MICHIGAN STATE FAIR & EXPOSITION CENTER

AUTHORITY BOARD OF DIRECTORS MEETING

October 18, 2006

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 1:35 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 AFLCIO

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

Robert G. Porter, Mayor of the City of Ferndale

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

Elaine Driker, Former Director, Detroit Orientation Institute @ WSU

Melissa Rogers, Representing Mitch Irwin, Director of MDA

Tim Jenkins, MSF Interim General Manager

ABSENT: Pat G. Albright, Owner of Albright Farms

Monique Field, Representing Lisa Webb Sharpe, Director of DMB

Thomas L. Valliere, Manager, Midland County Fair

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

Also Present: Daryl Love, MSF Facility Manager

Iris Lopez, State of Michigan, Attorney General's Office

Mr. Brian Siegel, Representing Joe Dumars' Fieldhouse, L.L.C.

Byna Camden, ICARE and surrounding neighborhood resident

APPROVAL OF MINUTES and ACCEPTANCE OF AGENDA

The minutes of the meeting held on September 13, 2006 were reviewed. ON MOTION BY Mayor Porter, supported by Mr. DeCock, and carried, the minutes were approved and the motion passed unanimously.

CHAIRMAN'S COMMENTS

Chairman Gaffney welcomed everyone to today's meeting of the Board then suggested that we move right into Mr. Siegel's presentation to insure a quorum should there be an item come before the Board to be voted upon today. Elaine Driker stated she had a prior commitment and would have to leave before the meeting adjourned. Chairman Gaffney then welcomed Mr. Brian Siegel, Representative for the Fieldhouse L.L.C., to today's meeting of the State Fair Authority Board.

PRESENTATION by Mr. Brian Siegel of the Fieldhouse L.L.C.

Mr. Siegel greeted the Board members and thanked them inviting for him to come in and make this presentation today regarding the future of Joe Dumars' Fieldhouse at the State Fairgrounds.

DISCUSSION WAS HELD at length regarding the lease arrangement between the State Fairgrounds and the Fieldhouse L.L.C. A letter, dated September 15, 2006, which had been hand delivered to Mr. Hertel, recent State Fair Manager, was discussed in detail. The basis for the letter was asking the Fair Manager and State Fair Authority Board to consider exploring new terms and conditions for the lease agreement with the Fieldhouse L.L.C. Mr. Siegel shared with the Board details and concerns as it relates to the financial losses sustained by the Fieldhouse L.L.C. and the reason they had to consider ending their arrangement with the Fairgrounds. Included in these discussions were items relating to unresolved issues having to do with heating units and utilities. Mr. Siegel shared with the Board the problems they have experienced with the usability and efficiency of the heating units and billing matters relating to the electrical panels inside the Ag. Building that were discovered as being used to service outside premises.

ON MOTION BY Mr. Deeb, supported by Mayor Porter, and carried, to permit the continuance of the current lease between the Michigan State Fair & Exposition Center Board of Authority and the Fieldhouse L.L.C. with the changes as outlined within the letter, dated September 15, 2006, presented at today's meeting of the Authority by Brian Siegel of the Fieldhouse L.L.C. and pending the results of a market analysis to be performed by the Michigan Department of Management and Budget.

Mr. Siegel agreed to have the Fieldhouse L.L.C. cover the cost and expense related to a fair market analysis (not to exceed $2,500). Further a "good faith effort" would be made by the Fieldhouse L.L.C. to succeed with their recreational program and the Fieldhouse L.L.C. would continue to work with the State Fair management, staff and the Attorney General's office to resolve any issues of concerns as it relates to their contract and activities at the State Fairgrounds. THE MOTION PASSED UNANIMOUSLY.

Mr. Siegel thanked the Authority Board for their time, support and hard work in trying to make the Fieldhouse operation a "win-win" for both parties. He also stated that the Fieldhouse L.L.C. is committed to doing whatever they can do to assure a great recreational resource and program will remain available to the community and he concluded by saying, on behalf of the Fieldhouse L.L.C., they are very hopeful that the project will be successful and they look forward to a continued relationship with the State Fair staff, Fair management and the State Fair Authority Board.

*AS AMENDED AT THE BOARD MEETING OF DECEMBER 18, 2006:

Mr. DeCock stated that he was upset with the way Mr. Siegel's situation was handled. Mr. DeCock believed the State Fair Authority Board should have been informed when Mr. Siegel first informed State Fair staff of the problems earlier in 2006. Mr. DeCock does not blame Mr. Siegel or Mr. Jenkins for this lack of action. The State Fair Authority Board received Mr. DeCock's statement today and the Minutes of October will reflect this change on Page 2, just before the Interim Managers Report.

