Oct. 12, 2015 - Arena Feasibility Study

STRATEG IC FEAS IB I L I TY STUDY

MAY 6 , 2015

FEASIBILITY TEAM INTRODUCTION

ROCHESTER SPORTS & ENTERTAINMENT ARENASTRATEGIC FEASIBILITY STUDY

Hammes Company is a full‐service real estate development and investment firm.We have been directly involved in leading several of the largest and mostcomplex sports and entertainment destination projects in the industry over thepast decade.


Hammes Company is one of America’s leading real estate advisory, development and investment companies. Ourprimary business is working with leading institutions – both public and private – to devise and execute communityeconomic development and investment strategies.

Mayo Clinic

National Football League

Green Bay Packers

State of Wisconsin

University of Wisconsin –Madison

Milwaukee Bucks

Cleveland Browns

Minnesota Sports Facility Authority / Minnesota Vikings

City of Allentown, Pennsylvania

Detroit Lions

Ford Family

Tisch Family Interests / NY Giants

Robert Wood Johnson IV / NY Jets

University of Southern California


Sink Combs Dethlefs has a long standing reputation for excellence in eventfacility design. Over the Past 53 years, we have designed:

50+ Arenas & Event Centers 250+ Sports & Entertainment Projects Projects in 31 States & 5 Countries 45+ Nationally Award‐Winning Projects


Sink Combs Dethlefs understands the functional aspects of an entertainment venue: the moving parts, that make a building orcomplex successful. The vision; the atmosphere; the impression it leaves; is one of the defining aspects of a facility and the one ofthe hardest to achieve. It takes great consideration of space and place. The building must function to a degree that function goesunnoticed for the atmosphere of a campus venue to shine through.

Target Center

Crisler Center

PPL Center

Cross Insurance Arena

Cedar Park Events Center

MTS Centre

The Schottenstein Center

Inner Mongolia Event Center

Chesapeake Energy Arena

Erie Insurance Arena

1st Bank Event Center

Independence Event Center

Denny Sanford Premier Center

Robins Center


Since 1996, Johnson Consulting has been serving public‐ and private‐sectorclients in North America and worldwide. Our clients include state, county, andmunicipal governments, sports franchise owners and teams, convention andvisitors bureaus, asset and portfolio managers, financial institutions, private‐sector developers, and universities and colleges.

INTRODUCTION


Introduction / Statement of the Problem:Although the $79 million of Civic Center improvements currently under construction are significant, theCity of Rochester is still in need of a modern multi‐purpose community arena, which would addsignificant support to the success of to the Civic Center complex as well as helping to establishRochester as a major regional destination for business, hospitality, entertainment and sports.

Benefits of New Arena:• A vibrant and flexible downtown gathering place for the Rochester community

• Significant return on public investment, including economic and fiscal impacts

• Increased diversity and number of arena events

• Increased overall visitation and activity for downtown Rochester

• Hotel room nights

• Restaurant and bar revenue

• Support service revenue

• Retail activity

• New Jobs


Key Issues:

• Taylor Arena, the existing venue added to the Civic Center in 1986, can only accommodate amaximum of 3,400 patrons in permanent seats and up to approximately 4,900 patronswhen temporary chairs are added.

• The sightlines from the permanent seating positions are poor for most events as comparedto modern arenas and concert venues.

• Operational flexibility is limited for many event types, including concerts, family shows,hockey and other sports. Promotors do not like the configuration.

• Arena and adjacent park areas need to work together to create operational synergies andnew event opportunities.

• Due to these limitations and its age, the Taylor Arena is nearing functional obsolescence andis not allowing Rochester to reach its full potential as a regional destination forentertainment and sports – as well as the significant collateral benefits that are associatedwith these events.


Overview of the Study:This study provides a vision for a new, state of the art, multi‐purpose arena at the MayoCivic Center.

• Evaluation of the Rochester market and potential demand to support the arena andspecific arena uses including USHL, concerts, trade shows, family shows and otherevents.

• Provide preliminary recommendations for arena size, configuration, program andpotential enhancements (e.g. connections to the adjacent park and convention center).

• Create target budget ranges for several arena options

• Discuss of potential economic impacts of the proposed arena.

• Provide a preliminary development schedule and discuss next steps.

MARKET ASSESSMENT


Market Assessment Overview:

We have engaged Johnson Consulting, based in Chicago, to provide market data related to the USHL, concerts, family shows, trade shows and other events due to their familiarity with the upper Midwest market.

• Assessment of Median Household Income and employment base in comparison to national averages and other competing markets. This is good indicator of greater levels of disposable income for entertainment spending.

• Evaluation of average USHL attendance per game in other markets as an indicator for potential attendance ranges in Rochester.

• Preliminary assessment of demand for concerts, family shows and other events

• Preliminary assessment of potential demand ranges for premium seating including Suites, Club Seats and Loge Boxes.

• Identification of future study needs including user surveys and promoter surveys to better understand detailed demand by segment (Premium, GA other), pricing and event mix.


