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Island County Fairgrounds plan revenue forecast a steep climb
The old adage of spending money to make money is evident in the $10.12 million makeover proposal for the Island County Fairgrounds.
Financed by non-voter-issued bonds and a fundraising foundation, the plan would see the 12.8-acre property go from a rustic, authentic, rural look to one of modern design and updated utilities with 15 fewer standing structures. In order to make the property more profitable and fix several claimed deficiencies with the buildings and grounds, the proposal calls for a major overhaul of what is now essentially a four-day-a-year moneymaker to a revenue engine that plan supporters hope will bring in cash 365 days year.
The plan has seen fierce opposition, with Whidbey residents questioning revenue estimates and even going so far as to form an opposition group. In the face of vocal dissent, the proposal’s backers remain resolute that it has value for the fairgrounds and the county.
“The concepts of making the property more usable year-round are valid,” said Commissioner Helen Price Johnson, also a member of the proposal’s steering committee.
Here’s a look at some of the key elements of how the property would be funded, where its money would be spent and what other fairs are doing to address failing buildings.
Steep climb, small payoff
At the peak of its 10-year buildout, after the property is redesigned and new buildings are up, the proposal projects revenue of more than $8 million in vendor sales. The managing body, recommended to be a public development authority (PDA) created by the Island County commissioners to oversee the property, however, would keep far less.
Facilities rental revenue and per capita revenue — money from ticket sales, a percentages of vendor sales, parking fees, etc. — combined are estimated at more than $3.3 million. After putting 10 percent into a cash reserve fund and paying off its expenses, the property figures to have $927,500 after taxes for capital debt service, essentially to pay off the loan that financed construction.
To generate the overall amount of money spent on the property, the proposal figures to draw 249,200 visitors to the fairgrounds once the entire property is fully redesigned. That averages to about 680 people visiting the fairgrounds every day of the year with each person spending — based on parking, admission, food, merchandise and novelties sales — about $32 per person. Currently the fairgrounds see about 21,000 annual fair visitors over four days, with another few thousand for other events during non-fair days. The growth from about 24,000 to nearly 250,000 visitors prompted a chuckle from Hal Gausman, fair manager of the Evergreen State Fair and deputy director of the Snohomish County Parks Department.
“It’s possible,” said Gausman, who added that he had not reviewed the Island County proposal. “It sounds a little wild, but I’d really have to look closely at it.”
The Evergreen State Fair had 340,367 paid visitors last year, about average for what is considered the largest public fair in Washington (the Washington State Fair, formerly the Puyallup Fair, is the largest fair in the state but is privately run) plus another 150,000 visitors to the property for other events during the year. Gausman said the Snohomish County fair makes up 60 percent of the fairgrounds’ annual revenue. Numbers for non-fair events are less specific because they are not all paid admission or ticketed events, compared to the fair which uses electronic tickets to track the date and time of entry.
Where do they all park?
Parking is a major money-maker for several fairgrounds. The Evergreen State Fair, Snohomish County’s annual 12-day fair in Monroe, made a record $1.4 million in on-site admission sales and parking in 2011. Gausman said the 180-acre property generates $400,000 annually in parking fees alone.
“That’s one of the big advantages that we have over Island County, over most fairgrounds in the state, is our large parking area,” Gausman said.
One of the cruxes of the island fairgrounds plan is the parking arrangement. Parking fees are the only revenue item expected to be 100 percent revenue kept by the PDA.
And that may have hit a wall.
Use of the 2.2-acre Langley Middle School ballfield for parking is recommended in the proposal. Typically the space is used by the school district as a booster club or Associated Student Body fundraiser, and the Whidbey Island Fair Association that produces the annual fair doesn’t see a dime. The exchange was informal and allowed easy access to the fair being just across the street. At $5 per vehicle and an estimated 250-vehicle capacity, the field could make money for the school district and fairgrounds, but South Whidbey School Board Director Damian Greene, also a member of the steering committee that pitched the plan publicly, said the district is not pursuing the proposed agreement.
