Supervisors seek audit and possible lease renegotiation with LA County Fair Assn. – Los Angeles Times
The Board of Supervisors on Tuesday ordered an audit of the Los Angeles County Fair Assn. and called for a possible renegotiation of the organization’s long-term lease in response to a Times investigation that found the fair’s managers were richly compensated even as the association lost money.
Los Angeles County Supervisor Michael D. Antonovich said he objected to the lavish compensation given to the nonprofit executives of the fair association, which operates on county land.
The Times reported Tuesday that the fair association’s chief executive, James Henwood Jr., 69, collected nearly $900,000 in total compensation in 2013, dwarfing that of other fair managers in California, according to the group’s tax filings and state records. That same year, the fair association lost $3.4 million.
From 2010 through 2013, Henwood and four members of his executive team received a combined $2.8 million in bonuses and incentive pay, boosting their total compensation to $8.75 million.
“Look at the excessive, generous compensations,” Antonovich said. “It doesn’t make for good business practice, be it a private company or a public company.”
Antonovich added that the salaries and bonuses reported in The Times story were out of line with other operators of fairs in California. “It’s not logical, or reasonable,” he said.
A spokeswoman for the fair association could not be immediately reached for comment.
Antonovich and Supervisor Hilda Solis, whose district includes the fairgrounds, proposed the motion that instructed the county chief executive to negotiate a possible amendment to the lease agreement, which currently gives the fair association nearly 500 acres in exchange for small shares of some of its revenues, such as 1.5% of the money generated by the fair and 5% of receipts from certain other events.
The county has also been giving the organization a discount on rent for the fairgrounds to help pay for the construction of a $28-million conference center that opened in 2012. The arrangement slashed the annual rent to an average of $200,000 from about $1 million in 2007.
“Any amendments should be structured to fully maximize revenue payments made by the association to the county, and ensure the continued community benefits and public good coming from the operations of the fairgrounds,” according to the motion, which passed unanimously.
The Board of Supervisors also directed the auditor-controller to conduct an audit of the fair association’s financial operations, “including all funding sources and revenue streams, along with all funds allocated to the county, governance structure, compliance with appropriate responsibilities as a nonprofit organization and all other financial matters that impact the county.”
The report is due in four months.
Follow me for the latest news in earthquake safety, El Nino, and the drought: @ronlin