A potentially pivotal meeting on an arena land swap proposal and the state fairgrounds' future is set for Friday, when California Exposition and State Fair officials may decide on the project's fate.

The agency's board of directors is expected to either vote on selling Cal Expo and swapping that fairground site for one in Natomas or postpone a decision to allow time to consider developer Gerry Kamilos' latest proposal, which includes privatizing operation of the new site.

Cal Expo's board of 10 volunteer directors must decide how to upgrade the aging facilities for the state fair and events held by trade groups and others on the grounds. Richard Cuneo, Operations and Planning Committee chair, said his decision will be guided by the need to protect taxpayers' investment while improving the 42-year-old fairgrounds.

"My intention is to get the best arrangement for the taxpayers of the state of California, and secondly, to support, enhance and expand the state fair on an annual basis," said Cuneo, a Sonoma resident and longtime board chairman for Sebastiani Vineyards & Winery. "In order to increase the viability and basic economic life of the fair, we need to continue to focus on the year-round acceptance of this property."

The Cal Expo board will hold a joint public hearing at 9:30 a.m. with the State Fair Leasing Authority prior to an 11:30 a.m. board meeting.

Consultant Andy Plescia will present his team's analysis of the original proposal. After determining the deal was not in the state fairgrounds' best interests, Plescia is recommending that Cal Expo stay put and sell part of the land to help finance the site's modernization.

Previously, Plescia served as the city of Sacramento's economic development director and as deputy director for the Capitol Area Development Authority. As a consultant, he's worked on a development project with the Madera District Fair in the Fresno area and with the state of California on the Cow Palace Project in Daly City, where he recommended how to develop some of the property, said Brian May, Cal Expo’s deputy general manager.

Following Plescia's presentation, Kamilos will formally present a modified proposal submitted earlier this month and ask the board to extend a negotiating period set to expire Saturday.

If the board decides to approve the land swap or remain in place but sell part of the land, the matter would be passed on to the governor's office. The State Fair Leasing Authority and state agencies such as the Department of General Services, Department of Finance and the Department of Food and Agriculture would have to sign off on the plan.

Cal Expo officials can't sell property without legislative authorization and the governor's approval. State Senate President Pro Tem Darrell Steinberg of Sacramento has agreed to introduce such legislation. The legislation would be reviewed in at least one legislative hearing and must be approved by the Senate and Assembly, before going on to the governor.

In May, Gov. Arnold Schwarzenegger included Cal Expo on a list of state properties to be sold to help solve the state's financial problems. Schwarzenegger has said he wants to see the land swap process completed before moving forward on selling Cal Expo, said Cal Expo's General Manager Norb Bartosik.

Cal Expo's board has 11 seats. All but one are filled. Nine are appointed by the governor with the consent of the state Senate. One is appointed by the Assembly speaker and another by the Senate Rules Committee.

Board members include Chairman Gil Albiani, an Elk Grove real estate broker; Vice Chairman Corny Gallagher of Fair Oaks, senior vice president of agribusiness for Bank of America; Cuneo; Rex Hime of Loomis, president and chief executive officer of the California Business Properties Association; and Amparo Pérez-Lemus of Davis, who has been a vice president with Bustos Media, according to Cal Expo’s website.

Other board members are River City Communications President Marko Mlikotin of Folsom; Orange County Farm Bureau executive director Kathleen Nakase of Huntington Beach; Sacramentan Steve Beneto, owner of Beneto Inc., which sells and leases jets worldwide from a West Sacramento base and former owner of Beneto Bulk Transport, which transported bulk petroleum nationwide; Bert Johnson of Los Gatos, who founded Good Samaritan Hospital; and Paul Stacey of Visalia, vice president of finance and administration and chief financial officer for Visalia Citrus Packing Group.

Albiani could not be reached for comment.

Representatives of Steinberg and Assemblyman Dave Jones of Sacramento — both nonvoting, ex-officio board members — are expected to attend Friday's meeting.

The board's decision will consider what "makes the most sense" for the state fair and allows Cal Expo to continue to be a "good neighbor," Hime said.

"We are on 42-year-old grounds that are showing their age. We are faced with ADA and seismic-safety issues," he said. "I think we're just looking for what's good for the state, the fair and the people of the region."

California State Fair photos by Kati Garner.