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Central States Fair group strong after climb out of financial pit

Steve Miller, Journal staff | Posted: Friday, August 17, 2007 11:00 pm | (0) Comments

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buy this photo Yellow paint marks where a ride will be placed on the newly resurfaced black top of the midway at the fairgrounds. (Photo by Seth A. McConnel, Journal staff)

RAPID CITY - Ten years ago, the Central States Fair organization was broke and hundreds of thousands of dollars in debt. The county-owned fairgrounds badly needed repair.
Today, the fairgrounds have been fixed up, both with improvements that are visible, such as painted buildings, new roofs and new midway asphalt, and improvements that are invisible, such as new electrical, sewer and phone lines.
And the fair organization is financially healthy, with a $631,611 fund balance at the end of its last fiscal year on Sept. 30. That was up from $469,557 the previous year.
Profits from the August fair have continued to rise, reaching $215,144 last year, up from $192,967 in 2005.
It didn't come easily.
In 1997, Central States Fair Inc., the group that puts on the annual August fair in Rapid City and the nonpro rodeo part of the winter Black Hills Stock Show, had about $100 in the bank and owed more than $350,000, according to Chuck White, who served as the fair's finance officer from 1999 to this year. He has resigned and gone into private business.
Local businesses that provided goods and services to the fair were waiting to get paid. The group's financial records were a shambles, according to Lyndell Petersen, who had returned to the fair board in the mid-1990s.
Buildings needed paint. The electrical system was outdated, resulting in power outages at inopportune times, such as right before a grandstand concert.
Sewers backed up.
The Pennington County Commission even considered selling the fairgrounds at one point.
"They were just on the verge of total failure," recalled current county commission chairman Jim Kjerstad, who was elected to the commission in 1996.
New members were elected to the fair board, which oversees the private, nonprofit Central States Fair Inc.
Among them was Ron Jeffries, who joined the fair board in March 1997 and then became the group's general manager in December that year. White later was hired as finance officer, a key step, Petersen said, in straightening out the financial picture.
Jeffries said the fair organization had suffered from a series of poor management decisions over the years, but he said his immediate predecessor, Vicki Simpson, had "inherited a nightmare."
"We needed to have better management of the grounds and facilities, and we needed to respond to the marketplace," Jeffries said.
At one point, all of the rent the group collected for the fairgrounds facilities was enough only to cover payroll for the staff, Jeffries said. "We had one note for $150,000 that we paid interest only on for almost two years."
Jeffries tells the story of finding a hammer in the fair's equipment inventory made of a hammer head welded to a piece of pipe covered with duct tape.
The grandstand needed paint badly, but there was little money. In 1998, Jeffries, his brother, a cousin and a friend hand-painted the grandstand with paint recycled from the city landfill, and Jeffries used his own brushes and rollers.
Since then, the debt has been paid, and the group has made a profit both on the fair and the stock show every year since 1998.
Net profit from the 2007 stock show totaled about $306,000.
Jeffries said three major factors have made the turnaround possible.
"Number one, we've worked hard at being good stewards of the fairgrounds and taken good care of the people who come and use our facility. We bend over backward to make sure people enjoy our facilities," he said.
Secondly, Jeffries said, the Pennington County Commission has provided extra money to make improvements to the fairgrounds.
Third, the local business community supported improvements through sponsorships and contributions, and volunteers have provided thousands of hours of labor to put on the fair and stock show, he said.
The county each year has provided about $60,000 for general operations of the fair, $50,000 to $60,000 for routine maintenance, and about $100,000 for long-range improvements. Last year, the county provided a one-time boost of $330,000 for major improvements but trimmed that back to $100,000 in the 2008 budget, Kjerstad said.
The county's decision to put money into the fairgrounds has been crucial but worth it, according to Kjerstad.
"The fairgrounds, we kind of think of as a park that all of the public uses, not just Pennington County but people from all over the West River area," Kjerstad said. "It's a great economic development tool, especially for Rapid City. It draws people by the thousands to horse shows and cattle shows, innumerable events."
However, Kjerstad said, the county commission probably will eventually end the subsidy to the fair because its budget is pinched by services it is required by law to provide. In anticipation, the fair group began building a reserve fund, which has reached $320,000. That fund will also be used to compensate for a revenue loss if the fair gets rained out.
In 2002, the county commission allocated $4.5 million to build the new Pennington County Event Center on the fairgrounds.
The 118,000-square-foot event center is rented out all but four weekends a year for horse shows, motorcycle races and other events, Jeffries said.
Those events bring thousands of people to Rapid City who wouldn't otherwise come and spend their money here, he said.
The fairgrounds formerly hosted two horse shows a year. Now, there are eight horse shows, Jeffries said. Next year, it will host an eight-day national Arabian horse event that will bring hundreds of people to town.
Jeffries said the event center is self-supporting, in part because the county paid for the construction. The event center had a profit of $117,282 last year.
Besides the event center, the fair organization and the county together have pumped about $1 million into improving the fairgrounds and upgrading equipment, Jeffries said.
Recent improvements include:
  • New roofs on the fine arts, creative arts and horticulture buildings; two horse barns; the Celts building; and the Subway building.
  • New parking in front of the event center.
  • New asphalt for the midway.
  • Remodeled bathrooms.
  • Replacement of water, sewer, electrical and telephone lines.
Those later improvements, although not visible to the public, are key, Jeffries said. "They're the basis for us growing into bigger and better productions for the public."
The fair is on the verge again, Jeffries said, but this time, it's on the verge of becoming a destination venue.

For example, he is looking for ways for the fairgrounds to be involved with the Sturgis motorcycle rally, although he wouldn't get into specifics.

Recent estimated attendance at venues managed by the Central States Fair Inc.

Central States Fair - 150,000; Black Hills Stock Show -250,000; Pennington County Event Center -60,000.

Petersen, a former county Extension agent and state legislator, was instrumental in wresting control of the fairgrounds in the 1960s to make it available for public use. He also helped launch the Central States Fair organization.

Petersen said the stability of the fair organization and the cooperation between it and the county will lead to more progress.
"Today, looking at the fairgrounds and how nice it looks, as the trees grow and other facilities get developed, it's going to be a showpiece," Petersen said. "I think the whole community can be very proud of it."
Contact Steve Miller at 394-8417 or steve.miller@rapidcityjournal.com

Posted in Top-stories on Friday, August 17, 2007 11:00 pm

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