Questions swirl around possibility of W.H. Lyon Fairgrounds sale in Minnehaha County

The Sioux Empire Fair starts Aug. 5 at the same place it began in 1939 in western Sioux Falls.

Now more than 80 years later, the future of the fair at the W.H. Lyon has been questioned as some Minnehaha County Commissioners want to see the land sold and the fair moved. Several hurdles stand in the way of that happening, however.

Knife River Corp., a building material company who is doing work at the nearby quarry, submitted an unsolicited offer of $65 million to buy the fairgrounds property earlier this month, which would’ve included a $15 million cash down payment.

The company wants the land for mining purposes for aggregates with minable rock running out in the current quarry location, Clark Meyer, president of Knife River in Sioux Falls said.

“It just seems like people don’t realize the urgency of the situation. … You’ll soon see that we’re running out of reserves,” Meyer said. “We depleted our reserves.”

Meyer believes that there are more reserves underneath the fairgrounds.

“We believe there’s a large deposit underneath there and we’ve requested to verify those reserves," he said. "We’ve currently been told to hold on that or wait on that, so we can’t verify that, we can only speculate,” Meyer said.

The Sioux Empire Fair will remain at the W.H. Lyon Fairgrounds for the foreseeable future, several county commissioners said. And the commission has deployed a task force group in hopes to improve the space.

More: Knife River Corp. offers $65 million for William H. Lyon Fairgrounds 

Questions surrounding possibility of sale

The fairgrounds were given to the county more than 80 years ago when Winona Lyon deeded the land, with a stipulation of the fair being held at that location. That has complicated the process.

“Knife River’s offer that they gave to us isn’t worth the paper it’s written on because one, there’s no clear pathway and two, no one can just make an offer,” Minnehaha County Commissioner Cindy Heiberger said.

But those in favor of moving the fair point to South Dakota Codified Law 43-25-18 that was introduced in 2005, which addresses land grants made. The law states that the title can revert to the grantor "because of changed conditions or circumstances (that make it) impossible or impractical to continue to hold or use the lands for the purpose mentioned."

More: Sioux Empire Fair kicks off Aug. 5. Here's what you need to know.

Dean Karsky, a member of the Minnehaha County Commission, says that the fairgrounds could potentially be sold, and that there's a roadmap to the process.

“I have the position that the land the fairgrounds sit on is not the highest and best use for the county or community as a whole and we should consider the potential sale of that to fund a new fairgrounds that still honors the legacy of the Lyon family, and it can be done," he said. "It would take a decision of a court of law to make it happen, most likely."

Not only are there questions surrounding the possibility of selling the fairgrounds, but the county would need more money than the initial $65 million offer to build new fairgrounds, Minnehaha County Commissioner Jeff Barth said.

“Sixty-five million (dollars) is far less than what would be required to replicate the property somewhere else,” Barth said. “... I think we really need about $350 million to properly relocate it, and again it probably won’t be there 100 years from now, but for now, it’s there.”

For Knife River, the initial $65 million offer was used as a starting point to get the conversation going, Meyer said, and he wants to see an improvement to the fair.

“We believe the best option is relocating the fair and using the fair’s current largest asset — and that’s the aggregate it's sitting on — to help fund the fair. We are supportive of the fair, we want a good fair for the community, for our citizens and especially for our agriculture community,” Meyer said. “We don’t believe that the fair right now is representative of this community.”

Heiberger said there’s only a few ways the county could sell the property, whether that be through surplus, auction, sealed bid or realtor. But, the county doesn’t have a clear title for the land, so they are unable to offer those options.

“None of that stuff can happen,” Heiberger said. “We can’t declare it surplus. (Knife River's) offer was just to bring it to the attention of taxpayers, but that’s not even a possibility, so it’s nothing.”

Task force aims to perform cost-benefit, financial assessments

Now it’s the county commission’s goal to figure out how to move the fairgrounds forward, Heiberger said.

There’s a task force composed of 15 people who are looking how to make improvements on the land, and they are working in conjunction with new architect and consultant Smith Architecture and Planning. CSL International, a solutions-based company, is also on the project and will provide cost-benefit analysis and financial assessments.

“They will try to make recommendations and plan how we can make the fairgrounds a destination, a place that people want to be and how we can hopefully get investments going forwards,” Heiberger said.

More: Minnehaha County locks down contract for project planning 

At a recent Minnehaha County Commission meeting, Joel Feldman of CSL International, said that the study will include financial operations of the existing fairgrounds complex and projects future impacts of improvements that would be recommended through the market study. They will also address potential costs to make improvements.

The contract, which was approved unanimously at the previous county commission meeting, outlines a consulting fee of $75,000 with 16 phases to reimagine the future of the fairgrounds.

“The goal of this is to give the information that we gain through this contract to the task force so that they can help sort through the cost benefit analysis and make recommendations back to the commission about how best to spend any dollars that we can either raise through the community or identify through other sources to enhance that fairgrounds,” said Jean Bender, who sits on the county commission.

In the 2022 official budget, the county fair was given $150,000.

“It’s just that the county doesn’t have that type of funding to bring that up to the caliber of a place that it could be,” Heiberger said. “... I mean, the county has a lot of responsibilities, most of them are mandated by the state.”

Heiberger said there have been some recent updates to the fairgrounds, including new bathrooms and renovation work on the armory, but there’s still work to be done.

“We’ve definitely got repairs to do and we don’t have the money, and so it’s going to be a community effort. We’re going to have to look to our big businesses and the City of Sioux Falls, smaller communities or the agriculture sector. I’m not saying just your small-town farmers, but people who are willing to put into an agriculture fairgrounds, because that’s what this is,” Heiberger said. “This could be a huge gem for this whole Midwest area and the state of South Dakota. We’re trying to figure out how to put it together.”

The fairgrounds are also competing for agriculture shows such as horse shows and rodeos.

"We don't have a facility that can continue to compete at the level we need to do to draw those events in," Karsky said.

Officials for the Sioux Empire Fairgrounds were contacted for this story, but deferred comments to county commissioners. Two members of the task force were unavailable for comment.

This article originally appeared on Sioux Falls Argus Leader: Questions swirl around chance of Minnehaha County fairgrounds sale