Existing law divides the state into agricultural districts within the boundaries of which agricultural associations may be formed. Existing law creates District 32a from real property commonly known as the Orange County Fair and authorizes the Department of General Services to sell all or any portion of the real property that composes District 32a.

This bill would repeal the provision creating District 32a out of the Orange County Fair property and would repeal the provision authorizing the sale of that property by the department. The bill would also repeal the creation of the District 32a Disposition Fund in the State Treasury.

Existing law divides the state into agricultural districts within the boundaries of which agricultural associations may be formed. Existing law creates District 32a from real property commonly known as the Orange County Fair and authorizes the Department of General Services to sell all or any portion of the real property that composes District 32a.

This bill would repeal the provision creating District 32a out of the Orange County Fair property and would repeal the provision authorizing the sale of that property by the department. The bill would also repeal the creation of the District 32a Disposition Fund in the State Treasury.

Existing law divides the state into agricultural districts within the boundaries of which agricultural associations may be formed. Existing law creates District 32a from real property commonly known as the Orange County Fair and authorizes the Department of General Services to sell all or any portion of the real property that composes District 32a.

This bill would repeal the provision creating District 32a out of the Orange County Fair property and would repeal the provision authorizing the sale of that property by the department. The bill would also repeal the creation of the District 32a Disposition Fund in the State Treasury.

Existing law divides the state into agricultural districts within the boundaries of which agricultural associations may be formed. Existing law creates District 32a from real property commonly known as the Orange County Fair and authorizes the Department of General Services to sell all or any portion of the real property that composes District 32a.

This bill would repeal the provision creating District 32a out of the Orange County Fair property and would repeal the provision authorizing the sale of that property by the department. The bill would also repeal the creation of the District 32a Disposition Fund in the State Treasury.

 THIRD READING  

Bill No: AB 1907

Author:

:

Vote:

SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 6/28/16

AYES: Hall, Berryhill, Bates, Block, Gaines, Galgiani, Glazer, Hernandez, Hill, Hueso, Lara, McGuire, Vidak

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

ASSEMBLY FLOOR: 69-9, 6/1/16 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill repeals the authorization for the Department of General Services (DGS) to sell the Orange County Fair (OCF) and removes OCF from the list of state assets to be sold.

ANALYSIS:

Existing law:

1. Divides the state into agricultural districts within the boundaries of which agricultural associations may be formed.
2. Creates District 32a from real property commonly known as the Orange County Fair and authorizes the DGS to sell all or any portion of the real property that composes District 32a.

This bill repeals the authorization for DGS to sell the OCF and removes OCF from the list of assets to be sold.

Background

Purpose of the bill. In 2009, the Legislature, along with Governor Schwarzenegger, approved legislation to facilitate the sale of the OCF, as part of an effort to close a state budget deficit of $42 billion. An auction was held in late 2010, with the winning bid submitted by Facilities Management West. However, the original sale price was deemed too low. While a new bid was renegotiated, it was never approved by the Legislature.

In 2011, a three-judge appellate panel halted the sale of the OCF, overturning a lower court’s decision that rejected an injunction to stop the sale of the property. In its decision, the court cited flaws in the bidding process, as well as a lack of approval and oversight from the Legislature. Since that time, Governor Brown has voiced his opposition to the sale of the OCF. Since 2011, the OCF has been self-sustaining, thus operating at no cost to taxpayers, and has drawn more than 1.3 million visitors every year.

This bill strikes two provisions that authorized DGS to sell the OCF, and would formalize policy in place with the Brown Administration.

Prior/Related Legislation

ABX4 22 (Evans, Chapter 20, Statutes of 2009-2010, Fourth Extraordinary Session) authorized DGS to establish a mechanism whereby all or portion of the OCF could be sold.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, unknown foregone revenues, potentially in excess of $100 million (General Fund), to the extent DGS were to exercise the authority to sell the property in the future.

