Friday, June 25, 2010

A Piece Of Our Heritage For Sale

TIME TO CHILL A LITTLE
It's time to throttle back on the rhetoric about the Fairgrounds sale just a little this weekend and enjoy what most of us hope will be the first of many annual visits by the Barrett-Jackson Automobile Auction to the Orange County Fair and Event Center.

AUCTION TIME IN COSTA MESA
Much hoopla has accompanied the launch of this auction week, which will be culminated over the weekend by the car auction.

WHAT A MACHINE!
In the spirit of community harmony and philanthropy, Facilities Management West has donated a pristine 1946 John Deere Tractor - one of only 2840 build during the war years of 1941-1947 - to the auction. According to Steve Davis, president of Barrett-Jackson Auction Company, "...this is one of the most beautifully restored John Deere tractors I've ever seen."

SLOW AND STEADY
This beautiful piece of our agricultural heritage will share the auction block with exotic cars capable of going 0-60 in less than 4 seconds. The tractor has a top speed of 15 miles per hour!

100% OF PROCEEDS TO CENTENNIAL FARM
According to Facilities Management West principal and Costa Mesa resident Richard Dick, 100% of the proceeds of the sale of this tractor will go to the Centennial Farm Foundation at the Orange County Fairgrounds, benefiting the children and programs at Centennial Farm, one of the lynch-pin features of the Fairgrounds.

TERRIFIC GIFT
According to Mack Ramsay, President of the Centennial Farm Foundation, "Centennial Farm and its connection with the people of Orange County is extremely important and dear to our hearts. We're grateful that Facilities Management West is providing this wonderful gift so the work of Centennial Farm can continue and remain a lasting part of our Orange County heritage."

BRING YOUR WALLET
The tractor is Lot # 617.2 and will be auctioned off between 12:30 and 1:30 p.m. on Sunday, June 27, 2010. For more information on the auction and schedule of events visit the Barrett-Jackson page HERE.

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Wednesday, June 23, 2010

Of Bars, Barbs and Boneheads

MORE INFO ON THE FAIRGROUNDS SALE
Well, the dust is beginning to settle after the late (early?) meeting of the Orange County Fairgrounds Authority Tuesday night - actually, 12:10 Wednesday morning - and some subsequent information makes this whole process even more fascinating.

MICKADEIT - "DEAL DONE IN A BAR"
For example, Orange County Register columnist Frank Mickadeit tells us in his column, HERE, that the deal was dead until Gary Monahan resurrected it on cocktail napkins at his gin mill late Friday night. His account of this event is very interesting.

KUDOS TO MONAHAN
Before going further I must commend Monahan for his role in salvaging the deal, both Friday evening and during a marathon session on Saturday. That, plus his matter-of-fact comments in the proceedings Tuesday night, probably kept it from going down in flames. He correctly pointed out, after much rancorous discussion, that we didn't really have a choice. Only by approving the deal with Facilities Management West would the City avoid having absolutely no influence on the future of the Fairgrounds. If the State, as it threatened, did put the property back on the market Wednesday it would likely be lost forever. And, as Monahan quietly alluded to, there was the chance that the State would simply lease the property, voiding the impact of Measure "C" and permitting an unlimited variety of uses.

THE LIST
Early in the discussion Monahan provided seven bullet points - a list of benefits to the city that this deal represents:
1 - Maintains control of the property's use.
2 - It receives a steady income from the property.
3 - We're not investing City tax dollars for the purchase of the property or for operations of the property.
4 - Unfettered ownership of the property when the lease terminates.
5 - Protects the community uses on the property as well as the annual fair.
6 - Benefits from protection from damages and liabilities.
7 - Has the opportunity to receive big ground lease payments once the state loan is repaid.

SPEAKERS STILL NOT HAPPY
Clearly, many speakers Tuesday night, among them former Mayor Sandra Genis, were unhappy - that's no surprise. Each of them had a passionate interest in keeping the Fairgrounds as-is. I understand their angst. However, this deal is much, much better than they could have expected under almost any other scenario. I hope, as time passes, they will begin to see that more clearly.