MARKET ANALYSIS OF ROCHESTER, MN ARENA

2000 2010 2015 % Growth 2000-2010

% Growth 2010-2015

CAGR*2000-2015

U.S. 281,421,906 308,745,538 318,536,439 9.7% 3.2% 0.8%

Minnesota 4,919,479 5,303,925 5,442,213 7.8% 2.6% 0.7%

Rochester MSA 184,740 206,877 213,487 12.0% 3.2% 1.0%

City of Rochester 91,816 106,769 110,887 16.3% 3.9% 1.3%

* Compounded Annual Grow th RateSource: Esri ArcGIS BAO, Johnson Consulting

Historic & Current Population - City of Rochester (2000-2015)

Market Overview

• Strong Population Growth of 1.3% annually since 2000

• Both City (1.3%) and MSA (1.0%) are growing at a rate faster than the rest of Minnesota (0.7%)

• Very Strong Median Household Income ($64,146 Rochester vs $53,217 National), a key indicator for greater levels of disposable income for entertainment spending

• Strong Growth in Median Household Income is projected

2015 2020 % Growth 2015-2020

CAGR* 2015-2020

U.S. $53,217 $60,683 14.0% 2.7%

Minnesota $60,056 $70,243 17.0% 3.2%

Rochester MSA $63,939 $75,688 18.4% 3.4%

Rochester City $64,146 $75,457 17.6% 3.3%

* Compounded Annual Growth RateSource: Esri ArcGIS BAO, Johnson Consulting

Median Household Income - City of Rochester (2015-2020)


2015 MEDIAN HOUSEHOLD INCOME BY ZIP CODE


MARKET ANALYSIS OF ROCHESTER, MN ARENA

Market Overview

• City of Rochester has very low unemployment rate of 3%which is about half of the national average of 5.2%

• Relatively high median income levels for local and regionalpopulation base

Rate Change Rate Change Rate Change Rate Change Rate Change

2010 5.9% - 7.4% - 5.9% - 6.3% - 9.6% -

2011 5.3% (0.6) 6.5% (0.9) 5.3% (0.6) 5.6% (0.7) 8.9% (0.7)

2012 4.4% (0.9) 5.6% (0.9) 4.4% (0.9) 4.6% (1.0) 8.1% (0.8)

2013 4.0% (0.4) 4.9% (0.7) 4% (0.4) 4.2% (0.4) 7.4% (0.7)

2014* 3.4% (0.6) 4.1% (0.8) 3% (0.6) 3.6% (0.6) 6.2% (1.2)

*December 2014 is most recent data availableSource: Bureau of Labor Statistics, Johnson Consulting

Unemployment Rate - Olmsted County (2004-2013)

Olmsted County Rochester MSA U.S.Rochester City Minnesota

Employer Industry Employees

Mayo Clininc Health Care 35,000

IBM Electronic 4,400*

Rochester Public Schools Education 2,460

Olmsted County Government 1,204

Olmsted Medical Center Health Care 1,200

McNeilus Truck & Manuf Mobile Concrete mixers, garbage trucks

1,050

Charter Communications Communications 873

City of Rochester Local Government 840

Kahler Hospitality Group Hotel/Restaurant Services 680

Crenio Fabricated Metal 652

RCTC Post Secondary Education 500

Federal Medical Center Corrections/Medical 450

Reichel Foods Refrigerated Lunch & Snacks

450

Samaritan Bethany, Inc. Health Care 440

Seneca Food Food Processing 400

Benchmark Electronics Design/Engineering 396

Hiawatha Homes Res.Services 380

Kemps Food Processing 341

McNeilus Steel, Inc Steel Fabrication 321

Cardinal of Minnesota, Ltd Res/Services 300

Pace Dairy Food Processing 280

Halcon Manufacturing 255

Think Bank Banking 250

Rochester Meat Company Meat Processor 250

Bard Medical Manufacturing 250

*Noted on IBM website

Source: Rochester Area Economic Development, Johnson Consulting

Largest Employers - Rochester MSA


REGIONAL FACILITIES

Venue Year Opened # of Seats Distance from Rochester LocationLa Crosse Center 1980 5,000-7,500 70 LaCrosse, WI

Xcel Energy Center 2000 18,568 80 St. Paul, MN

Verizon Wireless Center 1995 5,280 80 Mankato, MNTarget Center 1990 19,356 85 Minneapolis, MNYoung Arena 1994 3,000 119 Waterloo, IA

UNI-Dome 1976 16,324 120 Cedar Falls, IASources: Johson Consulting, Facility Websites, Mapquest

Competive Regional Venues within 120 Miles/ 2 Hr Drive Time

Market Overview ‐ Conclusions

• Opportunity for Rochester to have the best and mostflexible medium‐size arena within 120‐mile radius

• Would be highly competitive geographically for sports,concerts, festivals, trade shows, family shows and otherevents

