Astrodome FINAL Report 5-23-12
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Transcript of Astrodome FINAL Report 5-23-12
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1 CCOONNFFIIDDEENNTTIIAALL DDRRAAFFTT
For Discussion Purposes Only Subject to Change
RELIANT PARK MASTER PLAN ANALYSIS
April 9, 2012 Mr. Edgar Colon Harris County Sports & Convention Corporation One Reliant Park Houston, TX 77054
Dear Mr. Colon:
Conventions, Sports & Leisure International (CSL) in association with the consulting team comprised of Thinkwell Development, Populous, Entertainment + Culture Advisors, Venue Solutions Group, Management Resources, Pollavision and Manhattan Construction is pleased to present a summary report regarding the Reliant Park Master Plan Analysis. The attached report summarizes our research and analyses, and is intended to assist County representatives with their decisions regarding the Reliant Park Master Plan including the future use of the Astrodome site.
The information contained in this report is based on estimates, assumptions, and other information developed from research of the market, knowledge of the public assembly industry, and other factors, including certain information you have provided. All information provided to us by others was not audited or verified, and was assumed to be correct. Because the procedures were limited, we express no opinion or assurances of any kind on the achievability of any projected information contained herein and this report should not be relied upon for that purpose. Furthermore, there will be differences between projected and actual results. This is because events and circumstances frequently do not occur as expected, and those differences may be material. We have no responsibility to update this report for events and circumstances occurring after the date of this report. We sincerely appreciate the opportunity to assist you with this project, and would be pleased to be of further assistance in the interpretation and application of the study’s findings.
Very truly yours,
CSL International
Table of Contents Executive Summary ................................................................................................................................................................... i
1. Introduction ....................................................................................................................................................................... 1
2. Consultant Team .............................................................................................................................................................. 8
3. Reliant Park Analysis ................................................................................................................................................... 14
4. Market Analysis ............................................................................................................................................................. 55
5. Reliant Park Master Plan Analysis ....................................................................................................................... 100
6. Astrodome Site Future Use Analysis .................................................................................................................. 165
Appendices
i
Executive Summary
Executive Summary
ii
1.0 Introduction The history of Reliant Park began with the construction of the Harris County Domed Stadium, which opened in 1965. With the Astrodome as its anchor and the later addition of the Astroarena and Astrohall, the complex was later renamed Astrodomain. In 2002 the Astrohall was demolished and two new venues, Reliant Center and Reliant Stadium were added to what is now Reliant Park. The Astrodome and Astroarena have survived as Reliant Astrodome and Reliant Arena. Reliant Arena is still used for events, but few improvements have been made that would maintain its competitiveness with a modern building designed for similar use. Today, the Astrodome can no longer be used for public events.
In 2007, the Harris County Sports and Convention Corporation (HCSCC), a local government corporation formed to manage and develop Reliant Park, commissioned a study to assess the then current and future needs of the on-‐property tenants (the Houston Texans and the Houston Livestock Show and Rodeo), clients and potential clients of Reliant Park. The 2007 study (Reliant Park Master Plan) addressed concerns regarding the aging Reliant Arena, parking and traffic issues, the need for additional exhibit and meeting space for the Offshore Technology Conference (OTC) and program elements identified by the Houston Livestock Show and Rodeo (HLSR) as being essential to the continued growth of their event.
In 2010, the needs of the Reliant Park were again assessed in conjunction with discussions focusing on the possibility of repurposing the Astrodome to create a Science, Technology, Engineering and Mathematics (STEM) venue. The Reliant Park Master Plan was updated to reflect this new needs assessment. In July 2011, the HCSCC commissioned this study to provide an independent assessment of the market, financial, economic impact and funding parameters of the proposed Reliant Park Master Plan, including the options related to the future use of the Astrodome site. Harris County, The Houston Livestock Show and Rodeo, the Greater Houston Convention and Visitors Bureau, ARAMARK Sports & Entertainment, the Harris County-‐Houston Sports Authority, and the Houston Texans contributed to the funding of this study. The consultant team conducted an independent analysis, as well as, a comprehensive review of the numerous reports, studies and plans related to the Reliant Park Master Plan. Meetings were held with the Harris County Judge and Commissioners, key Harris County staff, Reliant Park tenants, operators and stakeholders to assess existing conditions, site attributes and constraints and to establish project goals for future use options. For the purposes of this study, the analysis was separated into two distinct elements: the Reliant Park Master Plan and the Future Use of the Astrodome Site. Further, the scope of work proposed in the Reliant Park Master Plan was separated into two distinct projects: the Replacement Arena Project and a possible on-‐site Hotel. The Replacement Arena Project includes the 8,000 to 10,000 seat performance arena, 250,000 square feet of exhibition space, a 45,000 square foot ballroom and additional meeting space, a 2,500 to 3,000 car parking garage,
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intermodal transportation center, demolition of the current arena and various site related projects. The Astrodome evaluation focused on four options for the future use of the Astrodome site: Maintain Status Quo, Reliant Park Plaza, Astrodome Multi-‐Purpose Facility and Astrodome Renaissance.
The following are the consultant team’s conclusions regarding the Reliant Park Master Plan including the future use of the Astrodome site:
• It is recommended that the Replacement Arena Project be developed at an estimated Project Cost of $385.4 million, less any amounts contributed by the Houston Livestock Show and Rodeo.
• It is also recommended that Harris County pursue the Multi-‐Purpose Facility option for the future use of the Astrodome site at an estimated Project Cost of $270.3 million (exclusive of the outstanding debt on the Astrodome), less any cost reductions obtained through available tax credits or sources other than Harris County property tax collections.
• In the event the Multi-‐Purpose Facility option is not chosen or available funds are not sufficient to support the Multi-‐Purpose Facility option, then Harris County should choose the Reliant Park Plaza option at an estimated Project Cost of $63.9 million (exclusive of the outstanding debt on the Astrodome).
• It is the design team’s strong recommendation that action be taken on the Replacement Arena Project and Astrodome. The improvements will have a significant positive effect on the tenants, major long term clients like OTC and committed special events including the 2016 Final Four and the 2017 Super Bowl bid. In order to derive these benefits this work must begin as soon as possible.
This Executive Summary contains the key findings and conclusions related to the feasibility and impacts of the various options contained in the Reliant Park Master Plan, including the future use of the Astrodome site. The Report should be read in its entirety to obtain the background, methods and assumptions underlying these findings.
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Executive Summary
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2.0 Consultant Team The consultant team consisted of the following companies:
• Conventions, Sports & Leisure International is a leading advisory and planning firm specializing in providing consulting services to the convention, sport, entertainment and visitor industries.
• Thinkwell is an industry leader in the concept development and design of large-‐scale destination resorts, theme parks, museums/exhibits, live shows, events and attractions.
• Entertainment + Culture Advisors is an international advisory firm focused on economic and market analysis for world-‐class destination entertainment and cultural development projects.
• Management Resources is a management consulting firm specializing in leisure-‐time attractions and events, including museums, aquariums, theme parks, destination resorts, corporate brand centers, world expositions and Olympiads.
• Populous is a global design practice specializing in creating environments that draw people and communities together for unforgettable experiences.
• Venue Solutions Group is focused on management and operations of public assembly facilities with municipalities, professional sports organizations, and private sector firms.
• Pollavision is a works cinema experience consultant supporting owners/operators, equipment suppliers and architects in designing and integrating all aspects of film, video and digital presentation.
• Manhattan Construction is known for building high profile, technically difficult mega projects. Manhattan is recognized for building excellence in sports stadiums, healthcare, government, education, laboratory, aviation, transportation, convention, casino and hospitality facilities.
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3.0 Reliant Park Analysis The Reliant Park Complex includes four venues: Reliant Stadium, Reliant Center, Reliant Arena and Reliant Astrodome. The Complex covers about 350 acres in the heart of the Harris County metropolitan area and provides parking for up to 26,000 automobiles. Reliant Park hosts a variety of public assembly events each year including sporting events, public consumer shows, conventions, trade shows and other entertainment events. The tenants at the Complex are the Houston Texans (Texans) and the Houston Livestock Show and Rodeo (HLSR). The Reliant Park Complex is also host to the annual Offshore Technology Conference and many other consumer shows and trade shows each year. Other pertinent facts that impact the analysis include the following:
• The three operational venues within Reliant Park (Reliant Arena, Reliant Center and Reliant Stadium) draw more than four million total visitors and host a combined total of 320 events annually.
• Since moving into Reliant Center and Reliant Stadium in 2002, annual attendance at the Houston Livestock Show and Rodeo has grown to over 2.2 million guests.
• The Offshore Technology Conference currently uses all of the available exhibit space in Reliant Arena and Reliant Center. Show producers have had to limit the growth of current exhibitors and in recent years have used air-‐conditioned tents in order to create additional exhibit space to meet the demand. The OTC has indicated that today, based on current demand, their event could use all of the exhibit space proposed in the Replacement Arena Project and most, if not all, of the exhibit space proposed in the Astrodome Multi-‐Purpose Facility. OTC and other event producers have expressed serious concerns regarding the condition and amenities in Reliant Arena. The location of Reliant Arena in relationship to Reliant Center, as it relates to the need for additional outdoor exhibit space on concrete to accommodate the increased demand for heavy outdoor exhibits, is also an issue.
• The lease agreement with the Texans limits event activity on their game days and restricts booking events at Reliant Park to one week per month during their season.
• The HLSR lease agreement allows for exclusive control of the premises during their show.
• Reliant Arena and the supporting exhibition and meeting spaces are well beyond the end of their expected useful life.
• In its current state, the Astrodome can no longer be used for public events.
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Financial Summary (in millions) – Reliant Park Operations
HCSCC/SMG has been successful at operating the various venues in Reliant Park, particularly given the scheduling constraints that are imposed because of the Texans and the HLSR scheduling needs. Essentially, HCSCC/SMG is able to schedule events only one week each month (the Protected Week) during the Texans’ season, prior to the April preceding those months, when the NFL schedule is released. Because of this restriction, the number of large-‐scale conventions and trade shows that can be scheduled are limited because these types of shows book venues several years in advance. Reliant Park hosts very profitable events. However, the overhead and related expenses incurred annually cause operating income to be negative in some years. The chart below summarizes the historical financial performance at Reliant Park.
4.0 Market Analysis Local market conditions and competitive venues are important components of assessing the potential success of the Reliant Park Master Plan and any proposed operations for the future use of the Astrodome site, including mixed-‐use development within the Astrodome Renaissance. The ability of a market to attract events, patrons, and generate revenues is measured, to some extent, by the size of the regional market area population and its income characteristics. Specific demographic and socioeconomic information that can affect the ability of a market to support sports and entertainment venues include
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population size, median age, age distribution, household income and corporate base. The following is a summary of the key characteristics of the Harris County market:
• Harris County is home to 23 Fortune 500 companies, ranking only behind New York and Chicago in the United States.
• Harris County was among the least impacted major metropolitan areas in the U.S. during the recent global recession and is recovering faster than the general economy, adding 62,300 jobs from September 2010 to September 2011 – highest in the United States.
• Based on the 2010 census, the Harris County metropolitan area has a population of approximately 5.7 million in the primary market (within an hour drive of the venue site) and approximately 6.9 million in the secondary market area (within a two hour drive of the venue site).
• In addition to Houston being the fourth largest city in the United States, both San Antonio (7th largest city in the U.S.) and Dallas (9th) are within 300 miles of Reliant Park, further increasing the potential market within an easy day’s drive of the venues.
• Total business and tourist travel to Harris County in 2010 was approximately 9.0 million visitors.
• Harris County’s convention business struggles at both Reliant Park and the George R. Brown Convention Center because of a lack of full-‐service hotels in close proximity to the exhibit halls.
• The Harris County metropolitan area offers its residents and visitors a significant variety of entertainment, four professional sports franchises, several major universities and a vibrant museum and cultural district. As a result, any new programming considered for the redevelopment of the Astrodome must include significant unique elements that create a destination for the region.
• Among facilities hosting live entertainment in the greater Harris County area, Cynthia Woods Mitchell Pavilion, Toyota Center, BBVA Compass Stadium, Merrell Center, Berry Center, Bayou Music Center, and House of Blues Houston represent the highest level of potential competition to the proposed performance Arena and/or the redevelopment of the Astrodome.
• While there are competitive venues in the Harris County area, there is not a mid-‐size indoor arena with a capacity in the 8,000 – 10,000 seat range.
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5.0 Reliant Park Master Plan Analysis As previously mentioned, the HCSCC commissioned a series of studies to develop a Master Plan for the Reliant Park Complex. These studies considered various options to address Reliant Arena deficiencies, the future use of the Astrodome site, the possibility of an on-‐site hotel and other concerns regarding the Complex. HLSR and the Texans were active participants in the development of these studies and the conclusions reached. The Reliant Park Master Plan proposed construction of the following components: Replacement Arena Project
The Replacement Arena Project includes the following components:
• Performance Arena with 8,000 to 10,000 fixed seats • 250,000 square feet of exhibition space • 45,000 square foot ballroom with additional meeting space • 2,500 to 3,000 space parking garage • Intermodal Transportation Center • Festival Plaza • Demolition of the current Reliant Arena and Plant II • Site improvements and paving
Hotel To address the need for an on-‐site Hotel, the Master Plan proposes construction of a hotel tower above the new exhibition space. An underground parking garage with a dedicated entrance off Fannin would support the hotel; therefore day-‐to-‐day hotel operations would not negatively affect street level activities during events. HCSCC has stated that Harris County property tax would not be used to construct the hotel. NOTE: Detailed cost and operating information is provided in Section 5.4 On-‐Site Hotel.
Astrodome
The Reliant Park Master Plan proposed three options for the future use of the Astrodome site: Reliant Park Plaza, Astrodome Multi-‐Purpose Facility, and Astrodome Renaissance. A fourth option, Maintain Status Quo, was added in this study. NOTE: For
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the findings, conclusions and recommendations regarding the future use of the Astrodome site see Section 6 of the Executive Summary. When combined with the existing facilities, the redeveloped Reliant Park Complex is anticipated to yield the following results:
• Satisfy the future needs of the Houston Livestock Show and Rodeo
• Extend the long-‐term relationship with the Offshore Technology Conference
• Increase parking revenues from the additional spaces available from the parking garage
• Attract larger conventions and trade shows
• Create new business opportunities and attract additional event activity
• Increase marketability and bookings for concert and entertainment events
• Allow more events to be booked simultaneously
• Increase income from arena events
• Create new income from premium seating opportunities
• Increase income from advertising and sponsorship sales
• Increase income from existing events
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ReliantAstrodome
Site
ReliantStadium
Reliant Center
ParkingGarage
PerformanceArena
ExhibitionHalls
FestivalPlaza
Bridge
TransportationCenter
HotelCarruth
Plaza
Reliant Park Master Plan
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Project Costs – Reliant Park Master Plan
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Preliminary Project Schedule – Reliant Park Master Plan
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Financial Summary (in millions) – Reliant Park Master Plan
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Conclusions and Recommendations
The following are the consultant team’s conclusions regarding the Reliant Park Master Plan.
• It is recommended that the Replacement Arena Project be developed at an estimated Project Cost of $385.4 million, less any amounts contributed by the Houston Livestock Show and Rodeo.
o Depending upon the option selected for the Astrodome, additional exhibition space in the Replacement Arena Project may be required.
o It is the design team’s strong recommendation that action be taken on the Replacement Arena Project and Astrodome. The improvements will have a significant positive effect on the tenants, major long term clients like OTC and committed special events including the 2016 Final Four and the 2017 Super Bowl bid. In order to derive these benefits this work must begin as soon as possible..
• It is also recommended that HCSCC continue its efforts to secure a private developer for the on-‐site Hotel.
o The analysis shows that the on-‐site Hotel would have a positive impact on Reliant Park.
o The HCSCC has stated that Harris County property taxes will not be used to develop the hotel.
6.0 Astrodome Site Future Use Analysis Options
A considerable amount of time and effort were devoted to evaluating various development and operational scenarios for the future use of the Astrodome site. Each of the development options was evaluated based on the financial and market viability of the possible option. The following options for the future use of the Astrodome site have been considered in detail in this report:
Maintain Status Quo
This option maintains the Astrodome in its current condition. The building will remain unusable and the cost of maintenance will continue to rise as the building ages and systems further deteriorate.
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Reliant Park Plaza
This option demolishes the Astrodome, fills the existing site to grade and constructs Reliant Park Plaza with perimeter support facilities for outdoor events.
Astrodome Multi-‐Purpose Facility
This option would renovate the Astrodome into a multi-‐use indoor event facility. A new event floor would be constructed at grade, existing seating would be removed, systems would be upgraded or replaced and improvements would be made to the roof and exterior skin.
Astrodome Renaissance
This option would overlay the Multi-‐Purpose Facility with Science, Technology, Engineering and Mathematics (STEM) programs and/or privately funded concepts, including retail, dining and entertainment (RD+E) and attractions. Approximately 400,000 square feet of new space would be created within the Astrodome to house the overlaid components. A new operating entity would be established to develop, fund and manage the Astrodome Renaissance improvements and operations. Funding for the new entity would be derived from tenant leases, philanthropic sources and other Astrodome Renaissance revenues.
While all options require public funding, the Astrodome Renaissance option as considered herein may only be pursued if the Astrodome Multi-‐Purpose Facility option is selected. Further, this option would only be considered if private sector and/or philanthropic funding can be found to support construction and operations. The Astrodome Renaissance option could be executed concurrently with the construction of the Astrodome Multi-‐Purpose Facility or at a point in the future. However, it should be noted that future construction costs would be higher.
Summary
The key findings related to the options for the future use of the Astrodome site are summarized below:
Maintain Status Quo
• Requires increasing maintenance and capital expenditures as the building ages
• Reduces the appeal of the Complex due to ongoing deterioration of the building
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• Obstructs site circulation and event operations
• Preserves the option to determine a best use in the future
• Provides no benefit from expenditures
Reliant Park Plaza
• Is the lowest publicly funded Project Cost option
• Creates additional parking
• Provides additional outdoor event space
• Reduces current Reliant Park maintenance costs
• Improves site circulation and access
Astrodome Multi-‐Purpose Facility
• Is the highest publicly funded Project Cost option
• Expands and supports core business
• Has a greater operating loss than the proposed Reliant Park Plaza
• Preserves the opportunity for additional future use
• Improves site circulation and access
• Provides interior, column-‐free, high bay exhibition space
• Creates a highly marketable, functional and unique space
• Offers ideal location for fairs, festivals and performances
Astrodome Renaissance
• All Multi-‐Purpose Facility findings apply, including opportunity for future use
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• Provides opportunity for third party development
o There are significant restrictions on the site that would impact third party development
• Creates a regional destination
General Findings
• Each option has capital costs to Harris County. Additionally, all options have operating shortfalls.
• Tenant operating restrictions will make it challenging for a third party operator to justify investment in the Astrodome Renaissance.
• The STEM concept is supported by several of the stakeholders in Reliant Park and could be an important addition to the Harris County area and the local education system. Our conversations with local colleges and universities have indicated a willingness to participate in a consortium for the development of the STEM program in the Astrodome.
• The costs associated with any STEM development and operation will require the financial involvement of the private sector. This will also require the creation of management infrastructure to operate the program and maintain the facility.
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Financial Summary (in millions) – Astrodome Future Site Use Analysis
Astrodome)Site)Option Status)Quo Reliant)Park)Plaza Astrodome)Multi8Purpose)Facility
Astrodome)Renaissance)[3]
Harris)County)FundingProject)Cost)[)1)] 8$)))))))))))))))))))))) 63.9$))))))))))))))))))) 270.3$))))))))))))))))) 385.4$)))))))))))))))))[)8)])Other)Funding)(i.e.)Private,)Philanthropic,)Other)) 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) (115.1)$))))))))))))))))Total)Harris)County)Funding 8$)))))))))))))))))))))) 63.9$))))))))))))))))))) 270.3$))))))))))))))))) 270.3$)))))))))))))))))Annual)Repair)and)Replacement 1.0$))))))))))))))))))))) 0.7$))))))))))))))))))))) 2.0$))))))))))))))))))))) 2.0$)))))))))))))))))))))
Operating)ResultsRevenue 8$)))))))))))))))))))))) 0.5$))))))))))))))))))))) 1.7$))))))))))))))))))))) 1.7$)))))))))))))))))))))Expenses 8)))))))))))))))))))))))) (1.2)))))))))))))))))))))) (3.6)))))))))))))))))))))) (3.6))))))))))))))))))))))Net)Operating)Income 8$)))))))))))))))))))))) (0.7)$))))))))))))))))))) ) (1.9)$))))))))))))))))))) ) (1.9)$))))))))))))))))))) )Rent)from)Third)Party)Operations 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) 12.5$)))))))))))))))))))Incremental)Expenses)Related)to)Third)Party)Revenues (4.6)$))))))))))))))))))) )Incremental)Debt)Service)Related)to)Astrodome)Renaissance 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) (8.9)$))))))))))))))))))) )Total)Income)(Loss) 8$)))))))))))))))))))))) (0.7)$))))))))))))))))))) ) (1.9)$))))))))))))))))))) ) (2.9)$))))))))))))))))))) )
Economic)ImpactTax)Revenue 8$)))))))))))))))))))))) 0.1$))))))))))))))))))))) 0.8$))))))))))))))))))))) 8.1$)))))))))))))))))))))Direct)Spending 8$)))))))))))))))))))))) 0.8$))))))))))))))))))))) 6.8$))))))))))))))))))))) 77.9$)))))))))))))))))))Total)Output 8$)))))))))))))))))))))) 1.3$))))))))))))))))))))) 10.8$))))))))))))))))))) 125.5$)))))))))))))))))Personal)Earnings 8$)))))))))))))))))))))) 0.5$))))))))))))))))))))) 4.3$))))))))))))))))))))) 52.6$)))))))))))))))))))Jobs 0 18 153 2,221
["1"]"Project"costs"do"not"include"outstanding"Astrodome"debt.
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Conclusions and Recommendations The following are the consultant team’s conclusions regarding the future use of the Astrodome site:
• It is recommended the Multi-‐Purpose Facility option be selected for the future use of the Astrodome site at an estimated cost of $270.3 million*, less any cost reductions obtained through available tax credits or sources other than Harris County property tax collections.
o This recommendation considers more than just the financial projections. It recognizes the magnitude of potential opportunities offered by this one-‐of-‐a-‐kind structure. In the Multi-‐Purpose Facility option the event floor would be over 300,000 square feet, column free and rising to a height of over 200 feet. The result is any event is possible, making Reliant Park a truly unique destination. There is simply no space like this in the world today.
o In the event this option is not chosen or available funds are not sufficient to support the Multi-‐Purpose Facility option, then Harris County should choose the Reliant Park Plaza option at an estimated cost of $63.9 million*.
o It is the design team’s strong recommendation that action be taken on the Replacement Arena Project and Astrodome. The improvements will have a significant positive effect on the tenants, major long term clients like OTC and committed special events including the 2016 Final Four and the 2017 Super Bowl bid. In order to derive these benefits this work must begin as soon as possible.
• Analysis of the Astrodome Renaissance has been unable to identify a mix of uses that can be financed today through traditional sources. However, if Harris County elects to pursue the Multi-‐Purpose Facility option, it preserves the Astrodome Renaissance option if other sources of funding become available.
• The Status Quo option is not recommended.
*These amounts do not include the outstanding debt on the Astrodome.
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Alternative Funding Sources In addition to funds provided by the County, there are three primary sources of funding for the Master Plan components and the Astrodome Multi-‐Purpose Facility:
• Rehabilitation Tax Credits;
• New Market Tax Credits; and
• Immigrant Investor Program (EB5) Funding.
The two tax credits are essentially grants that go to offset the total cost of the project. The EB5 funding is a type of debt that will need to be repaid. However, it can potentially be subordinated to county funds and other debt used to finance the project. Additionally, the cost of the EB5 debt is most likely very favorable for a project of this type.
Other financing vehicles (e.g. Tax Increment Reinvestment Zone bonds, Texas Economic Development Fund loans) have been identified as potential financing options, but not quantified.
A summary of each of the three alternative funding sources is set forth below:
Rehabilitation Tax Credits
Generally, a project can receive Rehabilitation Tax Credits equal to twenty percent (20%) of the total amount expended to repair or improve an historic building. However, there are several issues that would have to be addressed in order to receive these funds for the Astrodome.
First, the Astrodome would have to receive formal designation as an historic building. This is a process that would probably be successful in this case. This designation would impose specific restrictions on the maintenance of the building and would likely make it more difficult to make material alterations to the structure in the future. Second, the tax credit is available to the owner of the property. Because the HCSCC is a tax-‐exempt entity, an arrangement with a company that pays taxes would have to be developed that would satisfy this requirement. Third, only those expenses beyond the basis of the building are eligible in determining the amount of this tax credit. Thus, care must be taken with respect to expenditures to ensure that they are not incurred prior to the historic designation; as such, expenses could not be included and thus would lower the total amount of the potential tax credit. Fourth, if the tax credits are monetized, the value would
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be less than the total amount of the tax credit. Current market conditions indicate the monetized value would likely be 75% of the total amount of the tax credit.
New Market Tax Credits
The New Market Tax Credit Program provides a credit against Federal income taxes for investors that make “Qualified Equity Investments” (QEI) into “Community Development Entities” (CDE). Thus, the project must meet the definition of a CDE and the investment must satisfy the definition of the QEI, which should be accomplished in the case of rehabilitating the Astrodome. Once these requirements are satisfied and the credit is earned, the credit is taken over a seven-‐year period. However, the investment must remain in the CDE throughout the entire seven years and the total amount of the tax credit taken over that period is capped at 39% of the original investment. While the rehabilitation costs of the Astrodome would exceed $50 million, because of current market conditions and the limited availability of allocations for New Market Tax Credits, it would likely be the case that the investment eligible would be capped at $50 million or less. (Typical investments for which New Market Tax Credit allocations are received are between $5 million and $25 million.) Additionally, the monetized value of the allocation would likely be 65%, making the total amount of the New Market Tax Credits equal to $12.187 million for all scenarios.
Immigrant Investor Program (EB5) Funding
The EB5 funding program is operated by U.S. Citizenship and Immigration Services (USCIS). USCIS requires that all investments made through this program be “at risk”, with no guarantees provided to the investors. Additionally, EB5 funds are debt, and must be repaid. However, the terms are usually significantly more favorable than other sources of private debt and similar types of financing.
The amount of funds that can be provided to a project are determined by the number of jobs (direct and indirect) that are created or retained through a project during the initial two years of the project. In addition to indirect jobs, construction jobs are included in this calculation. Once the total jobs created or retained are computed, $1 million for every ten jobs can be loaned to the project. (This number can increase if the project is in a designated Targeted Employment Area (TEA), which is an area with unemployment at or above 150% of the national average). The TEA can be tailored based on a specific project but must be approved by USCIS.
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The chart below sets forth the amounts that could be contributed toward development costs from each of the three alternative sources:
Note: Appendix V contains additional information on Alternate Funding Sources.
1
1.0 Introduction
1.0 Introduction
2
1.1 Background When the Harris County Domed Stadium opened in 1965, it did not disappoint. “The Dome” was the world’s first multi-‐purpose, air-‐conditioned, fully enclosed sports stadium. But it was so much more than a stadium: it was an engineering marvel—nicknamed the “Eighth Wonder of the World” and the “Can-‐Do Cathedral”. The new state-‐of-‐the-‐art stadium put Houston and Harris County on the map and revolutionized the way the world played and watched sports.
Today, however, the first domed stadium finds itself sitting idly on the sidelines, shuttered and in need of major upgrades and improvements. The venue is no longer used for any sporting or public assembly events due to the unusable condition. What remains is an opportunity for Harris County to determine the highest and best use of the Astrodome site and address other needs within the Reliant Park complex.
To handle this opportunity in a manner that is both responsive to the needs of the community and fiscally responsible, the Harris County Sports & Convention Corporation (HCSCC) developed the Reliant Park Master Plan. For the purposes of this study, the analysis was separated into two distinct elements, the Reliant Park Master Plan and the future use of the Astrodome site.
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1.2 Reliant Park Master Plan In 2007, the HCSCC commissioned a master plan for the Reliant Park Complex to serve as a roadmap for all future development on the site. The project team first met with the tenants, the facility operator and other users of the Complex to develop a program of spaces based on each groups’ respective needs. At that time, both the HLSR and the OTC identified the need and their preference for additional exhibit and meeting space contiguous to Reliant Center, expressed concerns regarding the isolated location of Reliant Arena and the overall condition of the almost 40-‐year-‐old facility. The studies considered a variety of options including renovation of Reliant Arena, but given the location and issues related to the overall design characteristics of the facility, renovation did not address all of the concerns and was seen viable only as a short-‐term solution to the problems.
Following the program development phase of the project, the project team worked with the tenants and users to finalize the Reliant Park Master Plan. Possible locations for the new development included locations to either the west or south of Reliant Center. The study also took into consideration possible future uses of the Astrodome site in establishing the location for the replacement arena. The final plan established that the best location would be south of Reliant Center in the L-‐shaped configuration as shown on the Reliant Park Master Plan drawings contained herein. The Reliant Park Master Plan was then presented to the tenants and the OTC for review. After reaching a consensus by all parties, the HCSCC adopted the 2007 Reliant Park Master Plan.
The Reliant Park Master Plan was updated in 2010 in conjunction with discussions focusing on the possibility of creating a Science, Technology, Engineering and Mathematics Institute in the Astrodome. At the time, concerns related to the need for additional on-‐site parking, improved traffic flow and the possibility of incorporating an on-‐site hotel to improve Reliant Center’s marketability for conventions and major events were addressed. The final plan is shown on the following page.
1.0 Introduction
4
ReliantAstrodome
Site
ReliantStadium
Reliant Center
ParkingGarage
PerformanceArena
ExhibitionHalls
FestivalPlaza
Bridge
TransportationCenter
HotelCarruth
Plaza
Reliant Park Master Plan
1.0 Introduction
5
The scope of work proposed in the Reliant Park Master Plan was separated into two distinct projects for the purposes of this analysis and contains the project elements described below. Replacement Arena Project
The Replacement Arena Project includes the following components:
• Performance Arena with 8,000 to 10,000 fixed seats • 250,000 square feet of exhibition space • 45,000 square foot ballroom with additional meeting space • Festival Plaza • 2,500 to 3,000 space parking garage • Intermodal Transportation Center • Demolition of the current Reliant Arena and Plant II • Site Improvements and paving
Hotel
To address the need for an on-‐site Hotel, the Master Plan proposes a privately funded hotel tower constructed above the new exhibition space. An underground parking garage with a dedicated entrance off Fannin would support the hotel; therefore day-‐to-‐day hotel operations would not negatively affect street level activities during events.
1.0 Introduction
6
1.3 Future Use of the Astrodome Site The experts reviewed numerous reports, studies and plans related to the Astrodome, the overall Reliant Park Master Plan, and Harris County. Meetings were held with key Harris County staff, Reliant Park operators, and Reliant Park stakeholders to assess existing conditions, site attributes and constraints and establish project goals to address available options for the Astrodome. To begin to establish a clear vision and sound organizational principal to ensure the Astrodome’s future use reaches its full potential, the experts organized their research and findings into four distinct options for the HCSCC to consider as it related to the reuse of the Astrodome:
Maintain Status Quo
This option maintains the Astrodome in its current condition. The building will remain unusable and the cost of maintenance will continue to rise as the building ages and systems further deteriorate.
Reliant Park Plaza
This option demolishes the Astrodome, fills the existing site to grade and constructs Reliant Park Plaza with perimeter support facilities for outdoor events.
Astrodome Multi-‐Purpose Facility
This option would renovate the Astrodome into a multi-‐use indoor event facility. A new event floor would be constructed at grade, existing seating would be removed, systems would be upgraded or replaced and improvements would be made to the exterior skin.
Astrodome Renaissance
This option would overlay the Multi-‐Purpose Facility with Science, Technology, Engineering and Mathematics (STEM) programs and/or privately funded concepts, including retail, dining and entertainment (RD+E) and attractions. Approximately 400,000 square feet of new space would be created within the Astrodome to house the overlaid components. A new operating entity would be established to develop, fund and manage the Astrodome Renaissance improvements and operations. Funding for the new entity would be derived from tenant leases, philanthropic sources and other Astrodome Renaissance revenues.
1.0 Introduction
7
1.4 Reliant Park Master Plan Analysis Framework Too many large-‐scale projects are “design-‐led” which results in ambitious plans and designs that are ultimately unable to be executed. The framework for the project development process is the “Value Pyramid”. The focus of the analysis in the early stages is to better define the project economics, program and operations-‐-‐-‐thereby establishing program, budget and investment goals first to inform the creative development process. Public investment and key constituencies’ needs and constraints are also part of this evaluation. The ultimate goal is to achieve the final stage of the Value Pyramid, whereupon a project is executed successfully to achieve the creative development, operational and economic objectives. An important component of the consulting team’s process is recognizing the multiple existing constituencies in the community that needed to be involved in the planning and development and potentially the operations of the project. Engaging these groups in a preliminary programming process will allow for quick discarding of unworkable ideas.
Development*Execu/on*
Content*Programming*
Design*
Planning*
Market*Research*
Project*Feasibility*
Preliminary*Program*
Preliminary*Valua/on*
Public*Investment*/*
Private*Investment*
Make*it*happen*
Create*it*and*define*it*
What*should*this*be*and*why?*
Harris*County*Sports*&*
Conven/on*Corpora/on*
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2.0 Consultant Team
2.0 Consultant Team
9
An overview of the qualifications of each of the consultants follows below:
CSL International
Founded in 1988, Conventions, Sports & Leisure International (CSL) is a leading advisory and planning firm specializing in providing consulting services to the convention, sport, entertainment and visitor industries. CSL was established for the specific purpose of providing a source of focused research and expertise in these industries. Services include new/expanded event facility feasibility studies, organizational reviews/performance enhancement studies, destination master planning, industry benchmarking, negotiation assistance and related services. With a staff of 15 professionals, CSL has completed over 500 consulting engagements throughout North America and abroad, focusing on a variety of event facility planning, strategic advisory services and economic development issues.
Thinkwell
For over a decade, Thinkwell has been an industry leader in the concept development and design of large-‐scale destination resorts, theme parks, museums/exhibits, live shows, events and attractions. Thinkwell’s creativity is never done in a vacuum but rather in an environment that brings all of the business elements together—operations, architecture and engineering, technical planning, branding and marketing, education and evaluation in addition to the design
experience—ensuring the project’s success. Thinkwell’s services are sought after by some of the most well-‐known and successful companies in the world, including Warner Bros., Universal Studios, Disney, Harrah’s Entertainment, Sesame Workshop, Hilton, MGM, Twentieth Century Fox, Cirque du Soleil, and the NFL, among many others.
2.0 Consultant Team
10
Entertainment + Culture Advisors
Entertainment + Culture Advisors (ECA) is an international advisory firm focused on economic and market analysis for world-‐class destination entertainment and cultural development projects. ECA principals, formerly with Economics Research Associates (ERA), bring a wealth of knowledge and experience to each project. They have completed more than one thousand entertainment and cultural projects working with leading international destination development professionals around the world. While ECA provides the necessary quantitative analysis required for each project, the added value is the insight they bring from years of international experience helping clients optimize business models with the right balance of visitation, revenue potential, and capital investment.
Management Resources
Management Resources is a management consulting firm specializing in leisure-‐time attractions and events, including museums, aquariums, theme parks, destination resorts, corporate brand centers, world expositions and Olympiads. Founded in 1980, MR provides business, operational, marketing and ticket sales planning and advisory services to a diverse group of clients throughout the world. While the company’s first commitment is always to its clients, it is also dedicated to advancing the field -‐ through participation in associations such as IAAPA, as well as through the progressive nature of the company’s own work. Management Resources takes considerable pride in the fact that many of the company’s projects have been recognized for THEA and other awards. Management Resources take equal pride in knowing that past clients value the company and its abilities and that those clients return again and again for help. Management Resources has been around for thirty years but it continues to retain the entrepreneurial spirit of a small, energetic company. That’s due to the tireless drive and enduring creativity of the strategists at Management Resources. The company combines the deep industry knowledge of 250 years of shared experience with a desire to apply new thinking and find innovative approaches to help its clients.
2.0 Consultant Team
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Populous
Populous is a global design practice specializing in creating environments that draw people and communities together for unforgettable experiences. With clarity of vision and purpose that only amplifies the company’s expertise, all of the people, portfolio, capabilities and expertise formerly known as HOK Sport Venue Event continue as Populous. Populous continues to offer comprehensive design services, including sports architecture, conference and exhibition center architecture, master planning, events planning and overlay, interior design, sustainable design consulting, environmental graphics and way-‐finding, and facilities operations analysis. Populous enthusiastically embraces the expertise they uniquely claim—drawing people together around teams, athletes, events, places, commerce, industry and ideas they wholeheartedly embrace and adore. Whether it’s an event with more participants than you’ve ever dreamed of, a city looking to transform an area into a more economically and sustainable asset, or a rapidly growing urban center, Populous’ skills uniquely apply.
Venue Solutions Group
Three industry professionals bringing over 60 years of experience in the management and operations of public assembly facilities launched venue Solutions Group (VSG). Their history involves direct management of a variety of facility types, working closely with municipalities, professional sports organizations, and private firms. The expertise of these individuals includes venue operations, security/safety, guest services, sustainability, and administration. VSG can evaluate the overall operations and processes a venue utilize in order to fulfill their obligations from event procurement through completion. The company will identify strengths and weaknesses, identifying capital improvements (if necessary) that will allow a venue to broaden their appeal to event producers. VSG will also assess current and potential marketing opportunities, review the organizational structure, compare the facility’s specifications with competitors, and review rental structure, including ancillary fees, so that the facility is in the best possible position to meet its goals, whether those are based on finances, events, or a combination of the two.
2.0 Consultant Team
12
Pollavision
Pollavision was formed to fill the void between the theater owner/operator, equipment supplier and architect. With the popularity of people bringing the cinema experience to their home, the company has expanded into the home theater marketplace. Pollavision can comfortably work with the owner of the theater, the architect that is defining the space for the theater or the equipment supplier that is providing the equipment in the theater. Since Pollavision does not supply any equipment, it can maintain a neutral position as far as equipment selection and room design. The company’s mission is to provide the best performance, functionality and expertise to meet the budget and requirements of its client.
The company stays up-‐to-‐date with all new products and draws on a wealth of experience in designing and integrating all aspects of film, video or digital presentation. Pollavision’s vast commercial cinema and specialty theater experience gives the company an advantage that is not locally available in many markets. Pollavision can provide its clients with the finest in design of sound systems, acoustics, digital or film projection as well as the ability to provide complete turnkey assistance for new theatres or the renovation of existing theatres or home theaters. Pollavision can also provide all costs and operating projections, as well as engineering drawings and architectural drawings for all projects.
2.0 Consultant Team
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Manhattan Construction
As the first company to incorporate in the State of Oklahoma, Manhattan played an important part in building the Southwest. Among dozens of schools and courthouses, Manhattan also built the Oklahoma State Capitol building. Since its founding in 1896, Manhattan has expanded to Texas, Washington, D.C., Georgia and Florida, and internationally to Mexico and now performs work throughout the United States, Mexico and the Caribbean.
Manhattan is widely known for building high-‐profile, technically difficult mega projects like Reliant Stadium in Houston, Texas, with the first retractable roof stadium in the NFL; the Dallas Cowboys Stadium in Arlington, which is recognized as the premier sports venue in the world; and the U.S. Capitol Visitor Center in Washington, D.C., which sees nearly three million visitors per year. Manhattan has a diverse project portfolio and is recognized for building excellence in sports stadiums, healthcare, government, education, laboratory, aviation, transportation, convention, casino and hospitality facilities.
The company has grown into one of the largest privately-‐held construction firms in the western hemisphere and continually ranks on Engineering News Record’s top lists including general building, sports, entertainment, education, government and green building.
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3.0 Reliant Park Analysis
3.0 Reliant Park Analysis
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3.1 Reliant Park Venues The Reliant Park Complex includes four venues: Reliant Stadium, Reliant Center, Reliant Arena and the Astrodome. The Complex covers about 350 acres in the heart of the Harris County metropolitan area and provides parking for up to 26,000 automobiles. The Complex hosts a variety of public assembly events each year including sporting events, public consumer shows, conventions, trade shows and other entertainment events. The tenants at the Complex include the Houston Texans and the Houston Livestock Show and Rodeo, both of which participated in the financing of the Stadium. The Reliant Park Complex is also host to the annual Offshore Technology Conference and many other consumer shows and trade shows each year.
3.0 Reliant Park Analysis
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Astrodome
Opened in 1965, the Astrodome was the world's first multi-‐purpose, domed sports stadium and was nicknamed the "Eighth Wonder of the World”. This facility was the home of the Houston Oilers until 1997 and the Houston Astros until 1999. The facility has seating for 65,000 patrons and has 140,000 contiguous square feet of column free space for exhibits, general sessions, food and beverage events and concerts.
As the Astrodome aged and the sports and events industry evolved, it no longer met the standards for a modern events venue. The Astrodome lacks the spectator amenities, event accommodations, operational efficiencies and revenue producing elements that have become the industry standard for stadiums. Today, the Astrodome is no longer in use.
Conclusions
With the construction of Reliant Stadium, Minute Maid Park, BBVA Compass Stadium and the new stadium planned at the University of Houston, restoration of the Astrodome to its original state is not warranted. Further, the inability to use the Astrodome due to its dormant state causes a number of operational and logistical issues for major events on site. Event producers and guests are forced to work around the Astrodome and surrounding site.