NO TRANSPARENCY
The trail of speakers on this issue during public comments made it clear that few were happy with the deal as they understood it. I phrase it that way because there was much confusion about just which version of the deal we were addressing at this point. Many of them thought this was a bad deal, that lacked transparency as it progressed and without any kind of guarantees for transparency in the future. They're not wrong...

PAINFUL ETCHING
Burned in my brain is the exchange Tuesday night between OCFA Chairman Allan Mansoor and of the Facilities Management West team. I think a peek at the streaming video of the proceedings, HERE, will help you understand just how that went. Drag the timer bar over to 39:50 if you're in a hurry. That's the point where Mansoor begins his inquisition of Facilities Management West partner, Richard Dick, who was speaking in the absence of their normal negotiator, Guy Lemmon. Mansoor posed to Dick an issue that, in Mansoor's words, was "a deal breaker"... he told Dick that "it's my understanding some of the attorneys from Facilities Management West were, um, and this is what I've been told, I was not there, were considerably less than respectful to some of our city staff." He went on to express more concern about the alleged disrespectful treatment of the Costa Mesa team and stated, "that troubles me more than some of these details that are in this written agreement." waving the papers in the air. Oh, really, Allan? Is that right? You care more about some hurt feelings than a deal worth hundreds of millions of dollars to the city with a life span of more than a half-century? Are you really that obtuse? Guess so, because he persisted.

PRODUCT SPONSORSHIP
Mansoor then went on to question Dick about the product sponsorship segment of the MOU, observing that there is a cap on the amount the OCFA would receive. Of course, this issue had been hammered out over long, long meetings by teams of negotiators. It sure looked like Mansoor was attempting to modify the agreement that had already been approved by the City team and Facilities Management West. Dick attempted to give a little history and pointed out that the issue Mansoor was raising was just part of the approximately $300 million in net income to the city under the deal. Mansoor persisted, asking if there was a reason it couldn't be a percentage. Dick responded by saying, "Excuse me, but I didn't think we were coming here this evening to negotiate." Mansoor persisted and Dick said, "I didn't think we were in a negotiating position on rent."

TAG TEAM MATCH - FAIT/DICK VS. MANSOOR
This is where it got to be fun. At that point, around 46:45 on the counter, Kenneth Fait, head honcho of Facilities Management West, came to the podium - apparently tired of seeing his guy getting pilloried by Mansoor - and tried to calm the issue down. He apologized for any incivility by his team. He emphasized that "Sir, we're going to be in it forever, and how that works out - we better get along." Mansoor persisted, pointing out to Fait the difference between "hard, aggressive negotiating and unprofessional actions". In response to that Fait said, "I apologize, but we've offered you the max rent and I'm not going to offer you a penny more." He pointed out that it represents about $371 million "coming down the pike here." Mansoor persisted, indicating that he just wanted to know why there's a cap. Fait explained that, "If it's just money you want, we've offered you the max that we're going to offer." Mansoor said, "I appreciate that, but it really doesn't answer my question, simply a question of why there's a cap." Before Mansoor could finish that statement Fait said, "Because I want all the profit beyond that! It's very simple - I want all the money beyond that. It's really simple - that's mine! I've offered you what you're gonna get. That's a good working relationship. You know, I'm a private entrepreneur, I hope to make more than the money I'm paying you." He and Dick then left the podium and took a seat in the audience.

WAS THE DEAL BLOWN?
At that moment many of us watching the proceedings thought that Mansoor, in his ignorant, clumsy way, had blown the deal that had taken hundreds of hours of negotiation to bring to this point. With his apparent complete lack of grasp of business dealings and negotiations - probably due to spending 16 years in the black and white world of a jailer - he was going to destroy all the efforts of our negotiating team. In a headline in my previous post I asked, "Is he that stupid?" Here was your answer - Yes, he is.

