
A federal investigation revealed that the Del Mar Fairgrounds’ management unlawfully acquired a $4.7 million PPP loan.
At a Glance
- Del Mar Fairgrounds agreed to a $5.6 million settlement for misusing PPP funds.
- The 22nd District Agricultural Association (DAA) was ineligible for the PPP loan as a government-owned entity.
- The settlement reached without any admission of wrongdoing.
- The loan helped the DAA survive financially during the pandemic.
Settlement and Inquiry Details
The Del Mar Fairgrounds and its CEO reached a $5.6 million settlement over allegations of misused PPP funds. The 22nd District Agricultural Association, which operates the fairgrounds, agreed to pay this sum to resolve claims that it was ineligible for a $4.7 million loan. The Department of Justice asserted that the organization, as a government-owned entity, was not qualified to receive such funds. The loan was forgiven, which contributed to $4.7 million in principal costs and $97,890 in fees and interest.
The settlement was made to avoid litigation costs without determining liability, allowing the DAA to maintain its eligibility for the loan. The fairgrounds, heavily impacted by the pandemic, claimed transparency in applying for the loan and expressed surprise when the federal investigation commenced. They now plan to work with lawmakers to clarify DAAs’ eligibility for state and federal funding.
The Del Mar Fairgrounds announced Tuesday that they have returned a $5.6 million federal PPP loan to settle a dispute with the U.S. Attorney’s Office, which argues that they were not eligible for the COVID-era funds in the first place. @itslaurasplace https://t.co/Sfgg392NIy
— The Coast News Group (@coastnewsgroup) October 23, 2024
The PPP Loan Controversy
The Paycheck Protection Program was created to support eligible small businesses and exclude government-owned operations. The U.S. Attorney’s Office emphasized the ineligibility of the DAA under these terms, noting that the loan and its forgiveness amounted to a significant misuse of taxpayer money. However, the DAA defended its position, stating that applying for federal aid was necessary for survival during 2020 when mass gatherings were restricted, cutting off primary revenue streams.
“This settlement upholds the integrity of the COVID relief program and holds the DAA accountable for obtaining millions in taxpayer-funded benefits to which they were not entitled.” – San Diego U.S. Attorney Tara McGrath
The DAA insisted that the PPP loan was crucial in maintaining operations, as the organization generates significant tax revenue and contributes to the regional economy. The funding enabled the fairgrounds to weather the financial storms, ensuring that vital events like the San Diego County Fair could continue post-pandemic. Going forward, the organization plans to refocus on its community roles and hosting various events.
Del Mar Fairgrounds to pay $5.6M to settle pandemic-related loan allegations https://t.co/2WAb2HWNB2
— FOX 5 San Diego (@fox5sandiego) October 23, 2024
The Road Ahead for Del Mar Fairgrounds
As part of their future endeavors, the 22nd DAA aims to collaborate with legislators to enhance clarity over government-owned entities’ eligibility for financial programs. They have asserted their commitment to transparency, hoping to protect their institution from future uncertainties. The association also looks to continue providing economic benefits locally, with an eager eye on hosting community activities and events.
The fairgrounds will now likely scrutinize eligibility requirements closely, leveraging their experience to inform future practices. As a vital community touchstone, returning to normal operations remains their highest priority, reflecting the desire to bounce back stronger from an unparalleled global crisis.
Sources:
- Del Mar Fairgounds to pay $5.6M to settle allegations it was ineligible for PPP pandemic loan
- California Fairgrounds to Pay $5.7 Million Settlement Over COVID Loan