Council OKs fair plan with Fonner

After a full day of negotiations, it took barely a half-hour for the Grand Island City Council to greenlight plans for the future State Fair site.

The council Thursday night unanimously approved a 40-year lease with Fonner Park for the ground on which a new exhibition building will sit, along with an amended management agreement that would allow the city to rent the property for recreational events.

It also approved a six-and-a-half-year lease-purchase agreement from Wells Fargo Brokerage Services for the $5 million, 50,000-square-foot building itself.

Mayor Margaret Hornady credited officials from the city and Fonner Park for a day of fruitful negotiations that addressed all of both parties' concerns.

"The attitude of the room was one of positive problem-solving, mutual respect and enthusiasm for getting the job done," she told the council.

Most council members received copies of the agreements hammered out Thursday at about 5 p.m. Two hours later, they had detail-oriented questions for City Attorney Dale Shotkoski as they breezed through four 10-0 votes.

Councilwoman Peg Gilbert, who questioned the number of "blanks" and unknowns in the proposal at Tuesday's meeting, said this time around was much different.

"All of that was spelled out there, and it was within the parameters that I thought were very reasonable," Gilbert said.

Several of the city's primary concerns -- what access the city would have to the exhibition building, who would maintain it, who would insure it -- were answered in the management agreement with Fonner Park, Hornady said.

That agreement was an amendment of the four-year-old contract for the management of the Heartland Events Center, which is renewed annually.

It assigns Fonner Park responsibility for maintenance of the building, though those costs will be assessed back to the city in the form of rental fees.

City and Fonner Park officials will meet at least quarterly to set a schedule for the city's use of the building. Hornady said the city hopes to use it primarily for recreational activities.

The city will insure the building, and Fonner Park will retain the building's advertising and naming rights.

The 40-year lease from Fonner Park of the building's grounds will cost the city $10. It will be automatically renewed in five-year increments after the 40 years are up.

The lease-purchase agreement with Wells Fargo was carried over from Tuesday's meeting, with the payment schedule filled in.

Under that agreement, the city must pay Wells Fargo a total of just under $1.1 million each year in twice-annual payments of principal and interest, rather than the total of $435,000 reported earlier this week, City Administrator Jeff Pederson said.

 Nearly all of the proceeds from the 1.5 percent occupation tax on restaurants and non-alcoholic beverages that the council passed Tuesday will go toward that payment, Pederson said.

"We're not going to have an approximate $600,000 annual windfall here," he said.

Under state law, property taxes must be used to pay for lease-purchase agreements, including the one with Wells Fargo, Shotkoski told the council Tuesday.

So the occupation tax will be used to essentially "replace" the property tax funds used for the new fair building.

Pederson said he expects some of the remainder of the occupation tax money to make up the city's required $200,000 to $250,000 annual match of Nebraska State Lottery proceeds that go to the State Fair's host community.

The rest would have to be made up for elsewhere from the city's funds, he said.

The council also approved an escrow agreement with Wells Fargo that will ensure that the city's funds for the project are used only on the new building and are not spent until the costs are incurred, Shotkoski said.

The city's actions this week meet the Legislature's Oct. 1 deadline for having $3 million committed to the project and put it well on its way toward its $6 million requirement by next Feb. 1.

Hornady said the next step is for a private group to raise additional donations from the community.

The State Fair Board must also determine an exact site plan for the new buildings.

But Hornady said Thursday's negotiations, which began with misunderstandings between the city and Fonner Park and ended with some eagerly approved agreements, were a huge step forward.

Council President Mitch Nickerson agreed.

During the city's first meetings on the fair, Nickerson said, it felt like everyone wanted to swimming, but nobody wanted to be the first to jump in.

"I'm glad to say that after today, everybody wanted to go jump in the pool," Nickerson said.