CALMER HEADS PREVAILED
Fortunately, calmer heads prevailed. Fait and his team didn't do what some of us might have done - tell Mansoor to take the deal and shove it where the sun don't shine - and, after long and contentious discussions, the deal was finally approved by the OCFA Board, 4-1. Katrina Foley, to the surprise of a few observers, voted "No" on the deal.

WOULD THEY TRY THIS AGAIN?
I doubt if any of the participants would choose to try to put together a deal of this complexity in such a short time if the State had not held a gun to our heads all the way. And yet, they managed to do it. Good for them.


LATINO CAUCUS LURKING?

Now the details must be hammered out and the State must do it's part - that's no slam dunk, either. Our "amigos" in the Latino caucus are lurking in the shadows, waiting for an opportunity to stick a knife in the jugular of this deal by not passing the required legislation. We can only hope that they won't hold the political posturing of our mayor with his "Rule of Law City" resolution against the entire city and block the sale for spite. We hope they are bigger than that. Time will tell.

NINETY DAYS OF PINS AND NEEDLES
So, we now move forward toward a probable September 30th closing date for the escrow with fingers tightly crossed that nothing else will occur to quash the sale.




MANSOOR ILL-EQUIPPED AND UNWORTHY

One thing became crystal clear Tuesday night - Allan Mansoor has demonstrated, one more time, just how ill-equipped he is for higher office. While watching him Tuesday night it was obvious why he was not one of the members of the negotiating team. His limited intellect, lack of formal education and narrow life experiences have left him unprepared for a role in this kind of activity. No matter how hard he prays, no amount of divine intervention is going to change that. As we approach the November elections I'll remind you of just what a short-sighted, ignorant, political opportunist he is and how unworthy he is for your consideration for the Assembly seat he's seeking. History shows us that he will provide us with plenty of opportunities to point out his shortcomings between now and November.

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Budget & Fairgrounds Deals Approved!

BUDGET DISCUSSIONS ACRIMONIOUS
The first half of Tuesday night's council meeting went about as I expected. There was much acrimonious debate among some of the council members - Katrina Foley and Eric Bever were the main combatants - on how to vote on budget issues.

FOLEY NIBBLED AWAY
Foley tried, with only minimal success, to salvage a few dollars here and there in a budget with a $16 million dollar shortfall. Eventually the council voted 4-1, with Foley voting no, to approve the budget presented to them with a few modifications.

TOT ON THE NOVEMBER BALLOT
They also voted to place an increase in the Transient Occupancy Tax (TOT) on the November ballot. City Manager Allan Roeder suggested that a minimum 3% increase be considered. Instead, at Councilman Gary Monahan's suggestion, they approved placing a 2% increase on the ballot. At that point Costa Mesa will still be well below the county median, with virtually no realistic opportunity to go back after more in the near future. It's just another short-sighted move by the council - just like the many others in the past that have contributed to the giant fiscal hole we find ourselves in today.

OTHER REVENUE SOURCES TO BE EXAMINED
The council also directed the staff to return with specific proposals for increases in a few other areas.

FUND BALANCE TAPPED AGAIN
The budget as approved remains well short of being balanced so it forces the utilization of the diminished fund balance to make the numbers work. You may recall that, over the past three years, we've drawn down those reserves by $35 million! The exact amount necessary to be used is unclear... more to follow when I get a number.

FAIRGROUNDS SALE UP NEXT
The second half of the evening was dedicated to the meeting of the Orange County Fairgrounds Authority (OCFA), the joint powers authority formed by the City for the express purpose of purchasing the Fairgrounds from the State. So, the council members figuratively slipped into their Farmer John coveralls and became "authority members".

ROEDER - "MUST HAVE A DECISION TONIGHT"
Roeder, who functions as the Executive Director of this organization, brought the full council (authority board) up to speed on the timetable. He told them and the audience that a vote MUST be taken tonight on the purchase agreement and the memorandum of understanding with Facilities Management West because the State is prepared to place the Fairgrounds back on the block today, Wednesday, if the authority doesn't get a deal done tonight. He told us that the City had missed two recent deadlines imposed by the State last week and that we were at the end of our rope.

