Report 2016-106 Recommendation 9 Responses
Report 2016-106: Los Angeles County: Weak Oversight of Its Lease With the Los Angeles County Fair Association Has Likely Cost Millions of Dollars in Revenue (Release Date: November 2016)
Recommendation #9 To: Los Angeles County
To protect its interests and maximize its future revenue, the county should strongly consider ensuring that any potential amendment to the lease includes terms that require the association to provide the county with advance notice of any refinancing of the association's debt and what impact, if any, such transactions would have on the amount or timing of rent payments to the county.
Annual Follow-Up Agency Response From November 2021
County and Fair Association have executed Amendment No. 6 to the Lease that addresses this issue. Will send a copy of the amendment to the e-mail address set forth below.
- Completion Date: September 2021
California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented
The amendment includes provisions for notifying the county of any refinancing of the Fair Association's debt and the impact such transactions would have on the amount or timing of rent payments to the county, if any.
Annual Follow-Up Agency Response From January 2020
County's proposal regarding a revised rent structure and regarding revised encumbrance terms is being evaluated by the Association. Amendment should be completed by the end of calendar year 2020.
- Estimated Completion Date: End of calendar year 2020.
California State Auditor's Assessment of Annual Follow-Up Status: Pending
Annual Follow-Up Agency Response From November 2018
County has been and continues to negotiate with LACFA on the proposed amendment. The County intends to revisit the debt encumbrance provision as part of the amendment negotiations.
- Estimated Completion Date: TBD
California State Auditor's Assessment of Annual Follow-Up Status: Pending
1-Year Agency Response
The County continues to have dialogue with LACFA on the proposed amendment. The County's objective is to protect its interests and maximize its future revenue. The County will include in its negotiations language addressing the LACFA's debt.
ANTICIPATED COMPLETION DATE: TBD- the County's ability to successfully implement this recommendation is dependent on LACFA cooperation.
- Estimated Completion Date: TBD
- Response Date: November 2017
California State Auditor's Assessment of 1-Year Status: Pending
6-Month Agency Response
The County has begun dialogue with the new leadership at the LACFA in an effort to reach agreement on the direction that this potential amendment will take. The County's objective is to protect its interests and maximize its future revenue. Accordingly, The County will ensure that all terms of a potential lease amendment adhere to current market value and ensure the County remains whole at all times.
Anticipated Completion Date: TDB- the County's ability to successfully implement this recommendation is dependent on LACFA cooperation.
- Estimated Completion Date: TBD
- Response Date: May 2017
California State Auditor's Assessment of 6-Month Status: Pending
60-Day Agency Response
The County acknowledges and agrees with this recommendation and will consider it when preparing to negotiate a potential amendment to the current ground lease and operating agreement. The County's ability to successfully implement this recommendation is dependent on LACFA cooperation.
- Estimated Completion Date: TBD
- Response Date: January 2017
California State Auditor's Assessment of 60-Day Status: Pending
All Recommendations in 2016-106
Agency responses received are posted verbatim.