ARENA DEVELOPMENT TRENDS &USHL OVERVIEW


USHL DEMOGRAPHIC COMPARISONUSHL Profile

• Rochester is consistent with or above average in key demographic variables as compared to other USHL markets

Demographic Variable RochesterRank out

of 17 Average High LowPopulation 110,887 7 120,675 422,895 18,623Total Households 45,067 7 48,412 168,838 6,378Median Household Income $64,146 2 $48,766 $79,896 $24,982Entertainment Spending $34,878,289 5 $28,529,468 $94,190,028 $3,799,214Corporate Inventory 4,924 7 5,742 20,630 1,646


of 17 Average High LowPopulation 206,327 13 725,250 6,685,461 63,107Total Households 81,627 13 279,773 2,503,248 25,188Median Household Income $65,921 1 $54,746 - $41,640Entertainment Spending $61,343,335 9 $200,415,719 $2,023,280,689 $12,668,127Corporate Inventory 8,769 12 5,742 1,646 20,630


of 17 Average High LowPopulation 213,487 11 9,557,057 906,017 54,667Total Households 91,785 11 344,171 292,158 28,132,666Median Household Income $63,939 1 $53,308 - $40,764Entertainment Spending $61,254,719 9 $245,064,075 $2,727,239,308 $10,967,131Corporate Inventory 9,404 11 37,184 385,105 2,902

USHL Markets (City)

USHL Markets (25 mi Radius)

USHL Markets (MSA)


USHL MARKET ANALYSISUSHL Historical Average Attendance per Game

• 3 ‐ Year Average USHL Attendance per Game =

2,914

• Percent of Average Attendance per game to population = 3.03%

• Applying USHL average percentage to Rochester’s population =

110,887 x 3.03% 3,361 *

* Potential per game attendance

Team* Market 2012-13 2013-2014 2014-15Youngstown Phantoms Youngstown, OH 63,562 1,371 1,402 1,410 1,394 2.19%Chicago Steel Bensenville, IL 18,623 1,402 1,420 1,410 1,411 7.57%Bloomington Thunder Bloomington, IL 79,119 N/A N/A 2,028 2,028 2.56%Muskegon Lumberjacks Muskegon, MI 37,699 2,342 2,208 2,089 2,213 5.87%Des Moines Buccaneers Urbandale, IA 43,067 2,578 2,394 2,414 2,462 5.72%Dubuque Fighting Saint Dubuque, IA 59,085 2,562 2,606 2,527 2,565 4.34%Waterloo Black Hawks Waterloo, IA 69,552 2,667 2,693 2,425 2,595 3.73%Tri-City Storm Kearney, NE 32,208 2,426 2,683 2,704 2,604 8.09%

Cedar Rapids Rough Riders Cedar Rapids, IA 129,383 2,663 2,655 2,735 2,684 2.07%

Sioux City Musketeers Sioux City, IA 83,018 2,523 2,886 2,774 2,728 3.29%121,287 2,798 2,795 2,850 2,801 3.63%

Madison Capitols Madison, WI 240,627 N/A N/A 3,244 3,244 1.35%

Green Bay Gamblers Green Bay, WI 104,952 3,315 3,450 3,416 3,394 3.23%

Omaha Lancers Omaha, NE 422,895 3,587 3,324 3,301 3,404 0.80%Lincoln Stars Lincoln, NE 270,141 3,949 3,642 3,197 3,596 1.33%

Fargo Force Fargo, ND 118,456 3,902 3,515 3,543 3,653 3.08%Sioux Falls Stampede Sioux Falls, SD 168,198 3,884 4,256 6,376 4,839 2.88%

110,887 - - -* Excludes USA Development Team**2014-2015 Expansion Teams

Source: ESRI, Pointstreak, Johnson Consulting

USHL Market Population and Average Team Attendance (2012-2015)