MOVED TO CLOSED SESSION
After re-affirming the bylaws, they went into a closed session to be briefed by the negotiators. That closed session lasted 90 minutes.

BARLOW GAVE OVERVIEW OF DOCUMENTS
Once the meeting was re-convened City Attorney Kim Barlow gave a brief overview of both documents - the purchase agreement and MOU.


MANSOOR STEPPED IN IT
Then my jaw dropped as a haggard-looking Allan Mansoor, as chair of the authority, proceeded to chastise members of the Facilities Management West team for what "he had been told" was disrespectful behavior on the part of lawyers from FMW during negotiations! Funny, I thought those negotiations were confidential! Who told him? When? Regardless, he flustered Richard Dick - who was a stand-in spokesman for FMW - with questions about the deal that had been negotiated which so angered Kenneth Fait, the top dog at FMW, that he rushed to the podium and, in a very heated comment stream, told Mansoor that the deal we have is the best we're going to get. He wasn't going to offer a single penny more! I thought for sure Mansoor had blown this deal at that point.

MOST SPEAKERS DECRIED LACK OF TRANSPARENCY
Speaker after speaker stood and expressed consternation with what most described as a lack of transparency. The expressed concern about the deal itself and the fact that the City seemed to have given up control.


COSTA MESA DID THE "IMPOSSIBLE"

The pace of this process will almost certainly be the subject of a book one day. I doubt that anyone north of Bakersfield thought Costa Mesa could pull this off with the land mines placed in front of it. And still, the process continued at breakneck speed.

FINAL APPROVAL WEDNESDAY MORNING
At the end of the day, which turned out to be 12:10 a.m. Wednesday morning, the Orange County Fairgrounds Authority board voted unanimously to approve the sale agreement with the State and then, after much discussion, voted 4-1 to approve the MOU with Facilities Management West. Foley voted no, and explained her concerns at length before the vote was made. She said what others had said earlier in the evening - that this 55 year agreement needed to be like a marriage, but it just didn't feel right.

DEAL DONE
So, the deal is done. In a few hours the State will have in front of them the necessary paperwork to officially launch the escrow and the clock ticks at their end now.

LATINO CAUCUS THREAT PENDING
The elephant in the room at this point is the threat by the Latino caucus that, because of Mayor Mansoor's "Rule of Law City" resolution, they will block the legislation required for this deal to be finalized. I guess we'll find out about that soon enough.


NOT MUCH JOY TONIGHT

At the end of the day, in my opinion, both major issues addressed by the city council tonight - the budget and the Fairgrounds - ended up with not very many people leaving the auditorium happy. I suspect the Facilities Management West folks were pleased, but not happy. This will be a night to remember in the history of our city.

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Tuesday, June 22, 2010

Fairgrounds Deals Outlined

LATE ADDITION OF CRITICAL DOCUMENTS
With only a few hours until the meeting this evening the City released a revised agenda report for the Orange County Fairgrounds Authority (OCFA) meeting. In addition to the presentation of the bylaws of the organization, the most recent revision also includes two critical items - the Purchase and Sale Agreement with the State of California and the Proposed Memorandum of Understanding (MOU) with Facilities Management West (FMW) for the ground lease and operating agreement.

PLENTY OF LEGAL JARGON
The Purchase and Sales Agreement, all 75 pages of it, is replete with all the legal jargon you would expect for an agreement of this type. I'm not going to begin to try to decipher it for you - among my many shortcomings is a lack of legal training - but there are some pearls of information to be found on those pages.

PURCHASE PRICE
The purchase price, as was the case with the previous set of partners, is $96 million, for which the State will carry a note.

DEPOSIT
At close of escrow the Buyer (the OCFA) will pay $19.2 million.

SEPARATE ESCROW
Facilities Management West must deposit $1 million in an escrow account controlled by them within three days following the execution of the agreement. That will be applied to the amount, above, paid at close of escrow.

CLOSING DATE
The closing date is set at September 30, 2010, unless another date is mutually agreed upon.