3.0 Reliant Park Analysis
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Photo Support
West Entrance TV Room
Chiller Piping Football Turf
3.0 Reliant Park Analysis
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Chilled Water Pump Catwalk
Grounds Pump Room ADA Platform
3.0 Reliant Park Analysis
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East Seating Telescopic Seating
Suite Level Television Office Area
3.0 Reliant Park Analysis
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Main Electrical Distribution Main Electrical Distribution
Secondary Electrical Distribution Central Plant Electrical Distribution
3.0 Reliant Park Analysis
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Lower Bowl Seating Low Roof
3.0 Reliant Park Analysis
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West Elevation Escalator
3.0 Reliant Park Analysis
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Reliant Stadium
In August 2002, Reliant Stadium was completed at a cost of $442 million. It is the home of the Houston Texans and the Houston Livestock Show and Rodeo. This multi-‐purpose stadium has a seating capacity of 71,500, a total square footage of 1,900,000 square feet with 97,000 square feet of natural grass playing surface. Reliant Stadium is the only rodeo and NFL indoor/outdoor retractable roof, natural grass stadium that can be configured to utilize a 125,000 square foot space for general sessions, catered functions, exhibits, concerts, and much more. In addition, Reliant Stadium offers four massive concourse levels for special events. The design of the stadium roof provides a very flexible rigging configuration for major audio and visual presentations. Two hundred suites and 8,187 club seats complement Reliant Stadium.
The Stadium has also hosted the 2004 Super Bowl, the 2008 NCAA Men’s Regional Semi-‐Finals, the 2010 NCAA Men’s Regional Semi-‐Finals and the 2011 NCAA Final Four. The facility has also been the home of college football’s Texas Bowl, since 2006.
3.0 Reliant Park Analysis
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The following charts summarize the number of events and attendance by event type at Reliant Stadium for the past several years.
Total Number of Reliant Stadium Events by Event Type (FYE 2006 – FYE 2011)
0"
25"
50"
75"
100"
125"
150"
175"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FY"2011"
Num
ber'of'Events'
Amateur"&"Professional" Community"&"Religious" Entertainment"Family"Shows" Food"&"Beverage" Meeting"&"Seminar"Motor"Sports" NFL" Rodeo"Other"Events"
137'
161' 152'140'
131' 125'
3.0 Reliant Park Analysis
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Reliant Stadium Attendance by Event Type (FYE 2006 – FYE 2011)
Notes: Event types are based on Reliant Stadium classifications. Source: CSL International, facility management, 2011
0"
500,000"
1,000,000"
1,500,000"
2,000,000"
2,500,000"
3,000,000"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FYE"2011"
Attendance(
Amateur"&"Professional" Community"&"Religious" Entertainment"
Family"Shows" Food"&"Beverage" Meeting"&"Seminar"
Motor"Sports" NFL" Rodeo"
Other"Events"
2,421,721(
2,141,189(2,382,716(
2,253,922(2,362,652(
2,713,949(
3.0 Reliant Park Analysis
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3.0 Reliant Park Analysis
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Reliant Center
Reliant Center offers more than 706,000 square feet of contiguous single-‐level exhibit space divisible into 11 separate halls and boasts 61 meeting rooms configurable into over 100 variations, 2 major conference centers, 118 loading bays, over 150,000 square feet of registration space. The venue is used for a wide variety of events ranging from major trade shows to ticketed consumer events.
3.0 Reliant Park Analysis
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Over the past several years, Reliant Center has hosted events ranging in attendance from a few hundred people to more than 25,000. However the typical event has attendance of 3,000 – 5,000 per event over multiple event days. The charts below set forth the number of events and the annual attendance at Reliant Center for the past several years of operation.
Total Number of Reliant Center Events by Event Type
(FYE 2006 – FYE 2011)
0"25"50"75"100"125"150"175"200"225"250"275"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FYE"2011"
Num
ber'of'Events'
Community"&"Religious" Consumer"Show" Convention"Entertainment" Food"&"Beverage" Meeting"&"Seminar"Trade"Show" Other"Events"
124'
257'
141'
96'118'
105'
Notes:''Event'types'are'based'on'Reliant'Center'classi6ications.'Source:''CSL'International,'facility'management,'2011'
3.0 Reliant Park Analysis
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Reliant Center Attendance by Event Type (FYE 2006 – FYE 2011)
Notes:''Event'types'are'based'on'Reliant'Center'classi6ications.'Source:''CSL'International,'facility'management,'2011'
0"
150,000"
300,000"
450,000"
600,000"
750,000"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FYE"2011"
Attendance(
Community"&"Religious" Consumer"Show" Convention"Entertainment" Food"&"Beverage" Meeting"&"Seminar"Trade"Show" Other"Events"
625,718( 604,315(
678,850( 660,676(609,918( 585,207(
3.0 Reliant Park Analysis
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Reliant Arena
Reliant Arena opened in 1974 and includes the arena proper, four exhibit halls and the Pavilion. Features of Reliant Arena include a fixed seating capacity in the main Arena for 5,800; 275,000 square feet of exhibition space and over 18,000 square feet of meeting space.
Reliant Arena has served Harris County very well since 1974; however, it is now well beyond the end of its expected usable life and should be replaced with a new arena facility and associated exhibition space in order to contribute to the future success of Reliant Park and the greater Harris County community. It is only through an aggressive repair and maintenance program conducted by Harris County Sports and Convention Corporations and SMG that the facility and its major systems continue to function. The facility does not possess the requisite technology and production support elements that are demanded by today’s event producers. The guest experience elements that are critical customer influencers in making discretionary spending decisions are absent from the facility.
Reliant Arena was designed at a time when the focus was “Public Assembly”. Guests would arrive, view the event and depart. There was not any reasonable design effort in guest amenities. The food service areas including linear counter space, food prep, presentation, point of sale transactions and cooking were not designed to support anything other than the most basic items and does not meet even today’s minimum standards.
The Houston Livestock Show and Rodeo has grown in annual attendance from 1.5 million in 2002 to over 2 million attendees in 2011. Show organizers have expressed concerns regarding the condition of Reliant Arena, its location relative to Reliant Center and the Arena’s ability to meet the long term needs of the HLSR. Further, the HLSR has stated that there is insufficient space for warm-‐up arenas, practice arenas and stall space in Reliant Arena.
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In the 10 years that have passed since the opening of Reliant Center, the OTC has outgrown the available exhibition and meeting space in both Reliant Center and Reliant Arena. Over the years, event organizers have tried to satisfy the need for additional exhibition space by using the Reliant Stadium floor and creating temporary exhibit space using air-‐conditioned tents in the parking lots. Resisting for years to use Reliant Arena due to its remote location on the site and the condition of the facility. The OTC finally moved into Reliant Arena following torrential rains just prior to the event in 2009 that forced the OTC to abandon over 200,000 square feet of tents constructed in the Orange Lot. All of the exhibits housed in the tents were moved to the Arena just days before the opening of the show. Since that time, the OTC has continued to use the Arena and currently uses all the available space in Reliant Center and Reliant Arena. Due to the demand for additional exhibition space, the OTC has added a 50,000 square foot tent in the parking lot for this year’s event. Show organizers did consider using the Stadium floor in
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8'x13'10"
8'x10'EXIT
EXIT
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WW WW WW
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ELECTR
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DRIVE INFRONT DOOR
20'x 20'
FREIGHT DOCKFRT. DOOR12'x13'9"
DOCK FRT. DOOR12'x13'9"
FRT. DOOR12'x13'9"
FRT.
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13'9
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FRT. D
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SLIDING DOOR22'x13'
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FRT. DOOR20' X 20'
FRT. DOOR20' X 20'
FRT. DOOR20' X 20'
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ACCESS TOLEVEL 2 ACCESS TO
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OM
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30' CEILING
30' CEILIN
G
15' CEILING 12' CEILING
12'6" CEILIN
G
14' CEILING
47' CEILINGLIMIT TO LIGHTS
(67'MAX)
12' C
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30' CEILIN
G LIM
IT26' C
EILING
LIMIT
15' C
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FREIGHT DOCK
RAMP
101100 20
120
0
SEATIN
G SEA
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G
SEATIN
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TIN
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SEATING SEATING
103102101 20
320
220
1
107106105 20
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620
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107
108
109
207208209
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210211212
105104103 20
520
420
3
RAMPUP
RAMPUP
RAMPUP
RAMPUP
RAMPUP
DRIVE INRAMP
A(high)25,000'
Pavilion25,000'
Lobby25,000'
C50,000'
D100,000'
A(low)50,000'
B50,000'
Arena24,000'
Level 1
3.0 Reliant Park Analysis
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lieu of tents for additional exhibition space, but felt that managing the traffic flow between all three buildings would be difficult for attendees.
The following areas have been identified at Reliant Arena that support the recommendation for replacement:
General Condition
Due to the age of Reliant Arena, the overall feel of the facility is utilitarian and generally unappealing. The signage is fixed and is not consistent with the look and feel that sponsors, advertisers and business partners expect. The finishes are institutional, and there are virtually no premium fan amenities such as suites, clubs, or loge boxes. The general fan amenities including quality comfortable seating, video boards, high quality public address sound system and fan destinations do not exist in the facility as it exists today.
Loading Dock
There is no dedicated Loading Dock space to service the arena proper. There is only one loading dock bay, which creates an increased cost for events, as they require additional labor to offload the numerous trucks that contain show technical equipment. This is an inconvenience and a cost that events consider when determining show locations. The loading dock issue is exacerbated by the fact that the production or stage end of the seating bowl actually opens into what would normally be considered the main entry. Shows conduct their technical load-‐in through standard pedestrian doors.
Dressing Rooms and Production Spaces
There are insufficient support spaces including dressing and locker rooms to service today’s event needs, including the lack of a Green Room and flexible band and production spaces. The rooms that are available are very small and narrow. They do not meet the expectations of today’s show producers. There is no adequate location for crew catering and no area to support traveling show catering operations.
Seating
The arena bowl seating is not consistent with today’s guest expectation including the tread depth and physical seats and standards. Today’s arena facilities typically utilize retractable seating in order to gain more flexible flat floor space that can accommodate a wider variety of events, increasing the facility’s ability to generate revenue.
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The railing along the front row of the lower bowl is designed in a way that fans can easily slip through and onto the floor during events. The arena must use an ADA wheelchair lift to meet its obligations to the fans. This is not consistent with how today’s arena facilities provide service.
The seating capacity of 5,800 fixed seats provides limited opportunity for events. A fixed seating capacity of 8,000 to 10,000 with the opportunity for 2,000 additional floor seats would provide a capacity with an ability to accommodate 80% of all current concert tours in North America, as well as, all of the current touring family shows and most special events.
Backstage
In a rather unique design, the area behind the stage location is a large public lobby (an operable wall separates the stage area from this lobby). The result is that there is no true “backstage” area, and one must be created in adjacent exhibit halls. Securing this lobby, when required, is extremely difficult.
Show Technical Production
For shows that use sidewall video, this is a challenge in that the use of sidewall video screens requires the capacity to be reduced, as the video screens have to be placed out over the seating area. Also, the floor to grid height is only 37’, which is extremely low for today’s events and severely limits shows ability to manage their technical production of sound, lights and special effects. There is limited upstage power. Due to the glass around the facility, achieving blackout situations in the bowl have proven to be difficult during daytime events, which would include family show events. The combination of these multiple production challenges is a critical deterrent to events seeking to book Reliant Arena.
Program
In Reliant Arena, the concourses are very narrow, offering limited space for concession and merchandise sales. The concession lines frequently cross into the narrow concourse creating circulation obstructions. The restrooms are inadequate by today’s standards in both number of locations and guest -‐to-‐restroom ratio.
Meeting and Exhibition Space
Reliant Arena includes 275,000 square feet of exhibition space, 18,000 square feet of meeting space and its Pavilion also provides 1,700 fixed seats in a presentation format. There are significant issues with all of these spaces as they relate to meeting the needs of users from small to large campus wide events. The condition of these spaces has long since gone
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beyond their expected usable life and lack appeal. The ceiling heights do not meet the needs of today’s users, the electrical service and technology access and interface are not adequate to meet today’s event, convention and exhibition presenters. The location of roof support columns presents a significant obstacle to exhibition users.
Location
With the opening of Reliant Center in 2002 and the subsequent demolition of the Astrohall that same year, Reliant Arena was left isolated from the newer facilities making it difficult for users to take full advantage of the complex for major events. Usage is typically limited to smaller stand-‐alone events. For larger events, most users find the location of the arena too distant from Reliant Center and/or Reliant Stadium and view it as a last choice when booking the Reliant Park complex for anything other than smaller arena events. These concerns are aggravated by having to navigate around the Astrodome.
Maintenance and Capital Repairs
Although Reliant Arena is operational today, during recent years the HCSCC and Harris County have spent over $8 million dollars on capital repairs for Reliant Arena and Plant II, which provides chilled water for the Arena’s air-‐conditioning system to keep the facility in operation condition. These repairs include, but are not limited to, structural and foundation repairs to the northeast exterior wall, roof repairs, operable wall replacement for the mezzanine level meeting rooms, cooling tower replacement, installation of a new fire alarm system, chiller replacement, arena floor lighting replacement and installation of a new building automation system. Given the age of the mechanical and electrical systems in the Arena most, if not all, are at the end of their useful life expectancy and are energy inefficient.
Electrical Service
The electrical service for Reliant Arena, Plant II and large areas of the parking lots, feeds through the Astrodome and the Astrodome substation. Any plans regarding the future of the Astrodome must take into consideration how to maintain electrical service to these areas in the event the Astrodome is renovated or demolished
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Summary
Reliant Arena does not meet the expectations of users and guests, which limits its marketability and revenue generating ability. Listed below is a summary of concerns expressed by users and potential users regarding Reliant Arena.
• The ceiling in the arena proper is too low and lacks the rigging capacity required for major event production.
• The seating capacity is too low to attract the majority of touring events.
• The exhibit space adjacent to the arena is divided into five separate halls of various sizes making show layout inefficient. Access and circulation within the halls is awkward and confusing.
• The exhibit halls have low ceiling heights with poor quality lighting and inadequate event power and data capabilities.
• Concession facilities are limited and outdated and do not offer guests attending events the variety and/or quality of products expected.
• There is no secure backstage area with loading facilities for events.
• There are only two (2) small locker rooms, which can only be accessed from the public concourse.
• There are an insufficient number of restrooms and the current restroom facilities and amenities are of poor quality and outdated.
Conclusion
It is important to recognize Reliant Arena and the supporting exhibition and meeting spaces role in serving the entire Reliant Center complex, the primary tenants and the citizens of Harris County; however, the facility no longer has the ability to provide the desired support to events and guests and should be replaced. A new arena would provide the Reliant Center with the ability to compete for a variety of events that are not currently accommodated at the existing venue.
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Photo Support
Arena seating tread depths and quality of the seats (i.e. plastic) no longer meets the needs of today’s guests.
Fixed arena wall and open railings makes it easy for guests in the fixed bowl to get onto the floor.
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Low ceiling and rigging steel height is a significant disadvantage to event technical production.
The lack of show or production flex space in the arena bowl results in temporary support space having to be constructed, lowering the overall seat count for events.
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Current technology is outdated.
Public Address sound system does not meet today’s standards.
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Event producers conduct technical load-‐in through these pedestrian doors.
Photo of public concourse; the concourses are “institutional” and do not meet the needs of today’s customer’s expectations.
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Club area is located behind the stage with outdated technology and finishes.
Area generally considered the front door of the facility used for technical load-‐in, and event bus/truck parking.
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Concourses lack the width to sell merchandise or place sponsor/advertiser displays and maintain a reasonable path of travel for guests.
The area around Reliant Arena and the exhibit spaces does not have the access and ability to support either the facility or the event users.
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The ceiling heights, rigging capacity and technology are not up to today’s user standards.
Access into the facilities is limited and inadaquate. In addition the positioning of facility retated equipment as in the air handler shown in the photo below further exacerbate the problems.
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The columns shown in the photo below create a significant obstacle to potential users.
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Annually, Reliant Arena hosts various events including concerts, family shows, trade shows, exhibitions, and other such events. The following charts provide summaries of the events and attendance hosted at the facility in recent years.
Total Number of Reliant Arena Events by Event Type (FYE 2006 – FYE 2011)
0"
20"
40"
60"
80"
100"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FYE"2011"
Num
ber'of'Events'
Amateur"&"Professional" Community"&"Religious" Consumer"Show"Entertainment" Family"Shows" Food"&"Beverage"Meeting"&"Seminar" Trade"Show" Other"Events"
35'
59' 59'
41'
79'
45'
Notes:''Event'types'are'based'on'Reliant'Arena'classi6ications.'Source:''CSL'International,'facility'management,'2011.'
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Reliant Arena Attendance by Event Type (FYE 2006 – FYE 2011)
Notes:''Event'types'are'based'on'Reliant'Arena'classi6ications.'Source:''CSL'International,'facility'management,'2011.'
0"
50,000"
100,000"
150,000"
200,000"
250,000"
300,000"
350,000"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FYE"2011"
Attendance(
Amateur"&"Professional" Community"&"Religious" Consumer"Show"Entertainment" Family"Shows" Food"&"Beverage"Meeting"&"Seminar" Trade"Show" Other"Events"
128,418(
209,397(235,343(
303,952(
188,533( 189,423(
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3.2 Reliant Park Tenants and Major Users There are two tenants located within Reliant Park; the Houston Livestock Show and Rodeo and the Houston Texans. Both use Reliant Stadium as their home venue, although the HLSR, in particular, utilizes the entire Reliant Park Complex during its event. In addition, the OTC and Feld Entertainment (Feld) are significant users of the Complex. The OTC is held the first week of May each year and is the region’s largest annual convention with over 80,000 attendees. Feld books multiple family shows at the Complex each year, accounting for more than fifty performances annually.
Houston Livestock Show and Rodeo
The HLSR occupies Reliant Park for essentially six weeks in the spring each year and may occupy Reliant Park for 18 consecutive days between June 23rd and July 24th of any calendar year. While the events are taking place, HLSR has exclusive rights to occupy the entire Reliant Park complex, other than offices and spaces occupied by the Texans, SMG, HCSCC and the Reliant Park operations on a year-‐round basis. During the spring and summer HLSR periods, HCSCC may not hold events at Reliant Park, including events at the Astrodome. This exclusivity will have to be addressed in any redevelopment plan for the Astrodome.
Two documents were reviewed related to HLSR: (i) HLSR Stadium Lease agreement by and between the HCSCC and the HLSR and (ii) Stadium Tri-‐Party Agreement by and among the HCSCC, the HLSR and the Texans. The basic provisions of these two agreements provide that HLSR has a 30-‐year term to occupy Reliant Park, commencing in 2002 and continuing through 2031. During the term, the HLSR has the exclusive right to host (i) events containing entertainment and agricultural exhibitions and competitions, (ii) rodeo-‐like events and (iii) certain livestock and equestrian events.
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Houston Texans
The Houston Texans football team of the National Football League is the other major tenant within Reliant Park. The team has the exclusive right to exhibit professional football at any facility owned by Harris County. The team holds ten home games each season from mid-‐August through early January. When the team makes the playoffs, additional home games can occur. During home games the team has exclusive rights to the parking lots within Reliant Park, making access to the Astrodome difficult.
Two documents were reviewed related to the team: (i) NFL Club Stadium Lease Agreement by and between HCSCC and the team and (ii) Stadium Tri-‐Party Agreement by and among HCSCC, the team and HLSR. The team has a 30-‐year term to occupy Reliant Park, commencing in 2002 and continuing through 2031.
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Offshore Technology Conference
The Offshore Technology Conference was founded in 1969 by twelve engineering and scientific organizations in response to the growing technological needs of the global ocean extraction and environmental protection industries. Interdisciplinary and cross-‐sector cooperation was becoming acute as both industries moved into more hostile environments and unknown operating conditions.
The first conference was held in the Albert Thomas Convention Center, and as significance of the conference grew overnight, larger facilities at the Astrodome Complex were booked annually for the next 33 years. As the offshore industry continued to grow, so did the stature and size of the OTC, reaching a peak attendance in 1982 of 108,000 and an exhibition of more than 2,500 companies. Since the early 1980's, shifting business, political, and economic paradigms have altered the complexion of the OTC, but not its status as the one "must-‐attend" technical conference for engineers and scientists working in the offshore industry. In 2003, the OTC moved into Reliant Center, and today occupies the Center, Reliant Stadium, a Pavilion built on-‐site, and an outdoor exhibit area, totaling an area equivalent to 10 football fields. Throughout its 40-‐year history, the OTC has maintained its relevance to the offshore industry, and has initiated several programs to expand the scope and prestige of its coverage.
The OTC is also significant for Harris County, having generated nearly $1.8 billion in economic impact for the area. It is the largest convention held in the region each year. The OTC ranks among the largest 200 trade shows held annually in the United States and is among the 10 largest meetings in terms of attendance. Each year the OTC attracts more than 60,000 attendees and 2,000 exhibiting companies representing more than 110 countries. The current agreement for the use of Reliant Park by the OTC extends through the 2012 event. The current agreement has a four-‐year term. The event has been very successful at the current location and has been based in the Harris County area for its entire 40-‐year history.
Given the size of the OTC, the event would be able to use an indoor space with the height of the Astrodome to expand the existing scope and size of the conference. This would lead to increased revenues to the HCSCC from the event, as rent, food and beverage and parking revenues would all increase. However, the OTC has outgrown available permanent space at Reliant Center and Reliant Arena and temporary tents are used to provide approximately 50,000 square feet of additional exhibit space. Thus, without the proposed Reliant Arena Replacement and/or the use of the Astrodome to accommodate these needs going forward, these space constraints will need to be addressed in another manner or there is a risk that the OTC may relocate to a larger venue.
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Feld Entertainment
Feld Entertainment was established in 1967 and has presented events in over 65 countries and six continents since that time, making Feld the largest provider of live family entertainment in the world. Over 30 million people attend Feld Entertainment's productions every year. On any given day, more than 30 live performances that bear the Feld Entertainment brand take place, including Disney on Ice, Ringling Bros. and Barnum & Bailey, Disney Live, Arenacross, Monster Jam, Nuclear Cowboys, Monster Energy Supercross. In 1967, Feld purchased Ringling Bros. and Barnum & Bailey and subsequently created a second touring unit. Additional Feld innovations included television specials, national advertising campaigns and creative public relations. With these efforts and the many that followed, Feld catapulted Ringling Bros. back to its rightful place as America's premier entertainment experience and the event now has the proud distinction of being the only source of live family entertainment to have performed nonstop in three centuries.
In 1980, Feld added two ice based shows to its business – Ice Follies and Holiday on Ice. One year later, an agreement was reached with Disney and Walt Disney’s World on Ice was added and continues to be one of the most successful of Feld’s productions to this day. Feld Motor Sports was created in 2007 and is the world leader in producing and promoting specialized arena and stadium-‐based motor sports entertainment with more than 600 performances worldwide, attracting over five million fans each year. Feld Entertainment also produced Siegfried & Roy at the Mirage Hotel in Las Vegas for nearly 25 years and has contributed to numerous live shows both on and off Broadway.
Twenty-‐five to thirty-‐five Feld events are hosted at Reliant Park each year, including Ringling Bros. and Barnum & Bailey, Disney on Ice and Monster Jam, with most shows being held at Reliant Stadium. It is anticipated that many Feld shows would move to the Replacement Arena upon its completion, which would be a venue much more conducive to hosting these types of events. Operating costs would be reduced dramatically and the Arena would allow for a better overall fan experience. Total annual attendance for Feld programming over the past six fiscal years has ranged from 200,000 to nearly 400,000.
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Operating Agreements
Naming Rights Agreement
The Texans and HLSR have the exclusive right to jointly market, negotiate and enter into agreements covering the licensing of all naming rights, branding rights, pourage rights, service rights, signage, advertising and sponsors and other marketing rights to the entirety of Reliant Park (including the Astrodome); provided, however, that if the Astrodome is replaced, materially renovated or expanded for the purpose of either (a) changing its primary use to a use other than as a spectator facility or (b) allowing a new primary tenant who will not use the Astrodome as a spectator facility, the Texans and HLSR do not have any such aforementioned rights as to the Astrodome.
Food Service Agreement
ARAMARK has the right, subject to the various exclusions, to provide food, beverage, and retail merchandise concessions within Reliant Park, bounded, approximately, by Kirby on the West, Loop 610 on the South, Fannin on the East and the property line from Kirby to Fannin on the North side of Reliant Park. Accordingly, so long as the Astrodome is used as a public assembly venue facility, for the term of the ARAMARK Concessions Agreement (from April 1, 2002 through March 31, 2017), ARAMARK has the exclusive right to provide food, beverage and retail merchandise concessions in the Astrodome. However, if the Astrodome is redeveloped as a hotel (even if the hotel includes public meeting space) or other venue that is not a public assembly venue facility, such redeveloped facility will be excluded from the ARAMARK Concessions Agreement.
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3.3 Historical Operating Performance HCSCC and SMG have been successful at operating the various venues in Reliant Park, particularly given the scheduling constraints that are imposed because of the Texans and the HLSR scheduling needs. Essentially, SMG is able to schedule events only one week each month (the Protected Week) during the Texans’ season, prior to the April preceding those months, when the NFL schedule is released. Because of this restriction, the number of large-‐scale conventions and trade shows that can be scheduled are limited because these types of shows book venues several years in advance.
The chart below summarizes the historical financial performance at Reliant Park.
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The table below breaks down the event operating performance of Reliant Park over the past several years. As shown, Reliant Park hosts very profitable events. However, the overhead and related expenses incurred in Reliant Park operations cause operating income to be negative in some years, as shown above.
Note: In 2011, the Houston Livestock Show and Rodeo started in February, whereas in previous years it has always started in March. We have not included the 2011 HLSR in the numbers above though they would be included in SMG’s figures for the 2010-‐2011 fiscal year for accounting purposes.
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The Event Income, broken down by Reliant Park venue, is set forth below. The Astrodome ceased being used for public events during the 2007-‐2008 fiscal year and thus the data for that venue is only included for the first three fiscal years of this analysis.
Reliant(Stadium
Rev Exp
Event(Income((Loss) Events Event(Days Attendance NOI/Event
2005$06 16,822,048 9,059,856 7,762,192 137 73 2,421,721 $56,6582006$07 15,691,815 9,317,824 6,373,992 162 18 2,141,209 $39,3462007$08 14,952,372 7,983,642 6,968,730 152 143 2,382,716 $45,8472008$09 18,639,754 9,229,847 9,409,906 131 94 2,253,922 $71,8312009$10 18,233,021 9,414,381 8,818,640 125 81 2,362,652 $70,5492010$11 23,993,890 13,350,222 10,643,667 140 114 2,713,949 $76,026
Reliant(Center
Rev Exp
Event(Income((Loss) Events Event(Days Attendance NOI/Event
2005$06 8,578,641 2,694,052 5,884,589 124 242 625,718 $47,4562006$07 9,133,889 2,644,252 6,489,637 257 33 604,315 $25,2522007$08 10,156,762 2,960,437 7,196,325 141 266 678,850 $51,0382008$09 10,207,449 3,222,918 6,984,531 118 268 660,676 $59,1912009$10 9,767,339 3,133,675 6,633,664 105 218 609,918 $63,1782010$11 9,252,771 2,905,058 6,347,712 96 182 585,207 $66,122
Reliant(Arena
Rev Exp
Event(Income((Loss) Events Event(Days Attendance NOI/Event
2005$06 1,606,599 784,629 821,970 35 35 128,418 $23,4852006$07 3,371,391 2,117,728 1,253,663 59 12 209,397 $21,2492007$08 3,658,999 2,077,922 1,581,077 59 63 235,343 $26,7982008$09 4,980,967 2,873,734 2,107,233 79 95 303,952 $26,6742009$10 3,027,460 1,920,166 1,107,295 45 40 188,533 $24,6072010$11 2,883,599 1,698,554 1,185,045 41 41 189,423 $28,904
Parking(Lots
Rev Exp
Event(Income((Loss) Events Event(Days Attendance NOI/Event
2005$06 626,600 186,140 440,460 8 22 169,615 $55,0582006$07 1,842,758 803,876 1,038,882 33 3 281,699 $31,4812007$08 1,877,152 1,068,303 808,849 23 41 276,312 $35,1672008$09 439,444 169,325 270,118 29 52 250,083 $9,3142009$10 503,688 330,905 172,783 21 31 272,231 $8,2282010$11 497,528 215,340 282,187 25 45 300,790 $11,287
Astrodome
Rev Exp
Event(Income((Loss) Events Event(Days Attendance NOI/Event
2005$06 570,725 344,546 226,179 6 7 11,812 $37,6972006$07 235,755 131,753 104,002 19 0 22,777 $5,4742007$08 3,469 4,760 (1,292) 2 2 3,679 ($646)
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3.4 Summary – Reliant Park Analysis Reliant Park is a unique public assembly complex that provides a wide variety of options for different uses. The complex is home to major economic drivers to the Harris County community. Between the Texans, HLSR, and Offshore Technology Conference, the Complex generates significant economic and fiscal impacts for the County. These events also generate significant revenue for the complex. The venues also vary in age and condition, ranging from the state of the art Reliant Stadium and Reliant Center to the outdated Reliant Arena and unusable Astrodome. The complex has typically hosted anywhere from 300 to 500 events per year with the total attendance each year exceeding 3.0 million people. Reliant Stadium and Reliant Center provide amenities consistent with comparable venues around the country while the amenities related to the Reliant Arena directly influence the venues ability to attract new shows to the market. The Astrodomes condition also directly impact the ability of the Center to maximize the usage of the space for a variety of shows that could utilize additional space. The inability of the complex of the book major shows due to the restrictions of the tenant lease agreements also directly impacts the facility usage.
55
4.0 Market Analysis
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The demographic and socioeconomic profiles of the local market are important considerations when assessing the potential success of any large mixed use real estate development. The strength of a market in terms of its ability to attract events, attract patrons and generate revenues is measured, to some extent, by the size of the regional market area population and its income characteristics. Specific demographic and socioeconomic information can provide an indication of the ability of a market to support a sports and entertainment venue includes population, median age, age distribution, household income and corporate base.
4.1 Harris County Market Overview Harris County had a population of 4.1 million based on the 2010 census, making it the most populous county in Texas and the third most populous county in the U.S., ranking only behind Los Angeles County and Cook County (Chicago). The cost of living in Harris County is among the lowest of all markets in the United States. The 2010 annual average cost of living index shows that Harris County’s overall after-‐taxes living costs are nine percent below the national average, due to housing costs that are 21 percent below the average. Twenty-‐three companies on the 2010 Fortune 500 list are headquartered in the Harris County area. Only two metropolitan statistical areas have more Fortune 500 headquarters: New York with 74 and Chicago with 27. Major institutions of higher learning include Rice University, Texas Southern University, University of Houston (UH, UH-‐Downtown and UH-‐Clear Lake), University of St. Thomas, Houston Baptist University, the Houston Community College and San Jacinto College. Harris County’s two medical schools are the University of Texas Medical School and Baylor College of Medicine.
Cultural attractions in the Harris County area include a thriving theater district and numerous museums. Year-‐round resident companies in the major performing arts include the Houston Symphony Orchestra, the Houston Grand Opera, the Houston Ballet, and the Alley Theater. Major museums include the Museum of Fine Arts, the Contemporary Arts Museum, the Menil Collection, The Children’s Museum and the Museum of Natural Science. Harris County is also home to a number of professional sports teams with state-‐of-‐the art facilities. The Astros, Houston’s Major League Baseball team, plays its home games at Minute Maid Park; the Texans of the National Football League make their home at Reliant Park; and the Rockets of the National Basketball Association and the Aeros of the American Hockey League share the Toyota Center. The Houston Dynamo soccer team plays its home games at the University of Houston’s Robertson Stadium; however, a new $90 million stadium will be completed during to the 2012 season. In addition, collegiate teams from the University of Houston, Rice University, Texas Southern University and Houston Baptist University compete in most major sports.
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Harris County was one of the last major metropolitan areas in the United States to slip into the recent global recession and it was one of the first to begin to recover. ]Harris County added 62,300 jobs from September 2010 to September 2011. Most of the job growth occurred in health care and social assistance; durable goods manufacturing; leisure and hospitality; and food services and drinking places. Harris County’s economy is largely based on a broad spectrum of industries including:
• Oil and gas exploration and refining • Medical research and health care delivery • High technology – computers, aerospace, environmental, etc. • Government • International import & export • Commercial fishing • Agriculture • Education • Banking and finance • Manufacturing and distribution • Related service industries
Employment gains now match the state average, which is three times the national pace. Energy exploration and manufacturing are leading the way, but most other industries, except for federal government, are up year to year. The unemployment rate has edged down to 8.3%, even as the labor force has steadily risen on improving job opportunities. The housing market remains weak, though it is beginning to improve, driven by the improving labor market. House prices are declining, but new permits for both single-‐family and multifamily units have risen in recent months.
Medical tourism is on the rise in Harris County and it is expected to continue with the prominence of the Medical Center which is in close proximity to Reliant Park. Harris County is the capital of medical expertise in Texas, as it is home to several of the leading health sciences research institutions in the state including the University of Texas Health Sciences Center, MD Anderson Cancer Center, and Baylor College of Medicine. The proximity to Latin America and the trend growth in its economies explain the increasing inflow of patients from that region. The major hospitals consistently rank among the nation’s top institutions. The Texas Medical Center is at the forefront of research and treatment of cancer and heart disease.
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4.2 Reliant Park Primary & Secondary Markets The demographic and socioeconomic data presented in this report are based on the anticipated primary and secondary markets of Reliant Park. The primary market is the geographic area in which it is anticipated that the majority of attendees and venue users are expected to originate. The size of this primary market can be influenced by such factors as transportation systems, site accessibility, media coverage and competing entertainment venues in the surrounding region. For purposes of this analysis, the primary market is assumed to be the area within a one hour drive of the Astrodome and Reliant Park
In addition to the assessment of the primary market area, the analysis presented herein also includes an assessment of the combined primary and secondary markets for the proposed redevelopment, which is anticipated to include the area within a two hour drive from the Park, as outlined on the following page.
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Drive Time Map of Resident Market Segments
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Resident Market
In 2010, the primary resident market (0-‐1 hour drive time) consisted of approximately 3.56 million persons in the 0-‐30 minute segment and approximately 2.12 million persons in the 30-‐60 minute segment.
• As a whole, the primary resident market is forecasted to grow at an average annual rate of 2.0%, from 5.68 million in 2010 to 6.28 million by 2015.
The secondary resident market (1-‐2 hour drive time), which reaches outside of the Greater Harris County area, consisted of nearly 1.21 million persons in 2010.
• It is anticipated to grow at an average annual rate of 0.9% to 1.26 million by 2015.
By 2015, the total available resident market is forecasted to 7.54 million persons, an annual increase of 1.8% from 6.89 million in 2010.
Resident Market Demographics
Household Income
• Households in the defined resident market area are similar to national standards
• In 2010, median household income within the resident market was $55,869, compared to $54,442 nationwide
• Although the full resident market is in line with national standards, the primary market (0-‐60 minutes) has a more affluent median household income of $58,366
Household Expenditures
• Based on consumer spending data derived from Consumer Expenditure Surveys in 2005 and 2006 and projected to 2010 values, households in the total resident market spent a total of $8.1 billion on entertainment and recreation in 2010
• The primary market’s per capita spending totaled to $3,516 on entertainment and recreation in 2010, while the total resident market was slightly lower with a per capita spend of $3,361
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• The higher average annual spend in the primary market is expected as the primary market encompasses the Greater Harris County metropolitan area and is comprised of higher-‐earning households
Age Profile/Children’s Market
• The total defined resident market has a median age of 33.5, lower than the national median of 37.0
• The children’s market (0-‐14), consists of approximately 1.56 million persons, or 22.6% of the total resident market
o By comparison, the children’s market in the United States as a whole is 20%
o By 2015, the age distribution is forecasted to experience little change, with a slight proportional decrease (-‐2%) of residents within the age range of 35-‐54 and a proportional gain (2%) in residents age 55 and older
Ethnic/Racial Breakdown
• The total resident market population is predominantly Caucasian followed by Hispanic and African American.
Future Economic Outlook
The Harris County area, much like the rest of the United States, has suffered economically over the past several years. While the State of Texas did not suffer as much of a decline as the rest of the country, the Harris County area still saw a significant increase in unemployment, and a decrease in household income. However, Harris County’s recovery has firmed in recent months, with unemployment dropping to 8.3%. Employment gains now match those in Texas as a whole, which is three times that of the rest of the nation. All industries, other than government employment, have seen gains over 2010. House prices in the Harris County market continue to decline, but new construction permits have risen in recent months.
The strengthening energy industry will drive job gains over the coming year, raising demand for employees in drilling technology, engineering and geological sciences, as well as professional services such as finance and accounting. Job postings for professional services related to the energy industry are up 20% over the previous year, and compensation is up 7% over the same time period. Several factors will drive the gains. First, oil prices are likely to remain elevated for an extended period, keeping drilling profitable. Second, companies are obtaining permits for additional drilling in the Gulf of Mexico, following the moratorium after the BP spill in April of 2010. Third, products and services related to the energy sector will grow as well as geologists, chemical engineers and drilling technicians will be in increasing demand.
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Harris County’s recovery will stabilize over the next 9-‐15 months, led by the energy sector. Companies that provide equipment and services to the energy industry will also benefit. However, gains in these areas will be offset to some degree by the decline in NASA activities in the Harris County area. Longer term, above-‐average population growth in the State and further expansion in energy and health-‐related industries will help the Harris County area surpass the nation in most economic measures.
Employment
The oil and gas and health care industries dominate the employment landscape in Harris County, with many of the area’s largest employers involving those industries. The Texas Medical Center (TMC), which is located on the light rail line less than three miles from Reliant Park, employs more than 130,000 people. The significant involvement of the oil and gas corporations and the TMC would be imperative for the successful development of a STEM center within the Astrodome, in the event that option is considered.
University*of*Texas 30,641Wal8Mart*Stores,*Inc. 28,780Administaff 20,816United*Continental*Holdings 17,000ExxonMobil*Corporation 14,835Continental*Airlines,*Inc. 14,651Shell*Oil 11,855H.E.B. 9,405Hewlett8Packard*Company 8,500Memorial*Hermann*Healthcare*System 8,452The*Methodist*Hospital 7,147Chevron*Corporation 7,000BP 6,500JP*Morgan*Chase*and*Company 6,500AT&T 6,047Texas*Children's*Hospital 6,034Baylor*College*of*Medicine 5,635Baker*Hughes 5,369HCA 5,298KBR 5,089
TOP$EMPLOYERS
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4.3 Visitor Attractions Harris County is an attractive destination to visitors from around the world. The weather and location in proximity to resort towns like Galveston, as well as the level of entertainment and cultural events in the area are some of the reasons for this attractiveness. The data below summarizes the current tourist climate in the Harris County market.
• Total visitation to Harris County in 2010 was approximately 9 million. • The leisure visitor market to Harris County is much larger than the business tourist market and comprises a total of
71% of the total visitor market, while the remaining (29%) are business tourists and other tourists. • Nationally, US tourism is recovering from the late 2008-‐2009 recession. Although Harris County was more resilient in
2009 than the US as a whole, the reverse occurs in 2010, where Harris County loses ground (-‐8%) while the US (+7%) and Texas (+5%) post gains.
Houston'Market
Resident'Market 2010Primary'Resident'Market'(0'to'1'hours)0730'mins 3,561,00030760'mins 2,123,000Total'Primary'Market 5,684,000
Secondary'Resident'Market'(1'to'2'hours) 1,208,000
Total'Resident'Market 6,892,000
Visitor'MarketTotal'Visitor'MarketLeisure'Tourist'Market 6,397,000Business'Tourist/Other'Market 2,613,000
Total'Visitor'Market 9,010,000
Total'Available'Market 15,902,000
Source:'ESRI'Business'Analyst,'Greater'Houston'Convention'&'Visitors'Bureau,'ECA
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The Greater Harris County area has a diverse offering of visitor attractions including a large arts district, museums, theme parks, sports and live event venues, and science centers, among many others. Harris County is home to the fourth largest museum district in the country with 18 museums. General characteristics of the competitive market are as follows:
• Attendance ranges at selected attractions across the Greater Harris County area can range from 65,000 to over 4 million persons annually.
• Selected science centers, museums, zoos and aquariums in the Harris County area tend to have lower admission prices than theme or water parks in Texas. Average pricing at the various attractions are as follows:
o Science centers, museums, zoos and aquariums
Adult: Free -‐ $20 Child: Free -‐ $16
o Water parks
Adult: $17 -‐ $60 Child: $12 -‐ $50
• Average length of stay at the selected attractions in the Greater Harris County area range from 30 minutes to a full day.
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The following tables provide further detail on the visitor attractions in the Harris County market.
