Saddled with $45 million in repairs and no way to pay for them, Cal Expo took a first step Friday toward selecting private redevelopment partners who could breathe new life into the aging home of the State Fair.
On the same day it approved the expansion of Bonney Field, the makeshift soccer stadium run by Sacramento Republic FC, the Cal Expo board began the search for developers for what it has dubbed “the Cal Expo renewal project.”
Essentially, Cal Expo wants to hire one or more developers to overhaul all or part of the state fairgrounds’ 350 acres with as-yet-unspecified private development. The idea is to generate enough cash to finance an estimated $45 million backlog in renovations needed for Cal Expo’s buildings, most of which were built in the 1960s and 1970s.
“We’re saying, ‘Everybody bring your ideas and your qualifications ... to the table at one time,’ ” said Rick Pickering, the chief executive of Cal Expo. “We’re looking at alternatives, we’re looking at options, we’re looking at opportunities. As an economic engine in the region, it makes sense for us to explore.”
The process was born out of years of sagging attendance at the State Fair, as well as a bout of soul-searching that took place in early 2010. That’s when the Cal Expo board rejected a complicated proposal that would have sold the entire site to developers and relocated the fair to the Natomas site that houses Sleep Train Arena. A new arena would have been built downtown for the Kings, with cash generated by the Cal Expo redevelopment.
Cal Expo’s directors were roundly criticized for killing the plan, but it served as something of a wake-up call. A consultant on the arena project said Cal Expo could raise $60 million by selling 120 acres at the western edge of the fairgrounds.
That plan died, too, in part because of a wrinkle in state law. Not only does Cal Expo not get any state tax dollars for its operations, it is required to hand over to the general fund any dollars it earns from land sales.
However, Cal Expo can keep dollars it earns from leasing property, and on Friday the board approved the release of a “request for qualifications” from interested developers.
Any redevelopment would be limited to the 350-acre fairgrounds property north of the American River Parkway levee. Another 400 acres immediately adjacent to the river is considered too environmentally sensitive to be developed.
Experts on state and county fairs applauded Cal Expo’s efforts to reinvent itself.
“Instead of just waiting for someone to come to them with the next good idea, they’re casting about for the next good idea,” said Stephen Chambers, executive director of the Western Fairs Association, a Sacramento-based trade organization that represents 150 state and regional fairs.
Chambers said other fairs have made strides in leasing significant chunks of land to private developers. A fair in London, Ontario, now boasts a hotel, performing-arts center, permanent restaurants and other amenities to form a vibrant entertainment district. “They’ve tried to create an overarching theme,” he said.
Cal Expo has already implemented that model on a limited scale with tenants such as the Raging Waters aquatic park and, more recently, Bonney Field.
The 8,000-seat soccer stadium, built in a rush last spring for $3 million, hosted consistent sellout crowds in Republic FC’s inaugural season. The Cal Expo board voted unanimously Friday to let Republic FC and its stadium partner, Ovations Fanfare, add up to 4,200 seats for next season, for a total capacity of 12,200.
In reality, Republic team spokeswoman Erika Bjork said the team will probably add 2,500 to 3,500 seats, for a total capacity of no more than 11,500. The new seats will go on the north and west sides of the stadium.
Republic FC has been pushing hard to expand its season-ticket base, in part to get admitted as an expansion team in Major League Soccer.
“We’re on track to have 9,300 season tickets,” Bjork said.
The additional seating is expected to cost $1.5 million. Like the original construction, the cost will be paid by Ovations and Republic FC.
If Republic FC is successful in getting a spot in MLS, the team plans to build a privately financed stadium at the downtown Sacramento railyard at an expected cost of $120 million or more. Sacramento is competing against Minneapolis and Las Vegas for a team, and MLS officials said last week the league plans to make a decision by next June.
The stadium will pay Cal Expo a minimum of $100,000 in rent next year. All told, Cal Expo expects to earn around $1 million this year on $22.6 million in revenue. That level of profitability isn’t nearly enough to finance the renovations Cal Expo desires, Pickering said.
State Fair paid attendance fell from 847,000 in 2001 to as low as 461,000 in 2009. Cal Expo laid off approximately 80 employees during a five-year stretch ending in 2012, leaving the agency with just 35 full-time equivalents. Since replacing the retired Norb Bartosik two years ago, Pickering, who used to run the Alameda County fair, has partly rebuilt the Cal Expo staff by hiring 15 additional full-time equivalents.
Attendance has perked up somewhat, climbing 11 percent this year to 556,000. It was the best showing in six years.