Plaintiffs asks for Preliminary Injunction and Declaratory Relief to stop proposed sale of OC Fairgrounds citing an illegal proposal process
Representing American Fairs & Festivals, Inc. (American Fairs), Advanced Real Estate Services, Inc. (ARES), Tel Phil Enterprises, Inc. (TelPhil) and Jeffery Teller, who is President of American Fairs and TelPhil, Alvarado Smith, APC has filed a lawsuit in Orange County Superior Court seeking to halt the Department of General Services (DGS) from taking any further steps to sell the Orange County Fairgrounds until the court determines that the bill authorizing the sale is constitutional and that the DGS bidding process was properly conducted.
As part of the state's attempt to close its budget deficit, the Legislature approved a bill in 2009 authorizing DGS to sell the Fairgrounds based on a public bidding process, as was reported in Reuters, AP and other news sources. After rejecting all bids received in a February 2010 auction, DGS illegally attempted to sell the Fairgrounds in a non-public process, according to the lawsuit filed today. When the Legislature failed to amend the law to validate the privately negotiated sales agreement, DGS conducted a second public bidding process but added minimum bid terms and conditions designed to favor one preferred buyer to the detriment of other bidders. The lawsuit states that after awarding the sale to its preferred bidder, DGS compounded its errors by failing to respond to public records requests relating to the award and not obtaining legislative approval for the sale as required by the terms of its own RFP.
In addition to a flawed bidding process, the lawsuit also claims that the RFP is based on a statute that violates the State Constitution by redirecting the proceeds from the sale to reduce the budget deficit. Under Section 9 (Article III) of the Constitution, approved by voters as Proposition 60A in 2004, proceeds from the sale of state surplus property may only be used to retire debt authorized by the Economic Recovery Bond Act.
Other defects with the bid process include uncertainty surrounding what state entity has legal authority to convey title to the Fairgrounds property and whether the federal government retains a reversionary right to recover the property if it is ever sold by the state.
"The state of Californiawas so desperate to backfill its deficit that it did not properly analyze the legality of its proposed sale of the Orange County Fairgrounds," said Ruben Smith, Alvarado Smith attorney for the plaintiffs and former president of the Orange County Fair Board. "We are asking the court to issue a temporary restraining orderto allow the time that is necessary to unravel this flawed RFP process."
Based on the faultyRFP process, the unconstitutionality of the sale and the questionof what entity currently owns the property, the plaintiffs believe the court will have no choice but to stop the unfair sale of the Orange County Fairgrounds, which many of our local legislators have requested.
Contacts:
for Alvarado Smith
Brian Lochrie
Cell:
949-294-8269