MOORLACH UPDATE — OC Fair and Conscience — January 15, 2009

The first story from ABC Channel 7 below includes a video if you click on the link.  If you want to get a feel for what it was like in the OC Fair Board Room, then watching the clip should be worthwhile.  The article is the transcript.

Plan A was to stop the bidding process.  Plan B was to attempt to be the successful bidder.  Plan C is to shame the Department of General Services into declining all of the bids.  Selling a piece of property that costs the state nothing each year (the Fair generates its own net revenues and requires nothing from Sacramento) for $380,000 per acre in the Newport-Mesa area?  Brilliant.  That should be hard for them to swallow.  It will be for the residents of Orange County.

The second piece is from the LA Times and tries to address the concern about the low bid and what Sacramento needs to consider going forward.  The first e-mail that I received yesterday morning said it all:

Dear John:

I’ve been a real estate broker here in Ca. for 30 years and all of it in  OC.  We are in a real estate recession.

Tip- Sell when everyone is buying and buy when everyone is selling.  Simple stuff.

Good luck,

Ted Wells

Thank you, Mr. Wells.  With this sage advice in mind, it’s too bad that Gov. Davis did not sell the Fair in 2003, before he was successfully recalled.  At least then, when everyone was buying, the state should have sold.

Sacramento has a funny way of manipulating the taxpayers.  It’s a simple diversionary technique.  “We’ll close your parks and beaches and sell your amenities, because you don’t want to raise taxes.”  We’re not dysfunctional.  We’re taxed enough.  Sacramento, go on a diet.  We’re tired of the shake downs.

I included the attached photo, as one of your fellow subscribers was inside the frame.  Congrats, Ken.

The third article is the Daily Pilot’s take on the auction.

The fourth piece is another article from the Pilot.  The title is misleading.  It is referring to Supervisor Norby and not to me.   I am not opposed to the Orange County Sheriff’s Harbor Patrol from giving an occasional assist.  That’s the charitable thing to do.  But, it should be kept in balance with the services that the private sector provides.

The final article is in the OC Register.  It’s not too often that a Supervisor receives a pot shot from a staff member of another Supervisor’s office.  I do not believe you’ll find any quote of this nature in the media, by any of my staff members, about any of my colleagues.

All the same, I’ll gladly take the moniker!   I am the Board’s conscience!  Thank you.  Now I’m humming that old Glen Campbell tune, “Lineman For The County.” 

“I am the conscience for the county; and I drive the hard line. . . “


High bid on OC Fairgrounds lower than expected

Eileen Frere


An auction for the Orange County Fairgrounds was held Thursday, but the top bid was well short of what the state of California was hoping for. A lot of people are against the sale.

There was a last-minute protest over the sale of the Orange County Fairgrounds.

"It’s just been a real heritage treasure for 120 years of low-priced entertainment that the entire family can enjoy," said Costa Mesa resident Joy Williams.

Dozens gathered outside a building where the public action was held. The fairgrounds are home to a number of activities, including the Orange County Market Place, the annual fair, as well as an equestrian center.

State officials unsealed seven offers. The lowest initial bid was $1,000. Other bids came from the Orange County-Costa Mesa partnership and the Anaheim Sports Holdings. Advanced Real Estate was outbid during the auction.

The highest bid was $56,500,000, from Craig Realty Group, a developer responsible for outlet malls like Cabazon in Palm Springs, and the Citadel Outlets in Los Angeles County. The company’s chief executive officer insists the fairgrounds will stay.

"Our plan would be to keep it here and enhance what’s already been built," said Steven Craig, CEO of Craig Realty Group.

Craig would not say what "enhanced" means, only that there are no plans for a shopping mall.

"It’s still a bid that is much lower than what the state was expecting," said Orange County Supervisor John Moorlach.

In the past, state officials said the sale could bring in up to $180,000,000.

"Why would you sell beautiful 150 acres in the middle of Orange County at the bottom of the market? It makes no sense," said Brian Lochrie, Orange County Fairgrounds Preservation Society.

Governor Arnold Schwarzenegger plans to use the money from the sale of the fairgrounds to try to ease the state’s budget woes. The state could reject or accept the bid. It could execute a contract in a few months.