City Population

Attendance% of Historical Avg Attend to

Population

3YR Historical

Avg per GM

Rochester, MN

Average


USHL MARKET ANALYSIS

Applying league Avg Attend to League Avg Pop Ratio = 206,327x 1.21%

2,502 per gameattendance

Expected range of per GM attend = 2,500 – 3,500

• Avg Ratio of Attendance per game to 25 MI Radius population = 1.21%

Team Hockey Arena Location Year Opened Population 25 Mile

Population Capacity*3YR Avg. per

GM Attendance

% of Avg per GM

Attendance to Capacity

City Ratio of Avg

Attend to Population

25 Mile Ratio of Avg

Attend to Population

Sioux Falls Stampede Denny Sanford Premier Center

Sioux Falls, SD 2014 168,198 244,041 10,600 4,839 46% 2.88% 1.98%Omaha Lancers Ralston Arena Omaha, NE 2012 422,895 858,595 4,000 3,404 85% 0.80% 0.40%Dubuque Fighting Saints Mystique Ice Center Dubuque, IA 2010 59,085 157,900 3,079 2,565 83% 4.34% 1.62%Des Moines Buccaneers Buccaneer Arena Urbandale, IA 2008 43,067 606,369 3,408 2,462 72% 5.72% 0.41%Fargo Force Scheels Arena Fargo, ND 2008 118,456 221,888 5,000 3,653 73% 3.08% 1.65%Bloomington Thunder U. S. Cellular Coliseum Bloomington, IL 2006 79,119 222,325 7,000 2,028 29% 2.56% 0.91%Youngstown Phantoms Covelli Centre Youngstown, OH 2005 63,562 661,432 5,717 1,394 24% 2.19% 0.21%Sioux City Musketeers Tyson Event Center Sioux City, IA 2003 83,018 158,428 9,500 2,728 29% 3.29% 1.72%Green Bay Gamblers Resch Center Green Bay, WI 2002 104,952 466,102 8,709 3,394 39% 3.23% 0.73%Cedar Rapids RoughRiders Cedar Rapids Ice Arena Cedar Rapids, IA 2000 129,383 385,045 4,000 2,684 67% 2.07% 0.70%Tri-City Storm Viaero Events Center Kearney, NE 2000 32,208 63,107 5,000 2,604 52% 8.08% 4.13%Chicago Steel Edge Ice Arena Bensenville, IL 1997 18,623 6,685,461 3,000 1,411 47% 7.58% 0.02%Lincoln Stars The Ice Box Lincoln, NE 1995 270,141 339,749 5,010 3,596 72% 1.33% 1.06%Waterloo Black Hawks Young Arena Waterloo, IA 1994 69,552 195,212 3,000 2,595 87% 3.73% 1.33%Madison Capitols Alliant Energy Center Madison, WI 1967 240,627 577,164 7,890 3,244 41% 1.35% 0.56%Muskegon Lumberjacks L. C. Walker Arena Muskegon, MI 1960 37,699 280,104 5,100 2,213 43% 5.87% 0.79%

1999 121,287 362,497 5,626 2,801 56% 3.63% 1.21%

110,887 206,327 4,028 2,502

* Hockey CapacitySource: USHL, Individual Venue Sites, Johnson Consulting

United States Hockey League

Average

Rochester

Comparison of USHL Arenas & Markets


Facility Name MSA Population Median Income

Entertainment Spending Tenant(s) Capacity

# of Luxury Suites

# of Club Seats

Annual Naming Rights

Term Total Naming Rights

Estimated Cost

(millions)

Year Opened

Denny Sanford PREMIER Center Sioux Falls, SD 248,891 $55,002 $60,526,781 USHL, IFL 12,000* 38 500** - - - $150 2014PPL Center Allentown-Bethlehem-Easton, PA-NJ 835,683 $58,477 $224,607,036 AHL 8,500 36 986 - 10 - $272 2014Cross Insurance Center Bangor, ME 156,378 $40,861 $28,657,652 None 8,078 12 - $200,000 15 $3,000,000 $65 2013Cedar Park Center Austin-Round Rock, TX 1,917,917 $62,597 $546,603,306 AHL, NBADL 6,660 22 541 - - - - 2009ShoWare Center Seattle-Tacoma-Bellevue, WA 3,629,702 $68,802 $1,182,479,316 WHL, WFTDA 7,500 20 500 $317,500 10 $3,175,000 $68 2009Huntington Center Toledo, OH 607,965 $44,818 $130,504,672 ECHL 8,000 20 - $300,000 7 $2,100,000 $105 2009Town Toyota Center Wenatchee, WA 114,715 $51,850 $23,460,682 NAHL, IFL 5,000 26 397 $200,000 5 $1,000,000 $45 2008U.S. Cellular Arena Bloomington, IL 192,567 $59,983 $50,080,652 MISL,USHL 7,000 24 700 $345,000 6 $2,070,000 $37 20061st Bank Center Denver-Aurora-Lakewood, CO 2,703,067 $64,675 $847,956,846 None 6,000 25 900 - 5 - $45 2006Santa Ana Star Center Albuquerque, NM 907,398 $48,813 $205,378,292 NAHL, IFL 6,500 26 500 $500,000 5 $2,500,000 $43 2006Tim's Toyota Center Prescott, AZ 220,671 $43,284 $42,889,379 CHL, AIF 5,100 20 500 $175,000 10 $1,750,000 $24 2006Stockton Events Center Stockton-Lodi, CA 711,503 $53,784 $141,724,907 ECHL, AIF 10,000 24 500 - - - $45 2005Covelli Centre Youngstown-Warren-Boardman, OH-PA 552,952 $41,103 $100,443,018 USHL, WFTDA 5,700 24 500 $120,000 3 $360,000 $41 2005

American Bank Center Corpus Christi, TX 445,656 $48,010 $86,828,124 Texas A&M-CC, NAHL, LSFL 6,000 11 302 - 10 Not Discolsed $50 2004

