MICHIGAN STATE FAIR & EXPOSITION CENTER

AUTHORITY BOARD OF DIRECTORS MEETING

October 10, 2007

Pursuant to notice duly given, a meeting of the Michigan State Fair Authority was brought to order by Mr. Mark T. Gaffney, Chairman, on this date, beginning at 1:10 PM, in the Administration Building, Conference Room, at the Michigan State Fairgrounds, 1120 W. State Fair Avenue, in Detroit. 

PRESENT:     Mark T. Gaffney, President Michigan AFL/CIO (via teleconference)

                        Kenneth J. DeCock, Partner of DeCock and Sons LLC/Boyka's Farm Market

                        Pat G. Albright, Owner of Albright Farms

                        Elaine Driker, Former Director, Detroit Orientation Institute @ WSU

                        Robert G. Porter, Mayor of the City of Ferndale

                        Edward Deeb, President & CEO of MI Food & Beverage Association

                        Lisa Webb Sharpe,Director, Michigan Dept of Management & Budget

                        Jeff Haarer, Representing Don Koivisto,  Director of MDA

                        Steven R. Jenkins, MSF General Manager

ABSENT:       Thomas G. Coon, Ph.D., Professor and Director of MSU Extension

Also Present:    Robert Burns, DMB, Governmental Affairs

                         Mitch Irwin, North American Midway Entertainment

                         Danny Houston, North American Midway Entertainment

                         Ron Salley, Salley's Alley

                         Byna Camden ICARE and surrounding State Fair resident

                         Margaret Fletcher, MSF Finances

                         Johnnie Bennett, MSF Secretary

ACCEPTANCE OF AGENDA and APPROVAL OF MINUTES

ON MOTION BY Mr. Deeb, supported by Mrs. Driker and carried, the agenda was accepted for today's Board meeting with one change being made: Chairman Gaffney greeted everyone and stated it was his desire to waive the Chairpersons report for today's meeting of the Board.  The MOTION passed unanimously.

ON MOTION BY Mr. Albright, supported by Mr. Deeb, and carried, the minutes of the meeting held on September 12, 2007 were reviewed and approved with the following correction being made: Under the section of "New Business"  in the 2nd paragraph, the word "Doom" should be corrected to read "Dome".  The MOTION to approve the previous minutes was unanimously passed.

GENERAL MANAGER'S REPORT

Mr. Jenkins gave a brief wrap-up and recap of the 2007 MI State Fair:

The overall attendance was up by 2% from the previous year. There was an increase of 10% in sponsorship dollars from last year.  The Livestock Auction set records with an increase of $40,000 in sells from the previous year.  Mr. Jenkins was also very happy to report a ride revenue record was set for the Midway.  He added that since the State Fair receives a good portion of the ride revenue, when their revenue goes up, so does ours. 

Mr. Jenkins reported many favorable comments were received as it relates to how well the 07' Fair was put together and the added new attractions such as The Building of Science and Technology Center.  He stated the main drawbacks or continuing areas of complaints were focused on the highlighting of the Agricultural Exhibits and the number of vehicles displayed in front of the Miracle of Life Birthing Exhibit.  Mr. Jenkins stated that at the suggestion of Jeff Haarer, he made contact with Robert Creagh of the Michigan Dept. of Agriculture and now he will be meeting with the Executive Directors of the various commodity groups on November 6, 2007, in the Michigan Farm Bureau offices, in Lansing.  Mr. Jenkins stated it is his hope that we will be able to solicit their input and enlist their support and that the various commodity groups will tell us how we can better highlight them at the State Fair and encourage greater participation from the various individual commodity groups. 

Mr. Jenkins reported that while not surprised, he was certainly very disappointed recently to receive a letter from the Michigan Farm Bureau, indicating they had opted from both a budgetary and resource perspective to not come back and sponsor the Miracle of Life Birthing Exhibit for 2008.  Mr. Jenkins stated there might be an opportunity for him to meet with President Wayne Wood on November 6th while attending the commodity meeting at Michigan Farm Bureau.  Mr. Jenkins stated that if possible, he would like to present to Mr. Wood, the 2007 MI State Fair Sponsorship "Thank you" gift and also he would like the opportunity to begin discussions as it would relates to new ideas, areas and attractions where the Farm Bureau may be able to participate at the Fair.  Mr. Haarer reported that it is his impression that the UP State Fair received the same notice from Michigan Farm Bureau indicating also their decline to return.

