Faced with huge deficit, fair board OKs vendor fee hikes

Friday, September 9, 2011 at 12:25pm

Vendors who rent Tennessee State Fairgrounds space for events ranging from gun to lawn and garden shows will have to pay rates that are on average 26 percent higher than in the past.

Friday morning the Metro Board of Fair Commissioners voted 4-0, with one abstention, to implement the fairgrounds’ first vendor fee increase since 2007, a move billed as essential for the long-term sustainability of the financially struggling facility. The vote came with the understanding future rate hikes are likely to come in the years ahead.

“This certainly gives us a giant step forward in reducing our deficit,” fair board chair Katy Varney said.

Increases vary by building. To use the agriculture facility, for example, corporate vendors must pay a new $1,825 fee instead of a $1,450 payment. The Wilson Hall fee has bumped from $750 to $1,000. Flea market fees have increased only marginally. New fees go into effect Jan. 1, 2012.

In all, the rate changes are expected to inject an additional $107,000 in yearly revenues into the fairgrounds operations. But that will only partially reduce what is an annual deficit totaling $455,000.

Metro had hired the consulting firm Maximus Inc. to analyze the fairgrounds’ financial situation and deliver recommendations. Consultants advised the board charge rates that range from 49 percent to 337 percent greater to use certain facilities, but commissioners instead listened to the fairgrounds staff, which recommended less draconian hikes.

“We’re moving in the right direction,” Tennessee State Fair Executive Director Buck Dozier said. “We’ve got to stabilize things to keep customers and bring people back. Once we do that, we’re going to get closer to being able to hopefully break even or make a profit.

“It’s a whole different business model than it was years ago,” he said.

During the board’s deliberation, some fairgrounds staff members suggested the more expensive rates could make it more difficult to compete with Williamson and Wilson counties, places that also have expo centers that cater to vendors.

Nonetheless, Dozier said he’s confident longtime vendor customers would continue to turn to the fairgrounds for business, suggesting the perception the fairgrounds would be closing has hurt things more than anything else. With August’s ratification of a charter amendment to make it more difficult to redevelop the site, the fairgrounds seems poised to continue operations –– at least for now. 

“I think the key to retaining customers and bringing customers back is how long we’re going to be here,” Dozier said. “A lot of those who left us only left us because [they thought] we weren’t going to be here next year.

“The only concern that I have in terms of retaining and bringing back customers is the black cloud of uncertainty,” he said. 

2 Comments on this post:

By: JeffF on 9/9/11 at 1:51

Any estimate of when the mayor's office will get rid of the departmental service fees that were assessed to fairgrounds in order to create these losses or will we just have to wait until the election of the next junta?

By: govskeptic on 9/9/11 at 4:57

Huge Deficits? Outside auditors might show a lot more Voo-doo numbers applied
to this enterprise by Metro Finance than should be!