Budweiser Events Center Fort Collins-Loveland, CO 320,463 $60,647 $91,878,995 ECHL, IFL 5,211 24 777 $75,000 20 $15,000,000 $25 2003Comcast Arena At Everett Events Center Seattle-Tacoma-Bellevue, WA 3,629,702 $68,802 $1,182,479,316 WHL, NLL, RDCL 8,250 20 750 $740,000 10 $7,400,000 $63 2003State Farm Arena McAllen-Edinburg- Mission, TX 838,600 $34,176 $93,826,543 CHL, LSFL 5,500 25 500 $200,000 5 $1,000,000 $20 2003

Orleans Arena Las Vegas-Henderson-Paradise, NV 2,083,955 $52,541 $454,919,669 ECHL, WCC, WAC, LFL, PASL-Pro

7,000 22 220 - - - $150 2003

Ford Arena Beaumont-Port Authur, TX 413,556 $46,025 $76,547,042 ABA 8,200 15 750 $250,000 5 $1,250,000 $70 2003Tyson Events Center Sioux City, IA-NE-SD 171,347 $50,336 $32,728,056 USHL, APFL 10,000 27 0 $200,000 20 $4,000,000 $28.10 2003

1,035,134 $52,729 $280,226,014 7,063 23 548 278,654 9 3,431,154 71 2,007*10,600 Hockey Capacity (Only Profiled Facility w/10,000+ capacity)Estimated based on Stadium MapSource: RSV, Respective Venues, Johnson Consulting

New Arenas Since 2003 with Less Than 10,000-seat Capacity

Average 2007

NEW ARENA DEVELOPMENT TRENDS


CLUB LEVEL & SUITES OVERVIEW

Team Hockey Arena Location Year Opened Population Capacity* # of Suites

Sioux Falls Stampede Denny Sanford Premier Center Sioux Falls, SD 2014 168,198 10,600 22

Omaha Lancers Ralston Arena Omaha, NE 2012 422,895 4,000 12

Dubuque Fighting Saints Mystique Ice Center Dubuque, IA 2010 59,085 3,079 11

Des Moines Buccaneers Buccaneer Arena Urbandale, IA 2008 43,067 3,408 2

Fargo Force Scheels Arena Fargo, ND 2008 118,456 5,000 38

Bloomington Thunder U. S. Cellular Coliseum Bloomington, IL 2006 79,119 7,000 2

Youngstown Phantoms Covelli Centre Youngstown, OH 2005 63,562 5,717 26

Sioux City Musketeers Tyson Event Center Sioux City, IA 2003 83,018 9,500 30

Green Bay Gamblers Resch Center Green Bay, WI 2002 104,952 8,709 25

Cedar Rapids RoughRiders Cedar Rapids Ice Arena Cedar Rapids, IA 2000 129,383 4,000 7

Tri-City Storm Viaero Events Center Kearney, NE 2000 32,208 5,000 20

Chicago Steel Edge Ice Arena Bensenville, IL 1997 18,623 3,000 9

Lincoln Stars The Ice Box Lincoln, NE 1995 270,141 5,010 2

Waterloo Black Hawks Young Arena Waterloo, IA 1994 69,552 3,000 0

Madison Capitols Alliant Energy Center Madison, WI 1967 240,627 7,890 8

Muskegon Lumberjacks L. C. Walker Arena Muskegon, MI 1960 37,699 5,100 12

1999 121,287 5,626

110,887

Average

Rochester

Comparison of USHL Arenas & MarketsUnited States Hockey League

14

United States Hockey LeagueComparison of USHL Arenas & Markets


PREMIUM INVENTORY ASSESSMENT:Based on comparable arenas in similar markets, including USHL arenas, the Market Assessment indicates the following Premium Inventory for the Arena could be supportable:*

Club Seats: 500 to 700 SeatsUpgraded seats with sideline location, convenient access to adjacent club lounge with enhanced food service. Generally includes premium parking.

Suites: 12 to 20 Suites (including 1‐2 Party Suites for daily rental, which may contain additional seats)Private, enclosed suites including premium finishes and furniture with 12 to14 seating positions including drink rail seating. Generally includes premium parking.

Loge: 8 to 14 Loge BoxesSemi‐Private open boxes with 4 to 6 seating positions including upgraded movable chairs, standing room and drink rails or tables. Seats have a sideline location, convenient access to the club lounge and enhanced food service. Generally includes premium parking.

Note: Additional study and research is required to finalize the premium inventory and establish demand or pricing, including individual user surveys, corporate surveys and focus groups.


SUMMARY AND CONCLUSIONS:

• Strong Median Household Income ($64,146 Rochester vs $53,217 National), and growth is a keyindicator for greater levels of disposable income for entertainment spending.

• Solid employer base anchored by Mayo Clinic is a key indicator of demand for all event types aswell as premium seating demand.

• 3 ‐ Year Average USHL Attendance per Game is approximately 2,800. Johnson Consulting’sanalysis indicates average USHL attendance in Rochester may be in the range at 2,500 to 3,500 pergame when certain adjustments are made to account for larger markets.

• The USHL is a viable and growing league that is much stronger than it was in 2002.