REQUIRED LEGISLATION
As part of it's agreement the State legislature must have enacted legislation authorizing the sale of the property which also addresses the dissolution of the 32nd and/or 32A District Agricultural Associations and assigning the right to hold the Orange County Fair to the OCFA, which must be signed by the governor.

EMPLOYEES
The state must make arrangement for the existing employees of the Fairgrounds. The OCFA assumes no responsibility for hiring the State's employees.

NO COMPETING FAIR
As long as there is a fair conducted at this site the State may not authorize another competing event in the County of Orange.

MOU BETWEEN OCFA AND FMW
The Memorandum of Understanding between the OCFA and Facilities Management West includes the terms of the ground lease and operation parameters for the Fairgrounds.

TERM
The term is 55 years, with no options to extend.

PROFITS
The OCFA will receive a minimum of $750,000 per year beyond the amount necessary to service the debt for the first 5 years. Years 6-10 that increases to $1.5 million; years 11-20 it goes to $2.5 million; years 21-30, $2.85 million; years 31-55, $3.2 million.

PLUS A PERCENTAGE
In addition, OCFA shall be paid a portion of the revenue generated, 5%, with an annual maximum as follows: Years 1-5, $50,000; 6-20, $75,000; 21-35, $100,000 and 36-55, $200,000.

MANDATORY OPERATIONS
The following operations must be maintained by FMW: Annual Fair (minimum 24 days in July/August); Centennial Farm; Youth Expo; Equestrian use; Civic Center reciprocal uses, parking and such; minimum 18 month transition to maintain existing agreements for the marketplace/swap meet operations. FMW may terminate those agreements following the 18 month period.

CAPITAL IMPROVEMENTS
FMW will make capital improvements of $6-8 million over the next 5 years.

COMPLETE DOCUMENTS AVAILABLE FOR READING
If you're interested, you can read the entire text of both documents at the city website, HERE.

LONG NIGHT AHEAD
This is going to be a very interesting, very long evening. This subject will be considered following the budget discussions tonight. Hope you have some No-Doze or a large pot of coffee.

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Tough Time In Costa Mesa Today (Revised)

Today promises to be a very interesting day in Costa Mesa.

MANSOOR TO RETURN DONATIONS
First, Mona Shadia, writing in the Daily Pilot, reports that Mayor Allan Mansoor - Republican candidate for the 68th Assembly seat being vacated by Van Tran - has returned nearly $8,000 in campaign contributions. You can read Mona's article HERE. Seems Mansoor apparently didn't think anything was wrong with accepting thousands of dollars from folks with whom he was in negotiations for the purchase of the Orange County Fairgrounds until "someone" mentioned it to him.

IS HE THAT STUPID?

Now, I ask you, is he really that stupid? There was a time when I might have said no, but I'm not so sure now. I don't know just who's handling his campaign, but he's either not getting very good advice or he's ignoring it. I suspect the latter, since he's demonstrated a pattern over the past several years of ignoring expert advice.

NOT NEWS TO ME...
I've known about the potential conflicts of interest for a couple months, but chose not to make a fuss about it yet. Now this incident has saved me the trouble, although the entries on his campaign finance log mentioned in Mona's article are certainly not the only curious ones. You can view his list HERE. Just scroll down and look for familiar names among the more than 260 entries, among them Steve Mensinger, Colin McCarthy and Jeff Mathews - all appointees to city commissions. Mathews alone seems to have contributed a real pile of dough to Mansoor's campaign.

BUDGET BATTLES TONIGHT
Tonight the City Council is going to have a very full platter. At a special meeting scheduled to begin at 5:30 they will finally come to grips with the 2010/2011 budget after shoving it off a week and try to find some way to balance it without disemboweling city services. About the only way for that to happen is for them to consider new or increased fees - the Transient Occupancy Tax and Business License Fees, for example. Budget and Research Officer Bobby Young has prepared a long list of potential new or increased funding sources for the council to consider.

