interest in using national velodrome at coatesville

Transcription

August 9, 2013 Mr. Joseph DiSciullo Chairman of the Coatesville Redevelopment Authority City of Coatesville One City Hall Place Coatesville, PA 19320 Dear Mr. DiSciullo: Conventions, Sports and Leisure International (“CSL”) and DiSalvo Development Advisors (“DDA”) are pleased to present this draft report regarding a feasibility validation study for the National Velodrome at Coatesville, a proposed multi-‐purpose indoor velodrome and events center. The attached report summarizes our research and analyses and is intended to assist the Redevelopment Authority of the City of Coatesville (“Redevelopment Authority”), community leaders and other project stakeholders with their decisions regarding the potential development and operations of the National Velodrome at Coatesville or a dedicated events center as an alternative development scenario. The information contained in this report is based on estimates, assumptions and other information developed from market research including local market conditions, cycling industry trends, comparable facilities, user surveys and other factors, including certain information the Authority has provided. All information provided to us by others was not audited or verified and was assumed to be correct. Because 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 Conventions, Sports & Leisure International 7501 Lone Star Drive, Suite B200 • Plano, TX 75024 • Telephone 972.491.6900 •Facsimile 972.491.6903 TABLE OF CONTENTS
EXECUTIVE SUMMARY ..................................................................................................................... ES-‐1 1. INTRODUCTION ........................................................................................................................ 1 2. CYCLING OVERVIEW .................................................................................................................. 4 3. INDOOR VELORDROME CASE STUDIES ....................................................................................... 21 4. LOCAL MARKET CONDITIONS .................................................................................................... 37 5. CYCLING PARTICIPANT SURVEYS ................................................................................................ 51 6. ESTIMATED DEMAND .............................................................................................................. 66 7. PROJECTED FINANCIAL OPERATIONS .......................................................................................... 75 APPENDIX A: EVENT CENTER ANALYSIS APPENDIX B: RETIAL ANALYSIS Executive Summary
1.
Introduction
2.
Cycling Overview
3.
Indoor Velodrome Case Studies
4.
Local Market Conditions
5.
Cycling Participant Surveys
6.
Estimated Demand
7.
Projected Financial Operations
Appendix A. Event Center Analysis
Appendix B. Retail Analysis
Executive Summary
EXECUTIVE SUMMARY
Led by former U.S. Olympic Cyclist, long-‐time race promoter and area resident David Chauner, a development team comprised of Coatesville Velodrome, LP, BCW Development, LLC and Velodrome Management Group, LLC has proposed the construction of a $27.5 million, world-‐class velodrome and events center to be located near the intersection of PA Route 82 and Lincoln Highway (U.S. Route 30) in Coatesville, Pennsylvania. Project supporters envision that the project will help spur revitalization of downtown Coatesville. In order for the $27.5 million National Velodrome at Coatesville to become a reality, potential project developers are seeking a public-‐private agreement that includes a land lease with the Redevelopment Authority of the City of Coatesville (“Redevelopment Authority”) and construction funding that could include private equity, grants and government subordinated and conventional debt financing. As a next step in the planning process, the Redevelopment Authority engaged Conventions, Sports & Leisure International (“CSL”) to provide an independent validation study of the proposed National Velodrome at Coatesville. Additionally, as an alternative to the development of an indoor velodrome that could accommodate both cycling and non-‐cycling events, the Coatesville Redevelopment Authority is also interested in exploring the viability of a dedicated events center. The events center in Coatesville would be designed to primarily accommodate concerts, comedic performances, family shows, sporting events and other entertainment events. Project stakeholders envision that an event center in Coatesville could seat approximately 3,000 to 5,000 for concerts and other entertainment events, but also provide flexibility to host other events such as consumer shows, trade shows and other events requiring a large flat floor space that could be created with retractable seating. In order to validate the feasibility of the National Velodrome at Coatesville, CSL met with project stakeholders, toured the project site, reviewed local market conditions, reviewed cycling participation and industry trends, developed case studies of comparable velodromes, distributed an online survey to registered cyclists at over 100 local, regional and national cycling organizations, and interviewed sport organizations, concert and other event promoters. Research results were used to estimate potential demand for the National Velodrome at Coatesville and its potential financial operating results. Additionally, CSL evaluated the market potential of a dedicated events center in Coatesville, identified and developed case studies of comparable facilities in other markets, assessed local market conditions as they relate specifically to the events center development, and interviewed concert and event promoters and other industry professionals. The results of this research were applied to estimate potential demand for an events center in Coatesville and its potential financial operations. This Executive Summary outlines the key highlights of the feasibility validation study for the proposed National Velodrome at Coatesville, and the potential development of a dedicated events center in Coatesville (in lieu of the indoor velodrome development). The full report should be read in its entirety to obtain the background, methods and assumptions underlying the findings. ES-‐1 EXECUTIVE SUMMARY
Key Study Highlights: • Cycling is one of the most popular choices for physical activity across all age levels in the United States. • Competitive cycling participation in the United States has been growing steadily over the past decade. USA Cycling has experienced a 66 percent increase in cycling licenses issued, a 54 percent increase in events sanctioned and 77 percent increase in cycling club members. Today, USA Cycling has over 70,800 licensed members, sanctions over 3,000 events annually and has over 2,500 member clubs/cycling associations in its ranks. • Pennsylvania has the sixth highest number of licensed riders in the United States and the Eastern Seaboard has six of the top ten states in terms of competitive cycling participation. • The proposed National Velodrome at Coatesville would be only the second indoor velodrome in the United States and would be the first indoor velodrome located on the East Coast. Worldwide, there are over 900 velodromes of which 47 are indoor velodromes, mostly located in Europe and Australia. • The proposed 134,600 square foot National Velodrome at Coatesville is planned to include a 200-‐meter track surrounded by fixed seating for 2,000 to 3,000. Building plans also include a performance center for training, a restaurant, 30,000-‐square-‐feet of specialty retail space, locker rooms, restrooms, concession areas, storage and office space. • Year-‐round cycling events will serve as the primary anchor for the proposed National Velodrome at Coatesville, which is expected to host regional, national and international cycling competitions as well as accommodate a variety of developmental cycling programs for local youth to Olympic hopefuls. • While the international standard for competitive tracks is 250-‐meters, the National Velodrome at Coatesville is being designed with a 200-‐meter track to minimize construction costs, reduce operating costs and create a more intimate environment. The shorter track length will likely preclude the track from hosting periodic Union Cycliste Internationale (“UCI”) -‐ sanctioned international events. • Significant interest in the National Velodrome at Coatesville was exhibited by the cycling community with approximately 80 percent of cyclists surveyed indicating they would potentially use the facility for competition and training. • The National Velodrome at Coatesville has the potential to become an important hub for all cycling activities, not just track cycling. Nearly 80 percent of cyclists surveyed indicated that they would possibly use Coatesville as a hub for their cycling activities if the velodrome were built. Coatesville could potentially serve as the “Gateway to the Hills” as road cycling is popular in rural southern Pennsylvania due to the naturally hilly terrain. • It is also anticipated that the venue will be used to stage non-‐cycling events in the 10,000 square foot flexible space in the track’s infield, which could serve to host a variety of ES-‐2 EXECUTIVE SUMMARY
sporting activities such as basketball, cheerleading, gymnastics, soccer, tennis and volleyball, among other sports. A portable stage will be used to host concerts, entertainers, graduations and other events. Temporary seating placed on the infield could increase the seating capacity to approximately 3,000 to 4,000 spectators. •
•
•
•
•
Overall, it is estimated the proposed National Velodrome at Coatesville could host over 270 events and attract nearly 150,000 participants and spectators annually based on the building program and results of market research. Roughly 60 percent of anticipated events and attendance is estimated to be associated with cycling activities and 40 percent is anticipated to be associated with other uses. Most indoor velodromes do not operate profitably and are largely dependent on subsidies to sustain operations. The ability of the National Velodrome at Coatesville to achieve sustainable operations will depend, in large part, on its ability to maximize opportunities for non-‐cycling events and realization of substantial lease revenues from on-‐site retail. The velodrome and event center component is estimated to operate at a loss of slightly over $200,000 annually, which is consistent with the operating losses experienced by similar velodromes worldwide. However, with a unique building program that provides approximately 30,000 square feet of retail space, it is anticipated that the lease revenues generated from the retail space will be sufficient to offset the velodrome and event center operating losses and result in the National Velodrome at Coatesville generating an overall operating profit in excess of $200,000 annually once the retail space is fully leased. A retail analysis completed by DiSalvo Development Advisors indicates sufficient demand for the retail space with the best opportunities for tenants consisting of restaurants and limited-‐service eating places, health and professional care, office supplies, sporting goods, general merchandise and specialty food stores. Given the results of this study, it appears that the planned National Velodrome at Coatesville could be operationally sustainable by maximizing non-‐cycling uses of the facility and securing quality retail tenant leases. However, it is unlikely that net operating income from the facility will be able to support any meaningful level of project construction funding. Instead, for the National Velodrome at Coatesville to maintain operational sustainability, the funding of the $27.5 million facility will need to be derived from other sources, which could include developer equity, fundraising, grants, economic development funds, and other sources. •
•
The alternative development scenario of a dedicated events center in Coatesville could host approximately 80 events over 160 days and attract 152,000 spectators annually based on the proposed building characteristics and results of market research. Roughly 46 percent of anticipated events and attendance is estimated to be associated with spectator events while 54 percent is anticipated to be associated with flat floor and other events that utilize exhibition and meeting space. Most comparable event centers reviewed in this study operate at annual deficits and are largely dependent on subsidies to sustain operations. The ability of the events center in ES-‐3 EXECUTIVE SUMMARY
Coatesville to achieve sustainable operations will depend, in large part, on its ability to attract concert and other entertainment spectator events. The events center in Coatesville is estimated to generate operating revenues of approximately $1.1 million and incur operating expenses of $1.5 million, resulting in a deficit of nearly $400,000 annually, which is consistent with the operating losses experienced by similar event centers identified in this study. The full report should be read in its entirety to obtain the background, methods, and assumptions underlying these findings. ES-‐4 Executive Summary
1.
Introduction
2.
Cycling Overview
3.
4.
5.
6.
Estimated Demand
7.
1. Introduction
1. INTRODUCTION
Led by former U.S. Olympic Cyclist, long-‐time race promoter and area resident David Chauner, a development team comprised of Coatesville Velodrome, LP, BCW Development, LLC and Velodrome Management Group, LLC has proposed the construction of a $27.5 million, world-‐class velodrome and events center in Coatesville, Pennsylvania. The proposed National Velodrome at Coatesville would be the first indoor velodrome located in the eastern United States and would be only the second indoor velodrome in the United States. PROPOSED'SITE
The development team National'Velodrome'at'Coatesville
considered many locations in the Philadelphia area, but is now focused on Coatesville due to strong local government support, PA'<82'
availability of land Proposed'
'Velodrome'&''
Events'Center'Site'
accessible by highway, rail '
U.S.'<30'
and nearby airports and Chester County’s need for a multipurpose arena and special events venue. The planned 134,600 square foot multi-‐purpose venue is envisioned to be located at the “Flats”, a 22-‐acre site near the intersection of PA Route 82 and Lincoln Highway (U.S. Route 30), near downtown Coatesville. Project supporters envision that the project will help spur revitalization of downtown Coatesville. Designed as world-‐class CONCEPTUAL RENDERING
National Velodrome at Coatesville
indoor facility, the proposed National Velodrome at Coatesville is planned to include a 200-‐meter pine track, banked at 43 or 44 degrees and surrounded by seating for 2,000 to 3,000. It is envisioned that year-‐
round cycling events will serve as the primary anchor for the proposed National Velodrome at Coatesville, which is expected to host regional, national and international cycling competitions as well as accommodate a variety of developmental cycling programs for local youth to Olympic hopefuls. In addition to the world-‐class 200-‐meter track, plans also include the construction of a performance center for training, a restaurant, 30,000-‐
square-‐feet of specialty retail space, locker rooms, restrooms, concession areas, storage and office space. 1 1. INTRODUCTION
It is anticipated that the venue will also be used to stage non-‐cycling events in the 10,000 square foot flexible space in the track’s infield, which could serve to host a variety of sporting activities such as badminton, basketball, boxing, cheerleading, futsal, gymnastics, judo, soccer, tennis, volleyball, and wrestling, among other sports. A portable stage at the west end of the infield will be used to host concerts, entertainers, graduations and other events. Temporary seating placed on the infield and over the shallow-‐banked straightaways could increase the seating capacity to nearly 4,000 spectators, depending upon the performance and size of the stage. Potential developers believe the National Velodrome at Coatesville will become a popular hub for cycling, drawing participants and spectators from a regional, national and international area. Potential project developers also believe the National Velodrome at Coatesville’s unique year-‐round programs and special events will draw teams, clubs and fans from a 150 mile radius that include New York, New Jersey, the Delaware Valley, Baltimore and Washington DC. In order for the $27.5 million National Velodrome at Coatesville to become a reality, potential developers are seeking a public-‐private agreement that includes a land lease with the Redevelopment Authority of the City of Coatesville (“Redevelopment Authority”) and construction funding that could include private equity, grants and government subordinated and conventional debt financing. As a next step in the FEASIBILITY VALIDATION STUDY COMPONENTS
planning process, the National Velodrome at Coatesville
Redevelopment Authority engaged Conventions, Local Market Sports & Leisure Characteristics
International (“CSL”) to Comparable/
provide an independent Industry
Competitive
validation study of the Trends
Facilities
proposed National Velodrome at Coatesville. In order to validate the feasibility of the National Market Velodrome at Coatesville, Project Planning/
Potential User
Demand
CSL met with project Local Meetings
Interviews
stakeholders, toured the project site, reviewed local market conditions, reviewed cycling Financial
participation and industry Projections
trends, developed case studies of comparable velodromes, distributed an online survey to registered cyclist at over 100 local, regional and national cycling organizations, and interviewed sport organizations, concert and other event promoters. Research results were used to estimate potential demand for the National Velodrome at Coatesville, validate general building program elements necessary to accommodate demand, and estimate potential financial operating results. 2 1. INTRODUCTION
The study’s findings are presented in the following sections: Executive Summary 1. Introduction 2. Cycling Overview 3. Indoor Velodrome Case Studies 4. Local Market Conditions 5. Cycling Participant Surveys 6. Estimated Demand 7. Projected Financial Operations Appendix A: Event Center Analysis Appendix B: Retail Analysis This report outlines the key findings of the feasibility validation study for the proposed indoor velodrome and events center in Coatesville, and is designed to assist project representatives in making informed decisions regarding future facility development. The report should be read in its entirety to obtain the background, methods and assumptions underlying the findings. 3 Executive Summary
1.