INTERIM MANAGER'S REPORT

Mr. Jenkins gave a detailed overview of the recent State Fair staff meetings. He stated that the staff came together twice over the last month and did a full recap of the 2006 State Fair. During the meetings, the staff discussed any concerns they had in their various departments. They also shared their thoughts and ideas as it relates to improving and enhancing the State Fair and Fairgrounds. The staff discussed possible ways to decrease expenses and generate revenue for the Fair. Mr. Jenkins shared with the Authority some of the suggestions and recommendations made by the staff:

Premium/Entry Books - It was agreed that the Livestock, Agriculture and Community Arts Premium & Entry books would be available "on-line" by April 18, 2007.

Rain Checks - The staff discussed the possibility of offering rain checks to fairgoers who come to the Fair but have to leave due to rainy conditions. The rain check would be good for Fair admission only and would not include parking, ride wristbands or any other item purchased at the Fair.

Mr. DeCock asked for a definition or clarification regarding how much does it have to rain in order for someone to receive a rain check. Mr. Jenkins said that we would have to discuss this and work out the further details of this plan, if the Board expressed an interest in creating this type of special marketing tool. Mr. Jenkins stated that the idea of rain checks was simply an item suggested and talked about at the recent State Fair Staff meeting. But Mr. Jenkins said that in many cases we would rely upon the discretion of our State Fair Ambassadors to make some decisions as it relates to these sensitive matters.

More exit signs and portable restrooms throughout the Fairgrounds and parking lots were suggested.

Concert Announcements - The staff all agreed that it would be great to release some of the concert headliners earlier in the year instead of waiting until one month and sometimes just weeks before the Fair opens. Mr. Jenkins stated that a couple acts could even be released as early as Christmas 06'. He added that this would be a great marketing strategy and it may even help promote the early sell of our $25.00 Seasonal Fair Admission passes. Mayor Porter stated this may us also help in the area of free radio promotions and sponsorship agreements.

Nightly Concerts - It was suggested that we look into possibly holding two concerts a day, for some of the more popular entertainers such as Raven Symone' or Alice Cooper. Mr. Jenkins stated that a concert could possibly be held at 2:00 p.m. and again at 7:00 p.m. The staff suggested we look into more of the Radio Disney type of entertainment for the 07' State Fair.

Daily Parades - The staff discussed the possibility of reducing the number of daily parades and possibly just having an Opening Day, weekend and Labor Day Parade. Mr. Jenkins shared that the Fair spends $900.00 per band and there are two parades that take place daily (totaling $1,800). Mr. Jenkins said that, as an alternative to having the two daily parades through the week, we might also look into holding high school band competitions, with the winning band receiving a cash prize. Discussion was held regarding whether or not it would really be cost effective to reduce the daily parades.

It was agreed that Johnnie would send out to each of the Authority members a copy of the comments and suggestions shared at the State Fair staff meetings, a recap of the 2006 State Fair and any information that Mr. Jenkins and his staff could put together for the one year plan and budget report. Chairman Gaffney stated that while Mr. Jenkins and his staff were putting together items on the one end, it was suggested that the Authority Board also come up with a list of items to be discussed as considerations to be included in the one year plan for the Fair. Chairman Gaffney stated that at the next meeting of the Board it would be suggested that the Board do some serious brainstorming and complete the one year plan so that it will be prepared in time for the local neighborhood advisory group meeting, which will take place in the near future.

Mr. Jenkins reported that the Hob Nobble Gobble promoted by the Parade Company would be holding their big annual fundraiser at the Fairgrounds next month and he distributed a flyer highlighting the details of this wonderful event.

Mr. Jenkins distributed information regarding the "Smart Pistons Express" park and ride bus service, which leaves the Fairgrounds and travels to the Palace of Auburn Hills, for each of the Detroit Pistons' home basketball games. Included in this information were the bus schedule and the start time for each of the 2006-07 Piston game. The price for each individual bus ticket is $2.00 and this great program is being sponsored by SMART bus systems.

Mr. Jenkins passed around a copy of the State Fair Newsletter "Fair Times" (Volume II), produced by Rosemary Peralta, MSF Special Projects Manager. Mr. Deeb and the Board members complimented Ms. Peralta for the great work done on the newsletter.

