Del Mar officials and Fair Board joust over fairgrounds

Reporting from Del Mar —  This city’s preferred civic image is that of a quiet village with pristine beaches, trendy shops and upscale homes on tree-lined streets.

The state-owned Del Mar Fairgrounds, on the city’s northern edge, is another matter. The entertainment complex is mostly known for the annual San Diego County Fair and Thoroughbred racing season.

But there are also the gun shows, reptile shows, boat shows, horse shows, bingo, the gay rodeo, soccer matches, concerts and, soon, the largest dog show west of the Mississippi. In all, the fairgrounds draws more than 3 million visitors a year.

As the number of annual events and attendance have increased, tensions between this city of 5,000 and the Fair Board have gone from a simmer to a boil.

The two have jousted over traffic, parking, lighting, noise, construction of new facilities and, as in a bad marriage, money. The fairgrounds costs more in police and fire protection than it generates in local sales tax revenue, officials say.

It “is the black hole in our city,” Councilman Mark Filanc said.

In April 2009, former Gov. Arnold Schwarzenegger proposed selling the fairgrounds in Del Mar and Orange County, along with two dozen state office buildings to help balance California’s budget. For 18 months, Del Mar officials negotiated with the governor’s staff on a potential deal.

But last week, Gov. Jerry Brown pulled the plug on the sale of the office buildings and put plans for the fairgrounds on hold.

Del Mar officials, who are eager to purchase the fairgrounds to exercise greater control over its activities, were disappointed but vowed to fight on.

The potential sale is “a once in a lifetime opportunity” for Del Mar, said former Councilwoman Crystal Crawford, a lawyer and the city’s point person during negotiations.

In October, the two sides reached tentative agreement on price and terms. State Sen. Christine Kehoe (D-San Diego) introduced a bill to allow for the sale of the 375-acre property to Del Mar.

The price was set at $120 million, to be paid mostly through bonds and a loan from the state, with the proviso that the county fair, horse racing and other activities remain.

But in the tumult of the legislative session, Kehoe’s bill was never considered. The issue was awaiting the new governor, who remained mum until last week.

“I would still hope Del Mar will have an opportunity to brief the governor on our proposal,” Crawford said. “It’s still a good idea and makes a lot of sense.”

Fair Board members and others vehemently oppose the idea of selling the fairgrounds to Del Mar.

“Del Mar and the Fair Board have never gotten along,” said Louis Wolfsheimer, a San Diego lawyer and former Fair Board member. “Del Mar is a very small, very selfish city that is willing to put up with the fair and the racing but doesn’t want anything more at the fairgrounds.”

When Del Mar residents decided to incorporate as a city in 1959, the fairgrounds, established in the 1930s with financial help from actor-singer Bing Crosby and actor Pat O’Brien, was part of the package. From that era came Del Mar’s civic motto, “Where the Turf Meets the Surf.”

For several decades, the annual racing season drew Hollywood’s elite, along with politicians and other prominent figures, with many arriving by train or limousine. In 1958 the Fairest of the Fair was a La Jolla teenager named Raquel Tejada, later known as Raquel Welch.

At first, a detente existed between the city and the Fair Board, whose members are appointed by the governor. As a state-owned entity, the fairgrounds, which fills 22% of the land area of Del Mar, is largely exempt from municipal control.

In the early 1990s, the Fair Board started to increase the number of annual events, from about 100 in 1993, when current chief executive Tim Fennell was hired, to more than 350 today.

“The fair started as a brat,” said Peter Kaye, a retired journalist who has lived in Del Mar since the mid-1950s. “Now it’s become a bully.”

Del Mar restaurant owners complain that their business suffers during the annual county fair because local residents stay home to avoid the traffic while fair patrons — a record 1.3 million last summer — prefer the fried bananas, zucchini on a stick, Polish sausage and cinnamon rolls at the fair.

Fair officials point out that the fairgrounds pumps more than $400 million a year into the regional economy and provides hundreds of summer jobs for local youth. The fairgrounds provides about 36% of Del Mar’s sales tax revenue, according to city figures.

In 2002, to underscore its importance as a regional asset, the Fair Board changed the name of the Del Mar Fair to the San Diego County Fair.

When Schwarzenegger announced last year that he was willing to consider selling the fairgrounds to help the state through its financial crisis, Del Mar saw it as a long-awaited opportunity to gain the upper hand.

Then last week, after remaining silent on the issue during the campaign, Brown finally tipped his hand on the potential sale. He didn’t completely reject the idea, but he cast considerable doubt about its financial wisdom.

Only two days earlier, Del Mar officials had been jubilant. “We’re on a road to own the fairgrounds and control what happens there,” Mayor Donald Mosier said.

But in rejecting Schwarzenegger’s plan to sell a passel of state-owned office buildings, Brown looked at the same set of financial facts as his predecessor and reached a wholly different conclusion about what is best for the state.

Fennell, the fairgrounds’ chief executive, is confident that Brown will do the same with regards to the Del Mar Fairgrounds.

The City Council last week approved the idea of establishing an nine-member governing board to include representatives of other cities and constituency groups like the Farm Bureau — with Del Mar having only one vote. Del Mar, however, would control zoning, permitting and the environmental review process.

With Brown’s comments, both sides continued to dig in for the possibility of a fight in the Legislature. Lawyers are ready on both sides. Kehoe’s bill is pending. The Del Mar City Council plans meetings to explain the proposed sale to the public.

Meanwhile, the Fair Board this spring will consider an expansive master plan that could include a hotel and roof-top athletic facilities. Board members, past and present, still see Del Mar as a little city trying to roar.

“It’s like Secaucus, N.J., trying to buy the New York subway system because it thinks it can run it better,” Wolfsheimer said.

tony.perry@latimes.com