Fair's contract still in limbo

Sonoma-Marin Fair management and the City of Petaluma seem to be on opposite ends of the opinion spectrum when it comes to renegotiating the fair's $1 per year lease - which lasts through the end of 2023 - of the 64-acre downtown fairgrounds site.

While the fair is ready to restart negotiations as soon as possible, the city says that won't likely be happening any time soon.

"It's on the &‘parking lot list' of things the city doesn't want to lose track of, but it's not a high priority," said City Manager John Brown.

The fair, which initially signed the lease in 1936, has established itself as a popular Petaluma tradition and subleases the property to other vendors throughout the year to finance its annual five-day festivities.

Brown pointed out the city is locked into the current contract for another 11 years, and said that there's no pressing need to renegotiate the lease right now. He said that the city council moved fairground lease renegotiations off of their agenda this year - for the fourth year in a row - but will revisit the idea of starting talks again next year.

The last formal talks between fair management and the city took place in 2008, but the issue was shelved as the city began wrestling with severe budget cuts brought about by the economic downturn later that year. Since then, it would appear that both parties have remained incommunicado.

Fair management's eagerness to restart negotiations with the city stems from their assertion that that securing financing for infrastructure upgrades and facility renovations is difficult since financial institutions are wary of doling out long term loans when the shelf life of the fair is in question.

"Capital improvements are always an issue, especially when you only have a few more years on your lease," fair CEO Pat Conklin said in an interview this week.

Even if talks were to resume in the near future, the city's and the fairgrounds goals seem very different.

Nicole Marzo, chairman of the fair board, says that the fair is hoping to remain at its current location and keep the entire site available for fair usage. She says that the fairgrounds provide a unique community asset that delivers revenue to the city, brings tourism to the area and offers a place for nonprofits to meet.

Marzo added that the $1 lease is not unique to Petaluma, pointing out that many public institutions have low-dollar leases because they are thought to offer more to the community than their lease value.

But from the city's side, Brown said that the city's economic development plan defines the fairgrounds as an "opportunity site" and calls for the property to be developed. He said that when the city is ready to negotiate with fair management, it will want to discuss what new uses for the property would allow for a greater economic vitality of the site.

"The existing contract pretty much leaves it to the fair board to decide the use of the property. That is not an acceptable situation as far as I'm concerned," he said. "We'd like to have more authority on property we own. I think it can be a mutually beneficial operation."

Brown - along with other city council members in the past - suggested allowing the fair to use a portion of the property each year, and open the rest up for other possibilities that may generate more revenue for the city. He also said that the city may want to rethink the current $1 per year lease the fair holds, and suggested charging a sliding scale lease in which the city would retain a percentage of the fair's revenue each year.

"I think everybody can agree that it's not the highest and best use of the property as it's currently configured," he said.

But Conklin said that shrinking the space that the fair has to work with is not her first choice. "I'm running out of room for events," she said. "The fair takes up every bit of the fairgrounds and changing the size would definitely have an impact on our events."

(Contact Janelle Wetzstein at janelle.wetzstein@arguscourier.com)