After more than two years of negotiations, the City of Calistoga has reached an agreement with the county to purchase 34.3 acres of the Napa Fairgrounds property for $7,171,500.
The city council and the county board of supervisors unanimously approved the transaction on Tuesday.
It’s a rare occurrence for a town this size to own this much land in city limits, officials said. “This is one of the most important things to happen to Calistoga in 80 years,” Mayor Chris Canning said of the deal.
The purchase includes the Fairgrounds and Great Lawn, the Calistoga Speedway, St. Helena RV Park, and several buildings including the Tubbs, the Art Center, and community facilities. Basically, it’s everything except the Mount St. Helena Golf Course and clubhouse, and the adjacent single-family residence on Grant Street, which the county will retain.
Within three days the city is required to post a $100,000 refundable deposit that will go towards the purchase price. Once the agreement is signed, due diligence kicks in for a period of 120 days. Barring any unforeseen issues, escrow is expected to close approximately Feb. 15, 2020, according to the staff report.
The immediate fiscal impact is a $200,000 budget adjustment, and the city will need to borrow up to $8.5 million to help pay for the purchase and the associated costs, said City Manager Mike Kirn. In a nutshell the purchase will be paid for with bonds, and there will be no immediate financial impact to the General Fund, the report states.
Canning said the city is anticipating much greater hotel tax revenue in the coming year, with the new Four Seasons and Calistoga Hills resorts being completed.
Although residents are eager to know what will happen with the fairgrounds under city ownership, Kirn advised that for now, this is “just a real estate transaction,” and the city is not deciding at this point what to do with the property.
As stated in the agreement, the city does not have any current plans to change the uses of the property, and the mayor has said in the past the property will remain for community use.
As approved by the planning commission, the staff report states “The city would potentially enhance the visual appeal and recreational facilities of the fairgrounds,” and “The importance of the Napa County Fairgrounds should be recognized as both a recreational resource and as a location for community activities,” in keeping with the conformity of the General Plan.
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The terms and agreements of the deal do state the city is buying the property “as-is,” and “The county is not responsible for any costs related to the removal or cleanup of improvements, personal property, hazardous materials or dangerous conditions located on or affecting the property.”
The city is aware that the fairgrounds, including the buildings and facilities, have suffered from neglect and will need improvements or replacement.
The county has said to the best of their knowledge there are no major hazardous waste sites buried at the fairgrounds, and “and we’re fairly confident there are no smoking guns,” Kirn said, adding the city has already enlisted an agency specifically to help identify any such problem areas.
“The most important thing is to move forward cautiously in next 120 days,” Kirn said, adding the city will be looking in every nook and cranny, and deciding if buildings should be shuttered or repaired.
“We all know there will be significant challenges to fix it up,” Canning said. Should the city find anything too significant, there is an “out clause” in the agreement. Under city ownership, “This is not going to cease being an asset for county, but we stand a chance of being a better landlord, as they will admit. We’re in a good place with our friends over at the county.”
One of the most significant stipulations in the agreement states that if the city sells the property, or enters into any new long-term leases (not including existing leases) over the next 20 years, it will be subject to revenue sharing with the county.
The city could, however, make improvements and expand the RV park, for example, without sharing revenue with the county, Kirn said.
“It’s in our best interest to look at how to generate more revenue keeping in mind public interest,” he said.
Other stipulations of the sale state the county is responsible for installing new utilities, including water and sewer connections from the golf clubhouse to the residence located on the property.
Also, if the county wishes to sell the golf course in the future, it is obligated to offer it to the city for purchase first.