SUPPORT: (Verified 8/11/16)

California Fairs Alliance

Orange County Employees Association

Orange County Fair & Event Center

Western Fairs Association

OPPOSITION: (Verified 8/11/16)

None received

ARGUMENTS IN SUPPORT: Supporters of this bill argue that the passage of the bill will preserve the OCF as an ongoing local, regional and statewide asset that began in 1890 and will continue in perpetuity.

ASSEMBLY FLOOR: 69-9, 6/1/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Bigelow, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Williams, Wood, Rendon

NOES: Baker, Brough, Chávez, Beth Gaines, Grove, Harper, Mayes, Obernolte, Wilk

NO VOTE RECORDED: Olsen, Patterson

Prepared by:

8/15/16 20:26:59

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1907 (Daly) - Orange County Fair: sale of state property

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 1907 would repeal the authority for the Department of General Services (DGS) to sell all or part of the Orange County Fairgrounds, as specified.

Fiscal Impact:

Unknown foregone revenues, potentially in excess of $100 million (General Fund), to the extent DGS were to exercise the authority to sell the property in the future. Staff notes that previous attempts to sell the property were unsuccessful, and there are no current plans to sell any part of the property. (see staff comments)

Background:

Existing law divides the state into 54 agricultural districts, including the 32^nd District, located in Orange County, and District 32a, which consists of all real property within District 32 that is commonly known as the Orange County Fair in the City of Costa Mesa. Existing law authorizes DGS to sell all or any portion of the property that composes District 32a pursuant to a public bidding process designed to obtain the highest, most certain return for the state from a responsible bidder, and specifies that such a transaction would be deemed to be the fair market value. Existing law also requires DGS to report specified information to the Legislature 30 days prior to executing a transaction, including the financial terms, a comparison of fair market value and the agreed upon price, and any basis for agreeing to terms and conditions other than fair market value. Proceeds from the sale would be deposited into the General Fund, after paying off any bonds that involve the property and reimbursing DGS for any administrative costs.

The 2009-10 budget agreement authorized the sale of Orange County Fair property as one part of a larger effort to generate revenue from the state’s high value assets to help close significant state budget gaps following the 2008 financial crisis. In October 2009, DGS began soliciting bids for the sale of the property. The highest bid of $56.5 million was far below the assumed value of $96 million to $180 million, so DGS rejected all bids for the sale in March of 2010, and instead commenced negotiations with the City of Costa Mesa for sale of the property. In August 2010, DGS again put the Orange County Fair property out to bid, and Facilities Management West was selected as winning bidder after offering $100 million for the property. However, the Fourth District Court of Appeal blocked that sale, citing a flawed bidding process, as well as a lack of approval and oversight from the Legislature. DGS has not attempted to sell the property since that ruling, and currently has no further plans for selling the property.

According to the Department of Food and Agriculture, the Orange County Fair operates with a surplus and attracts over 1.3 million visitors annually.

Proposed Law:

AB 1907 would repeal provisions in existing law that create District 32a, commonly known as the Orange County Fair, and those that authorize DGS to sell all or any portion of the property that composes District 32a, as specified.

Related Legislation:

AB 4x 22 (Evans), Chap. 20, 2009-10 4^th Ex. Session, authorized DGS to sell all or part of the Orange County Fair, among other things related to state property.

Staff Comments:

This bill would repeal the authority for DGS to sell the Orange County Fairgrounds, thereby removing the potential for future one-time state revenue gains. While the estimated value of the property in 2009 was $96 million to $180 million, it is safe to assume that the current value could be much higher, considering the original estimate was at the depths of the recession. Staff notes, however, that the City of Costa Mesa has consistently opposed the sale, and indicated that they would not entitle the property for development or reuse for any purpose other than as a fairgrounds, which accounts for dampened buyer interest and low bids in the initial sale attempts. Furthermore, Costa Mesa voters passed an ordinance that requires voter approval for any change to the use of the property. It appears highly unlikely that DGS would consider advertising the property for sale in the near future, and highly unlikely it would sell for a fair price if it were offered for sale, considering local opposition to changing the allowable use of the property (thereby depressing development interest), and a lack of interest among DGS and the current Administration in selling the property.