High bid for O.C. Fairground called too low

Orange County lawmakers criticize $56.5-million offer for a property that was expected to raise up to $180 million for the state. The auction was the first in a series proposed by the governor.

By Tony Barboza and Kimi Yoshino

Gov. Arnold Schwarzenegger’s plans to help California’s financial crisis by selling state-owned landmarks got off to a bumpy start Thursday when an auction to sell the Orange County Fairground drew a winning bid far below the estimated value of the property.

Hailed by the governor as a "new way of thinking" about generating revenues, the auction ended up raising serious doubts about the viability of selling other properties, including the L.A. Coliseum, the Del Mar racetrack and San Quentin State Prison.

The high bid for the 150-acre piece of prime property in Costa Mesa came from an outlet mall developer, Newport Beach-based Craig Realty and partner Dwight Manley, a former sports agent. The investors offered $56.5 million — woefully short of the state’s expected $96-million to $180-million price tag.

The Department of General Services will determine over the next few weeks whether to accept the bid. Orange County officials, who begged Schwarzenegger to halt the auction, said it would be outrageous to sell the property at that price and would amount to a gift of public land to the developer.

"I don’t think the state should be selling a high-value asset for literally 25 cents on the dollar," Assemblyman Jose Solorio (D-Santa Ana) said after the auction, which took place in a cramped administration building at the fairgrounds.

Schwarzenegger wants to sell numerous landmark properties across California, hoping to raise as much as $1 billion to help balance the state’s budget. Orange County, where conservative politicians advocate reducing the reach of government, was seen as a logical place to start.

If anything, the lackluster bids for prime Orange County real estate a few minutes’ drive from South Coast Plaza left some politicians wondering how the state could possibly have better luck selling state lands elsewhere in California.

"There is a real urgent need to get cash from someplace," said Orange County Supervisor John Moorlach, a conservative Republican. "But the state needs to step back and say, ‘What are our priorities when we sell?’ Is this really surplus property or are they just trying to make a statement for the sake of shaking the taxpayers down?"

Assemblyman Van Tran (R-Garden Grove) described the auction as "a bust." Even the swap meet owner who sets up shop at the fairgrounds every weekend likened the possible sale of the treasured property to selling an "old piece of furniture to the highest bidder."

"If the state is happy with $56.5 million for something that will eventually be turned into an outlet mall, then it’s over," Moorlach said. "But I have a funny feeling that they’re going to have to take a hard swallow to explain."


In all, only seven bidders made offers on the property, which includes a concert amphitheater, exhibition halls, an outdoor swap meet and an equestrian center. The offers ranged from a $1,000 protest bid from the swap meet operators to a $55-million bid from Facilities Management West, Inc. The auction itself lasted less than a minute, and only increased the high bid by $1.5 million.

Winning bidder Steven Craig, whose company portfolio includes the Cabazon Outlets near Palm Springs and the Citadel Outlets in Commerce, said he’s "happy" to keep the fairgrounds intact.

"We like it that way," Craig said. "But we’d like to find a way to make it financially viable. Maybe a private enterprise approach will work. . . . We see this as an interesting opportunity to enhance something that’s here."

For now, the 2010 county fair, which starts its 51st year in Costa Mesa on July 16, is "forging ahead," said fair spokeswoman Robin Wachner. What happens in 2011, however, is anyone’s guess.

A few dozen protesters — some riding horses outside the auction site — said they fear that a sale to a non-government agency could spell the end of the fairgrounds and lead to an outlet mall popping up in its place. Many carried signs and wore bright orange stickers that said, "Derail the sale."

"This is really unfortunate," said Costa Mesa Councilwoman Katrina Foley. "We can’t start selling off our public assets for under market value."

Even if the state accepts the high bid, Solorio has sponsored a bill that would rescind authorization for the sale. Cosa Mesa is also putting up its own blockades by asking voters to approve a ballot measure in June that would lock in the fairgrounds zoning and make any commercial development impossible.

Eric Lamoureux, a spokesman for the state Department of General Services, said state real estate experts would evaluate the bids. If the agency accepts the $56.6-million offer, a contract could be signed by spring, with the property probably changing hands this fall. Although the bid fell far short of the state’s estimates, Lamoureux said, the "intention was to let the market dictate what the price of the property should be."