Overview of Harris County Visitor Attractions
Selected'Attractions Location Year'OpenedFacility'Size'(SF/seats) Annual'Attendance
Attractions'and'Amusement'ParksMoody%Gardens Galveston,%TX 1983 242%acres 2,000,000Six%Flags%Astroworld%A%CLOSED Houston,%TX 1968 104%acres A
AmphitheatersCynthia%Woods%Pavilion The%Woodlands,%TX 1990 16,500%seats 1,237,500
Sports'and'Live'Event'VenuesToyota%Center Houston,%TX 2003 19,000%seats 663,831Minute%Maid%Park Houston,%TX 2000 43,836%seats 2,331,490Reliant%Stadium Houston,%TX 2002 71,500%seats 2,682,442Reliant%Arena Houston,%TX 1974 5,800%seats 173,849BBVA%Compass%Stadium Houston,%TX 2012 30,000%seats n/aConstellation%Field Sugar%Land,%TX 2012 7,500%seats n/aSugar%Land%Concert/Performing%Arts%Venue%(PROPOSED) Sugar%Land,%TX PROPOSED 6,500%seats n/aBayou%Music%Center Houston,%TX 1999 2,815%seats 140,000Hofheinz%Pavilion Houston,%TX 1969 8,500%seatsRobertson%Stadium Houston,%TX 1941 32,000%seats 264,368Berry%Center%Arena Cypress,%TX 2006 8,300%seatsBerry%Center%Stadium Cypress,%TX 2006 11,000%seatsBerry%Center%Theater Cypress,%TX 2006 450%seatsLeonard%E.%Merrell%Center Katy,%TX 2005 7,200%seatsHouse%of%Blues%Houston Houston,%TX 2008 1,528%seatsSam%Houston%Race%Park Houston,%TX 1994 32,000%capacity n/a
Science'CentersHouston%Museum%of%Natural%Science Houston,%TX 1969 115,000%SF 1,637,000Space%Center%Houston Houston,%TX 1992 184,000%SF 750,000
Source:%Individual%attractions%and%venues,%ECA
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Overview of Harris County Visitor Attractions (continued)
Selected'Attractions Location Year'OpenedFacility'Size'(SF/seats) Annual'Attendance
MuseumsThe$Museum$of$Fine$Arts$Houston Houston,$TX 1924 300,000$SF 1,598,000Art$Car$Museum Houston,$TX 1998 n/a 10,000$@$20,000Children’s$Museum$of$Houston Houston,$TX 1984 90,000$SF 850,000The$Health$Museum Houston,$TX 1996 28,000$SF 200,000The$Menil$Collection Houston,$TX 1987 30,000$SF 130,000Holocaust$Museum$Houston Houston,$TX 1996 27,000$SF n/aHouston$Fire$Museum Houston,$TX 1980 6,360$SF 15,000Contemporary$Arts$Museum Houston,$TX 1972 n/a n/aSan$Jacinto$Battleground$State$Historic$Site$&$Monument Houston,$TX 1939 1,200$acres 500,000
Zoos'and'AquariumsHouston$Zoo Houston,$TX 1922 55$acres 1,600,000Downtown$Aquarium Houston,$TX 2003 6$acres 357,954
Retail,'Dining'and'EntertainmentBayou$Place Houston,$TX 1997 130,000$SF n/aKemah$Boardwalk Kemah,$TX 1999 40$acres 3,500,000$@$4,000,000
Other'RetailThe$Galleria Houston,$TX reopened$2003 2,400,000$SF 24,000,000Traders$Village Houston,$TX 1989 100+$acres 2,250,000City$Center$(Town$and$Country) Houston,$TX 2010 1,800,000$SF 3,500,000$@$4,500,000Uptown$Center Houston,$TX 1999 169,110$SF n/a
Source:$Individual$attractions$and$venues,$ECA
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Harris County Attraction Details
Average EstimatedSelected0Attractions Location Length0of0Stay Capital0Investment Adult ChildAttractions0and0Amusement0ParksMoody%Gardens Galveston,%TX 1.556%hrs $25%million%renovation %$%%%%%49.95% %$%%%%%49.95%Six%Flags%Astroworld%5%CLOSED Houston,%TX 5 5 %5% %5%
AmphitheatersCynthia%Woods%Pavilion The%Woodlands,%TX 354%hrs $9.5%million%renovation n/a n/a
Sports0and0Live0Event0VenuesToyota%Center Houston,%TX 354%hrs $202%million $12+ $12+Minute%Maid%Park Houston,%TX 354%hrs $250%million $7+ $1+Reliant%Stadium Houston,%TX 456%hrs $352%million $28+ $28+Reliant%Arena Houston,%TX 354%hrs n/a $50+ $50+BBVA%Compass%Stadium Houston,%TX n/a $80%million $24%5%$100 $24%5%$100Constellation%Field Sugar%Land,%TX 354%hrs $30%million $8%5%$12 Free+Hofheinz%Pavilion Houston,%TX 354%hrs $40%million%expansion%(2013) $5%5%$11 $5%5%$11Robertson%Stadium Houston,%TX 354%hrs $650,000 $20%5%$54 $20%5%$54Berry%Center%Arena Cypress,%TX 254%hrs $72.9%million%(1) Free+ Free+Berry%Center%Stadium Cypress,%TX 354%hrs $72.9%million%(1) $7 $4Berry%Center%Theater Cypress,%TX 254%hrs $72.9%million%(1) Free+ Free+Leonard%E.%Merrell%Center Katy,%TX 254%hrs $18.9%million Free+ Free+House%of%Blues%Houston Houston,%TX 254%hrs $20%million $12%5%$45 $12%5%$45Sam%Houston%Race%Park Houston,%TX n/a $90%million $6+ Free+
Science0CentersHouston%Museum%of%Natural%Science Houston,%TX 458%hrs $85%million%expansion%(2012) 15.00$%%%%% 10.00$%%%%%Space%Center%Houston Houston,%TX 456%hrs $29%million 20.00$%%%%% 16.00$%%%%%
Admission0Pricing
Source:%Individual%attractions%and%venues,%ECA(1)%%Total%cost%of%Berry%complex%was%$72.9%million,%which%included%the%Center,%Stadium%and%Theater
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Harris County Attraction Details (continued)
Average EstimatedSelected0Attractions Location Length0of0Stay Capital0Investment Adult Child
Admission0Pricing
MuseumsThe$Museum$of$Fine$Arts$Houston Houston,$TX 1.576$hrs $4.5$million$(garden) 7.00$$$$$$$$ 3.50$$$$$$$$Art$Car$Museum Houston,$TX 171.5$hrs n/a Free FreeChildren’s$Museum$of$Houston Houston,$TX 1.574$hrs $3.9$million 8.00$$$$$$$$ 8.00$$$$$$$$The$Health$Museum Houston,$TX 173$hrs n/a 8.00$$$$$$$$ 6.00$$$$$$$$The$Menil$Collection Houston,$TX 172$hrs $24$million Free FreeHolocaust$Museum$Houston Houston,$TX n/a n/a Free FreeHouston$Fire$Museum Houston,$TX 171.5$hrs n/a 5.00$$$$$$$$ 3.00$$$$$$$$Contemporary$Arts$Museum Houston,$TX 172$hrs n/a Free FreeSan$Jacinto$Battleground$State$Historic$Site$&$Monument Houston,$TX 3.5$hrs $1.5$million 10.00$$$$$$ Free
Zoos0and0AquariumsHouston$Zoo Houston,$TX 376$hrs $50,000 12.00$$$$$$ 8.00$$$$$$$$Downtown$Aquarium Houston,$TX 174$hrs $38$million 9.25$$$$$$$$ 6.25$$$$$$$$
Retail,0Dining0and0EntertainmentBayou$Place Houston,$TX 1.576$hrs $23$million Free FreeKemah$Boardwalk Kemah,$TX 174$hrs n/a Free Free
Other0RetailThe$Galleria Houston,$TX 30$mins74$hrs n/a Free FreeTraders$Village Houston,$TX 30$mins72$hrs n/a Free FreeCity$Center$(Town$and$Cuntry) Houston,$TX 174$hrs $500$million Free FreeUptown$Center Houston,$TX 30$mins73$hrs n/a Free Free
Source:$Individual$attractions$and$venues,$ECA
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4.4 Harris County Area Sports and Entertainment Venues There is a limited supply of events, spectators and attendees within any marketplace and the number and type of local facilities that could compete for those will impact the market potential for the redevelopment of Reliant Arena. The following table presents a summary of other sports and entertainment venues located within Reliant Park’s primary and secondary market areas
Venue Location
Berry%Center%Arena Cypress,%TXCynthia%Woods%Mitchell%Pavilion The%Woodlands,%TXBBVA%Compass%Stadium Houston,%TXHofheinz%Pavilion Houston,%TXHouse%of%Blues%Houston Houston,%TXLeonard%E.%Merrell%Center Katy,%TXSugar%Land%Concert/Performing%Arts%Venue Sugar%Land,%TXToyota%Center Houston,%TXVerizon%Wireless%Theater Houston,%TXAlley%Theatre Houston,%TXBerry%Center%Stadium Cypress,%TXBerry%Center%Theater Cypress,%TXConstellation%Field Sugar%Land,%TXHobby%Center%for%the%Performing%Arts Houston,%TXJesse%H.%Jones%Hall Houston,%TXMinute%Maid%Park Houston,%TXStafford%Centre Stafford,%TXWortham%Center Houston,%TX
(1)%The%University%of%Houston%has%approved%a%renovation/expansion%of%Hofheinz%Pavilion%that%will%expand%seating%capacity%to%8,600.(2)%%The%Alley%Theatre%consists%of%the%824Vseat%Hubbard%Stage%and%an%additional%300Vseat%stage.(3)%%The%Hobby%Center%for%the%Performing%Arts%consists%of%the%2,650Vseat%%Sarofim%Hall%and%the%500Vseat%Zlikha%Hall.(4)%%The%Wortham%Center%consists%of%the%2,423Vseat%Alice%&%George%Brown%Theater%and%the%1,100Vseat%Cullen%Theater.
Source:(Pollstar(and(CSL(International(Research
Primary/and/Secondary/Market/AreaLevel/of/Competition/of/Local/Venues
Total PotentialSeating Degree/ofCapacity Competition
8,300 High16,500 High30,000 Medium8,600 (1) Medium1,529 Medium7,200 Medium6,500 Medium19,000 Medium2,815 Medium824 (2) Low
11,000 Low465 Low
9,500 Low2,650 (3) Low2,911 Low42,000 Low1,115 Low2,423 (4) Low
(1)%The%University%of%Houston%has%approved%a%renovation/expansion%of%Hofheinz%Pavilion%that%will%expand%seating%capacity%to%8,600.(2)%%The%Alley%Theatre%consists%of%the%824Vseat%Hubbard%Stage%and%an%additional%300Vseat%stage.(3)%%The%Hobby%Center%for%the%Performing%Arts%consists%of%the%2,650Vseat%%Sarofim%Hall%and%the%500Vseat%Zlikha%Hall.(4)%%The%Wortham%Center%consists%of%the%2,423Vseat%Alice%&%George%Brown%Theater%and%the%1,100Vseat%Cullen%Theater.
Primary/and/Secondary/Market/AreaLevel/of/Competition/of/Local/Venues
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As shown above, the venues representing the highest potential competition to the possible replacement of Reliant Arena are the Cynthia Woods Mitchell Pavilion, the House of Blues, the Bayou Music Center, the Toyota Center, and the Hofheinz Pavilion. It is important to note there is a “gap” in the marketplace with respect to a smaller sized arena (capacity between 8,000 – 10,000). The only indoor arena available for events currently is the 19,000 seat Toyota Center. That capacity is not an efficient venue for many shows, concerts and other events, which would be much better served to perform in a smaller venue.
The following case studies provide a summary of the events and attendance held at competitive area venues, as reported by Pollstar. It should be noted that some smaller concerts and shows, as well as trade shows, exhibitions, swap meets, and other such events are not reported by Pollstar and are in addition to the events and attendance discussed herein.
Toyota Center
Toyota Center is a 19,000-‐seat multi-‐purpose arena that opened in 2003 in downtown Houston, and serves as the home of the NBA Rockets and AHL Aeros. The $308 million arena is owned by the Harris County-‐Houston Sports Authority and is operated by Clutch City Sports and Entertainment. Premium seating offered at the arena includes 2,900 club seats that cost $8,000 per year, 105 luxury suites that lease for $225,000 per year, and 567 courtside seats that cost $20,000 annually.
In addition to tenant basketball and hockey games, Toyota Center hosts a variety of concerts and family/children shows, with Live Nation being the preferred promoter for the facility.
According to Pollstar, the Toyota Center hosted 48 non-‐tenant events in 2010, with an average attendance of approximately 7,131. Approximately 50 percent, or 24, of the events held at the Toyota Center in 2010 could potentially be accommodated by the anticipated capacity of the new arena in Reliant Park. It is anticipated that the new Reliant Arena and the Toyota Center could directly compete to host mid-‐sized concerts,
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family shows, and other such events. However, the proposed expanded Reliant Arena could potentially have an advantage in scheduling these events due to the large number of dates reserved by professional sports tenants of the Toyota Center. Competition will also exist for the sponsorship/advertising dollars of area companies.
Minute Maid Park
Opened in 2000, Minute Maid Park is the home of Major League Baseball’s Houston Astros. The stadium has a capacity of approximately 43,800 for Astros games and is owned and operated by the Harris County-‐Houston Sports Authority. While primarily a baseball venue, the stadium can host soccer and rugby events as well as large concerts and live entertainment. Its debut as a soccer venue happened during the 2006 edition of the CONCACAF Champions Cup. The stadium hosted the first leg of the quarterfinal between Portmore United of Jamaica and Club América of Mexico. The stadium also is the host of the Houston College Classic college baseball tournament, part of the winter fan festival held in February and in November of this year, and Taylor Swift performed before the stadium’s largest crowd for a concert, with just more than 42,000 in attendance. Because of Minute Maid Park’s focus on the Astros and the fact the team occupies the stadium almost exclusively from April through early October, the venue does not provide significant competition for live entertainment at the Reliant Park venues, with the exception of Reliant Stadium during certain times of the year.
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BBVA Compass Stadium
BBVA Compass Stadium, currently being built for the Houston Dynamo of Major League Soccer, will be a state-‐of-‐the-‐art, soccer specific, open-‐air stadium and is planned to be open in May of 2012. When completed, BBVA Compass Stadium will be a central feature of Houston’s East Downtown Redevelopment Plan. The stadium will be part of a true stadium and entertainment district, which will also include Toyota Center, Minute Maid Park, Discovery Green, The House of Blues and the George R. Brown Convention Center. Aside from Major League Soccer and international soccer matches, the new stadium will also host Texas Southern University football, concerts, boxing matches, and much more. BBVA Compass Stadium will have a capacity of 22,000 for Dynamo games but will be capable of expansion to 30,000 for certain events. A concert stage and other components are included in the stadium project and AEG has been engaged as the promoter for the venue, with a strong track record of attracting third party events.
Constellation Field
In addition to the professional sports venues in the Harris County area, the suburb of Sugar Land commenced construction on a minor league baseball stadium that will be located approximately 25 miles from downtown Houston and is expected to be completed for the 2012 baseball season. Constellation Field will be a state-‐of-‐the-‐art multi-‐purpose Triple-‐A ballpark. In addition to high level professional baseball, the park will also host other sports including football, soccer, lacrosse, cheerleading and band competitions, etc., as well as concerts, group outings, and scout sleepovers. Total ballpark capacity will be approximately 7,500 for baseball (expandable to 10,000) and 9,500 in concert configuration. Like Minute Maid Park and BBVA Compass Stadium, Constellation Field would not be considered significant competition for live entertainment events. Constellation Field has a capacity that would be competitive for more events than the other larger stadiums; however, the venue is exclusively an outdoor venue that will be heavily occupied by the baseball team from April through September, which is the primary season for outdoor shows.
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Berry Complex
The Richard E. Berry Educational Support Center (Berry Center) was funded by a Bond Referendum passed by the Houston suburb of Cypress in December 2001. The Complex consists of four venues: the Arena, Conference Center, Stadium and Theater and cost more than $72 million to construct. The Arena (Berry Center) has 8,300 permanent seats, with an additional 1,700 portable seats for a total capacity of nearly 10,000.Berry Center hosts concerts, indoor sporting events, meetings and conferences, graduation ceremonies; school performances and competitions and catering and banquets for honors, awards, and celebrations. And is the current home of the Texas Copperheads of the Southern Indoor Football League. The Conference Center is a multi-‐use indoor space offering 17 possible room sizes and configurations totaling more than 150,000 square feet of floor space. The Stadium is an 11,000 seat outdoor venue used primarily as a home for Cypress-‐Fairbanks ISD high school football teams, but which also hosts trade shows, outdoor concerts and large banquets. Finally, the Theater has a capacity of 450 for banquets, performing arts events and small concerts and other performances.
Merrell Center
The Leonard E. Merrell Center opened in the Houston suburb of Katy in 2005. The 145,000 square foot facility has a seating capacity of 7,200 for concerts and 1,200 for banquets and theater shows. The Merrell Center also has 3,000 square feet of meeting/conference space that can be divided into four smaller rooms of various sizes. Funds for the $18.9 million construction costs of the Merrell Center came from a Tax Increment Reinvestment Zone (TIRZ), developed in partnership with the City of Katy and the Katy Development Authority. Since 2008, the Merrell Center has hosted the Southland Conference Men’s and Women’s Basketball Championships and is also the home venue of the Houston Stallions of the Lone Star Football League. Each year the venue also schedules conferences, concerts and conventions as well as events for the schools within the Katy Independent School District, including basketball and other sports, graduations and award ceremonies.
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Hofheinz Pavilion
Hofheinz Pavilion opened in December 1969 of the University of Houston campus at a cost of $4.2 million ($26.6 million in 2012 dollars) and serves as the home for men’s and women’s basketball. The multipurpose facility is also used for concerts, special events, convocations and student-‐sponsored activities. It has also been the site for numerous University functions, such as commencement exercises and professional seminars and forums.
Hofheinz Pavilion has been renovated multiple times over the past 20 years. A new ceiling, lighting and sound system were installed in 1991. In 1992, the men's and women's basketball locker rooms were enlarged, and equipped with personal lockers for each player. Prior to the 1998-‐99 season, luxury suites were added at the top of the arena, bringing capacity to 8,479 currently. With the addition of luxury suites ringing the top rim of seats for the 1998-‐99 season, capacity of Hofheinz Pavilion now stands at 8,479. In June 2010, the University approved another renovation project that would include practice facilities for both the men’s and women’s teams and increase capacity slightly to 8,600, at a cost of approximately $40 million.
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Cynthia Woods Mitchell Pavilion
The Cynthia Woods Mitchell Pavilion opened in 1990 in The Woodlands, Texas, and is owned and operated by The Center for the Performing Arts at The Woodlands, a non-‐profit 501(c)()(3) organization. The pavilion has a total seating capacity of 16,500, including 6,500 fixed seats and lawn seating for approximately 10,000. In 2009, a $9.5 million expansion was completed in order to repair damage sustained during Hurricane Ike. Renovations included construction of 2,000 new reserved seats and building a new expanded canopy structure covering all 6,500 fixed seats. Premium seating options include season tickets and approximately 50 luxury boxes, which include VIP parking passes, private entrance, in-‐seat wait service, and access to the Woodforest Bank Club. The pavilion hosts a variety of outdoor events including concerts, family/children shows and other events, which are promoted and produced by Live Nation.
According to Pollstar, the pavilion hosted 45 events in 2010, with an average attendance of approximately 8,153. Approximately 49 percent, or 22, of the events held at the pavilion in 2010 could potentially be accommodated by the anticipated capacity of the new Reliant Arena in Reliant Park. Due to their similar fixed seating capacities, it is anticipated that the new Reliant Arena could directly compete with the Cynthia Woods Mitchell Pavilion to host mid-‐sized concerts, family shows, and other such events during the amphitheater season, which runs from late April to late October. Competition could also exist for outdoor events between the pavilion and the proposed Reliant Park festival site.
House of Blues Houston
Opened in 2008 in downtown Houston, the 1,528-‐seat House of Blues Houston is owned and operated by Live Nation. The facility serves as an anchor for the Houston Pavilions outdoor shopping and entertainment complex. Patrons can purchase membership to the Foundation Room, which provides lounge seating, fine dining, and a private outdoor balcony with views of downtown Houston. According to Pollstar, the facility hosted 63 events in 2010, with an average attendance of approximately 920. All of the events held at the facility in 2010 could potentially be accommodated by the anticipated capacity of the new Reliant Arena in Reliant Park. It is anticipated that the proposed venue and the House of Blues Houston could directly compete to host small concerts, family shows, and other such events requiring a smaller capacity. Competition will also exist for the sponsorship/advertising dollars of area companies.
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Bayou Music Center (Formerly Verizon Wireless Theater)
The 2,815-‐seat Bayou Music Center opened in 1999 in downtown Houston’s theatre district. The 130,000 square foot theater has a seating capacity that can be reduced in order to accommodate a wide variety of events, and provide smaller events a “full house” atmosphere. The theater, owned and operated by Live Nation, hosts a variety of events including concerts, comedy shows, and spectaculars.
According to Pollstar, the theater hosted 21 events in 2010, with an average attendance of approximately 2,518. All of the events held at the theater in 2010 could potentially be accommodated by the anticipated capacity of a new Reliant Arena in Reliant Park. It is anticipated that the proposed new venue and the Bayou Music Center could directly compete to host concerts, family shows, and other such events requiring a smaller capacity. Competition will also exist for the sponsorship/advertising dollars of area companies.
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4.5 Retail/Dining/Entertainment Destinations Bayou Place
Downtown dining and entertainment destination Bayou Place is experiencing a renaissance. Two new bars opened in 2011 as part of the center's re-‐imagined nightlife experience, Bayou Place Live! Western-‐themed PBR Houston brings country dancing and a little bull-‐riding action while Lucie's Liquors offers an upscale sports bar experience, Vegas-‐style. Retro beach concept Shark Bar and whiskey bar Chapel Spirits debuted in May. The Blue Fish, a Dallas outpost serving up sushi, opened in March 2011.
Robert Redford's highly-‐anticipated Sundance Cinemas, opened November 2011, features both general release and art films along with several drink-‐and-‐dine options. The Verizon Wireless Theater stages a variety of live concerts, and Hard Rock Cafe has long been a Theater District staple. Samba Grille offers up a diverse lunch menu and Brazilian-‐style rodizio service during the dinner hour.
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Uptown Park
Located ten miles west of downtown Houston, Uptown Park has over 50 different stores, shops, restaurants and clubs. The development is less than one mile from the Houston Galleria on the west side of Loop 610. Uptown Park is lined with shops, boutiques and cafes that create an intimate atmosphere with an emphasis on charm all on the ground level of the development. With lush fountains, detailed architecture and lavish landscaping, the surroundings are warm and inviting and attract people from the Harris County area and from around the country.
There are a number of hotels in close proximity to Uptown Park, with all levels of service from luxury brands like the St. Regis and Hotel Granduca, to family accommodations at the Marriott Courtyard and Embassy Suites.
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The Galleria
Owned and managed by the Simon Property Group, The Galleria is an upscale mixed-‐use urban development located in the Uptown District of Houston, Texas. The development consists of a retail complex, an ice rink, as well as the Galleria Office Towers complex, two Westin hotels, and a private health club. The office towers and hotels are separately owned and managed from the shopping center. The Galleria opened in 1970 and expanded to its current size in 2003.
The development includes approximately 2.4 million square feet in gross leasable area with over 375 tenants making it the largest mall in Texas. The Galleria, which receives a reported 24 million annual visitors, is currently anchored by Saks Fifth Avenue, Nordstrom, Neiman Marcus and two separate, full-‐line Macy’s.
Memorial City Mall
Memorial City Mall is a super-‐regional center and offers merchants 1.7 million square feet of retail space, featuring anchors Macy’s, Dillard’s, JCPenney, Target and Sears, as well as 150 specialty stores and restaurants. Memorial City Mall is the focal point of Memorial City, a 200-‐acre mixed-‐use destination which includes 1.3 million square feet of Class A office space, 2.1 million square feet of medical/office space, a 267-‐room Westin hotel and more than 600 residential units.
A $300 million renovation and remerchandising project was completed in 2003. Sales have increased dramatically every year since the renovation, with many key retailers achieving sales above $1,000 per square feet. Comp store sales at Memorial City Mall rose 13% in 2010,
the largest increase among all enclosed regional malls in Harris County. Amenities at the mall include an NHL-‐sized ice rink, a Children’s Play Castle, a double-‐decker Venetian-‐style carousel and a Cinemark 16 Theatre.
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Sugar Land Town Square (City Walk)
Sugar Land Town Square is a 32-‐acre, 1.3 million square-‐foot mixed-‐use development located approximately 20 miles southwest of downtown Houston. Sugar Land Town Square is a public/private partnership between the City of Sugar Land, Fort Bend County, Fort Bend County Levee Improvement District Number 2 and Planned Community Developers, Ltd. Throughout the 2000’s, various phases of the development were opened.
The development is adjacent to the First Colony Mall and includes a 300-‐room full-‐service Marriott hotel and conference center, an 82,000 square-‐foot Sugar Land Town Square City Hall, 167 mid-‐rise residential condos, 566,000 square feet of office space, 238,000 square feet of Main Street retail and restaurants and a 1.4-‐acre pedestrian plaza. Other amenities include a 24 screen AMC Theater, Lifetime Fitness and sports centers for local high schools.
First Colony Mall
The First Colony Mall is a regional mall with adjacent streetscape outdoor shopping (Sugar Land Town Square) located in Sugar Land which is approximately 20 miles southwest of downtown Houston, Texas. The mall is owned by General Growth Properties and opened in 1996 with renovations in 2006.
It encompasses approximately 1.1 million square feet of gross leasable area with 150 tenants with its anchor tenants being Dillard’s, Macy’s and JCPenney. Other retailers within the mall generally cater to upper-‐middle class. Amenities include a 24-‐screen AMC theatre adjacent to the property in the Sugar Land Town Square. The mall brings in an estimated 15 million visitors annually.
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Kemah Boardwalk
Located 20 miles from downtown Houston, the Kemah Boardwalk is open daily year-‐round. Located just 20 miles from downtown, the Boardwalk is home to fabulous waterfront restaurants and the Kemah Boardwalk Inn, a 52-‐room boutique hotel adjacent to the restaurants and amusements and attracts more than 3 million visitors annually. The main attractions of the 42-‐acre complex, which opened in 2001, are its many restaurants overlooking Galveston Bay. The area was developed by Landry's Restaurants, which owns all of the restaurants on the boardwalk. Activities include shopping and midway games, as well as a miniature train that traverses the entire area. Additional attractions include a 36-‐foot carousel, a 65-‐foot (20 m) Ferris wheel, and a new wooden roller coaster. The Boardwalk is also now the nearest recreational and entertainment park in the Harris County area. The South End Historic District of the Kemah Boardwalk features many local, family owned businesses. The businesses range from bed and breakfasts to shopping. The Clipper House Inn has several cottages to choose from.
Source: Individual venue/mall websites
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4.6 Cultural Attractions and Museums The Harris County metropolitan area is home to numerous cultural attractions and premier museums, which complicates the task of redeveloping the Astrodome, as most any type of attractions geared toward one or more concept that has traditionally been the purview of a museum of cultural venue already exists in the marketplace. The following pages summarize many of the attractions.
Space Center Houston
Since 1992, this $75 million, 180,000 square foot, 'edutainment' complex has entertained and informed over 11 million guests. Space Center Houston is located approximately 25 miles south of downtown Houston in the NASA/Clear Lake area and features a multitude of permanent exhibits, attractions, theatres and exhibits. In addition, the venue presents an amazing array of traveling exhibits and astounding events created exclusively by SCH's own creative exhibit team. In 2011, the Space Center added ‘Summer Sports Slam’, a sports experience where visitors can step into the world of professional sports and hit a grand slam, score a winning touchdown or even make the winning goal with unique challenges such as Bazooka Outfielding, Human Foosball and JumpShot Basketball.
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Houston Museum of Natural Science
Hundreds of thousands of people visit the Houston Museum of Natural Science (HMNS) each year. The primary venue is located near Rice University. The HMNS also has a satellite museum in Sugar Land and also operates the George Observatory in Needville, Texas, about 40 miles southwest of downtown. The Museum has a number of permanent exhibits and several that are temporary in nature, such as “Ancient Ukraine” and “Texas!”. There is also an IMAX theater and a Planetarium, which serve as two of the primary attractions at the HMNS.
Holocaust Museum Houston
Charged with educating students and the public about the dangers of prejudice and hatred in society, the Holocaust Museum Houston is dedicated to remembering the 6 million Jews and other innocent victims of the Holocaust and honoring the legacy of the survivors. Using the lessons of the Holocaust and other genocides, they teach the dangers of hatred, prejudice and apathy. The permanent exhibit at the Museum is Bearing Witness: A Community Remembers, which focuses on the stories of Holocaust survivors living in the Harris County metropolitan area. A tour begins with a look at life before the Holocaust. Visitors then see the beginnings of Nazism and Adolf Hitler’s rise to power. The displays progress through the disruption of normal life, to segregation, to imprisonment in concentration camps and, finally, to extermination. The roles of collaborators, by-‐standers, rescuers, and liberators are portrayed through artifacts, film reels, photographs, and text panels. The main exhibit ends with the moving short films, Voices and Voices II, which alternate daily in the 100-‐seat theater. These films are compilations of verbal testimony from area survivors.
The Museum's newest addition to the Permanent Exhibit is a 1942 World War II railcar of the type used to carry millions of Jews to their deaths. The railcar was formally dedicated and opened to the public during 10th Anniversary ceremonies on Sunday, March 5, 2006. The Museum also includes two changing galleries for art and photography exhibits, the Lack Family Memorial Room -‐ a quiet place for contemplation, and the Eric Alexander Garden of Hope.
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Museum of Fine Arts
Founded in 1900, The Museum of Fine Arts, Houston's (MFAH) collection numbers more than 56,000 works and embraces the art of antiquity to the present. Located in the heart of Houston’s Museum District, the MFAH is a dynamic cultural complex comprising two gallery buildings, a sculpture garden, visitors center, library, movie theater, gift shop, café, two art schools, and two house museums.
Children’s Museum of Houston
“America’s No. 1 Best Children’s Museum” by Parents magazine, winner of Nickelodeon Parents’ Picks “Best Museum in Houston 2009 & 2010,” Click2Houston’s “Best Museum 2010,” the Children’s Museum of Houston is a Citysearch.com’s nationwide 5-‐star children’s museum. Housed in a whimsical building designed by internationally acclaimed architect Robert Venturi, the Children’s Museum of Houston offers a multitude of exhibits bursting with action-‐packed fun that engage kids in the ultimate learning experience. The Museum was founded in 1980 by a group of Houston parents who hoped to elevate early childhood development to a community-‐wide priority. Since then, the Museum has grown to serve more than 850,000 people annually, focusing on bilingual (Spanish/English) learning programs for kids ages birth to 12 years and workshops in literacy, science, math, health, engineering, civic engagement, culture and social studies. The Museum operates as a 501(c)(3) under the direction of a Board of Directors. In 2005, the Museum launched its Take Another Giant Step Capital Campaign to fund the doubling of the Museum’s exhibition space, the expansion of the Museum’s outreach programs and the formal launch of the Museum’s Institute for Family Learning. On March 14, 2009, the Museum opened its doors to a new building addition featuring more than 39,000 square feet of new exhibition space, including seven new, permanent exhibits: Cyberchase – The Chase Is On!, based on the award-‐winning PBS KIDS GO! animated series; Invention Convention; PowerPlay, FlowWorks, Kidtropolis, U.S.A. and a new TotSpot.
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Downtown Aquarium
Located in downtown Houston, near City Hall, the 500,000-‐gallon under-‐water adventure complex includes a Ferris wheel, an aquatic carousel, Shark Voyage, a white tiger exhibit and a restaurant. Harris County's first public aquarium, the Downtown Aquarium was designed to entertain the masses. The world-‐class complex, perched on the redeveloped 400 block of Bagby, boasts 500,000 gallons of visible underwater tanks with more than 200 species of marine life -‐ and that's just skimming the surface.
Menil Collection
The Menil Collection opened to the public in June 1987 as the primary repository of John and Dominique de Menil’s private collection. One of the most significant of the twentieth century, the collection consists of nearly 15,000 works dating from the Paleolithic era to the present day. Although historically vast, it uniquely resists the conventional museum model of the encyclopedia. Instead, within the four areas that largely define the collection—Antiquity, Byzantine and Medieval, Tribal, and Twentieth-‐Century Art (with a concentration in Surrealism)—one finds a selective approach to acquisition that yields depth with regard to particular areas and artists.
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Houston Symphony
Founded in 1913, the Houston Symphony is one of America's oldest performing arts organizations, with a distinguished musical history. Over the years, the orchestra has grown and matured under the direction of distinguished leaders such as Ernst Hoffmann (1936-‐47), Efrem Kurtz (1948-‐54), Ferenc Fricsay (1954), Leopold Stokowski (1955-‐61), Sir John Barbirolli (1961-‐67), André Previn (1967-‐69), Lawrence Foster (1971-‐78), Sergiu Comissiona (1979-‐88) and Christoph Eschenbach (1988-‐99). Maestro Hans Graf, who took the podium in September 2001, is the Houston Symphony's fifteenth music director.
The orchestra moved into Jones Hall, its current home, in 1966, and in 1971, the Symphony signed its first 52-‐week contract with the musicians. Today, the Houston Symphony is widely acclaimed as one of the top orchestras in the world. Each year the Houston Symphony performs approximately 170 concerts for more than 350,000 Houstonians. The season includes the Fidelity Investments Classical Series; the 6-‐concert classical Shell Favorite Masters series, Great Performers and TOTAL Gold Classics series; the Cynthia Woods Mitchell Pops at Jones Hall series; Weatherford Family Concerts; the Chevron Fiesta Sinfónica Familiar and the Houston Chronicle Dollar Concert; a summer series at The Cynthia Woods Mitchell Pavilion and KPRC Local 2 Summer Symphony Nights at Miller Outdoor Theatre where the orchestra has performed for more than 60 years. The season also includes six SoundPlusVision concerts underwritten by the Albert and Margaret Alkek Foundation, and the JPMorgan Chase Summer in the City series.
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The Health Museum
The John P. McGovern Museum of Health & Medical Science, also known as The Health Museum, is Harris County's most interactive science learning center and a member institution of the world-‐renowned Texas Medical Center. Located in the heart of the city's Museum District, The Health Museum encourages growing interest and regard for healthier lifestyles, fitness and good physical, mental and spiritual health. The Health Museum currently serves more than 200,000 visitors annually, including more than 40,000 schoolchildren in organized field trips. Since the grand opening more than ten years ago, the facility has seen more than 1.5 million visitors. The Health Museum is the most visited health museum of its kind in the country and one of the top public attractions in the Harris County area. The Health Museum is committed to excellence in innovative and interactive health and science educational experiences such as:
• A hands-‐on walk through the human body
• New and exciting exhibits
• Real organ dissections
• Obesity prevention and nutritional awareness
• Science mini-‐classes and mini-‐med schools
• Health fairs and community outreach
• Family science labs
• School field trip experiences
• Home school classes and programs
• Scout programs
Summer camps
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In addition to the permanent exhibits, the Amazing Body Pavilion and You: The Exhibit, other attractions include the McGovern 4D Theater, the Sue Trammell Whitfield Gallery, seasonal exhibits, and learning centers.
American Cowboy Museum
Dedicated to the preservation and understanding of western multicultural heritage, the American Cowboy Museum, a 501(c)(3) organization, offers a unique setting, introducing groups to the contributions of Blacks, Hispanics, Native Americans, and women to the development and culture of the west. This learning experience expands the horizons and enhances the academic studies of all children, especially inner-‐city youths who often never leave their immediate neighborhoods. Less than five miles from the Reliant Park Complex, in sight of the Houston skyline, museum visitors may be greeted by "Peter" and "Paulette" the peacocks, plus "Nibbles" and "Nefertiti" the goats. They all live on the historic Taylor-‐Stevenson Ranch -‐ working ranch with seven generations of family pride and western heritage. The 1940 Air Terminal Museum
The 1940 Air Terminal Museum is the only educational institution in Harris County dedicated to promoting the city's significant civil aviation history. The Houston Municipal Airport Terminal is a beautiful and rare example of classic art deco airport architecture from the golden age of flight. The Terminal served Harris County during the years when air travelers dressed in their finest and embarked for exotic destinations aboard roaring prop-‐liners like the Douglas DC-‐3 and the Lockheed Constellation. Designed by noted architect Joseph Finger (who also designed Houston's City Hall), the Terminal was built to meet Harris County's growing role as a major center for air commerce in the 1930s. The Terminal was completed in 1940 and served as the primary commercial air terminal for Harris County until 1954. While most major cities have razed the beautiful art deco airport terminals of the 1930s and 1940s to make way for modern buildings, jet traffic or the closing of airports, the Houston Municipal Airport Terminal stands on William P. Hobby Airport as a quiet monument to the rich and varied history of aviation in the region.
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Buffalo Soldiers National Museum
The Buffalo Soldiers National Museum is the only museum in the U.S. dedicated primarily to preserving the legacy and honor of the African-‐American soldier. It houses the largest repository of African-‐American military history in the world. The 10th Cavalry, an all African-‐American Army unit, was nicknamed Buffalo Soldiers by Cheyenne warriors in 1867 out of respect for their fierce fighting ability. Over time, the term Buffalo Soldier was applied to all African-‐American soldiers. The mission of the museum is to interpret, articulate, collect, display and preserve historic artifacts, documents, videos, prints and other historic memorabilia which detail the history of the brave men and women who overcame extreme adversity while gallantly fighting the great American wars.
Houston Zoo
Set in a 55-‐acre lush tropical landscape, the Houston Zoo is home to more than 4,500 exotic animals representing more than 900 species. The Houston Zoo was named one of the top 10 zoos in the U.S. by Parents magazine in 2009. The Zoo is located in close proximity to a number of other cultural attractions, including the Houston Museum of Natural Science. In 2011, the Zoo opened its largest new habitat ever – the African Forest, which recreates the wilderness habitats of some of the continent’s most majestic animals. The Forest encompasses 6.5 acres and cost more than $35 million to develop.
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4.7 Convention Centers and Meeting Space The George R. Brown Convention Center was opened on the east side of downtown Houston on September 26, 1987. The center was named for the late Houston entrepreneur, civic leader and philanthropist George R. Brown. Brown’s Texas Eastern Corp. donated six of the 11 blocks required to build Houston’s sparkling new Pompeduei inspired convention center.
The facility is owned by the City of Houston and managed by the Houston First Corporation. The bonds issued to finance the Center were repaid by hotel occupancy tax revenues, with no local taxes being used to pay back the debt. The first convention held in the George R. Brown Convention Center was the American Society of Travel Agents beginning on October 11, 1987.
On July 28, 2001, ground was broken on a project to expand the
convention center and build an adjacent 1,200-‐room convention headquarters hotel. At a cost of $165 million and requiring 27 months of construction, the Brown grew from 1,150,000 square feet to 1,800,000 square feet of built space. Three exhibit halls were added to increase exhibition space from 451,500 square feet to 853,500 square feet. Fifty-‐seven meeting rooms were added bringing the total number of meeting rooms to 100. Expansion was completed on December 3, 2003. A comparison of the top 16 convention markets in the United States was conducted by CSL to determine where Houston ranks with respect to convention space, exhibit space, meeting space and hotel inventory. Out of the markets surveyed, Houston ranked near the mid-‐point in terms of sellable space, and in the lower half with respect to hotel inventory.
Facility City, StateAnaheim Convention Center Anaheim, CABoston Convention & Exhibition Center Boston, MAColorado Convention Center Denver, CODallas Convention Center Dallas, TXGeorge R. Brown Convention Center Houston, TXGeorgia World Congress Center Atlanta, GAHenry B. Gonzalez Convention Center San Antonio, TXLas Vegas Convention Center Las Vegas, NVMcCormick Place Chicago, ILMoscone Center San Francisco, CANew Orleans Morial Convention Center New Orleans, LAOrange County Convention Center Orlando, FLPhoenix Convention Center Phoenix, AZSan Diego Convention Center San Diego, CAWashington Convention Center Washington, DC
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As this data clearly demonstrates, the Harris County market needs additional convention and meeting space, particularly adjacent to or within walking distance of hotel rooms. The proposed Reliant Park Master Plan and the redevelopment of the Astrodome could address these needs to some extent. As discussed elsewhere, the fact that Reliant Park is more than 10 miles from the George R. Brown Convention Center makes having large events that would utilize both venues virtually impossible. However, the Master Plan would significantly increase the types and number of events that would be able to bring convention and trade shows to Reliant Park, particularly with a hotel included in the redevelopment.
These data are useful to consider when evaluating potential demand for additional space. In addition, data as to historical occupancy levels for existing Reliant Park and Brown Convention Center space, national demand trends, competitive facility development, event hotel needs and the opinions of target market event planners will be considered in evaluating potential development of future Reliant Center convention and trade show space.
Exhibit Meeting Ballroom Total2Sellable Hotel2Rooms HeadquarterSpace Space Space Space w/in21/22Mile Hotel2Rooms
Houston2Rank* 6 13 13 6 12 10
*"out"of"16"markets"surveyed
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4.8 Hotels The availability of hotel rooms to serve the requirements of event attendees is a critical factor in the success of a convention and trade show center. Based on conversations with Convention and Visitors Bureau representatives in each market and other industry research, we have measured the inventory of hotel rooms within one-‐half mile of the respective event facilities in competitive and comparable markets. This is an important analysis because event planners typically prefer to achieve their room block in hotel properties located within a relatively short distance from the event facility.
• Currently there are approximately 803 hotel properties with room inventory totaling 74,199 in the Greater Harris County area according to Smith Travel Research.
• Total length of stay for overnight visitors to Harris County averaged 3.4 nights in 2010.
• Average length of stay for hotel/motel visitors to Harris County was 1.2 nights.
• Overnight leisure visitors shortened their time in Harris County, with an average stay that dropped by almost half a night in 2010 (3.3 vs. 3.7 in 2009); now placing near the US average (3.4).
• The proportion of leisure overnight visitors remains high (60 % of visitors spent the night for leisure in 2010 versus 61 % in 2009 – much higher than the 51 % in 2008) and very beneficial for Harris County.
• Harris County enjoys an above average proportion of business visitors (18 %), who generally spend more on each trip (versus 13 % of business travelers for US destinations).
• In 2010, average travel party size totaled 2.6 persons.
• Annual market-‐wide occupancy in 2010 was 55.8 %, which fell from 56.1 % in 2009.
• Average Daily Rate (ADR) was $92.09 in 2010, down from $96.09 in 2009.
• National hotel occupancy increased to 57.6% in 2010, reflecting national hospitality trends and overall economic conditions.
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The number of events currently held at Reliant Park combined with the operating restrictions that exist due to the leases of the HLSR and the Texans would not seem to support the development of a convention hotel at Reliant Park today. However, the implementation of the Master Plan and the addition of a multi-‐use facility on the current Astrodome site may create enough demand for rooms and related amenities to convince a private developer to construct a hotel in the future.
