22nd DAA to Repay Paycheck Protection Program Funds, Says ‘Clarity’ Needed on Legal Status
"Several years after the loan was forgiven, we were surprised to learn that the local United States Attorney's Office had begun to question whether the 22nd DAA was technically eligible for a PPP loan under its interpretation of the 2020 CARES Act legislation," said the DAA in a statement, maintaining that it has cooperated fully with the inquiry.
The 22nd District Agricultural Association’s board has agreed to repay a federal Paycheck Protection Program loan that helped the organization stay afloat during the COVID-19 pandemic, saying that they are now seeking to “better clarify” its status under state and federal law.
The loan was later converted to a grant by the Small Business Association, meaning the organization did not have to pay it back, the DAA said.
However, the U.S. Attorney’s Office later began an investigation into whether the DAA, which owns and operates the Del Mar Fairgrounds, was technically eligible for the PPP loan.
The organization says they were blindsided by the federal inquiry.
“Several years after the loan was forgiven, we were surprised to learn that the local United States Attorney’s Office had begun to question whether the 22nd DAA was technically eligible for a PPP loan under its interpretation of the 2020 CARES Act legislation,” said the DAA in a statement, maintaining that it has cooperated fully with the inquiry.
“While we maintain that the 22nd DAA was indeed eligible, the inquiry has made one thing abundantly clear: there is a lack of clarity about DAAs’ standing as ill-defined ‘state institutions’ under the law and their eligibility for state and federal funding and grant programs.”
The DAA said they have reached a settlement with the U.S. Attorney’s Office to repay the full amount of the loan, plus interest and processing fees — a total of about $5.6 million — without penalty.
“Our Board of Directors is confident this decision will allow the 22nd DAA to move forward and get back to doing what we do best: producing and hosting cherished events and activities that bring our diverse communities together,” the statement said.
The 22nd District Agricultural Association owns and operates the Del Mar Fairgrounds on behalf of the state and is governed by a nine-member board appointed by the California governor. Fairgrounds operations are primarily funded by revenues generated by hosting events, the largest of which is the annual San Diego County Fair.
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