DISCUSSION of the mandates outlined in PA 468 - 2004.

Elaine Driker distributed to Chairman Gaffney and Johnnie Bennett a copy of the list of the expanded neighborhood group to be invited to come in and meet with the State Fair Authority and share they thoughts and ideas for the future of the State Fair. Mrs. Driker stated that we are due for a meeting with the neighborhood advisory group, as noted in Senate Bill #1103. Mrs. Driker reported that she, Chairman Gaffney and Mayor Porter and another gentleman (who was unknown to them at the time)

 *AS AMENDED AT THE BOARD MEETING OF DECEMBER 18, 2006:

Chairman Gaffney stated that the "unknown" person who sat in on a phone conference with him, Elaine Driker and Mayor Porter was "Brad Coombs" of Meridan Entertainment.

had a conference call recently and discussed what the agenda for such a meeting might look like, as well as who should be invited. The list of invitees was then circulated to all of the Board members and Mrs. Driker asked Johnnie if she would prepare a copy to send out to all of the Board at a later time. This expanded list included members and leaders from the local neighborhood, business owners along Woodward Avenue, governmental officials, and representatives from school districts and the community. Mrs. Driker stated that it was recommended that the agenda for this meeting would include a recap of the 2006 State Fair and she added that under the umbrella of the one year plan and five year plan, we may be able to solicit input from this broad group as to what their thoughts and ideas as it relates to the future of the State Fairgrounds. Mrs. Driker noted that we should be careful to remind everyone that this is an "advisory" group and not a policy-setting group and that the Authority welcomes their suggestions and would like to invite them to share their ideas on what they would like to see happen at the Fair facility.

DISCUSSION WAS HELD at length regarding the date and time when this larger group meeting should take place. Mrs. Driker and Chairman Gaffney discussed possibly combining the November and December Authority meeting and inviting the neighborhood group to join us at the conclusion of the regular Board meeting. It was discussed having the Board meet at 5:00 p.m. in the Administration Building Conference Room and then joining the neighborhood group in the Community Arts Building Auditorium at 6:00 p.m. Mrs. Driker strongly urged and encouraged each of the Board members to attend this very important and informative meeting.

Chairman Gaffney reported on the Authority Boards responsibilities to draft and publish a one year, a five year plan, draft an annual report to be given to the Governor, then finally, establish and hold an annual meeting of the local neighborhood advisory council. Chairman Gaffney gave a brief overview of what the statement might look like as it relates to the report to the Governor: The State Fair Authority would definitely want to hold an annual Fair each year and have it look very similar to our previous Fairs, despite the financial deficit year. And we would be interested in continuing out reach, marketing and development of programs like the Dumars' Fieldhouse and other year round, long-term lease programs.

Chairman Gaffney stated the annual report to the Governor might also contain a hint at some of the items to be listed in the five year plan. He added that the five year plan will be much more detailed and we may want to discuss and revisit such proposals as the Huron Clinton Metro Parks proposal to create and develop a park at the Fairgrounds. He added that we may also revisit the concept of having a Drive-in theater or other year round proposals that were once presented to the Board.

Mrs. Driker reported that Heather Carmona, Woodward Avenue Action Association, might be willing to work with us, as a facilitator, on developing these plans. Chairman Gaffney stated he would welcome Ms. Carmona to come in and work with us on a strategic five year plan and he believes her expertise would be of great value towards these efforts. Chairman Gaffney reported on the discussions between he and the other neighborhood sub-committee members over the last month. They talked about combining the November and December Authority meeting in order to put together the one year plan and then share this information with the local neighborhood advisory group and at that time, we could ask them for their input regarding the five year plan. Mr. Deeb suggested creating a special survey to send out to the various individuals who may not be able to join us at the meeting, but would like to offer suggestions and ideas for the Authority Board's consideration.

Chairman Gaffney stated that Mr. Jenkins should work with the State Fair staff team to develop a one year plan and he suggested that this information be mailed out to each of the Board members before the scheduled Authority and neighborhood group meeting. Chairman Gaffney stated that once we have put together the one year plan and shared it's contents with the neighborhood group and received their input for the five year plan, then a series of meetings would take place with Heather Carmona and others, to develop a more detailed, strategic plan for the Fair.

Chairman Gaffney asked Mr. Jenkins to prepare and send to the Board members a copy of the items discussed at the recent staff meetings, an attendance, security and financial outcome for the 2006 Fair, as well as a review of the 2005 financial report and possibly a recommendation or item that could be listed in the one year plan.