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4.9 Constituent Interviews As a primary component of the research conducted throughout the redevelopment analysis, the team conducted extensive interviews with Astrodome/Reliant Park constituents, stakeholders and other interested parties. These interviews are summarized below. Parties interviewed included but were not limited to the following:
• Ed Emmett – Harris County Judge
• El Franco Lee – Harris County Commissioner
• Steve Radack – Harris County Commissioner
• Jack Morman – Harris County Commissioner
• R. Jack Cagle – Harris County Commissioner
• Dave Walden – Chief of Staff for Jack Morman – Harris County Commissioner – Precinct No. 2
• Joanye Henderson – Chief of Staff for R. Jack Cagle – Harris County Commissioner – Precinct No. 4
• Mark Miller – General Manager, SMG-‐Reliant Park
• David Turkel – Director, Harris County Community Services Department
• Nancy Powell – Economic Development Director, Harris County
• Andy Icken – Chief Development Officer, City of Houston
• Janis Schmees – Executive Director, Harris County-‐Houston Sports Authority
• Susan Young – Director, South Main Alliance
• Dr. Richard Wainerdi – President/CEO/COO, Texas Medical Center
• Skip Wagner – President, Houston Livestock Show and Rodeo
• Jamey Rootes – President, Houston Texans
• Dr. Mary Spangler – Chancellor, Houston Community College System
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• Emil Pena – Executive Director – Energy & Environmental Systems Institute, Rice University
• John Marsh – Operations Director, Rice University
• Kareem Ayoub – Student, Rice University (Empower Program)
• Dr. John Rudley – President, Texas Southern University
• Dr. Bill Flores – President, University of Houston Downtown
Below is a sample of comments from these discussions:
• There is a realization that the on-‐going maintenance and other carrying costs relative to the financial and event benefits associated with the Astrodome may ultimately point to support for a demolition scenario. However, it is imperative that every possible option be considered before reaching that conclusion.
• One possibility for redevelopment initiative involves renovating the Astrodome to a festival pavilion to host the city’s annual festivals. While this may not create positive net cash flow, it would complement the other Reliant Park tenants and allow for scheduling to meet those tenants’ needs. Furthermore, it would create a central location for festivals and ease the burden on the downtown area that occurs when those events are taking place.
• The proposed multi-‐faceted STEM Center that has been promoted previously in conjunction with several of the local universities – University of Houston, Rice, Texas Southern, and St. Thomas – is supported by a large number of stakeholders. The STEM concept would include research and show space for all of the schools, along with residential dorm-‐type facilities to accommodate students and researchers. As with most other proposals, working around the six-‐week long Rodeo schedule will have to take place. However, there are certainly opportunities for a STEM concept to be tailored to unique Reliant Park event patterns.
• Because the initial cost of renovating the Astrodome to a condition capable of redevelopment is significant, demolition of the Astrodome is viewed as a potential solution for consideration.
• The Commissioners do not appear to have any preconceived notions of concepts that would or would not be looked upon favorably, so long as they make economic sense.
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• Houston City Council has approved a Tax Increment Reinvestment Zone (TIRZ) that includes the 350 acres of Reliant Park; however, further steps have not been taken towards implementation.
• There are strong feelings that a larger scale project that included land adjacent to Reliant Park and the old Astroworld site was needed to make any redevelopment financially viable, given the issues related to the Astrodome.
• A 6 or 7-‐level parking garage within the Astrodome could free up some of the land used for surface lots to create green space and allow developers much more financially viable options to create projects in the future. This would also alleviate some of the operating issues related to the Rodeo’s use of Reliant Park and the impact those operations have on access to the Astrodome during the month the Rodeo takes place.
• The Texas Medical Center submitted a proposal for expansion that utilized the Astrodome in 2004. Since that time, the largest agency of the nearly 50 that comprise the Medical Center, MD Anderson, has constructed a new facility and thus would likely not need any additional space.
• The largest issue the George R. Brown Convention Center has currently in attracting events to Harris County is a lack of full service hotels within walking distance of the Center. This is also an issue with the Reliant Park site, though the proposed Master Plan does include a hotel.
• It has been reported that Disney has acquired significant acreage in eastern Montgomery County for a potential EPCOT type project. Assuming Disney has purchased this land, their financing and final plans are unknown.
• There are significant operational issues associated with the HLSR and the Texans with any redevelopment of the Astrodome. One proposed solution is to construct a tunnel (similar to tunnel capabilities in San Antonio) to provide access between major Reliant Park facilities during these events. It is estimated that the cost of the tunnel would be approximately $20 million, adding to the site costs related to any redevelopment.
• It is believed that when the proposed renovations of Reliant Arena and the other proposed site renovations are completed, the completed facilities would position Reliant Park to fully compete for events in the varied target market segments.
• The entire area around Reliant Park, including adjacent land and the old Astroworld site, should be contemplated when evaluating the redevelopment.
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• The Light Rail line runs along the eastern edge of Reliant Park and provides a direct link to the Medical Center as well as downtown. This access allows for the inclusion of adjacent land in a large-‐scale potential development.
• Given the costs associated with bringing the Astrodome to a point where something could be built within its interior and the restrictions associated with any use given the operating rights of the Rodeo and the Texans, it is felt by many, that a much larger scope must be utilized to ensure the successful adoption of any redevelopment plan.
• The STEM concept would be an important addition to the Harris County area and the national education system if done properly. Creating a STEM center as has been contemplated would provide for an environment that excites persons of all ages to get involved and learn about the STEM subjects and also allows multiple universities and area corporations to share the costs and creative burden of developing and operating a facility of this type and magnitude.
• The costs associated with the STEM center development and operation will require the financial involvement of corporations in the Harris County area and will also require the creation of significant infrastructure to maintain the facility on an on-‐going basis.
• All of the Universities and colleges that the team met with expressed strong interest in being involved in the STEM center and expressed the need for additional classroom and laboratory space. In addition, the schools all felt that having some edutainment/entertainment component was imperative to generate interest from children and adults outside of the schools’ respective student bodies.
• Rice University’s Empower program can serve as a possible model for the structuring of the basic STEM programming and perhaps provide the needed infrastructure to manage this component of the venue. The program is a service venture in which Rice students, physicians, and scientists provide information and hands-‐on experience to students in elementary, middle and high schools, promoting and realistically portraying medical and scientific careers. Empower also focuses efforts on the general population to increase scientific literacy.
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4.10 Summary – Market Analysis Harris County’s demographics provide a very strong basis for additional Reliant Park development. The city is the fourth largest in the United States and continues to grow. It is within 300 miles of two of the other ten largest cities in the United States – San Antonio (7th) and Dallas (9th) – and serves as an international hub for United Airlines, providing access for millions of additional potential visitors.
The State of Texas as a whole, and the Harris County market specifically, have weathered the economic downturn better than most other parts of the United States. While the area has suffered, it has stabilized and is poised to rebound with strong potential growth in both the short and long-‐term.
As seen through the analysis summarized above, the level of sports franchises, live entertainment venues and cultural attractions within the Harris County metropolitan area offers its residents and visitors with a very significant base of entertainment. That being said, with the closing of Astroworld, the area lacks a major theme park and this is often looked at as detracting from Harris County as a destination market.
There clearly is potential for the addition of full service hotel rooms in close proximity to Reliant Park. For many Reliant Park events, there is a deficiency of area hotel rooms, and those that do exist are generally limited service properties that do not fully meet the needs of conventions and other similar events. Provided hotel rooms are added, the potential exists to support additional convention and meeting space. However, it must be reiterated that the convention and meeting space included in the proposed Reliant Arena replacement merely replaces the existing space that would be lost with the demolition of Reliant Arena – no net additional space is being added under the current plans.
Furthermore, although there are a significant number of live entertainment venues in the Harris County market, there truly is a need for a mid-‐size indoor venue with a seating capacity of between 8,000 to 10,000 permanent seats. The existing Reliant Arena has 5,800 fixed seats and lacks the amenities that are attractive to most touring shows. The capacity also prevents the Arena from hosting many types of shows, including family shows like Disney on Ice and the circus, which presently are held at Reliant Stadium. The Stadium is not an efficient venue for these types of shows because of the costs associated with reconfiguring the seating areas (which are approximately $100,000 per event) and the lack of intimacy even after the reconfiguring. By constructing a new venue, significantly more shows could be brought to Reliant Park, more dates at the
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Stadium could be opened for larger events, and the shows that are moved from the Stadium to an arena would generate better financial performance.
Given the proximity of the Houston Museum of Natural Science (HMNS) to Reliant Park, the addition of a second planetarium Harris County/Houston would also seem to be problematic. Furthermore, the existing planetarium has a number of complimentary venues and exhibits at the HMNS, putting it in a strong position to compete for visitors with a second similar venue.
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The purpose of this section is to analyze the market potential for two of the components of the Reliant Park Master Plan: the Replacement Arena and the on-‐site Hotel. Further, the analysis for the Replacement Arena is separated into market segments for the Performance Arena and the Exhibition and Meeting Space. Throughout this section, we outline key findings associated with the analysis of historical Reliant Park operations, competitive and comparable markets and facilities, and potential future event demand specific to Reliant Park. Operational characteristics of the George R. Brown Convention Center (GRBCC) are also considered. This research is used to present findings as to the market demand implications associated with the proposed improvements.
5.1 Reliant Park Master Plan Overview The Harris County Sports and Convention Corporation has spent a great deal of time and resources over the past decade on various discussions and formal studies in an effort to develop a Master Plan for the Reliant Park Complex. In 2007, the HCSCC commissioned a study to assess the then current and future needs of the on-‐property tenants, clients and potential clients of Reliant Park. The HCSCC, in particular, wanted to address concerns regarding the aging Reliant Arena, address the need for additional exhibit and meeting space for the Offshore Technology Conference, incorporate in the Master Plan the program elements identified by the HLS&R as being essential to the continued growth of their event, address parking and traffic issues related to the site and to develop a comprehensive plan for future development at the complex.
In 2010, the needs of the complex were once again assessed in conjunction with discussions focusing on the possibility of creating a Science, Technology, Engineering and Mathematics (“STEM”) Institute in the Astrodome. This effort stressed that any planning efforts regarding the future use of the Astrodome site must be coordinated with the 2007 Master Plan Study to ensure the functionality of a modified complex. In developing the revised plan, HCSCC worked closely with the tenants to ensure that the final outcome would be acceptable to all stakeholders. The results of the HCSCC’s efforts were presented in June of 2010 to the public in the “Reliant Park Master Plan”. The Reliant Park Master Plan proposes construction of the following components:
Replacement Arena Project
The Replacement Arena Project includes the following components: the Performance Arena, 250,000 square feet of exhibition space, a 45,000 square foot ballroom, additional meeting space, Festival Plaza, Parking Garage and the Intermodal Transportation Center. Below is a description of the major program elements.
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• The Performance Arena would feature a U-‐shaped seating bowl and have a capacity of 8,000-‐10,000 seats. This multi-‐purpose venue would be designed to allow multiple seating and presentation configurations. Other features of the Performance Arena would include:
o Multiple seating and event configurations. Seating capacities for events would range from concert configuration with a maximum capacity of 12,000 seats with temporary seating on the floor to a theater configuration with a seating capacity of 1,500 to 2,500 seats.
o The arena floor would have a maximum size of 300’ x 125’ for equestrian events which through the use of a portable seating platform can be reduced to 200’ x 85’ for ice hockey and standard arena productions. A permanent ice floor will be incorporated into the arena floor slab.
o Premium seating options would be included. The current program has 10 to 12 suites with 14 to 16 seats each, loge boxes with 6 to 8 seats each and a club level. These assumptions will be verified with future programming and market analysis.
o The ceiling height over the main arena floor would be a minimum of 65’. A rigging grid with increased rigging capacity, catwalk access and fall protection system would also be designed into the roof structure.
• To replace the exhibition space that would be lost with the demolition of the current arena, approximately 250,000 square feet of column free exhibit space divisible into three halls would be located between Reliant Center and the Performance Arena. It is important to note that if an Astrodome option is selected that does not provide additional exhibit space, consideration should be given to an additional 85,000 square feet of exhibition space at a minimum. The proposed 250,000 square feet does not add any new exhibition space to the complex, it merely replaces the space currently available in the arena.
• To enhance opportunities for outdoor events, Festival Plaza would be created in the area between the Astrodome site, the Replacement Arena and the Parking Garage. This 320 foot wide, curb-‐less plaza will function as an indoor/outdoor venue for festivals and entertainment events, an area for outdoor exhibit space, and support space for major sporting events. In addition, this area will serve as the main Grand Stand and start/finish line for the Shell and Pennzoil Grand Prix of Houston, scheduled to return to Reliant Park in 2013. Festival Plaza would be lined with lush green planters providing a park-‐like setting while also providing permanent seating and shade.
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• A parking garage with 2,500 to 3,000 parking spaces would be located south of the Performance Arena. The ground floor of the garage would be approximately two stories high. This design would allow flexible programming of the space, allowing it to serve as more than just a parking area; it would also be used for covered outdoor exhibit space and support for arena events. For example, this area could also be transformed into horse stables during rodeo season or animal holding pen space for the Ringling Bros. and Barnum & Bailey® Circus.
• An Intermodal Transportation Center would be located at the south end of the Parking Garage. In addition to serving as a bus depot, the Intermodal Transportation Center would serve as an arrival/departure point for taxis, limousines, and METRORail riders.
• Various other improvements are also proposed in the Master Plan and include (i) pedestrian bridges connecting the Astrodome to both Reliant Stadium and Reliant Center, if the Astrodome remains, (ii) demolition of the current arena and Plant II, (iii) lowering the Westridge drive lane at the Kirby entrance and the construction of a pedestrian/vehicle bridge to improve traffic flow at the Westridge entry, (iii) reconfiguration of Reliant Parkway and its extension to the 610 feeder, and (iv) site improvements and paving following the demolition of the current arena.
Hotel
To address the need for an onsite Hotel, the Master Plan proposes the construction of a hotel tower above the new exhibition space. An underground parking garage with a dedicated entrance off Fannin will support the hotel, therefore day to day hotel operations will not negatively affect street level activities during events like the annual Houston Livestock Show and Rodeo and the Houston Texans football games. Development of the Hotel will only take place if a private developer can be found to fund the construction and operation of the Hotel.
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Project Costs
A breakdown of the projected costs for the Replacement Arena and Hotel are set forth below. The Construction Cost represents the hard costs associated with the construction of each of the project elements. Project costs include the construction costs plus design fees, owner’s representative fee, furniture, fixtures and equipment, permits, legal fees and testing. A 5% escalation estimate is also included.
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Anticipated Results
When combined with the existing facilities, the redeveloped campus is anticipated to yield the following results:
• Satisfy the future needs of the Houston Livestock Show and Rodeo.
• Extend the long-‐term relationship with the Offshore Technology Conference.
• Increase parking revenues from the Houston Livestock Show and Rodeo due to the continued growth in the event and the additional spaces available from the parking garage.
• Attract larger conventions and trade shows: as a result of the addition of the contiguous exhibit space included in the Replacement Arena. Marketability for conventions and trade shows would be further enhanced if a private developer can be secured for the onsite hotel.
• The proposed Replacement Arena would better suit the needs of professional sports franchises given its higher seating capacity and enhanced amenities, which should result in increased event activity. Professional sports franchises could bring an additional 35 to 38 event days to the complex with an average attendance between 6,000 and 8,000 guests.
• Increase marketability and bookings for concert and entertainment events: primarily due to the increased seating capacity in the arena and improvements in the amenities of the arena.
• Allow more events to be booked simultaneously: due to the addition of the new high-‐quality exhibition space. Scheduling is always an issue at Reliant Park especially during the NFL season. The new exhibit space would create the opportunity for more simultaneous bookings throughout the year and more specifically during Reliant Park’s protected weeks during the fall.
• Create new business opportunities: historically Reliant Park has not been a destination for food and beverage events. With the addition of the Ballroom and additional meeting space, Reliant Park should see a significant increase in this business segment.
• Increase income from arena events: the enhanced amenities and concession facilities planned for the arena should greatly increase the food and beverage income for events currently hosted in the arena as well as the new event activity that is anticipated.
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• Create new income from premium seating opportunities: through the addition of suites, loge boxes and club seating in the arena. These amenities do not exist in the Reliant Arena and are considered essential elements in new facilities. In addition to the usage fees associated with the purchase of premium seating, additional revenues are also anticipated from food and beverage sales and premium parking offerings.
• Increase income from advertising and sponsorship sales: due to the upgraded facilities and overall increase in event activity and attendance. While the upgraded arena alone will create new advertising and sponsorship income, the anticipated increase in event activity and attendance should add value to the existing facilities and add value for advertising and sponsorship income for the entire campus.
• Increase income from existing events: by moving Circus and Disney on Ice from the Stadium to the arena, eliminating the cost to install the blackout curtain and reducing staffing, cleaning and utility costs.
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5.2 Performance Arena Reliant Arena Operating History
Reliant Arena has a fixed seating capacity of 5,800 and total capacity of 8,500, which fills a niche in the Harris County market for mid-‐size indoor arenas as there are no other venues of this size in the area. However, with the venue being opened in 1974 and lacking premium seating and other modern amenities, Reliant Arena is not adequate to host many of the events that it otherwise would be able to given the lack of comparable sized venues in the Harris County area. Annually, Reliant Arena hosts various events including concerts, family shows, trade shows, exhibitions, and other such events. The following charts provide summaries of the events and attendance hosted at the facility in recent years.
Total Number of Reliant Arena Events by Event Type (FYE 2006 – FYE 2011)
0"
20"
40"
60"
80"
100"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FYE"2011"
Num
ber'of'Events'
Amateur"&"Professional" Community"&"Religious" Consumer"Show"Entertainment" Family"Shows" Food"&"Beverage"Meeting"&"Seminar" Trade"Show" Other"Events"
35'
59' 59'
41'
79'
45'
Notes:''Event'types'are'based'on'Reliant'Arena'classi6ications.'Source:''CSL'International,'facility'management,'2011.'
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Reliant Arena Attendance by Event Type (FYE 2006 – FYE 2011)
0"
50,000"
100,000"
150,000"
200,000"
250,000"
300,000"
350,000"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FYE"2011"
Attendance(
Amateur"&"Professional" Community"&"Religious" Consumer"Show"Entertainment" Family"Shows" Food"&"Beverage"Meeting"&"Seminar" Trade"Show" Other"Events"
128,418(
209,397(235,343(
303,952(
188,533( 189,423(
Notes:''Event'types'are'based'on'Reliant'Arena'classi6ications.'Source:''CSL'International,'facility'management,'2011.'
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Comparable and Competitive Facilities
The following sections present an overview of selected arenas that are comparable to the new Reliant Arena. An assessment of the physical, operational and financial characteristics of comparable arenas provides a framework from which to benchmark the potential operations of the new Arena. The analysis is divided into two parts. First, the primary comparable facilities reviewed were selected based on one or more of the following criteria, including but not limited to: (a) location in a major metropolitan area in competition with a larger sports arena, (b) seating capacity of at least 7,500 seats, and (c) opened in the past 10 years.
Sears Centre
Sears Centre is located in Hoffman Estates, Illinois (a suburb of Chicago) and opened in Fall 2006. The building seats 9,700 people for hockey and up to 11,800 for concerts. Sears Centre is owned by Ryan Companies US, Inc. and Sears Holding Corporation (the publicly traded parent of Kmart and Sears Roebuck) and was developed in partnership with the Village of Hoffman Estates. CCO Entertainment manages the building.
Location: Hoffman Estates, IL (Chicago) Year Opened: 2006 Capacity: 9,700 (hockey), 11,800 (concert) Size: 252,000 sq. ft. Cost: $62 million Funding: 100% private Ownership: Ryan Companies & Sears Holdings Management: CCO Entertainment Total Events: 135 Total Attendance: 630,500
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Sears Centre is home to three minor league sports tenants, the NLL Chicago Shamrox (lacrosse), MISL Chicago Storm (soccer) and CIFL Chicago Slaughter (football). The building’s hockey tenant, the Chicago Hounds of the UHL, folded operations after the 2007 season. As shown, the Sears Centre hosted approximately 135 events in a stabilized year, 48 of which were tenant events.
There are 43 suites at the Sears Centre that lease for an average annual total of $35,000 and 24 loge boxes that lease for an average of $22,500 annually. Suite and loge box leases include tickets to concerts, sporting events and family shows. The Sears Centre also has 1,000 club seats that lease for an average of $1,250 per year. All premium seating includes VIP parking and access to private lounges and restrooms. There are 3,200 parking spaces available for arena patrons, along with additional off-‐site parking lots available to the public in case of traffic overflow.
Sears Centre cost $62 million to construct. The Village of Hoffman Estates provided a first mortgage to the private developers of the arena by issuing $50 million in general obligation bonds, which are expected to be paid back through revenues generated by the ongoing operations of Sears Centre. Remaining project funding included a $6 million land donation by Sears and $6 million in equity contributions by the Ryan-‐Sears partnership.
Competitive arenas include the United Center in downtown Chicago which is home to the NBA Bulls and NHL Blackhawks, Allstate Arena in Rosemont, and several other collegiate arenas.
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Sovereign Bank Arena
Opened in 1999, Sovereign Bank Arena is located in Trenton, New Jersey (approximately 30 miles from downtown Philadelphia) and seats 8,100 for hockey and 10,500 for concerts. The facility has 17,000 square feet of space for floor shows on the arena floor. It is owned by Mercer County and operated by Global Spectrum.
The arena is home to the New Jersey Devils’ ECHL affiliate, the Trenton Titans. The table to the right presents a summary of the historical event activity at Sovereign Bank Arena in a recent year. The facility hosted 141 events and attracted 352,291 patrons. Event activity included 38 Titans hockey games, seven concerts, 36 family shows, 23 non-‐tenant sporting events and 37 other events, including trade shows, graduations and religious events.
There are 32 suites at the Sovereign Bank Arena and they lease at an average annual price of $45,000 per year for three or five year terms. A multi-‐year contract includes tickets to every event in the arena. Included in the suite prices are 18 tickets, VIP parking and a private entrance. Suite packages include concierge service, cable TV and an invitation to all VIP events.
There are 1,100 club seats in the Sovereign Bank Arena, which lease for $900 per year with terms ranging from three to five years. The seats include season tickets to all Trenton Devils home hockey games, the first option to purchase tickets to all arena events, VIP parking and access to two Club Lounges and concierge services.
Location: Trenton, NJ (Philadelphia) Year Opened: 1999 Capacity:
8,100 (hockey), 10,500 (concert) Size: 200,000 sq. ft. Cost: $53 million Funding: 100% public Ownership: Mercer County Management: Global Spectrum Total Events: 141 Total Attendance: 352,291
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The $53 million Sovereign Bank Arena was financed by Mercer County via general obligation bonds guaranteed by the County. There was no private money used in the construction of the facility. Sovereign Bank Arena competes with several arenas in the greater Philadelphia marketplace including the Wachovia Center, home to the NBA Philadelphia 76ers and the NHL Philadelphia Flyers, the Wachovia Spectrum and the Liacouras Center.
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Gwinnett Center
The Arena at Gwinnett Center opened in 2003 in Duluth, Georgia as an addition to an existing convention complex. The 366,049 square foot facility, which seats 12,000 for basketball and 13,000 for concerts, has 17,000 square feet of arena floor space for conventions and trade shows and 22 meeting rooms located in the convention center. The arena is owned by Gwinnett County and operated by the Gwinnett County Convention and Visitors Bureau.
The table to the right summarizes event activity at the Gwinnett Center in a recent year. The arena hosted 110 events and drew 620,979 attendees. Events included ECHL Gwinnett Gladiators games, AFL Georgia Force games, concerts, family shows and other sports and religious events.
The facility has 36 suites that seat 12 to 14 people and lease for $50,000 to $70,000 per year. Suite lease terms range from three to seven years. Included in the ticket price are 12 or 14 suite tickets to all arena events, two guest passes and three parking passes, plus the option to purchase up to four additional suite tickets. Accommodations in the suite include a refrigerator, storage cabinets, wet bar, large screen television (50" to 60") with in-‐house feed and cable, a telephone with an in-‐house line and local service and signage on the exterior of suite.
Location: Duluth, GA (Atlanta) Year Opened: 2003 Capacity: 11,500 (hockey), 13,000 (concert) Size: 380,000 sq. ft. Cost:
$91 million Funding: 100% public Ownership: Gwinnett County Management: Gwinnett County CVB Total Events: 110 Total Attendance: 620,979
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The Gwinnett Center also has 1,390 club seats that lease for $1,500 to $1,700 per year with one-‐year terms. Included in club seats are season tickets to all regular season Gwinnett Gladiators games and the first right of refusal for post-‐season tickets and additional arena events. Amenities include access to a private club lounge, a private entrance and elevator to club level and VIP parking with purchase of four or more seats.
The $91 million arena was 100 percent publicly funded through $65 million in revenue bonds issued by Gwinnett County and backed by hotel/motel tax collections, another $25 million in revenue bonds that were issued by the Gwinnett Development Authority and also backed by hotel/motel taxes, and a $1 million contribution from the Gwinnett Convention & Visitors Bureau.
Gwinnett Center primarily competes with Philips Arena, the home of the NBA Hawks in downtown Atlanta.
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Paul Tsongas Arena
Paul Tsongas Arena is located in Lowell, Massachusetts (a suburb of Boston) adjacent to the University of Massachusetts-‐Lowell (“UMass-‐Lowell”) campus. Tsongas Arena is a multi-‐purpose indoor facility that opened in January 1998 and has a capacity of 6,500 for hockey and 7,800 for concerts. The arena also maintains a lawn with a capacity of 3,500 people for outdoor concerts, festivals, and special events. The venue offers 30,000 square feet of exhibit space on the arena floor. The venue is owned by the City of Lowell an operated by Global Spectrum.
Tsongas Arena is home to two hockey teams including the NHL New Jersey Devils’ AHL affiliate, the Lowell Devils, and the NCAA Division I UMass-‐Lowell River Hawks. Arena management indicated that the facility hosted approximately 92 event days in the most recent fiscal year, as illustrated to the right. Arena events included 41 AHL games, 17 UMass-‐Lowell sporting events, 10 concerts, five family shows, and various other sporting events, trade shows, conferences and banquets.
The arena does not have any private suites, but includes approximately 250 club seats that lease for an average annual fee of $299 per seat. Seats can be leased on a one year or three year basis. Club seat prices include season tickets to all regular season home games for UMass-‐Lowell River Hawks hockey and the first right to purchase tickets for all other arena
Location: Lowell, MA (Boston) Year Opened: 1998 Capacity: 6,500 (hockey), 7,800 (concert) Size: 175,000 sq. ft. Cost: $28 million Funding: 86% public, 14% private Ownership: City of Lowell Management: Global Spectrum Total Events: 92 Total Attendance: 236,409
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events. Club seat amenities include center-‐ice location with optimum sightlines, padded seats with cup holders, one VIP parking pass for every two seats purchased and access to the Talon Club Room.
The $28 million facility was funded through a $4 million City of Lowell municipal bond and $4 million from the University fund. US Senator Paul Tsongas, who the arena is named after, was also instrumental in acquiring state funding for the project. The remaining $20 million was funded by state grants, including $3 million for a canal and river walkway around the arena and $3.5 million for an access road and rotary connecting the arena with an existing parking garage.
Tsongas Arena is located 30 miles northwest of Boston, drawing from an audience of 4.5 million residents. However, a facility representative indicated that despite its proximity to Boston and its competing facilities, Tsongas Arena has been successful in drawing events due to its ease of access relative to facilities in downtown Boston, and its intimate size which provides better sightlines than the larger TD Banknorth Garden in Boston. Other competing arenas in the Boston area include the DCU Center in Worcester, as well as collegiate arenas such as Conte Forum (Boston College), Agganis Arena (Boston University) and Matthews Arena (Northeastern University).
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Comcast Arena at Everett Events Center
Comcast Arena at Everett Events Center was completed in 2003 and has a seating capacity of 10,000 for concerts and 8,300 for hockey. The Everett Events Center complex, located in Everett, Washington (a suburb of Seattle), also has a 57,000 square foot floor for trade shows and conventions. The facility is owned by the Everett Public Facilities District and operated by Global Spectrum. Naming rights were sold to Comcast in 2007 for $3.4 million over 10 years.
With the arena’s af2 indoor football team folding operations after the 2007 season, the sole tenant in Comcast Arena is the Everett Silvertips of the Western Hockey League. The arena also hosts concerts, circuses and other family shows, ice shows, motor sports, trade shows and graduations. The table at the right presents a breakdown of events hosted by Comcast Arena in a recent year.
The arena has 20 suites that range in price from $30,000 to $40,000 per year and lease for one, three, five or seven year terms. Suite prices include 12 tickets to all events, a private VIP entrance and a VIP club lounge. Additional suite features include a wet bar, a refrigerator, a television with high-‐speed Internet access and a nameplate at the suite entrance.
Location: Everett, WA (Seattle) Year Opened: 2003 Capacity: 8,300 (hockey), 10,000 (concerts) Size: 300,000 sq. ft. Cost:
$54.5 million Funding: 100% public Ownership: Everett Public Facilities District Management: Global Spectrum Total Events: 148 Total Paid Attendance: 470,417
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The facility has 761 club seats that lease for an average of $775 per year with one-‐year terms. Amenities for club seats include the first right to purchase tickets for arena events, one parking pass for every two club seats purchased, access to a private club lounge and priority booking for the club lounge on non-‐event days.
The $71.5 million construction project, $54.5 million of which was attributed to the arena, was funded with state sales tax rebates and City contributions. The City of Everett contributed $15 million toward facility construction by issuing general obligation bonds. While the bonds are not backed by a specific source, the City anticipates that it will recoup a significant portion of its contribution through a five percent admissions tax as well as rent received from retail spaces in the complex. The remaining $56.5 million was financed through bonds issued by the Everett Public Facilities District (“EPFD”). Approximately $33.9 million of the EPFD bond issue is anticipated to be backed by Everett Events Center revenues, and the remaining $22.6 million is backed by sales tax rebates received from the State as well as City and County hotel/motel tax revenues. The EPFD uses state sales tax revenue for the $2.8 million annual debt payment.
The Everett Events Center competes in the greater Seattle marketplace with Key Arena, home to the NBA Seattle Supersonics, and the Tacoma Dome, among other facilities.
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Family Arena
Located in St. Charles, Missouri (a suburb of St. Louis), Family Arena was completed in 1999 and seats 11,522 for concerts and 9,643 for ice events. Additionally, there is a 30,000 square foot area for flat shows. The arena is owned and operated by the St. Charles Public Arena Authority.
The Missouri River Otters of the United Hockey League folded operations following the 2007 season, leaving the River City Rage of the United Indoor Football League as the sole tenant of Family Arena. The table below summarizes historical event activity at the Family Arena during a recent year. Family Arena hosted 91 events, including the Rage, concerts, family shows, motor sports, trade shows and graduations.
Family Arena has 44 suites that range from $15,000 to $30,000 per year and lease from one to seven year terms. Lease fees include VIP parking. There are also 296 club seats that lease for two years at $888 per year.
Family Arena was funded through $35 million in taxable leasehold revenue bonds secured by lease payments. The bonds were issued through the St. Charles Public Arena Authority, which is a not-‐for-‐profit arm of the government, so voter approval was not required. The original 57-‐acre land donation came from Station Casino St. Charles in St. Charles County and was valued at approximately $6.2 million.
Location: St. Charles, MO (St. Louis) Year Opened: 1999 Capacity: 9,643 (hockey), 11,522 (concerts) Size: 192,855 sq. ft. Cost:
$35 million Funding: 82% public, 18% private Ownership: St. Charles Public Arena Authority Management: St. Charles Public Arena Authority Total Events: 91 Total Attendance: 248,251
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Originally, the Family Arena Management Enterprise LLC (“FAME”), a private entity, was responsible for paying $2.2 million of the $2.8 million annual debt payment, two years of which they contributed up front, and the County was responsible for the remaining $600,000. However, FAME turned over operations of the facility to the St. Charles Public Arena Authority a few years after opening, and FAME’s portion of annual debt payments is now paid by a combination of arena revenues and County sales tax revenue.
Family Arena primarily competes with the Scottrade Center, home of the NHL St. Louis Blues, and Chaifetz Arena, a 10,600-‐seat venue on the campus of St. Louis University that was completed in April 2008.
E-‐Center
Located in West Valley City, Utah (a suburb of Salt Lake City), the E-‐Center opened in 1999 and gained international exposure as the host venue for the Ice Hockey Championships at the 2002 Olympic Winter Games. The arena seats 8,200 for hockey and up to 12,000 for concerts. With 20,910 square feet of arena floor space, the facility can also accommodate floor shows. The center is publicly owned by West Valley City and privately managed by Centennial Management Group.
The table at the right summarizes the events hosted by the E-‐Center in a recent year. The facility hosted a total of 83 events, including ECHL hockey games, concerts, family shows, other sporting events, graduations and religious events.
Location: W. Valley City, UT (Salt Lake City) Year Opened: 1999 Capacity: 8,200 (hockey), 12,000 (concert) Size: 300,000 sq. ft. Cost:
$49.3 million Funding: 100% public Ownership: West Valley City Management: Centennial Management Total Events: 83 Total Paid Attendance: 311,217
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The E-‐Center has 38 suites that range in price from $35,000 to $50,000 per year with lease terms ranging from three to seven years. The suites can accommodate 16 to 20 people and include regular season and playoff tickets. Amenities include a private suite attendant/concierge service, BOSE Wave Radio, 27” cable television with remote control, double-‐sided sink and refrigerator and local telephone access.
The 1,750 club seats in the E-‐Center lease for $1,200 to $1,500 annually, with terms ranging from two to four years. The lease terms include tickets to all Utah Grizzlies games and the first right of refusal to purchase tickets for other events.
Funding for the $49.3 million E-‐Center came from West Valley City. The initial round of financing came in the form of revenue bonds issued by the Building Authority. The E-‐Center competes in the greater Salt Lake City marketplace with EnergySolutions Arena, home of the NBA Utah Jazz, as well as several collegiate venues, including Huntsman Center (University of Utah), Dee Events Center (Weber State), Marriott Center (BYU), and McKay Events Center (Utah Valley State).
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Desoto County Civic Center
Desoto County Civic Center is located in Southaven, Mississippi, about 15 minutes south of downtown Memphis, Tennessee. The facility opened in 2000 and holds a maximum capacity of 10,000 people. Desoto County Civic Center also includes a 20,000 square foot convention and meeting space, a 35,000 sq. ft. arena floor, as well as a 400-‐person theater. The venue is owned and operated by Desoto County.
In a recent year, the arena at Desoto County Civic Center hosted approximately 200 events. Tenant sporting events featured 32 CHL Mississippi RiverKings games and nine games for the now defunct af2 Memphis Xplorers. The arena also hosted graduations, high school sporting events and other community events, as well as concerts, family shows, and religious gatherings. Desoto County Civic Center has two types of luxury suites, seating either 10 or 17 people. The arena’s 12 suites range from $35,000 to $45,000 per year, with lease terms ranging from three to seven years. Suite packages include tickets to all RiverKings home games, VIP parking and the option to purchase tickets for all other public arena events.
Funding for the Desoto County Civic Center was generated via a special tourist promotion tax of two percent levied on the gross proceeds of restaurants, hotels and motels in Desoto County. Competitive arenas in the market place include FedEx Forum (home of the NBA Memphis Grizzlies and University of Memphis basketball) and Pyramid Arena.
Location: Southaven, MS (Memphis) Year Opened: 1999 Capacity: 8,500 (hockey), 10,000 (concert) Size: 200,000 sq. ft. Cost:
$27.5 million Funding: 100% public Ownership: Desoto County Management: Desoto County CVB Total Events: 200 Total Paid Attendance: 255,663
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Citizens Business Bank Arena
Citizens Business Bank Arena opened on October 24, 2008, in Ontario, California, which is located approximately 35 miles east of downtown Los Angeles. The arena was developed as the centerpiece of Piemonte at Ontario Center, a large-‐scale office, retail, hotel, entertainment and urban-‐living complex. The arena is also adjacent to the San Manuel Indian Bingo & Casino. The 225,000 square foot multi-‐purpose facility seats 9,736 for hockey and 11,089 for concerts, and features 3,500 on-‐site parking spaces for use by arena patrons. The arena is owned by the City of Ontario and managed by AEG.
The arena is home to the NHL Los Angeles Kings’ ECHL affiliate, the Ontario Reign. Citizens Business Bank Arena hosted 125 events in a recent fiscal year, including 36 ECHL games, 20 concerts, 25 family shows, 19 other sporting events and 25 miscellaneous other events.
There are 36 suites at Citizens Business Bank Arena that lease for an annual average of $63,000 and include tickets to all arena events, as well as access to the Sky Box Bar. Suites are sold on a minimum five-‐year lease. The arena also has one 14-‐person suite available for nightly rental, with costs dependent upon event and ticket price. Citizens Business Bank Arena also has 770 club seats, which lease for $1,100 per year and include Reign season tickets, first right of refusal for all other arena events and access to the VIP Club, which is located in the adjacent San Manuel Indian Bingo & Casino.
Citizens Business Bank Arena cost $150 million to construct and has been paid for in full by the City of Ontario. The City generated $62 million from the sale of several public properties to developers and received $12 million from the City’s
Location: Ontario, CA (Los Angeles) Year Opened: 2008 Capacity: 9,736 (hockey), 11,089 (concert) Size: 225,000 sq. ft. Cost: $150 million Funding: 100% public Ownership: City of Ontario Management: AEG Total Events: 125 -‐ projected Total Attendance: 577,500 -‐ projected
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redevelopment department to build the parking lot and freeway signs for the arena. The remaining $76 million came from an annual budget surplus that the City of Ontario allocated to a facility development fund.
Citizens Business Bank Arena is the primary multi-‐purpose arena in the Inland Empire region, which comprises San Bernardino and Riverside counties. However, there are two major professional arenas within 45 miles. Honda Center is located in Anaheim and is home of the NHL Anaheim Ducks. Staples Center is located in Los Angeles and is home to the NBA Los Angeles Lakers, NBA Los Angeles Clippers, NHL Los Angeles Kings, NBA D-‐League Los Angeles D-‐Fenders, WNBA Los Angeles Sparks and AFL Los Angeles Avengers.
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Key findings regarding the primary comparable venues included the following:
• The eight primary comparable facilities profiled have an average fixed seating capacity for hockey of approximately 8,900 people. Average concert capacity is around 10,800.
• The average total development cost of the primary comparable facilities was approximately $79.8 million in 2012 dollars. On average, they were built around 2002 and public funds accounted for 94 percent of project funding.
• Ownership of comparable venues is primarily through a municipal entity, with Sears Centre in the suburbs of Chicago as the only exception.
• The majority of comparable facilities are operated by private contract firms, such as Global Spectrum or SMG, which specialize in management. Desoto County Civic Center and the Gwinnett Center are the only publicly-‐operated comparable arenas.
• Primary comparable arenas hosted an average of 125 events, ranging from a low of 83 events at E-‐Center in West Valley City, Utah to a high of 200 events at Desoto County Civic Center in Southaven, Mississippi.
• In terms of non-‐tenant events, comparable facilities hosted an average of 85 events, with a low of 34 at Tsongas Arena in Lowell, Massachusetts, and a high of 159 at Desoto County Civic Center. Non-‐tenant events typically included concerts, family shows, high school sports, graduations, flat floor shows, and other miscellaneous events.
• Average total attendance for the facilities was approximately 411,000, ranging from a low of 236,409 at Tsongas Arena to a projected high of 630,500 at Sears Centre.
• Seven of eight primary comparable facilities have private suites. The average number of private suites was 33, ranging from a low of 12 at Desoto County Civic Center to a high of 44 at Family Arena outside of St. Louis. The average annual suite price was approximately $42,375.
• Seven of the primary comparable facilities have club seats. The average number of club seats was 915, ranging from a low of 250 at Tsongas Arena to 1,750 at E-‐Center. The average annual club seat price was approximately $1,020.
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Market Demand Analysis – Performance Arena
The proposed plans for the Performance Arena include a U-‐shaped seating bowl with a fixed seating capacity of between 8,000 to 10,000. This multi-‐purpose venue will be designed to allow multiple seating and presentation configurations. Other features include a 125’ x 250’ playing floor, 10-‐12 suites and loge boxes. This facility would allow Reliant Park to host more events than in the current arena, and it will also address the need for more space for some larger events, such as the OTC and the HLSR.
The new arena, with increased capacity and better amenities, will allow for the booking of several additional shows each year and also will allow for certain events currently held at Reliant Stadium, particularly family shows like Ringling Brothers Barnum and Bailey Circus and Disney on Ice, to move to the new arena. This will save operating expenses of over $100,000 for each of these shows, which are the costs of reconfiguring and hosting the events in Reliant Stadium, and will also free up additional dates at the Stadium. It is anticipated that the new Performance Arena, with its increased capacity and modern amenities should double the number of events held annually. As discussed above, the family shows currently held at the Stadium, which total between 25-‐35 events annually, will move to the Performance Arena. In addition, the larger capacity and the lack of competitive venues in the Harris County area will significantly expand the number of entertainment and sporting events that would consider booking at the Performance Arena. The existing Arena generates an average of $25,000 of revenues after expenses from each of the events held at the facility. Increasing the capacity of the venue by nearly double will allow for an increase in operating income from each event from historical levels. It is anticipated, that the types of events the new venue will attract will also ensure that the income increases on a per event basis, to approximately $40,000 for an average non-‐sporting event and $30,000 for each team game at the arena. Using the assumptions set forth above, the number of annual events could increase to 151, including 40 minor league hockey games. The family shows currently being held at Reliant Stadium each year would relocate to the Arena as well, accounting for approximately 23 additional events each year. The increased capacity would also allow for additional concerts and sporting events to be booked that currently will not play at the Arena. As a result of the increase in number of events as well as the profitability of each show, the total annual operating income generated by events at the proposed Reliant Arena should be approximately $4.4 million, a dramatic increase from the $1.3 million currently generated in an average fiscal year.
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5.3 Exhibition and Meeting Space Historical Performance – Harris County Facilities
The key operational elements of Reliant Center and the George R. Brown Convention Center (GRBCC) have been analyzed. Understanding utilization levels, event mix and other such characteristics of the facility is important to provide a basis from which to evaluate potential unmet demand for event space in the market.
Reliant Center hosts a wide variety of both local and non-‐local events. Based on classifications provided by Reliant Center management, event data for the six year period spanning fiscal years ending 2006 through 2011 have been segmented into the following six event types: Community and Religious, Consumer Show, Convention, Entertainment, Food and Beverage, Meeting and Seminar, Houston Livestock Show and Rodeo, Trade show, and Other Events. Data presented herein is inclusive of events utilizing space in at least some portion of Halls A through E.