Mr. Jenkins reported that while some of the concern is financial, in terms of Michigan Farm Bureau leaving, the greater concern is with regards to the people resources and the wonderful livestock volunteers who were always able to provide information to the public and those who had questions about the animals.  Mr. Jenkins stated that while sponsorship dollars can be replaced, the livestock knowledge and farm animal information that MI Farm Bureau volunteers bring to the Fair would definitely be the greater loss.  Mr. Jenkins reported he will pursue these discussions with President Wood and hopefully Michigan Farm Bureau would be willing to consider new areas of involvement with the State Fair.

A discussion was held at length regarding Michigan Farm Bureau's decision to pull out and some of the concerns expressed by various commodity exhibitors, as it relates to the conditions of the Fairgrounds and the much needed repairs, especially in the area of exhibitor restrooms and shower facilities.  Mr. Jenkins stated that we recently reviewed a list of needed repairs and these concerns will be addressed before the 2008 State Fair.  Mr. Albright agreed to provide Mr. Jenkins with a full list of repairs and renovations needed.  He stated the top areas on the list to be considered for repair were restrooms and shower facilities for the exhibitors.  Mr. Albright stressed one of the biggest problems we suffer is not so much as the location of the Fair, but rather it has to do with how the State Fair is perceived.  He added that the continuing needed repairs have caused some exhibitors to no longer participate and/or visit our Fairgrounds.

A suggestion was offered by Director Webb Sharpe to have the Board put together a letter and send it to Michigan Farm Bureau conveying our disappointment with their recent decision to pull out support from the State Fair.  Thus, we would like to extend to them a meeting opportunity, where we may be able to come together and look at other options and ways in which we can work through some of the details of their involvement at the Fair.

ON MOTION BY Mayor Porter, supported by Mr. Deeb, and carried, a MOTION was made to have the Board draft a letter to the Michigan Farm Bureau expressing our disappointment in their decision to leave the Fair, however, we are fully committed and have requested and directed the General Manager of the Fair to move forward and arrange a meeting with Michigan Farm Bureau in an effort to address and accommodate their concerns.  The MOTION passed unanimously.

Mr. Albright stated Ferndale, Michigan is a really wonderful city and should be greater promoted as one of the surrounding areas and sites where Fair exhibitors could find nice hotel accommodations while exhibiting at the Fair.  Mr. Jenkins stated we are hoping to educate the public and get them to see the Fairgrounds as more of a year-round entertainment campus and event center and not merely a two-week annual event held at the end of each summer.  Mr. Jenkins stated that it is his hope that families will soon have a different image of the Fairgrounds and that they will consider our monthly calendar of events when planning weekend activities for their family.  Mrs. Driker suggested we contact WWJ Radio to look into the possibility of promoting Fair events on their "Great Stuff" program.

Mr. Jenkins reported on new and upcoming events to be held at the Fairgrounds:

Little Caesars and Wayne State Men's Hockey continues to lease the State Fair Coliseum for their Ice Hockey events from September through April.

Joe Dumar's Fieldhouse is open once again for Basketball events in the Agriculture Building from late September through April.

Dave Bergman, former Detroit Tigers, is holding Baseball "The Hitting Zone" events in the Michigan Mall Building.

Mr. Jenkins was happy to report that we have now confirmed a rental arrangement for the Dairy Barn to hold Equestrian "Horse" events almost every day beginning this December.  Mr. Jenkins added that this group has also agreed to make necessary improvements and renovations to the building, which would include the restrooms and windows.  The Equestrian event will include training sessions as well as open riding shows for the public.

Mr. Jenkins stated that the Fair will now feature "Hockey, Hoops, Hits, and Horses" and he added one more event that would complete the "H" showcase at the Fair: "Haunts".

Mr. Jenkins reported Adam Gottlieb, President and Owner, of Hart Medical and Dave Grossman, President and Owner of Pegasus, are promoting a Halloween event, "Scaregrounds at the Fairgrounds" every day for two weeks leading up to Halloween night.  Mr. Jenkins distributed a calendar of events to the Board members and invited them to attend the events and share the information with their families.

