Audit: Milwaukee Mile Hurts State Fair Finances

Thursday, July 24, 2008 12:32 PM CDT

The Milwaukee Mile is dragging down State Fair Park's financial position, according to an analysis by the Wisconsin Legislative Audit Bureau.

The annual report said State Fair Park turned a profit in 2006-07 for the first time in eight years. It's predicting a $400,000 profit this year.

But State Fair Park will incur about $1.1 million annually in debt service payments beginning this year that were supposed to be covered by Milwaukee Mile Holdings LLC when it took over as promoter in December 2005. Those costs were shifted back to the park in contract revisions that cut the amount the promoter had to pay in licensing fees.

“We cannot continue to amend this agreement to the detriment of the taxpayer,” said Rep. Suzanne Jeskewitz, co-chair of the state's Joint Legislative Audit Committee. “Perhaps it's time to determine if we need to cut our losses and redevelop the property. How much money can you throw down a black hole?”

State Fair Park Deputy Director and Chief Financial Officer Craig Barkelar said there will be no more revisions to the contract. Both he and Milwaukee Mile Holdings Chairman Craig Stoehr said it would be premature to shut down the Mile.

Driver Dario Franchitti, an IndyCar Series winner, said it upsets him to hear Jeskewitz's comments.

“It's a great facility,” he said. “I saw the Nationwide race was a really good crowd. The IndyCar race was a good crowd. Cup teams test up there as well, and there's other races that go on there, too. I mean, come on, guys. I would hope that doesn't happen.”

ESPN commentator Rusty Wallace, a five-time winner at the Mile in United States Auto Club and American Speed Association stock cars, said for the track to close “would be horrible.” He said the marketing people need to sell more sponsorships and promote it better.

Wallace is also the designer of Iowa Speedway, which hosts the IndyCar Series, ARCA stock cars and the ASA Midwest Series stock cars. Although 100,000-plus-seat, corporate-owned tracks have come to dominate the racing industry, there is still a place for smaller venues such as Milwaukee and Iowa, Wallace said.

Also in the audit:

- The bureau recommended that the fair park board re-evaluate the way it selects livestock judges and seek an opinion from the state's Government Accountability Board on whether Agriculture Department Director Brian Bolan's outside business interests represent a conflict of interest.

The Milwaukee Journal Sentinel reported last year that Bolan, who oversees the fair's livestock shows, was part owner of two heifers that won championship ribbons in the 2005 and 2006 State Fairs.

Bolan, who breeds cattle, said at the time he would curtail his private business to keep his post. But the Audit Bureau said he continued that work at least through March of this year.

- The deficit continues to worsen for the 6-year-old Wisconsin Exposition Center, financed with $44.9 million in industrial revenue bonds by a nonprofit organization created by the fair park board, according to financial statements reviewed by the Audit Bureau. The deficit nearly doubled to $2.3 million from 2005 to 2006, according to the statement.

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