Total Number of Reliant Center Event Days by Event Type
(FYE 2006 – FYE 2011)
0"
50"
100"
150"
200"
250"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FYE"2011"
Num
ber'of'Event'Days'
Community"&"Religious" Consumer"Show" Convention"Entertainment" Food"&"Beverage" Meeting"&"Seminar"Rodeo" Trade"Show" Other"Events"
166'
199' 192'
156'
213'
178'
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Over the past six fiscal years, the number of event days at Reliant Center exhibit space ranged from 156 to 213, with a spike to 213 in 2009. Consumer shows have comprised the largest segment of event days, increasing from 81 event days in fiscal year ending 2008 to 85 event days in fiscal year ending 2011, including:
• Houston Auto Show • Bridal Symposium • International Gem and Jewelry Show • Houston Gun Collectors and Antiques Show • Home and Design Show • Texas Home and Garden Show • International Boat Sport & Travel Show • Houston RV Show • Houston Ballet’s Nutcracker Market
Trade shows also comprise a significant segment of events utilizing Reliant Center exhibit space. The number of total trade show events held at Reliant Center has decreased from 17 in fiscal year ending 2007 to just eight in fiscal year ending 2011. This trend follows a pattern similar to that experienced in many large event public assembly facilities across the United States in light of the recent economic downturn and recovery process.
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In an effort to characterize the overall event mix and utilization of Reliant Center, the following exhibit presents the total number of utilization days (including move-‐in, event and move-‐out days) by event type for fiscal years ending 2006 through 2011.
Total Number of Reliant Center Utilization Days by Event Type (FYE 2006 – FYE 2011)
0"50"100"150"200"250"300"350"400"450"500"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FYE"2011"
Num
ber'of'Utilization'Days'
Community"&"Religious" Consumer"Show" Convention"Entertainment" Food"&"Beverage" Meeting"&"Seminar"Rodeo" Trade"Show" Other"Events"
352'
435' 424'
342'
451'410'
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Over the past six years, the number of utilization days has ranged from approximately 342 to 451; though if we remove the 25 event days due to FEMA’s usage of Reliant Park as part of their response to Hurricane Ike in September 2008, FYE 2007 had the most utilization days with 435. Consumer show event days comprise an average of 46 percent of total annual event days at Reliant Center, and have remained relatively consistent over the past six fiscal years ranging from 177 event days in fiscal year ending 2008 to 203 event days in fiscal year ending 2009. The large number of total event days reflects Reliant Center’s ability to accommodate numerous events consisting of multiple event days and multiple concurrent events.
The following exhibit outlines total attendance by event type for the same six year period among all events utilizing Reliant Center.
Reliant Center Attendance by Event Type
(FYE 2006 – FYE 2011)
0"
150,000"
300,000"
450,000"
600,000"
750,000"
FYE"2006" FYE"2007" FYE"2008" FYE"2009" FYE"2010" FYE"2011"
Attendance(
Community"&"Religious" Consumer"Show" Convention"Entertainment" Food"&"Beverage" Meeting"&"Seminar"Trade"Show" Other"Events"
625,718( 604,315(
678,850( 660,676(609,918( 585,207(
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As shown, attendance at Reliant Center events has steadily increased over the past six fiscal years from approximately 585 thousand in fiscal year ending 2011 to nearly 700 thousand in fiscal year ending 2008, driven largely by attendance at the Houston Livestock Show and Rodeo. Consumer show attendance has experienced an approximate five percent decline during the past six years, which may largely be a result of recent overall economic conditions. Combined, convention and trade show event attendance represents a small share of overall complex attendance, and has remained largely constant during this time period, increasing from 86,100 attendees in fiscal year ending 2006 to nearly 115,300 in fiscal year ending 2007 before settling closer to 90,000 attendees in each of the past two fiscal years. It is also important to measure Reliant Center exhibit space use from the perspective of square footage occupancy. Occupancy levels (measured by dividing the total amount of sold event space by the total amount of sellable space within the facility multiplied by 365), can indicate the degree to which usage of the facility has reached a maximum capacity. The occupancy of a facility is determined to be within a practical maximum capacity range when the actual occupied space in a facility reaches a level of 70 percent of total sellable capacity. Above 70 percent occupancy, a facility has exceeded “practical maximum capacity” and may be turning away significant business.
These assumptions account for the reality that a portion of the facility’s total capacity is unsellable due to holidays, maintenance days and inherent booking inefficiencies that result when events cannot be scheduled immediately back-‐to-‐back. Occupancy levels below 50 percent may indicate that a center has not attracted sufficient market share necessary to support space levels. However, it is important to assess the wide variety of factors impacting event demand before making a determination that a lack of event demand exists. At Reliant Center, there are significant booking restrictions due to the HLSR and the Texans being the primary tenants at Reliant Park. For all practical purposes, Reliant Center can only be booked one week a month (The Protected Week) during the football season because the Texans hold the other weeks until the release of the NFL schedule in April prior to the start of the applicable season. Because these holds remain in place until 5-‐8 months prior to the actual date, it is not feasible to book most conventions and trade shows within such a short time frame. This substantially reduces the number of event days that would be considered available for Reliant Center’s capacity.
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In order to identify the types of activities that are generating the most facility use, the exhibit below presents a summary of exhibit space occupancy by event type for each of the individual halls from fiscal years 2006 through 2011.
Reliant Center Exhibit Space Occupancy Percentages by Hall (FYE 2006 – FYE 2011)
Overall Reliant Center exhibit space occupancy rates have experienced a slight decline during the past two fiscal years after a six-‐year high 60.5 percent occupancy rate in FYE 2009. Reliant Center experienced a 48.3 percent occupancy rate in FYE 2010 and 44.1 percent occupancy rate in FYE 2011. These compare to George R. Brown Convention Center occupancy rates of 48.5 percent, 45.1 percent and 48.2 percent exhibit space occupancy rate in FYE 2009, FYE 2010 and FYE 2011, respectively.
Source:((CSL(International,(facility(management,(2011(
0%#
10%#
20%#
30%#
40%#
50%#
60%#
70%#
80%#
90%#
FYE#2006# FYE#2007# FYE#2008# FYE#2009# FYE#2010# FYE#2011#
Occupancy(
Hall#A1# Hall#A2# Hall#A3# Hall#A4# Hall#B# Hall#C# Hall#D# Hall#E1# Hall#E2# Hall#E3# Hall#E4#
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It is important to note that the Texans and the HLSR hold dates that prevent booking of other events. For example, there were 137 days on which holds were placed for last year’s calendar, significantly impacting the ability to book events. If these days are removed from inventory, the resulting Reliant Center occupancy percentages increase significantly. Certainly not every hold day would yield an actual event, and we would expect that scheduling adjustments could be made in some cases to the holds and/or a potential event, so that the lost inventory due to holds would not be so severe. However, even assuming a loss of 50 percent of the hold dates, occupancy levels for Reliant Center space reach high levels, as presented in the following exhibit.
Reliant Center Exhibit Space Occupancy Percentages by Hall Adjusting for Hold Dates (FYE 2006 – FYE 2011)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Occ
upan
cy
Hall A1 Hall A2 Hall A3 Hall A4 Hall B Hall C Hall D Hall E1 Hall E2 Hall E3 Hall E4
Source: CSL International, facility management, 2011
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As noted above, occupancy percentages adjusted for hold dates range between 60 and 80 percent. These data are more indicative of a full facility, creating potential pressure for additional space. As the economy continues to rebound in the coming years, it is reasonable to expect that Reliant Center’s largely consumer show based events will again allow the facility to generate occupancy rates above 50 percent. However, considering the excess capacity available at the GRBCC, it may be difficult for Reliant Center to attract a significant number of incremental nationally rotating conventions and trade show events that oftentimes prefer downtown convention facilities with greater access to hotel inventory and entertainment options. The following exhibit summarizes the size distribution on a per-‐event basis for exhibit space events at Reliant Center from fiscal year ending 2006 through fiscal year ending 2011.
Reliant Center Exhibit Hall Event Distribution by Size (FYE 2006 – FYE 2011)
Note:&&Figures&only&represent&those&events&utilizing&exhibit&space.&Source:&&CSL&International,&facility&management,&2011&
0
150,000
300,000
450,000
600,000
750,000
1& 3& 5& 7& 9& 11&13&15&17&19&21&23&25&27&29&31&33&35&37&39&41&43&45&47&49&51&53&55&57&59&61&63&65&67&69&71&73&
Square'Feet'of'Exhibit'Space'
FYE&2006& FYE&2007& FYE&2008& FYE&2009& FYE&2010& FYE&2011&
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The number of events utilizing all 706,200 square feet of exhibit space at Reliant Center over the past six fiscal years has ranged from five in fiscal year ending 2011 to nine in both fiscal year ending 2007 and fiscal year ending 2009. Some of these events include the HLSR, OTC, the Boat Show, Nutcracker Market and the Reliant Park World Series of Dog Shows. In fiscal year ending 2011 there were four events that utilized four of the five exhibit halls including the Houston Auto Show, Fiestas Patrias and Los Magnificos Car Show, which each utilized the full allotment of exhibit space in previous years (a Cinco de Mayo celebration was the fourth event utilizing four of the five halls).
Over the period analyzed, between 59 and 80 percent of overall Reliant Center event activity used no more than 300,000 square feet of exhibit space. However, the two largest annual events at Reliant Center, the HLSR and the OTC use all of the available space within the facility, as well as additional space in Reliant Arena and the surrounding grounds, including additional space under temporary tents for the OTC. Another important metric to analyze is the seasonality of demand, which can assist in understanding demand potential for multiple overlapping events. For example, heavy demand for a particular event type during historically busy periods at a center can indicate a “clustering” of demand, and highlight the need for a facility to be able to accommodate multiple overlapping events.
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The following exhibit displays Reliant Center exhibit hall average occupancy on a monthly basis for the past six fiscal years. Reliant Center Exhibit Space Monthly Occupancy
(FYE 2006 – FYE 2011)
Monthly occupancy rates at Reliant Center vary greatly, ranging from the high occupancy rates in January through April to the generally low occupancy months of July through December. Some of the large events that create the high occupancy rates during the early part of the calendar year include the HLSR, the Houston Auto Show, and the Houston RV Show. The OTC occupies Reliant Center exhibit space in April and May. It should be noted that these data do not reflect hold dates, which would provide for higher general occupancy throughout the year It is also useful to consider Reliant Center use on a daily basis, as presented in the following exhibit for fiscal year ending 2011.
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Daily Reliant Center Exhibit Hall Utilization (March 2010 through August 2010)
Note: Multiple colors reflect multiple events held on the same day.
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The full 706,200 square feet of exhibit space at Reliant Center was utilized in approximately 30 percent of the calendar in fiscal year 2011. There are significant gaps between event use within the exhibit halls in June, July and October and large stretches in August and September in which there is relatively low use of exhibit hall space. In some cases, these gaps correspond to dates held by the Texans and/or HLSR. Analysis of Competitive and Comparable Facilities and Markets – Exhibition and Meeting Space
This section provides an analysis of various physical characteristics and resources of both competitive and comparable facilities and communities. This data helps place the Reliant Center product within a competitive and comparable market context with respect to facility space, hotel inventory and other related destination features. There are two types of exhibit space offered at the facilities reviewed: prime space and gross space. Prime space refers to the dedicated exhibition area, typically used by conventions and trade shows for exhibits that is column-‐free or with minimal columns, has high ceilings (typically 35 feet in height), utility floor grids (supplying electricity, telecommunications, water, etc.), convenient accessibility to each hall for load-‐in/load-‐out and other such amenities. Gross space refers to the total area that can be used for exhibits and often includes surrounding areas such as lobbies and substandard space in terms of columns, ceiling heights and other characteristics. The following exhibit presents a comparison of exhibit space, highlighting the square footage of both contiguous and total exhibit space offerings within a set of competitive facilities. The facilities included in this set are primarily located in the central states and could be seen as primary competitors for large convention/trade events. In terms of total exhibit space offerings, McCormick Place in Chicago offers the largest space of the facilities reviewed, with nearly 2.6 million square feet, while the New Orleans Morial Convention Center offers the largest contiguous space with nearly 1.2 million square feet of exhibit space. On average, the largest contiguous exhibit space available among the competitive and comparable facilities reviewed is approximately 477,700 square feet, while the total available exhibit space averages approximately 690,400 square feet. Reliant Center ranks sixth among the 17 facilities reviewed in terms of total exhibit space, and offers the fourth most contiguous exhibit space. In the Harris County market, the GRBCC competes effectively for nationally rotating conventions and trade shows requiring up to 700,000 square feet of exhibit space. If plans for added hotel inventory proximate to the GRBCC materialize, this would improve its ability to attract such events
There are several large trade centers that operate outside large urban areas, and which could be instructive to potential future development decisions for Reliant Center. Centers such as the Kentucky Expo Center (KEC) in Louisville, located outside the downtown core and with limited adjacent hotel inventory, attract several very large non-‐local trade events annually, particularly those with a need for some type of outdoor exhibit space and/or large general session space. In addition to the KEC, there are several other large venues that cater to significant trade and consumer shows, and operate with a hotel
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inventory similar to that provided proximate to Reliant Center. We have focused specifically on these venues, summarizing available exhibit space below.
Comparison of Prime Exhibit Space Competitive Facilities
191,000 205,800
246,100
253,200 350,000
388,800 426,600
475,000 566,600
579,000 584,500
706,200 719,600
726,600
813,600 862,000
1,068,500
0" 500,000" 1,000,000" 1,500,000" 2,000,000" 2,500,000" 3,000,000"
Louisville,"KY"
Birmingham,"AL"
Austin,"TX"
Fort"Worth,"TX"
Nashville,"TN"
Kansas"City,"MO"
San"Antonio,"TX"
Minneapolis,"MN"
Indianapolis,"IN"
Denver,"CO"
Phoenix,"AZ"
Reliant"Center"
Dallas,"TX"
GRBCC"
New"Orleans,"LA"
Atlanta,"GA"
Chicago,"IL"
Square"Feet"
Largest"Contiguous"Exhibit"Space" Other"Exhibit"Space"
Source:""facility"Uloorplans,"management,"and"industry"publications,"2011"
Total"Average"="690,400"Total"Median"="579,000"
"Contiguous"Average"="477,700"Contiguous"Median"="388,800"
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Comparison of Prime Exhibit Space
Comparable Non-‐Urban Trade Facilities
706,000%
787,000%
905,500%
957,500%
0% 500,000% 1,000,000% 1,500,000% 2,000,000% 2,500,000% 3,000,000%
Reliant%Center%
Rosemont,%IL%
Cleveland,%OH%
Louisville,%KY%(KEC)%
Square%Feet%
Largest%Contiguous%Exhibit%Space% Other%Exhibit%Space%
Source: facility floorplans, management, and industry publications, 2011
Total Average = 838,900 Total Median = 846,000
Contiguous Average = 515,500 Contiguous Median = 552,900
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These facilities are in markets that offer another primary convention facility located in the downtown core. The I-‐X Center in Cleveland primarily hosts large consumer shows such as the Ohio RV Supershow, the Cleveland Auto Show and the Great Big Home and Garden Expo, several trade shows such as AmCon Design and Contract Manufacturing Expo and the Rubber Expo and special events such as the I-‐X Indoor Amusement Park event. The KEC hosts a number of large trade shows including the National RV Show, Mid-‐America Trucking Show, the Green Industry and Equipment Show and the National Farm Machinery Show; as well as consumer shows such as the Louisville Boat, RV and Sport Show, and equine events such as the World’s Championship Horse Show. The inventory of large national trade events hosted on a fixed basis at the KEC may serve as a model for future event activity at Reliant Park. The large indoor exhibit space, significant outdoor exhibit space, ample parking and large fixed seating areas effectively accommodate the event needs of large trade and consumer events. However, it is important to note that the Louisville market is located within driving distance of a very significant share of domestic U.S. population. The Harris County market does not offer drive capability to as large of a population. Also of note, the KEC does not offer significant adjacent hotel inventory, however they are aggressively trying to attract a large headquarter hotel to help address concerns that they may lose events due to lack of hotel inventory.
Market Demand Analysis – Exhibition and Meeting Space Large convention centers typically host events that vary widely in space needs, attendance levels and hotel room requirements. The size, type and flexibility of the space within many facilities can accommodate large exhibitions and consumer shows, as well as large and mid-‐sized conventions and trade shows. To form a basis for the market demand analysis, detailed surveys were completed with planners of large conventions and trade shows that may represent a potential event market for Reliant Center. Our research was conducted to evaluate facility and hotel requirements, current perceptions of Reliant Center as an event facility and opinions as to the future of the industry overall.
Telephone and Internet-‐based surveys were completed with representatives of the following types of organizations:
• Current and past users of Reliant Center event space – We have surveyed event planners with a history of hosting events at Reliant Center. Given their familiarity with the facility, they provide valuable insight with regard to facility conditions and limitations.
• Largest 200 national conventions and trade shows – National associations are membership-‐based organizations that typically have annual conventions that rotate among various cities throughout the United States. Data was compiled
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regarding the largest conventions and trade shows in the country in terms of net square feet of exhibit space required. These events generate significant levels of non-‐local attendees and have sizable requirements in terms of both event space and hotel needs. Given the limited number of facilities capable of hosting their events, they provide valuable insight with regard to a key market segment if Reliant Center is to expand.
Following several introductory questions, current and past users were asked to indicate the likelihood of their organization returning to Reliant Center in the future, assuming the facility and community continues to meet the needs of their events in terms of space availability, hotel requirements, etc. Respondents were given various options of indicating interest in holding a future event at Reliant Center from “definitely” to “definitely not” hold an event.
All of the current and past users of Reliant Center surveyed indicated that they would “definitely” or “likely” consider returning to the facility with their event, with 79 percent of respondents indicating that they would “definitely” return. The overall interest among current and past users of Reliant Center indicates a high level of satisfaction with the Reliant Center product. Some strengths of Reliant Center, as cited by surveyed current and past users include:
• Great facilities, amount of space, location and parking.
• Great staff, from sales, to event coordinating, and event ushers/security.
• SMG personnel are extremely knowledgeable and work to facilitate the needs of the client.
• Facility size, good location, lots of hotels, good mix of space between conference and exhibit space.
• Parking is great; good access to highways, staff is great.
A series of questions were posed in which event planners were asked to comment on various aspects of Reliant Center including the current levels of exhibit space, limitations to registration, circulation and other Reliant Center areas, and surrounding hotel inventory.
First, event planners were asked whether demand exists from their events for additional exhibit, meeting and/or multipurpose space. Approximately 92 percent of respondents indicated that the existing Reliant Center space offering was sufficient to accommodate their events in either the short-‐term or foreseeable future. As is well documented, the events that have indicated a need for added space are primarily the OTC and the HLSR. Later in this analysis, we discuss potential demand
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for expanded space from other events not currently hosted at the Center. In evaluating future space additions, it is important to develop a demand or occupancy framework that could sustain the use of any significant addition to sellable space.
Planners were asked about the configuration of Reliant Center event space, to which nearly all respondents indicated that the existing configuration adequately accommodates their event. Planners were also asked whether their event requires additional registration, circulation or other non-‐sellable event space. Approximately 88 percent of respondents again indicated that the existing space offering at Reliant Center currently accommodates their event. The results of these questions suggest that a limited number of current and past Reliant Center users would benefit from expanded or improved facilities.
Following the questions regarding existing Reliant Center event space offerings, current and past event planners were asked a series of questions regarding the supporting hotel inventory. Of those surveyed, approximately 13 percent of respondents indicated that their event requires hotel rooms, suggesting a more local attendee orientation for many of the existing Reliant Center events. At the same time, the OTC, as well as other large convention/trade events that could potentially be attracted to Reliant Center, do require a significant inventory of hotel rooms, with a large on-‐site headquarter hotel an ideal component of this inventory.
Finally, respondents were asked to comment on any improvements they would like to see made at Reliant Center to better serve their event. Sample comments collected include:
• Moving walkways to get from one side of the facility to the other.
• Parking is always an issue; location of parking related to the event space being used.
• An on-‐site hotel would be nice to avoid the need for shuttles.
• Would like to see the Astrodome converted to a hotel, casino, or indoor amusement park.
• The Astrodome could house at least two layers of parking, which would alleviate parking problems during the rodeo and football games.
• Astrodome could be converted to exhibit space on ground level with meeting space on upper levels; also could consider (a portion of) it as a banquet hall.
• Astrodome could be developed into a planetarium or a covered park.
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• On-‐site electrical hookups and RV waste water dumping stations.
• The availability of water, drainage (general plumbing), gas, and electric are not as readily available as at other facilities.
• We would like a better quality hotel facility nearby.
• A wider selection of on-‐site food service would be nice.
• On-‐site transportation between parking and event halls and moving sidewalks.
• The lack of full service hotels in close proximity is a major problem. With the high cost of parking with no in/out privileges, our customers need to be able to walk to restaurants, and other venues and return to the event.
• An outdoor park area with dining options would be a great addition.
• Would like more handicapped parking spaces and maybe more flexibility with certain events that attract an older demographic.
In order to gain insight into events that could potentially utilize expanded or improved Reliant Center event space, data has been compiled regarding many of the largest conventions and trade shows in the country in terms of net square feet of exhibit space used. Many of the largest conventions and trade shows in the U.S. between 2008 and 2010 have been considered, and 218 events have been analyzed as part of this effort. Of these events, 82 rotate among destinations and/or facilities, while the remaining events are held in a fixed location or on a fixed rotation of locations.
The following exhibit outlines the destinations that have hosted large rotating convention and trade events between 2008 and 2010. It is important to note that some of these events were held in each of the three years reviewed, while some events were held just once or twice.
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Rotating Events Hosted by Destination – Top US Conventions and Trade Shows 2008-‐2010
Note%(A):%%Five%markets%hosted%three%events,%including:%Cleveland,%OH;%Denver,%CO;%Houston,%TX;%Indianapolis,%IN;%and,%San%Antonio,%TX.%Note%(B):%%Five%markets%hosted%two%events,%including:%Boston,%MA;%Essex%Junction,%VT;%Miami,%FL;%New%York,%NY;%and,%Phoenix,%AZ.%Note%(C):%%Fourteen%markets%hosted%one%event.%Source:%Red7Media,%2011%
1%
2%
3%
4%
6%
6%
7%
10%
15%
15%
18%
29%
29%
30%
0% 5% 10% 15% 20% 25% 30% 35%
Note%(C)%
Note%(B)%
Note%(A)%
Reno,%NV%
Washington,%DC%
Dallas,%TX%
San%Francisco,%CA%
Anaheim,%CA%
San%Diego,%CA%
Atlanta,%GA%
New%Orleans,%LA%
Las%Vegas,%NV%
Chicago,%IL%
Orlando,%FL%
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Of the top 200 trade shows largest trade shows (in terms of net exhibit space used) held between 2008 and 2010 that rotate destinations, approximately 42 percent held their event in Orlando, Chicago or Las Vegas. The Harris County market hosted three of the top 200 rotating trade show events during this three year period, including the 2008 Windpower Conference held at the GRBCC.
Of the 82 rotating events, 18 of them (or approximately 22 percent) are medical events, which typically require a significant amount of first-‐class meeting space in order to accommodate the large number of educational and certification classes that occur during these events. As a result, they generally look for event facilities that are surrounded by a significant supply of private (hotel) meeting space at which they can host breakout meetings and other smaller functions. Often times these events are more suited to downtown event facilities.
Rotating national events typically have specific preferences and/or requirements with regard to the months in which their event(s) occur. The following exhibit presents the seasonality patterns, by month, for the 82 identified events that represent the primary event market demand for an expanded/improved Reliant Center. For purposes of comparison, we have also presented the average occupancy rate for Reliant Center, by month, from 2008 through 2010.
Largest US Conventions and Trade shows 2008-‐2010 Rotating Events Hosted by Month and Average Reliant Center Exhibit Hall Occupancy FYE 2006-‐FYE 2011
Source: Red7Media, CSL International, facility management, 2011.
9%
16%
9%
6%
14%
9%
4%
4%
4%
14%
9%
1%
96%82%
86%
65%
50%
36%38%
19%26%
34%41% 40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0%
5%
10%
15%
20%
25%
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The seasonality of demand can assist in understanding demand potential for multiple overlapping events. For example, heavy demand for a particular event type during historically busy periods can indicate a “clustering” of demand, and highlight the need for a center to be able to accommodate multiple overlapping events. As presented above, seasonal preference among the top national trade shows that rotate destinations follow a pattern somewhat similar to industry standards, with stronger demand in the spring and fall months.
National convention and trade show event demand peaks in February, May and October at approximately 16 percent, 14 percent and 14 percent, respectively, with December, generating the lowest demand at just one percent of the events. Reliant Center occupancy rates correlate somewhat with demand among the rotating events analyzed, especially with respect to the diminishing occupancy rates from July through September and strong occupancy numbers in February. With the exception of May/June and October/November, the low utilization periods for Reliant Center correspond with periods of low demand from large national conventions and trade shows.
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In order to approximate exhibit space requirements of the national event market analyzed, the amount of gross square feet used by each rotating convention and trade show from 2008 through 2010 has been summarized in the exhibit below.
Summary of Exhibit Space Used –
Largest US Conventions and Trade Shows 2008-‐2010
Source:((Red7Media,(2011(
0(
300,000(
600,000(
900,000(
1,200,000(
1,500,000(
1,800,000(
2,100,000(
2,400,000(
2,700,000(
5%(
10%(
15%(
20%(
25%(
30%(
35%(
40%(
45%(
50%(
55%(
60%(
65%(
70%(
75%(
80%(
85%(
90%(
95%(
100%
(
Average(=(545,600(Median(=(396,200(
Reliant(Center(
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As presented, the average amount of exhibit space needed among the largest national conventions and trade shows approximates 545,600 gross square feet. With approximately 706,000 square feet of contiguous prime exhibit space, Reliant Center currently satisfies approximately 80 to 85 percent of the potential market for national convention and trade show events. The GRBCC, with 639,000 square feet of contiguous exhibit space can accommodate nearly 80 percent of the large convention/trade event market, and is better positioned to offer significant nearby hotel inventory.
These data are important to consider when evaluating the potential for expansion of Reliant Center space to attract added large convention/trade event activity. Challenges include:
• There is a very small segment of the market that requires more space than is currently available at Reliant Center today.
• The GRBCC can accommodate the large majority of large convention/trade events that require headquarter hotel inventory and are typically hosted in an urban environment.
• Large trade show venues located outside the downtown core in Louisville, Cleveland and Chicago tend to attract several very large trade events held annually at the complex. The large population base within drive distance from these destinations is an important component of their success.
On average, large convention/trade events attract approximately 15,400 total delegates and 5,700 exhibitor attendees. Approximately fifty percent of the market consists of events with 11,300 delegates and 4,800 exhibiting personnel or more. The largest trade show, in terms of total attendance attracts approximately 67,600 delegates and 24,500 exhibiting personnel.
Detailed telephone interviews were completed with event planners representing the largest conventions and trade shows (in terms of net square feet) throughout the country. The survey resulted in 21 completed interviews out of a potential 82 events that rotate among various destinations, or a 26 percent capture percentage. The primary objectives of the survey were to ascertain the perceived interest in using expanded/improved Reliant Center facilities for one or more future events and to better understand the overall facility/destination requirements of large trade events.
Respondents were asked to indicate the likelihood of their organization using Reliant Center facilities in the future, assuming the facility and community met the needs of their event(s) in terms of space availability, hotel requirements, etc. The positive response percentage (“definitely use”, “likely use” and “possibly use”) by national conventions and trade shows approximates
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86 percent; however, a significant percentage of this positive interest (64 percent) is considered “tentative” interest (i.e. those that indicated “possibly” hold an event at Reliant Center, rather than “likely” or “definitely”).
Several events indicating a modest interest in Reliant Center tend to fit the profile of needing large amounts of exhibit space, with less emphasis on headquarter hotel needs. These include:
• The International Builders Show – requiring up to 2 million gross square feet of exhibit space. The show has recently been held in Las Vegas and Orlando, both of which offer venues with 2 million square feet of exhibit space.
• InfoComm International – requiring approximately 1 million square feet of exhibit space, and recently held on a pattern between Orlando and Las Vegas. Consideration is being given to expanding the cities in which the event will be held.
• The Hearth, Patio and BBQ Show – requiring up to 425,000 gross square feet of exhibit space and recently held in Orlando, Reno and Atlanta. Reliant Center can accommodate this event currently, however show dates conflict with the Houston Livestock Show and Rodeo.
In addition, there were several events that indicated a likeliness to consider Reliant Center, most of which are large trade oriented events that can be accommodated in the space currently provided by Reliant Center or the GRBCC. Others are more convention oriented, including:
• American Dental Association
• American Society of Clinic Oncology
• American Urological Society
• National Cable and Television Association
• American Public Health Association
We note that these convention events (several in the medical field) tend to rotate to more urban locations with significant nearby hotel inventory. Of all planners expressing some level of interest in using Reliant Center, approximately 47 percent require a headquarter hotel attached or within close walking distance of the event facility.
On average, events expressing an interest in rotating future events to an expanded/improved Reliant Center require 5.1 days to move-‐in, 2.5 days to move-‐out and 3.7 total event days. The number of attendees at an event influences the number of guest
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rooms occupied. The following exhibit presents a summary of peak night guest room demand associated with the potential national convention and trade show market for Reliant Center.
Summary of Peak Night Hotel Guest Room Demand – Top US Conventions and Trade shows 2008-‐2010
0"
5,000"
10,000"
15,000"
20,000"
25,000"
30,000"
5%"
10%"
15%"
20%"
25%"
30%"
35%"
40%"
45%"
50%"
55%"
60%"
65%"
70%"
75%"
80%"
85%"
90%"
95%"
100%
"
Average"="8,770"Median"="4,000"
Note:"Of"those"respondents"with"a"positive"interest"in"Reliant"Park."Source:""CSL"Top"US"Conventions"and"Tradeshows"Survey,"2011."
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As shown above, the average national convention or trade show event with a potential interest in rotating future events to Reliant Center requires a room block of 8,770 peak night guest rooms. As noted earlier in this report, there is a total capacity of 2,030 guest rooms proximate to Reliant Park. Assembling a greater room block requires shuttling to a number of properties located further from Reliant Park. As discussed earlier, the lack of hotel inventory proximate to Reliant Park will continue to negatively impact Reliant Center’s ability to successfully attract and retain events within this segment.
In an effort to collect open-‐ended feedback with regard to current perceptions of Reliant Park’s position in the convention and trade show industry, national event planners were asked to provide comments on how they see the needs of their event(s) changing over the next several years. Responses included, but were not limited to the following:
• Seeing slight growth with the economy coming back, but not enough to change the needs of our event
• Need more meeting space inventory
• Look for more environmentally aware facilities
• Increasing demand for improved wireless coverage (signal and bandwidth)
• General seating component with flexible seating capacity (1,000 to 5,000 seats)
Additionally, we asked event planners to describe any creative facility and/or operational innovations they have seen at convention centers around the country. A sample of responses is presented below:
• Free Wi-‐Fi
• Messaging and/or wayfinding on digital video screen
• Recharging stations for cell phones, laptops, tablets, etc.
Finally, we asked respondents for their overall impressions of Reliant Park and the Harris County market as a potential host site for their events. Responses included, but were not limited to those summarized below:
• Since we have special requirements (i.e., fridge trailers for produce; ability to provide steam for laundering/dry cleaning, etc.) for our event we go wherever we can that will accommodate our needs. If Harris County and Reliant Park can accommodate our needs, we would consider bringing our event there.
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• We want a central location where guests can eat, shop and walk around. San Antonio’s Riverwalk is a really good example. Reliant Park may be too far from entertainment options to be a viable consideration.
• Need more hotel rooms within walking distance.
• Don’t know about Harris County or Reliant Park and have never heard anyone say anything positive or negative about it. At the same time, we don’t want to rule out any destination without first looking at them. Our first priority is facility size and nearby hotels. We like “touristy” locations, but it is not a top priority.
• Have looked at Reliant Park in the past and thought the facility and destination package was excellent. The only conflict was that a large recurring event occurs within the same month our event is held and takes up a significant chunk of date availability. If our dates were available, we would definitely bring our event to Reliant Park.
Summary
Based on the research summarized here, there are several key points that impact the potential market support for the future need for exhibition and meeting space.
• Reliant Center has hosted a significant number of exhibition hall utilization days over the past five years, ranging from 352 days to 451 days. This reflects the Center’s ability to accommodate numerous events consisting of multiple event days and multiple concurrent events. Consumer shows comprise an average of 46 percent of total annual event days at Reliant Center.
• Attendance at Reliant Center events has steadily increased over the past several fiscal years from approximately 1.4 million in fiscal year ending 2006 to over 1.7 million in fiscal year ending 2011, driven largely by attendance at the HLSR. Convention and trade show event attendance represents a small share of overall complex attendance, and has remained largely constant during this time period.
• Reliant Center exhibit hall occupancy rates have experienced a slight decline during the past two fiscal years after a six-‐year high 60.5 percent exhibit hall occupancy rate in fiscal year ending 2009. Reliant Center experienced a 48.3 percent occupancy rate in fiscal year ending 2010 and 44.1 percent occupancy rate in fiscal year ending 2011. These compare to George R. Brown Convention Center occupancy rates of 48.5 percent, 45.1 percent and 48.2 percent exhibit space occupancy rate in fiscal year 2009, fiscal year ending 2010 and fiscal year ending 2011, respectively. As the economy
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continues to rebound in the coming years, it is reasonable to expect that Reliant Center’s largely consumer show based events will allow the facility to generate occupancy rates above 50 percent. However, considering the excess capacity available at the GRBCC, it may be difficult for Reliant Center to attract a significant number of incremental conventions and trade show events that oftentimes prefer downtown convention facilities with greater access to hotel inventory and entertainment options.
• Over the period analyzed, between 59 and 80 percent of overall Reliant Center event activity used no more than 300,000 square feet of exhibit space. Monthly occupancy rates at Reliant Center vary greatly, ranging from the high occupancy rates in January through April to the low occupancy months of July through December. Some of the large events that create the high occupancy rates during the early part of the calendar year include the HLSR, the Houston Auto Show, and the Houston RV Show. OTC occupies a significant amount of Reliant Center exhibit space in April and May. From June through December, Reliant Center generally has significant excess exhibit hall capacity.
• In terms of total exhibit space offerings McCormick Place in Chicago, Illinois offers the largest space of the facilities reviewed, with nearly 2.6 million square feet, while the New Orleans Morial Convention Center offers the largest contiguous space with nearly 1.2 million square feet of exhibit space. On average, the largest contiguous exhibit space available among the competitive and comparable facilities reviewed is approximately 477,700 square feet, while the total available exhibit space averages approximately 690,400 square feet. Reliant Center ranks sixth among the 17 facilities reviewed in terms of total exhibit space, and offers the fourth most contiguous exhibit space.
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5.4 On-‐Site Hotel Harris County Market Analysis – Convention Hotels
There are approximately 2,030 hotel rooms within one-‐half mile of Reliant Park, and the largest hotel property is the 630-‐room Crowne Plaza Houston – Reliant Park/Medical Center. Only Kansas City, Missouri (2,020 rooms), Los Angeles, California (1,685 rooms) and Chicago, Illinois (1,090 rooms) offer fewer hotel rooms within one-‐half mile, and all of these markets are in the process of adding additional hotel rooms. As previously mentioned, the majority of hotel properties within one-‐half mile of Reliant Park are limited service properties, or properties that do not offer an on-‐site restaurant, and much of this inventory is utilized by Texas Medical Center business. While these properties are generally sufficient (and sometimes preferential) for budget conscious attendees, a greater mix of full-‐service hotel properties with a significant committable inventory of rooms for Reliant Park may be necessary to attract a greater share of non-‐local convention and trade show events.
By comparison, there are approximately 3,250 hotel rooms within one-‐half mile of the George R. Brown Convention Center, including the 1,230 room Hilton of the Americas. On average, there are approximately 5,000 hotel rooms within one-‐half mile of event facilities located in the competitive and comparable markets analyzed. Plans for added hotel inventory proximate to the GRBCC could improve its ability to attract such events. Most of the other markets that offer fewer hotel rooms within one-‐half mile are significantly smaller than Houston in terms of population, corporate base, convention center size and other characteristics.
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1,031 1,089
1,327 1,685 1,700 1,828
2,017 2,027
3,251 3,776
3,940 4,169
5,617 6,486 6,594
8,317 8,614
9,354 10,544
0" 2,000" 4,000" 6,000" 8,000" 10,000" 12,000"Birmingham,"AL"
Chicago,"IL"Fort"Worth,"TX"Los"Angeles,"CA"
Phoenix,"AZ"Louisville,"KY"(KEC)"
Kansas"City,"MO"Reliant"Center"
GRBCC"Dallas,"TX"
Louisville,"KY"(KICC)"Minneapolis,"MN"
Austin,"TX"Indianapolis,"IN"
Denver,"CO"Atlanta,"GA"
New"Orleans,"LA"San"Antonio,"TX"
Anaheim,"CA"
Number"of"Rooms"
Average"="5,000"Median"="3,860"
Note:"(1)"Includes"new"1,003Zroom"Marriott"Marquis"(expected"to"break"ground"midZ2012"and"open"in"2015)"and"296Zroom"Hyatt"Place"(expected"to"open"early"2013)."Source:"Industry"publications,"Hotel"and"Lodging"Association"of"Greater"Houston,"2011."
Hotel Rooms Within One-‐Half Mile Competitive and Comparable Facilities and Markets
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Market Demand Analysis
In order to provide a broad perspective of overall lodging trends and their impact on potential Reliant Center headquarter hotel development, we have analyzed Smith Travel Research (STR) trends for the overall United States lodging market, and evaluated the performance of a set of specific properties in Houston market area with relevance to the proposed project. Smith Travel Research is a nationally recognized firm that collects, analyzes and distributes occupancy, revenue, demand, and supply statistics for the lodging industry. In addition, as part of this analysis the following tasks have been completed
• Reviewed existing Reliant Center facilities, as well as proposed improvements in terms of impact on performance of a headquarter hotel.
• Considered existing performance metrics for large convention-‐oriented hotels in the Houston market.
• Considered the performance of large headquarter hotels generally in large markets throughout the country.
• Considered broad national hospitality demand and financial performance measures.
• Met with Reliant Center management to discuss the project.
In terms of market-‐wide demand and supply considerations, we note that there are plans in place to develop a new headquarter hotel adjacent to the George R. Brown Convention Center. This would potentially have a positive impact on event demand for the Brown, and would also serve to attract smaller in-‐house meetings and conferences to the market.
We also note that the downtown provides a distinct event attendee experience as compared to Reliant Center, and planners looking for an urban experience would not typically include the Reliant Center area as a potential event site. Other important factors incorporated into this headquarter hotel analysis include the following:
• Historical recent data for occupancy levels, average daily rate (ADR) and revenue per-‐available-‐room (RevPAR) for a set of large Houston market area hotels. This information is useful in putting parameters around the potential rate and ADR performance levels for the proposed Reliant Center property.
• The typical room night generation provided by an adjacent large convention and trade venue. It is not uncommon for a headquarter hotel do derive approximately 20 percent of its overall room night demand from the adjacent or attached center. In addition, as much as 50 percent of the demand can originate from in-‐house events not tied to the center.
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Finally, the remaining demand can originate from demand sources in the general area, including the extensive medical industry presence.
• The seasonality of demand in the Houston market, as well as the influence of major tenant events such as OTC and the Houston Livestock Show & Rodeo. These recurring events, along with the presence of the NFL, can provide an important base of annual demand.
• The potential investment in the proposed improvements to Reliant Center, and the impact on potential demand levels. Estimates of financial performance presented herein are predicated on improvements taking place to Reliant Center.
It is expected that the hotel will have stabilized operations at 68% occupancy during the third year of operations (2019). A convention center hotel located at Reliant Center offers an opportunity to expand revenue generating opportunities at the convention center by attracting corporate group and association group business. Meeting planners representing large corporate groups and large association groups generally do not utilize convention centers which do not have close proximity to hotels that can accommodate their groups for overnight lodging. In general, meeting planners wish to accommodate their meeting attendees in two hotels or less. The vast majority of meeting planners wish to house all meeting attendees in a single hotel. A single hotel eases group transportation issues, offers the meeting planner the opportunity to deal with a single hotel sales and management organization, and minimizes potential guest issues when group members are located in differing hotels which likely have differing room quality, food & beverage facilities, amenities and customer service models. It is therefore possible that a large convention/conference hotel could attract significant in-‐house group business, as well as supporting hotel needs from large Reliant Park users. Significant restaurant capabilities would have to be provided within and nearby the hotel.
Development Considerations
It is imperative to attract a “first tier” hotel brand to the convention center hotel. Companies such as Hilton, Hyatt, Marriott and Starwood (Sheraton and Westin) have the national and international name recognition to attract guests from all customer segments. In addition, each of these hotel brands has substantial national sales office organizations, which manage existing contract relationships with group and association customers around the country. The sales effort for a convention center similar to that suggested for Reliant Center would likely begin 24 months prior to the hotel actually opening. Given that many groups and associations book convention center hotels as far out as five years before an event, having access to the existing
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“book of business” of the selected hotel brand will provide an opportunity to stabilize hotel operations sooner than may otherwise occur.
There are literally hundreds of hotel management companies in the domestic U.S. However, a hotel of the size contemplated at Reliant Center would likely be corporately managed. That is, the corporate entity that controls the hotel brand would also manage the hotel. This is somewhat different than most hotels which are managed by a company which uses a hotel brand name by acquiring a license for a franchise and paying the company which controls the brand name a franchise fee. In general, the corporations which control hotel brands are only franchise hotels which are smaller than 500 rooms.
