While walking around the Minnesota State Fair in recent years, perhaps you’ve admired a new or renovated building and thought, “I wonder who paid for that.” The answer is the fair itself, and a big part of that is bonding.
Since 2003, the fair’s parent organization, the State Agricultural Society, has had the ability to raise funds for new projects through bonds. That bonding authority would be expanded under HF1468, a bill sponsored by Rep. Greg Davids (R-Preston), which was laid over Monday by the House Property and Local Tax Division for possible inclusion in its report to the House Taxes Committee.
The bills would increase the state fair’s total maximum amount of bonds issued and outstanding from $20 million to $30 million. It would also repeal the expiration of its bonding authority, which is set to happen in 2025.
“Our bonding authority has allowed us to do some significant capital improvements over the years,” said Jerry Hammer, the state fair’s general manager. “It’s allowed us to save and restore the Grandstand, put roofs on major buildings, build a new Bazaar, build the West End Market and the transit hub, which is used by about half the people who attend the fair. And now we’re building a new exhibit building on the north end of the fairgrounds that will highlight all that’s great about Minnesota traveling.
“We’ve used the authority four times since we first received it in ’03. The $20 million, when you factor in inflation, is more like $14 million. This is just to get us caught up and get things in good shape, where we’ll be able to continue major capital improvements to the fairgrounds. … We’re also on a very aggressive debt retirement program. Today, we have $20 million in debt we’re carrying, because of a construction project, but that will be gone within seven years.”
Rep. Linda Runbeck (DFL-Circle Pines) asked about the recent collapse of a section of the fair’s cattle barn under heavy snow.
“We’ve been there before,” Hammer said. “We had a major storm 12 days before the fair started in 2007. We got everything back up, and it wasn’t even noticeable come fair time. Insurance is taking care of the cattle barn roof.”
Rep. Kaohly Her (DFL-St. Paul) asked why there was a sunset provision in the legislation that established the fair’s bonding authority in 2003.
“We’d never done anything quite like this, with a quasi-state agency having bonding authority,” Hammer said. “So the intent was to check back in five years and see how we’re doing. Since then, that sunset has gone from five years to 10 years, which it is now. With 16 years of experience and four major projects and more on the horizon, I think it’s been pretty well established that we’re able to manage the debt.”