• Suite count in comparable markets and recent arenas is generally 12 ‐ 24 Suites. Mayo may favorNon‐Suite premium seating such as Loge Boxes and Club Seats

• Loge Boxes are a strong trend Nationally and appear to be supportable in Rochester. PotentialInventory could be projected at 8 to 14 Loge Boxes with 4 to 6 seats each.

• Club Seat range in comparable markets and recent arenas is generally 500 to 900. Higher end ofthe range appears to be supportable in Rochester.

ARENA CONCERT MARKETOVERVIEW


INDUSTRY TRENDS – CONCERTS

Industry Trends ‐Concerts

• Only a small number of acts in the industry that can sellout larger venues

• Solid market of potential concerts to draw from with a midsize arena (5,000 to 9,000 +/‐ 94% of Top 101 to 200 grossing tours )

• National Promoters favor the Rochester Market and would like to have more events here if a new downtown arena was constructed.


INDUSTRY TRENDS – FAMILY EVENTSIndustry Trends

• Discussions with promoters from Feld Entertainment were very optimistic for the Rochester marketplace as it relates to their desire to host shows at a new venue

• Such family shows as the WWE are already preforming in the Rochester marketplace, which is a strong indicator given their historically higher than average ticket price per event

ROCHESTER SPORTS & ENTERTAINMENT ARENASTRATEGIC FEASIBILITY STUDYIndustry Trends – Flexible Arena Configuration


PROJECTED DEMAND

Johnson Consulting expects that the following projections are reasonable based on comparablefacilities and their knowledge of the market for concerts and other arena events

Sources: Johnson ConsultingAssumes a USHL team as a Sports Tenant; certain events including: flat‐floor events, non tenant‐sports events, family shows and others may be multi‐day events.

# of Events Avg.

AttendanceTotal

Attendance # of Events Avg.

AttendanceTotal

Attendance # of Events Avg.

AttendanceTotal

Attendance

Worst Case Base Case Best Case

Projected Demand for Proposed Arena Rochester, MN

3025 35

Sports Tenant 32 2,500 80,000 32 3,000 96,000 32 3,500 112,000Family Shows 16 3,300 51,975 19 3,500 66,150 21 4,000 84,000Concerts 8 6,000 49,500 10 7,200 71,280 11 8,000 88,000Non Tenant‐Sport Events 25 2,500 62,500 30 3,000 90,000 35 3,500 122,500Flat‐Floor Events 5 2,625 13,781 6 3,150 19,845 7 3,500 24,500Graduations / Civic 3 3,000 9,000 3 3,600 9,720 3 4,000 12,000Banquets / Meetings / Parties 8 188 1,547 10 225 2,228 11 250 2,750Other 5 3,375 17,719 6 4,050 25,515 7 4,500 31,500

Total 102 ‐ 286,022 116 ‐ 380,738 127 ‐ 477,250

Avg. Attendance

Total Attendance # of Events

Avg. Attendance # of Events

Avg. Attendance

Total Attendance

Worst Case Base Case Best Case

# of EventsTotal

Attendance

Sources: Johnson Consulting and Mayo Civic CenterAssumes a USHL team as a Sports Tenant; certain events including: flat‐floor events, non tenant‐sports events, family shows and others may be multi‐day events.

PRELIMINARY ARENA PROGRAM OVERVIEW


Description

Seat Count

TotalTelescopic Fixed Premium Seating

Total

Option 1A Diagonal, Main Level Concourse, 2 Level

950 1,700 800 4,000 141,242 SF

Option 1B Diagonal, Main Level Concourse, 2 Level

1,500 2,700 800 5,000 150,000 SF

Option 2A Diagonal, Elevated Concourse, 3 Level

1,975 3,434 1,100 6,500 194,546 SF

Option 2B Diagonal, Main Level Concourse, 2 Level

1,660 3,640 700 6,000 156,180 SF

Option 2C Diagonal, Main Level Concourse, 2 Level, Practice Court

1,660 3,640 700 6,000 177,705 SF

Option 3 East‐West, Elevated Concourse, 3 Level

2,230 2,570 1,000 5,800 191,549 SF

ARENA PROGRAMMING OPTIONS

OPTION 1A: 4,000 SEATS


Option 1A ‐ 45 degree SE Site Orientation with the Event / Concourse at Street LevelLevels – (2 total) Shared Event ‐ Concourse Level / Suite Level Seating Capacity Hockey – 4,000 seats Seating Capacity Basketball – 4,650 seatsSeating Capacity Concerts (end stage configuration)– 4,800 seats Trade Events (flat floor) ‐ 27,000 Sq. Ft. (160) 10x10 BoothsBuilding Area – 141,242 (Gross SF)Special Features ‐ ¾ (horseshoe) Bowl configuration (reduces square footage but keeps the arena integrity) / 50’ clear to underside of truss / Center‐hung scoreboard optional / Exterior Views to the park / Optional exterior amphitheater seating for 2,500 patrons / Flexible event configurations / End stage balcony style seating. Connections and Synergies between elements – Connection to the Mayo Civic Center at the SW Event and Suite Level / Shared Loading / Shared Commissary / Direct access to the park. Pros – Lowest Square Footage of the options / Exterior views to the park / Site Orientation / Reduced amount of trees being removed from the park. Cons – Challenging Capacity for attracting larger concerts / does not allow for future growth / reduced end stage concert capacity due to stage placement / reduced concourse circulation.