Introduction
2.
Cycling Overview
3.
4.
5.
6.
Estimated Demand
7.
2. Cycling Overview
2. CYCLING OVERVIEW
Cycling is among the most popular choices for physical activity across all age levels in the United States. According to the National Sporting Goods Association’s most recent statistics, approximately 40 million (or 14 percent) of Americans age seven and older were estimated to have ridden a bicycle six times or more in a year. In 2011, over five million bicycle riders were frequent participants, riding 110 or more days per year. The National Bike Dealers Association’s (“NBDA”) research (conducted by the Bicycle Market Research Institute) reported that 73 percent of adult cyclists rode for recreation, 53 percent for fitness, 10 percent for commuting, eight percent for racing and six percent for sport. The purpose of this section is to provide an overview of the cycling industry including the types of organized cycling; international, national and local competitive/recreational cycling organizations; and track cycling. TYPES OF ORGANIZED CYCLING While frequently referred to as a single sport, there are several types of organized cycling including road, track, mountain biking, BMX, cyclo-‐cross and para-‐cycling. Each type of organized cycling is described below. Road: Road cycling is the most widespread form of cycling. Forms of road cycling include recreational, racing, and utility cycling. Various types of bicycles are used on the roads and can include BMX, recumbent, racing, touring and utility bicycles. However, dedicated road bicycles have drop handlebars and multiple gears. Road bikes also use narrow, high-‐pressure tires to decrease rolling resistance and tend to be somewhat lighter than other types of bicycles. Famous road cycling race examples include the Tour de France, the Giro d'Italia, the Criterium de Dauphine Libere, and the Philadelphia International Championship. Track: Track cycling is a bicycle racing sport held on specially built banked tracks called velodromes. Riders use specifically designed bicycles for track racing. Track cycling events fit into two broad categories, sprint races and endurance races. Sprint races are generally between eight and ten laps, while endurance races are held over much longer distances. The length of these races typically varies from 12 to 16 laps for the individual and team pursuit races, up to 200 laps for a full length Madison race held during the World Championships or Olympic Games. 4 2. CYCLING OVERVIEW
Mountain Biking: Mountain biking is the sport of riding bicycles off-‐road, often over rough terrain, using specially designed bikes. Mountain bikes share similarities with other bikes, but incorporate features designed to enhance durability and performance in rough terrain. Mountain biking can generally be broken down into multiple categories including cross country, trail riding, downhill, free ride, dirt jumping and trials. The vast majority of mountain bikers participate in recreational cross country and trail riding. BMX: Bicycle motocross, or BMX, is the sport of racing bicycles on motocross style tracks which use an inline start and have various obstacles. BMX also refers to the bicycle itself, which is specifically designed for dirt and motocross track cycling. Cyclo-‐Cross: Cyclo-‐cross is a new form of cycling that has been gaining in popularity. Cyclo-‐cross is a hybrid form of road and off-‐road cycling where participants can take their bicycles off road, but it is not to be confused with mountain biking. Cross bikes are very similar to traditional road bikes except for the wheels which are designed to be taken off road, with large tread on their tires they are designed to handle unpaved roads and rough trails. Para-‐Cycling: Para-‐cycling is a form of cycling for disabled persons that includes three classes: cycling, handbike (or hand cycling) and tricycle. OVERVIEW OF INTERNATIONAL, NATIONAL AND LOCAL CYCLING ORGANIZATIONS Cycling is governed by international, national and local cycling organizations. Local cycling organizations tend to be the grass roots level of organization for the sport by providing programming in recreational and competitive cycling in a local or regional area. National and international organizations are generally responsible for structuring high performance level cycling and training, including establishment of rules, regulations and competitions. Union Cycliste Internationale (UCI) The Union Cycliste Internationale (“UCI” or “International Cycling Union”) is the international governing body for cycling recognized by the International Olympics Committee. UCI has relationships with national cycling federations including USA Cycling. It is also responsible for setting standards for competitions and the facilities in which sanctioned international competitions are held. Track cycling is one of the cycling disciplines which the organization governs (i.e. through setting standards for sanctioned velodrome facility design). Track events included on the UCI international calendar must be held at a UCI-‐homologated (accredited) velodromes. 5 2. CYCLING OVERVIEW
A UCI-‐homologated velodrome must meet specific criteria with regard to track geometry, markings, equipment, and accommodations for officials. According to UCI, velodromes are classified into four categories at the time of their homologation, based on the technical quality of the track and installations. The UCI-‐homologated UCI Homologation Track Categories
category determines International Cycling Competitions
the level of sanctioned Track
international Category Homologation
Level of Events
competition which 1
UCI
Elite World Championships, Olympic games
can be organized in 2
UCI
World Cups, Continental Championships, Junior World Championships
the velodrome. The 3
UCI
Other International Races
4
National Federation National Events
levels of hosted events and range of Source: UCI.
track categories are described in the table to the right. While velodrome tracks have been developed in various lengths ranging from 133 meters to over 400 meters, the required track length for UCI-‐sanctioned international events is 250 meters. The track at the planned National Velodrome at Coatesville is being designed as 200 meters in length, which does not meet the minimum track length for UCI-‐sanctioned international events. Potential developers have cited the following reasons for their decision to design a 200-‐meter track for the National Velodrome at Coatesville: • A 250-‐meter track will increase the size of the building and add an estimated $2 million to $3 million in additional project costs. • A larger building will result in higher operating costs for HVAC, utilities, building maintenance and other costs which will negatively impact the financial operations. • The current UCI standard of 250 meter tracks is required for World Cup Events (four per year), World Championships (one per year) and Olympic and Pan American Games (every four years in select cities). Potential project developers believe that building the velodrome track in order to bid on and attract an international UCI event every few years does not make financial sense. • Potential developers feel that the UCI-‐sanctioned events are highly regulated and are rarely financially successful for the host track due to strict regulations and unfavorable revenue sharing. • Potential developers believe the most successful events are indoor six-‐day races that offer infield dining, music, entertaining, announcing and flexible formats, which are not permitted at traditional UCI championship events. • Potential project developers anticipate creating and hosting their own annual national and international events that will not be subject to a costly bid process or relocation to another venue. 6 2. CYCLING OVERVIEW
• Potential developers of the facility will create youth programs, training and developmental activities that can easily be held on a 200-‐meter track. It should be noted that the UCI’s new World Training Center Velodrome in Aigle, Switzerland has a 200-‐meter track. • Potential developers envision that the National Velodrome at Coatesville will be built as an entertainment center for exciting events and believe a smaller, more intimate facility is best suited to meet both cycling and non-‐cycling needs and produce the best financial operating results. USA Cycling USA Cycling (“USAC”) is based in Colorado Springs, Colorado and is the national governing body for competitive bicycle racing in the United States. It covers the disciplines of road, track, mountain bike, cyclo-‐cross, BMX and collegiate racing. Growth of Competitive Cycling in the U.S. USA Cycling requires licenses for various levels of participation including racing, coaching, officials, mechanics, UCI support and race directors. USA Cycling membership includes a range of skill levels, ages, disciplines, and functions from top-‐level professionals and world-‐
class coaches to local officials and novice riders. The following table summarizes the historical number of licenses issued, sanctioned events, and officially recognized cycling clubs across the country, according to USA Cycling. Growth of Competitive Cycling in the U.S.
From 2002 to 2011
Licenses Issued
Events Sanctioned
Member Clubs
70,829
' 11
' 11
2,569
' 11
3,026
69,771
' 10
' 10
2,414
' 10
2,933
65,845
' 09
2,219
' 09
2,638
' 09
62,323
' 08
2,120
' 08
2,535
' 08
61,594
' 07
' 07
2,050
' 07
2,473
59,537
' 06
' 06
1,970
' 06
2,280
' 05
54,281
' 05
1,575
' 05
2,204
48,990
' 04
n/a
'
04
' 04
2,132
44,325
' 03
' 03 n/a
' 03
1,933
42,724
' 02
' 02 n/a
' 02
1,969
40,000
60,000
80,000
1,500
2,250
3,000
1,500
2,500
3,500
66% increase
since 2002
54% increase
since 2002
S ource: USA Cycl i ng.
7 77 increase
since 2005
2. CYCLING OVERVIEW
As evidenced by the number of USA Cycling licenses issued, events sanctioned and club members, the sport of competitive cycling in the United States continues to grow. For the ninth consecutive year, the number of licensed competitive cyclists has risen compared to the previous year, while the number of registered clubs and event sanctions also increased. Collectively, these categories represent the popularity of bike racing in America from a participation standpoint. In 2011, USA Cycling had 70,829 licensed riders, coaches, mechanics, officials and others, representing a 1.5 percent increase over the previous year. The number of USA Cycling sanctioned clubs rose 6.4 percent to 2,569 teams. USA Cycling also sanctioned 3,026 events including road, track, cyclo-‐cross, mountain bike, and collegiate competitions, a 3.2 percent increase from the previous year. The growth in USA Cycling membership continues a nine-‐year trend which has seen the number of licensed racers in America increase by 66 percent since 2002. Over that same period of time, the number of events sanctioned by USA Cycling has risen by 54 percent, while affiliated clubs have grown by 77 percent since 2005. Many of the sport’s insiders point to the success and popularity of American athletes in cycling’s most notable events, such as the Tour de France and the Olympic Games, as a primary factor in the sport’s recent boom. Types of USA Cycling Licenses The graph below presents a breakdown of the licensed members of USA Cycling for 2011. USA Cycling License Type
2011 Licenses Issued
Total Licenses Issued: 70,829
Others -‐ 1%
Collegiate Riders
7%
Coaches -‐ 2%
Officials -‐ 2%
Road, Track & Cyclo-‐Cross Riders
64%
Mountain Bike Riders
20%
International Licenses -‐ 4%
Collegiate Riders -‐ 7%
Mountain Bike Riders -‐ 20%
Road, Track & C yclo-‐Cross Riders -‐ 64%
Source: USA Cycl i ng.
8 2. CYCLING OVERVIEW
USA Cycling licensed membership is largely comprised of road, track and cyclo-‐cross riders, who collectively make up 63 percent of total members. Mountain biking has the second largest percentage of licensed riders in the U.S., making up 20 percent of the membership. Additionally, collegiate riders comprise seven percent of total membership. Of all cycling disciplines, BMX has the lowest number of officially licensed riders, with less than one percent of total USA Cycling membership. Geographic Distribution of USA Cycling Membership To determine potential local and regional demand, it is critical to evaluate where competitive cyclists are concentrated in the United States. The following graph presents a breakdown of the top states, according to the number of licensed USA Cycling members for 2011. GEOGRAPHIC DISTRIBUTION OF USA CYCLING LICENSES
Top States
California
11,899
Texas
4,675
New York
3,825
Washington
3,116
Colorado
3,116
Pennslyvania
2,621
Florida
2,479
Massachusetts
2,408
Illinois
2,337
North Carolina
2,267
Virgina
1,983
Arizona
1,912
New Jersey
1,912
Utah
1,629
Ohio
1,558
Wisconsin
1,558
Michigan
1,417
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Source: USA Cycl i ng.
