Legal battle puts Orange County Market Place reopening in jeopardy

While OC Market Place vendors wait to hear whether their beloved weekend swap meets will be allowed to resume at the OC Fairgrounds after an eight-month pandemic hiatus, a lawsuit wending its way through the system doesn’t spell good news.

The crux of the months-long legal battle is not about the Market Place’s closure but rather when it could — and should — have been reopened.

Since the swap meet closed March 12, one week before stay-at-home orders were issued statewide, Pennsylvania-based managing company Spectra Food Service and Hospitality has been trying to terminate its rental agreement with the OC Fair & Event Center, which operates the fairgrounds as the 32nd District Agricultural Assn.

In a letter to the district written in May, Spectra Executive Vice President Richard Schneider cited a “force majeure” clause that states either party can exit the contract if unable to perform for 90 days or more due to extreme circumstances.

“Anticipating that the stay-at-home order, or other government restrictions, will prevent the Outdoor Marketplace from reopening by June 12 (90 days after the closure), the purpose of this letter is to notify the association that Spectra is hereby terminating the agreement,” Schneider wrote.

The letter was sent May 20 — three days before the California Public Health Department established guidelines allowing certain Orange County retailers, including swap meets, to reopen.

OC Fair & Event Center chief executive Michele Richards immediately informed Schneider in a May 27 letter Spectra would be expected to resume operations — and rent payments — but the company has not complied. The rental agreement signed by both parties in August 2016 runs through August 2024.

Today, the site of the erstwhile OC Market Place in Costa Mesa is a scene of abandonment. Spectra’s last monthly rent check to the district was for the month of March, in the amount of $171,666.

Shoppers peruse offerings at the OC Market Place at the fairgrounds in Costa Mesa.

(File Photo)

On Sept. 23, the state attorney general’s office filed a lawsuit with the Orange County Superior Court on behalf of the 32nd District, a state agency, seeking unpaid rent.

The suit claims Spectra effectively breached its rental agreement with the district when it failed to reopen the OC Market Place after state guidelines made allowances for swap meet business to continue.

“Commercially reasonable options were made available to defendants to allow reopening of the Outdoor Marketplace, and defendants failed to avail themselves of those options in direct violation of their contractual duties and obligations to the district,” the document states.

A spokeswoman for Spectra said by email Friday company policy prohibited officials from commenting on ongoing litigation, adding, “Spectra has not been managing the OC Market Place since June 2020, so we’re unable to comment on its reopening.”

While the lawsuit does not specify the amount of damages being sought, attorneys are seeking compensatory damages, additional rent, interest and legal fees. Orange County Superior Court documents indicate a jury trial has been scheduled for Nov. 14, 2022.

On Oct. 23, however, attorneys for Spectra requested the case be moved to the U.S. District court level, citing a diversity of parties, since the amount in question exceeded $75,000 and the plaintiff and defendant are from different states.

In their filing, attorneys indicated the 32nd District was seeking “future rent under the agreement in an amount exceeding $2 million per year for each of the next four years.”

OC Fair & Event Center spokeswoman Terry Moore said officials could not comment on ongoing litigation but clarified state fairgrounds are not allowed to operate swap meets in the state of California.

Meanwhile, OC Market Place vendors, many of whom relied on weekend swap meet sales as a livelihood, are frustrated at the continued closure. Some have publicly accused the OC Fair & Event Center of not giving Spectra a break during difficult financial times.

“The management of the fairgrounds doesn’t want the Market Place,” said Mike Robbins, owner of Paradise Cigars, a company run out of a mobile humidor that has become locally iconic since the business opened in 1979. “They should be working with Spectra in any way, shape or form they can.”

Robbins said several vendors have claimed unemployment benefits during the pandemic and are finding it hard to make ends meet.

On its website, Spectra boasts a client list of more than 250 venues around the U.S. and in Singapore, including state and county fairs throughout California and stadiums nationwide.

Its legal filing discloses links between the Pennsylvania company and several other corporate entities, including Comcast Spectacor, owner of the NHL team the Philadelphia Flyers, and the Comcast Corp.

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