DETROITThe Michigan State Fair advisory board has unanimously approved a plan by which Nederlander Theatrical Organization, a Franklin-based developer of theaters and entertainment facilities, will spend $200 million to make vast improvements in and around the fairgrounds and operate the fair's facilities in exchange for the proceeds from running concessions.
Nederlander plans to refurbish buildings at the park, bury utilities, and build parking ramps, theaters and restaurants on 40 acres adjacent to the fairgrounds, and provide new facilities for animals. In addition, Nederlander plans to assist five area churches and several neighborhoods in cleanup and rebuilding efforts. The cost of the entire project could reach half a billion dollars, a Nederlander spokesman said.
"The governor asked us originally [eight years ago] to make this place stand on its own financially," said John Hertel, general manager of the fair. "We've accomplished our goals but haven't reached the epitome. We're at the point where we can't do a whole lot more with the resources available to us," he said.
Nederlander officials expect the project to create up to 1,000 full-time jobs. The developer will operate the facilities using the same employees at the fairgrounds year-round, thereby eliminating the need for layoffs and relieving the fair's administrative staff of an annual round of hiring headaches.
By signing a 30-year deal with the fair with two 10-year options after that, Nederlander agreed to pay the fair's base lease payment of $500,000 per year for the first five years and 2 percent of all ticket sales, excluding events staged by charitable organizations.
Spokesmen believe the project will be a win-win situation for all parties involved. After struggling for years to bring the fair's bottom line from red to black, the fair earned $28,000 in profits last year, a modest take at best compared to what officials believe could come from Nederlander's plans.