Fairgrounds manager gets 20-year extension despite poor showing

The operator is proposing some significant changes to the 158-acre property

SAN JOSE » Despite persistently drawing criticism for the way it manages the struggling Santa Clara County Fairgrounds, a nonprofit has been granted a new 20year contract to continue running the 158-acre property.

The Board of Supervisors approved the contract Tuesday at a time when the county also is contemplating redevelopment plans for the fairgrounds at Tully and Monterey roads in San Jose. Supervisor Cindy Chavez has proposed creating a 55-acre public park there and building a museum displaying historic neon signs.

The Fairgrounds Management Corp. also has proposed new uses for the site, including a family entertainment center, hotel and sports facilities for the San Jose Giants, San Jose Earthquakes and USA Cricket.

The 20-year contract allows the county to terminate the agreement at any point with 90- day written notice.

As part of the approval, Fairgrounds Management Corporation must submit a draft master plan by the end of April outlining its vision for revamping the property and must submit regular reports about its finances, upcoming projects, maintenance and capital improvement plans.

The length of the agreement is meant to provide stability for the Fairgrounds Management Corp., or FMC, which has operated on year-to-year extensions and threeyear contracts since taking over the fairgrounds in 1995.

Supervisor Joe Simitian, who abstained from voting, objected to the contract’s length, especially since the board hasn’t yet decided what it wants to do with the property.

He suggested going with a 10year contract instead.

“I think our board has frankly struggled to reach any consensus on what the property could and should look like beyond the next 10 years,” Simitian said. “Now we’re talking about a hotel, and a minor league baseball park, and office building — these are 30-, 40-, 50-year uses.”

He also pushed the FMC to provide more frequent updates so major proposals won’t get too far along without board input.

“I don’t want proposals showing up that are 95% baked, that commit us for 40 years,” Simitian said.

Chavez said she’s comfortable with the agreement because the county can end it any time. “The way this is structured, it allows for severability at anytime based on the board’s desire,” she said.

The county formed the FMC in 1995 after a previous operator declared bankruptcy. But the organization’s management practices have been criticized for years, including by a grand jury report in 2011 and another one earlier this yea that blamed it for the fairgrounds’ decline.

In its heyday, the county fair ran for two weeks and drew hundreds of thousands of visitors. But as attendance has fallen, the fair has lost money year after year.

Last year, the FMC said the fair turned a corner. Attendance nearly doubled from the previous year and the event turned a profit for the first time in three decades. Though the profit was only $14,000, that was substantially better than the $245,000 loss in 2017.

Although the FMC did not report final attendance numbers or profit or loss figures for this summer’s fair in its 2020 budget proposal and business plan, the plan partially blames the 2019 fair’s “unfavorable financial result” on the Gilroy Garlic Festival mass shooting that happened a few days before.

The organization is projecting a 9% growth in its overall revenues in 2020 and says it plans to bolster reserves as its revenues grow.

Chavez has said the county should give the fairgrounds’ new leadership a chance to perform; the current executive director, Abe Andrade, joined the organization in 2018. He was previously the chief financial officer for San Jose’s now- defunct redevelopment agency.

Andrade didn’t immediately respond to a request for comment about the new agreement.

It’s the fourth time the county has tried to redevelop the property since 1998.

In the early 2000s, the county struck an agreement to build a House of Blues concert venue on part of the site, but that fell through after a recession scuttled financing. Two other attempts in the 2000s to solicit redevelopment proposals didn’t go anywhere.

More than 1,300 people have signed a petition calling on the county to build transitional housing for the homeless at the fairgrounds, but supervisors haven’t taken up that idea. At a meeting in October, the board opted to pursue plans to revamp the fairgrounds as a public event space.

The county previously has built more than 500 units of housing on the site.