TOWN TOYOTA CENTER (WENTACHEE)


TYPICAL CONCOURSE – DODGE CITY


Option 1A:‐ 4,000 Seats‐Main Level Concourse‐ 2 Seating Levels


Option 1A: 4,000 Seats‐ Event / Concourse Level


Option 1: 4,000 Seats‐ Suite Level

OPTION 1B: 5,000 SEATS


Option 1B – 45 degree SE Site Orientation with the Event / Concourse at Street LevelLevels – (2 total) Shared Event ‐ Concourse Level / SuiteSeating Capacity Hockey – 5,000 seats Seating Capacity Basketball – 6,000 seatsSeating Capacity Concerts (end stage configuration)– 6,200 seats Trade Events (flat floor) – 32,000 Sq. Ft. (185) 10x10 BoothsBuilding Area – 150,000 (Gross SF)Special Features ‐ 360 degree Bowl configuration / 50’ clear to underside of truss / Center‐hung scoreboard optional / Exterior Views to the park / Ideal site orientation / Optional exterior amphitheater seating for 2,500 patrons / Flexible event configurations / Loading DockConnections and Synergies between elements – Connection to the Mayo Civic Center at the SW Event and Suite Level / Shared Loading / Shared Commissary / Direct access to the park. Pros – Site Orientation / Reduced Square Footage / Allows Future Growth / Cost per seat reduction due to reduced amount of Telescopic seating locations. Cons – Borderline Capacity for attracting larger concerts / does not allow for future growth / reduced concourse circulation.


TIM’S TOYOTA CENTER (PRESCOTT VALLEY)

OPTION 2B: 6,200 SEATSBASE SCHEME


Option 2B – 45 degree SE Site Orientation with the Event / Concourse at Street LevelLevels – (2 total) Shared Event ‐ Concourse Level / SuiteSeating Capacity Hockey – 6,200 seats Seating Capacity Basketball – 7,200 seatsSeating Capacity Concerts(end stage configuration)– 7,800 seats (approximately 2,000 seat increase)Trade Events (flat floor) – 32,000 SF (185) 10x10 Booths (approximately 7,500 SF increase)Building Area – 156,180 (Gross SF)Special Features ‐ 360 degree Bowl configuration / 50’ clear to underside of truss / Center‐hung scoreboard optional / Exterior Views to the park / Ideal site orientation / Optional exterior amphitheater seating for 2,500 patrons / Flexible event configurations / Loading DockConnections and Synergies between elements – Connection to the Mayo Civic Center at the SW Event and Suite Level / Shared Loading / Shared Commissary / Direct access to the park. Pros – Site Orientation / Capacity for attracting larger concerts / Reduced Square Footage / Allows Future Growth / Reduced amount of trees being removed from the park / Cost per seat reduction due to reduced amount of Telescopic seating locations. Cons – Currently not planned to have exterior amphitheater style seating at an additional cost.


CEDAR PARK EVENT CENTER


ALLEN EVENT CENTER


TYPICAL CONCOURSE – INDEPENDENCE EVENT CENTER


DENNY SANFORD PREMIER CENTER (SIOUX FALLS)


Option 2B: Base Scheme‐ 6,200 Seats‐Main Level Concourse‐ 2 Seating Levels


Option 2B: Base Scheme‐ Event / Concourse Level


Option 2B: Base Scheme‐ Suite Level


Option 2B: With Amphitheater‐ 6,200 Seats‐Main Level Concourse‐ 2 Seating Levels‐ Site Plan


Option 2B:Preliminary Design Concept

COST & BUDGET


Considerations Affecting Cost – Also Affect Feasibility:

• Number of Seats, Building Area, Building Volume and Configuration

• Number of concourses and connections to renovated Mayor Civic Center

• Premium Amenities

• Operational Flexibility – e.g. telescopic seating and multifunction spaces

• Operable wall or operable glass to support outdoor events

• Orientation of the Arena – 45 degrees or 90 degrees

• Volatility of construction market in general and unique market issues facing the Rochester, MN.

• Other


Master Project BudgetThe Master Project Budget format addresses all categories of cost to providea complete project budget including:

o Site Costs (Similar among the options)

o Construction Costs (Vary by Building Volume, Area and Complexity)

o Furniture, Fixtures and Equipment Costs (FF&E – Similar for all)

o Development Costs (Similar for All)

o Project Contingency (Vary slightly)


Project Cost / SF Multiplier Comparative Construction Costs for Rochester (escalated to 2017)

Cedar Park, TX (Austin) $196 1.49 $292

Allen, TX (Dallas) $207 1.42 $293

Independence, MO (Kansas City)

$205 1.17 $240

Dodge City, KS $203 1.36 $276

Bangor, ME $299 1.08 $322

CONSTRUCTION COST COMPARISON

Note: All Costs shown are Construction Costs only and are provided for comparison purposes only. Rochester, MN specific costs are unique and unknown at this time.


