Since before the pandemic, the MBOTMA board has been interested in exploring the feasibility of MBOTMA acquiring its own permanent festival site. For the past several months, a task force of the board has been researching this possibility.
The idea of owning our own festival space is being explored as both a way to decrease event costs and to provide additional sources of organizational revenue. Owning a site allows for more flexibility and the ability to scale our programming, but there are many factors to consider.
At the April board meeting, the Land and Capital Planning committee offered an update about its work exploring these issues. The following are objectives and key considerations generated by the committee.
● Identify risks and opportunities associated with owning festival grounds and event space.
o Key consideration: Any land purchase must present an opportunity for revenue growth and long-term sustainability. Much of the infrastructure needed to host a bluegrass festival is similar to the needs of other events, like weddings, family reunions, and other similar gatherings. Can festival land also generate non-event revenue (farming, hunting, camping, etc.)? Does owning our own space save rental costs and volunteer hours? Does it open more programming options for us in the future (such as expanding Grass Seeds into a summer camp)?
o Key consideration: Does owning our own site carry insurmountable barriers related to insurance and meeting regulatory requirements?
o Key consideration: Any potential site development will take time and resources to become festival-ready; this could take up to two years. Can we manage our regular programming while also building out a new site?
o Key consideration: Any business beyond festival hosting will have an impact on staffing and may require new roles as operations scale up.
● Determine factors in identifying viable site locations.
o Key consideration: Potential sites must be located closer to significant population centers than our current site, and be located in a community that represents increased opportunity for local engagement and sponsorship of events.
o Key consideration: Land with a variety of features is preferred. Wooded space for tent camping and shade, clear and flat space for RV hookups, plenty of site layout options, etc.
o Key consideration: 80 acres seems to be the minimum we would need to support our August Festival in its current state. More acreage may allow for growth and options during site development.
o Key consideration: Zoning and permitting will need to be sorted out as part of any potential purchase.
o Key consideration: There will be give-and-takes. Raw acreage may cost less on the front end, but require more in development. Sites with utilities (road access, electric, water, etc.) may have higher up-front costs but be more cost-efficient in the end.
● Build an understanding of the real estate market for such a venture and build scalable cost models to support a land search.
o Key consideration: There is a limit on what the organization can afford, which constrains the geographic location of potential sites. This hovers around the 1-hour-drive mark from the Twin Cities and first-ring suburbs.
● Locate viable sites and begin conversation and information gathering about potential purchase.
o Key consideration: This task is not as easy as calling someone up and purchasing land. There will always be a process of engaging with a seller, learning more about the property, and exploring the community.
o Key consideration: Managing this process as a nonprofit board will be clunky; can we move at the pace needed to secure a purchase in a competitive market?
The board engaged a real estate agent to support us in taking a more serious look at potential sites. As part of this process, the Land and Capital Planning committee drafted a business plan to support this type of purchase and has been determining what price points are in the range of feasibility given our current organizational structure.
Much sooner than we anticipated, we learned of a parcel of land, not yet publicly listed for sale, that seems to meet or exceed all of our requirements:
● Ideal location near the I-35 corridor, a reasonable distance from the Twin Cities, Duluth, and St. Cloud, with good local access to shopping, restaurants, and hotels, as well as potential sponsorship partners
● Ample size of nearly 160 acres; flat and dry with both open and wooded areas
● Already has water and electric on it as well as good road access
● Includes buildings and other features that could serve our program needs and provide meaningful sources of revenue for MBOTMA
● An unusually supportive, well-connected seller would like to bring an arts organization to the property as a cultural contribution to the region and has offered to help us obtain permits or zoning we may need
● An initial financial plan, considering the revenue opportunities that would be available immediately upon purchase, supports the viability of this potential purchase.
We do not yet have all the information we need to determine whether this property is suitable as a permanent festival site for MBOTMA. But, based on what we know currently, it seems an extraordinary opportunity that we should pursue to learn more.
Entering into a purchase agreement with appropriate contingencies in place gives MBOTMA the opportunity to determine the suitability of the site for our purposes.
Because the property is not publicly listed for sale, and to avoid unscheduled site visits, the seller asked MBOTMA not to make details of this opportunity public until and unless a purchase agreement was in place. This request presented a challenge at a time when improved board communication with members has been identified as a priority. However, the board concluded that to forgo this outstanding opportunity to avoid a temporary period of confidentiality would be a mistake that the organization might long regret.
At a special meeting held April 25, the board unanimously (8 of the 10 voting members being present) voted to move forward with a purchase agreement. At the May board meeting, after lengthy discussion held in closed session in continued respect for the seller’s request for confidentiality, the board affirmed its decision to execute a purchase agreement in order to begin the due diligence process.
MBOTMA will have 60 days after the execution of a purchase agreement to conduct due diligence to determine if the property is a feasible site for hosting our events and potential new events and activities in the future.
If we are not satisfied with the condition of the property, not satisfied that the site is suitable for MBOTMA’s purposes, or if we are unable to secure the necessary financing, we can terminate the purchase agreement within that 60-day period, and our earnest money will be refunded in full.
As of this writing, a purchase agreement has been drawn up by a real estate attorney representing MBOTMA and presented to the seller, but some terms are still under discussion and the agreement has not yet been accepted and signed by the seller. We expect that to happen soon. The 60-day due diligence period will start if and when that occurs.
Due diligence considerations will include:
● Inspections of environmental conditions, soil, well, septic, and other systems
● The likelihood of receiving required permits
● Verifying that any existing infrastructure supports our needs with the potential for appropriate expansion
● A beginning design concept and working punch list of development steps with estimated costs
● An understanding of the impact this will have on current staff workload and its potential impact on executing our current program plan
● An understanding of support from the local community
These next steps will require specific skills and expertise, some of which we hope to leverage from within our own community.
The board will be engaging our community to solicit input in this process and to call upon members with expertise to support us in the evaluation of the site. We need and want member input into this due diligence stage and, if the purchase goes forward, in planning and developing the site as our new festival grounds.
● We will share more specific details about the property after a signed purchase agreement is in place.
● Within the first few weeks of the 60-day review period, the board will hold a Zoom “town meeting” to hear from members and answer their questions.
● In the week ahead, we will be involving a cross-section of the membership -- some who have served previously on our board or key event committees, or who have particular expertise relevant to site development -- in providing some early input on the property.
● We will also schedule a general site visit opportunity for members soon.
● In the meantime, questions or comments may be sent to firstname.lastname@example.org.
● In addition to the “town meeting” opportunity, we will develop and continue to update Frequently Asked Questions to share answers to the questions we may receive.
In the coming weeks, please keep an eye out for one or more surveys to help us identify key priorities for site design, as well as other communications outlining specific ways you can get involved in this important project.