State Could Make $60M for 300 Acres

According to a study released Tuesday by Michael LaFaive of the Mackinac Center for Public Policy, based in Midland, MI, the state could likely sell the Michigan State Fairgrounds in Detroit for around $57 million, and the Upper Peninsula State Fairgrounds in Escanaba for $2.6 million. The study is titled "Proposed Budget Reductions for the Michigan Department of Agriculture," and is the first in a series of budget cut recommendations by the center on the state's 20 departments.

All total, LaFaive said the state could cut $34 million from the MDA, not counting the money it could raise by selling the two parcels of land. "Michigan officials late last year required $460 million in budget cuts and one-time revenue enhancements to balance the 2002-2003 budget," LaFaive said.

As of January 14, those cuts were still not enough to balance the budget ending September 2003. Gov. Granholm has already made an across-the-board cut in school spending of more than 3%, and other departments are being intensely scrutinized.

LaFaive said legislators must ask themselves if the government hasn't moved beyond its core functions. The capitol should allow the private sector to take responsibility for some of the current state functions, LaFaive said. As for the fairgrounds, LaFaive said the state operation of fairs should end.

Both programs promise to leak a few million each from the budget each year. For example, while the Detroit fair did earn a paltry $28,000 profit, the maintenance and upkeep are going to be about $900,000 more expensive in 2003, LaFaive said. He also said recent transactions of a portion of the 200-acre Detroit fairgroundsshows that the land is valuable. Developer Joseph Nederlander agreed to buy 36 of the acres for $6.1 million, and had almost completed a deal to turn around and sell the property for $10.5 million to an acquaintance. Though the deal eventually fell through, the marketability of the land was proven, LaFaive said.

The 100-acre Escanaba Fairgrounds would be less in demand, LaFaive allowed, given the abundant supply of undeveloped land in and around the region. However, LaFaive said it's clear that private fair businesses would take up the slack for the publicly operated fairs, which in the case of Detroit has been around for 98 years.

This is not the first time someone has suggested selling the Detroit fairgrounds. Early last year, State Sen. Leon Stille urged the sale and relocation of the Michigan State Fairgrounds. Proceeds would be used to relocate the fair in a more centralized location more suitable for promoting agriculture while maintaining the state fair's status as the national oldest active agricultural expo, the senator had said.

"The fair has fallen to last place among state fairs in attendance and has been profitable only because of generous donations from the private sector," Stille says. "The Detroit area no longer is a viable location for a state agricultural expo."

His idea died for lack of support. However, Granholm told a crowd of reporters, including GlobeSt.com, that the fair property could be up for grabs. "I think it's safe to say the fairgrounds are on the table," Granholm said. "I'm not personally in favor of getting rid of the state fair."

LaFaive said Granholm and her staff must consider cuts, instead of raising taxes, to raise needed revenue. "Michigan citizens already rank ninth among 50 states in the amount of taxes they pay per capita. Increasing that tax burden will not make Michigan more attractive to job providers and talented workers, two key ingredients in making the Great Lakes State a more prosperous place to live," LaFaive said.