Community Commentary:

The overwhelming sentiment expressed at the town hall meeting hosted by Assemblymen Van Tran and Jose Solorio regarding the Orange County Fair is that the residents of Costa Mesa and Orange County want the fair to continue operating “as is,” and that any sale of the land should be done in a transparent manner. The people have given their elected officials their marching orders; if we fail to rise to the occasion, we may forever lose the real “Great Park.”

The Costa Mesa City Council and community organizations are working hard to ensure local control by pressing forward with an initiative to lock in the zoning. Considering this prime piece of real estate might be worth significantly more as a planned community of 30-story condominiums than as a vital link to our heritage, the council’s concerns that a new owner would attempt to commercially develop the property are well founded. By locking in fairground zoning, the city’s leaders discourage bids by politically connected developers looking to flip the property for a quick buck. It also ensures that the property is priced and sold as a fair.

In the depressed economic climate, the fair generates roughly $2.5 million in annual net revenue, down from $5 million a few years ago. As our local economy improves, it is probable the fair will return to these previous numbers.

The two most likely local fair buyers are the county and the city of Costa Mesa. The question is how either of these entities would consummate such a transaction.

By analyzing how much debt the property can conservatively support, it is possible to establish a reasonable ball park price for the fair. Market conditions dictate that it would cost a government entity roughly $750,000 in annual debt service to finance every $10 million borrowed. Considering the cost of borrowing and the fair’s revenues, the property can conservatively support $25 million in borrowing, making this a reasonable asking price for the fair.

This simple mathematical analysis demonstrates that purchasing the fair would not be prohibitively expensive for a local government even in these cash-strapped times. Costa Mesa and the county should consider forming a Joint Powers Agreement to issue self-supporting bonds for the purchase and operation of the fair.

In establishing the JPA, these local governments could agree to create a new seven-member fair board composed of three citizens appointed by the city, two citizens appointed by the chair of the Board of Supervisors, the elected county treasurer and the elected county auditor-controller. This structure ensures all stakeholders are adequately represented and all meetings are conducted with public transparency.

In December, the Board of Supervisors approved a set of investment guidelines that permits the treasurer’s office to buy bonds from any Orange County government entity.

If the proposed JPA were to issue bonds on a conservative basis, the treasurer’s office is ready and willing to make an investment in our community.

Given the numbers described above, this would be a sound financial purchase, and a tremendous investment in the county’s future.

CHRISS STREET is the Orange County Treasurer-Tax Collector.