After a lengthy discussion, it was agreed that the Authority would bring any information on the one year plan to the December meeting and at that time, the plan will be reviewed, completed, approved and finally prepared to then share with the local neighborhood advisory group.

Mr. DeCock stated that we should also consider the changing positions of the elected officials, who will be moving into new offices after the first of the year. He stated that we may want to hold off on scheduling the neighborhood meeting until after we know who will hold which office and we have a more accurate list of names and addresses that will not be subject to change over the next month. Mr. Jenkins stated that we will be sure to get the name and addresses of the new official and they would each be included and invited to participate in our upcoming meeting of the neighborhood groups.

OLD BUSINESS

There was no old business to report.

NEW BUSINESS

Mr. Jenkins reported that last year the State Fair used Brad Coombs of Meridian Entertainment to negotiate and book out musical acts for the annual Fair. The cost for this service was $25,600. Mr. Jenkins stated that he, Pat Boyer and a few other staff members would be attending the International Association of Fairs & Expositions Convention held Las Vegas, the first week of December. Mr. Jenkins stated that while at the convention he and Pat would look into reserving and possibly booking at least two of our musical acts for the 2007 State Fair. He said this would be a perfect opportunity for us to get a few contracts in motion and underway for earlier promotions and marketing strategies. He added that the Fair spent a total of $737,000 last year for the Band shell entertainment and $452,400 of this money was went to signing the acts and the balance covered things such as: security, catering, back-line equipment, sound, lights and stage set-up. Mr. Jenkins stated that he believes it would be in the best interest of the State Fair to book an entertainment director. But he also feels very strongly that he and Pat Boyer can negotiate, reserve and book much of the entertainment for the Fair and save us a greater portion of the contracting/booking expenses. Mr. Jenkins stated that Brad Coombs is aware of our concerns as it relates to our budget and he has agreed, if only in a small capacity, to assist us and help with our entertainment goals and needs.

Mr. Jenkins stated that if some of our entertainment can be booked before Christmas, it would allow us a greater opportunity to produce a few special promotions and early Fair advertisements generating excitement and more awareness of our annual Fair. Mr. Jenkins added that he is anticipating spending approximately $200,000 for a few musical acts while in Las Vegas. Chairman Gaffney and the Board expressed their support for this endeavor.

Mr. Jenkins reported that along with the Hob Nobble Gobble event, we have partnered with the Parade Company to do their "Holidays-On-Parade" special event, which will take place at the Fairgrounds on the weekend after Thanksgiving. He added that the Parade Company has also agreed to allow us space to sell State Fair merchandise, seasonal Fair admission passes, Friends of the Fair memberships and any other Fair promotional items. Mr. Jenkins invited the Authority members to contact him if they knew of any craft people or anyone who may be interested in setting up a small booth at the Holidays-On-Parade event.

Mr. Jenkins stated the Friends of the Fair, a 501C organization, is looking at hiring a fund-raising consultant and a grant writing foundation to possibly bring additional funds to the Fair for brick and mortar type projects.

Discussion was held regarding the recent crime problems, which occurred after the recent State Fair, involving the Chrysler vehicles being stored at the Fairgrounds. Mr. Jenkins reported that a group of teenagers (14-16 years of age) have been caught steeling vehicles from the Fairgrounds over the last month. Auto theft is a problem at many of the sites where vehicles are being parked and stored around Michigan. Mayor Porter stated there is a direct line into the Ferndale Police Dispatch and he has been closely monitoring this situation as it relates to hit and run incidents involving the cars being stolen. Mr. Jenkins stated that on tomorrow morning he's scheduled to meet with Deputy Chief, Robert Dunlap, of the Detroit Police Department and he will also meet on Monday with the Michigan State Police about this matter. He added that cement barriers and other deterrents have been positioned throughout the Fair facility and we are hopeful that this will help eliminate and cut down on some of the problem.

Mayor Porter was happy to report that he has found a group willing to donate roofing for the Ulysses Grant House located on the southeast end of the Fairgrounds, across from the musical Band shell.

PUBLIC COMMENT

There was no public comment to come before the Board at today's meeting.

DATE for NEXT MEETING

The next meeting of the Michigan State Fair Authority Board was not decided at this time. The next scheduled meeting date will be determined and mailed at a later time.

ADJOURNMENT

The meeting was adjourned at 4:00 p.m.