A brief discussion was held regarding whether or not the Fair should be spending additional monies to promote and advertise events throughout the year for our various partners who hold activities at our Fairgrounds.   Due to the lack of funding to support the Fair year round, it was agreed the Fair should concentrate mainly on promoting the Fairgrounds as a great rental location and potential event site for interested customers and potential partners.

Mr. Albright stated that because we do not have a marketing person in place it is really difficult for us to truly understand and appreciate our full potentials and abilities as a rental site.  He added that a marketing person would be able to research other venues and make comparisons on what we are charging for various rental arrangements and agreements.  Mr. Jenkins reported that our rental customers are responsible for paying the utility expense for their event i.e. lights and heating and we also bill them for maintenance set up and tear down and security needs for each event.

FINANCIAL REPORT

Mr. Jenkins distributed various financial documents that highlighted much of the year-end closing details.   The first report showed a roll up of our year-to-date account tracking items, such as the utility bills, Fairground administrations, maintenance operations, community arts, livestock, entertainment and a variety of other invoices.

The second document detailed all of the information on purchase orders we have for this year, as well as what we have already spent monies on.  Mr. Jenkins stated this report will show a large amount of our purchases, but he was certain it did not include everything.  He stated the report was 95% accurate and complete and we should have all of our numbers of FY 07 by October 19, 2007.

The last document distributed highlighted the various staff and partner efforts, which contributed to a reduction in our 2007 expenditures.  Mr. Jenkins complimented Director Webb Sharpe and the Department of Management and Budget (DMB) on how they worked so closely with us to help us control our expenditures this year.  Mr. Jenkins added that we were very fortunate to have their advice, suggestions and counsel and he further stated that if DMB would forgive us the charges for using their staff, we would be very close to breaking even this year. 

Mr. Albright complimented Mr. Jenkins and his staff on how early the premium checks were mailed out this year.  He stated that while premium checks is not the motivation for his families involvement at the State Fair, it is certainly nice for all of the exhibitors when their premium checks are received in a timely fashion.  Again he thanked Mr. Jenkins and staff for their hard work and dedicated services.

Director Webb Sharpe commended Mr. Jenkins and his staff members also for the hard work and wonderful job accomplished as it relates to driving the expenses this year for the Fair.

Director Webb Sharpe and Chairman Gaffney both agreed that an overall analysis should be presented and reviewed at the next meeting of the Board in November.  It was suggested that the Board would review and take a closer look at the daily Fair activities.  I.e. daily attendance, the breakdown of how many children and adults attend the Fair each day, ride cost and revenue on given days, nightly entertainers and weather conditions and it was further agreed that the same information from the previous year would also be included in this review.  A brief discussion was held regarding how "Kids Free Days" and discounted ride-all-day wristbands affected the overall success of the Fair. 

Mr. Jenkins reported that the attendance for children at the Fair was up by approximately 47,000 compared to last year.  He also stated the Fair was able to save money this year in the area of golf cart rentals and in the area of our daily Parade activities.  Mr. Jenkins reported that in 2006 the Fair spent $26,000 to rent golf carts, while this year we only spent $16,000 by assigning less carts to staff members who may have only needed cart transportation for a very limited amount of time.  He added that instead of paying $20,000 for the marching bands each day, we entered into an agreement with Joan LeMahieu, President of the Parade Company and we held our first Marching Band Competition.  We awarded the winning band $900.00 and they also will appear in this years Thanksgiving Day Parade held every year along Woodward Avenue.  Mr. Jenkins was happy to report the winning band will also represent the State Fair in the Thanksgiving Day Parade.   The Board thanked Mr. Jenkins for such a detailed Financial Report.

OLD BUSINESS

The Board welcomed Mr. Salley to today's meeting and Mr. Jenkins stated that he had recently received a drafted Letter of Intent from Mr. Salley, which had been requested by the Board at the previous Board meeting held in September.  Mr. Jenkins stated that the letter was to include time frames and details as it related to the Board's commitment to the proposal made by Mr. Salley.  Mr. Jenkins reported that after reviewing the drafted Letter of Intent, he then sent his suggestions, revisions and response back to Mr. Salley.

Mr. Salley thanked the Board for allowing him time and a place on the agenda today.  He stated his primary reason for coming today was to request from the Board a letter clearly indicating the proposed property in the old Softball City area would not be open for negotiations to any other perspective clients during an agreed period of time.  Mr. Salley asked the Board to allow him an exclusive agreement on the proposed land for an agreed upon period of time until his financial backing was secured and confirmed for the construction of a 100-lane Bowling Alley and Family Entertainment Center.