MASTER PROJECT BUDGETSITE IMPROVEMENTS & DEMOLITION

Site Acquisition

Site Utilities & Improvements

Site Preparation and Demolition

Environmental


MASTER PROJECT BUDGET

General RequirementsSite Work Site Improvements / LandscapingConcrete Foundations / Superstructure Concrete / Structural Precast / Architectural PrecastMasonryMetals Structural Steel & Metal Deck / Metal FabricationWood & Plastics Rough Carpentry / Architectural WoodworkThermal & Moisture Protection Waterproofing / Roofing & S.M. / Metal PanelsDoors & Windows Doors, Frames, & Hardware / Overhead Doors / Glass, Glazing, & CurtainwallFinishesSpecialties Toilet Partitions & Accessories / MiscellaneousSeating SystemsSpecial Construction MiscellaneousConveying Systems Elevators & EscalatorsMechanical Plumbing / Fire Protection / HVACElectricalPerformance & Payment BondContractor Staffing & Fee Staff Costs / Contractor FeeConstruction Contingency

CONSTRUCTION COSTS



ArtworkAthletic Equipment Basketball Floor / Baskets / Other Dasher Boards / Other / Zamboni Audio‐Visual including Scoreboards, TVs and Sound System Computer EquipmentCommunication Equipment Radios Press FacilitiesFood Service Food Service / Equipment / Portables / Smallwares Furniture including Premium SpacesGraphics & SignageLaundry EquipmentLoading Dock EquipmentMaintenance EquipmentWindow Washing EquipmentMedia EquipmentParking EquipmentSeating Systems Loose Chairs Security EquipmentStage & Rigging EquipmentVehiclesWaste Handling EquipmentMiscellaneous Window TreatmentsOther FF&EMiscellaneous

FURNISHINGS, FIXTURES & EQUIPMENT



Architecture & Engineering Design Services / Reimbursables / Other Consultants

Geotechnical & Soil Analysis Geotechnical Services / Other Consultants

Testing & Inspections

Marketing & Collateral Public Relations / Advertising

Development Services Development Services / Reimbursables

Legal Services

Taxes, Insurance & Bonding Builder's Risk Insurance / General Liability Insurance / Professional Liability Insurance

Permits & Regulatory Costs Building and Environmental Permits

Operations & Pre‐Opening Costs Ground Breaking Opening Ceremony Pre‐Opening

Miscellaneous Professional Services

Other Development CostsMiscellaneous

DEVELOPMENT COSTS

Project Contingency

PROJECT CONTINGENCY



Construction Interest Construction Interest

Reserve Funds Capitalized Interest Fund / Debt Service Reserve Fund / Working Capital Fund

/Special Reserve Fund

Finance Legal Services Borrower's Counsel / Bond Counsel / Bank Counsel / Tax Counsel / Trustee's

Counsel / Other Finance Legal

Costs of Issuance Ratings Agency Fee / Issuance Printing Costs / Financial Consultant / Financial

Consultant Reimbursement / Trustee's Origination Fee / LOC Commitment Fee

Closing Costs Issuer's / Lender's Closing Fee LOC Closing Fee

Other Financing Costs Other Financing Costs

*No financing costs are included in the Master Project Budget at this time.

FINANCING COSTS*


Conceptual Cost Summary*:

• 4,000 Seat Multi‐Purpose Arena: $55 – $60 Million

• 5,000 Seat Multi‐Purpose Arena: $60 – $65 Million

• 6,000 ‐ 6,200 Seat Multi‐Purpose Arena: $65 – $75 Million

• Ancillary Development TBD

* Assumes Approximately $325 / SF for Construction Costs and Approximately $425 to $440 / SF for Total Project Costs in the Rochester, MN, Market assuming a 2017 completion. These assumptions are preliminary and subject to change due the absence of complete design information and the volatility of the current construction market.

NEXT STEPS

ROCHESTER SPORTS & ENTERTAINMENT ARENASTRATEGIC FEASIBILITY STUDYPreliminary Schedule


Next Steps

• Select the preferred arena option

• Provide information to Destination Medical Center Corporation (DMCC)

• Provide information and recommendation to Mayo Civic Center Committee

• Detailed Financial Analysis / Economic Impact Study

• Complete Definitive Agreements

• Start design and pre‐construction planning in November of 2015 for project

completion in October / November 2017

STRATEG IC FEAS IB I L I TY STUDY

MAY 6 , 2015

Oct. 12, 2015 - Arena Feasibility Study

Documents

Transcript of Oct. 12, 2015 - Arena Feasibility Study