The Solana Beach City Council reviewed the final draft of the Del Mar Fairgrounds Fiscal Impact Report Wednesday and picked holes in many of its conclusions.
The study, conducted by Economic and Planning Systems, or EPS, concludes Solana Beach has an annual net fiscal benefit of $209,000 from the fairgrounds, after certain revenues and expenses are weighed.
But City Council members expressed skepticism about nearly every measurement and complained that the report did not address quality of life issues like traffic and noise.
The study was done as part of a settlement agreement between the fairgrounds and the cities of Del Mar and Solana Beach in 2013 after the fairgrounds filed plans to build a hotel and condos on site in 2011. Those plans have been scrapped.
But Solana Beach and Del Mar continue to have problems with the fairgrounds. The study was considered one way to assess costs versus benefits.
Two residents from the city of Del Mar spoke at the meeting and called the report “a folly,” and some of the research conclusions “laughable.”
Del Mar‘s finance committee has also reviewed the report and the full Del Mar City Council will review it next month.
The study concludes Del Mar makes a net gain of about $1 million annually from hosting the fairgrounds.
Ashleigh Kanat of EPS acknowledged that the report only covered certain quantifiable revenues and costs, such as income from sales tax, transient occupancy tax and off-track betting. Expenses were limited to sheriff and fire responses, road repairs and general government costs.
Solana Beach Mayor David Zito said other studies have put a dollar value on the hours spent sitting in traffic jams. He said it is hard to believe that an increase in crime during fairground events only adds up to 5 percent of the cost of one sheriff’s deputy.
Solana Beach City Council member Lesa Heebner said other fiscal impacts were not taken into account: local restaurants complain they lose rather than gain business during fairground events because people avoid the area when it’s crowded with traffic going to shows.
Heebner said people don’t usually choose to access the fairgrounds from Del Mar Heights Road, driving through Del Mar: rather they use Via de la Valle and Loma Santa Fe, which is in Solana Beach. She questioned why the report shows only $17,000 in public works costs for Solana Beach and $44,000 for Del Mar.
Heebner also said that the city used to benefit from off-track betting to the tune of $100,000 a year and now that share has dropped to about $30,000. The report states Solana Beach earned $42,700 from off-track betting last year, while Del Mar receives $115,600.
“A good case can be made that Solana Beach is impacted far more than Del Mar is,” Heebner said after the meeting. “And we are getting less in monetary reward.”
Russ Penniman, president of the 22nd Agricultural District, which runs the fairgrounds, spoke at the Solana Beach meeting and described the challenges facing horse racing in Southern California. He said overall revenue from horse racing is falling, even though the Del Mar Fairgrounds have picked up an extra fall meet as a result of other racetracks closing.
Penniman said the Del Mar Fair Board is considering other ways to increase revenues so the aging exhibition halls can be replaced. Kaaboo, a three-day music festival that held its first event last year, drew large crowds.
But noise complaints led the city of Del Mar to declare in December 2015 that the fairgrounds had violated the 2013 settlement agreement.
Solana Beach's Zito said his city appreciates having the fairgrounds next door.
“Solana Beach wouldn’t be Solana Beach without the fairgrounds” he said. But Zito said he wished the study was able to better assess the impacts.
The Solana Beach council voted to send the report to the finance committee next month for further review, and urged the report's authors to consider its comments.