The dearth of bids for prime Orange County real estate doesn’t bode well for the proposed sale of other high-profile properties. The sales were supposed to raise $600 million to $1 billion for the general fund.

After lawmakers balked at unloading these public assets, all major public landmarks except the Orange County Fairground were taken off the auction block. Orange County politicians were initially supportive but soured on the plan when they realized they couldn’t ensure the land’s continued use as a fairgrounds. The state wanted to sell to the highest bidder, regardless of how it would use the land.

Schwarzenegger was given authority to sell and lease back 11 large state office buildings, including the Ronald Reagan building in downtown Los Angeles. Those sales are expected to begin in a few weeks.


Developer wins auction

President of Craig Realty Group makes no guarantees that the OC Fair & Event Center will be kept as fairgrounds.

By Mona Shadia

In less than a minute of live bidding, a Newport Beach-based developer offered $56.6 million to win Thursday’s public auction the Orange County Fairgrounds, which drew a packed house at the Costa Mesa venue.

Craig Realty Group, known for building luxury outlet malls, was declared the winner after edging out Advanced Real Estate Services’ bid of $56 million.

“This is an opportunity to improve what’s here,” said Steven L. Craig, Craig Realty president and chief executive. “I’m happy to keep the fair here, but we’d like to find a way to make it financially viable. Maybe a private-enterprise approach will work.”

Pressed for details, Craig wouldn’t elaborate on how he proposes to make the fairgrounds financially viable. The Newport Coast resident said he was unaware of Costa Mesa’s plan to place the issue of the fairgrounds’ land-use on the June ballot.

At this time, Craig said, he has no specific plan for the fairgrounds site. He wouldn’t give any guarantee that he would keep it as a fairground.

Costa Mesa and the county jointly bid $6.5 million, although county officials said they were willing to reach up to $40 million at the live auction.

A developer winning the bid is what Costa Mesa and county officials had feared the most. Councilwoman Katrina Foley called it “the worst-case scenario.”

“We only have so much money, and we can’t put the taxpayers’ dollars at risk. We already cut $19 million from our budget,” Foley said, referring to how the city was limited in bidding for the fairgrounds.

Tel Phil Enterprises Inc., which runs the weekly swap meet at the fairgrounds, placed a protest bid of $1,000.

“This is a bid on behalf of the people of Orange County,” said Jeff Teller, president of the Tel Phil company. “The fairgrounds is nothing but a jewel of Orange County.”

At least two dozen men in suits — and no women — filled up the two front rows of the auction room. All were bidders or their representatives. The rest of the room was occupied by members of the press. There were also community members in the room, who wore big orange buttons bearing the words “derail the sale” in bold, black letters.

After the auction, Orange County Supervisor John Moorlach said that with a winning bid this low, he hopes Gov. Arnold Schwarzenegger closes this “Pandora’s box” and calls off the sale.

Craig Realty’s live bid falls short of the $96 million to $180 million state officials wanted for the 150-acre property. The fairgrounds are not sold yet, as the state may still reject the developer’s offer.

“The administration is going to review the bid and see if it’s beneficial to the state of California,” Mike Naple, a spokesman for the governor, said Thursday from Sacramento.

Outside the auction room, Brad Shefmire, who was among the people protesting the sale, struck an optimistic note, even though a developer had cast the highest bid.

“I think this is a win for us,” said Shefmire, who runs his equestrian business out of the fairgrounds. “I see this as a win that the state got a low bid. This has given me hope. It’s a push for the sale to be stopped.”

Supervisor: Stop voluntary services

He and others want the harbor patrol to tow boats only in emergency situations, like the Coast Guard does.

By Joseph Serna

Though a recent report states that the county is between a rock and a hard place when it comes to funding the Orange County Sheriff’s Harbor Patrol, some residents and business owners are demanding they find a way out.

During the Orange County Board of Supervisors’ meeting earlier this week, county officials, including Sheriff Sandra Hutchens, said harbor patrol staffing is minimal.

According to a memo by a county task force charged with looking into funding matters, staff levels have remained the same for nearly 30 years at the harbor patrol, but costs have substantially increased.

At the meeting Tuesday, Supervisor Chris Norby emphasized that voluntary services performed by sheriff’s deputies in Newport Beach and Huntington Beach harbors should be stopped.