“The consensus was, right now, we are not open to discussing any changes to the school,” Greene said of the five-member school board, adding that the district is working on a summertime deal for boat trailer parking at the bus barn parking area.
Once tabbed for closure, Langley Middle School has become a performing arts hub with part of the campus leased to Island Dance, Whidbey Children’s Theater and Whidbey Island Center for the Arts.
Recent investments in the school itself made altering the property less attractive to the school district. Greene said the district paid to fix some drainage on the nearby football field and was also considering resurfacing the track. Having cars potentially park around that did not make sense for the district’s recent investment. Denying use of the lot was also a statement that not every piece of the Langley Middle School campus was for sale or lease, despite three buildings on the campus being rented out over the past year.
“We still have a lot of work to do figuring out exactly where we’re headed as a district with the middle school,” Greene said.
Despite that potential hiccup in finding a place to put all of the supposed visitors, Island County Commissioner Helen Price Johnson said it could be worked around.
“That’s one of those variables,” she said. “The plan is a concept. Each of those pieces would modify how the plan would be implemented. Certainly that would have an impact.”
Critics of the proposal claimed its creator, Norm Landerman-Moore, was not aware of local conditions. One of which being that plenty of people park for free along county roads and Langley streets during the fair, leading to a long stretch of cars south along Camano Avenue and east along Sandy Point Road.
“Economic studies work with the data,” Price Johnson said.
“Any plan, when it hits reality, needs to be modified.”
Other spending brings in less money, by percentage, for the property. For example, admission for fairs and expositions would cost $6, of which the PDA would keep $1.80 — 30 percent. Festivals are marked for the highest per capita spending at $47.60, followed by conferences and symposiums, fairs and expositions, special events, trade shows and finally demonstrations that are projected to bring in $15.30 per person.
Another major fundraising arm for the PDA would be a foundation. The Island Event Center Development Authority Foundation would be a group of dues-paying members who promote the property and its programs. There would also be an exclusive group, the IECF 500 Club, of major donors paying at least $1,000 for a membership fee.
“Strategically, formation of the foundation and 500 Club is vital to the immediate and long-term prosperity of the IECDA and the markets and populations it will benefit,” states the report on page 17.
Day-to-day management of the fairgrounds would be handled by a staff of 14 employees ranging from an executive director to janitorial staff. Payroll would cost an estimated $621,810 for salaries, wages and benefits, with nearly one-sixth going to the executive director.
Fairs and fairgrounds around Western Washington have similar issues to Island County: old buildings and outdated infrastructure that costs a lot to maintain. The Evergreen State Fairgrounds are run by Snohomish County but are self-financed, meaning operations are paid for by revenue generated from the property through rental and ticket sales.
“We are like a lot of other fairgrounds in the state,” Gausman said. “We have buildings with amazing character, but they have leaky roofs or floor issues.”
During a recent conference of fair managers around Western Washington that was held at the Island County Fairgrounds, Gausman said his property built a 33,600 square-foot event center four years ago. Since then, the Gary D. Weikel Event Center is booked almost every weekend.
One of the unforeseen consequences is that other facilities on the property are being rented less often. Gausman said community user groups prefer use of the new event center to their older building, which has led his group to look at building a new space for their needs. But the Monroe fairgrounds has an annual payment of at least $350,000 to pay off property and construction costs.
The margin for profit in the early years would be far smaller for the redesigned Langley fairgrounds. The first operating year of the PDA was estimated to have $182,000 to pay off a loan used to build the space for agricultural products and animal shows, open air events area and pave the RV lot, and would need to generate $728,000.
Whidbey Island fair supporters backed the proposal because it addresses structural issues with several buildings by renovating some and rebuilding and relocating others.
“What we asked for was a plan that would help the property pay for itself and be viable,” Price Johnson said.
“It’s an aging infrastructure … It’s a valuable piece of property and an asset, but it’s a challenge.”