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The City of Calistoga has asked Napa County for an extension of due diligence in its process of purchasing the Napa County Fairgrounds, and has delayed final approval of a financial model to fund the purchase.

On Nov. 19, the council cited an ongoing dispute between the county, the Napa County Fair Association and a third party over an estimated $1.4 million investment in equipment at the Speedway, as a possible reason to extend due diligence.

The city decided Tuesday it also wants time to confer with legal staff on whether to pursue an environmental study on the property.

The city was set to approve a financing model at the Dec. 3 council meeting, but upon discussion of possible toxic substances in the ground from the Speedway, and lead and asbestos in the buildings, the council wants to determine the need to pursue a phase one assessment study.

“It is my recommendation that we do not enter into a financial agreement (at this time) and revisit legal counsel on the necessity of the study and the impacts of the assessment,” said Mayor Chris Canning.

In August, the city reached an agreement with the county to purchase 34.3 acres of the fairgrounds property for $7.2 million. The deal is now in due diligence, with escrow expected to close approximately Feb. 19, 2020. The city has until Dec. 18 to complete its due diligence and another 60 days after that to close on the property, according to a staff report.

Canning said the city formally asked the county for an extension of due diligence on Tuesday.

At issue is possible soil contamination from used oil at the Speedway, and due to the age of the buildings, environmental issues like lead and asbestos are not uncommon, said City Manager Mike Kirn.

Kirn said the county has been periodically looking for hot spots, and he is comfortable going forward with the county’s disclosures during the sale process.

“There have been no disclosures from county of anything else they are aware of,” he said.

Council Member Don Williams said he was “inclined to see a phase one assessment for an environmental decision, and then decide whether to proceed with phase two for finding (possible) toxic, or not, environmental conditions of the fairgrounds. This is an important process,” he said.

As for the dispute over the equipment installed at the Speedway by a third party, Canning said the city will not get involved, but wait for a resolution.

“We are not interested in purchasing the property until the dispute or conversation is completed. Use of Speedway will be considerably impacted by what happens,” he said.

Based on the request for an extension of due diligence, the city will postpone a final decision on financing action. Financial advisers at the meeting said the city is not at risk for putting the final decision on hold and the documents won’t need to be changed.

The city council previously approved the issuance of 30-year bonds. It is anticipated that the financing will generate $9 million toward the purchase and pay for some much-needed improvements.

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You can reach Cynthia Sweeney at 942-4035 or csweeney@weeklycalistogan.com.

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The Weekly Calistogan Editor

Cynthia Sweeney has been editor of The Weekly Calistogan since July, 2018. Previously, she was a reporter for the St. Helena Star, and North Bay Business Journal. She also spent a significant amount of time freelancing in Hawaii.