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Fair Finance Fears:
Fairgrounds – Hanging On By a Thread

Jay Thomas | Bellaire Street & Jim Benedict | Christie Lane

The 22nd Agricultural District has very-serious financial issues and are on the brink of imploding. One of the leading sources of income for the City of Del Mar is the tax revenue from the fairgrounds and the racetrack. Our city took a big hit in 2020 and this could carry over into 2021 and possibly for several years to come.

What is going to happen next, and how did we get here?

Background - The 22nd Agricultural District is the largest county fair in the state and is a self-funded enterprise reporting to the California Dept. of Food & Agriculture (CDFA). It is completely reliant on income generated from the fairgrounds including the racetrack and the horse park east of the freeway. The 22nd board of directors including an appointee representing Del Mar and others are appointed by the governor. Other than the local board member this is a “pay-to-play” board with the average political contribution to the governor of about $30,000 (a big part of the problem in our opinion).

What is happening right now - Through September 30th, the Ag District has lost $10.4 million this year. Due to the cancellation of the San Diego County Fair, staffing was reduced from 153 to 62 in October. This was a long process as the state mandated a six-month notice to the affected civil servants most of whom were unionized. The District has less than one month’s cash on hand for a payroll that now exceeds this amount coupled with unpaid vendors invoices. They have requested $12 million from the state to fund operations through June of 2021. Without this funding the District will need to lay off the remainder of its employees in the next month or two leaving close to $65 million in debt obligations (Racetrack Authority Debt and other debts taken on for the new concert venue) and almost $35 million of unfunded pension, medical retiree, and paid leave obligations to the state who owns the property.

What’s next? - We can only look into our crystal ball. But all options do not look very positive. One thing is clear; the 22nd Ag District was ill prepared to deal with the Covid-19 crisis which obliterated its business model. Given that the pandemic crisis is not going away in the near future it is certain the district will fail unless the state bails them out. There are examples of other business models that could work for the prize piece of property that is a big part of the City of Del Mar, but this will take time and require a relook at how the state will want this property to operate in the future. Stay tuned…………………..

 

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