PAINFUL DECISIONS AHEAD
However, they will be asked to find $8 million dollars in savings somewhere since most new revenue sources would become effective in January if approved by the voters. It's highly unlikely that the budget will be balanced without major concessions from the employee bargaining units. The 76 jobs that are on the block will likely remain so - that $8 million is calculated after the layoffs.


NOT MUCH LEFT IN RESERVES
And, although some consideration will be given to use Fund Balance, there's not much left in that bucket. The city has drawn down it's reserves by almost $35 million over the past three years. Most of the money left in the reserves now are designated funds - emergency reserves, etc. - and not available for use balancing the budget.

ORANGE COUNTY FAIRGROUNDS AUTHORITY
Following the budget meeting the council will re-convene as the Orange County Fairgrounds Authority (OCFA), review and approve the bylaws of the organization and immediately go into a closed session meeting in which they will hear from the negotiators on the purchase of the Fairgrounds. The agenda then calls for them to have an open session meeting. We can speculate about those two events - I suspect we will hear about the offer and watch the authority board either vote to approve it - or not.

NOTE: The city distributed a revised agenda report late Tuesday morning which includes staff reports for the purchase terms of the Fairgrounds and the Memorandum of Understanding (MOU) between the OCFA and Facilities Management West for the ground lease for the Fairgrounds. You can find them by clicking HERE, then selecting the link for the 6/22/10 meeting of the OFCA board.


PLENTY OF STRESS TO GO AROUND

All in all, it's going to be a very, very stressful evening. The budget session is sure to leave nobody happy - we are too deep in the hole. It certainly will not be a boring night. And, it's entirely possible that the deal hammered out by the negotiators will not get the approval of the authority board (council). That would be a shame.

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Monday, June 21, 2010

Final Election Results & Fairgrounds Deal?

ALL BALLOTS COUNTED
According to the Registrar of Voters office this morning, all the ballots have been counted and the numbers are final. They will be certified tomorrow. So, for the last time (probably) here are the local election results from the Primary Election on June 8th.



LESS THAN 1/3 VOTED!

Fewer than one-third of the registered voters made their way to the voting booth - or took their time to cast a ballot via mail or any other way. To the more than 1.2 million of Orange County voters who didn't participate in the process - when things don't go the way you want, if your elected representatives don't do what you want, just muzzle yourselves. If you don't participate you don't get to gripe about it later.
REPUBLICANS OUT-VOTE DEMOCRATS
More than twice as many Republicans voted than did Democrats. Republicans (42.8%) turned out in a much higher ratio than did Democrats (28.8%). Let's hope that trend holds in November.TRAN IN TROUBLE
Van Tran is going to have a tough time against Loretta Sanchez in November.
GIDDYAP, LATINOS!
Allan Mansoor tallied more than 22,000 votes in the primary, 69.3% of the Republican vote in the district. It looks like he may just waltz to victory for the 68th Assembly seat being vacated by Tran using the same strategy he followed four years ago - to ride the backs of the Latino population in his district to victory. Unless Phu Nguyen can motivate his base to turn out in large numbers in November, Mansoor will end up in Sacramento in January.
MUSIC STOPPED - LEECE LEFT WITHOUT A SEAT
Wendy Leece missed a seat in the 68th Assembly District Republican County Central Committee, finishing more than 900 votes behind the 6th place finisher. Costa Mesa Parks and Recreation Commissioner Jeff Mathews finished 5th in the voting, more than 1,000 votes ahead of Leece.MEASURE "C" OVERWHELMING
The final count for Measure "C", the General Plan Designation of the Orange County Fair and Event Center, finished with an even 13,000 voters (87.7%) screaming loud and clear that they want the Fairgrounds to remain as it is - a fairgrounds. We'll see how this result affects the possible sale.FAIRGROUNDS DEAL MAY BE ANNOUNCED
Incidentally, rumor has it that the deal between the City, the State and Facilities Management West nearly went down in flames last week a couple times but, following a marathon session on Saturday, it looks like there may be agreement. We should find out on Tuesday, when the joint powers authority, the Orange County Fairgrounds Authority, meets in both closed and open session following the special council meeting that was called to attempt to get a budget passed.

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