‘Perpetual lease’ on fairgrounds not favored by city councilors
City councilors are holding off on making any changes to its land lease with the Fair Board.
At the end of April, Fair Board members requested a “perpetual” lease to ensure that the site of the East Otter Tail County Fair would be secured well into the future. The board is currently raising money for a new $100,000 cattle barn, and wants to make sure the fairgrounds won’t be moving any time soon.
“We’re going to be making a $100,000 investment in the fairgrounds,” said Board President Pete Zavadil. “We just want some insurance that it’s going to stay there.”
However, at a meeting last week, councilors said they were not in favor of a perpetual lease.
There are no plans to move the fairgrounds, they assured, and they don’t foresee anything like that happening in the near future. But as councilor Fred Lemkuhl said, it wouldn’t be right to “burden future councils” with what can or can’t be done with that land some years down the road.
The land, located on the south side of town, has been the site of the fair for more than 100 years, but “who knows” what things will look like in another hundred, said Lemkuhl.
The fairground land is a valuable asset for the city, explained City Attorney Dennis Happel. Tying it up in a perpetual contract is not legally advisable and would most likely be frowned upon by the state. Even the city’s current 20-year lease is a stretch, he said.
“You want to stay here in Perham – I’m sure if you keep doing what you’re doing, we’ll want to keep you here,” said Happel. “But even 20 years is a long time to commit such a substantial asset.”
Fair Board member Karen Gorentz said a longer lease term would be more favorable to possible donors and lending institutions. She said obtaining financing for construction projects on leased land can be a challenge.
The Fair Board leases the fairgrounds from the city, but owns its buildings on the property.
Councilor James Johnson, who also didn’t want to “bind future councils to any decisions we make tonight,” added that the relationship between the city and the Fair Board should be viewed as “a partnership,” and he wondered if there would be a way for the two to work together to find and guarantee funding for the cattle barn project.
The Fair Board has been raising funds to pay for the project, but wants to get construction going and still has another $40,000 to raise.
A decision on whether to change the terms of the lease was tabled, giving the city and the Fair Board time to look into financing options.
The current lease is good through 2028.