Mr. Jenkins stated in his recent communications with Mr. Salley that the Board would be very reluctant to enter into an exclusive agreement with him that supported the idea of closing the door to potential partnership arrangements with other groups that may very well already have their financing in place. 

Mr. Salley once again stressed the importance of having a firm letter of commitment and a Letter of Intent from the Board in order for him to be able to go out and secure finances for the proposed Family Entertainment project.  Mr. Jenkins reviewed the request made by Mr. Salley today and he stated one of the concerns expressed by the Board is that we have had other proposals come before the Board and for whatever reason the project and plan was not completed.  He added the Board now has to wonder what more can be done to assure we are not just wasting our time and will eventually be stuck with an empty hole to fill later.  Is it in the best interest of the Fair to decline from holding discussions and negotiations with other potential partners, while awaiting confirmation of financial backing for this project The question was raised, should we wait and can we afford to wait?   Mr. DeCock questioned what restrictions or rules apply to the Fairgrounds in terms of leasing and selling the property, which was originally donated by JL Hudson, exclusively for Agricultural related events and activities.  Mr. Burns of DMB agreed to bring information back to the Board regarding what the State can or cannot do as it relates to the Fair property.

ON MOTION BY Mayor Porter, supported by Director Webb Sharpe and carried, Mr. Salley will be referred to the proper people at the MI Department of Management and Budget, real estate division, who would be able to assist him further with his request to enter into an exclusive arrangement for State Fair property.  Director Webb Sharpe agreed to put Mr. Salley in touch with the appropriate people at the Department of Management and Budget.  The MOTION passed unanimously.

Chairman Gaffney thanked Mr. Salley for his continued interest and efforts as it relates to becoming a partner of the Fairgrounds.  Mr. Salley thanked the Board for their time and patience today and he then exited the meeting.

Mr. Jenkins briefly reported on a proposal that will soon be coming to make a presentation before the Board that will promote golfing events at the Fairgrounds.  He stated "Next Shot Golf" will be invited to make a presentation at the next meeting of the Board.

NEW BUSINESS

Mr. Jenkins stated we presently have a three year contract with Wade Shows with 2 one-year options on the contract.  Mr. Jenkins stated he received inquiries from a few amusement ride companies and North American Midway was included in these.  He added that it was his intent to exercise one of the options and extend the contract with Wade Shows for an additional year. 

Mr. Mitch Irwin and Danny Houston of North American Midway Entertainment thanked the Board for the opportunity to make a brief presentation before them today with the hope that the Board would consider opening the bid process for the Ride and Games contract for the 2008 State Fair.

A lengthy discussion took place regarding the pros and cons of extending the current contract and opening up the bid process for a new contract.

Mr. Houston invited the Board members to tour any of their remanding Fairs and Festivals for this calendar year and stated he was sure the Board members would be impressed with the North American Midway Entertainment operation and the service their company has to offer.  Mr. Houston stated that because of North American Midway's success record, the company would be willing to pay the State Fair "up-front" monies as part of the agreement, if they won the bid.  Mr. Houston agreed to send to the Board members a listing of their upcoming events and locations.

ON MOTION BY Mr. Albright, supported by Mrs. Driker, and carried, the Board agreed to begin the process for sending out to bid the 2008 Amusement Rides and Games contract for next years State Fair.  The MOTION was passed.

Mr. Albright shared with the Board his impressions of this company and stated he has been very impressed with not only the appearance of their operation at county fairs, but also with their staff member services.  Mr. Albright highly recommended this organization be considered when the contract goes out for bid.  The Board thanked Mr. Irwin and Mr. Houston for their presentation today.

PUBLIC COMMENT

Byna Camden stated she was very pleased to see the activities at the Fairgrounds moving forward and she thanked the Board once again for welcoming her participation.

DATE for NEXT MEETING

The next meeting of the Michigan State Fair Authority Board was re-scheduled  for Monday, November 19, 2007, beginning at 1:00 p.m. in the Administration Building Conference Room, at the Michigan State Fairgrounds, in Detroit.  

ADJOURNMENT

The meeting was adjourned at 3:42 p.m.