Del Mar considering options now that investors appear to have pulled out of planned fairgrounds purchase
By Joe Tash
ContributorDel Mar officials are considering their options for financing a purchase of the county fairgrounds from the state, now that an investor group of horse owners appears to have reared back from the deal.
Last year, before former Gov. Arnold Schwarzenegger left office, Del Mar reached an agreement with the state to buy the 400-plus-acre fairgrounds — which includes a horseracing track and grandstands — for $120 million.
Of that amount, the city planned to borrow $45 million by selling bonds, raise another $45 million through a loan from the state, and the final $30 million was to have come from the group of horsemen headed by Mike Pegram.
However, in an interview published July 9 in the Thoroughbred Times, Pegram reportedly said he has given up on the deal. “Like a lot of things in horse racing, it just didn’t work out,” Pegram is quoted as saying. Pegram had not returned phone messages left by this newspaper by the time of this web posting seeking confirmation of his comments.
Del Mar Mayor Don Mosier, who along with Councilman Marc Filanc is heading up the city’s efforts to purchase the fairgrounds, said he hasn’t spoken with Pegram for several months, but was aware the investors were frustrated at the slow pace of decision-making at the state level regarding a potential sale of the fairgrounds.
“This did not come as a surprise to us. He (Pegram) told us he didn’t want to move forward with the deal right now. He wanted to take a break and reevaluate it based on the numbers,” following the current Del Mar race meet, Mosier said.
The agreement between the city and Pegram’s group, which owns a number of racehorses including 2010 Preakness Stakes winner Lookin at Lucky, was never formalized with a written memorandum of understanding, Mosier said.
“He was very enthusiastic about trying to make the Del Mar meet the premier event in the country,” bring in the Breeders Cup and improve the backstretch, said Mosier of Pegram. “In the end, we did not reach a signed agreement.”
“This was a serious flirtation but not an engagement,” he said.
While Mosier said he would like to contact Pegram to confirm whether his position has changed since their last discussion, the council at its meeting on Monday will also consider whether to issue a request for proposals from other potential investors.
The idea is to be ready if and when the state makes a decision on whether to sell the fairgrounds, Mosier said.
Momentum on the proposed sale has stalled since current Gov. Jerry Brown took office in January. A bill by state Sen. Christine Kehoe authorizing the sale has been tabled until next year. And Brown has ordered his administration to study whether the state should sell fairgrounds properties across California.
Joe Harper, president and general manager of the Del Mar Thoroughbred Club, which runs the annual race meet, said he has heard from contacts in Sacramento that the state is unlikely to move forward on selling the fairgrounds any time soon.
“At the present time the governor has no interest in selling the fairgrounds,” Harper said he has been told during recent conversations. “You can never say never in politics, but at the present time, there certainly are no plans for selling it.”
While he has not taken a position against the sale, as was done by officials with the 22nd District Agricultural Association, which runs the fairgrounds for the state, Harper said he always questioned the financial aspects of the proposed deal. In particular, he said, he was concerned that if bonds were sold to pay for the purchase, revenue currently used to maintain and improve the facility would instead go to debt service.
“I never could see the deal, where the money would all stay here,” Harper said.