On June 3, 1938, Mrs. Winona A. Lyon deeded to Minnehaha County 49.57 acres of land on the west side of the Sioux River, south of Highway 38, near West Sioux Falls for use as a fairground, subject to rigid "exceptions, reservations, restrictions and limitations". Under the terms of the gift, the grounds must be designated as the "William H. Lyon Fair Grounds" and shall be maintained, managed and controlled by the county Commissioners and their successors in office, for use of the public as a County Fair Grounds, wherein generally specified displays of farm produce, livestock and crafts could be exhibited, and 4-H Clubs and Home Extension work could be demonstrated. Provision is also made for the entertainment of the public with amusements of various kinds.
The terms of the gift also stated that, "In the event of the failure of the grantee to hold such fairs or exhibitions for five consecutive years, then, in that event, the said premises and title shall immediately revert to the grantor or next of kin to the grantor, with the right of immediate possession.
On February 17, 1940, a deed, supplementary to that of June 3, 1938, was made to "explain and amplify the intention of the grantor," covering the same deed for the former date. In case of fire, flood, tornado or State or National emergency, the five-year stipulation would be waived.
On July 17, 1942, additional land was donated by Mrs. Lyon under the same general terms, plus other conditions as follows: "Providing a highway shall be constructed and maintained extending west of Kiwanis avenue, bridging the Sioux River and entering said fairgrounds as near 3rd Street as possible, and that said highway be designated as Lyon Boulevard, and shall be 100 feet in width throughout its full length", the bridge to be of "ornamental and artistic design" and the same width as the roadway.
Entrance to the fairgrounds was to be made on the east line of county Auditor's Tract One (1) of the Northeast quarter (N. E. 1/4) of Section Thirteen (13), Wayne Township.
According to stipulations of the deed, at a point of entrance from the highway to the fairgrounds a suitable gateway was to be constructed and maintained, and thereto affixed a bronze plaque as a memorial to the late W.H. Lyon. A like entrance was also to be constructed and maintained at the south line of the Northeast one-half (N. E. 1/2) of the Southeast quarter (S. E. 1/4) of Section thirteen (13), Wayne Township. Provision is also made for a highway and bridal path from highway 16 to the south entrance of the grounds.
It was also provided that work on the highway, bridge and gateway "shall be commenced as soon as necessary labor and material can be obtained, and shall be completed in three years (from August 1, 1942), except in case of flood, fire, tornado, epidemic, State or National emergency."
The first fairs held on this fairground were in 1938-39. Some buildings, including the first section of the amphitheater, were built by WPA labor and material.
In 1940, the Sioux Empire Fair Association, Inc., was organized and took over the grounds on a lease from the county. The fair of that year was conducted on a much larger scale and included additional features such as horse racing, outdoor pageants, comedies and plays.