Looking at the State Fair Through a Business Lens
When people discuss the Minnesota State Fair, the first thing that comes to mind is often deep-fried food on a stick-not dollars and cents.
But a recent report by Finance & Commerce shifts gears to look at the fair as a real estate and business venture.
As one of the largest private or commercial campuses in the St. Paul area, how much is the real estate worth, and who owns and leases it? State Fair General Manager Jerry Hammer told Finance & Commerce that for insurance purposes, the fair's 350,000 square feet of space are valued at around $200 million.
The fair, considered a “quasi state agency,” according to Finance & Commerce, is operated by the Minnesota State Agricultural Society, and does not pay taxes.
The fair owns most of the larger buildings, but not concessions, union booths, and other smaller structures. It owns the land, which it leases to tenants, who also pay an annual license fee to the fair.
Food and beverage concessionaires turn over 15 percent of their gross revenue. Non-food concessions, like amusements, reportedly pay $105 per “front foot”-meaning a 10-foot-wide space would run $1,050 over the 12-day fair. Exhibits that display products for future, off-site sales pay $90 per front foot. “Educational” non-food tenants pay $70 per front foot, according to Finance & Commerce.
Hammer told the newspaper that higher attendance doesn't necessarily mean increased revenue-as expenses like transportation, security, and part-time staff rise along with a boost in foot traffic.
The fair also collects revenue during the off-season, as various groups lease buildings on the fairgrounds for more than 100 events-contributing another $2.5 million to $3 million a year.
The budget for this year's fair is reportedly $38.5 million, and gross revenue is expected to match that amount. Finance & Commerce points out that despite its high attendance, the fair doesn't resemble a great business proposition. It earns between roughly $1 million and $1.5 million a year.
To learn more about some of the historic buildings on the state fairgrounds and the renovation of several key properties, read the full Finance & Commerce story here.