Del Mar Fairgrounds agency sued over withdrawn contract for fair operations

The owner of a company that provides rides and games to county fairs is suing the 22nd District Agricultural Association, contending the district wrongly deprived the business of a lucrative five-year contract to operate the San Diego County Fair earlier this year.

Talley Amusements of Texas filed the suit in San Diego federal court on July 28. The suit says the company was the rightful winner of a bidding contest to act as the master operator of the midway at the annual Del Mar fair, with responsibility for rides and games.

Talley contends it did not win the contract because district officials made errors when scoring the bid proposals and that they illegally rounded up the score of the winning bidder, RCS. Talley filed a formal protest in March over the awarding of the contract, but before it could be heard the district abruptly withdrew the entire contract proposal in the wake of a decision not to hold the month-long fair this year.

The lawsuit, which fair officials said they would not comment on, is the latest turn in a three-year sequence of events that has seen contracts awarded, protested, overturned by judges and withdrawn at the cash-strapped district, which runs the Del Mar Fairgrounds. The process has been shadowed by allegations of backroom dealing and bid-rigging, which fair officials have denied.

On Aug. 3, a few days after Talley filed its suit, the district formally released another request for bids — this one again to contract with a company to be the master operator of the midway.

A spokesperson for the fair said there was no connection between the two events and that the new bid proposal had been in the works “for months.”

John Moot, the lawyer for Talley who has been battling the fair board over the contracts, said that the district knew it was facing a lawsuit in May, when he filed a claim against the fair over the lost contract. He also said the new request for bids continues a pattern of the district administration favoring RCS in contracting.

Moot said that parts of the new bid request are slanted against his client. In one instance, the requirements to be a qualified bidder changed. Previously bidders had to have been a master operator at any three fairs in the country with attendance of 500,000 or more, between 2017 and 2019. That could include the same fair over three successive years.

Under the new request for bids, that has changed to requiring being an master operator at three separate fairs, each with attendance of 1 million or more.

That requirement narrows down the number of qualified bidders considerably, he said, and appears to favor RCS, one of the nation’s leading midway operators which can easily meet the requirement while others — including Talley— can’t.

There were also changes to how bids would be scored. The financial aspect of a bid, which represents how much money the fair would get and which was a strength of the Talley bid previously, will count for 30 percent of the overall score. Previously, it counted for half, he said.

Moot called the changes “outrageous.”

“After cancelling the RFP that Talley Amusements actually won,” he said in an email, “they have written a new RFP in such a way that Talley Amusements can no longer even submit a qualifying bid.”

But Jennifer Hellman, the marketing director for the fair, said in a statement that the changes were justified. In an email response she said that while financial considerations are a “major component” of the bid, this time the fair decided that “operational and technical factors that most impact health, safety and customer experience” would be given more weight.

She also said that the fair always intended that bidders have references from three different fairs, and that the new language is meant to clarify that. And, since the fair draws more than 1 million people, the new bid request was updated to reflect that larger attendance.

The annual fair is the largest in the state, and the sixth-largest county fair in the nation. Because of the coronavirus pandemic, no fair has been held the past two years.

This year the fair was able to put on a scaled-down event called “HomeGrown Fun” that drew about 272,000 people in June and July. The fair provides more than half of the revenues for the 22nd District Agricultural Association.

After decades as an “independent midway” — one where individual businesses that stage rides or games contract with the agency annually to provide entertainment — the district began moving in recent years to where it is now, seeking a single operator for the fairs rides, games and ticketing.