DEL MAR -- With the annual San Diego County Fair going on right now and horse racing fans getting ready to cheer on their favorite long shots, a state official Tuesday reiterated a promise that those activities will continue if Sacramento sells off the Del Mar Fairgrounds.

Hammered by the worst financial crisis in California history, Gov. Arnold Schwarzenegger wants to shop seven landmarks and 11 office buildings in a bid to generate as much as $3 billion.

One of the landmarks is the 406-acre Del Mar Fairgrounds, which was built in 1936 and sits next to the Pacific Ocean and Interstate 5, one of San Diego County's busiest freeways. The state estimates its value at $350 million to $650 million.

Its appearance last month on a list of properties to be sold prompted an outcry from fairgoers, race fans and others around the county.

But Fred Aguiar, secretary of the State and Consumer Services Agency, said in a 25-minute Webcast on Tuesday afternoon that Sacramento would structure the sale so any buyer would have to continue using the fairgrounds as a home for the fair and horse races. The site hosts the fair in June and early July, and the thoroughbred races from late July into September.

"The governor has made it very clear on Del Mar," Aguiar said. "The governor believes very strongly that because of the horse racing activity that's there right now and the horse facilities that are there … he wishes to put a price on that property as an existing horse racing entity and business. So the value that we'll place on that will be just that."

The state estimates the sale will take two years to complete.

Tim Fennell, chief executive officer for the Del Mar Fairgrounds racetrack, said he is skeptical that the state could set up a sale in a way that would prevent a buyer from discontinuing the races and fair at some point.

And Fennell said he does not believe the state would receive anywhere near the $350 million to $650 million it says the property is worth, if it were sold with the goal of continuing its present use.

He said last year the fairgrounds netted $4 million in profits, largely because of a disappointing racing season in a down economy. But even in a good year, the take tops out at about $10 million, he said.

Real estate experts have criticized the timing of the proposal, warning that the properties would fetch a much lower price than they could if the state waited to sell them when the economy recovers.

Del Mar Mayor Crystal Crawford said Tuesday she is less concerned about the state's proposal. While she understands the concerns, she said there is reason to believe the state is serious about not compromising the fairgrounds as a treasured regional recreation center.

"The public has expressed some serious concerns about what would happen with the fair and the horse racing, but it seems to me that the administration in Sacramento is sensitive to that," Crawford said.

And Crawford, a lawyer, said she's not worried about the state's ability to structure a transaction so the annual events are protected.

"Sales can be put together in an unlimited number of ways," she said.

Aside from potential contractual obligations, Crawford said, any buyer would be limited by restrictions on development in the sensitive wetlands and flood-prone areas of the property, which fronts the San Dieguito River.

"I'm not losing sleep over this," she said. "For one thing, I know that it is a long process. And two, I know that there are serious constraints on whatever happens in that area. But we're certainly watching this closely."

The fairgrounds pump an estimated $400 million annually into the San Diego County economy, Fennell said.

Other valuable coastal properties that might be put on the market include the Los Angeles Memorial Coliseum, the Orange County Fairgrounds and San Quentin Prison.

Unlike the fairgrounds in San Diego and Orange counties, Amanda Fulkerson, a spokeswoman for the consumer services agency, said a buyer of the coveted waterfront property at San Quentin would be free to develop it as he or she pleased.

"No one's intent on keeping that as a prison," Fulkerson said.

Aguiar also said the state is exploring selling 11 state office buildings around the state to unlock the equity, and leasing them back for use by state agencies.

Call staff writer Dave Downey at 760-745-6611, ext. 2623.