Jill Schramm/MDN The Minot Country Club clubhouse, shown Wednesday, is owned by the North Dakota State Fair Foundation and has been leased to Minot Country Club. The property now is in foreclosure.

The North Dakota State Fair Foundation is dissolving, and the blame is falling on a former board president.

At the request of the North Dakota State Fair Association, the Minot Area Community Foundation has stepped in to help ensure that charitable programs and donations can continue.

The fair foundation board announced on social media on Nov. 21 that the foundation is closing.

“After conducting thorough analysis and reviewing the numbers, the Board has concluded that our incoming funds and donations are not aligning with the Foundation’s needs. As we all know, the economy has been somewhat sluggish over the past couple years, and the costs to operate an organization are continuously rising,” the foundation stated.

In a news release provided in response to an inquiry regarding the closing, the foundation explained: “In 2014, then board president Todd Berning, requested that the Foundation create the North Dakota State Fair Foundation Tax Credit Endowment Fund into which funds would be contributed and allowed to grow, ensuring a stream of money for the Foundation to support the North Dakota State Fair for years to come. Throughout 2014, 2015 and 2016, over two million dollars were placed into the Endowment Fund.

“At the recommendation of Todd Berning, a portion of funds in the Endowment Fund were used to purchase real estate in Ward County. Following the purchase of the real estate, a lease agreement was entered into between the Foundation, as the landlord, and the Minot Country Club, Inc. and Golf Minot, Inc., as the tenant. In addition, Todd Berning spearheaded the lending of the remaining monies in the Endowment Fund to Golf Minot, Inc. to partially finance the new Minot Country Club. The Foundation only recently became aware that Todd Berning was directly involved in Minot Country Club, Inc., which may have included a financial interest.

“Unbeknownst to the other board members of the Foundation and contrary to the Foundation’s ByLaws, in January 2015, Todd Berning signed a mortgage in the name of the Foundation pursuant to which the Ward County real estate purchased through the Endowment Fund was offered to secure a $2,500,000 loan to Golf Minot, Inc. by First International Bank and Trust. Golf Minot, Inc. has now defaulted on its loans with First International Bank, defaulted on its loans to the Foundation and breached the terms of the lease agreement. First International Bank has commenced a legal action to foreclose on the mortgage signed by Todd Berning and take the real estate that was to be the future of the Foundation and its support for the North Dakota State Fair.

“The actions of Todd Berning have irreparably harmed the Foundation to such an extent that it no longer sees itself capable of fulfilling its intended purpose of supporting the North Dakota State Fair and its participants,” the release concluded.

The foundation property at 1912 Valley Bluffs Dr. SE in Minot includes the clubhouse and parking lot. Golf Minot/Minot Country Club owns the golf course land and also is facing foreclosure.

The most recently listed board president for Minot Country Club did not respond to a phone message and Berning was unable to be contacted. Berning was founder and president of EPIC Companies, which along with several of its affiliates is in bankruptcy. He also faces a bank foreclosure proceeding in North Central District Court on a mortgage for Henry Land Holdings, which he and two co-defendants used to purchase nine lots adjacent to The Tracks development on 37th Avenue Southwest in Minot.

Ward County tax records show the fair foundation’s 7.8 acres of golf course property, with a market value of about $2.48 million, have unpaid taxes since 2022. With penalties, the total owed is $109,343. Also delinquent, Golf Minot owes taxes and penalties of $80,312 on 161 acres valued at nearly $2 million, county records show.

Jason Zimmerman, president of Minot Area Community Foundation, said MACF had handled donations for the State Fair Association from 2003 until the formation of the fair foundation in 2010. Last October, Fair Manager Craig Rudland asked MACF to reestablish its agreement with the association, he said.

“The primary objective is to ensure the continuity of their existing programs, like their scholarships program and their 4-H and FFA chapter grants, and then to, hopefully, provide an outlet for people that want to support the State Fair through charitable giving,” Zimmerman said.

The scholarship program, funded by Hess Corp., provides several annual scholarships of up to $10,000 per scholarship. The grant program provides up to $500 grants to 4-H clubs or FFA chapters for community service projects or to support participation in the State Fair. Because of application deadlines, the fair association acted quickly to get those programs in place with MACF.

“That was a little bit of the urgency behind just making sure that there was a mechanism in place for the State Fair Association and their partners to support those programs,” Zimmerman said.

If the fair association wishes to embark on initiatives to support the fair, MACF can serve as the avenue for donors to provide charitable gifts. However, the association must conduct its own fundraising activities. MACF also won’t be taking on the charitable gaming functions of the fair foundation.

In addition, MACF has had discussions with the fair board about setting up an endowment fund, Zimmerman said.

He noted MACF, which celebrates 25 years next year, is transparent about its operations and is independently audited every year.

“We’re more financially stable than we’ve ever been. And so, I would hope that would give potential donors a level of comfort in knowing that their dollars would be going to what they want those dollars to go to, and that the intent of their gift is followed,” he said in the wake of the fair foundation’s troubles. “The unfortunate part about it is the essence of the State Fair has been about 4-H, FFA, the youth side of things. That was not lost on Craig or the board of directors. These kids that work so hard to participate in their North Dakota State Fair should not be punished.”

Update: The North Dakota State Fair Foundation’s tax delinquency on a second parcel at the Minot Country Club is $15,075, bringing total tax owing to $124,418. Golf Minot also has an additional parcel, bringing its total tax owed to $109,222.