-- END --

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Isadore Hall, III

Chair

2015 - 2016 Regular

Bill No: 1907 Hearing Date: 6/28/2016

SUBJECT: Orange County Fair: sale of state property

DIGEST: This bill repeals the authorization for the Department of General Services (DGS) to sell the Orange County Fair (OCF) and removes OCF from the list of state assets to be sold.

ANALYSIS:

Existing law:

1. Divides the state into agricultural districts within the boundaries of which agricultural associations may be formed.
2. Creates District 32a from real property commonly known as the Orange County Fair and authorizes the DGS to sell all or any portion of the real property that composes District 32a.

This bill repeals the authorization for DGS to sell the OCF and removes OCF from the list of assets to be sold.

Background

Purpose of the bill. In 2009, the Legislature, along with Governor Schwarzenegger, approved legislation to facilitate the sale of the OCF, as part of an effort to close a state budget deficit of $42 billion. An auction was held in late 2010, with the winning bid submitted by Facilities Management West. However, the original sale price was deemed too low. While a new bid was renegotiated, it was never approved by the Legislature.

In 2011, a three-judge appellate panel halted the sale of the OCF, overturning a lower court’s decision that rejected an injunction to stop the sale of the property. In its decision, the court cited flaws in the bidding process, as well as a lack of approval and oversight from the Legislature. Since that time, Governor Brown has voiced his opposition to the sale of the OCF. Since 2011, the OCF has been self-sustaining, thus operating at no cost to taxpayers, and has drawn more than 1.3 million visitors every year.

This bill would strike two provisions that authorized DGS to sell the OCF, and would formalize policy in place with the Brown Administration.

Prior/Related Legislation

AB 146 (Olsen, 2014) would have authorized the construction of the California American Portuguese Veterans Memorial within the existing All Veterans Memorial in the State Capitol Park. (Held in Senate Rules Committee)

SBX2 16 (Ashburn, Chapter 12, Statutes of 2009-10 Second Extraordinary Session) shifted the horse racing industry’s obligation to fund the network of California Fairs from license fees imposed on horse racing wagers to the General Fund.

ABX4 22 (Evans, Chapter 20, Statutes of 2009-2010 Fourth Extraordinary Session) authorized DGS to establish a mechanism whereby all or portion of the OCF could be sold.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

Orange County Employees Association

Orange County Fair & Event Center

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: Supporters of the bill argue that the passage of the bill will preserve the OCF as an ongoing local, regional and statewide asset that began in 1890 and will continue in perpetuity.

ASSEMBLY THIRD READING

ATR Bill Id:

Author:(Daly)

As Amended Ver:May 27, 2016

Majority vote

SUMMARY: Repeals the authorization for the Department of General Services (DGS) to sell the Orange County Fair & Event Center property (OCF) and remove OCF from the list of state assets to be sold.

EXISTING LAW:

1. Divides the state into agricultural districts, which may form district agricultural associations (DAAs).
2. Creates DAA 32a, the Orange County Fair, and authorizes DGS to sell all or any portion of the real property that composes OCF.

FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill has forgone potential one-time General Fund (GF) revenues in the range of $100 million. However, DGS is not currently planning to sell OCF so any foregone revenue is uncertain.

COMMENTS: In 2009, the Legislature, along with Governor Schwarzenegger, approved legislation to facilitate the sale of the OCF, as part of an effort to close a state budget deficit of $42 billion. An auction was held in late 2010, with the winning bid submitted by Facilities Management West; however, the original sale price was deemed too low. While a new bid was renegotiated, it was never approved by the Legislature.

