Sioux Empire association keeps longtime vendor
The Sioux Empire Fair Association voted Wednesday to sign a contract with its current carnival vendor, Armstrong Shows, over two other suitors, swayed in part by a proposal that included a $180,000 loan to the fair association with a potential forgiveness clause and a revenue-sharing plan.
But the nature of the loan could raise some critics’ eyebrows as the fair tries to get back to normal after a year marked by scandal.
The loan will be arranged by carnival owner Todd Armstrong but comes from private investors who wish to remain anonymous. The fair association still is emerging from the cloud of a $647,000 embezzlement by former office manager Kathy Gourley and from a climate of mistrust by the Minnehaha County Commission, which owns the W.H. Lyon Fairgrounds. That mistrust was based on a perceived lack of transparency on the part of former fair association CEO Matt Adamski.
But neither current fair association manager Trygve Fredrickson, association president Steven Munk nor Commissioner Jeff Barth, the county commission liaison to the fair association, were troubled by the anonymous loan.
Fredrickson says the investors are “known quantities affiliated with Armstrong. They want Todd to be here, and they want us to be able to move forward.”
Munk says of the source of the loan, “I don’t even know who it is.” But if commissioners ask, “it probably will be shared with them. We don’t want to create misgivings or misunderstandings or keep commissioners in the dark.”
Barth said it was between Armstrong and his investors, and Armstrong agreed.
“It’s being loaned to me, and I’m loaning it to them,” Armstrong said of the money he’s directing to the fair association.
The county commission last month restored a five-year management contract with the fair association, so the association does not have to clear its five-year contract with Armstrong Shows, based out of Bayside, Texas, with commissioners.
Fredrickson says the loan will enable the association to pay off existing past due notes to vendors from the fair in August.
“This will free up our cash flow and get things on an even keel,” he said. Overall, the fair association is carrying $576,987 in debt.
Two other things set Armstrong apart from other bidders. He has a personal stake in Sioux Falls because his family’s company has done the fair midway for almost 20 years, and “the 2001 fair was the last time I saw my father. He passed away after that.” Also, Armstrong says that like the fair association, his company has fought back from daunting financial troubles.
“Our situation was a lot worse. I know what it feels like when you’re up against the wall, and nobody is there to help you. We have a sense of loyalty to them,” he says of the fair association. “What better way to show that loyalty than help them in time of need?”
If the fair association signs another contract with Armstrong Shows at the conclusion of the five-year deal, the $180,000 loan will be forgiven, and unlike other bidders that promised the fair association a set income from the midway, Armstrong provides an income guarantee but also will share revenue with the fair association if the midway is more successful than anticipated.
Still, the fair association vote was not unanimous. One member voted no on the Armstrong proposal. Fredrickson, Munk and Barth wouldn’t say who that was.
“We didn’t take a roll call,” Fredrickson said.
According to Munk, no one on the board had misgivings about Armstrong, but some questioned whether other bids were better.
According to Fredrickson, “there were higher dollar amounts offered, but there were contingencies attached to those higher loan amounts. That’s all they were, loans. The only one that has the potential for forgiveness is the Todd Armstrong option.”
At least one proposal would have changed the fair dates to overlap the school year, and board members were not comfortable with that, Munk said.
“It was a very difficult decision,” Barth said. “All three of the carnival vendors we had discussions with were prepared to upgrade their activities on the property. I think we will see a better fair with better carnival machines and better marketing.”
Securing a carnival contract now frees Fredrickson to seek other strategic partnerships, he said. These will be focused on an overall goal to build ties between the fair’s traditional agricultural-based participants and a growing number of fairgoers with no strong farm ties.
“The idea is to address, educate and entertain the non-agricultural public,” Fredrickson said. “Everything we have out here is toward educating the non-agricultural public.”