounds, but Jim Righeimer also has a conflict. First he insists on being included as a volunteer consultant (which resulted in one developer approving a deal for another developer), but then he decides to run for city council.
If FMW concludes this deal, they will be negotiating with the city council/planning commission/JPA for all kinds of favors. Won’t that be a sweet setup if Righeimer makes it onto the council?
On second thought, I don’t think I will be voting for Jim after all. Too many conflicts.
You’re spot-on about Riggy. I just hope Costa Mesans have two candidates who can beat him, I’m not sure who those would be right now.
The City of Costa Mesa rejected American Fairs and Festivals appeal request today. http://abubblingcauldron.blogspot.com/2010/08/american-fairs-and-festivals-appeal.html
Costa Mesa has only 5 candidates running for two seats today. Leece and Riggy seem to be slam dunks unless Susan Lester can convince all her medical marijuana dispensary clients to vote! It will take a major gaffe on the part of either Leece or Riggy (or both) for them not to be elected.
Dude …..were we supposed to vote today? Yeah……but wheres my car?
So gericault, what your saying is that in this democracy people are guilty until proven otherwise? I always thought it was innocent until proven guilty and that the burden of proof was upon the accuser not the accused.
So, the simple fact that someone “thinks” the fair board was up to no good is proof that they were up to no good? Maybe the reason all of these articles are from a year ago is simply because the accusations were unfounded? If the fair board is so guilty, why haven’t charges been brought forward?
I would hate to live in your version of America.
I don’t care about the Fair Board . They failed in the one obligation they were appointed to observe. To steward the fairgrounds for future generations. They failed. More than that , they hired a lobbyist to insert the Fairgrounds into the CA budget and passed a resolution to support the sale. They have never asked the Governor to stop this madness that they started. Because of the actions that they have started a private company is about to take over the fairgrounds for 55 years. Without public over sight, or input. The 32nd DAA and the employees are gone.
After three generations when the fairgrounds finally becomes “public” again, we’ll see how much history and heritage remains.
Half Full, I have no power to do anything but express my opinions in the public forum.
I posted a lot of articles against the Fair Board. They lost the confidence of the public. That is a fact.The Attorney General for the State of California dropped them as a client. That’s a fact.
If you don’t like the America I live in where the public has a right to criticsize those entrusted with our public treasures , tough.
I don’t respect your opinions or viewpoint….but I respect your right to express them.
But you prove my point, they might have failed at their jobs but you act as though you have proof that there were criminal acts involved and now you back pedal once I ask for proof.
And, Vern, you hinted earlier that if someone else didn’t bring it forward, you would proudly display the smoking gun. Well, show your cards.
So, you don’t approve of their job performance? They just put on the best Fair in the fair’s history. Sounds like job performance to me.
Your version of America isn’t about the right to criticize. Your version is the right of the lynch mob. Screaming “fire” in a crowded theater isn’t freedom, it is irresponsible.
Plus, you aren’t being honest in your motivations. This is all about the horses. You don’t care about the “fair.” You will embrace any group the promises you a subsidized stable close to your home. Maybe the fair board would keep the stables if you paid the market rate. You are simply advocating welfare for horses.
People are “innocent until proven guilty” of CRIMINAL ACTS. There is plenty of room and reason to believe them to be untrustworthy actors in this drama without accusing them of criminal acts. The four links gericault provided show plenty of backing for that.
When we met with Attorney General Jerry Brown to complain to him about their secretly forming a “Foundation” to lobby for the sale of the Fairgrounds to THEMSELVES, he nodded his head and said it’s very difficult and rare to prove or obtain a conviction for a violation of the Brown Act. What he did instead was withdraw all his state lawyers from representing them since he felt they were guilty of indefensible “conflict of interest.” Since then they have had to represent themselves.
Many of us, most of us, feel that the Fairgrounds are a public trust and should be operated with transparency and public input. There’s no contesting that this group felt and behaved (and feels and behaves) very differently. So we quite vehemently distrust and disapprove of them. Maybe it’s just two ways of looking at what it means to be “stewards” of a “public trust.” But I stand by mine, and look forward to a better, more transparent and trustworthy board under the next Governor.
