Recent news reports indicate that a private Michigan state fair (now called “Great Lakes State Fair”) will operate from Aug. 31 to Sept. 3 in the city of Novi. The official, government-supported state fair that had been located in Detroit closed in 2009 for lack of taxpayer subsidies.
Mackinac Center analysts first called for privatization of the government-run state fair and the sale of its Detroit land in 2003. The recommendation included eliminating government subsidies not just for the Detroit fair but also for the one held in Escanaba in the Upper Peninsula.
The Detroit location required an annual average annual taxpayer subsidy of some $2 million from 1970 to 1995. Dramatic improvements were made to the fairground in the 1990s and the fair even managed to squeeze out a profit of $28,000 in 2002, a rare year in which no operating subsidy was required.
(Editor's note: Documents provided to the author by the Michigan Department of Agriculture after posting this blog indicate that 2002 was not the last year the fair produced a surplus. After losing more than $700,000 in 2003 the fair did “collect more than it spent,” however, $352,000-plus of fair revenue came from selling off a portion of its land. It then saw expenditures exceed revenues from 2005 through 2008. Click here for details.)
In that 2003 report, we estimated that a sale of the 200-acre fairgrounds in Detroit could have generated some $57 million at the time. The online news agency Mlive.com has reported that just the land without the 20 buildings on the site was worth about $13 million according to a 2007 appraisal. This year the state transferred ownership of the site to a government “land bank” authority, which has issued a request for proposals for the sale or development of the land.
The Upper Peninsula state fair was transferred to a local authority in 2010 and is still operational. In the past it also received state taxpayer assistance. The 2003 Mackinac Center report indicated that in 2001 it drew a $177,900 state subsidy.
(Editor's note: Subsequent to posting this blog the MDA produced a revenue and expenditure report for the Upper Peninsula state fair that showed operating losses from 1999 through 2009 exceeding $1.7 million. Click here for details.)
As the privately operated Novi fair and many county fairs demonstrate, getting state government out of the fair business has not resulted in a “dearth of fair fun” — just as we predicted in 2003.