For the purposes of this study, the top 17 states in total licenses were presented. These states comprise approximately 72 percent of total USAC membership, while the remaining 33 states account for approximately 28 percent of members. Pennsylvania has the sixth highest number of licensed riders, with over 2,600 members. The Eastern Seaboard contains 9 2. CYCLING OVERVIEW
seven of the top 13 highest licensed membership states (New York, Pennsylvania, Florida, Massachusetts, North Carolina, Virginia, and New Jersey). USA Cycling Sanctioned Events In 2011, USA Cycling sanctioned over 3,000 official cycling events. USA Cycling is also responsible for the administration of eight national-‐level racing calendars and hold 17 national championship cycling events for all ages and skill levels in road, track, mountain bike, cyclo-‐cross and BMX. The following TYPE OF CYCLING EVENTS
graph illustrates the 2011 USA Cycling Events
breakdown of USA sanctioned cycling Total Sanctioned Events: 3,026
event by category. At approximately 77 percent of the total number of events, road, track and cyclo-‐
cross events made up the overwhelming majority of 2011 USA Cycling-‐sanctioned events. Mountain bike racing events made up the second largest total at 18 percent. Collegiate cycling represented six percent of total of USA Cycling-‐
sanctioned competitions. Collegiate
6%
Mountain
Bike 18%
Road, Track, and Cyclo-‐Cross
77%
Source: USA Cycling
USA Cycling Membership Demographic Profile USA Cycling administers a bi-‐annual member survey that addresses questions as it relates to member demographics; including age, gender, education level, household income, as well as questions pertaining to cycling participation, importance of various event factors, and consumer information, among others. Key information from the 2010 USA Cycling Member Survey includes the following: • The majority of USA Cycling members, 75 percent, fall in the masters-‐level category, aged 30 and over. Senior-‐level members, ages 19 to 29, make up 22 percent of the membership; while junior-‐level riders, ages 18 and under, comprise three percent of 10 2. CYCLING OVERVIEW
USA Cycling members. In 2010, the median age for all USA Cycling members fell in the range between 30 and 39 years old. • The gender distribution of USA Cycling membership is largely comprised of male riders, making up 86 percent of total membership, while females comprise approximately 14 percent of the membership base. • Yearly household incomes for USA Cycling members are higher than national averages, with a median household income between $80,000 and $100,000. Additionally, 23 percent of licensed members reported annual incomes in excess of $150,000. • Approximately 53 percent of USA Cycling members lived in households with multiple family members who regularly ride a bicycle. The mean number of cycling family members was 1.9 per family. • The median age that members first competed in a bicycle race was between the ages of 21 and 25. • Approximately 50 percent of USA Cycling members indicated their primary purpose of riding a bike was for exercise/fitness. Additionally, 38 percent of members indicated they primarily ride for competition purposes. Other primary reasons included commuting (3 percent), environmental (1 percent), financial (less than 1 percent), and other (8 percent). • The median number of days per week respondents ride their bikes was between four and five days. Approximately 36 percent of members indicate they ride six or more days a week. • Approximately 75 percent of USA Cycling members indicated that road cycling was their primary discipline. Mountain biking was the second highest reported primary discipline at approximately 17 percent. Track cycling is the primary cycling discipline for approximately three (3) percent of USA Cycling members in 2010, while another 12 percent indicated it was their secondary cycling discipline. • The most important event factor for USA Cycling members is the location of the event. Other important factors included proximity of event to your home, personal goals achievements, and categories offered in the event. The importance of these event factors was similar across masters, senior, and junior level riders; with senior/master levels placing slightly more importance on location factors, while junior riders placed more importance on personal goals achievements and categories offered. • On average, USA Cycling members spent approximately $1,867 on participating in competitive and non-‐competitive cycling events over the course of the year. Spending categories including gasoline, entry fees, lodging, food, airline tickets, bike transportation, and rental cars. 11 2. CYCLING OVERVIEW
Local Cycling Clubs While national and international organizations are responsible for structuring high performance level cycling training and competition, local cycling clubs are the grass roots levels of organization for the sport, with these local clubs providing programming in recreational and competitive cycling in a local or regional capacity. These clubs are largely non-‐profit, volunteer-‐run entities which provide programming for youth, adults and seniors. Each club has a particular geographic focus and may specialize in one or more cycling disciplines (road, track, mountain biking, BMX, touring, etc.). They may also be comprised of mostly recreational cyclists or have members and coaching programs oriented towards more competitive or advanced cyclists. Local cycling clubs are usually affiliated with a state association and may also be members of other cycling authorities. These affiliations allow the clubs to issue insurance to their members and provide a means of networking and exchanging with like-‐minded groups and individuals. In Pennsylvania, there are currently few local cycling clubs focused exclusively on track cycling, however several do include track cycling as part of their stated areas of interest and programming. The table on the following page lists 132 cycling organizations based in Pennsylvania. TRACK CYCLING Track racing is one of the most spectator-‐friendly disciplines of competitive cycling. This discipline is contested on a velodrome and features a variety of sprint and endurance events in which athletes or teams compete in individual or mass-‐start races. Track cycling is an activity conducted both indoors and outdoors on banked velodromes typically 200 meters to 400 meters in length. Track Facilities The history of competitive track cycling dates back to as early as 1870, when cycling on wooden indoor tracks regularly drew large crowds and was included in the inaugural Olympics Games in 1896. The riders competed on wooden indoor tracks that closely resembled modern velodromes. A velodrome is an arena designed specifically for track cycling. Modern velodromes feature steeply banked oval tracks, consisting of two 180-‐degree circular bends connected by two straights. The straights transition to the circular turn through a moderate easement curve. Modern velodromes are constructed by specialized engineers and architects, with most tracks being made of wood truss work with a surface of strips made of various types of wood. Indoor velodromes are typically built with less expensive pine surfaces, however some designers have been moving away from traditional materials. Velodrome tracks can be surfaced with several different materials, including timber, synthetics and concrete. Recently constructed world class indoor tracks tend to be timber or synthetic surface; while longer, older outdoor tracks are typically made with concrete. Today, there are over 900 velodromes across the world. 12 2. CYCLING OVERVIEW
LOCAL CYCLING CLUBS
Commonwealth of Pennsylvania
Organization
Location
Organization
Location
Sprinter's Edge Track Development Team Gotham Cyclists JVR Sports Altoona Bicycle Club The Performance Lab p/b Caffeinated Cyclist Lamprey Systems Lehigh University Stoudts Brewing Co/JB Mountain Bikes Susquehanna Bicycle Racing Team Young Medalists/ Team Rothrock Ag3r Phenix Velo Club DeSales University Wheels for Wells Chesco Grand Prix LLC PCT Pennsylvania LLC Road Cycling League Confluence Tourism Association Lancaster Regional Cycling Team Central Bucks Velo Cycle Sports/Doylestown Wheelmen Doylestown Bike Works Northeast Masters Cycling Association Cycle Fitters Penn State-‐Lehigh Valley Chester County Cycling Foundation Team Army-‐USAC Guys Racing Club Kapelmuur Independent South Mountain Cycles Toasted Head Racing Presque Isle Cycling Club Team Competitive Gear GS Simmeria Lehigh Wheelmen Assoc Zen Masters Racing Mid Atlantic Racing, LLC Team CF Club Wissahickon Keystone Velo Club Blue Mountain Velo Saucon Valley Bikes / Weyerbacher Indiana University-‐PA Bikin' Blazers Cycling Club North Point Women's Racing Team Flood City Velo Apollo Racing Kutztown University of Pennsylvania RaceWheelRental.com Vortex Cycling Club ChamRakh Cycling ERA Cycling Franklin and Marshall College Orange Street Velo & Retül Studio Speeddream Sports EBS Racing Club Bucknell University Horizon Racing Lamb's Gap Cycling Team Lost Boys Racing, inc. Team Chameleon/Black Creek Millersville University-‐Pennsylvania Beaver Valley Velo Bike King Racing Thru-‐It-‐All Body Shop Inc Freddie Fu Cycling Team Alburtis Allentown Allentown Altoona Bala Cynwyd Bethlehem Bethlehem Blandon Bloomsburg Breinigsville Butler Camp Hill Center Valley Chester Heights Coatesville Coatesville Coatesville Confluence Dover Doylestown Doylestown Doylestown East Stroudsburg Easton Easton Elizabethtown Elizabethtown Elkins Park Emmaus Emmaus Emmaus Erie Erie Fleetwood Fogelsville Fort Washington Glen Mills Glen Mills Glenside Hanover Harrisburg Hellertown Indiana Jenkintown Jenkintown Johnstown King Of Prussia Kutztown Kutztown Kutztown Lafayette Hill Lancaster Lancaster Lancaster Lancaster Langhorne Lewisburg Macungie Mechanicsburg Mechanicsburg Millersburg Millersville Monaca Morrisville Mt Joy Murrysville Bucks County Racing Club Sturdy Girl Cycling Shirks Racing Masters Team Pennsylvania Cycling Association Mainline Cycling Breakaway Racing-‐PA Bicycle Therapy Campanohvac/Breakawaybikes.com CS Velo D3DEVO Drexel University Kelpius Cycling L'equipe DeVille PA Masters RC Pallas Athene Women's Cycling Peanut Butter & Co. Human Z oom Philadelphia Ciclismo QCW Cycling Saint Joseph University Sweathogs Racing Team Independence Temple University The Bell's Bike Shop Cycling Team Tri State Velo University of Pennsylvania XAɅЯBA Racing Wannabe Cancer Free Racing Carnegie Mellon University East End Cycling Club Fort Pitt Velo Iron City Bikes Koeles Cycling Club Pro Bikes Pittsburgh Race Team Steel City Endurance Team Phenomenal Hope University of Pittsburgh UPMC Cycling Performance Sunnybrook Trek/Limerick Chiropractic Cycling Fusion/Stage 5 Cycling TeamLionofFlanders.com Iron-‐Tree Data Networks Cycling Marywood University Allegheny Cycling Association Shippensburg University of Pennsylvania Spinteck Cycling Team South Mountain Velo Club Swarthmore College On Track Cyclists Kutztown Cutters Cycledrome Bicycling Team Lehigh Valley Velodrome Upstate Velo Pennsylvania State University Strongland Chamber Foundation Villanova University Evolution Racing DPS Penn Altra Motion Team Relentless Tenacity Bike Line Chester County Velo High Voltage Racing and Recreation Susquehanna Valley Velo Club Mason Dixon Velo Revolution Wheelworks Racing Mid-‐Atlantic Cycling Club Newtown Norristown Oley Oreland Paoli Phhiladelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Philadelphia Phoenixville Pittsburgh Pittsburgh Pittsburgh Pittsburgh Pittsburgh Pittsburgh Pittsburgh Pittsburgh Pittsburgh Pittsburgh Pottstown Reading Schnecksville Scranton Scranton Sewickley Shippensburg
Spring City Spring Grove Swarthmore Telford Topton Trexlertown Trexlertown Tunkhannock University Park Vandergrift Villanova Warminster Washington Wayne Wayne West Chester West Chester Wexford Williamsport Wrightsville Wynnewood Zionsville Source: USA Cycling.
Olympic and World Championship Events are required by UCI to be held on 250 meter tracks. However, other events on the UCI calendar may be held in velodromes that measure between 133 meters and 500 meters. Smaller tracks require a steeper banking, for example a 250 meter track banks around 45 degrees, while a 333 meter track has a banking of around 32 degree. Track cycling currently offers more events at the Olympics and Cycling World Championships than all other disciplines combined. In the United States, track racing reached a peak of popularity in the 1930’s when events were regularly held in New York City’s Madison Square Garden, which was originally built as a track racing venue. A group of US velodromes later formed the American Track Racing Association (“ATRA”) and its membership now includes the majority of all velodromes in the United States. ATRA was established to advance the sport of track cycling, the capital improvements of facilities and for the promotion of track riding and racing. Member benefits include the sharing of information, economical insurance rates, public relations and marketing services to member tracks. United States Velodromes Today, there are 27 velodromes in the United States. The table on the following page lists the current velodromes. As depicted in the table, all but one velodrome in the United States are outdoor facilities. The ADT Event Center in Los Angeles, CA is the only other indoor velodrome in the U.S. The average age of U.S. velodromes is 21 years old. The oldest velodrome is the Washington Park Velodrome in Kenosha, WI, which opened 86 years ago in 1927. The most recent velodromes to open include the Giordana Velodrome in Rock Hill, SC and the Cleveland Velodrome in Cleveland, OH, both of which opened in 2012. There is a wide range of track sizes at U.S. velodromes. The average track size is 333 meters, with tracks ranging in size from a low of 166 meters at both the Chicago Velo Campus in Chicago, IL and the Cleveland Velodrome in Cleveland, OH to a high of 498 meters at the Asheville Mellowdrome in Asheville, NC. There are also a variety of track surfaces at U.S. velodromes. The most common track surface is concrete, primarily due to the outdoor location of most U.S. velodromes. Overall, concrete tracks account for 56 percent of velodrome track surfaces in the U.S., while wooden tracks and asphalt tracks each make up 22 percent of the track surfaces. One of the most popular velodromes in the U.S. is Valley Preferred Cycling Center (formerly Lehigh County Velodrome) in Trexlertown, PA, approximately 90 minutes from Coatesville. Opened in 1975, this 333-‐meter outdoor velodrome has hosted hundreds of competitive and recreational events from local grass roots programs to World Championships and Olympic Trials. It’s Air Products Development Program has produced 16 Olympic cyclists, including Olympic Champion, Marty Nothstein. 14 2. CYCLING OVERVIEW
UNITED STATES VELODROMES
Velodrome
City
State
ADT Event Center at Home Depot Center Alkek Velodrome
Alpenrose Velodrome
Baton Rouge Velodrome
Boulder Valley Velodrome
Brian Piccolo Park Velodrome
Chicago Velo Campus
Cleveland Velodrome
Dick Lane Velodrome Ed Rudolph Velodrome
Encino Velodrome
Garden State Velodrome
Giordana Velodrome Hellyer Park Velodrome
Kissena Park Velodrome
Major Taylor Velodrome Marymoor Velodrome
