Published: Sept. 17, 2010
Updated: 6:15 p.m.

By JON CASSIDY
THE ORANGE COUNTY REGISTER

COSTA MESA – Twice before, the board of the Orange County Fair & Event Center has tried to buy the fairgrounds from the state.

Now it says it already owns the property.

The board voted Friday to send Gov. Arnold Schwarzenegger the results of a title search and arguments that the fairgrounds are independent from the state.

“The way I look at it, it’s a separate entity,” said Steve Edwards, the attorney presenting the findings to the board.

Edwards had a title search conducted, and announced at the meeting that the fairgrounds is actually owned by the 32nd District Agricultural Association, the formal name of the institution the board presides over.

In 2009, the Legislature authorized the state Department of General Services to sell the fairgrounds. But the board heard Friday that the title to the property was never formally transferred to the state.

The state is currently auctioning off the fairgrounds in a bidding process that ends Sept. 30. The title issue could cloud the process, discouraging bidders, who would be unable to get the necessary title insurance, Edwards told the board.

State Senator Lou Correa, D- Santa Ana, who was at the board meeting, did not comment on the legal findings, but did say that he’s now “even more convinced that the merits are against any sort of sale.”

Costa Mesa, with a private partner, is trying to buy the fairgrounds from the state for $96 million. City Manager Allan Roeder said the findings were interesting, and that he wanted to see the governor’s response.

“The response would apply irrespective of who the purchaser is,” Roeder said. “These are questions that need to be answered.”

Edwards, the attorney, also presented evidence that the 32nd District Agricultural Association is distinct from the state itself, raising the question of whether the state has the authority to sell the property. The association is variously described in legal records as a state agency, political subdivision, and an instrumentality, Edwards said.

Board member Don Dykema expressed surprise at the finding, saying, “It’s a state agency, as I’ve looked at it all along.”

The association is described as a state agency in the first sentence of its bylaws.

Indeed, the fairgrounds workers (even its CEO) are state employees, but those salaries are paid by revenues from the Orange County Fair, board member David Ellis said afterward.

“The state’s looking for a windfall here from something they’ve never supported,” Ellis said.

As part of its independent character, the agricultural association has authority to sell surplus property and reinvest the proceeds without returning them to the state. The board heard from the former head of another fair in Lake Perris who had done just that.

Much of the discussion Friday was about how the fair’s finances are independent of the state’s, going back to the purchase of the property from the federal government in 1949.

The former Army base was purchased for $130,195, with half of the money coming from the agricultural association, and half from a state fair and exposition fund, according to a contemporaneous Los Angeles Times article.

The state’s portion came from a horse racetrack tax dedicated to fairs, not from General Fund money, Edwards said.

The deed itself grants the property to the “32nd DISTRICT AGRICULTURAL ASSOCIATION, STATE OF CALIFORNIA, Orange County, Anaheim, California, a poltical sub-division of the State of California.”

Despite the terms of the bylaws and the common understanding, briefing papers for the board described the association as a “distinct institution from the State of California itself.”

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