In our opinion, the most significant participant in the convention center hotel development is the hotel brand/operator. The success of the hotel operation, measured in financial terms such as debt service coverage ratios, is dependent on the hotel operator’s ability to generate revenue and “flow-‐through” to Net Operating Income. No other transaction participant has nearly as significant a role to play. In addition, regardless of the type of capital structure employed, not only will the “quality” of the hotel underwriting be assessed, but so will hotel brand/operator “incentives” and the operator’s participation in some form of credit support.
Every large scale, municipally sponsored transaction completed in the last several years included a sizeable contribution by the hotel brand/operator. These contributions have most often taken the form of “key” money and debt service guarantees. It is interesting to note that transactions initiated by hotel brands/operators, or developers in concert with hotel brands, typically have had the least amount of financial contribution. The transactions that have included the highest hotel brand/operator contributions have been municipally sponsored and controlled.
In order to maximize the potential financial contribution of the hotel brand/operator, it is essential to isolate the selection of the hotel brand/operator from the selection of any other participant in the development management process. There are other benefits as well. By separating the hotel brand from the developer, for example, “hidden” developer fees are eliminated and, more importantly, brand specifications for the hotel itself can be integrated into master planning, site selection and spatial programming activities far earlier in the planning process than may otherwise occur. In addition, an “early” announcement of hotel brand/ operator to the market will serve as an “accelerant” for Convention and Visitor Bureau and convention center sales & marketing activities. This would be a most effective way to let the meetings marketplace know that Harris County is moving forward with a convention center hotel in a substantive way.
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Certain entities within the developer “community” will seek to encourage the County to create an request for proposal process for the convention center hotel that could colloquially be called the “team approach”. Under this approach, a developer creates a team that includes architects, the prime contractor, the hotel brand/operator and others among what would be the many professional entities that would be a part of a hotel development. In general, the developer seeks to have the hotel brand/operator execute an exclusivity agreement so that the hotel brand/operator cannot participate on any other “team” in response to a “team approach” request for proposal.
This method is highly effective for developers that are able to secure exclusive agreements with hotel brand/operator entities. The reason is that this approach drastically reduces the pool of qualified developers who can compete. This is so because the only hotel brands that are “available” for the convention center hotel are those that are not currently represented in the market. Alternatively, hotel brands that may be available could also include those that are in the market area but are outside the geographic area defined in the radius restriction covenants contained in the management contracts of these branded hotels. For example, the Hilton brand may be unavailable not just because it is represented in the market but because it is precluded, through its management contract, from having another Hilton hotel within a certain defined geographic area.
By separating the hotel brand/operator selection process from the developer/builder selection process, the County will not only generate a higher financial contribution from the hotel brand/operator, but it will expand the universe of potential developers and large scale builders that can participate in the developer/builder selection process.
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5.5 Financial Projections The projected net operating income for the proposed Reliant Park Master Plan is set forth in the chart below
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5.6 Conclusions and Recommendations Replacement Arena Project
It is recommended that the Replacement Arena Project be developed at an estimated cost of $385.4 million. This would include construction of the following components:
• Performance Arena with 8,000 – 10,000 fixed seats;
• 250,000 square feet of exhibition space;
• 45,000 square foot ballroom, with additional meeting space;
• 2,500 – 3,000 space parking garage;
• Intermodal transportation center; and
• Festival Plaza.
Depending upon the option selected for the Astrodome, additional exhibition space in the Replacement Arena Project may be required. By utilizing the Astrodome site as either the Multi-‐Purpose Facility or Astrodome Renaissance, floor space that exceeds 300,000 square feet of covered, column-‐free, high ceiling space is retained for use by the OTC and other users occupying Reliant Park. If the Astrodome is demolished for use as Reliant Park Plaza, or if the Status Quo is maintained, the additional exhibition space proposed in the Astrodome Multi-‐Purpose Facility or the Astrodome Renaissance options would not be available. Although 250,000 square feet of exhibition hall space would be created with the Replacement Arena Project, approximately the same amount of space would be eliminated due to the demolition of the current arena. As a result, the Master Plan would simply retain the exhibit space square footage that currently exists within Reliant Park if the Astrodome floor could not be used.
Hotel
It is also recommended that HCSCC continue its efforts to secure a private developer for the on-‐site hotel. A hotel located within the Complex would have a positive impact on Reliant Park. Events that require hotel rooms within close proximity to the event site, which include most large conventions, would be more likely to consider Reliant Park if this development were to occur. As has been discussed above, the lack of hotel rooms within one-‐half mile of convention center space is a significant
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hindrance both at Reliant Park and the George R. Brown Convention Center. While one hotel would not completely eliminate this issue at Reliant Park, it would have a dramatic impact on the types of events that can be brought to the Complex.
Notwithstanding the foregoing, the HCSCC has stated that the on-‐site hotel would only be developed with primarily private funding. Thus, this component of the Master Plan would require a third party to conduct its own analysis and decide to invest the capital necessary to construct the hotel.
165
6.0 Astrodome Site Future Use
Analysis
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A considerable amount of time was devoted to evaluating various development and operational scenarios for the future use of the Astrodome site. Each of the development options was evaluated based on the financial and market viability of the possible option. The following options for the future use of the Astrodome site have been considered in detail in this report:
Maintain Status Quo
This option maintains the Astrodome in its current condition. The building will remain unusable and the cost of maintenance will continue to rise as the building ages and systems further deteriorate.
Reliant Park Plaza
This option demolishes the Astrodome, fills the existing site to grade and constructs Reliant Park Plaza with perimeter support facilities for outdoor events.
Astrodome Multi-‐Purpose Facility
This option would renovate the Astrodome into a multi-‐use indoor event facility. A new event floor would be constructed at grade, existing seating would be removed, systems would be upgraded or replaced and improvements would be made to the exterior skin.
Astrodome Renaissance
This option would overlay the Multi-‐Purpose Facility with Science, Technology, Engineering and Mathematics (STEM) programs and/or privately funded concepts, including retail, dining and entertainment (RD+E) and attractions. Approximately 400,000 square feet of new space would be created within the Astrodome to house the overlaid components. A new operating entity would be established to develop, fund and manage the Astrodome Renaissance improvements and operations. Funding for the new entity would be derived from tenant leases, philanthropic sources and other Astrodome Renaissance revenues.
While all options require public funding, the Astrodome Renaissance option as considered herein may only be pursued if the Astrodome Multi-‐Purpose Facility option is selected. Further, this option would only be considered if private sector and/or philanthropic funding can be found to support construction and operations. The Astrodome Renaissance option could be executed concurrently with the construction of the Astrodome Multi-‐Purpose Facility or at a point in the future. Future construction costs would be higher.
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Each of these potential options will be analyzed in detail in this section, including the projected costs associated with each option.
6.1 Maintain Status Quo Since 2008, Reliant Astrodome has been unable to host public events due to the lack of an Occupancy Certificate. HLSR last used the Dome in 2008 to host The Hideout but has not held the Rodeo or any concert performances in the facility since 2002. Following the Astros move to Minute Maid Park in 1999, no professional sports team has been a tenant of the Astrodome. The HCSCC spends between two and three million dollars annually on regular maintenance of the venue including fire alarm systems, fire suppression systems, water-‐proofing and roof. These costs do not include periodic capital expenditures, such as the $750,000 that was required due to a fire that took
place within the interior of the Astrodome in 2011. It is important to note that utilities for portions of the Reliant Park complex run through the Astrodome.
The proposed Replacement Arena Project would include relocation of the utilities that currently flow through the Astrodome, alleviating one of the significant issues with maintaining the status quo of the facility. However, in spite of this fact, the annual maintenance and periodic capital needs are likely to increase over time. Maintaining status quo of the Astrodome also fails to address its negative impact on operations for Reliant Park. The venue also is an eyesore and a potential safety hazard, which negatively impacts marketability of the Complex and the experience of all guests attending events at Reliant Park.
Under this option, Harris County would continue to maintain the Astrodome in its present condition. The Astrodome would remain closed to the public, with only maintenance workers and security guards permitted to enter to perform basic, essential maintenance and security activities. The Astrodome would not generate any income for Harris County.
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6.2 Reliant Park Plaza
The Reliant Park Plaza would provide expanded space for outdoor events that are currently hosted on site and for potential new events and festivals. The Plaza would be designed to recognize the contributions of the Astrodome over its life to Harris County, the surrounding community and the State of Texas. The work to be undertaken involves removal of any remaining hazardous material, which still exists within the Astrodome. The structure would be taken down. Site utilities currently supplying and passing through the building would be rerouted or moved to another location on site as required. The hole created by razing the building would be filled and paved. Carruth Plaza would be retained and incorporated into the design of the Reliant Park Plaza and permanent rest rooms and concession buildings would be added on the perimeter of the Plaza.
The Plaza would be an ideal venue for outdoor fairs, festivals, performances, receptions and events. Surrounding the Plaza would be plenty of pathways for strolling and green space for relaxing or tossing around a football with family and friends before game time. A signature water feature could serve as a focal point of the Plaza. A programmed fountain show, designed to evoke memories of the historic Astrodome, could provide a fitting tribute to the landmark that once stood there and a “do not miss” photo opportunity for visitors. At night, this impressive water feature could light up, creating an eye-‐catching centerpiece and filling visitors with a sense of wonder and excitement. Public art installations, some even constructed from remnants from the
demolished Dome, could inspire and energize the Plaza. When needed, the Plaza would double as additional parking and support facilities for Reliant Park events.
Because tearing down the Astrodome would remove the icon that (along with NASA) helped put Houston on the map, it may be unpopular with many Harris County residents. However, tearing down the Astrodome and replacing it with a plaza area would have positive impact to Reliant Park. The visual blight and safety hazard that currently exists because of the Dome’s condition would be eliminated, creating flexibility for the site’s future development. The plaza area would allow for the hosting of a limited number of events each year such as festivals, outdoor concert series and similar events.
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Schematic Drawings – Reliant Park Plaza
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6.3 Astrodome Multi-‐Purpose Facility
The concept of this option is to preserve the Astrodome while creating a truly multi-‐purpose facility that provides spectator amenities and a large open and air-‐conditioned interior space for hosting a wide variety of special events. Throughout the year, the multi-‐purpose facility could feature a constantly changing roster of events—ranging from large spectator events, (e.g. HLSR’s Summer Festival or a high school football championship game) to conventions, exhibits, press conferences, private parties, and support service activities thereby infusing the Dome with energy, activity and events once again. The multi-‐purpose facility would also offer Harris County a spacious, ideal location for fairs, festivals, performances and other events but with one key difference: the location would be air-‐conditioned, while preserving the historic Astrodome experience.
A new event floor constructed at grade will support a flexible seating system used to accommodate events of all shapes and sizes. By adding a the event floor at grade, the Astrodome multi-‐purpose facility would provide significant support and storage space below the slab, which would, among other uses, could provide space for chilled water and rain water storage. This would save significant operating expenses annually. On-‐site concession, retail and restrooms areas would also service the facility.
This option could also provide the base for future development incorporating the concepts discussed under the “Astrodome Renaissance” in the following section and preserve the iconic structure.
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Design Program -‐ Astrodome Multi-‐Purpose Facility
Floor area by level and uses:
Level 1 -‐ 394,000 square feet
• Vertical circulation • Festival/Exhibition expansion • Support space • Central plant & chilled water storage • Event storage • Staging, loading and marshaling
Level 3 – 410,000 square feet
• Multi-‐purpose floor • Permanent restrooms • Food and beverage service • Entrance to leasable floors above
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Schematic Drawings – Astrodome Multi-‐Purpose Facility
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Schematic Drawings – Astrodome Multi-‐Purpose Facility (continued)
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Schematic Drawings – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Event Set-‐Ups – Astrodome Multi-‐Purpose Facility (continued)
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Summary – Astrodome Multi-‐Purpose Facility
In the Astrodome Multi-‐Purpose Facility option the event floor would be over 300,000 square feet, column free and rising to a height of over 200 feet. The resulting space would be truly unique and would create new event opportunities for Reliant Park as well as growth opportunities for existing events. Retaining the Astrodome as a multi-‐purpose facility in conjunction with the Replacement Arena Project increases the total available exhibition space by nearly 33 percent, further expanding the number and types of events that can be brought to the Complex each year. This additional space will also allow the Complex to satisfy the needs of the OTC and will greatly enhance the likelihood that the OTC, will continue to use Reliant Park for this event that is vital to the Harris County economy. Through the use of portable seating, the column free space is highly flexible and capable from supporting almost any event configuration.
This option could also provide the base for future development by incorporating the concepts discussed under the “Astrodome Renaissance” in the following section. Furthermore, this option would eliminate the visual blight and address safety and security concerns regarding the facility. It would also preserve the iconic structure.
By adding a the event floor at grade, the Astrodome Multi-‐Purpose Facility would provide significant support and storage space below the slab, which would, among other uses, could provide space for chilled water and rain water storage. This would save significant operating expenses annually.
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6.4 Astrodome Renaissance
The vision of the Astrodome Renaissance option is to become the leading entertainment destination in Harris County. It would offer a diverse and unique package of hospitality, retail, entertainment, educational and food and beverage options that would be an enhancement of the Astrodome Multi-‐Purpose Facility. The Astrodome Renaissance assumes that the Astrodome Multi-‐Purpose Facility would be developed first with the additional components being added when interest from third parties justifies these concepts.
The Astrodome Renaissance would target a broad base of visitors appealing to business, tourists and family markets with a high level of repeat visitation. There are also opportunities for year round or seasonal experiential attractions, exhibits and retail opportunities to enhance the menu of customer offerings. These can be designed to be complimentary to the programs currently being offered by both the tenants, which would allow for redevelopment that would greatly benefit Harris County, its residents and the Harris County area.
Taking advantage of the enormous volume of space within the Astrodome, new floors would be added at the perimeter of the structure above the main event floor to house the Renaissance improvements. The development plan assumes that the HCSCC or a new entity created to operate the new facilities would develop the “core and shell” of the Renaissance space with the individual tenants responsible for the interior construction and operation, similar to a typical shopping mall. To eliminate conflicts, a sole provider should operate the food and beverage services.
An in depth assessment of this option has been completed to provide a comprehensive analysis of the menu of alternatives available as well as a realistic assessment of the economics corresponding to each component idea. In order to achieve the goals of the Renaissance, the team recommends a three-‐step approach, as follows:
(1) The Harris County Sports and Convention Corporation and SMG should leverage and capitalize on existing anchors and infrastructure. Reliant Park already has a built-‐in, active market with +/-‐ 350 event days annually. Reliant Park is home to Reliant Stadium, which offers a diverse list of annual events including the Houston Livestock Show and Rodeo, Houston Texans (NFL), Texas Bowl (NCAA), major events (Super Bowl, Final Four, WrestleMania), concerts, and family shows. Reliant Center hosts the OTC, and multiple other trade and consumer shows throughout the year. Finally, Reliant Arena hosts concerts, sporting events and the equestrian events associated with the HLSR.
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(2) The HCSCC should develop complements to the existing anchors to extend visitor length of stay and increase on-‐site spending. This can be done through two primary modes – retail, dining and entertainment (RD+E) and hotels. Retail could come in the form of destination anchor stores, medium format and specialty or boutique shops. Dining could be developed with destination restaurants, local interest outlets, and quick-‐service food offerings. Finally, the creation of entertainment options would complement the retail and food and beverage options, further driving visitors to the site, beyond what is already provided by the existing on-‐site anchors. Other complements could come in the form of a major cinema, attractions, clubs and bars, or other indoor entertainment. The hotels and on-‐site accommodations will serve to extend visitor length of stay and provide overnight options for business and convention visitors as well as sports, leisure and attraction guests.
(3) The creation of new attractions could help to fully develop and complete the build out of the Astrodome Renaissance program. This can be done by designing entertainment options that fit and further complement the anchors and proposed RD+E and Hotel components.
A multitude of attractions and experiences will create critical mass for the Astrodome Renaissance and Reliant Park Complex. The complete entertainment offering will combine fixed anchor attractions, multi-‐use event space and other soft program “fill” attractions. It should offer a variety of entertainment options and price points and capitalize on sponsorship opportunities by utilizing the environment, events and entertainment. Finally, the Astrodome Renaissance will provide the opportunity to appeal broadly to multiple users (local and regional residents, business and leisure visitors) and age groups in order to fully activate the site.
Full$Renova+on$
and$Repurpose$Alterna+ves$
Hotels'+'Retail,'Dining'and'
Entertainment'(RD&E)'
Culturally'Driven'–'STEM'Orienta@on'ABrac@on'Driven'
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Destination Driven Programming
The location of Reliant Park requires the development program to be destination oriented in nature. In other words, the site needs to attract visitors through the actual program elements as opposed to having patrons visit the site in conjunction with an existing use.
Some of this targeted programming already exists as illustrated in the graphic on the right. In order to be economically sustainable, and be a consistent driver of traffic to Reliant Park, the project needs to be programmed as a multi-‐purpose project, maximizing the number of days and the time of days that the site is active.
Reliant(Park(
Spor/ng(events(
Live(music(program(mul/ple(
size(venues(
Blue(Man(Group,(Cirque(de(Soleil(
and(other(traveling(produc/ons(
Restaurant(and(retail(district(
Hospitality((Themed(hotel(/(Great(Wolf(Lodge)(
NonIprofit(culturally(themes(
aKrac/ons(
Indoor(entertainment(
complex,(aKrac/ons([Water(based,(ice/snow(
based,(condi/oned(space](
Mee/ng(spaces,(conven/on(
business([EXISTING(AND(IMPROVED](
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The chart below outlines the funding options available for the Astrodome Renaissance.
Reliant(Park(Redevelopment(Authority(
Site(Development(and(Building(Redevelopment(
U:li:es( Parking( Build(Astrodome(“Core(and(Shell”(
Develop(new(mee:ng,(exhibi:on(and(flexible(space(
Private(Investment(
Retail,(Dining,(Entertainment(and(Events(
Hotel((s)(
Regional(AJrac:ons,(
(reference(the(AJrac:on(Matrix)(
NonNprofit,(Cultural(
AJrac:ons(
Texas(Sports(Museum(
Permanent(Rodeo(Exhibit(
STEM(based(exhibit(
Single(Operator(for(Food(and(Beverage,((Concessions,(and(Parking(
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Concept List and Matrix -‐ Astrodome Renaissance
The team has compiled and reviewed a set of potential entertainment attraction formats for the Reliant Park-‐Astrodome Renaissance project. Each option was evaluated based on its merit for the site with consideration given to a number of factors including Business Model (commercial, non-‐profit, corporate), Compatibility (scheduling fit, parking demand, size and scale), and Market Context (drawing power and competitive environment), as shown in the matrix below.
Category Use Business/Model1 Compatibility2 Drawing/Power3Competitive/Environment4
EntertainmentLarge&Scale Outdoor-Theme-Park Comm 3 8 7
Outdoor-Water-Park Comm 5 6 6Spectacle-Attraction Comm 5 8 9
Medium&Scale Indoor-Theme-Park Comm 6 6 6Indoor-Water-Park Comm 6 5 6Indoor-Attraction Comm 7 5 7
Small&Scale Family-Entertainment-Center Comm 7 5 7Corporate-Attraction Corp 9 4 6Cinema Comm 8 6 5
Arts/Cultural Cultural-District NP/Comm 2 6 3Theatre NP/Comm 6 5 4Amphitheater NP/Comm 5 5 4
Museum/Science-Center Children's-Museum NP 7 4 4Natural-History-Museum NP 7 4 4Science-Center NP 7 4 4Houston-History-Museum NP 8 3 4
Sports Sports-Academy NP/Comm 4 3 5Rec/Tournament-Field-Complex NP/Comm 2 5 5Houston-Sports-Hall-of-Fame NP/Comm 9 3 7Center-for-Sports-Medicine NP/Comm 9 3 5
Education/Training STEM-Center NP 8 3 6Art-Institute NP 5 2 4Culinary-Institute NP 5 2 4Medical-Institute NP 6 3 4
Wildlife-Attraction Zoo NP 3 6 3Aquarium NP/Comm 6 6 3Oceanarium NP/Comm 3 6 4
Industry Movie-Studio Comm 3 2 7Community Events-Plaza NP/Comm 8 4 7Footnote:*Arena,-Convention-and-Conference/Meeting-Space-assumed-to-be-covered-as-part-of-Step-1-and-2-programming.1-Y-NP-=-NonYprofit;-Comm-=-Commercial;-Corp-=-Corporate
3-Y-Drawing-power-based-on-consideration-of-attractiveness-to-the-resident-and-tourist-market.-1-=-low-drawing-power.-10-=-high-drawing-power.4-Y-Competitive-environment-based-on-level-of-competition-within-the-Houston-local-and-regional-market.-1-=-strong-competition.-10-=-weak-competition.
Source:-ECA
Market/Context
2-Y-Compatibility-rank-based-on-consideration-of-the-attraction-or-facility's-scheduling-fit,-parking-demand,-relative-size/scale-with-the-existing-and-proposed-program-at-Reliant-Park.-1-=-low-compatibility.-10-=-high-compatibility.
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Below are more detailed analyses of the primary components that have been proposed and considered to be included in the complete renovation of the Astrodome. Some of the concepts are worth considering in more detail, while others would not be good fits given cost and/or operating constraints.
Science, Technology, Engineering and Mathematics [STEM] Programming
Transforming the Astrodome into a magnet of Science, Technology, Engineering and Mathematics (STEM) education and transformative experience, the programming in this theme would promote Harris County’s role as a leader in both informal and formal STEM education and industry. Interactive attractions, programs and events focused on STEM would offer hands-‐on opportunities for locals and visitors to explore, discover, play and learn. The Astrodome itself would become a landmark of applied technology and engineering in creating a responsible and sustainable environment—from solar panels on its roof to point of use water treatment and heating.
Multiple opportunities exist within the Astrodome itself. A Science Center (similar to the Center of Science and Industry (COSI) in Columbus, Ohio) would offer edutainment exhibits, state-‐of-‐the-‐art, flexible labs and classrooms to support a variety of programming, unique evening and holiday events such as sleepovers and camps, and a flexible, multi-‐use theater space. An interactive Energy Exploratorium centered on fossil fuels as well as energies of the future could tell Harris County’s story as the Energy Capital of America in a way that stimulates curiosity and STEM exploration through highly immersive and interactive exhibits and programming.
In a nod to Harris County’s aeronautical heritage, a branded educational space experience like Sesame Street Presents: The Planets or a NASA Kids Space Place would allow children to explore the science of the universe at a very young age in a relatable, immersive environment. A Museum of Technology and Innovation would inform, provoke thought and motivate people of all ages with content and programs centered on the region’s scientific and technological innovations and contributions. A Technology and Innovation Hall of Fame would showcase the work of Harris County’s many corporate and individual leaders in STEM fields, including Nobel Laureate Richard Smalley who discovered Buckyballs.
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State-‐of-‐the-‐art office and incubation space and a cutting-‐edge conference center would make the Astrodome a hub for STEM focused non-‐profit foundations, community education outreach, city wide teacher training and professional development, corporations, start-‐ups and university programs (from neighboring universities like Rice University and University of Houston). By providing flexible space designed not just to accommodate such diverse groups but incubate and encourage relationship building, the Astrodome could become the apex for STEM development across disciplines and industries in Harris County. Special STEM events such as science fairs,
robotics competitions and STEM symposiums could provide an ever-‐changing mix of STEM activities, beckoning guests to return again and again.
The original Master Plan presentation proposed that a planetarium serve as the focal point for the STEM activities. However, this analysis indicates that the planetarium concept is unsupportable, given the presence of the existing Burke Baker Planetarium.
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Summary of Science, Technology, Engineering and Mathematics [STEM] Programming Options:
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Summary of Science, Technology, Engineering and Mathematics [STEM] Programming Options (continued):
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Texas Experience Programming
This theme would bring the heart of Texas to the heart of Reliant Park. Flanked by Reliant Stadium, home of the Texans, and the world’s largest livestock show, the HLSR, the landmark Astrodome would be the perfect setting for the ultimate Texas Experience. The Texas state tourism slogan is "Texas: It's like a whole other country." Here, guests would find themselves delightfully immersed within the great, expansive “country” of Texas all under one roof. From history and culture to BBQ, music and sports, visitors would see, feel and savor what it means to “be Texan”.
The Texas Experience could begin with the Museum of Texas Culture, where interactive exhibits and specialized programs tell a constantly evolving story of Texas culture and traditions. Special cultural events including “kicker dancing” lessons, Folklorico performances and Oktoberfest could be celebrated at the Museum’s Texas Cultural Center, a venue for music, theatrical and literary performances as well as workshops, lectures and educational seminars. After absorbing Texas culture, guests could step back in time in Wild West World, where the old west would unfold before their eyes! Attractions and shows could bring to life the history, legends and lore of Texas and the western frontier.
With highly interactive media, including high-‐definition holographic effects, and immersive technology, a Texas Sports Experience would commemorate Texas sports history and legends. Guests could cycle alongside Lance Armstrong, box with George Foreman and get golfing tips from Lee Trevino, among other Texas greats. Long a center of music innovation and a top filmmaking state, a Texas Film and Music Hall of Fame would pay homage to the impressive contributions Texans have made to the music and film industries. Updatable exhibits could explore the history, legacies and contributions Texas has made to all forms of music and film. A state-‐of-‐the-‐art performance venue would host live music events and film screenings, including special features of past and present films set in Texas.
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Devoted exclusively to the sport of rodeo, a Houston Livestock Show and Rodeo Museum could offer year-‐round excitement and inspiration via hands-‐on exhibits and extensive collections of memorabilia. An authentic Houston Livestock Show and Rodeo Store could extend the museum experience, offering a one-‐of-‐a-‐kind collection of merchandise and souvenirs.
Through educational programs and exhibits, a Texas Museum of Industry would preserve and showcase the industrial and technological heritage of Texas, including Texas’ powerful presence in the energy, information technology, oil and natural gas, aerospace, biomedical research, fuel processing, electric power, agriculture, and manufacturing industries.
Guests would also be enticed by a collection of uniquely Texan shopping, dining and nightlife offerings. A Texas Market could showcase culture, products and delicacies exported from regions around Texas. After sampling Jalapeno Jelly and stocking up on western wear, guests could get their Barbacoa or cowboy style fix at The Round-‐up, a BBQ restaurant serving a cornucopia of South, East, Central and West Texas fare and then head over to a Saloon to learn the Texas Two-‐Step or Austin: Live, an intimate live music venue, to groove to indie rock. The Sam Houston Revue, a Texan musical comedy revue and dining opportunity, could tell the story of the Texas Revolution and the resulting short-‐lived Republic of Texas.
A Texas Nighttime Spectacular, a stunning show under the Dome would feature digital projection, sound and special effects guaranteed to thrill and leave lasting memories of a full day and night of true Texas entertainment.
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Summary of Texas Experience Programming Options:
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Summary of Texas Experience Programming Options (continued):
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Summary of Texas Experience Programming Options (continued):
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Summary of Texas Experience Programming Options (continued):
NOTE: Appendix III contains a list of additional museum attractions considered in this study.
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Astrodome History Programming
This theme would honor the Astrodome’s rich sports, entertainment and architectural legacy. Guests could travel back in time via The Astrodome Experience, a ticketed, free-‐flow attraction that would allow guests to explore more than 50 years of Dome history through a slate of immersive experiences. Here, artifacts, interactive exhibits, media displays, and hands-‐on demos would highlight unforgettable athletes and performers. Large LED panels would feature an endless loop of the Astrodome’s greatest sports and entertainment performances from the Battle of the Sexes to the Cougars upset of UCLA to Elvis in concert.
On Judge’s Tour, guests would get an exclusive all-‐access, behind-‐the-‐scenes look at the Astrodome while learning about the history of the Astrodome, and the man behind it (Judge Hofheinz). Highlights of the tour could include a visit to the Judge’s exclusive apartment as well as the Astrodome’s chapel, tilt room, bowling alley, barbershop, Polynesian room and the presidential suite. Additional tours offered could include architectural and sports history tours, among others.
A gift shop would sell unique Astrodome relics and keepsakes, including AstroTurf, souvenir programs, books and photographs. The Astrodome could also host a fully functioning, state-‐of-‐the-‐art Broadcast Studio. Here, television hosts and radio DJs could interview Harris County’s sports legends of yesterday and today, recap Texans games and report on the goings on at the HLSR. Visitors could catch a glimpse of the action through the studio’s windows or as part of a live studio audience.
In a tribute to its predecessors Astrodomain and Astroworld, an indoor world-‐class retail, dining and entertainment complex would offer an array of options day and night.
It would be a great place to catch a film, mingle over cocktails or enjoy a relaxing meal under the Astrodome with family and friends after a day of visiting. An indoor theme park could be home to the world’s largest indoor Ferris wheel (surpassing the 125 foot high wheel at the I-‐X Center in Cleveland), a roller coaster and other amusement park rides and attractions.
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Summary of Astrodome History Programming Options:
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Entertainment/Edutainment Programming
Intended for both afternoon trips and all day excursions, the Astrodome’s entertainment offerings in this theme would create fun, excitement, and learning in an environment that encourages parents and children to explore and play together.
Family fun turns aquatic at the WaterDome, an indoor water park, filled with entertaining children’s water-‐play areas, exhilarating slides, pools and a lazy river. The SnowDome, a breathtaking indoor world of outdoor wintry landscapes and awe-‐inspiring ice statuaries, would bring year-‐round winter fun to Harris County. A snow park, slides, sled runs, skating pond and ice maze would be just
some of the attractions featured in this icy wonderland. Adventurous families would find outdoor thrills indoors at the AdventureDome, a unique experience that would combine high-‐adrenaline recreational activities and hands-‐on experiential learning, including rock climbing, zip lining, a ropes course and a skydiving simulator, all under the Dome
Kids and their parents could get hands-‐on with entertainment that enriches and inspires at branded children’s experiences such as LEGOLAND Discovery Center, the ultimate LEGO playland, complete with LEGO models of local landmarks, interactive rides, and a 4-‐D cinema, and The Crayola Factory, an immersive and colorful creative space full of interactive and imaginative art projects. For the littler ones, attractions like a Sesame Place or Nickelodeon Fun Zone would magically bring characters to life with rides, shows and attractions. Family dining establishments like Rain Forest Café would serve up family friendly fare.
Flexible, world-‐class performance spaces would attract live music entertainment, ranging from local performers and musicians, as well as globally recognized blockbuster acts. A state-‐of-‐the-‐art cinema would be a perfect place for nighttime activities
A sportsplex would offer a wide variety of traditional recreation activities: a state-‐of-‐the-‐art fitness center, indoor turf fields, batting cages, driving ranges, a dance studio, and more, all available for lessons, league play, tournaments and facility rental.
Attraction Driving Programming will have strong market appeal as it will create potential appeal from outside Harris County and bring visitors to the area from outside the region. It will also
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provide a unique attraction for Harris County residents, all on a year-‐round basis. Because of the nature of the attractions proposed, the lack of themed attractions in the region will be addressed. However, as discussed above, access limitations during other Reliant Park events like Texans games, the HLSR and the OTC and other conventions will restrict the ability to generate revenues as patrons will most likely not be able to attend the attractions on a 365-‐day per year basis.
Summary of Entertainment/Edutainment Programming Options:
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Summary of Entertainment/Edutainment Programming Options (continued):
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Summary (Cultural and Education Driven Programming)
The addition of cultural programming and components within the Astrodome creates the potential for additional similar attractions in the future and thus a strong compliment to the existing Museum District nearby. These types of attractions also create good public relations opportunities and support policy and political agendas due to their philanthropic nature. Because Reliant Park does not have these types of attractions currently, the addition of these venues would bring a new type of attendee to the Park and expand the annual attendance and allow for additional events each year as well.
There are concerns that exist with museum and cultural attractions in that they generally are expensive to build and are commercially challenging as they usually operate at negative cash flow. They thus would require supplemental funding through foundations or similar organizations and also would require the creation of support staff and related infrastructure to operate on a daily basis. This too is difficult and would require the efforts of a wide range of companies, organizations and individuals. The nearby Museum District, which could serve as a strong compliment to this programming would need to be included in the development plans as it would be imperative to avoid competing attractions.
Flexible Space and Seasonal Overlays
Flexible event space would create new opportunities for changing attractions and exhibits and support facilities for Reliant Park events. Ongoing performing arts events, festivals and art installations would infuse the Dome with international energy and spirit. The look and feel of the Astrodome would morph and change with seasonal events and holidays. Lighting, audio, façade, dressing and digital projections could enhance and transform public spaces, activating and shaping the environment.
Summary of Flexible Space and Seasonal Overlays Programming Options:
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Conference Center and Hotel
100,000 square feet of high-‐end configurable meeting and event space with an eco-‐friendly design, complete sound separation between rooms, and on-‐site complete food and beverage service would address important facility selection criteria for most convention, conference, meeting and trade show planners. Connected to the Conference Center, a hotel could offer a balance of full-‐service resort/spa and meeting/convention hotel, including a pool, spa, fitness center and business center.
The Conference Center/Hotel would also provide additional support facilities for Reliant Park events, including the OTC, Texans games and Houston Livestock Show and Rodeo activities. As discussed, elsewhere, there is a lack of hotel rooms within close proximity to Reliant Park, and those that currently are available are limited service hotels that are not acceptable to typical attendees at conventions and trade shows. In order to determine the size and brand of the hotel as well as the conference space that would be added through the redevelopment process, much further analysis will be needed.
The Retail, Dining & Entertainment components would also enhance the existing businesses within Reliant Park. However, selecting the right components that complement each other as well as the existing anchors is essential to the success of the Astrodome Renaissance. Offering more food and beverage options for the game, rodeo and other event attendees would enhance the overall guest experience. Additionally, the RD+E programming could foster future development as well, by increasing the annual attendance at Reliant Park new projects both within and adjacent to the Park would want to capitalize on the new found life in the Astrodome. Summary of Conference Center and Hotel Programming Options:
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Phase I Program -‐ Astrodome Renaissance
Based on the proposed strategy for Reliant Park and the Astrodome Renaissance as outlined earlier, the preliminary overview of the Harris County market (resident and tourist and competitive) as well as the review of benchmark attractions and subsequent concept ideas matrix, the project team has outlined a preliminary Phase I Program, with the projected costs related to the development of this Phase included as well. These costs, which are set forth in the table below, assume that the Astrodome Multi-‐Purpose Facility option was selected and the “core and shell” elements were constructed in order for the development of the individual components to take place.
SF Project*Cost Cost/SF [/]*Core*&*Shell [/]*Adjustment Buildout*Cost/SF Revised*Project*Cost
Retail
Anchor 50,000 8,750,000$3333333333 3 175333333333333333333333 100333333333333333333333 533333333333333333333333333 7533333333333333333333333 3,750,000$3333333333 3
Medium 50,000 8,000,000$3333333333 3 160333333333333333333333 100333333333333333333333 533333333333333333333333333 6033333333333333333333333 3,000,000$3333333333 3
Small 50,000 7,000,000$3333333333 3 140333333333333333333333 100333333333333333333333 533333333333333333333333333 4033333333333333333333333 2,000,000$3333333333 3
Subtotal 150,000 23,750,000$333333333 158333333333333333333333 8,750,000$3333333333 3
Food3&3Beverage
Destination 40,000 8,000,000$3333333333 3 200333333333333333333333 100333333333333333333333 533333333333333333333333333 100333333333333333333333 4,000,000$3333333333 3
Local3Mid5Size 60,000 10,500,000$333333333 175333333333333333333333 100333333333333333333333 533333333333333333333333333 7533333333333333333333333 4,500,000$3333333333 3
Small 25,000 3,750,000$3333333333 3 150333333333333333333333 100333333333333333333333 533333333333333333333333333 5033333333333333333333333 1,250,000$3333333333 3
Subtotal 125,000 22,250,000$333333333 178333333333333333333333 9,750,000$3333333333 3
Entertainment
STEM5Related3Museum/Attraction 40,000 35,000,000$333333333 875333333333333333333333 100333333333333333333333 125333333333333333333333 650333333333333333333333 26,000,000$333333333
Indoor3Attraction 40,000 20,000,000$333333333 500333333333333333333333 100333333333333333333333 533333333333333333333333333 400333333333333333333333 16,000,000$333333333
Subtotal 80,000 55,000,000$333333333 688333333333333333333333 42,000,000$333333333
Educational/Research
STEM3Center 70,000 30,000,000$333333333 429333333333333333333333 100333333333333333333333 533333333333333333333333333 329333333333333333333333 23,000,000$333333333
Subtotal 70,000 30,000,000$333333333 429333333333333333333333 23,000,000$333333333
Hotel/Conference3Center
Hotel3(1253Rooms) 92,000 25,000,000$333333333 272333333333333333333333 100333333333333333333333 533333333333333333333333333 172333333333333333333333 15,800,000$333333333
Conference3Center 140,000 49,000,000$333333333 350333333333333333333333 100333333333333333333333 533333333333333333333333333 250333333333333333333333 35,000,000$333333333
Subtotal 232,000 74,000,000$333333333 319333333333333333333333 50,800,000$333333333
TOTAL 657,000 205,000,000$****** 312********************* 204********************* 134,300,000$******
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As discussed earlier, the goal is for each of the components to work together, complementing not only each other, but also the existing anchors on the site. The proposed program will help extend visitor length of stay and increase on-‐site spending through the addition of Retail, Dining, and Entertainment (RD+E), hotels and various entertainment options that fit and further complement the anchors. Business Models -‐ Astrodome Renaissance
The potential business models for the suggested entertainment components are outlined in this following section. Two sets of attraction business models are outlined – Core-‐Phase I attractions, which could be part of the initial Astrodome Renaissance Master Plan and Phase II attractions, which could be incorporated into a longer term master plan. Due to costs related to the planetarium and the consensus among the consultant team that an attraction of that type was not ideal, it was not included in the Phase I components set forth below. The Museum of Natural Science currently has a planetarium, further strengthening the belief that a second facility of that type would not be successful at the Astrodome site.
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Entertainment Business Models (Phase I – Core Attractions) -‐ Astrodome Renaissance
Market'and'Economic'CharacteristicsSTEM4related'Attraction/'
Museum
Concept
Sizing&Range&(footprint) 30,000&4&50,000&sq.ft.
Pricing&Model&(gated/non4gated) pay4one4price
Average&Length&of&Stay&(range) 2&4&3&hours
Concept&Positioning Family&market.&Education4based&potential
Attendance'PotentialAttendance/Visitation&Range 100,000&4&500,000
FinancialBusiness&Model non4profit
Headline&Price&(midpoint&of&range) $15.00
Admissions&Yield&Range 40%&4&60%
Per&Capita&Expenditure&Range $6.00&4&$12.00(incl.&admissions,&food&&&beverage,&merchandise,&other)
Total&Revenue&Generation&(range) $600,000&4&$6&million(based&on&medium&attendance/per&capita&range)
Operating&Margin&(%&NOI/EBITDA) (20%)&4&(50%)(based&on&earned&income)
InvestmentPreliminary&Investment&Level&(based&on&industry&standards) $20&4&$50&million(cost&of&attraction&development&only,&no&additional&allocation&for&land&or&infrastructure&development&costs)
Development'and'Operations
Developer/Operator Joint&Venture&(HCSCC/SMG/Operator)
Source:&ECA
Examples California&Science&Center,&AMNH,&Johnson&Space&Center
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Entertainment Business Models (Phase I – Core Attractions) -‐ Astrodome Renaissance (continued)
Market'and'Economic'Characteristics
Concept
Sizing&Range&(footprint)
Pricing&Model&(gated/non7gated)
Average&Length&of&Stay&(range)
Concept&Positioning
Attendance'PotentialAttendance/Visitation&Range
FinancialBusiness&Model
Headline&Price&(midpoint&of&range)
Admissions&Yield&Range
Per&Capita&Expenditure&Range
(incl.&admissions,&food&&&beverage,&merchandise,&other)
Total&Revenue&Generation&(range)
(based&on&medium&attendance/per&capita&range)
Operating&Margin&(%&NOI/EBITDA)
(based&on&earned&income)
InvestmentPreliminary&Investment&Level&(based&on&industry&standards)
(cost&of&attraction&development&only,&no&additional&allocation&for&land&or&
infrastructure&development&costs)
Development'and'Operations
Developer/Operator
Source:&ECA
Examples
Indoor'Attraction
25,000&7&75,000&sq.ft.
pay7one7price
3&7&5&hours
Children's/family&market.&
Education7based&potential
250,000&7&750,000
commercial
$20.00
50%&7&60%
$15.00&7&$20.00
$4&7&$15&million
20%&7&35%
$15&7&$30&million
Joint&Venture&
(HCSCC/SMG/Operator)
KidZania,&WonderWorks,&LEGO&
Discovery,&Sesame&Workshop,&
SeaLife&Center
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Design Program -‐ Astrodome Renaissance
Floor area by level and uses:
Level 1 – 394,000 sf
• Vertical circulation • Festival/Exhibition expansion • Support space • Central plant & chilled water storage • Event storage • Staging, loading and marshaling
Level 2 – 170,000 sf
• Undeveloped space • Vertical circulation for each building quadrant
Level 3 – 61,200 sf
• Events plaza & spectacle attraction space • STEM-‐related attraction • Medium retail • Local mid-‐size food and beverage • Entrance to floors above
Level 4 – 127,000 sf
• Events plaza & spectacle attraction space • STEM-‐related attraction • Corridors and plaza • Anchor, medium and small retail • Local mid-‐size and small food and beverage
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Level 5 – 125,500 sf
• Education/research plaza & attraction space • STEM-‐related attraction • Corridors and plaza • Conference Center • Anchor, medium and small retail • Destination and small food and beverage
Level 6 – 124,500 sf
• Education/research plaza & attraction space • STEM-‐related attraction • Corridors and plaza • Conference Center • Medium and small retail • Local mid-‐size and small food and beverage
Level 7 – 125,500 sf
• Events plaza & spectacle attraction space • Hotel • Indoor attraction • Corridors and plaza • Hotel • Medium and small retail • Destination, local mid-‐size and small food and beverage
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Schematic Drawings – Proposed Astrodome Renaissance Program
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Schematic Drawings – Proposed Astrodome Renaissance Program (continued)
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Schematic Drawings – Proposed Astrodome Renaissance Program (continued)
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Schematic Drawings – Proposed Astrodome Renaissance Program (continued)
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Schematic Drawings – Proposed Astrodome Renaissance Program (continued)
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Financial Projections -‐ Astrodome Renaissance
As shown below, there is potential for the proposed Phase I programming to generate moderate profits for the third party operations. Whether the operating profits translate positively to overall economic performance will ultimately depend on the leases/operating agreements that are executed, as well as the type of financing and related costs to develop each of the concepts. The STEM facility and related attractions will almost certainly operate at a loss and will require either corporate or philanthropic support to sustain operations.
