Despite challenges, 22nd DAA accepts impact report

DEL MAR — The board of directors that governs the Del Mar Fairgrounds accepted as sufficient a report on the fiscal impacts the state-owned facility has on Del Mar and Solana Beach, despite criticism from officials in both cities that the study is flawed and inaccurate.

And when it was presented to the 22nd District Agricultural Association at the Sept. 13 meeting, the consulting firm that prepared the report stood by its conclusions.

Director Fred Schenk said he read letters challenging some of the data that were submitted for the record from Del Mar and Solana Beach.

“Is there anything about that which has been generated by the cities that made you question or second-guess the results that you reached?” Schenk asked Ashleigh Kanat, executive director of Economic & Planning Systems, which partnered with Johnson Consulting to conduct the study.

“No,” Kanat said. “We have a professional responsibility to make sure that we can stand by our results. … Our objective was to remain as objective as possible.

“We wanted the data to speak for itself,” she added. “So our task really was to identify data that would tell the story that was transparent and available to all. There are no impressions in here. … It was very data-driven.”

The joint study was ordered as part of a 2013 legal settlement over proposed development at the fairgrounds between Del Mar, Solana Beach, the San Dieguito River Park Joint Powers Authority and the 22nd DAA.

The three entities developed a scope of work, selected the consultant and equally split the $90,000 cost.

The consultants collected data from both cities on sales and transient occupancy taxes. They also included parimutuel revenue from satellite wagering and possessory interest tax, the latter of which only Del Mar receives.

Del Mar receives sales tax revenue from all onsite sales because the facility is in that city. Solana Beach receives no money from that source.

Information was also garnered from intercept surveys during the Good Guys Car Show, Del Mar National Horse Show, San Diego County Fair, summer thoroughbred race meet and three-day KAABOO music festival.

Additional data was collected from area businesses and city departments such as public works.

Economic benefits not included were direct employment and nontaxable spending because, as Kanat noted, it is not an economic impact study.

Also not included were quality-of-life costs such as impacts from noise and traffic, revenue area businesses lose because people avoid the fairgrounds during certain events and costs associated with incidents that occur off-site involving someone who was in the area to attend an event at the facility.

If law enforcement officers or firefighters assigned to Del Mar responded to an incident at the fairgrounds and something happened in Del Mar, Solana Beach safety personnel would be called. Those costs incurred by Solana Beach were not included.

Fairgrounds General Manager Tim Fennell said there have been times when law enforcement hired by the fairgrounds responded to incidents in the neighboring cities.

“There is give and take on both sides,” he said.

According to the study, which Kanat described as “very transparent and collaborative,” Del Mar nets a little more than $1 million annually. The annual net fiscal gain for Solana Beach is $209,400.

In their letter, Del Mar officials stated the reported TOT revenue is too high and the costs for law enforcement, firefighters and medical responders are too low. They also noted administrative overhead costs for city staff related to law enforcement, fire, medical and public works were not included.

According to the letter from Solana Beach, TOT revenues in that city “were very likely overstated,” off-track betting estimates were inaccurate and street maintenance costs for roads in the city that are heavily used to access the fairgrounds “are likely low.”

Solana Beach officials also noted the study measured the net positive impact but “ignored the potentially greater net negative” when people avoid the city during fairgrounds events.

Director David Watson, a land-use attorney, said he’s worked with multiple clients who have commissioned similar studies.

“When they’re done there’s always people that don’t like the results,” he said. “But EPS is one of the leading experts in this area. That’s why they were selected. EPS knows what they’re doing.

“There’s always going to be people that challenge results,” he added. “If you read carefully the letters from the two cities you will note not one of them is saying that there’s a net negative to the cities. They just don’t think the numbers should be as high.

“The net conclusion that I came to was you can be as nitpicky as you want but there’s still going to be a net benefit,” Watson said. “There was no scenario that anyone from the city was able to present that actually showed the reverse conclusion.”

No one from either city requested the study be redone. The 22nd DAA agreed to accept the report as is and file it with the letters from Del Mar and Solana Beach to fulfill its legal requirement.

“This study does what the settlement agreement asks us to do,” Watson said.

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