Judges to hear O.C. Fairgrounds case

The latest, and perhaps final, chapter in the Orange County Fairgrounds saga could begin Friday, when attorneys for the Newport Beach-based company with the winning bid for the property will argue why a hold on the sale should be lifted in the state Court of Appeal.

In a court order issued Dec. 22, Presiding Justice David Sills told attorneys for winning bidder Facilities Management West (FMW) and its opponents that they “should bear in mind that the decision on the [hold] may effectively determine the case, and thus are also invited to devote considerable attention to the merits of the case.”

According to FMW attorneys, the merits of the case focus on mainly two questions: Can the state sell off the fairgrounds as surplus property, and was the bidding process for the 150-acre grounds open and fair?

The fairgrounds were put on the auction block in mid-2009, when California was dealing with massive debt and then-Gov. Arnold Schwarzenegger was looking for revenue in unlikely places. He found support in selling off state property that lawmakers overwhelmingly deemed expendable, and the fairgrounds were put up for sale.

What transpired for the next year were fumbled negotiations and false starts by private companies and Costa Mesa. The state had to put the property up for public bid twice.

The first time, developers low-balled the state Department of General Services, with the highest bid coming in at $56.5 million. When the state rejected that offer, Costa Mesa made two attempts to buy the fairgrounds in a joint venture with private companies, including one with FMW.

Those attempts failed when state lawmakers didn’t pass necessary legislation to OK the deal, so FMW went forward alone.

In a second bidding process by the state, FMW beat out Orange County Marketplace owner Jeff Teller’s company, among others, with a $100-million bid. Teller’s company and others are now challenging the sale.

Opponents claims include that the bidding process was biased toward FMW.

Attorneys for FMW sale opponents did not return calls for comment Thursday.

Though a three-judge panel will hear arguments Friday in Santa Ana, they’re not expected to come back with a decision until next month. Depending on the outcome, there could be few, if any, legal roadblocks standing between FMW owning the fairgrounds.