Del Mar Fair asks Orange County Fair for bail-out

Del Mar Fairgrounds executive director Tim Fennell has blamed COVID-19 as the key reason why his 160-employee district, now $20 million in the red, could implode and leave the future of the Del Mar Fair and its 340-acre prime seaside property in the lurch.

The fairless fairgrounds set up its own website urging denied fairgoers to say nice things about the fair to their elected officials.

The Union-Tribune ran two front-page articles in three weeks about the fragile financial state of the fairgrounds. The first was headlined the “Fairgrounds may close if no financial aid received.” The latest, a June 16 article, claimed the floundering district is operating in “Survival Mode.” Both cited the pandemic and declining interest in horse race wagering as the reasons why the state-run enterprise is upside down.

But some longtime elected officials and an Orange County watchdog say there is a systemic dysfunction that has torpedoed the Del Mar Fairgrounds – officially known as the 22nd District Agricultural Association.

Shortly after he asked the governor for a $20 million bailout, Fennell appeared before a teleconferenced meeting of the Orange County Fair board May 28 asking for a $5 million emergency loan to help its sister district to the south. Reggie Mundekis says she has attended every monthly meeting of the Orange County fair board since Governor Arnold Schwarzenegger suggested selling all of the state-owned fairgrounds in 2008.

“The Del Mar Fair is fond of bragging how it is the largest fair in the state and the sixth largest in the country, so why would they be in financial problems,” asks Mundekis about Fennell’s appeal for financial help. She noted how the Orange County board maintains a $53 million surplus. “And we don’t even have horse racing. How can Del Mar have no reserves? This all just doesn’t make sense.”

She said Fennell was not forthcoming. “At the May meeting they show these beautiful power-point slides showing how beautiful Del Mar is and how beautiful the beach is, but they are giving absolutely no financial information. That’s when the board said maybe it was not such a good idea to make this loan decision today. It made me think maybe there are things that are not being disclosed.”

Mundekis did her own digging. She says Fennell avoiding telling the Orange County board key information like how its nearly $40 million in 2015 revenue bonds used for new grandstand seating and other infrastructure was downgraded by the Fitch Rating service in April from a BB-minus “stable” rating to a BBB-minus or “negative” rating. She says she tried to get other details on two other loans for $18.5 million and $15 million that the district secured in 2018 to transform the Race Place wagering facility into a concert venue, but that that data was not provided to her or available on the fairground’s website.

“I told them they have over 150 people on payroll who are doing nothing right now because the place is closed and they can’t find these loan documents? These are things that should be kept in a file.” While Mundekis admits she is not a concert-industry specialist, she asks, “How will they ever make that concert venue money back, especially now with the concert industry the way it is? The Orange County Fair doesn’t have all these bonds and debt. This has a good opportunity to come crashing down unless they start making good decisions.”

Mundekis claims that a state audit of a Bakersfield fair board uncovered mis-uses including “state credit cards for lobster dinners” and “state employees working for private companies…They had to put in new procedures.”

But “new procedures” is an understatement for the Del Mar Fairgrounds says former county supervisor Pam Slater-Price who for 20 years oversaw the 3rd District that includes the fairgrounds.

Slater-Price says over the years the fair has morphed from a two-week exposition celebrating local agriculture to a four week-long carnival. “It started decades ago when the county was much more agricultural. Those times are gone. Now it’s more of a month of carnies and junk food…a glorified flea market. Why use this very precious land for that purpose? It just doesn’t make any sense to me.”

She says it’s time for a complete overhaul of how the fairgrounds is governed, and that those who live nearby need a bigger say in how the fair is run.

Chief executive Fennell reports to a nine-person board which is appointed by the governor. Over the years, many of those appointees were known to be connected with campaign contributions or political connections. Slater-Price points out that only one of the nine current Del Mar Fairgrounds board of directors, Don Mosier, lives nearby. She says Del Mar and Solana Beach are overrun with traffic during the fair.

“Sometimes during the fair, traffic is so bad you literally can’t move. At least Del Mar gets the sales tax,” says Slater-Price. “Solana Beach gets nothing but the headache. The mission of the fair board seems at opposite interests with the local community. It seems the whole mission has become to just bring in as much cash as possible…They’ve got all these full-time state employees with fully-loaded benefit packages.”

Currently not in office, Lesa Heebner was elected three times to the Solana Beach city council. She says one of the reasons she is now running for mayor of Solana Beach is to make sure that locals who live near the fairgrounds get a greater say over how the fairgrounds impacts the adjacent neighborhoods.

“The fair traffic gets so bad that Highway 101, Stevens Avenue, and Via de la Valle are so clogged that at times you can’t move for 45 minutes.”

Heebner says that in her estimation all ten members of the Del Mar and Solana Beach city councils are in support of a total overhaul of the fairgrounds governing board that would mandate more input from those two cities. She says that while locals are now talking about a new fairgrounds governance, it would get complicated since it would probably involve the governor, state legislators, and the county. Also involved are the Del Mar Racetrack Authority, the State Racetrack Leasing Commission and the Del Mar Turf Club. “I would like it to be controlled by a new authority. I hope it’s not a pipe dream.”

Heebner says Solana Beach traffic, safety, and businesses all suffer during the fair. “People fill up on turkey legs and fried butter and afterwords have no appetite for dining or shopping in Solana Beach.”

Heebner says of the fairgrounds’ appeal for a $5 million loan from the Orange County fair board and the $20 million request from the state: “The financial situation is embarrassing, especially when you compare it to the much smaller Orange County fair board’s financial situation.”

She notes that when former board member Chula Vista attorney David Watson resigned from the fair board two months ago he “saw the writing on the wall.” When he left, Watson was quoted as saying the district is facing “…extreme financial turmoil.”

“I don’t think the governor is going to allow the allow fair to go away,” says Heebner. “But the place is so beautiful and so many different things could be happening there.”

A request for comment from Tim Fennell was not forthcoming.

The Orange County fair board (32nd District Agricultural Association) will again reconsider the Del Mar Fairgrounds’ $5 million loan request at their June 25 meeting. The teleconferenced meeting is viewable live in real time. For more information on the May 28 Orange County fair board meeting. For more on the May 28 Orange County fair board meeting click here.