Asheville Mellowdrome
National Sports Center Velodrome
New England Velodrome
Penrose Park Velodrome San Diego Velodrome
7-‐Eleven US Olympic Training Center Velodrome
Superdrome
Valley Preferred Cycling Center The Velodrome at Bloomer Park Washington Park Velodrome
Carson Houston
Portland
Baton Rouge
Erie
Cooper City Chicago
Cleveland
Atlanta
Northbrook
Encino
Wall Township
Rock Hill
San Jose Queens
Indianapolis Redmond
Asheville Blaine
Londonderry
St. Louis
San Diego
Colorado Springs Frisco
Trexlertown
Rochester Hills Kenosha California
Texas Oregon
Louisiana
Colorado
Florida
Illinois
Ohio
Georgia
Illinois
California
New Jersey
South Carolina
California
New York
Indiana
Washington
North Carolina
Minnesota
New Hampshire
Missouri
California
Colorado Texas Pennsylvania Michigan
Wisconsin
Year
Opened
2004
1986
1967
2010
2013
1993
2011
2012
1972
2004
2004
2011
2012
2007
1964
1982
1974
2001
1990
2007
2005
1976
1983
1996
1975
2001
1927
(1)
(2)
(4)
(5)
(6)
(8)
(9)
Type
Track
Length
Track
Surface
Indoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
250 m
333 m
268 m
333 m
250 m
333 m
166 m
166 m
322 m
Wooden
Concrete
Concrete
Concrete
Wooden
Concrete
Wooden
Wooden
Concrete
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
333 m
252 m
400 m
250 m
335 m
400 m
333 m
400 m
498 m
Concrete
Concrete
Asphalt
Concrete
Concrete
(7)
Asphalt
Concrete
Concrete
Asphalt
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
Outdoor
250 m
333 m
333 m
333 m
333 m
250 m
333 m
200 m
333 m
Wooden
Asphalt
Asphalt
Concrete
Concrete
Wooden
Concrete
Concrete
Asphalt
(3)
(1) Boulder Valley Velodrome c onstruction began i n 2 012, a nd hope to open April 2 013
(2) Northrbook Velodrome originally built i n 1 959, but was r ebuilt i n 2 004 (3) Concrete paved a sphalt (4) Encino Velodrome Build i t 1 968, but r enovated i n 2 004
(5) Garden State Velodrome was built i n 1 950, but c onverted i n 2 011
(6) Hellyer Park was built i n 1 993, but r enovated i n 2 007
(7) Kissena Park velodrome r epaved i n 2 004
(8) Mellowdrome was c onverted i nto a Velodrome i n 2 007
(9) Penrose Park Velodrome was originally built i n 1 961, but was r eopened i n 2 005
International Indoor Velodromes The advent of indoor tracks ensured that cycling events could be competed year-‐round, regardless of weather conditions. The nature of indoor track cycling lends itself to being relevant to all cyclists as a form of cross-‐training; likewise, track athletes cross-‐train via participation in road cycling and other sub-‐disciplines. The opportunity indoor velodromes provides for all-‐season conditioning is beneficial for all forms of cycling. While track cycling in the United States is dominated by outdoor velodromes, internationally indoor velodrome racing is a vibrant sport and is particularly popular in Europe. Indoor track cycling is most notable in the United Kingdom, Belgium, Germany and the Netherlands where velodromes are often used as off-‐season training by road racers as well as track racing specialists. The sport also has significant followings in Australia, New Zealand, and Japan. Today, there are 48 indoor velodromes worldwide. The chart on the following page lists the indoor velodromes including its name, city, country, year opened, track length and surface type. 15 2. CYCLING OVERVIEW
INDOOR VELODROMES WORLDWIDE
Velodrome
City
Country
Year
Opened
Track
Length
Track
Surface
Silverdome
Lancaster
AUS
1984
287 m
Wooden
Adelaide Super-‐Drome
Gepps Cross
AUS
1993
250 m
Wooden
Joe Ciavola Velodrome
Hisense Arena
Melbourne
Melbourne
AUS
AUS
2004
2000
250 m
250 m
Wooden
Wooden
Perth SpeedDome
Midvale
AUS
1989
250 m
Wooden
Dunc Gray Velodrome
Sydney
AUS
1999
250 m
Wooden
Ferry-‐Dusika-‐Hallenstadion
Antwerps Sportpaleis Vienna
Antwerp
AUT
BE
1999
2011
250 m
250 m
Wooden
Wooden
Gent-‐Blaameersen
Ghent
BE
2006
250 m
Wooden
Sportpaleis Ghent
Ghent
BE
1965
166 m
Wooden
Burnaby Velodrome
Burnaby
CAN
1997
200 m
Wooden
Forest City Velodrome
Laoshan Velodrome
London
Beijing
CAN
CHINA
2005
2004
138 m
250 m
Wooden
Wooden
Guangzhou Velodrome
Guangzhou
CHINA
2010
250 m
Wooden
Ballerup Super Arena
Copenhagen
DK
2001
250 m
Wooden
Velòdrom d'Horta Barcelona
ESP
1984
250 m
Wooden
Velódromo de Galapagar
Madrid
ESP
2007
265 m
Wooden
Palma Arena
Palma de Mallorca
ESP
2007
250 m
Wooden
Velódromo de Anoeta
San Sebastián
ESP
1965
285 m
Concrete
Velódromo Municipal Luis Puig
Vélodrome de Hyères-‐Toulon-‐Var
Valencia
Hyères
ESP
FRA
1992
-‐
250 m
-‐
Concrete
-‐
INSEP
Paris
FRA
1938
200 m
Wooden
RSG
Augsburg
GER
1988
200 m
Wooden
Velodrom Prenzlauer Berg
Stadthalle
Berlin
Breman
GER
GER
1996
1984
250 m
Wooden
(3)
166 m
Wooden
Westfalenhalle
Stellingen
Dortmund
Hamburg
GER
GER
1952
1961
(4)
200 m
250 m
Wooden
Wooden
NRW-‐Leistungszentrum
Olympia-‐Halle
Kaarst-‐Büttgen
München
GER
GER
1971
1972
250 m
200 m
Wooden
Wooden
Hanns-‐Martin-‐Schleyer-‐Halle
Olympic Velodrome
Stuttgart
Athens
GER
GER
1984
2004
285 m
250 m
Wooden
Wooden
Indira Gandhi Arena
New Delhi
INDIA
2009
Velodromo fassa bortolo di montichiari
Montichiari
ITALY
2009
250 m
250 m
Wooden
Concrete
Changwon Velodrome
Gwangmyeong Velodrome
Changwon
Gwangmyeong
KR
KR
2000
2006
250 m
250 m
Wooden
Wooden
250 m
200 m
Wooden
Wooden
250 m
250 m
Wooden
Wooden
(1)
(2)
(5)
Sportpaleis Alkmaar
Alkmaar
NL
2003
(6)
Amsterdam Velodrome
Amsterdam
NL
2000
(7)
Omnisport Apeldoorn
Invercargill ILT Velodrome
Apeldoorn
Invercargill
NL
NZ
2008
2006
UCI World Cycling Centre
Lee Valley Velodrome
Aigle
Stratford
SUI
UK
2002
2011
Sir Chris Hoy Velodrome
Calshot Velodrome
Glasgow
Calshot Spit
UK
UK
Newport Velodrome
Pride Park Velodrome
Newport
Derby Manchester Velodrome
ADT Event Center at Home Depot Center Manchester
Carson 200 m
Wooden
250 m
Wooden
2012
1996
250 m
143 m
Wooden
Wooden
UK
UK
2003
2014
250 m
250 m
Wooden
Wooden
UK
USA
1994
2004
250 m
250 m
Wooden
Wooden
(8)
(1) Antwerps Sportpaleis was originally built i n 1 933, a nd r enovated from 2 010-‐2011
(2) Burnaby Velodrome began c onstruction i n 1 991 a nd opened i n 1 997
(3) Ferry-‐Dusika-‐Hallenstadion was originally built i n 1 976, but r enovated i n 1 999
(4) Stadthalle was originally built i n 1 964, but r enovated i n 1 984
(5) W estfalenhalle was originally built i n 1 935, but r enovated i n 1 952
(6) I ndira Gandhi Arena was orignally built i n 1 982, but r enovated i n 2 009
(7) Sportpaleis Alkmaar was originally built i n 1 964, but r enovated i n 2 003 r eplacing the c oncrete s urface for wood
(8) Velodrome i n Amsterdam was orignally built i n 1 928, but was r envoated from 1 996 to 2 000
(9) Lee Valley Velodrome was built between 2 009-‐2011
Indoor velodromes can be found in 18 different countries. The countries with the most indoor velodromes include Germany (8 velodromes), United Kingdom (6 velodromes), Australia (6 velodromes), and Spain (6 velodromes). The average age of an indoor velodrome is 19 years. The oldest velodrome is the INSEP in Paris, France, which opened 75 years ago in 1938. The most recent velodrome to open is the Sir Chris Hoy Velodrome in Glasgow, Scotland, which opened in 2012. The track sizes at indoor velodromes tend to be smaller than outdoor velodromes due to cost considerations. The median track size for an indoor velodrome is 250 meters, with tracks ranging in size from a low of 138 meters at the Forest City Velodrome in London, Ontario, Canada to a high of 285 meters at the Hanns-‐Martin-‐Schleyer-‐Halle in Stuttgart, Germany. Overall, two-‐thirds of indoor velodromes have a track surface equal to 250 meters. Only 13 percent have a 200-‐meter surface, similar to the track size envisioned for the National Velodrome at Coatesville. While there are varying track surfaces for outdoor velodromes, the indoor velodromes have predominately wooden surfaces. Overall, 93 percent of indoor velodromes have wooden surfaces and 7 percent have concrete surfaces. Types of Track Races There are a variety of formats in velodrome races. A typical event will consist of several races of varying distances and structures. The most straightforward is the "Scratch Race," where riders compete over a specified distance and the order of finish determines the winners. Points Races assign value to specific laps throughout a race and riders position in relation to the field; generally the leading rider and occasionally the second place rider will be awarded points. The structure and timing of points races varies greatly, but the winner is determined by the accumulation of points and not necessarily the rider crossing the line first at the end of the race. Elimination Races (also known as "devil take the hindmost") removes the last place rider from each lap until only three to five riders remain. The final standings are then determined by a sprint over the last two laps. Madison Races team up pairs of riders in a tag-‐team format. Riders "sling" their teammate forward to facilitate alternating sprints that keep the pace very high during typically long races (30 kilometers or more compared to 3 kilometers to 10 kilometers for most other races). The name is taken from Madison Square Garden where the format was popular in the early 1900’s. Keirin Races involve pacing six to nine riders with a motorcycle known as a “derny” until the last lap and a half when a sprint for the finish determines the winner. 17 2. CYCLING OVERVIEW
Omnium Competitions assign a point value to final standings of each race and riders accumulate points over the course of an event or series of events. This is not a specific race, but a competition that ties races and events together. Track Bicycles Track bicycles are some of the simplest bicycles used in competition. The two most unique aspects of a track bicycle is the lack of brakes and a single, fixed-‐gear mechanism. Slight variations and modifications to track bikes customize them to the type of event that is being contested. With mass-‐start endurance events, individual and head-‐to-‐head sprint events, and individual and team time trials against the clock, track cycling requires bikes specific to an athlete’s respective specialty. One of the most notable aspects of a track bike is the lack of brakes. This setup is used for mass-‐start endurance races such as the Points Race, the Madison and the Scratch Race, as well as sprint-‐oriented events like the 500-‐Meter Time Trial, the Keirin and the Sprint. A single fixed-‐gear mechanism means that a rider has only one gear and cannot stop pedaling. With only one chain ring in the front and one gear in the back, the lack of gears (and brakes) makes for an extremely lightweight bike. A rider must choose which gear to run, considering the balance between one that allows for maximum speed yet allows a quick acceleration. Because of the smooth surface of a velodrome, extremely lightweight tubular tires can be used. These tires allow for very high pressure and are glued to the wheel with a special adhesive to reduce the amount of friction between the tire and the surface of the track. In order to eliminate a potential barrier to participating in track cycling, it is envisioned that the National Velodrome at Coatesville would maintain a fleet of track bicycles that would be available for rent. This will be critically important for introducing new riders to track racing and growing the sports at a grass roots level. SUMMARY An understanding of the cycling industry and trends provides a framework from which to assess potential demand for the proposed National Velodrome at Coatesville. Key cycling trends include, but are not limited to, the following: • Cycling is among the most popular choices for physical activity across all age levels in the United States, with approximately 40 million (or 14 percent) of Americans age seven and older were estimated to have ridden a bicycle six times or more in a year. Over five million Americans are considered frequent cycling participants, riding 110 or more days a year. • Organized cycling is divided into several sub-‐disciplines including road, track, mountain biking, BMX, cyclo-‐cross, and para-‐cycling. 18 2. CYCLING OVERVIEW
•
•
•
Cycling is governed by international, national and local cycling organizations. The Union Cycliste Internationale (“UCI”) is the international governing body for cycling, and establishes standards for competitions and the facilities in which sanctioned international events are held. The required track length for UCI-‐sanctioned events is 250 meters. The planned National Velodrome at Coatesville is being designed as 200 meters in length and potential developers have cited several reasons for the decision that include: additional $2 to $3 million in project costs, higher operating expenses, UCI events being too costly to host and having unfavorable financial terms, creating and hosting their own national/international events, most track programming can be held on 200 meters, and the desire to maintain an intimate facility for cycling and other events. Competitive cycling participation in the United States has been growing steadily over the past decade. From 2002 to 2011, USA Cycling has seen an approximate 40 percent increase in cycling licenses, with an estimated 70,829 licensed riders, coaches, mechanics, officials, and others in 2011. •
Pennsylvania has the sixth highest number of licensed riders, with over 2,600 members. The Eastern Seaboard contains seven of the top 13 highest licensed membership states. •
Local cycling clubs are the grass roots level of organization for the sport, and provide programming in recreational and competitive cycling in a local or regional capacity. These clubs are largely non-‐profit, volunteer-‐run entities which provide programming for youth, adults and seniors. There are 132 local cycling organizations based in Pennsylvania that are recognized by USAC. Track racing is one of the most spectator-‐friendly disciplines of competitive cycling and is contested on a velodrome and features a variety of sprint and endurance events in which athletes or teams compete in individual or mass-‐start races. Track cycling is conducted both indoors and outdoors on banked velodromes typically 200 meters to 400 meters in length •
•
There are 27 velodromes in the United States today. The majority of existing velodromes in the United States are outdoor facilities with tracks over 250 meters in length (70 percent), with the average track size of 333 meters. There have been 12 velodromes, or 44 percent of the total, constructed in the US over the past decade. The average age of U.S. velodromes is 21 years old. •
There are 47 indoor velodromes worldwide; with the average age international indoor velodromes is 19 years. At approximately 70 percent, the significant majority of international indoor velodromes contain 250 meter tracks. There has been a clear surge in indoor velodromes built in the past decade, with 38 percent of the international total having been constructed in the past ten years. ********** 19 2. CYCLING OVERVIEW
Cycling industry trends and statistics are considered together with local and regional market characteristics, an assessment of the historical operations of comparable facilities, market surveys, and interviews with potential facility users to estimate the potential demand and resulting financial operations of the proposed National Velodrome at Coatesville. 20 Executive Summary
1.
Introduction
2.
Cycling Overview
3.
4.
5.
6.
Estimated Demand
7.