SF
RetailAnchor 50,000Medium 50,000Small 50,000Subtotal 150,000
Food8&8BeverageDestination 40,000Local8MidASize 60,000Small 25,000Subtotal 125,000
EntertainmentSTEMARelated8Museum/Attraction 40,000Indoor8Attraction 40,000Subtotal 80,000
Educational/ResearchSTEM8Center 70,000Subtotal 70,000
Hotel/Conference8CenterHotel8(1258Rooms) 92,000Conference8Center 140,000Subtotal 232,000
TOTAL 657,000
Gross0Revenues Operating0Margin NOI
40,000,000$888888888 5.0% 2,000,000$8888888888 830,000,000$888888888 5.0% 1,500,000$8888888888 825,000,000$888888888 5.0% 1,250,000$8888888888 895,000,000$888888888 4,750,000$8888888888 8
10,000,000$888888888 7.5% 750,000$888888888888812,000,000$888888888 7.5% 900,000$88888888888886,250,000$8888888888 8 7.5% 468,750$888888888888828,250,000$888888888 2,118,750$8888888888 8
3,250,000$8888888888 8 A35.0% (1,137,500)$888888888 88,000,000$8888888888 8 25.0% 2,000,000$8888888888 811,250,000$888888888 862,500$8888888888888
5,000,000$8888888888 8 A50.0% (2,500,000)$888888888 85,000,000$8888888888 8 (2,500,000)$888888888 8
5,560,547$8888888888 8 31.5% 1,750,000$8888888888 82,500,000$8888888888 8 10.0% 250,000$88888888888888,060,547$8888888888 8 2,000,000$8888888888 8
147,560,547$000000 4.9% 7,231,250$000000000
6.0 Astrodome Site Future Use Analysis
222
Summary -‐ Astrodome Renaissance
The retail and food and beverage components will determine the ultimate financial success of the venue. For the purposes of these financial projections, it was assumed that the rent and occupancy costs for the retail and food and beverage programming elements were roughly $37 per square foot and that third party operators would pay rent to the HCSCC. The rent form the tenant leases would be used to fund the capital costs required to construct the “core and shell” spaces and operate the Renaissance improvements within the Multi-‐Purpose Facility. The projected annual rent that could be anticipated from the third party tenants in Phase I of the Renaissance Program is set forth below.
RetailAnchorMediumSmallSubtotal
Food4&4BeverageDestinationLocal4Mid<SizeSmallSubtotal
EntertainmentSTEM<Related4Museum/AttractionIndoor4AttractionSubtotal
Educational/ResearchSTEM4CenterSubtotal
Hotel/Conference4CenterHotel4(1254Rooms)Conference4CenterSubtotal
TOTAL
Astrodome,Rent,($/SF)
Annual,Rent
35.00$44444444444444444 1,750,000$4444444444 442.00$44444444444444444 2,100,000$4444444444 442.00$44444444444444444 2,100,000$4444444444 4
5,950,000$4444444444 4
35.00$44444444444444444 1,400,000$4444444444 435.00$44444444444444444 2,100,000$4444444444 435.00$44444444444444444 875,000$4444444444444
4,375,000$4444444444 4
14.00$44444444444444444 560,000$444444444444414.00$44444444444444444 560,000$4444444444444
1,120,000$4444444444 4
10.50$44444444444444444 735,000$4444444444444735,000$4444444444444
4.0% 222,242$44444444444444.0% 100,000$4444444444444
322,242$4444444444444
12,502,242$,,,,,,,,
6.0 Astrodome Site Future Use Analysis
223
6.5 Summary The key findings related to the options for the future use of the Astrodome site are summarized below:
Maintain Status Quo
• Maintenance and capital costs will increase as the building ages.
• Deterioration of the building detracts from the appeal of the Complex.
• Obstructs site circulation and event operations.
• Preserves the option to determine a best use in the future.
• Continue to cost money while returning no benefit.
Reliant Park Plaza
• Lowest publicly funded Project Cost.
• Provides additional outdoor event space.
• Includes limited additional parking.
• Reduces current Reliant Park maintenance costs.
• Improves site circulation and access.
Astrodome Multi-‐Purpose Facility
• Highest publicly funded Project Cost.
• Expands and supports core business.
• Reduces operating income.
• Provides interior, column-‐free, high bay exhibition space.
• Creates highly marketable, functional and unique space.
6.0 Astrodome Site Future Use Analysis
224
• Preserves the opportunity for additional future use.
• Improves site circulation and access.
• Creates ideal location for fairs, festivals and performances.
Astrodome Renaissance
• All Multi-‐Purpose Facility findings apply, including opportunity for future use.
• Provides opportunity for third party development.
o There are significant restrictions on the site that would impact third party development.
• Creates a regional destination.
General Findings
• Each option has capital costs to Harris County. Additionally, some options have operating shortfalls.
• Operating restrictions on the site make it challenging for a third party operator to justify investment to redevelop the Astrodome.
• The STEM concept is supported by several of the stakeholders in Reliant Park and could be an important addition to the Harris County area and the local education system. Our conversations with local colleges and universities have indicated a willingness to participate in a consortium for the development of the STEM program in the Astrodome.
• The costs associated with any STEM development and operation will require the financial involvement of the private sector. This will also require the creation of management infrastructure to operate the program and maintain the facility.
6.0 Astrodome Site Future Use Analysis
225
6.6 Financial Projections
Astrodome)Site)Option Status)Quo Reliant)Park)Plaza Astrodome)Multi8Purpose)Facility
Astrodome)Renaissance)[3]
Harris)County)FundingProject)Cost)[)1)] 8$)))))))))))))))))))))) 63.9$))))))))))))))))))) 270.3$))))))))))))))))) 385.4$)))))))))))))))))[)8)])Other)Funding)(i.e.)Private,)Philanthropic,)Other)) 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) (115.1)$))))))))))))))))Total)Harris)County)Funding 8$)))))))))))))))))))))) 63.9$))))))))))))))))))) 270.3$))))))))))))))))) 270.3$)))))))))))))))))Annual)Repair)and)Replacement 1.0$))))))))))))))))))))) 0.7$))))))))))))))))))))) 2.0$))))))))))))))))))))) 2.0$)))))))))))))))))))))
Operating)ResultsRevenue 8$)))))))))))))))))))))) 0.5$))))))))))))))))))))) 1.7$))))))))))))))))))))) 1.7$)))))))))))))))))))))Expenses 8)))))))))))))))))))))))) (1.2)))))))))))))))))))))) (3.6)))))))))))))))))))))) (3.6))))))))))))))))))))))Net)Operating)Income 8$)))))))))))))))))))))) (0.7)$))))))))))))))))))) ) (1.9)$))))))))))))))))))) ) (1.9)$))))))))))))))))))) )Rent)from)Third)Party)Operations 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) 12.5$)))))))))))))))))))Incremental)Expenses)Related)to)Third)Party)Revenues (4.6)$))))))))))))))))))) )Incremental)Debt)Service)Related)to)Astrodome)Renaissance 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) 8$)))))))))))))))))))))) (8.9)$))))))))))))))))))) )Total)Income)(Loss) 8$)))))))))))))))))))))) (0.7)$))))))))))))))))))) ) (1.9)$))))))))))))))))))) ) (2.9)$))))))))))))))))))) )
Economic)ImpactTax)Revenue 8$)))))))))))))))))))))) 0.1$))))))))))))))))))))) 0.8$))))))))))))))))))))) 8.1$)))))))))))))))))))))Direct)Spending 8$)))))))))))))))))))))) 0.8$))))))))))))))))))))) 6.8$))))))))))))))))))))) 77.9$)))))))))))))))))))Total)Output 8$)))))))))))))))))))))) 1.3$))))))))))))))))))))) 10.8$))))))))))))))))))) 125.5$)))))))))))))))))Personal)Earnings 8$)))))))))))))))))))))) 0.5$))))))))))))))))))))) 4.3$))))))))))))))))))))) 52.6$)))))))))))))))))))Jobs 0 18 153 2,221
["1"]"Project"costs"do"not"include"outstanding"Astrodome"debt.
6.0 Astrodome Site Future Use Analysis
226
6.7 Conclusions and Recommendations It is recommended the Multi-‐Purpose Facility option be selected for the future use of the Astrodome site at an estimated cost of $270.3 million, not including the debt currently outstanding on the Astrodome. This recommendation considers more than just the financial projections as it recognizes the magnitude of potential opportunities offered by this one-‐of-‐a-‐kind structure. In the Astrodome Multi-‐Purpose Facility option the event floor would be over 300,000 square feet, column free and rising to a height of over 200 feet. The result is any event is possible, making Reliant Park a truly unique destination. There is simply no space like this in the world today.
Retaining the Astrodome as a multi-‐purpose facility in conjunction with the Replacement Arena Project increases the total available exhibition space by nearly 33 percent, further expanding the number and types of events that can be brought to the Complex each year. This additional space will also allow the Complex to satisfy the needs of the OTC and will greatly enhance the likelihood that the OTC, will continue to use Reliant Park for this event that is vital to the Harris County economy.
If Harris County elects to pursue the Astrodome Multi-‐Purpose Facility option, it preserves the Astrodome Renaissance option if sources of funding become available. Analysis of the Astrodome Renaissance has been unable to identify a mix of uses that can be financed today through traditional sources but the Multi-‐Purpose Facility allows the Renaissance option to be developed when funding becomes available.
In the event available funds are not sufficient to support the Multi-‐Purpose Facility option, then Harris County should consider the Reliant Park Plaza option at an estimated Project Cost of $63.9 million, again not including the debt currently outstanding on the Astrodome. The Reliant Park Plaza, as opposed to the Status Quo, would significantly enhance the overall guest experience and site circulation and create new event opportunities something that is not possible with the Astrodome in its current condition.
The Status Quo option is not recommended. As noted above, the Astrodome in its current condition negatively impacts event operations and site circulation. The facility also costs between $2 million and $3 million annually to maintain, an amount that will only increase as the venue deteriorates further. The Status Quo option does have the lowest initial cost and keeps all development options open in the future. However, as have been noted above, keeping the Astrodome in its current state is not recommended.
227
Appendices
228
Appendix I: Illustration of Nearby Hotel Support – Competitive and Comparable Markets
Total Hotel Rooms within ½ Mile = 2,027
Total Hotel Rooms within ½ Mile = 3,251
½ Mile Radius
Reliant Park
1
65
7
3
42
5 – Hyatt Place Hotel (164) 6 – Hilton Garden Inn (132) 7 – Hampton Inn and Suites (120)
1 – Crowne Plaza (630 rooms) 2 – Holiday Inn (235) 3 – Quality Inn (196) 4 – Homestead Studio Suites (165)
6 – In at the Ballpark (201) 7 – Courtyard by Marriott (191) 8 – Residence Inn by Marriott (171) 9 – Holiday Inn Express (112)
1 – Hilton Americans (1,230 rooms) 2 – Four Seasons (404) 3 – The Magnolia Hotel (314) 4 – Club Quarters (274) 5 – Embassy Suites Hotel (262)
½ Mile Radius
4
5
6
78
9
2
3
George R. BrownConvention Center1
229
Total Hotel Rooms within ½ Mile = 1,089
Total Hotel Rooms within ½ Mile = 3,777
1 – Hyatt Regency McCormick Place (800 rooms) 461 additional rooms expected to be added mid-2013 2 – Chicago South Loop Hotel (232)
6 – Aloft Dallas Downtown (193) 7 – Hotel Indigo (170) 8 – The Joule, Dallas (129) 9 – Hotel Lawrence Dallas (118)
1 – Hyatt Regency Dallas (1,122 rooms) 2 – Omni Dallas Conv. Cnt. Hotel (1,001) 3 – Adolphus Hotel (422) 4 – The Magnolia Hotel (330) 5 – Crowne Plaza Dallas (292)
½ Mile Radius
2
1McCormick Place 1
5
6
78
9
3
½ Mile Radius
4
2Dallas
Convention Center
230
Total Hotel Rooms within ½ Mile = 6,594
Total Hotel Rooms within ½ Mile = 2,017
10 – Comfort Inn Downtown (231) 11 – Residence Inn by Marriott (229) 12 – Hilton Garden Inn (221) 13 – Ritz-Carlton Denver (202) 14 – Hotel Monaco (189) 15 – Courtyard by Marriott (177) 16 – Hampton Inn and Suites (148) 17 – Hotel Teatro (110)
1 – Sheraton Denver Hotel (1,225 rooms) 2 – Hyatt Regency Denver at CCC (1,100) 3 – Denver Marriott City Center (615) 4 – Grand Hyatt Denver (512) 5 – Westin Hotel Tabor Center (430) 6 – Crowne Plaza (634) 7 – The Curtis (336) 8 – Magnolia Hotel (246) 9 – Sheraton Denver Hotel (1,225)
1
3
5
2
4
6
78
910
11
12
13
14
1516
½ Mile Radius
ColoradoConvention Center
17
½ Mile Radius
Kansas CityConvention Center
12
3
4
5
1 –Marriot Kansas City Downtown (946 rooms) 2 – Crowne Plaza Kansas City (385) 3 – Hotel Phillips (217) 4 – Hilton President Hotel (213) 5 –Aladdin Holiday Inn (193)
231
Total Hotel Rooms within ½ Mile = 1,828
Total Hotel Rooms within ½ Mile = 10,803
½ Mile Radius
1
KentuckyExpo Center
3
2
4
5
6
7
8
9
10
11
12
13
8 – Comfort Inn and Suites (97) 9 – Airport Expo Center Sleep Inn (75) 10 – Residence Inn by Marriott (72) 11 – Super 8 Airport Expo (68) 12 – Ramada Limited Airport (49) 13 – Howard Johnson Express (44)
1 – Crowne Plaza Airport (588 rooms) 2 – Hilton Garden Inn (208) 3 – Courtyard by Marriott Airport (150) 4 – Hampton Inn Airport/Expo Center (130) 5 – Country Inn and Suites Airport (121) 6 – SpringHill Suites (120) 7 – Holiday Inn Airport and Expo Center (106)
10 – Days Inn Convention Center (219) 11 – Comfort Suites (214) 12 – Hamton Inn Convention Center (170) 13 – Springhill Suites Convention Center (167) 14 – Hawthorn Suites Orlando Conv. Ctr. (135) 15 – Red Roof Inn (134) 16 – Extended Stay America (119) 17 – Extended Stay Deluxe Orlando (113)
1 – Peabody Orlando (1,641 rooms) 2 – Westgate Lakes Resort & Spa (1,596) 3 – Hilton Orlando Convention Center (1,417) 4 – Rosen Centre Hotel (1,334) 5 – DoubleTree Resort Orlando (1,094) 6 – Quality Inn Plaza (1,020) 7 – Rosen Plaza (800) 8 – Westin Imagine Orlando (315) 9 – Clarion Inn and Suites (221)
½ Mile Radius
7
Orange CountyConvention Center
124
5
11
8
9 10
1213
14
15
1716
3
6
232
Appendix II: Program Benchmarks In order to analyze the potential program for the Astrodome Renaissance at Reliant Park, the team assessed a selection of benchmarks throughout the United States based on program, performance and market. The following case studies outline those benchmarks. Selected benchmarks include:
• L.A. Live, Los Angeles, California
• Champions Square, New Orleans, Louisiana
• Yerba Buena Gardens, San Francisco, California
• Georgia World Congress Center, Atlanta, Georgia
• PETCO Park & Convention Center, San Diego, California
• Kansas City Power & Light District, Kansas City, Missouri
• Kentucky Expo Center, Louisville, Kentucky
• Patriot Place, Foxboro, Massachusetts
• Lambeau Field – Titletown, Green Bay, Wisconsin
• Columbus Arena District, Columbus, Ohio
233
L.A. Live, Los Angeles, California
Overview: A mixed-‐use urban district positioned as tourist-‐oriented sports and entertainment hub located in downtown Los Angeles, CA.
Opening Date: 2007
Size: 27 acre site and 350, 000-‐400,000 net square feet of LA Live RD+E
Tenant Mix: Dining, entertainment and hotels
Anchor Tenants: Nokia Theater, Club Nokia, Grammy Museum, ESPN West Coast Broadcast Headquarters
Retail: None (currently)
Dining: ESPN Zone, Fleming’s Prime Steakhouse & Wine Bar, Katsuya, Trader Vic’s, Wolfgang Puck Bar & Grill, Yard House
Entertainment: Nokia Theater, Club Nokia, Grammy Museum, 14-‐screen Regal Cineplex, Lucky Strike Bowling, The Conga Room
Hotel & Residences: Ritz-‐Carlton Hotel and Residences, JW Marriott Hotel
234
Major Attractions: Staples Center, Los Angeles Convention Center
Visitor Volumes: 8-‐10 million (75-‐ 80% resident, 20-‐25% tourists)
Development Costs: $2.5 billion (total project)
Parking/Access/Transportation:
• A parking structure on-‐site with 5,300 spaces • MTA station on 7th St. and Flower St.
235
Champions Square, New Orleans, Louisiana
Overview: Champions Square is an outdoor festival venue used for corporate events, festivals and concerts. It is located in the Central Business District of New Orleans, Louisiana.
Tenant Mix: Restaurants, entertainment
Attractions: LaSalle Street, Club XLIV, Louisiana Superdome
Surrounding Uses: New Orleans Arena, hotels, office
Sizing: 121,000 square feet
Opening Date: 2010
Parking / Access / Transportation:
• Champions Garage is adjacent to the development with 2,000 spaces
• Multiple garages and lots are available around the Superdome
236
Yerba Buena Gardens, San Francisco, California
Overview: Located on 87 acres in downtown San Francisco, California, an urban redevelopment that includes retail and residential space, gardens and a cultural arts district
Tenant Mix: Hotels, gardens, retail, attractions, convention center and entertainment
Attractions: Sony Metreon, Moscone Convention Center, six acres of gardens, Zeum (children’s museum) , Yerba Buena Center for the Arts (showcasing local San Francisco arts), Historic Charles Looff Carousel, Yerba Buena Ice Skating Center, Yerba Buena Bowling Center
Surrounding Uses: Residential – including low and moderate income housing, convention center, entertainment and recreation facilities, cultural facilities
Opening Date: 1992
Phasing / Expansions:
• Phase 1 –1992
• Phase 2 –1993
• Phase 3 –1999, opened Metreon and added Children’s Garden and the restored carousel
Parking / Access / Transportation:
• Served by Bay Area Rail Transit (BART) and MUNI (bus system) • Parking available at 3 garages with 4,216 total spaces available
237
Georgia World Congress Center Authority Campus, Atlanta, Georgia
Overview: The Georgia World Congress Authority Campus is located in the convention corridor of downtown Atlanta and ranks among the top five largest convention destinations in the country.
Tenant Mix: Entertainment, convention center
Attractions: The Georgia World Congress Center, the 71,250-‐seat Georgia Dome and 21-‐acre Centennial Olympic Park
Surrounding Uses: Cultural attractions, retail, dining, entertainment, hotel
Opening Date: Phase 1-‐1976 (convention center)
Phasing/Expansions:
• Phase II – 1985 (convention center expansion) • Phase III – 1992 (convention center expansion and Georgia Dome
opening) • 1996 -‐ Centennial Olympic Park opens for Olympic games • Phase IV – 2002 (convention center expansion)
Owner: State owned and operated
Visitation: More than a million guests attend functions at the convention center annually and an estimated 3 million people visit Centennial Olympic Park annually
238
Parking/Access/Transportation:
• The Georgia World Congress Center Authority operates six surface lots and two parking decks on campus totaling to approximately 7,000 parking spaces
• The campus is walking distance to the 13,000 hotel rooms in Downtown Atlanta
• The GWCC campus is served by two MARTA (Metropolitan Atlanta Rapid Transit Authority) stations
239
PETCO Park & Convention Center, San Diego, California
Overview: PETCO Park and the San Diego Convention Center are adjacent to each other and adjacent to the Gaslamp Quarter (an outdoor walk able urban retail and dining district) in Downtown San Diego
Opening Date: PETCO Park opened in 2004 while the convention center opened in 1989 with an expansion in 2001 to double its size
Owner/Manager: City of San Diego and the San Diego Padres are owners of the stadium and the Padres manage the stadium; the convention center is managed by San Diego Convention Center Corporation
Sizing: The convention center is approximately 2.6 million gross square feet
Capacity: PETCO Park’s capacity is approximately 42,500 and the convention center can hold up to 125,000 at one time
Estimated Capital Investment: $450 million to construct PETCO Park; $164 million to construct the San Diego Convention Center
240
Kansas City Power & Light District, Kansas City, Missouri
Overview: The Kansas City Power & Light District is a mixed-‐use district located in downtown Kansas City. The district holds more than 50 restaurants, bars, shops and entertainment venues. The district is a nine-‐block neighborhood that links the Convention Center to the Sprint Arena.
Tenant Mix: Retail, dining, entertainment, hotel
Attractions: Midland Theater by AMC, The AMC Mainstreet Movie Theater, Convention Center, Sprint
Arena, KC Live! Entertainment District
Surrounding Uses: Hotel, residential, retail, dining, parks, convention, office, parking
Sizing: 500,000 square feet RDE
Opening Date: 2007
Parking / Access / Transportation:
• The District is about 20 minutes south of the Kansas City International Airport and less than 8 minutes south of the Downtown Airport
241
Kentucky Expo Center, Louisville, Kentucky
Overview: The Kentucky Expo Center is a multi-‐use facility with other sporting venues and outdoor facilities on-‐site and hosts a number of events including the Kentucky State Fair, the North American International Livestock Exposition and the National Farm Machinery Show. The Kentucky Exposition Center is approximately 4 miles south of downtown Louisville Kentucky.
Tenant Mix: Convention and conference, entertainment, hotel
Attractions: Freedom Hall Coliseum, Cardinal Stadium, Broadbent Arena
Surrounding Uses: Churchill Downs, Six Flags Kentucky Kingdom (closed), Kentucky International Convention Center, Louisville International Airport, University of Louisville, residential, golf, dining, retail and hotel
Sizing: 1.3 million square feet of flexible exhibit space, 2,000 rooms within walking distance and 300 acres of outdoor exhibit and demonstration space
242
Parking/Access/Transportation:
• 19,000 parking spots • Five minutes from Louisville International Airport
243
Patriot Place, Foxboro, Massachusetts
Overview: Patriot Place is a mixed use development located in Foxboro, Massachusetts, approximately 30 miles south of downtown Boston which includes Gillette Stadium as the anchor.
Tenant Mix: Retail, dining, entertainment, office, hotel, healthcare and theatre
Attractions: Gillette Stadium, Cinema De Lux, Showcase Live, The CBS Scene, Brigham and Women’s /Mass General Health Care Center, The Hall at Patriot Place and Renaissance Hotel
Surrounding Uses: Patriot Place is located in a low density residential area with parking surrounding the development which is used by stadium visitors. Adjacent Wynn Casino has been proposed
Sizing: 1.3 million square feet of retail, dining and entertainment
Opening Date: 2007; Gillette Stadium opened in 2002
244
Parking/Access/Transportation: • Free parking for retail customers is available at Patriot Place even on event and game days
245
Sports and Entertainment District, Green Bay, Wisconsin
Overview: A sports and entertainment district adjacent to Lambeau Field which is located about 5 minutes away from the downtown area of Green Bay. There is no defined district area or district name but there is talk of future plans.
Tenant Mix: Retail, hotel, restaurant
Attractions: Lambeau Field
Surrounding Uses: Industrial and residential neighborhoods, hotels, restaurants, Brown County Memorial Complex where sporting events, shows and concerts are held and includes the Resch Center, Shopko Hall and the Brown County Memorial Arena
Parking / Access / Transportation:
• No parking structures • Parking lots at Lambeau Field and adjacent sports and
entertainment district • Residents open their personal homes for parking during games
at Lambeau Field • Close access to freeway
246
Columbus Arena District, Columbus, Ohio
Overview: The Arena District is a 75-‐acre mixed-‐use development located in downtown Columbus, Ohio. This urban neighborhood features premier office space, a variety of restaurants, entertainment venues and residential housing. Acres of park and plaza areas provide open space. The district is home to the NHL’s Columbus Blue Jackets (Nationwide Arena) and AAA baseball’s Columbus Clippers (Huntington Park).
Tenant Mix: Office, residential, retail, dining, entertainment, and hotel and park space
Attractions: Nationwide Arena, Huntington Park, Arena Grand Movie Theatre, Dispatch Ice Haus, Lifestyle Communities Pavilion, Arena District Athletic Club
Surrounding Uses: Columbus Convention Center, arts and entertainment area (The Short North), public market (The North Market), residential, office retail
Opening Date: The district began development in the late 1990s
Owner/Manager: Developed and managed by Nationwide Realty Investors (NRI)
Sizing: 1.5 million square feet of office and RD+E space, 685,000 square feet Nationwide Arena, 10,000-‐seat Huntington Park, 500 residential units
Visitation: 2.5 million visitors annually to the Columbus Convention Center
247
Proposed Astrodome Renaissance – Entertainment Business Models (Phase II – Attractions)
Market and Economic Characteristics Indoor Entertainment Center Concept
Sizing Range (footprint) 40,000 - 80,000 sq.ft.
Pricing Model (gated/non-gated) pay-as-you-go Average Length of Stay (range) 1.5 - 2.5 hours
Concept Positioning Family market
Attendance Potential Attendance/Visitation Range 300,000 - 600,000 Financial Business Model commercial Headline Price (midpoint of range) n/a Admissions Yield Range 50% - 60% Per Capita Expenditure Range $15.00 - $20.00 (incl. admissions, food & beverage, merchandise, other) Total Revenue Generation (range) $4.5 - $12 million (based on medium attendance/per capita range) Operating Margin (% NOI/EBITDA) 25% - 35% (based on earned income) Investment Preliminary Investment Level (based on industry standards) $20 - $30 million
(cost of attraction development only, no additional
allocation for land or infrastructure development costs) Development and Operations
Developer/Operator Joint Venture
(HCSCC/SMG/Operator)
Source: ECA
Examples Dave & Buster's, Lucky Strike!, Sega Republic
248
Market and Economic Characteristics Corporate Attraction Concept
Sizing Range (footprint) 30,000 - 50,000 sq.ft.
Pricing Model (gated/non-gated) pay-one-price Average Length of Stay (range) 1 - 1.5 hours
Concept Positioning Family market (some
business market)
Attendance Potential Attendance/Visitation Range 150,000 - 450,000 Financial Business Model corporate Headline Price (midpoint of range) $15.00 Admissions Yield Range 45% - 60% Per Capita Expenditure Range $12.00 - $18.00 (incl. admissions, food & beverage, merchandise, other) Total Revenue Generation (range) $2 - $8 million (based on medium attendance/per capita range) Operating Margin (% NOI/EBITDA) (20%) - (35%) (based on earned income) Investment Preliminary Investment Level (based on industry standards) $10 - $25 million
(cost of attraction development only, no additional
allocation for land or infrastructure development costs) Development and Operations
Developer/Operator Joint Venture
(HCSCC/SMG/Corporation)
Source: ECA
Examples
World of Coke, Ben & Jerry's, Louisville Slugger, Corning Museum of Glass, Crayola
Factory
249
Market and Economic Characteristics Texas Museum/Hall of Fame Concept
Sizing Range (footprint) 40,000 - 80,000 sq.ft.
Pricing Model (gated/non-gated) pay-one-price Average Length of Stay (range) 2 - 3 hours
Concept Positioning Family market. Education-
based potential
Attendance Potential Attendance/Visitation Range 100,000 - 500,000 Financial Business Model non-profit Headline Price (midpoint of range) $10.00 Admissions Yield Range 40% - 60% Per Capita Expenditure Range $6.00 - $12.00 (incl. admissions, food & beverage, merchandise, other) Total Revenue Generation (range) $600,000 - $6 million (based on medium attendance/per capita range) Operating Margin (% NOI/EBITDA) (20%) - (50%) (based on earned income) Investment Preliminary Investment Level (based on industry standards) $20 - $50 million
(cost of attraction development only, no additional
allocation for land or infrastructure development costs) Development and Operations
Developer/Operator Joint Venture
(HCSCC/SMG/Operator)
Source: ECA
Examples
Bob Bulluck Texas State History Museum, National
Museum of American History, Pro Football HOF, Kentucky Derby Museum,
Country Music HOF
250
Appendix III: Additional Museum Concepts Considered In addition to the ideas listed in 6.0 Astrodome Site Future Analysis, below is a list of additional museum attractions considered for this study:
• Energy • Space • Harris County History • Area Icons and Personalities • Texas Medical Center and healthcare Leadership • Diversity/Racial Transformation and Internalization • Harris County “Over the Horizon” Future • Planetarium • International Museum of Houston • National Petroleum Hall of Fame • Museum of Play • Interactive Live Broadcasting Museum
251
Appendix IV: Construction Cost Estimates Included in this section are construction estimates for each of the Master Plan Components. These estimates are based, in most cases, on assumptions derived from historical construction costs for work similar in scope to the proposed Master Plan component or subcomponent. Not included in these estimates, are other costs related to design, permitting, legal fees, project management fees, escalation, furniture, fixtures and equipment, delivery of utilities to the component site, contingency or other soft costs. Allowances for these costs are included in the Project Cost estimates used within the report.
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3-'*DKDE"(!"&%$--%&P" 01234)456"3690<1109G6 !:'NO:AAA""""""" (C(:C%B:!BN !%NDC!
!"F#%P"E"&'(3*"&%()*DR"P'
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8I-VW*"R3*,-E/."G*/.*I".#"0H.I#V#+*[ )456"G4996G243 (B:AAA"""""""""""" !(:N(N:A@A %(NDA' 8JVW*."]EH"/#."\**/"JYVE.*V
>EIX-/W"TEIEW* 03690"T030T6 !:A%A:AAA""""""" @%:N'(:@C( @@DC' 8JVW*."]EH"/#."\**/"JYVE.*V
1-.*">E`-/W </K,JV*H"a*H.I-VW*"2J//*, N:'C!:@%O
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b#.*,"TEIEW* B!:C%A:(!!
6D'%#(5D'"# @!B:('N:A!C
IJKL"'("-'$E%'"($-(S%-"K(DTT(DT()DFJ#DJ-(9'JKQU(("E%$#(K%'"K(.2O2.O21..(%&K(E""'$&L/PD&T"*"&P"(P%##(1.O1VO21.2U((6W$-(SJKL"'(*"T#"P'-(PJ**"&'(K%Q(F*$P$&L(%&K(KD"-(&D'($&P#JK"("-P%#%'$D&U((
!"#$"% &'!('!)
!"#$%&'()%*+(,%-'"*()#%& ./01/.2,34536634(78496!:76;84(78,)34< !=>;9=?(@/1A/.2B(@/.0/.2B(@/2@/.2396!8?8,=(C(?8,=(3D36=,=46E(?=,8F;6;84(G(;,)8!6(H;FF
.E011E111((((( I9H
(?"-J*$K'$L&( M'N :, :&$'(7L-' 6L'%#(7L-'
?$O$-$L&(2(9$'"PL*+ACM Abatement (SC) Including Helix Ramps 1 LS %*&++*+++,++ %*&++*+++
Haz / Mat Abatement: W/ Above
Demo Structure & Remove from Site (Implosion) !*-++*+++"""""" ./0 1,+) 2*()+*%++(This assumes that the salvage value belongs to the demolition subcontractor. This does not include removal of the foundations.)
Demo & Remove from Site Existing Concrete Paving, Sidewalks and Curbs !+%*)++""""""""" /0 !,&+ !&1*-++
Temp Protection @ Adjacent Buildings / Clean Glass !""""""""""""""""""""" 34456 )++*+++,++ )++*+++
Fill at Plaza Area w/ Rough Surface Grading to Drain &11*)27""""""""" 89 !+,++ &*11)*2(((No Select Fill and Assume 90% Compaction)
Remove Berms - Assume 20' tall berms, 85% around the Dome plus 1.4 Swell Factor (Truck Yards) 19,613 89 (,++ !&1*7+%(Includes laod & removal form the site.)
Temporary Sub-Surface Dewatering for Fill Operations 1 34456 )&+*+++,++ )&+*+++Equipment Rental / Diesel / Maintenance 6 :5 !)*+++,++ 2)*+++(Assume 6 Months)
Site UtilitiesStorm Drainage System 18 38;</ /=
Sanitary Sewer System 18 38;</ /=
Domestic Water at Support Buildings 18 38;</ /=
Chilled Water - connected @ Carruth plaza (Not Required: Packaged units at Support Buildings) - 40 /=
Grease Traps for Concessions 20,000 /0 /=4" PVC Site Grease Waste Piping 400 40 /=
Site Gas Piping to Out Buildings 18 38;</ /=
Event Water Distribution @ Plaza Areas 1 ALLOW /=
Saw Cut / Repair Existing Concrete & Asphalt Paving for Utility Tie-ins and Haul Traffic Damages (Allowance) 15,000 /0 /=
Patch / Plug Existing Utilities 1 34456 /=
)"#$"% &'!('!)
!"#$%&'()%*+(,%-'"*()#%& ./01/.2,34536634(78496!:76;84(78,)34< !=>;9=?(@/1A/.2B(@/.0/.2B(@/2@/.2396!8?8,=(C(?8,=(3D36=,=46E(?=,8F;6;84(G(;,)8!6(H;FF
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(?"-J*$K'$L&( M'N :, :&$'(7L-' 6L'%#(7L-'Site Paving6" VIP Parking Area at South West Quad (Includes Sub- Grade Grading) !%7*27+""""""""" /0 /=
6" Site Paving Outside Plaza (Includes Sub Grade Grading) )7&*-&2""""""""" /0 /=
6" Site Paving at Previous Dome Location (Includes Sub-Grade Grading) -7-*27+""""""""" /0 /=
Assumed Paving Upgrades @ 6" Site Paving (50%) -%%*&2%""""""""" /0 /=
Curb and Gutter Tie-in 1*)(+""""""""""""" 40 /=
Misc Paving: Assume 12' wide circumference around Dome "island" 2&*-1+""""""""""" /0 /=
Assumed Paving Lime Stabilization: 100% of the VIP Parking & Site Paving Areas !+!*&(7""""""""" /9 /=
Water Feature !""""""""""""""""""""" 34456 /=
Landscaping / Irrigation (18 acres minus paving area) 7%*7--""""""""""" /0 /=
Temporary Painted Wood Construction Fence w/ Gates: Up & Down 1*)(+""""""""""""" 40 )+,++ !)&*1++
Division 2 Subtotal .QER@0ERR2
Division 9 FinishesToilet/Concessions/Support at grade level (8EA - 5,000 SF each). Includes CMU walls, roof, finishes and MEP. Food Service equipment OFOI. &+*+++""""""""""" /0 /=
Awnings at Support Buildings (2000 LF x 10' wide, both sides) %+*+++""""""""""" /0 /=
Division 9 Subtotal 1
?$O$-$L&(.1(9K"J$%#'$"-
6>?$@AB@AC".D>EF@GH"'"/@CA>CI"'"/JD@E@AC !""""""""""""""""""""" 34456 /=
-"#$"% &'!('!)
!"#$%&'()%*+(,%-'"*()#%& ./01/.2,34536634(78496!:76;84(78,)34< !=>;9=?(@/1A/.2B(@/.0/.2B(@/2@/.2396!8?8,=(C(?8,=(3D36=,=46E(?=,8F;6;84(G(;,)8!6(H;FF
.E011E111((((( I9H
(?"-J*$K'$L&( M'N :, :&$'(7L-' 6L'%#(7L-'KID@LIJID"8D#MB"8#AJD#N"O>DD@IDH !""""""""""""""""""""" 34456 /=
(?$O$-$L&(.1(9K"J$%#'$"-(6L'%#( 1
?$O$-$L&(.A(=F=76!;73FDemo Existing Sub-Station D<(8S4=! +
New Underground Primary Electric Service (Fannin to Arena) 1,050 LF 2&+,++ 2(2*&++
New Electrical Service from Arena Plaza and Plant 2 500 LF 2&+,++ -2&*+++
New Switchgear for Arena - (2) 4000 Amp Panels (primary duct bank included above) 1 ALLOW )++*+++,++ )++*+++
New Switchgear for Plaza - $50k per Support Building 1 ALLOW /=
Site Lighting 784,080 GSF /=Decorative Light Pole Upgrades 1 ALLOW /=
Low Voltage: Conduit/Cabling/Site Landscape Lighting 400 EA /=
Event Cabling Raceways / Pits 1 ALLOW /=
Event Electrical Distribution Raceways 4 EA /=
Event Show Power, per Quad 4 EA /=1,362,500
Temporary Electrical Service / Electrical Consumption Charges 20 MO /=
Low Voltage: Surveillance SystemPOS Surveillance Cameras 16 EA /=Plaza Pole Mounted Surveillance Cameras 30 EA /=3" PVC Raceway w/ Inner-duct and Cabling to Stadium 800 LF /=Site Conduit Raceways w/ Cabling 3,000 LF /=Recording Equipment Revisions/Racks 1 ALLOW /=Conduit and Connections to Existing Building 1 ALLOW /=
0
Division 16 Subtotal .E0A2ET11
6863F(7896(8H(S8!U 21E01AE@R2
9:D6863F(7896(8H(S8!U )+*-+1*%7) !&,1).IAID>N"8#AB@J@#AH"P1QR !*)!(*-7+ +,7%/STG#AJD>GJ#D"O#AB"PG#HJ"#$"M#DU"V"!,)&QR )&-*(-! +,)+
%"#$"% &'!('!)
!"#$%&'()%*+(,%-'"*()#%& ./01/.2,34536634(78496!:76;84(78,)34< !=>;9=?(@/1A/.2B(@/.0/.2B(@/2@/.2396!8?8,=(C(?8,=(3D36=,=46E(?=,8F;6;84(G(;,)8!6(H;FF
.E011E111((((( I9H
(?"-J*$K'$L&( M'N :, :&$'(7L-' 6L'%#(7L-'OS@NB@AC"KIDL@J"PG#HJ"#$"M#DU"V,)+%QR %!*%)& +,+-OS@NBIDH";@HU"PG#HJ"#$"M#DU"V",-12QR 2%*&)& +,+1.IAID>N"4@>T@N@J?"=AHSD>AGI"PG#HJ"#$"M#DU"V",2+(QR !%-*22+ +,!!)*LV"J'(9WX'L'%# ))*+-(*%-- !1,7&8:W;"0II"W"-,&Q 22!*-%& +,&7.8"O#AB"P/STJ#J>N"V",(-&QR !(%*+)! +,!%)*LV"J'(6L'%# ))*77-*277 !2,178#AJ@ACIAG?"W"!+Q"X"G#HJ"#$"M#DU )*+-+*1%7 !,&1)*LV"J'(I*%&Y(6L'%# )&*+)%*%%( !7,)&
!"#$"% &'!('!)
!"#$%&'()%*+(,%-'"*()#%& ./01/.2,34536634(78496!:76;84(78,)34< !=>;9=?(@/1A/.2B(@/.0/.2B(@/2@/.2!=C;346()3!D()C3E3
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(?"-I*$J'$K&( L'M :, :&$'(7K-' 6K'%#(7K-'
?$N$-$K&(2(9$'"OK*+ACM Abatement (SC) Including Helix Ramps 1 LS *+
Haz / Mat Abatement: W/ Above
Demo Structure & Remove from Site (Implosion) !,-..,..."""""" /*0 *+
Demo & Remove from Site Existing Concrete Paving, Sidewalks and Curbs !.%,)..""""""""" *0 *+
Temp Protection @ Adjacent Buildings / Clean Glass !""""""""""""""""""""" 12234 *+
Plaza Area Final Grading: Top Dress Existing Subgrade (9") & Fine Grade for Hardscaping (No Select Fill: 90% Compaction) !!,!55""""""""""" 67 !89.. !5(,()&
Remove Berms - Assume 20' tall berms, 85% around the Dome plus 1.4 Swell Factor (Truck Yards) 19,613 67 *+
Temporary Sub-Surface Dewatering for Fill Operations 1 12234 *+Equipment Rental / Diesel / Maintenance 6 :3 *+(Assume 6 Months)
Site UtilitiesStorm Drainage System 18 16;<* )&,...9.. %&.,...
Sanitary Sewer System 18 16;<* (,...9.. !%%,...
Domestic Water at Support Buildings 18 16;<* 8,...9.. !.(,...
Chilled Water - connected @ Carruth plaza (Not Required: Packaged units at Support Buildings) - 20 !,&..9.. .
Grease Traps for Concessions 20,000 *0 )9.. %.,...4" PVC Site Grease Waste Piping 400 20 !(9.. 5,)..
Site Gas Piping to Out Buildings 18 16;<* 8,...9.. !.(,...
Event Water Distribution @ Plaza Areas 1 ALLOW )&.,...9.. )&.,...
Saw Cut / Repair Existing Concrete & Asphalt Paving for Utility Tie-ins and Haul Traffic Damages (Allowance) 15,000 *0 59&. !!),&..
Patch / Plug Existing Utilities 1 12234 &.,...9.. &.,...
Site Paving6" VIP Parking Area at South West Quad (Includes Sub- Grade Grading) !%=,5=.""""""""" *0 89.. (=(,5%.
)"#$"% &'!('!)
!"#$%&'()%*+(,%-'"*()#%& ./01/.2,34536634(78496!:76;84(78,)34< !=>;9=?(@/1A/.2B(@/.0/.2B(@/2@/.2!=C;346()3!D()C3E3
.F011F111((((( G9H
(?"-I*$J'$K&( L'M :, :&$'(7K-' 6K'%#(7K-'6" Site Paving Outside Plaza (Includes Sub Grade Grading) )=&,-&5""""""""" *0 89.. !,55),!%)
6" Site Paving at Previous Dome Location (Includes Sub-Grade Grading) -=-,5=.""""""""" *0 89.. ),-8),5%.