In 2011, a three-judge appellate panel halted the sale of the OCF, overturning a lower court's decision that rejected an injunction to stop the sale of the property. In its decision, the court cited flaws in the bidding process, as well as a lack of approval and oversight from the Legislature. Since that time, Governor Brown has voiced his opposition to the sale of the OCF. Since 2011, the OCF has been self-sustaining, thus operating at no cost to taxpayers, and has drawn more than 1.3 million visitors every year.

This bill would strike two provisions that authorized DGS to sell the property, and would formalize policy in place with the Brown administration.

Analysis Prepared by: Victor Francovich / AGRI. / (916) 319-2084 FN: 0003136

Date of Hearing: April 6, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1907

Author:(Daly) – As Introduced Ver:February 11, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill repeals the provision in existing law that allows the Department of General Services (DGS) to sell part or all of the Orange County Fair (OCF) property.

FISCAL EFFECT:

Forgone potential one-time GF revenues in the range of $100 million. However, DGS is not currently planning to sell OCF so any foregone revenue is uncertain.

COMMENTS:

1. Purpose. According to the author, AB 1907 would protect OCF from possible efforts in the future to sell the property for one-time state revenues. The author notes that the OCF is home to the county fair, which draws more than 1.3 million visitors each year, as well as a number of cultural and recreational events. Moreover, the author notes that the property has been self-supporting since 2011.
2. Background. The 2009-10 budget agreement authorized the sale of OCF property as one option to help close significant state budget gaps following the 2008 financial crisis. In October 2009, DGS began soliciting bids for the OCF sale. The highest bid of $56.5 million was far below the assumed value of $96 million to $180 million. In March 2010, the department rejected all bids for the sale, and the state commenced negotiations with the City of Costa Mesa for sale of the property. In August 2010, DGS again put the OCF property out to bid, and Facilities Management West (FMW) was selected as winning bidder after offering $100 million for the property. However, the 4^th District Court of Appeal blocked that sale, citing a flawed bidding process. Since that ruling, DGS has not attempted to sell the property and there are currently no plans to do so.

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081

Date of Hearing: March 30, 2016

ASSEMBLY COMMITTEE ON AGRICULTURE

Bill Dodd, Chair

ABPCA Bill Id:AB 1907 (

Author:Daly) – As Introduced Ver:February 11, 2016

SUBJECT: Orange County Fair: sale of state property.

SUMMARY: Repeals the authorization for the Department of General Services (DGS) to sell the Orange County Fair & Event Center property (OC Fairgrounds) and remove OC fairgrounds from the list of state assets to be sold.

EXISTING LAW:

1. Divides the state into agricultural districts, which may form district agricultural associations (DAAs).
2. Creates DAA 32a, the Orange County Fair, and authorizes DGS to sell all or any portion of the real property that composes OC Fairgrounds.

FISCAL EFFECT: Unknown.

COMMENTS: In 2009, the Legislature, along with Governor Schwarzenegger, approved legislation to facilitate the sale of the OC Fairgrounds, as part of an effort to close a state budget deficit of $42 billion. An auction was held in late 2010, with the winning bid submitted by Facilities Management West; however, the original sale price was deemed too low. While a new bid was renegotiated, it was never approved by the Legislature.

In 2011, a three-judge appellate panel halted the sale of the OC Fairgrounds, overturning a lower court’s decision that rejected an injunction to stop the sale of the property. In its decision, the court cited flaws in the bidding process, as well as a lack of approval and oversight from the Legislature. Since that time, Governor Brown has voiced his opposition to the sale of the OC Fairgrounds. Since 2011, the OC Fairgrounds has been self-sustaining, thus operating at no cost to taxpayers, and has drawn more than 1.3 million visitors every year.

This bill would strike two provisions that authorized DGS to sell the property, and would formalize policy in place with the Brown administration.

REGISTERED SUPPORT / OPPOSITION:

Support

California Fairs Alliance

Orange County Employees Association

Western Fairs Association

Opposition

None on file.

Analysis Prepared by: Victor Francovich / AGRI. / (916) 319-2084