3. Indoor
Velodrome
Case Studies
3. INDOOR VELODROME CASE STUDIES
An assessment of the physical, operating and financial characteristics of comparable indoor velodromes provides a framework from which to benchmark the potential operations of the proposed National Velodrome at Coatesville. The purpose of this section is to present an overview of indoor velodromes that can be considered comparable to the proposed National Velodrome at Coatesville. The venues included in this analysis consist of facilities that are similar in size to the facility being contemplated in Coatesville, including several of which are located in markets similar in size to the Coatesville/Philadelphia market. Physical, operating, and financial characteristics (to the extent available) were obtained and reviewed for the following indoor velodromes: • ADT Event Center (Carson, California, United States); • Adelaide Super-‐Drome (Adelaide, Australia); • Amsterdam Velodrome (Amsterdam, Netherlands); • Burnaby Velodrome (Burnaby, British Columbia, Canada); • ILT Invercargill Velodrome (Invercargill, New Zealand); • National Cycling Center (Manchester, United Kingdom); and, • Omnisport Velodrome (Apeldoorn, Netherlands). ADT Event Center Carson, California (USA) Year Opened: 2004 Track Length: 250 meters Seat Capacity: 2,450 Capital Cost: $15.0 MM Funding: 100% privately funded Building Footprint: 10,200 square meters (108,792 square feet) Facility Operator: Anschutz Entertainment Group (AEG) Facility Operator: Anschutz Entertainment Group (AEG) Opened in 2004, the ADT Event Center was built as part of the 125-‐acre Home Depot Center Complex in Carson, California, a suburb of Los Angeles. The Home Depot Center also includes a 27,000-‐seat soccer stadium, 8,000-‐seat tennis stadium and an outdoor track and field facility with 2,000 seats, expandable to 20,000 seats. 21 3. INDOOR VELODROME CASE STUDIES
The ADT Event Center is the only international standard indoor track in North America (it should be noted that there are two additional indoor velodromes in Canada, but neither venue meets international standards). The $15 million ADT Event Center was privately funded by the Anschutz Entertainment Group (“AEG”), which owns and operates the entire Home Depot Center Complex. The ADT Event Center is also a part of The Home Depot Center's partnership with the United States Olympic Committee (“USOC”) as an Official U.S. Olympic Training Site and is the home track to USA Cycling's national track cycling program. The 20,000 square foot infield contains two basketball courts and five volleyball courts surrounded by netting to allow for simultaneous use of the facility. Both ends of the infield also contain weight training areas for tennis and basketball training. The velodrome does not contain showers, changing rooms, or lockers for bike storage. The facility does have containers located in the building mezzanine that riders can rent for bike and equipment storage. The facility is located in a suburban location, approximately 19 miles from downtown Los Angeles. The Event Center is conveniently located near freeways to allow participants and spectators easy access to the facility. Facility management estimates that most regular users of the facility are within 20 to 30 miles of the Event Center, and while national events will vary, there is still a heavy west coast draw. The ADT Event Center hosts a variety of cycling and non-‐cycling events every year. Based on discussions with facility management, the ADT Event Center hosts, on average, one major international championship, such as the UCI Track Cycling World Cup, one major national cycling championship, and approximately 20 local/regional racing competitions, among other weekly programs. The ADT Event Center offers introductory through elite level programming, and utilizes a membership structure for frequent riders, with between 400 and 500 total members. Membership fees range from $360 (for volunteers) to $480 (for standard membership). Additionally, the Southern California Volleyball Association also holds weekend tournaments every weekend from January through July. Athlete’s Performance uses the basketball courts for training of advanced and elite-‐level basketball players, although no official tournaments are hosted at the facility. Event attendance levels range from less than 100 spectators for local events, 1,200 to 1,300 attendees for national championships, and sellouts of 2,400 for international level events. Ticket prices range from $5 to $10 for national championships, and $20 to $50 for international level events. Tickets are no longer sold for local/regional races after failed experiences in the past. The facility hosts training and competitions under the guidance of USA Cycling, which has a partnership with the facility. The USA Cycling team and Team Canada use the facility as a national training center for their respective countries. The Home Depot Center complex has several departments responsible for staffing event management, operations, guest services, security, engineering and grounds. These staff members are allocated on as-‐needed basis to each venue within the complex. The ADT Event Center has one full-‐time track manager who handles the day-‐to-‐day operations of the velodrome and manages staffing levels. The facility also relies heavily on the local cycling community for volunteer assistance for both daily operations and especially during events. 22 3. INDOOR VELODROME CASE STUDIES
ADT Event Center facility management indicated that the facility is not financially sustainable on its own. It relies heavily on creating operating efficiencies with the Home Depot Center Complex and is subsidized by the overall Home Depot Center Complex operations. Facility management indicated that one of its greatest challenges is the required certification needed for riders to use the track. All track participants must complete a four-‐week certification course at a cost of $225, although this fee is waived if the rider becomes an annual member. Experienced riders can complete a one-‐day certification at a cost of $80. In hindsight, facility management indicated that the ADT Event Center could benefit greatly from: (1) incorporating a bike shop, coffee shop, and/or fitness areas into the building, (2) utilizing areas under the stands for storage, and/or offices, and (3) providing restrooms accessible from the track. Adelaide Super-‐Drome Gepps Cross, South Australia Year Opened: 1993 Track Length: 250 meters Seat Capacity: 4,000 (2,000 fixed, 2,000 infield) Capital Cost: $30.0 MM ($20.4 MM USD) Building Footprint: 12,400 square meters (133,472 square feet) Facility Operator: Government of South Australia Office for Recreation & Sport Facility Owner: Government of South Australia Office for Recreation & Sport The Adelaide Super-‐Drome was originally built to house the Australian Institute of Sport’s Track Cycling Team, host international events and provide an elite training venue for cyclist and other sports. The facility has spectator seating for 4,000 (2,000 fixed seats with additional standing room for 2,000 in the track infield) surrounding a 250-‐meter track. Other facility amenities include a recessed infield area, corporate boxes, a VIP lounge, warm-‐up areas adjacent to the track, two changing rooms, a fully equipped training room and lockable storage spaces. A banquet/conference room is available for use, with a full-‐service kitchen and bar, and space to accommodate up to 200 guests. On-‐site parking is available for 1,500 cars. The facility is located in a suburban location only eight kilometers (five miles) from a highway and an approximate 15-‐minute drive from the Adelaide Airport. There are eight hotels within four kilometers (three miles) of the facility. 23 3. INDOOR VELODROME CASE STUDIES
The $30.0 million ($20.4 MM USD) facility was publicly funded and is owned by the South Australian State Government and operated by the Office of Recreation & Sport. Tenants include the South Australian Cycling Federation and Australian Institute of Sport Track Cycling. The Super-‐Drome serves as a base for all track cycling disciplines for Cycling Australia, with most of its track time dedicated to high performance training. The facility hosts seven to eight national and international ticketed events a year, two to three racing league nights a week and frequently serves as an international training camp venue. Local cycling groups and other sports (such as indoor soccer, cheerleading, hockey) also book the facility. Schools have also booked the venue for tours, competitions and basic skills clinics. The facility has also been used by local business for corporate outings. No concerts are hosted at the venue due to concerns related to crowd control and potential cleanup expenses. The Super-‐Drome does not operate at profit and is publicly subsidized. The track’s Director of Operations estimated operating losses to be approximately $120,000 ($125,000 USD) annually and attributed these losses primarily to the limited track time available for public use because priority is placed on training for the Australian National Team. Excluding staff salaries and wages, it costs approximately $1.0 million ($1.1 MM USD) to maintain the Super-‐Drome each year. Significant track operating expenses noted by the Director of Operations included $500,000 ($522,000 USD) for building and grounds maintenance, $250,000 ($261,000 USD) to $300,000 ($312,000 USD) for utility expenses and $75,000 ($78,000 USD) for general cleaning. According to facility management, the three greatest challenges with operating the Super-‐Drome include: (1) cleaning costs due to the size of the grounds/venue, (2) lack of office space, and (3) lack of storage space. Amsterdam Velodrome Amsterdam, Netherlands Year Opened: 1970 (covered in 2002) Track Length: 200 meters Seat Capacity: 2,500 (1,500 fixed, 1,000 infield) Capital Cost: €4.9 MM ($4.7 MM USD in 2002 dollars) Funding: 95% publicly funded, 5% privately funded Building Footprint: n/a Facility Operator: Foundation Stadium Amsterdam Facility Owner: City of Amsterdam 24 3. INDOOR VELODROME CASE STUDIES
Originally opened in 1973 as an outdoor velodrome, the Amsterdam Velodrome was developed in multiple phases. A roof was initially added in 1998, and the facility was later fully enclosed with heating in 2002, at a cost of €4.9 million ($4.7 USD). The facility was largely funded by the City of Amsterdam and the local township of Slotervaart. Approximately five percent of construction costs were also covered by private founders of the facility. The track is owned by the City of Amsterdam and operated by Foundation Stadium Amsterdam. According to the management agreement, the City pays the major maintenance costs while the foundation handles the more minor on-‐going costs associated with facility operations. A local cycling club constructed adjacent club rooms with changing rooms, a lounge, and bar facilities when the track was originally built. These features were incorporated into the building when the track was covered and continue to provide support facilities for the velodrome. There is additional office space located in prefabricated buildings directly adjacent to the velodrome. Recently, facility management has been considering plans to raise the roof by approximately three meters in order to increase the venue’s seating capacity from 1,500 to 2,500 and add additional support amenities. The velodrome is located in a sports park, which has a dedicated 2.5 kilometer (1.6 mile) road cycling track. The road cycling track is free-‐of-‐charge and hosts three nights of racing each week during the summer. According to facility management, there have been discussions to expand the outdoor offerings by developing BMX facilities to complement the existing track and road facilities. While the velodrome is a multi-‐purpose venue, the primary focus of facility programming is track cycling. There are 31 hours per week of regular track hours, comprised of 10:00 am to Noon on Monday, Wednesday, Friday and Saturday (without coaching), Noon to 1:00 pm for derny (motorbike pacing) riding on Monday, Wednesday, and Friday, 4:30 pm to 10:00 pm, Tuesday and Thursday (with coaching), 6:30 pm to 10:00 pm on Wednesday (with coaching), and 4:00 pm to 9:30 pm on Sunday (with coaching). According to facility management, the highest track usage occurs from October to March during the colder months of the year. During this period, the track is used for the majority of available programming hours, and remains fully booked on weekends. Usage of the track is significantly reduced during the summer months as cyclists spend more time outdoors. During the summer, the track remains essentially closed from April through August, but the facility is still open to host other events. The Amsterdam Velodrome utilizes a per-‐use fee structure and does not offer annual or season membership passes. Usage of the track costs €10 ($13 USD) for access to a three hour session. Additional charges include the rental of an aluminum-‐framed bike for €11 ($15 USD), plus €1 ($1 USD) for the use of a helmet during the session. Each three-‐hour session can accommodate 45 to 60 cyclists, assuming that participants are not continuously riding for three hours. These sessions do not include coaching, but it is available if a track fee of €12 ($16 USD) is paid. The velodrome does offer monthly passes at a cost of €30 ($40 USD), which only includes sessions on Monday, Wednesday, and Friday. The velodrome also offer discounts for 10 session bundles, with fees of €80 ($106 USD) without coaching, and €100 ($132 USD) with coaching, providing riders a total savings of €20 ($26 USD). School groups are granted all-‐inclusive packages for €30 ($40 USD) per student for a three hour riding session. 25 3. INDOOR VELODROME CASE STUDIES
The velodrome also provides group clinics that include coaching, which have proven to be popular with road cycling clubs and other organizations interested in learning track cycling. Groups of up to 20 riders are charged a group rate of €375 ($496 USD) or €575 ($761 USD) if bikes are required, for a three hour clinic. The Amsterdam Velodrome has approximately 12 cycling event days each year, with the Six Day Race Series being the most prominent event, along with the 50k National Championships, a Sunday night race series, among other events. Catering facilities, sound and lighting systems are rented for these events and facility management indicated that these events generate the most revenue for the facility. Corporate and VIP hospitality tickets cost €80 ($102 USD) and accommodate between 750 and 1,000 spectators in the track infield during the Six Day Race Series, and are very lucrative for the velodrome. Standard tickets cost €25 ($32 USD) for the event. Other successful programming includes their “Friday Nights at the Velo” program that attracts school groups (approximately 150 participants) per event night, from 4 pm to 10 pm. This event was noted as a good revenue generator, but also a great way to involve local youth in the sport of cycling. Non-‐cycling events include small trade shows, corporate events, boxing events, and indoor sports. Facility management estimated there are approximately two of these types of events held every month, and five if you include corporate outings. The Amsterdam has hosted a couple of concerts and house music shows in the past, but management indicated the facility was not built for this purpose, citing issues with the metal roof and noise control. The facility is supported by three full-‐time staff members, one manager, one track director, and the head of maintenance. Facility management noted the high level of volunteer support the facility receives from retired cyclists that fix bikes, clean the track, among other tasks; these volunteers are provided an annual pass to the track for their services. While facility management realizes the 200 meter track limits their ability to host championships, they also attribute the success of their Six Day Series to the smaller track size, which provides spectators better sightlines and a more exciting experience. Financially, the facility operates near breakeven levels and attributes their financial challenges to the level of competition for track cycling in the area. There are two 250-‐meter velodrome tracks within 75 miles of the Amsterdam Velodrome. 26 3. INDOOR VELODROME CASE STUDIES
Burnaby Velodrome Burnaby, British Columbia (Canada) Year Opened: 1997 Track Length: 200 meters Seat Capacity: 500 (150 fixed, 350 infield) Capital Cost: $10.0 MM ($7.2 MM USD in 1997 dollars) Funding: 100% publicly funded, mix of Provincial & Municipal funds Building Footprint: 5,800 square meters (62,431 square feet) Facility Operator: Volleyball BC Facility Operator: City of Burnaby The 200-‐meter Burnaby Velodrome is located in the suburb of Burnaby, British Columbia, Canada. Located 15 minutes outside of Vancouver, the velodrome is the only cycling facility located in lower British Columbia and mainly serves the population of Greater Vancouver. The facility is owned by the City of Burnaby and operated by Volleyball BC. The Burnaby Velodrome Club serves as a tenant in the facility. The facility is one of the two indoor velodromes in Canada and utilizes an air-‐supported dome roof. The facility was built in 1997 and offers bleacher seating for 150, and a total capacity of 500 spectators with standing room in the track infield. The facility has 150 on-‐site parking spaces. Facility management indicated the original construction cost was approximately $10 million ($7.2 million USD) and an additional $5 million ($4.9 million USD) of capital improvements have been invested into the facility since its original construction. These improvements included a new insulated roof, new furnace, new hanging lights and an enclosed meeting room overlooking the track. The track infield offers six volleyball courts and a small set of stands. The facility also offers a multi-‐
purpose gymnasium, changing rooms, warm-‐up areas, two official’s rooms, a meeting room, office space and equipment storage. The 200-‐meter track does not meet international specifications to host UCI sanctioned world championship events. However, it has hosted the Canadian National Track Championships. The facility hosts approximately three to four cycling events each year. Burnaby Velodrome Club hosts Friday night racing leagues in the fall and winter, with approximately eight race nights in each season. The facility also hosts youth cycling camps, structured training sessions from junior to elite levels, learn to ride and race programs, among other coached and open riding sessions. 27 3. INDOOR VELODROME CASE STUDIES
Open riding fees at the facility range from $10 ($10 USD) to $20 ($20 USD), while annual membership fees range from $175 ($174 USD) to $448 ($445 USD). Classes and lessons range from $25 ($25 USD) to $35 ($35 USD) per session. The facility also offers bike rentals for $5 ($5 USD) for members and $10 ($10 USD) for non-‐members. According to facility management, cycling activities account for approximately 30 percent of overall facility utilization. The infield space is primarily used for volleyball. Volleyball BC has its headquarters at the facility and also operates a retail store at the venue. Adult volleyball leagues host nightly practices and games six nights a week from September through December and January through March. The club volleyball season spans from January through May and utilizes the facility approximately three nights a week. Local high school sporting events are hosted at the facility during the fall months. The facility also hosts other sporting events, including badminton, gymnastics and indoor soccer. The facility has also been used for indoor exposition space, but facility management noted that there are complications associated with hosting such events in an air-‐supported dome due to the constant ingress/egress of event attendees. While facility management would not disclose the detailed financial operations of the velodrome, facility management did indicate that the facility is not profitable and relies on a small property tax subsidy. Facility management noted significant challenges associated with the 200-‐meter track as it relates to attracting international championship events. The track length and limited seating capacity of the venue were mentioned as the two main factors that limit the velodromes event levels. For those reasons, the track is used mostly for cycling development and training. The track size does allow the facility to host national and international invitational events, but facility management noted they are outbid by 250-‐meter tracks with larger seating capacities. Additional challenges in operating the venue include the infield netting and appropriate infield entry points. Balancing the multi-‐use nature of the facility has been a challenge, but was also noted by facility management as the greatest success of the facility due to the high level of volleyball and other sport programming. 28 3. INDOOR VELODROME CASE STUDIES
