California Agency Hires Consultant in Bid To Capitalize on Property Surrounding Del Mar Racetrack
By Lou Hirsh CoStar News December 29, 2022 | 3:32 P.M.
A California state agency is turning to a real estate consultant to explore the possible commercial redevelopment of a 324-acre fairgrounds property that houses Del Mar Racetrack, a nationally known staple of horse racing for the past 85 years.
Public filings show the 22nd District Agricultural Association, which oversees the fairgrounds, is looking to study demand and financial prospects for potential residential, office, retail and lodging components.
The agency’s executive board is slated to formally vote next month on its selection of San Diego-based consulting firm London Moeder Advisors, chosen this month after a competitive proposal process to conduct a review of real estate development options for at least a one-year term, with two optional one-year extensions.
The annual summer San Diego County Fair and other special events booked on the property at 2260 Jimmy Durante Blvd. in Del Mar, California, have seen declining attendance over the past decade. The trend was exacerbated in 2020 and 2021 when the county fair was among several nationwide that were canceled due to the pandemic, depriving fairgrounds operators of revenue.
The fairgrounds executive board is now reviving potential redevelopment options for the property, which have been stop-and-start through various economic cycles. New commercial elements could be added to existing restaurant and concessions facilities adjacent to the racetrack, which is owned by the state agency and operated by the Del Mar Thoroughbred Club.
According to the proposal chosen by the fairgrounds board, London Moeder will “establish conclusions and recommendations as to which land uses can succeed, at what scale, when and how to phase” as well as the best locations throughout the main fairgrounds campus to place new elements.
'Nothing Changing Overnight' In addition to a 212-acre main fairgrounds campus, the property being studied also includes a 48-acre recreational facilities area that hosts special events and a 64-acre equestrian center used by race participants and the general public. “Throughout, we will be cognizant of how to achieve these objectives for land use development while maintaining and, ideally, enhancing your existing service, events and land uses,” London Moeder Principal Gary London said in the proposal selected by the state agency.
A fairgrounds board spokeswoman told CoStar News the agency would not be commenting before the scheduled Jan. 10 meeting on prospective changes coming to the property, apart from public documents already released regarding the consultant selection. Fairgrounds agency CEO Carlene Moore told the San Diego Union-Tribune that the consultant’s work is part of a larger master-planning effort that could take several years to complete.
“I think this is an incredible step, for us as an organization, of looking to and planning for the future, and helping to make sure that we’ve created a space that is inclusive of everybody in San Diego County,” Moore said. “Don’t worry, nothing is changing overnight.” The Del Mar Racetrack opened in 1937, and its seasonal horse races have been perennial spots for sightings of celebrities and other dignitaries. Horse racing is a steady revenue generator at the fairgrounds and is expected to remain so going forward. Racetrack operators pay $1.2 million annually in rent while racing generates an additional $3 million in food and beverage revenue, state officials said.
The bid to better capitalize on the fairgrounds real estate comes as the agency expects to report a 2020 operating loss of $17.7 million for the Del Mar property, according to a draft audit released last month. The property has since rebounded as the agency reported an $18.8 million profit for the first nine months of 2022, but the facility still has more than $118 million in long-term debt and payroll obligations. State officials over the past several years have rebuffed proposals to sell the fairgrounds outright to private developers. But net operating income has been declining as costs have been rising, even as the fairgrounds attracted 3 million visitors at 300 events held annually on the property in the years just prior to the pandemic.
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