Assumed Paving Upgrades @ 6" Site Paving (50%) -%%,&5%""""""""" *0 89.. ),.85,%%!
Curb and Gutter Tie-in 8,)(.""""""""""""" 20 !%9.. (5,=).
Misc Paving: Assume 12' wide circumference around Dome "island" 5&,-8.""""""""""" *0 (9.. 8.),((.
Assumed Paving Lime Stabilization: 100% of the VIP Parking & Site Paving Areas !.!,&(=""""""""" *7 &9.. &.5,=%-
Water Feature !""""""""""""""""""""" 12234 ),...,...9.. ),...,...
Landscaping / Irrigation (18 acres minus paving area) =%,=--""""""""""" *0 &9.. %5%,88&
Temporary painted Wood Constr. Fence w/ Gates: Up/Dn 8,)(.""""""""""""" 20 *+
Division 2 Subtotal .2F222FPPA
Division 9 FinishesToilet/Concessions/Support at grade level (8EA - 5,000 SF each). Includes CMU walls, roof, finishes and MEP. Food Service equipment OFOI. &.,...""""""""""" *0 =.9.. %,&..,...
Awnings at Support Buildings (2000 LF x 10' wide, both sides) %.,...""""""""""" *0 )&9.. !,...,...
Division 9 Subtotal QFQ11F111
?$N$-$K&(.1(9J"I$%#'$"-
4>?$@AB@AC"/D>EF@GH"'"*@CA>CI"'"*JD@E@AC !""""""""""""""""""""" 12234 !5&,...9.. !5&,...
KID@LIJID"6D#MB"6#AJD#N"O>DD@IDH !""""""""""""""""""""" 12234 !&.,...9.. !&.,...
(?$N$-$K&(.1(9J"I$%#'$"-(6K'%#( 02QF111
-"#$"% &'!('!)
!"#$%&'()%*+(,%-'"*()#%& ./01/.2,34536634(78496!:76;84(78,)34< !=>;9=?(@/1A/.2B(@/.0/.2B(@/2@/.2!=C;346()3!D()C3E3
.F011F111((((( G9H
(?"-I*$J'$K&( L'M :, :&$'(7K-' 6K'%#(7K-'
?$N$-$K&(.A(=C=76!;73CDemo Existing Sub-Station R<(8S4=! .
New Underground Primary Electric Service (Fannin to Arena) 1,050 LF *+
New Electrical Service from Arena Plaza and Plant 2 500 LF *+
New Switchgear for Arena - (2) 4000 Amp Panels (primary duct bank included above) 1 ALLOW *+
New Switchgear for Plaza - $50k per Support Building 1 ALLOW %..,...9.. %..,...
Site Lighting 784,080 GSF .95& &((,.8.Decorative Light Pole Upgrades 1 ALLOW &.,...9.. &.,...
Low Voltage: Conduit/Cabling/Site Landscape Lighting 400 EA -&.9.. !%.,...
Event Cabling Raceways / Pits 1 ALLOW %..,...9.. %..,...
Event Electrical Distribution Raceways 4 EA &.,...9.. )..,...
Event Show Power, per Quad 4 EA &.,...9.. )..,...1,978,060
Temporary Electrical Service / Electrical Consumption Charges 20 MO &,...9.. !..,...
Low Voltage: Surveillance SystemPOS Surveillance Cameras 16 EA %,)..9.. 85,)..Plaza Pole Mounted Surveillance Cameras 30 EA %,)..9.. !)8,...3" PVC Raceway w/ Inner-duct and Cabling to Stadium 800 LF )&.9.. )..,...Site Conduit Raceways w/ Cabling 3,000 LF -.9.. =.,...Recording Equipment Revisions/Racks 1 ALLOW !5&,...9.. !5&,...Conduit and Connections to Existing Building 1 ALLOW &.,...9.. &.,...
708,200
Division 16 Subtotal 2F1TUF1A1
6863C(7896(8H(S8!D [email protected]
9:R6863C(7896(8H(S8!D ).,%(.,!&8 !&95&/IAID>N"6#AB@J@#AH"P8QR !,))(,(.= .9=&*STG#AJD>GJ#D"O#AB"PG#HJ"#$"M#DU"V"!9)&QR )&8,..) .9).OS@NB@AC"KIDL@J"PG#HJ"#$"M#DU"V9).%QR %!,5(. .9.-OS@NBIDH";@HU"PG#HJ"#$"M#DU"V"9-85QR 5&,!8) .9.8/IAID>N"2@>T@N@J?"+AHSD>AGI"PG#HJ"#$"M#DU"V"95.(QR !%&,... .9!!)*KV"I'(9WX'K'%# )),))8,=.( !59!.6:W;"0II"W"-9&Q 555,=%) .98.
%"#$"% &'!('!)
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(?"-I*$J'$K&( L'M :, :&$'(7K-' 6K'%#(7K-'/6"O#AB"P*STJ#J>N"V"9(-&QR !(&,&=& .9!%)*KV"I'(6K'%# )-,!=.,%%& !59(%6#AJ@ACIAG?"W"!)Q"X"G#HJ"#$"M#DU ),%&5,8!= !9(=)*KV"I'(G*%&Y(6K'%# )&,8%(,.8- !=95-
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C#F#$!.!GH#$IJ!K*&L#M 0N@O111 #P%-(%'Q!(I!*#R&%'C#F#$!2!GH#$IJ!K*&L#M .S1O111C#F#$!0!G&(!K*&L#M 0N@O111 '#J!-$&TC#F#$!@ .1AO111 'I'DU-#&T$#C#F#$!V .1AO111 'I'DU-#&T$#C#F#$!A .1AO111 'I'DU-#&T$#C#F#$!S .1AO111 'I'DU-#&T$#
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</0#"B/-.:1@"V"$8##AB".#"W<W"8:1/"=:198DE/E"-,#;/C 6 6 6766 66
X/0F"BY#A:1@"Z"B.AD9.DA-8"E/0# NL45666 3J 67>% (L%5%666
H-A.YT#AU"=:198DE/E":1"F-;:1@"1D0,/AB",/8#TC 66
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69%(#!:(%$%(%#- 63:./"2:@Y.:1@]"^1"/8/9.A:9-8 6
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C#F#$!.!GH#$IJ!K*&L#M 0N@O111 #P%-(%'Q!(I!*#R&%'C#F#$!2!GH#$IJ!K*&L#M .S1O111C#F#$!0!G&(!K*&L#M 0N@O111 '#J!-$&TC#F#$!@ .1AO111 'I'DU-#&T$#C#F#$!V .1AO111 'I'DU-#&T$#C#F#$!A .1AO111 'I'DU-#&T$#C#F#$!S .1AO111 'I'DU-#&T$#
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Appendix V: Preliminary Analysis of Potential Capital Structures for Astrodome Redevelopment
Contacts:
Michael Bartolotta Trey Cash Phillip MartinMichael Bartolotta Trey Cash Phillip MartinVice Chairman Senior Vice President Vice President700 Milam Street, Suite 500 700 Milam Street, Suite 500 700 Milam Street, Suite 500 Houston, TX 77002 Houston, TX 77002 Houston, TX 77002Phone: 713.654.8641 Phone: 713.654.8651 Phone: 713.654.8620Fax: 713.651.9361 Fax: 713.651.9361 Fax: 713.651.9361E il i h l b t l tt @fi t E il t h@fi t E il hilli ti @fi tEmail: [email protected] Email: [email protected] Email: [email protected]
Harris County Sports & Convention CorporationPreliminary Analysis of Potential Capital Structures for Astrodome Redevelopment
Table of ContentsPreliminary – For Discussion Purposes Only
HA
Tab A: Estimated Capital Structure
RR
IS
CO
UN
T
Tab B: Pro-Forma Cash Flows
Tab C: Rehabilitation Ta Credits YS
PO
RT
S&
Tab C: Rehabilitation Tax Credits
Tab D: New Market Tax Credit Program &
CO
NV
EN
TI
O
Tab E: EB-5 Program
ON
CO
RP
OR
A
Tab F: Tax Increment Financing
Member FINRA & SIPC© 2012 First Southwest Company
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1 May 23, 2012
Preliminary – For Discussion Purposes OnlyH
AEstimated Capital Structure
RR
IS
CO
UN
T
Tab A
YS
PO
RT
S&&
C
ON
VE
NT
IOO
NC
OR
PO
RA
Member FINRA & SIPC© 2012 First Southwest Company
TI
ON
H A R R I S C O U N T Y S P O R T S & C O N V E N T I O N C O R P O R A T I O N May 23, 2012
Estimated Capital Structure – Multipurpose with Expansion (‘000’s)H
A
MultiPurpose
Estimated Project Cost(1) 385,358 270,331 655,689
Expansion Total
RR
IS
CO
UN
T
Projected Rehabilitation (Historic) Tax Credit(2) - 40,550 40,550 Projected New Market Tax Credit(3) 7,315 4,872 12,187 Projected EB5(4) 65,000 15,000 80,000
Subtotal 72 315 60 422 132 737 YS
PO
RT
S&
Subtotal 72,315 60,422 132,737
Required other financing (5) 313,043 209,909 522,952 (6)
Notes:Th i li i d d k d dili fi d if ( ) h i k il bl d (b) k
&
CO
NV
EN
TI
O
These estimates are very preliminary and need market due diligence to find if (a) there is a market available and (b) market costs are similar to projected.
(1) Source: Harris County Sports & Convention Corporation.
(2) Rehabilitation (Historic) Tax Credit, assuming full 20.00% with 75% realization of tax credits (multipurpose project only).(3) New Market Tax Credit assuming allocation can be found, with credit equal to 39% of allocation secured ($50 million) with market value at 62.5% of O
NC
OR
PO
RA
g , q ( )effective credit. Due to the limited availability of allocations, the maximum amount available has been capped at $50 million.
(4) EB5 is a loan program that is related to the number of jobs created by the facility. The amount is an estimate based upon 800 jobs(650 for expansion & 150 for multipurpose), and every 10 jobs creates $1 million in loan capacity.
(5) Other financing vehicles ( e.g. Tax Increment Reinvestment Zone bonds, Texas Economic Development Fund loans) have been identified as potentialfinancing options but not quantified
Member FINRA & SIPC© 2012 First Southwest Company
TI
ON
3
financing options, but not quantified.(6) The cost of raising funds and necessary carrying costs have not been factored in at this time, because time horizon for revenue has not been finalized.
Estimated Capital Structure – Multipurpose with Expansion (‘000’s) MultiExpansion Total
HA
Equity: PurposeProjected Rehabilitation (Historic)
Tax Credit(1) n/a 40,550 40,550 Funding Breakdown ('000's):Projected New Market Tax Credit(2) 7,315 4,872 12,187 Equity (Tax Credits) 52,737
Equity Subtotal: 7,315 45,422 52,737 [A] Debt 602,952
Expansion Total
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q y , , , [ ] ,
Debt: Total 655,689 Projected EB5 Loan(3) 65,000 15,000 80,000 [B]
Total Tax Credits/Loans:(4)72,315 60,422 132,737 [C] = [A]+[B]
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Required other financing (Debt) (5) 313,043 209,909 522,952 [D] = [F]-[C]
Total Sources of Funds: 385,358 270,331 655,689 [E] = [C]+[D]
Estimated Project Cost: (6)385,358 270,331 655,689 [F] &
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Notes:These estimates are very preliminary and need market due diligence to find if (a) there is a market available and (b) market costs are similar to projected.
(1) Rehabilitation (Historic) Tax Credit, assuming full 20.00% with 75% realization of tax credits (multipurpose project only).(2) New Market TaxCredit assuming allocation can be found with credit equal to 39% of allocation secured ($50 million) with market value at 62 5% of O
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New Market Tax Credit assuming allocation can be found, with credit equal to 39% of allocation secured ($50 million) with market value at 62.5% of
effective credit. Due to the limited availability of allocations, the maximum amount available has been capped at $50 million. (3) EB5 is a loan program that is related to the number of jobs created by the facility. The amount is an estimate based upon 800 jobs
(650 for expansion & 150 for multipurpose), and every 10 jobs creates $1 million in loan capacity. (4) Other financing vehicles ( e.g. Tax Increment Reinvestment Zone bonds, Texas Economic Development Fund loans) have been identified as potential
financing options but not quantified
Member FINRA & SIPC© 2012 First Southwest Company
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financing options, but not quantified.(5) The cost of raising funds and necessary carrying costs have not been factored in at this time, because time horizon for revenue has not been finalized.(6)
Source: Harris County Sports & Convention Corporation.
Estimated Capital Structure – Expansion Only (‘000’s)H
A
Expansion
Estimated Project Cost(1) 385,358
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Projected New Market Tax Credit(2) 12,187 Projected EB5(3) 78,000
Subtotal 90,187
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Required other financing (4) 295,171 (5)
Notes: &
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These estimates are very preliminary and need market due diligence to find if (a) there is a market available and (b) market
costs are similar to projected.
(1) Source: Harris County Sports & Convention Corporation.(2) New Market Tax Credit assuming allocation can be found, with credit equal to 39% of allocation secured ($50 million) with market value at 62.5% of
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effective credit. Due to the limited availability of allocations, the maximum amount available has been capped at $50 million. (3) EB5 is a loan program that is related to the number of jobs created by the facility. The amount is an estimate based upon 780 jobs, and
every 10 jobs creates $1 million in loan capacity. (4) Other financing vehicles ( e.g. Tax Increment Reinvestment Zone bonds, Texas Economic Development Fund loans) have been identified as potential
financing options, but not quantified.
Member FINRA & SIPC© 2012 First Southwest Company
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(5) The cost of raising funds and necessary carrying costs have not been factored in at this time, because time horizon for revenue has not been finalized.
Estimated Capital Structure – Expansion Only (‘000’s) H
A
Equity: Expansion Funding Breakdown ('000's):Projected New Market Tax Credit(1)
12,187 [A] Equity (Tax Credits) 12,187 Debt: Debt/Loans 373,171
P j t d EB5 L (2) RR
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Projected EB5 Loans(2)78,000 [B] Total 385,358
Total Tax Credits/Loans:(3)90,187 [C] = [A]+[B]
Required other financing (Debt) (4)295,171 [D] = [F]-[C]
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Total Sources of Funds: 385,358 [E] = [C]+[D]
Estimated Project Cost: (5)385,358 [F]
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Notes:
These estimates are very preliminary and need market due diligence to find if (a) there is a market available and (b) market
costs are similar to projected.
(1) New Market Tax Credit assuming allocation can be found, with credit equal to 39% of allocation secured ($50 million) with market value at 62.5% of
effective credit. Due to the limited availability of allocations, the maximum amount available has been capped at $50 million. ON
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(2) EB5 is a loan program that is related to the number of jobs created by the facility. The amount is an estimate based upon 780 jobs, and
every 10 jobs creates $1 million in loan capacity. (3) Other financing vehicles have been identified as potential financing options, but not quantified. Examples include Tax Increment Reinvestment
Zone bonds and Texas Economic Development Fund loans.(4) The cost of raising funds and necessary carrying costs have not been factored in at this time because time horizon for revenue has not been finalized
Member FINRA & SIPC© 2012 First Southwest Company
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The cost of raising funds and necessary carrying costs have not been factored in at this time, because time horizon for revenue has not been finalized.(5) Source: Harris County Sports & Convention Corporation.
Estimated Capital Structure – Multipurpose Only (‘000’s)H
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Multipurpose
Estimated Project Cost(1) 270,331
Projected Rehabilitation (Historic) Tax Credit(2) 40 550 RR
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Projected Rehabilitation (Historic) Tax Credit 40,550 Projected New Market Tax Credit(3) 12,187 Projected EB5(4) 15,000
Subtotal 67,737
( ) ( ) YS
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Required other financing (5) 202,594 (6)
Notes:
These estimates are very preliminary and need market due diligence to find if (a) there is a market available and (b) market &
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costs are similar to projected.
(1) Source: Harris County Sports & Convention Corporation.(2) Rehabilitation (Historic) Tax Credit, assuming full 20.00% with 75% realization of tax credits (multipurpose project only).(3) New Market Tax Credit assuming allocation can be found, with credit equal to 39% of allocation secured ($50 million) with market value
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at 62.5% of effective credit. Due to the limited availability of allocations, the maximum amount available has been capped at $50 million. (4) EB5 is a loan program that is related to the number of jobs created by the facility. The amount is an estimate based upon 150 jobs,
and every 10 jobs creates $1 million in loan capacity. (5) Other financing vehicles have been identified as potential financing options, but not quantified. Examples include Tax Increment Reinvestment
Zone bonds and Texas Economic Development Fund loans.
Member FINRA & SIPC© 2012 First Southwest Company
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(6) The cost of raising funds and necessary carrying costs have not been factored in at this time, because time horizon for revenue has not been finalized.
Estimated Capital Structure – Multipurpose Only (‘000’s) Equity: Multipurpose
HA
Projected Rehabilitation (Historic) Tax Credit(1)40,550 Funding Breakdown ('000's):
Projected New Market Tax Credit(2)12,187 Equity (Tax Credits) 52,737
Equity Subtotal: 52,737 [A] Debt 217,594
Debt: Total 270,331 RR
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Debt: Total 270,331 Projected EB5 Loan(3)
15,000 [B]
Total Tax Credits/Loans:(4)67,737 [C] = [A]+[B]
Required other financing (Debt) (5)202 594 [D] [F] [C] Y
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Required other financing (Debt) ( )202,594 [D] = [F]-[C]
Total Sources of Funds: 270,331 [E] = [C]+[D]
Estimated Project Cost: (6)270,331 [F]
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Notes:These estimates are very preliminary and need market due diligence to find if (a) there is a market available and (b) market costs are similar to projected.
(1) Rehabilitation (Historic) Tax Credit, assuming full 20.00% with 75% realization of tax credits (multipurpose project only).(2) New Market TaxCredit assuming allocation can be found, with credit equal to 39% of allocation secured ($50 million) with market value at 62.5% of O
NC
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New Market Tax Credit assuming allocation can be found, with credit equal to 39% of allocation secured ($50 million) with market value at 62.5% of
effective credit. Due to the limited availability of allocations, the maximum amount available has been capped at $50 million. (3) EB5 is a loan program that is related to the number of jobs created by the facility. The amount is an estimate based upon 150 jobs,
and every 10 jobs creates $1 million in loan capacity. (4) Other financing vehicles have been identified as potential financing options, but not quantified. Examples include Tax Increment Reinvestment
Z b d d T E i D l t F d l
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Zone bonds and Texas Economic Development Fund loans.(5) The cost of raising funds and necessary carrying costs have not been factored in at this time, because time horizon for revenue has not been finalized.(6) Source: Harris County Sports & Convention Corporation.
Preliminary – For Discussion Purposes OnlyH
APro-Forma Cash Flows
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Pro-Forma Cash Flows - Multipurpose with Expansion (‘000’s) Assumes 3% Annual Growth (1) Multi-Purpose with Expansion
2013 2014 2015 2016 2017 2018 2022 2023 2027 2028 2032 2033 2037 2038 2042
HA
2013 2014 2015 2016 2017 2018 - 2022 2023 - 2027 2028-2032 2033-2037 2038-2042Revenues(1)
Event Revenues 45,106 46,459 47,853 49,288 50,767 277,614 321,831 373,091 432,514 501,402 Non-Event Revenues 3,127 3,221 3,318 3,417 3,520 19,246 22,312 25,866 29,985 34,761 Additional Required Revenues (1.50x) - 9,868 56,447 56,281 56,105 288,161 298,621 292,552 285,525 277,360 Total Revenues 48,233 59,548 107,617 108,986 110,391 585,022 642,764 691,508 748,024 813,523
Expenses(1)
Salaries 10 043 10 344 10 654 10 974 11 303 61 809 71 654 83 066 96 296 111 634 RR
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Salaries 10,043 10,344 10,654 10,974 11,303 61,809 71,654 83,066 96,296 111,634 Utilities (Incremental) 1,545 1,591 1,639 1,688 1,739 9,509 11,024 12,779 14,815 17,174 G&A 279 288 296 305 314 1,718 1,992 2,309 2,677 3,103 Event expenses 18,241 18,789 19,352 19,933 20,531 112,271 130,152 150,882 174,914 202,773 Non-Event expenses 12,787 13,170 13,565 13,972 14,392 78,699 91,233 105,764 122,610 142,139 Total Expenses 42,895 44,181 45,507 46,872 48,278 264,005 306,055 354,801 411,312 476,823
Projected NOI (with Additional Revenues) 5,338 15,366 62,111 62,114 62,113 321,016 336,710 336,707 336,712 336,700
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Projected NOI (without Additional Revenues) 5,338 5,498 5,663 5,833 6,008 32,855 38,088 44,155 51,188 59,341
Projected D/S Requirements:(7)
EB5 Loan(2) (3% Int Only): - 2,400 2,400 2,400 2,400 7,200 - - - - EB5 Fix-out(2) (6%, 30yr): - - - - - 11,770 29,432 29,430 29,432 29,435
Required Other Financing(5)(6%, 30yr): - 7,844 39,007 39,009 39,009 195,041 195,041 195,042 195,043 195,032 Total Projected Debt Service: - 10,244 41,407 41,409 41,409 214,011 224,473 224,472 224,475 224,467 &
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Revenues in Excess of 1.00x Coverage(8) 5,338 5,122 20,704 20,705 20,704 107,005 112,237 112,236 112,237 112,233
Coverage (with Additional Revenues)(3) n/a 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x
Coverage (w/o Additional Revenues)(3) n/a 0.54x 0.14x 0.14x 0.15x 0.15x 0.17x 0.20x 0.23x 0.26x
Notes:(1) Source: Harris County Sports & Convention Corporation. Projected Sources of Funds (000's)(7)
Sources MP w/Exp(2) EB5 is a loan program that is related to the number of jobs created by the facility. The amount is an estimate based upon the creation of 780 jobs, and every 10 jobs creates $1 million in loan capacity. ON
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Sources MP w/Exp
Historic Tax Credit(9) [Equity] 40,550 (3) Coverage based on 3% growth. Rating agencies may require coverage without growth in revenues. New Market Tax Credit(4)[Equity] 12,187
EB5 Loans(2) [Debt] 80,000
Subtotal 132,737
Required Other Financing(6) 522,952 (6)
(5) Estimated debt service on additional required funds needed to finance the project, after accounting for the EB5 loan funds, NMTC and Historic Tax Credits. Assumes a 30 year level debt service financing at the fixed rate of 6.0% with principal amortized from 2015 through 2041.
Other financing vehicles have been identified as potential financing options, but not quantified. Examples include Tax Increment Reinvestment Zone bonds
( ) p g j y y p j , y j p yThe EB5 loan assumes a seven year interest only period and upon expiration is refinanced by the issuance of 30 year level debt (the "EB5 Fix-out"), at a rate of 6.0% and principal amortized from 2021 through 2049.
(4) New Market Tax Credit assuming allocation can be found, with credit equal to 39% of allocation secured with market value at 62.5% of effective credit. Due to their limited availability, assumes allocation capped at $50 million.
Member FINRA & SIPC© 2012 First Southwest Company
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Total Project Funding(1) 655,689 (7) The cost of raising funds and necessary carrying costs have not been factored in at this time, because time horizon for revenue has not been finalized. Last year of additional revs: 2043(8) Excess Revenues may be used for additional project funding, M&O, early repayment of outstanding debt, etc. Yr of final debt payment: 2049(9) Rehabilitation (Historic) Tax Credit, assuming full 20.00% with 75% realization of tax credits (multipurpose project only).
g p g p q pand Texas Economic Development Fund loans.
Pro-Forma Cash Flows – Expansion Only (‘000’s) Assumes 3% Annual Growth (1) Expansion Only
2013 2014 2015 2016 2017 2018 2022 2023 2027 2028 2032 2033 2037 2038 2042
HA
2013 2014 2015 2016 2017 2018 - 2022 2023 - 2027 2028-2032 2033-2037 2038-2042Revenues(1)
Event Revenues 43,930 45,247 46,605 48,003 49,443 270,375 313,439 363,361 421,235 488,327 Non-Event Revenues 2,612 2,690 2,771 2,854 2,940 16,077 18,637 21,606 25,047 29,036 Additional Required Revenues (1.50x) - 9,604 29,641 29,408 29,167 152,185 160,306 151,995 142,357 131,199 Total Revenues 46,542 57,542 79,017 80,265 81,550 438,637 492,381 536,962 588,640 648,563
Expenses(1)
S l i 10 043 10 344 10 654 10 974 11 303 61 809 71 654 83 066 96 296 111 634 RR
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Salaries 10,043 10,344 10,654 10,974 11,303 61,809 71,654 83,066 96,296 111,634 Utilities (Incremental) 515 530 546 563 580 3,170 3,675 4,260 4,938 5,725 G&A 232 239 246 253 261 1,426 1,654 1,917 2,222 2,576 Event expenses 17,922 18,460 19,013 19,584 20,171 110,305 127,874 148,241 171,852 199,224 Non-Event expenses 10,511 10,826 11,151 11,486 11,830 64,693 74,997 86,943 100,790 116,844 Total Expenses 39,222 40,399 41,611 42,859 44,145 241,404 279,853 324,427 376,099 436,002
Projected NOI (with Additional Revenues) 7,319 17,143 37,406 37,406 37,404 197,233 212,528 212,535 212,540 212,561
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Projected NOI (without Additional Revenues) 7,319 7,539 7,765 7,998 8,238 45,048 52,223 60,540 70,183 81,361
Projected D/S Requirements:(7)
EB5 Loan(2) (3% Int Only): - 2,340 2,340 2,340 2,340 7,020 - - - - EB5 Fix-out(2) (6%, 30yr): - - - - - 11,476 28,696 28,694 28,696 28,699
Required Other Financing(5)(6%, 30yr): - 9,089 22,598 22,597 22,596 112,993 112,989 112,996 112,997 113,008 Total Projected Debt Service: - 11,429 24,938 24,937 24,936 131,489 141,686 141,690 141,694 141,707 &
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j , , , , , , , , ,
Revenues in Excess of 1.00x Coverage(8) 7,319 5,714 12,469 12,469 12,468 65,744 70,843 70,845 70,847 70,854
Coverage (with Additional Revenues)(3) n/a 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x
Coverage (w/o Additional Revenues)(3) n/a 0.66x 0.31x 0.32x 0.33x 0.34x 0.37x 0.43x 0.50x 0.57x
Notes:(1) Source: Harris County Sports & Convention Corporation.
P j t d S f F d (000' )(7) ON
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Projected Sources of Funds (000's)(7)
Sources Expansion(3) Coverage based on 3% growth. Rating agencies may require coverage without growth in revenues. New Market Tax Credit(4)[Equity] 12,187
EB5 Loans(2) [Debt] 78,000
Subtotal 90,187
Required Other Financing(6) 295,171
Estimated debt service on additional required funds needed to finance the project, after accounting for the EB5 loan funds, NMTC and Historic Tax Credits. Assumes a 30 year level debt service financing at the fixed rate of 6.0% with principal amortized from 2015 through 2041.
(5)
EB5 is a loan program that is related to the number of jobs created by the facility. The amount is an estimate based upon the creation of 780 jobs, and every 10 jobs creates $1 million in loan capacity. The EB5 loan assumes a seven year interest only period and upon expiration is refinanced by the issuance of 30 year level debt (the "EB5 Fix-out"), at a rate of 6.0% and principal amortized from 2021 through 2049.
(2)
New Market Tax Credit assuming allocation can be found, with credit equal to 39% of allocation secured with market value at 62.5% of effective credit. Due to their limited availability, assumes allocation capped at $50 million.
(4)
Member FINRA & SIPC© 2012 First Southwest Company
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(6)
Total Project Funding(1) 385,358 (7) The cost of raising funds and necessary carrying costs have not been factored in at this time, because time horizon for revenue has not been finalized. Last year of additional revs: 2043(8) Excess Revenues may be used for additional project funding, M&O, early repayment of outstanding debt, etc. Yr of final debt payment: 2049
Other financing vehicles have been identified as potential financing options, but not quantified. Examples include Tax Increment Reinvestment Zone bonds and Texas Economic Development Fund loans.
Pro-Forma Cash Flows – Multipurpose Only (‘000’s) Assumes 3% Annual Growth (1) Multi-Purpose Only
2013 2014 2015 2016 2017 2018 2022 2023 2027 2028 2032 2033 2037 2038 2042
HA
2013 2014 2015 2016 2017 2018 - 2022 2023 - 2027 2028-2032 2033-2037 2038-2042Revenues(1)
Event Revenues 32,926 33,914 34,931 35,979 37,059 202,651 234,928 272,346 315,724 366,011 Non-Event Revenues 2,096 2,159 2,224 2,291 2,359 12,902 14,957 17,340 20,101 23,303 Additional Required Revenues (1.50x) 2,287 12,147 25,767 25,844 25,914 132,746 137,933 140,533 143,550 147,051 Total Revenues 37,309 48,220 62,922 64,114 65,332 348,299 387,819 430,219 479,375 536,364
Expenses(1)
Salaries 9 830 10 125 10 429 10 742 11 064 60 503 70 140 81 311 94 262 109 275 RR
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Salaries 9,830 10,125 10,429 10,742 11,064 60,503 70,140 81,311 94,262 109,275 Utilities (Incremental) 1,030 1,061 1,093 1,126 1,159 6,339 7,349 8,520 9,877 11,450 G&A 258 265 273 281 290 1,585 1,837 2,130 2,469 2,862 Event expenses 14,696 15,137 15,591 16,059 16,541 90,452 104,859 121,560 140,921 163,366 Non-Event expenses 11,495 11,840 12,195 12,561 12,937 70,748 82,016 95,079 110,222 127,778 Total Expenses 37,309 38,428 39,581 40,768 41,992 229,627 266,200 308,599 357,751 414,732
Projected NOI (with Additional Revenues) - 9,792 23,341 23,345 23,340 118,672 121,618 121,620 121,624 121,632
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Projected NOI (without Additional Revenues) (2,287) (2,355) (2,426) (2,499) (2,574) (14,073) (16,315) (18,914) (21,926) (25,418)
Projected D/S Requirements:(7)
EB5 Loan(2) (3% Int Only): - 450 450 450 450 1,350 - - - - EB5 Fix-out(2) (6%, 30yr): - - - - - 2,207 5,518 5,518 5,519 5,519
Required Other Financing(5)(6%, 30yr): - 6,078 15,111 15,113 15,110 75,558 75,561 75,562 75,564 75,569 Total Projected Debt Service: - 6,528 15,561 15,563 15,560 79,115 81,079 81,080 81,083 81,088 &
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Revenues in Excess of 1.00x Coverage(8) - 3,264 7,780 7,782 7,780 39,557 40,539 40,540 40,541 40,544
Coverage (with Additional Revenues)(3) n/a 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x 1.50x
Coverage (w/o Additional Revenues)(3) n/a -0.36x -0.16x -0.16x -0.17x -0.18x -0.20x -0.23x -0.27x -0.31x
Notes:(1) Source: Harris County Sports & Convention Corporation. Projected Sources of Funds (000's)(7)
Sources Multipurpose(2) EB5 is a loan program that is related to the number of jobs created by the facility. The amount is an estimate based upon the creation of 150 jobs, and every 10 jobs creates $1 million in loan capacity. ON
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p p
Historic Tax Credit(9) [Equity] 40,550 (3) Coverage based on 3% growth. Rating agencies may require coverage without growth in revenues. New Market Tax Credit(4)[Equity] 12,187
EB5 Loans(2) [Debt] 15,000
Subtotal 67,737
Required Other Financing(6) 202,594 (6)
(5) Estimated debt service on additional required funds needed to finance the project, after accounting for the EB5 loan funds, NMTC and Historic Tax Credits. Assumes a 30 year level debt service financing at the fixed rate of 6.0% with principal amortized from 2015 through 2041.
Other financing vehicles have been identified as potential financing options, but not quantified. Examples include Tax Increment Reinvestment Zone bonds
The EB5 loan assumes a seven year interest only period and upon expiration is refinanced by the issuance of 30 year level debt (the "EB5 Fix-out"), at a rate of 6.0% and principal amortized from 2021 through 2049.
(4) New Market Tax Credit assuming allocation can be found, with credit equal to 39% of allocation secured with market value at 62.5% of effective credit. Due to their limited availability, assumes allocation capped at $50 million.
Member FINRA & SIPC© 2012 First Southwest Company
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Total Project Funding(1) 270,331 (7) The cost of raising funds and necessary carrying costs have not been factored in at this time, because time horizon for revenue has not been finalized. Last year of additional revs: *N/A*(8) Excess Revenues may be used for additional project funding, M&O, early repayment of outstanding debt, etc. Yr of final debt payment: 2049(9) Rehabilitation (Historic) Tax Credit, assuming full 20.00% with 75% realization of tax credits (multipurpose project only).
and Texas Economic Development Fund loans.
Preliminary – For Discussion Purposes OnlyH
ARehabilitation Tax Credits
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Summary of Key Points for Rehabilitation Tax Credits
T dit i il bl t th ( ) d/ th tit h h ld titl t th t
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• Tax credit is available to the person(s) and/or the entity who holds title to the property
• In general, project can receive a tax credit equal to 20% of total costs directly related to the repair or improvement of structural and architectural features of the historic building
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– Construction period interest and taxes, architect fees, engineering fees, construction management costs, reasonable developer fees, and any other fees paid that would normally be charged to a capital account may also be used towards the tax credit basis Y
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be charged to a capital account may also be used towards the tax credit basis
• Expenditures must exceed adjusted basis of building
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– Must be careful on expenditures occurring before the rehabilitation period, potentially increasing the basis
• The entity may then sell these tax credits in exchange for cash to be used towards these ON
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• The entity may then sell these tax credits in exchange for cash to be used towards these qualified costs
– If trying to monetize rehabilitation credit, value will be less than value of tax credit
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Summary of Key Points for Rehabilitation Tax Credits
• Rehabilitation credit is available in the year the building is placed in service
HA
Rehabilitation credit is available in the year the building is placed in service
• Rehabilitation tax credit for taxpayers using straight line depreciation, non residential up to 39 years
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– This may imply that the owner of the building is a taxpayer
• Rehabilitation must be done according to the “Standards for Rehabilitation” as defined by YS
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• Rehabilitation must be done according to the Standards for Rehabilitation as defined by Secretary of Interior
– Final work must be certified by the Secretary of Interior &
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• Will want to consult with Project Developer/Contractor with respect to program, their experience with program and restrictions of program, which may impede building completion timelines O
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timelines
• Consider seeking RFPs from qualified responders to work with Corporation with respect to Historic Tax Credit project funding
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Preliminary – For Discussion Purposes OnlyH
ANew Market Tax Credits
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Summary of Key Points for New Market Tax Credit Program
P id dit i t f d l i t f i t th t k Q lifi d E it
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• Provides a credit against federal income taxes for investors that make Qualified Equity Investments into Community Development Entities (“CDEs”)
• CDEs in turn use the proceeds of these investments to make Qualified Low-Income
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Community Investments
• The credit is taken over a 7 year period
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• The credit rate is:– In each of the first three years, 5% of the original investment amount– In each of the final four years, 6% of the original investment amount &
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y , g• Above equals 39% of amount of original investment
• New Market Tax Credits are offered to investors for “Qualified Equity Investments” (QEIs) in h C
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the CDE
• QEIs must remain invested in the CDE during the 7 year tax credit period
Member FINRA & SIPC© 2012 First Southwest Company
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17
Key Provisions of the New Market Tax Credit Program
• General Items of Consideration:
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General Items of Consideration:– If the investment in the project is structured with required repayment (as opposed to donation)
the term of repayment is generally equal to the 7 year tax credit period
– Qualified Active Low-Income Community Businesses may be required to be a tax paying entity i Q lifi d L I C i I R
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to receive Qualified Low-Income Community Investments
– Transaction size generally ranges from $5 to $25 Million • For project sizes larger than this, a separate component of the total project might be
broken out as a possibility YS
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broken out as a possibility
• The transaction size for this contemplated project is much larger than ordinary, which may make the total amount of eligible allocation more difficult to obtain, because of this we have capped the amount of allocation available at $50 million.
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– Large banks with a separate New Market Tax Credit Group are potential investors and NMTC purchasers for qualified projects
– In the event the project qualifies, we anticipate ample supply of credits from entities who have been funded with New Market Tax Credits O
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been funded with New Market Tax Credits
– Consider issuing a RFP to qualified entities and consultants to respond with NMTC equity proposals
Member FINRA & SIPC© 2012 First Southwest Company
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– Fees and costs tend to be extremely high on the percentage of equity received and structure will result in added level of complexity and creation of various legal entities required for program
18
Preliminary – For Discussion Purposes OnlyH
AEB-5 Program
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Tab E
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Member FINRA & SIPC© 2012 First Southwest Company
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H A R R I S C O U N T Y S P O R T S & C O N V E N T I O N C O R P O R A T I O N May 23, 2012
Key Provisions of the EB-5 Program
EB5 i l h i l d h b f j b d b h f ili
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• EB5 is a loan program that is related to the number of jobs created by the facility
• Assumes a maximum of 800 of the 934* jobs created will be on a full-time basis
• EB5 loans have 7 year term Analysis assumes interest only until expiration Loan amount is RR
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• EB5 loans have 7 year term. Analysis assumes interest only until expiration. Loan amount is refinance over 30 years upon expiration.
• Assumes project location is not designated in a Targeted Employment Area. Non-TEA designation requires minimum of $1,000,000 per investor
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• A Regional Center (RC) is usually the conduit through which the investments are made
• Investors may be required to participate in the operational management; in practice, this can be satisfied by: &
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satisfied by:– taking a managing position, – participating in the decision-making process, or– being a limited partner in a LLP
• In some cases, the participation requirement may be waived ON
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• USCIS requires confirmation that all such investments are classified as being "at risk" with no specific guarantees being made by the project developers to the EB-5 investor
Member FINRA & SIPC© 2012 First Southwest Company
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_____________*Source: Harris County Sports & Convention Corporation
20
Preliminary – For Discussion Purposes OnlyH
ATax Increment Financing
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Tab F
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Member FINRA & SIPC© 2012 First Southwest Company
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H A R R I S C O U N T Y S P O R T S & C O N V E N T I O N C O R P O R A T I O N May 23, 2012
Tax Increment FinancingH
A
• Tax Increment Financing is a financing that is financed through an entity that captures the growth in ad valorem tax base, resulting in capturing of tax dollars for a specific purpose
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• Captured value is on real property, not personal property
• To be effective, multiple governmental entities opt in to create a more robust revenue stream.
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School districts can not participate in Tax increment financings
• The growth in tax base is critical to financing a project predicated on increasing the assessed value in an area &
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value in an area
• Usually requires a separate entity to finance and/or administer financing over the life of the increment period
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Member FINRA & SIPC© 2012 First Southwest Company
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Tax Increment Financing Characteristics
T i t i ll 20 b t t t t d b d i d f t i t
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• Term is typically 20 years, but must not extend beyond period of tax increment
• Significant analysis of taxpayers within tax increment district:• Concentration/Diversification of captured appraised value R
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Concentration/Diversification of captured appraised value• Due diligence on top taxpayers• Ability of major taxpayers to protest tax rolls• Historical tax collections
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• Risk of devaluation of assets in increment
• Most likely, credit agencies will not allow significant growth, if any, in analyzing ability to repay debt for an investment grade rating &
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repay debt for an investment grade rating
• Debt usually has limitation on issuance of additional debt
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• If during ramp up period of assessed valuation related to project, capitalized interest may be used, but reduces net proceeds available for project
• Most likely will require a debt service reserve fund further reducing net proceeds
Member FINRA & SIPC© 2012 First Southwest Company
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• Most likely will require a debt service reserve fund, further reducing net proceeds
DisclaimerFirst Southwest Company (“FirstSouthwest”) has received certain documents, reports, financial statements and other items
HA
p y ( ) , p ,of information (such information and data referred to in this paragraph as the “Information”) for the purpose of preparingthis preliminary analysis. With respect to the Information provided to us by the Harris County Sports & ConventionCorporation (the “Corporation”) for the purpose of this discussion, with the Corporation’s permission, (i) we have assumedthe accuracy and completeness of such information for purposes of this discussion, (ii) we have made no effort toindependently verify or confirm the accuracy or completeness of such Information and (iii) we make no representation or R
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depe de t y ve y o co t e accu acy o co p ete ess o suc o at o a d ( ) we a e o ep ese tat o owarranty with respect thereto, including but not limited to the work product of any of the Corporation’s other consultants.
All opinions and estimates are given as of the date hereof and are subject to change. Any preliminary financial analysis issubject to uncertainties. Inevitably, some assumptions used will not be realized and unanticipated events and circumstances
A l h b t ti t t thi ti ith th i f ti il bl Th id d f YS
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may occur. Any values shown are our best estimate at this time with the information available. They are provided forinformation purposes only and are not guaranteed for accuracy or as realizable values.
This preliminary analysis is provided as an overview for the Corporation’s information and benefit only and may not berelied upon in any manner whatsoever by any other person, and shall not be not be disclosed, redistributed, provided to or &
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p y y y p , , , putilized by others without the prior written consent of FirstSouthwest.
Neither FirstSouthwest nor any of its affiliates shall have any liability, contingent or otherwise, for any use of theinformation set out or referred to herein. FirstSouthwest assumes no liability and shall not be responsible for any resultsfrom the use of this analysis or any subsequent modification whatsoever to the analysis provided to the Corporation from O
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from the use of this analysis or any subsequent modification whatsoever to the analysis provided to the Corporation fromFirstSouthwest, and the Corporation waives any claims against FirstSouthwest that may be connected thereto.
FirstSouthwest, its representatives and affiliates make no representation and have given the Corporation no adviceconcerning the appropriate accounting treatment or possible tax consequences of the information contained herein. The
Member FINRA & SIPC© 2012 First Southwest Company
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g pp p g p qCorporation should consult with its own accounting and tax advisors, as applicable, to the extent it deems appropriate toensure that the risks are fully understood
24