Invercargill ILT Velodrome Invercargill, New Zealand Year Opened: 2006 Track Length: 250 meters Seat Capacity: 1,200 Capital Cost: $10.0 MM ($6.5 MM USD) Funding: 100% publicly funded Building Footprint: 9,300 square meters (100,104 square feet) Facility Operator: Southland Indoor Leisure Center Charitable Trust; Track programming – Cycling Southland Facility Owner: Stadium Southland Trust Opened in 2006, the $10.0 million ($6.5 million USD) Invercargill ILT Velodrome is New Zealand’s first indoor velodrome. The velodrome is considered a national and international level track cycling facility that utilizes infield space to accommodate other sports and community-‐based events. The Invercargill Licensing Trust (“ILT”), a local operator of hospitality, accommodation, food and beverage and entertainment facilities, provided $5.0 million ($3.2 million USD) in funding. The Community Trust of Southland provided $1.6 million ($1.0 million USD), the Central Government $1.0 million ($650,000 USD). The remaining funds were raised through contributions from New Zealand National Funding Agencies. Invercargill ILT Velodrome is owned and managed by Southland Leisure Charitable Trust, a non-‐profit community trust funded by community sources. The facility was built in conjunction with a planned extension to Stadium Southland six years ago. The velodrome was constructed to be used as a multipurpose facility that can host a number of other sporting and cultural events, along with track cycling. The facility houses a 250 meter Siberian pine cycling track, with infield space that contains four sport courts primarily used for basketball, tennis, and netball. The courts are made with Rebound Ace surface that is both durable and versatile across different indoor activities. These courts are surrounded by motorized netting that allows the facility to accommodate infield sports and cycling simultaneously. Facilities also include a fitness center, media facilities, meeting rooms and offices. Along with these spaces, the facility also provides storage, showers, changing rooms, an on-‐site kitchen and bar facilities, a café, a physiotherapist, and retail shop. Cycling Southland, the local cycling organization, is responsible for track programming, while Stadium Southland is responsible for the programming of the track infield. Cycling Southland is a 29 3. INDOOR VELODROME CASE STUDIES
tenant of Stadium Southland, paying for rental based on hourly usage. Cycling Southland pays $25 ($21 USD) per hour to use the facility or $35 ($29 USD) per hour if lights are required. Facility management indicated that the velodrome generates approximately $600,000 ($500,700 USD) in total annual revenues, allowing the venue to generally breakeven. Cycling Southland employees include one CEO, one events/track manager, two coaches (one development based, one coaching coordinator), and one administrative assistant. The facility is heavily dependent on volunteer contributions requiring 50 volunteers for championship cycling events and 25 for larger community-‐
based events. The velodrome utilizes a membership structure that allows track members to pay half price for use of the facility. Cycling Southland has approximately 500 members who pay a $40 ($33 USD) annual fee. Per-‐use rates to use the facility cost approximately $10 ($8 USD) per hour/per rider. Rental equipment is available at the very low cost of $5 ($4 USD) for rental of bike and helmet per session. According to facility management, the facility’s greatest success is its accessibility and very high level of usage. While the venue’s price points are low, it has enabled the facility to steadily grow in usage. Over the past six years since the facility was built, Cycling Southland has gone from a 130-‐member organization to having a membership base of over 500. Along with regular track programming, the facility hosts several national and international level cycling events, including the Junior World Championships, two National Championships, two Oceania Championships, Elite Track Cycling Event, and Age Group Championships. Tickets for these events range from $10 ($8 USD) to $20 ($17 USD) for adults and $5 ($4 USD) to $10 ($8 USD) dollars for juniors. The facility has also had success with their Corporate Pursuit Events, a two-‐day event held every July, that attracts 34 six-‐person teams that pay a $900 ($751 USD) team entrance fee. The Invercargill ILT Velodrome also hosts approximately 20 to 30 non-‐cycling events each year. Events held at the facility include trade and craft shows, tennis, netball, and other sports. Weekly programming for other sports includes two nights dedicated to netball with one night each for volleyball and tennis. A key challenge noted by facility management is the current operating model where infield bookings are made by Stadium Southland and track programming is handled by Cycling Southland. This has been a source of frustration and many scheduling conflicts. 30 3. INDOOR VELODROME CASE STUDIES
National Cycling Center Manchester, England (United Kingdom) Year Opened: 2008 Track Length: 250 meters Seat Capacity: 4,500 (3,000 fixed, 1,500 infield) Capital Cost: £9.5 MM construction ($17.6 MM) / £24.5 MM expansion ($38.8 MM USD) Funding: 100% publicly funded Building Footprint: 13,700 square meters (147,465 square feet) Facility Operator: Velodrome Trust Facility Owner: Manchester City Council Located in Manchester, England, the National Cycling Center is a multi-‐sport facility widely used for a variety of activities and events at the local to international levels. Opened in 2008, the £9.5 million ($17.6 million USD) velodrome was publicly funded with contributions from Sport England of £6 million ($11.1 million USD), Manchester City Council of £2.5 million ($4.6 million USD), and the Foundation for Sport and the Arts provided £1 million ($1.9 million USD). The velodrome is located near Etihad Stadium, home of Manchester City Football Club, in an established sports precinct of the City of Manchester and adjacent to retail development. Over the past two years, £24.5 million ($38.8 million USD) of capital investment have been made to the complex and grounds, which has doubled the size of the velodrome to include an indoor BMX track, new offices for British Cycling, a café, cycling shop and retail space. Of this cost, £19.6 million ($31.1 million USD) is for the facility and the remainder is for public trails and pathways that will link the complex to existing National Cycling Center facilities. Manchester City Council contributed £8.6 million ($13.6 million USD), Sport England granted £3 million ($4.8 million USD) and the Northwest Regional Development Agency (NWDA) provided £8 million ($12.7 million USD). The remaining £5 million ($7.9 million USD) was used for public spaces including new bike and footpaths and was funded by the Homes and Communities Agency and the European Regional Development Fund. The velodrome is owned by the Manchester City Council and operated by the Velodrome Trust, a non-‐profit company of which Manchester City Council is the only member. The Velodrome Trust is represented by Manchester City Council, Sport England, and British Cycling and receives annual funding from Sport England. 31 3. INDOOR VELODROME CASE STUDIES
The facility has 3,000 permanent seats but can accommodate up to 4,500 spectators with room for an additional 1,500 spectators in the track infield. Also included in the velodrome are two hospitality boxes overlooking the track and areas for officials, media and VIPs. The velodrome utilizes the 8-‐to-‐
10 seat hospitality boxes for both private and public use, depending on the event. For the popular Revolution Series cycling event, the velodrome sells each box for £250 ($379 USD), not including food and beverage options available for purchase. The facility also has spin bikes, rental bikes and rental storage available for public use, but there are no major separate rooms available. There are function rooms that are used exclusively as offices and conference suites for British Cycling and other track cycling groups. According to facility management, the National Cycling Center is the most utilized velodrome in the world and is viewed by many in the cycling world as the best example of velodrome operations. Since opening, the facility has hosted the World Track Championships three times and successive rounds of World Cup events every year since inauguration. Other cycling events held at the facility include National Track Championships, National Madison Championship and Revolution Series. The Revolution Series was created in 2003 by marketing firm, Face Partnership, and the National Cycling Center to provide a new style of cycling event in the UK. The series invites the best cyclists in the UK to compete with other European cyclists in an event that has proven to be quite popular, attracting an average of 2,000 spectators. The National Cycling Center also attracts 4,000 for World Cup, World Championship, and National Madison Championship events, between 1,000 to 2,000 spectators for National Track Championships, and between 300 to 500 attendees for smaller national/international events. Nightly races are primarily for participants and draw between 20 and 30 spectators. Total attendance levels for cycling events were estimated to range between 30,000 and 33,000 spectators annually. The facility regularly programs youth developmental cycling, league racing, training for elite riders and has existing partnerships with local schools and universities. The National Cycling Center is primarily used for cycling purposes, but the velodrome contains a multi-‐use sports court that provides facilities for netball, basketball, badminton and other sports. Velodrome representatives view indoor soccer as incompatible with track cycling due to the possibility of a ball leaving the netted infield or distracting riders. The infield space of the facility is also used for National Cheerleading Championships, Martial Arts National Championships and boxing events, among other uses. The velodrome has hosted two live music events for the Manchester International Festival, but facility management indicated that this was the exception and the building was not designed to host concerts, citing issues with sound proofing and neighbor complaints of noise. Facility management does not foresee future use of the building for concerts or live music events due to these issues. While the facility is primarily used and marketed as a cycling venue, total attendance levels for non-‐cycling events were estimated to be around 40,000 annual spectators. The National Cycling Center is largely dependent on public subsidy covered by grants from Sport England and the City of Manchester to remain sustainable. The following table summarizes the National Cycling Center Three Year Financial Plan provided by the Velodrome Trust. 32 3. INDOOR VELODROME CASE STUDIES
The National Cycling Centre in Manchester, UK
Three Year Financial Plan (2011 through 2014, shown in GBP)
2011/12
2012/13
2013/14
REVENUE
GRANTS AND SUPPORT
£ 191,000
£ 191,000
£ 191,000
TRACK HIRE (World Class, l eagues and e vents)
520,432 571,215 590,511
TRACK ADMISSION (Courses, Tasters e tc )
176,744 197,795 213,797
RENTAL INCOME
162,921 225,653 283,725
OTHER INCOME
265,622 282,565 299,178
CATERING i ncluding major e vents
219,500 345,000 375,000
REVOLUTION INCOME 215,000 215,000 215,000
TOTAL INCOME
£ 1,751,219
£ 2,028,228
£ 2,168,211
EXPENSES
COST OF SALES
£ 133,750
£ 193,500
£ 193,500
BUILDING COSTS
659,626 715,000 763,350
STAFF COSTS
871,496 1,004,440 1,036,568
ADMINISTRATION
204,951 205,900 215,382
REVOLUTION COSTS
210,000 210,000 210,000
TOTAL TRADING COSTS
£ 2,079,823
£ 2,328,840
£ 2,418,800
TRADING SURPLUS/(DEFICIT)
(328,604) (300,613) (250,589)
MCC UNDERWRITING
(328,604) (300,613) (250,589)
Source: The Vel odrome Trus t (Opera tor o f Na ti ona l Cycl i ng Center, Ma nches ter, UK)
The National Cycling Center is not currently financially sustainable without public subsidy of the velodrome. However, facility management indicated that due to the association with British Cycling and Sport England, the facility places scheduling priority on cycling first, which limits the ability of the venue to maximize revenue from other sources. 33 3. INDOOR VELODROME CASE STUDIES
Omnisport Velodrome Apeldoorn, Netherlands Year Opened: 2008 Track Length: 250 meters Seat Capacity: 6,000 (5,000 fixed, 1,000 infield) Capital Cost: €58.0 MM (for entire complex) ($85.3 MM USD in 2008 dollars) Funding: 100% publicly funded Building Footprint: 25,000 square meters (269,098 square feet; for entire complex) Facility Operator: Libema Facility Owner: City of Apeldoorn Opened in 2008, the Omnisport Velodrome is part of a large sports complex that contains a 250-‐
meter cycling track, a sports hall, and meeting/hospitality/conference space. Additionally, the facility contains an ice skating rink that is used six weeks during the winter months. The €58 million ($85.3 million USD) sport complex was funded with City of Apeldoorn, Provincial, and Dutch Top Sport funds. The facility is located in Apeldoorn, Netherlands, a city with approximately 300,000 residents. The velodrome has 5,000 fixed seats and has room to accommodate 9,000 spectators for concerts and other events. The facility has on-‐site parking for 1,500 cars. The City of Apeldoorn owns the complex and has a 10 year management agreement with Libema to manage the day-‐to-‐day operations. Libema is one of the largest leisure groups in the Netherlands and manages five other exhibition/conference complexes around the country. As part of the agreement, Libema is required to handle routine maintenance of the facility, while the City of Apeldoorn jointly funds on-‐going developments that enhance the ability of the venue to attract events that benefit both parties. Libema is not directly responsible for any sport programming, but rather hire the space out accordingly. Omnisport Velodrome is the regular home for Dutch National Cycling Championships and has hosted the European Cycling Competitions and World Championship Cycling Competitions. Other cycling events include the Six Day Championship, and weekly local cycling club championships. Facility management estimated that the facility typically hosts 8 to 10 large regional/national/international cycling events a year, with average expected attendance between 250 for the lower tier events and 4,000 for European and World Championship competitions. 34 3. INDOOR VELODROME CASE STUDIES
The facility is not opened for walk-‐ins and bookings must be made in advanced. The Dutch Cycling Association has a standing booking on weekdays from 9:30 am to 12:30 pm throughout the year. De Adelaar, a local cycling club, has reserved time from September to May on Monday, Thursday, and Friday from 7:00 pm to 10:00 pm, Tuesday from 6:00 pm to 10:00 pm and Wednesday from 2:00 pm to 10:00 pm. According to facility management, track rental rates are €100 ($132 USD) per hour. The rental rate for the infield is also €100 ($132 USD) per hour. The velodrome is considered a multi-‐use facility that regularly utilizes the infield to host indoor athletic events, concerts, expos, conferences and other events. The infield track is primarily used for track and field sports and the facility features a 200-‐meter four lane perimeter running track, eight lane sprint track down the middle, long jump pit, pole vault, high jump and throwing cages. Other sports that have been played at the facility include soccer, volleyball, tennis, hockey and basketball. The facility hosts four large athletic championships each year, that draw between 500 and 2,000 spectators, and the AFAS Tennis Classic; a week long tennis event that draws sell-‐out crowds to the velodrome. The velodrome also hosts approximately four concerts each year, according to facility management. Each concert draws approximately 4,000 spectators on average, and generates approximately €85,000 ($112,500 USD) in total revenue, including the €25,000 ($33,100 USD) fee to use the facility. The velodrome utilizes two sections of the track, halfway down each straightaway, that lower to provide vehicles the ability to drive over the tracks. This feature has been extremely useful for the hosting of concerts, expos and other events that require the transport of heavy equipment to the track infield. Facility management indicated that Omnisport Velodrome has had success with their sport café and catering facilities, which helps attract the general public into the complex and also supports corporate use of the complex. Facility management indicated that the velodrome complex generates approximately €1.5 million in revenues each year ($2.0 million USD), excluding a €500,000 ($662,000 USD) annual subsidy from the City of Apeldoorn. Facility management indicated that the velodrome operates profitably when factoring in the €500,000 annual subsidy. SUMMARY Within this section, the physical and operational characteristics of select indoor velodromes were reviewed. The following is a summary of the key findings of the analysis of comparable indoor velodromes: • Six of the seven comparable indoor velodromes were largely funded by public entities, with the exception of ADT Event Center in Carson California; which was 100 percent privately funded by Anschutz Entertainment Group. • The average total seating capacity of the seven indoor velodromes reviewed in this section was approximately 3,021 seats, including fixed seating, infield and standing room only areas. • On average, the construction costs for the comparable velodromes was approximately $11.9 million USD (Omnisport Velodrome in Apeldoorn, which cost €85.3 million, or $85.3 million 35 3. INDOOR VELODROME CASE STUDIES
•
•
•
•
USD, for the development of the entire sports complex). It should be noted that the average costs were calculated based on the capital cost at time of construction, and have not been adjusted for inflation. The majority of comparable velodromes reviewed do not operate profitably and are largely dependent on municipal subsidies to overcome financial operating shortfalls. Facility management of many velodromes indicated that the need to focus on cycling events and programming limited their ability to attract other events that could potentially draw higher revenues. All of the comparable indoor velodromes analyzed in this section are multi-‐use in nature. Facility managers at the majority of indoor velodromes indicated that the facilities would not be sustainable without utilizing the infield space for other purposes including indoor sports, consumer shows and exhibitions, and other community-‐based events. Overall, the indoor velodromes reviewed had between average five full-‐time staff members. Most facility managers noted the dependency on volunteer contributions when hosting championship cycling events and other larger events. Facility management at the Burnaby Velodrome, one of the two 200 meter indoor velodromes reviewed, indicated that the venue struggles to attract sizeable cycling events due the size of its track and lack of seating capacity. This limits the use of the facility to primarily cycling development and training. The Amsterdam Velodrome, also a 200 meter track, has had much success with its Six Day Race Series, utilizing corporate and VIP hospitality areas to maximize revenue. •
Indoor velodromes with ancillary amenities including cafés, kitchen/catering areas, and bars indicated that they had success with these facilities and helps make the velodrome more of an attraction and elevates the experience of event participants and spectators. Retail and bike shop spaces have also been successful for several facilities. ********** While comparisons with the facilities described in detail within this section may be useful, the physical characteristics and operational philosophy of a new indoor velodrome will depend on the specific needs and preferences of project stakeholders and local market conditions. In developing a demand estimates and financial projects for a new indoor velodrome, the review of comparable facilities is considered together with an assessment of demographic and socioeconomic data, local market facilities, industry trends, velodromes standards and other factors. 36 Executive Summary
1.