Finally what’s this HORSE SHIT at the end? I can’t even remember the last time I was on a horse. YOUR bizarre agenda finally shows its head. Who is this, the boy from “Equus?”
The only reason the attorney general’s office withdrew their services was because the new fair board foundation was not a state entity. The state cannot represent them, or pay their legal bills. There was nothing sinister about that action. It was expected.
The fair board did not form their foundation secretly. It was touted in the newspaper for all to see. That’s when I first realized Costa Mesa had a means of acquiring the fairgrounds for perpetuity, WITHOUT costing taxpayers a dime.
I’ve been in favor of the fair board ever since. NOTHING else makes any sense at all. This fair board has done everything in it’s power to preserve the fairgrounds. They don’t deserve the kind of treatment they’ve been receiving from the media.
As an aside: Developers will destroy those fairgrounds. If you love what you have, you better keep them at bay.
Bootsie, they MET secretly to form this “Foundation.” It was against the Brown Act, which sadly is enforced as rarely (never) as our carpetbagging laws. Similarly with their latest little move, which by the way is an offer that makes no sense and if there were any danger of it succeeding we would be tearing it apart here. But in any case they make all their plans behind closed doors and engender well-earned mistrust.
Remember back a little over a year ago, when Arnold tried to put MANY state properties on the auction block – EVERY community fought to keep their Fairgrounds/racetracks/coliseum/etc except for OUR Board who launched into secret motion and tried to get it sold to them.
It feels a little pointless to fight over this right now. The clear and present danger is the Facilities Management West deal. Let’s see if there’s some way we can stop that.
Vern, anyone can meet (secretly, or not) to form a separate entity. As long as the new entity is separate from the first, it does not concern the first. It is separate. That’s why the fair board was expected to get their own legal counsel for the foundation.
Government employees are allowed to hold other jobs, or other positions, or have other interests. There is no law against that, ….. as long as they are separate. That’s why the Fair Board Foundation was formed.
Trust me, the fair board broke no laws. The “scandal” is imagined, not real.
Personally, I would love to see AFF (sans the developer) and the Fair Board Foundation come together at this time. They share common interests, and common goals. BOTH would like to retain the swap meet, the fair and the equestrian center. That is also what the public wants.
Now that would truly be a “win-win” scenario.
Actually, the Fair board is not accountable to the Brown act, they are Bagley-Keene people. And the horse comment was directed at gericault.
And, I hate to burst your bubble, Vern, but board members will always be political insiders and that probably won’t change. When you consider the “26 ticket” fiasco from a couple of years ago, the prime engineers of that policy were Carona, Smith, and Barbaro (a democrat). It was the current board who changed that policy.
And, I know, you are going to say, “They only changed the policy in light of public criticism” but they did change it despite the fact that, at the time, it violated no FPPC rules.
And, while you suckle up to AFF, remember the “26 ticket” Smith is the current AFF lawyer, Ruben Smith. So, protecting the public trust isn’t as black and white as you would pretend.
protecting the public trust isn’t as black and white as you would pretend.
You got me mixed up with some other writer.
Yeah yeah, Bagley Keene, not Brown Act. And no no, Bootsie, members of the Fair Board meeting in secret to discuss Fair business and start up a Foundation regarding the Fairgrounds is against the spirit and letter of the rarely-enforced Bagley Keene.
Still, let’s focus on what’s happening now. The meeting’s at 4:30, see you there.
Here’s my solution: http://abubblingcauldron.blogspot.com/2010/08/ofca-meeting-my-proposal.html
Maybe now you can see why I suggested AFF, and the fair board, put their differences aside and slay a dragon that is MUCH bigger than anything Costa Mesa has ever entertained before.
There is NO way AFF can climb this mountain alone. The city council made that very clear this evening. AFF is finished, ….. Kaput!
We have a city council, and a city manager, who simply can’t see the avalanche that is coming. Call them naive, or call them stupid, but they can’t seem to see past their bottom line. I think that’s known as tunnel vision.
I’m hoping AFF will get up, dust themselves off, ………………… and regroup! 🙂 🙂