Santa Clara County Considers Long-Term Deal with Fairgrounds Management Organization

After decades of short-term contracts, the organization hired to operate the Santa Clara County Fairgrounds may finally land a long-term deal that will allow it to invest in transformative capital improvements on the property.

The Santa Clara County Board of Supervisors on Tuesday will vote on a 20-year master agreement with the Fairgrounds Management Corporation (FMC). County Supervisor Cindy Chavez, who authored the board referral argues that the security of a decades-long contract will allow FMC to negotiate leases long-term enough to develop facilities such as hotels and sports complexes.

Since the county began its master-planning process for the fairgrounds, Chavez says FMC has proven itself more than capable as a management partner.

“Traditionally, the county had charged the FMC with scraping together just enough revenue from short-term uses to subsidize a money-losing fair,” she wrote in her referral. “The county kept the FMC on a short leash with one-year and three-year agreements, so the FMC could not negotiate long-term uses which could fund capital improvements. Essentially, the FMC’s role was to ‘play defense’—to keep the county’s general fund from needing to subsidize the annual fair.”

Now, Chavez says FMC is on the offensive.

“Even constrained by the limits of a three-year agreement with the county, the FMC’s current leadership has brought exciting new partnerships, including becoming the new regional home for Cirque du Soleil and hosting a major corporate event for Amazon,” per the memo. “For the first time in over 30 years, the fair itself even turned a profit in 2018.”

If the board OK’s the deal this week, better days may be in store for the county’s 78-year-old fair—a once-bustling annual event that for years has been plagued by dwindling revenues and attendance.

The 20-year agreement up for consideration is divided into three phases. During the first phase, from 2020 to 2024, FMC proposes building a new hotel, along with a family entertainment center with mini golf, arcade games and go-karts. As it enters the second phase of the agreement, from 2025 to 2029, FMC plans to build a minor league baseball stadium in partnership with San Jose Giants and ink a deal with Cirque du Soleil to operate on a regular basis at the fairgrounds. During phase three in 2030 to 2034, FMC says it will build a public market and an indoor sports facility.

Chavez also wants the county to designate 55 acres of the fairgrounds as a county park where public events will be held. “The urban area around the fairgrounds is becoming developed more and more densely,” she wrote. “As a result, there is a need for large, open spaces for residents, that are enjoyed elsewhere in our community, such as Martial Cottle County Park or the expanses of the Stanford University campus.

Most of Santa Clara County’s residents seem to agree. A county survey found that 80 percent of respondents want active recreation on the fairgrounds, while 72 percent believe that the property should be used as a public meeting and event space.

That’s one of the reasons why Chavez says she’s rejecting plans to build housing for the homeless on the site. For one, she says the county has already developed over 500 units of permanent affordable housing at the fairgrounds. And the county has adopted guiding principles outlining the core purpose of fairgrounds as being for public events. Chavez says she believes that “to diverge from the broad outlines of the master plan’s guiding principles would betray the thousands who participated in the master plan process.”

Still, findings from a Santa Clara County Civil Grand Jury report published earlier this year loom large over FMC. In their report published this past June, grand jurors slammed FMC for what they called weak fiscal oversight.

“FMC’s bookkeeper lacks transparency,” the civil grand jury wrote. “There is no realistic chance that FMC will have enough financial ability to address the backlog of deferred maintenance. The 25-year old master agreement is woefully outdated and in need of review and revision.”

On those points, the Board of Supervisors concurred. In response to the concerns, FMC has clarified details about its revenue sources. The county is also working with FMC to search for extra funding to clear its backlog of maintenance work.

The Board of Supervisors meets at 9:30am Tuesday at the County Government Center, 70 W. Hedding St., in San Jose. Click here to read the agenda in full.

Nicholas Chan is a journalist who covers politics, culture and current events in Silicon Valley. Follow him on Twitter at @nicholaschanhk.

5 Comments

  1. How the County likes to reward bad behavior. Close an airport, but reward a bad company. Dollar Dave must be getting sometimg

  2. When you fly into San Jose it stands out like a sore thumb – the County Fairgrounds. Acres and acres under-developed for decades. And in the midst of a housing shortage and homelessness crisis the County wants to use this land for entertainment venues…the home for a circus. Talk about mission creep. Time for the County to focus on core priorities. I hope the Supervisors read this before tomorrow and also get grounded in some reality. If anything, the use of the Fairgrounds now needs to come before voters instead of decided this way.

  3. Sounds like a plan. The only thing I can add is green space for residents who live nearby so they can picnic and a sports track to exercise. San Jose University no longer has the track and many people came here to run, walk, and play. There are no green spaces in this area and with all the development it is badly needed.

  4. So much for the “housing crisis”…. “We already sold 10 acres 20 years ago to developers to build 500 units” so what more can the county be expected to do? And “thousands” would be betrayed is we sold another 20 acres to build 10,000 homes? No, this is pure re-election focus-group decision-making. Not the public interest, but the interest of wealthy “suburb” voters who the supervisors know will vote them out if, heaven forbid, they aggressively move to provide more housing for low-income people.

Leave a Reply