Introduction
2.
Cycling Overview
3.
4.
5.
6.
Estimated Demand
7.
4.
Local Market
Conditions
4. LOCAL MARKET CONDITIONS
The proposed National Velodrome at Coatesville is anticipated to be a multipurpose facility capable of hosting cycling, concerts, entertainment events, indoor sports and consumer shows, among other activities. The viability of the proposed venue is dependent, in large part, on local and regional market characteristics and the marketability of the facility/community to potential cycling participants, touring events and spectators. Key market characteristics include the demographic and socioeconomic profile of the local/regional market, transportation access, hotel inventory, visitor attractions and the level of competition in the marketplace. This section provides an overview of the Coatesville market in terms of key market characteristics that can impact the viability of the proposed National Velodrome at Coatesville. Accordingly, this section is presented in the following components: • Demographic and Socioeconomic Characteristics; • Corporate Base; • Transportation Access; • Hotel Inventory; • Visitor Attractions; and, • Competitive Facilities. DEMOGRAPHIC AND SOCIOECONOMIC CHARACTERISTICS The demographic and socioeconomic data presented in this report is based on the anticipated market areas for the proposed National Velodrome at Coatesville. The size of the venue’s market area is influenced by factors such as the type and quality of venue programming, the site location and accessibility, visitor amenities and competing facilities, among other factors. The National Velodrome at ANTICIPATED LOCAL AND REGIONAL MARKET AREAS
Coatesville would be the second Indoor Velodrome & Events Center
indoor cycling track in the United States and the only indoor cycling track on the East Coast. For certain cycling events, it is anticipated that the National Velodrome at Coatesville could draw from a substantial area for regional, national and international competitions. However, the majority of uses for the National Velodrome at 200 100 Miles
Miles
Coatesville will likely involve a more regional/local focus. The market areas analyzed herein include the City of Coatesville, Chester County, the Philadelphia Core-‐Based Statistical area (CBSA), a 100-‐mile radius and a 200-‐mile radius 37 4. LOCAL MARKET CONDITIONS
surrounding the proposed site of the National Velodrome at Coatesville. The map on the previous page illustrates the anticipated market areas from which the majority of facility patrons are expected to come within. Key local and regional demographic and socioeconomic market characteristics that may impact the viability of the proposed National Velodrome at Coatesville include, but are not limited to: • Population; • Age; and, • Household Income. The following table presents historical, current and projected population as well as age and income statistics for the City of Coatesville, Chester County, the Philadelphia CBSA and 100-‐mile and 200-‐
mile radii from the proposed site at the Flats. MARKET DEMOGRAPHIC AND SOCIOECONOMIC DATA
The National Velodrome at Coatesville
City of
Chester Philadelphia
100 Mile
200 Mile
Coatesville
County
CBSA
Radius
Radius
Population
1990 P
opulation
10,361
433,487
5,687,140
19,420,984
44,424,115
2000 Population
13,101
498,886
5,965,343
20,765,316
47,209,790
2013 Population
13,606
509,675
6,022,170
21,028,349
47,908,213
2018 Population
14,322
524,577
6,109,258
21,454,851
49,005,992
Historical Annual Growth
1.2%
0.7%
0.2%
0.3%
0.3%
Future Annual Growth
1.0%
0.6%
0.3%
0.4%
0.5%
Age
Median Age
30.8
39.2
38.3
38.9
38.6
0 to 17 years
30.0%
24.3%
22.9%
22.7%
22.5%
18 to 34 years
26.9%
20.3%
23.0%
22.2%
22.8%
35 to 54 years
25.2%
28.3%
27.3%
27.7%
27.8%
55 to 74 years
14.2%
21.0%
20.3%
20.8%
20.5%
75+ years
3.8%
6.0%
6.5%
6.6%
6.4%
Household Income
Median HH Income
$37,017
$85,554
$59,771
$63,373
$62,340
Median HH EBI $31,687
$67,565
$47,304
$49,342
$48,436
Less than $25,000
34.2%
11.7%
21.9%
19.4%
20.5%
$25,000 to $50,000
28.3%
16.6%
21.4%
21.1%
20.9%
$50,000 to $75,000
13.0%
15.9%
17.3%
17.9%
17.3%
$75,000 to $100,000
11.6%
13.9%
12.7%
13.1%
12.5%
$100,000 to $150,000
9.6%
20.3%
14.8%
15.5%
15.0%
$150,000 to $250,00
2.5%
13.7%
8.3%
8.8%
8.9%
Over $
250,000
0.8%
7.9%
3.8%
4.3%
4.8%
Source: Claritas.
38 4. LOCAL MARKET CONDITIONS
Population The level of population from which to draw can impact the ability of the National Velodrome at Coatesville to host events and attract participants / spectators. Key population-‐related statistics of the National Velodrome at Coatesville’s market area include: • The City of Coatesville, while relatively small, is part of the Philadelphia-‐Camden-‐Wilmington CBSA, which has over 6.0 million residents and is the sixth largest among 917 CBSAs in the United States. • Due to the area’s proximity to other major cities on the east coast, the population within 100 and 200 miles of the proposed National Velodrome at Coatesville is substantial. Specifically, there are over 21 million residents within 100 miles (about a two hour drive) and nearly 48 million residents within 200 miles (about a four hour drive). This represents a substantial market from which to draw participants and spectators for various events and programming that could be hosted at the National Velodrome at Coatesville. • Over the next five years, it is anticipated that the population growth rate will be greater in the City of Coatesville and Chester County relative to the larger regional market area for the National Velodrome at Coatesville. • Applying national cycling participation rates complied by SGMA to the population within 200 miles of the National Velodrome at Coatesville yields an estimate of 6.1 million bicycle riders, of which about 760,000 ride 110 or more times per year. Age The age characteristics within a market represent another key demographic variable that is important to the overall viability of the National Velodrome at Coatesville. The overall age distribution of the market can be indicative of the types of events that may be attracted to, and be successful in, a market. As cited earlier in this report, 75 percent of USA Cycling members fall into the masters-‐level competition category, which is for ages 30 and over. Senior-‐level USA Cycling members, aged 19 to 29, make up 22 percent of the membership base and junior-‐level members, aged 18 and under, comprise three percent of USA Cycling membership. The median age group for USA Cycling members is 30 to 39 years of age. Key age-‐related statistics of the National Velodrome at Coatesville’s market area include: • The immediate market area for the National Velodrome at Coatesville (the City of Coatesville) is characterized by a median age that is significantly below the national average as well as the larger regional market area. Specifically, the median age of Coatesville residents is 30.8 years, compared to Chester County, the Philadelphia CBSA and the 100-‐
mile and 200-‐mile radii, all of which have median ages generally eight to nine years older than Coatesville. 39 4. LOCAL MARKET CONDITIONS
In comparison, the U.S. median age is approximately 37 years which is roughly one to two years younger than the median age of the regional market area for the National Velodrome at Coatesville, but about six years older than the median age of the City of Coatesville’s residents. • It will be important that programming for the National Velodrome at Coatesville appeal to a variety of age categories for both cycling and non-‐cycling events in order to maximize utilization. Most competitive cycling events will be adult-‐aged competitors, while some of the camps and developmental programs could be geared towards developing younger riders. From a non-‐cycling standpoint it is anticipated that the greatest demand for sports activities (basketball, volleyball, soccer, tennis, wrestling, gymnastics, cheerleading, etc.) in the track infield will be grade school, middle school and high school aged participants. Household Income Household income provides an indication of a market’s ability to purchase tickets, concessions, merchandise, and parking at cycling and other spectator events. It also provides an indication of the potential participation rates in sporting activities as most sports participants can be characterized as having higher than average household incomes. Key income-‐related characteristics of the National Velodrome at Coatesville’s market area include: • While Chester County has the highest median household income of any county in Pennsylvania at $85,554, the immediate Coatesville area is characterized as having a significantly lower median household income at $37,017. • The larger regional market area for the National Velodrome at Coatesville has median household incomes ranging from $59,771 to $63,373, which are lower than Chester County but significantly higher that the U.S. median household income of $49,297. • Overall, the relatively higher income characteristics of regional market area relative to the U.S. as a whole, indicates that the market may be at an advantage in terms of sports participation rates, which are influenced, to some degree, by household incomes. • It will also be important to consider the income demographics of the market when pricing tickets, seating and other offerings associated with the facility. Consideration should be given to potentially offering City of Coatesville residents discounted prices to encourage use by local residents, particularly if City funds are used to fund a portion of venue development and/or operations. CORPORATE BASE Local/regional corporate support can play a critical role in the overall success of the National Velodrome at Coatesville through the purchase of tickets, advertising, sponsorships, naming rights, •
hospitality offerings and underwriting events. The following table summarizes the number of companies in the local and regional market areas. Most corporate CORPORATE BASE DATA
involvement in National Velodrome at Coatesville
facilities such as the City of Chester Philadelphia 100 Mile 200 Mile
National Velodrome Annual Sales
Coatesville
County
CBSA
Radius
Radius
at Coatesville is 6
81
915
5,477
8,825
associated with Under $1.0 MM
$
1.0 M
M t
o $
2.4 M
M
6
204
2,034
12,403
19,493
companies that have $2.5 MM to $4.9 MM
7
206
2,154
13,297
20,330
a local or regional $5.0 MM to $9.9 MM
6
161
1,535
9,193
14,230
presence. There are $10.0 MM to $24.9 MM
7
134
1,298
7,414
11,382
over 8,900 company $25.0 MM to $49.9 MM
1
42
492
3,025
4,411
2
34
544
3,177
4,483
headquarters located Over $50.0 MM
in the Philadelphia TOTAL 35
862
8,972
53,986
83,154
CBSA and over 83,000 Excl udes certai n i ndus tri es s uch a s government e nti ti es , m embers hi p o rga ni za ti ons , rel i gi ous companies orga ni za ti ons , n on-‐profi t o rga ni za ti ons , a nd p ri va te h ous ehol ds .
headquartered within Source: H oovers
200 miles of the proposed velodrome. Major employers in the local area include companies such as On Time Staffing (10,000 employees), Einstein Community Health Associates (6,000 employees), Cooper Healthcare (4,500 employees), Richlieu Associates (3,900 employees); MBNA Consumer Services (3,009 employees), and The Children’s Hospital of Philadelphia Foundation (3,000 employees), among others. TRANSPORTATION ACCESS Transportation access will be vital to the success of the National Velodrome at Coatesville. Ease of access is important from the perspective of attracting both local and non-‐local participants and spectators. Additionally, the location of a market and, in particular the facility, factor heavily in how concert and other touring entertainment event promoters choose venues based on how the market and facility fits in the context of the overall routing of touring act. TRANSPORTATION)ACCESS
The map on the right National)Velodrome)at)Coatesville
illustrates the planned PA;10)to)Reading)
(35)Miles))
National Velodrome at Coatesville’s site relative U.S.);)30)Bypass)to)
Philadelphia)
to regional markets and (44)Miles))
major transportation arteries. In terms of local access, the National U.S.);)30)Bypass)to))
Proposed))
Hershey)&)Harrisburg)
Velodrome)Site)
Velodrome at (53)Miles,)66)Miles))
Coatesville’s site appears to be well-‐positioned to draw patrons from the Chester)County)Airport)
(4)Miles))
regional market. The PA;10)to)BalGmore)&)Washington)
(73)Miles,)115)Miles))
)
facility would enjoy a visible location along U.S. Highway 30, which links to major north/south arteries such as State Highway 10, six miles to the west, and U.S. Highway 322, six miles to the east. The visibility of the site may also have a positive impact on the value associated with naming rights and other sponsorship opportunities associated with the venue. Beyond the local market, the interstate REGIONAL MARKET DRIVE TIME
highway system connects Coatesville and the greater Philadelphia CBSA to several National Velodrome at Coatesville
regional markets that could represent sources of participants and spectators at Distance Drive Time
CBSA
(1)
the National Velodrome at Coatesville. City
(miles)
(hours)
Population
The table to the right summarizes the mileage and drive times between Lancaster, PA
29
0:47
528,329
Coatesville and several regional markets. Reading, PA
35
0:48
414,193
Most notably, Coatesville is positioned in Hershey, PA
53
1:06
556,770
66
1:18
556,770
relatively close proximity to other major Harrisburg, PA
67
1:08
367,555
markets on the East Coast: 73 miles to Trenton, NJ
69
1:31
167,786
Baltimore, 115 miles to Washington DC, Dover, DE
Baltimore, MD
73
1:33
2,750,201
and 130 miles to New York City. Allentown, PA
78
1:19
829,018
115
2:15
5,828,935
The proximity of these regional markets to Washington, DC
New Y
ork, N
Y
130
2:09
19,149,591
the National Velodrome at Coatesville will 141
2:17
562,468
enhance the ability of facility Scranton, PA
173
2:51
936,341
management to draw participants and Stamford, CT
spectators to the first indoor velodrome on the East Coast. Based on discussions (1) A Core-‐Ba s ed Sta tis tica l Area i s a geogra phi ca l a rea cons i s ting o f a county o r counties tha t h a ve a h i gh d egree o f e conomi c a nd with cycling organizations in the region, s oci a l i ntegra tion a nd i s d etermi ned b y the U.S. Offi ce o f Ma na gement a nd B udget.
