The Nebraska State Fair

By Harvey Perlman

Whether or not to move the Nebraska State Fair to make way for a research-and-development campus for the University of Nebraska-Lincoln presents the challenge of respecting the past without sacrificing the future. The choice is not between a state fair and a research-and-development campus. In the long term, the choice is whether we want both or neither.

The university proposes to use the existing State Fair Park ground to build a research-and-development campus where private-sector research-oriented companies could locate next to university faculty. We know these types of campuses attract private investment, generate jobs and contribute to long-term economic growth. We also know that to be successful such campuses must be located as close as possible to the core campus of the university. State Fair Park represents the only relatively significant land available for that purpose.

Moving the fair

The Lincoln Mayor’s Arena Task Force proposed to move the state fair to the current site of the Lancaster County Event Center. The advantages of colocating the fair at the events center are considerable. Existing facilities could serve the state fair as well as the current activities at the events center. Duplication of overhead costs could be reduced. Sufficient land exists to appropriately conduct a state fair. Opportunities exist to make the state fair a regionally attractive event.

I believe that it is significantly more likely that the state fair can be preserved and successful at a new site, and at less overall cost to taxpayers. A recent independent consultant, hired by the Legislature, concluded it would cost $175 million to build the ideal state fair appropriate for Nebraska from the ground up. That is a lot of money! The consultant also concluded that such a fair could generate economic returns of approximately $4 million per year and at the same time would need resources to sustain its facilities. What we have not yet heard is what it will cost to preserve the state fair at its current location! Or, with a reasonably smaller investment, how close we could come to the ideal at a different location.

The status quo jeopardizes both the state fair and economic progress. Even with the infusion of now almost $3 million per year in lottery proceeds, the state fair board faces considerable challenges going forward. As the independent consultant confirmed, the only activity at State Fair Park that makes money is simulcast horse racing, and the current operating deficit is $2.2 million. The consultant also confirmed that there is “light use of facilities for non-fair events, due to poor quality and functionality of existing facilities.”

The challenge for modern facilities is considerable. As the consultant reported, there are 72 buildings at State Fair Park and an examination in 2000 recommended that 29 buildings be removed, four buildings be renovated and the “remaining 33 buildings be refurbished.” The state fair board this year engaged an engineering firm that indicated that the two signature buildings on the grounds, the 4-H Building and the Industrial Arts Building (currently closed for use), would each take from $6 million to $8 million to restore to modern standards. By the State Fair Board’s own calculation, its 15-year cash flow statement indicates that it will have $500,000 per year to invest in new facilities. And, the board continues to indicate it will incur no debt nor ask taxpayers for any assistance. One important question in this debate is how, under these circumstances, will the state fair survive? How will it become, if not an “ideal” state fair, at least a modern state fair that reflects the quality of Nebraska?

The consultant’s report also provided an interesting picture of who currently attends the state fair. To be sure, since infusion of the lottery proceeds, attendance is on the rise. The state fair board has made creative use of its new funding to make investments in programming and customer amenities that have made the grounds and the event more attractive. However, 78 percent of those attending the state fair reside within 60 miles of Lincoln. In 2006, total attendance reached 289,683, yet only 149,824 actually paid admission. If one assumes that a higher percentage of the exhibitors (who do not pay admission) are from beyond 60 miles of Lincoln, it becomes clear this is hardly a significant economic driver for Nebraska or even for Lincoln.

Unlike the consultant, the Mayor’s Arena Task Force concluded it would take around $75 million to move the fair to the Lancaster Events Center and that it was at least plausible that this could be done without general state tax support. More careful analysis must be done. But it remains a fair question (no pun intended) whether, and in what form, the state fair can continue in its current circumstance if nothing is done.

A research-and-development campus

The build-out of the research-and-development campus would be a long-term activity. One such campus at North Carolina State took 20 years to become really successful. But today, that campus has 61 corporate and governmental partners with 1,600 employees, expanded university research facilities with 1,350 university employees, and 250 students involved with private-sector companies.

Can something like this work in Nebraska? We know it can. We have had inquiries from private-sector firms about building facilities so they could be located near our faculty researchers. The extraordinary growth in research at UNL and at the University of Nebraska Medical Center demonstrates that Nebraska is research competitive. It is critical for Nebraska’s future that we try to capture the potential economic growth associated with that research.

Will such a campus require public investment? Of course. But our expectation is that most of the investment in infrastructure would be paid by private sector companies. And the return in terms of economic growth, jobs and capital investment will be substantial.

The idea of colocation of the state fair and the Lancaster County Events Center first surfaced in January 2004, through what was known as the “partnering” committee consisting of Lincoln, state, university, Legislative, and state fair representatives. The committee’s task was to save the state fair from certain bankruptcy. The committee recommended an effort to seek lottery funds and to colocate the fair and the events center at State Fair Park. The state fair board at the time unanimously passed a motion supporting the overall concepts of the partnering committee report.

The Mayor’s Arena Task Force again took up the issue within its overall charge to make sense of the various exhibition and convention facilities in Lincoln. In October 2006, the task force voted again for colocation but this time at the event center site. The Lancaster Ag Society, which operates the events center, endorsed the recommendation. The state fair board did not.

At the state fair board meeting on November 10, 2006, the 2015 Group, composed of Lincoln business leaders, invited the state fair board to study the financial and other aspects of colocation and offered to raise through private philanthropy 10 percent of the cost of moving the fair, should that be feasible. The fair board refused to participate in a study. In 2007, the Legislature adopted LB 435, which directed the Agriculture Committee of the Legislature to hire an independent consultant to study the state fair. The consultant’s final report is due November 15. Shortly thereafter any community may make its case to be home of the state fair. In the 2008 legislative session, some resolution of the issue is possible.

A unique opportunity for economic development

I believe Nebraska has a unique opportunity to contribute to economic development. Moving the state fair will both free State Fair Park to become an economic engine and it will provide a fresh start for the state fair, freed of the burden of an aging and inadequate infrastructure. Of course, whether we can afford to move the fair is a proper question and must be carefully considered. But we must also consider the cost of doing nothing.

If such a move transpires, there will be some who will miss the familiar setting of the annual state fair, just as all of us, from time to time, think back fondly of places from our past. But these places were created because past Nebraskans, looking to the future, built them to serve future generations. We can respect the past; we can create remembrances to provoke the memories we share, but if we allow the past to restrict our future, our children will suffer the consequences.

Related: To Prairie Fire Newspaper by Tam Allan

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