A deal between the city of Del Mar and the board that runs the Del Mar Fairgrounds to potentially build affordable housing on Fairgrounds property is officially off.
On Tuesday, the 22nd District Agricultural Association (DAA), which is the governor-appointed board that runs the Del Mar Fairgrounds, voted 5-3 to terminate an exclusive negotiating agreement it first signed with the city of Del Mar in 2024.
The move to kill the deal now puts pressure on city of Del Mar officials to potentially move forward with a housing project they have repeatedly rejected.
At Tuesday’s meeting, some board members argued there were too many uncertainties and moving pieces to realistically get the project going by next April 2027, when the agreement was set to expire. The state’s housing department, or HCD, gave the city of Del Mar until November of this year to secure a lease agreement.
A couple of board members also said the process thus far has been “messy” and had too much “animosity” to continue with the current agreement.
The Fairgrounds board and Del Mar leaders have had some ups and downs throughout the negotiations for this affordable housing project. In fact, the agreement has almost fallen apart twice before.
Earlier this month, there was a third incident. The Del Mar City Council held a special meeting to request a formal investigation by county and federal prosecutors into state Attorney General Rob Bonta and a member of the Fairgrounds board, Mark Arabo.
Why? City leaders became concerned that both Bonta and Arabo may have sought to block the affordable housing project proposed for the Fairgrounds because they have ties to one of the developers behind a controversial housing project proposed for Del Mar’s North Bluff called Seaside Ridge. Seaside Ridge developers are currently suing Del Mar for repeatedly rejecting their project.
Both Arabo and representatives for Seaside Ridge have denied the allegations. And at Tuesday’s Fairgrounds board meeting, Arabo voluntarily recused himself from any discussions or votes related to the affordable housing project proposed for the Fairgrounds.
“Out of an abundance of caution and for my deep respect for this board, I’m voluntarily stepping aside,” Arabo said during the meeting. “My voluntary recusal is not an admission nor a validation of the city’s [investigative] referral.”
Too Many Uncertainties
Besides the messiness of it all, some board members said their biggest concern was that the project itself had become too complicated.
That’s because the only location on the Fairgrounds property that the 22nd DAA board considered potentially viable to build the project on would need to go through an annexation process.
The site, which is currently an RV Park, is on Fairgrounds land (which is state land); however, it technically falls into the city of San Diego’s jurisdictional boundaries. So, for Del Mar to build a housing project on that land – and receive housing, or RHNA, credits for it – the city of San Diego would have to agree to annex that land to the city of Del Mar.
Del Mar officials, including Del Mar Mayor Tracy Martinez, gave public comments at the meeting assuring Fairgrounds board members that talks with San Diego councilmembers regarding a possible annexation were positive.
But board member Ted Miyahara wasn’t convinced. He made the motion to terminate the agreement because of what he said was a huge lack of certainty.
“The fundamental issue is not simply whether San Diego likes this concept, the question is whether San Diego will take the necessary government action to annex property and allow the city of Del Mar to receive RHNA credit,” Miyahara said.
He added that this being an election year adds to the uncertainty. There are four San Diego City Council seats up for election, and another councilmember, Marni Von Wilpert, is running for a congressional seat.
“Next year is going to look very different from a City Council composition standpoint in the city of San Diego,” Miyahara said. “We don’t know what the current council would do today if asked, ‘will you annex,’ and we definitely don’t know what the future council would do.”
Board member Phil Blair argued that the Fairgrounds should continue the agreement and take a leadership role in the process; if the Fairgrounds, which owns the land, is supportive of the project, then the city of San Diego, and all other agencies will likely follow suit, he said.
Another board member, Frederick Schenk, said the ultimate goal is to provide affordable housing for people who need it, adding that the board is mandated by the governor to make way for affordable housing, especially on state land.
Nonetheless, the board voted 5-3, with Blair, Schenk and Lisa Barkett opposed, to terminate the agreement. Arabo voluntarily recused himself.
With the prospect of an affordable housing project at the Fairgrounds now looking unlikely, the city of Del Mar may be forced to turn to its state-mandated backup plan: the exact North Bluff site where developers of that controversial housing project, Seaside Ridge, are ready and waiting to build.
A spokesperson for the city of Del Mar did not respond to a request for comment.