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Legality of Stark County fairgrounds LLC in question following meeting

The Stark County state’s attorney has raised concerns over the legality of a public-private LLC being formed to develop the county’s fairgrounds.

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Park Board President Arnie Binek conveyed attorney Tom Henning’s concerns during the county Fair Association’s Wednesday night meeting at the North Dakota State University Extension building. Henning initiated a separate meeting about the LLC, Binek said, with concerns over whether public entities can be in LLCs.

Dickinson State University Foundation lawyer Paul Ebeltoft thinks forming an LLC is fine, so Binek said “that’s gonna be a discussion later.”

The group, steered mostly by Fondation CEO Kevin Thompson, recently filed for LLC registration with the North Dakota Secretary of State with plans to develop and run an indoor facility and outdoor arena for land the park board recently purchased south of town.

“So we’re looking at how we can do this,” Binek said. “We’re not there yet.”

Fair association chairwoman Lee Ann Karsky suggested the groups involved go back to the plan from before the Foundation got involved — her association, after all, was created to run the fairgrounds. It already has representatives from the county, the park board and the Roughrider Commission — all the groups in the planned LLC, except the Foundation.

A likely plan moving forward is to reverse roles, with Thompson being a representative on the fair board.

Karsky said to her, the LLC seems like the same board being recreated.

“I’m really scared of that LLC and the way it’s wrote up,” she said.

Fair association lawyer Sandy Kuntz didn’t sign off on the LLC either. She said it’s “wasting off a lot of resources” with how duplicative it is of the fair association.

“This group was designed for exactly what you wanted — to run a fairgrounds,” she said.

Plus, the association has the benefit of being a government entity, with defined processes for public hearings, etc.

“You’re throwing an awful lot of effort into an entity that we already got established statutorily,” Kuntz said. “The LLC does not make sense.”

Dickinson State University was also a planned LLC member but resigned recently — something fair board member Frank Klein called “strictly a political decision.”

Kuntz suggested a joint ventures agreement or contract between the fair association and the Foundation to clearly lay out whose role is whose, and where public money goes.

Klein pointed out that other counties in the state commonly are in control of their own fairgrounds.

The park board a year ago allocated $300,000 for planning and development to the DSU Foundation.

All were wary of any planning group that involved too much runaround in decision-making. And with $300,000 already put toward the project, Binek doesn’t want to start from scratch.

“I don’t want to start it all over,” he said. “We’ve got a lot of money spent and a lot of work done already.”