Supervisor John Moorlach, who had staff on the task force, echoed Hutchens’ argument that the services aren’t the issue for funding with the patrol, it’s staffing. Each said that given state and county laws about patrolling the coastline and the tidelands in the Back Bay, which is unincorporated land, requires the same staffing they have now.

Norby said he simply wants the funding for the county harbor patrol to stop flowing through the county park funds, which came thanks to a resolution in 1975. The county cannot, however, force either Newport Beach or Huntington Beach to pay for the services themselves.

More than a dozen members of the public spoke at the meeting, many arguing on behalf of boat-towing companies. They argued that the patrol is wasting time and money towing boats in nonemergency situations.

John McCullough, a Newport Beach business owner, suggested that the harbor patrol follow the Coast Guard’s lead and tow boats only in emergency situations. In the end, county officials received and filed the task force’s report and sent it to the county auditor, who is expected to evaluate the harbor patrol’s services and see where reductions can be made.


Supervisor’s use of park fund for monument questioned


SANTA ANA – A $350,000 monument backed by Supervisor Janet Nguyen has generated controversy, with some calling it an extravagant use of park funds and others saying it will serve as an educational feature serving hundreds of children in Midway City.

The Board of Supervisors voted 4-1 Tuesday to approve the historical memorial at Roger Stanton Park, with Supervisor John Moorlach casting the dissenting vote.

Moorlach and two other county supervisors – Bill Campbell and Patricia Bates – handed over the remainder of their Fund 130 park funds to the county’s general fund because of the financial crisis. Moorlach says he could not vote in favor of the monument in light of the fact that he and other supervisors had returned their funds.

"We’re talking about the worst fiscal condition in our history," he said. "I just didn’t get it. I couldn’t vote for it. It’s not a good message to send to employees."

Nguyen’s Chief of Staff Andrew Do, who wrote the proposal for the monument, said it will serve hundreds of students who congregate every day at the park for after-school activities.

The memorial will feature U.S. history, including presidents from different periods in history, according to the report. It could also portray important events in the history of the Vietnamese American community to reflect the diversity of the First District, which is about 25 percent Vietnamese, Do said.

A couple of years ago the park was nothing but a "rundown piece of dirt,” he said.

Nguyen worked with local community members to raise money to put in a fresh grass cover and new park benches there, he said.

"However, there are all these middle school and high school age children there every day and there is nothing in the park to keep them occupied," he said. "That’s why we thought an interactive exhibit telling children about American history and the diversity of their community would be a good idea."

Do said Moorlach handed over the remaining park funds because he had already spent a good deal of his funds in 2007 – as soon his office received them.

"We diligently waited for the right projects to come our way," he said. "Why should we be criticized for doing that? And who put Moorlach in the position of being the board’s conscience?"

Moorlach’s office returned $749,333 out of the $2 million allocated to his Second District office, according to his staff.

Nguyen’s and Chris Norby’s office also returned exactly $749,333 to the general fund, according to Howard Sutter, spokesman for the County CEO.

However, Moorlach Chief of Staff Rick Francis, said that the first and fourth districts did not return all of the remaining funds they had while Bates and Campbell’s office did.

Moorlach was "elected by voters to be a voice of reason when it came to fiscal matters," said Francis.

Do said the monument will not be exclusively Vietnamese. He and Nguyen approached the Vietnamese Community Culture and Performance Arts Society or Cau Lac Bo Hung Su Viet to design the monument because of its reputation in the community.

"We selected them because they have no political affiliations or agendas," he said.

Song Thuan, president of the group, said Wednesday that he did not want to talk about the project. Thuan told the Nguoi Viet Daily News that he was not aware his proposal had been accepted and that he wasn’t ready to talk about it.

Do said that’s probably because the project is still at a very preliminary stage.

"All we know right now is we’re going to have plaques about U.S. presidents and American history," he said. "The rest of the monument has not been designed yet."

Westminster has two monuments – the Vietnam War Memorial at the Sid Goldstein Freedom Park and the Boat People Memorial at Westminster Memorial Park. The city of Garden Grove is also considering a Vietnam War Museum as a tourist attraction to the resort area on Harbor Boulevard.

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