avid cyclists are willing to travel between one and two hours for training facilities; Source: Googl e Ma ps ; Cl a ri ta s .
while many cyclists are willing to travel three hours or more for staged races and regional cycling competitions. Larger national competitions will draw from an even larger area, with elite cyclists willing to travel across the county, or even internationally, to participate. Based on discussions with local/regional youth and adult sports organizations (i.e. basketball, volleyball, soccer, tennis, cheerleading, gymnastics, etc.), most participants are generally willing to travel up to 30 minutes for regularly scheduled games or practices and up to four hours for tournaments or other major competitions. The proposed location could be attractive to touring concerts and other entertainment events routing through the region. However, event promoters may choose to bypass Coatesville if their tour includes stops in nearby Philadelphia, Harrisburg or Hershey due to the proximity of those markets to Coatesville and the number and quality of spectator event facilities in the regional area. The City of Coatesville recently announced a redevelopment project, which includes the renovation of the local Amtrak Station. The renovation of the Coatesville Amtrak Station will bring back online the Keystone Corridor Service route, which lies between the Parkesburg, PA and Downingtown, PA stops. The Keystone Corridor services Pennsylvania and connects Pittsburgh and Philadelphia. The renovated train station will help better facilitate statewide transportation. The new Coatesville 42 4. LOCAL MARKET CONDITIONS
station will be located on North 3rd Avenue, between Coates Street and Fleetwood Street, a short walking or riding distance from the National Velodrome at Coatesville site. It is anticipated that the project will be completed in 2016. Coatesville is also conveniently located approximately four miles from the Chester County G.O. Carlson Airport and 41 miles from Philadelphia International Airport. Chester County G.O. Carlson Airport is a public-‐use, general aviation airport that serves primarily private and corporate aircraft. Philadelphia International Airport is the only major commercial airport serving the sixth largest metropolitan area in the United States. In 2011, Philadelphia International Airport accommodated 30.8 million passengers, including 4.3 million international passengers, and handled 448,129 aircraft takeoffs and landings. Thirty airlines offer nearly 620 daily departures to 125 cities, including 36 international destinations. HOTEL INVENTORY The availability and quality of hotel rooms are important considerations in determining the ability of the National Velodrome at Coatesville to effectively accommodate track cycling events, sports tournaments and other activities that draw out-‐of-‐town attendees. It is anticipated that the vast majority of out-‐of-‐town visitors to the National Velodrome at Coatesville will seek hotel accommodations in Chester County. Based on information provided by the Chester County Conventions & Visitors Bureau, there are 39 hotel, motel and bed and breakfast establishments within Chester County that can serve out-‐of-‐town patrons of the National Velodrome at Coatesville. In total, Chester County includes 3,804 hotel guestrooms, consisting of a variety of full-‐service, limited-‐service and extended-‐stay accommodations. Based on data provided by Smith Travel Research, the average daily rate (“ADR”) in Chester County is approximately $112. Hotel occupancy rates in Chester County are generally at their lowest from December through March, when occupancy rates have average 56 percent, and highest from May through July, and September through October, when occupancy rates average approximately 70 percent in recent years. It is anticipated that lodging currently available in the market is sufficient to accommodate potential new demand that could be generated by the National Velodrome at Coatesville. It is likely the new 125-‐room Courtyard Philadelphia Coatesville, which is near the proposed site, will benefit the most from room night demand generated by the National Velodrome at Coatesville. VISITOR ATTRACTIONS In addition to overnight accommodations, the community’s visitor-‐related amenities, in terms of entertainment and attractions, can contribute significantly to the success the proposed National Velodrome at Coatesville. 43 4. LOCAL MARKET CONDITIONS
Chester County is located in the heart of Brandywine Valley, an area comprised of Southeastern Pennsylvania and Delaware known for its rolling hills and waterways. The area’s existing visitation is driven by the wide variety of unique entertainment LOCAL ATTRACTIONS
options, historic landmarks, Chester County Area
museums, wineries and other amenities (both American Helicopter Museum
Hagley Museum
natural and man-‐made) Anselma Mill
Herr's Snack Factory Tours
offered by the community. Barns Brinton House
J. Maki Winery
Many of the unique Bear Creek Mountain Resort
John Chads House
attractions, events and Blue Mountain
Kalmar Nyckel
community resources in and Booth's Corner Farmers Market
Longwood Gardens
around Chester County are Brandywine Battlefield Park
Marsh Creek State Park
presented in the table on the Brandywine River Museum
Marsh Creek Watersports
right. Brandywine Valley Wine Trail
Natural History Museum
Brinton 1
704 H
ouse
Nemours Mansion & Gardens
These and other attractions Newlin Grist Mill
are important marketing Chadds Ford Historical Society
Chaddsford W
inery
Newlin Grist Mill & Park
assets for the National Velodrome at Coatesville’s Chester County Historical Society Old New Castle
QVC Studios
management team to Christian Sanderson Museum
Rockwood Museum
market to prospective out-‐ Christian Sanderson Museum
Colonial P
ennsylvania P
lantation
Saint Peter's Village
of-‐town participants and Colonial Theatre
Talula's Table
spectators. Delaware A
rt M
useum
Va La Vineyards
Valley Forge
As an important component Delaware Children's Museeum
Wharton Sherick Museum
of the Chester County visitor Devon Horse Show & Country
White Clay Creek Park
infrastructure, the market is Exton Square Mall
Winterthur
also recognized for its Gibraltar Estate
longstanding history of annual events and festivals. The following presents a listing of recurring Chester County and Brandywine Valley area events and festivals: • A Day in Old New Castle • Chester County Jazz Festival • Annual Kennett Run • Clifford Brown Jazz Fest • Annual Plein Air Event • Delaware Chamber Music Festival • Barns-‐Brinton House Opens Weekends • Delaware Shakespeare Festival • Barrels on the Brandywine • Fairville Fun Fair • Brandywine "Big Bang' BBQ • Historic Autos at Winterthur • Brandywine Food & Wine Festival • Ice Cream Festival • Brandywine Hills Point-‐to-‐Point Horse Races • Iron Hill Twilight Criterium • Brandywine Polo • John Chad's House Opens • Brandywine Rover Museum Antiques Show • Kennett Chocolate Lovers Festival • Chads Ford Art Sale & Show • Longwood Gardens Fireworks and Fountains • Chester County Antiques Show • Longwood Gardens Fireworks and • Chester County Homebrew Festival Fountains • Chester County Hospital Polo Cup 44 4. LOCAL MARKET CONDITIONS
Longwood Garden's Orchid Extravaganza • Trout Fishing in the Newlin Grist Mill Stream MidAtlantic Wine and Food Festival • Trout Rodeo at Anson B. Nixon Park • West Chester Film Festival Mt. Cuba's Annual Wildflower Celebration • Willowdale Steeplechase Pennsylvania Guild Fine Craft Fair People's Festival • Wilmington Beer Week Polar Plunge at Brandywine Picnic Park • Wilmington Flower Market President's Day Observance at Chadds Ford • Wilmington Garden Day Historical Society • Wine & Chocolate Tastings at Brandywine Valley Wine Trail • Radnor Hunt Races • St. Anthony's Italian Festival • Wine & Jazz Festival • Stateline Loop 9K/5K Trail Race • Winterthur Point-‐to-‐Point Horse Races
• The Wild and Scenic Film Festival The Chester County area is also home to several significant American Revolutionary War battle sites and landmarks, and is home to the Du Pont family mansions and gardens at Longwood, Winterthur, Hagley and Nemours that attract millions of visitors from the region and around the world. This collection of various activities, attractions, events and festivals provides the Chester County area with unique entertainment options for visitors and a distinct competitive advantage. COMPETITIVE FACILITIES The number and type of local and regional facilities that would possibly compete for the limited supply of events, participants, spectators and corporate sponsors within the marketplace will impact the market potential for the National Velodrome at Coatesville. The purpose of this section is to assess facilities that could provide some level of competition to the National Velodrome at Coatesville. Given the multi-‐purpose nature of the venue, there are a variety of facility types that could represent competition, including other track facilities (indoor or outdoor velodromes), indoor sports complexes, spectator sports and entertainment venues and exhibition facilities. Track Cycling Facilities The table below summarizes the track cycling facilities, both at a regional and national level, which could provide competition to the National Velodrome at Coatesville. TRACK CYCLING FACILITIES
Competitive Facilities
Distance
from
Seating
•
•
•
•
•
•
•
Facility
Location
Facility Type
Preferred Valley Cycling Center
Garden State Velodrome
Kissena Park Velodrome
Trexlertown, PA
Wall Township, NJ
Queens, NY
Coatesville
Capacity
54 mi.
104 mi.
144 mi.
2,000
4,000
n/a
2,682 mi.
2,450
Regional Competition
Velodrome (333m, outdoor)
National Competition
ADT Event Center
Carson, CA
Velodrome (250m, indoor)
The following are key findings regarding potentially competitive track cycling facilities: • There are three outdoor velodromes located within 150 miles of the proposed National Velodrome at Coatesville, including the Preferred Valley Cycling Center (54 miles), Garden State Velodrome (104 miles), and the Kissena Park Velodrome (144 miles). These are established venues and will represent competition to the indoor velodrome during the outdoor riding season. • The ADT Event Center in Carson, California is the only other indoor velodrome located in the United States. Given its significant geographic distance from Coatesville, the venues are not expected to compete for the local and regional programming that will account for the majority of cycling uses at each venue. However, the venues may compete from time to time to host the same national or international cycling events. The ADT Event Center will have a competitive advantage for certain event in this regard given its 250 meter track versus the planned 200 meter track at the National Velodrome at Coatesville. Indoor Sports Complexes The following table summarizes local and regional indoor sports and recreation complexes that could potentially compete with the National Velodrome at Coatesville for non-‐cycling sports activities such as basketball, volleyball, soccer, tennis, gymnastics, wrestling, martial arts, fencing and other indoor sports activities. INDOOR SPORTS COMPLEXES
Distance
from
Facility Location
Facility Type
Coatesville Indoor Space
United Sports Training Center
Downington, PA
Sports complex (indoor/outdoor)
6 mi. 127,000 s q. ft
Charles A. Melton Arts & Education Center
West Chester, PA
Recreation Center
17 mi.
50,000 s q. ft
New Holland New Holland, PA
Recreation Center
21 mi.
51,250 s q. ft
Recreation Center
Competitive Edge Sports
King of Prussia, PA
Sports complex (indoor)
28 mi.
40,000 s q. ft
Body Zone Sports & Wellness Complex
Wyomissing, PA
Sports complex (indoor)
35 mi. 160,000 s q. ft
Sports
Spooky Nook Manheim, PA
Sports complex (indoor/outdoor)
36 mi. 700,000 s q. ft
Key findings from potentially competitive indoor sport complexes include: • There are five (5) major indoor sports complexes located within a 30 to 45 minute drive of Coatesville. • The amount of indoor space at the selected facilities ranged between 40,000 square feet and 700,000 square feet, with the median facility containing 89,125 square feet. In comparison, the National Velodrome at Coatesville will have approximately 10,000 square feet of programmable sports/recreation space in the track infield. • The United Sports Training Center is expected to have the highest degree of potential competition based on its range of indoor offerings and its location in proximity to the 46 4. LOCAL MARKET CONDITIONS
proposed National Velodrome at Coatesville. United Sports Training Center is a privately funded 127,000 square feet indoor, and 60-‐acre outdoor complex. The facility offers leagues, tournaments, camps & clinics for multiple sports including: soccer, baseball, basketball, volleyball, flag football, field hockey, inline hockey lacrosse, martial arts and other activities. It is anticipated that the proposed facility will be competing directly for indoor sports; primarily soccer, volleyball, basketball and inline hockey. Spectator Sports and Entertainment Venues It is anticipated that the National Velodrome at Coatesville’s management will seek to maximize utilization and revenues by marketing the venue for other spectator sports and entertainment events such as concerts, comedy acts, family shows, professional tennis exhibitions and other ticketed events. It is anticipated that the venue could seat up to 4,000 for various non-‐cycling spectator events. The following table summarizes local and regional sports venues, performing arts centers, theatres and other spectator-‐based entertainment venues that that could potentially compete with proposed National Velodrome at Coatesville. This analysis focuses on fixed seating venues of 5,000 seats or less within 50 miles of Coatesville. SPECTATOR SPORTS AND ENTERTAINMENT VENUES
Distance
From
Seating
Facility
Location
Facility Type
Coatesville Capacity
The Note
West Chester, PA Theatre
15 mi.
400
American Music Theatre
Lancaster, PA
Theatre
22 mi.
1,600
Tower Theater
Upper Darby, PA
Theatre 42 mi.
3,119
Electric Factory
Philadelphia, PA
Theatre 45 mi.
3,000
Trocadero Theatre
Philadelphia, PA
Theatre
50 mi.
1,200
Keswick Theatre
Philadelphia, PA
Theatre
50 mi.
1,300
The Blockley
Philadelphia, PA
Theatre
50 mi.
700
World Café Live
Philadelphia, PA
Theatre
50 mi.
650
Key findings from potentially competitive spectator-‐based sports and entertainment venues include: • There is no dedicated event center with a meaningful seating capacity in Chester County. • There are eight (8) fixed seat public assembly venues under 5,000 seats within 50 miles of the proposed National Velodrome at Coatesville. These venues are primarily theaters and focus on hosting performing arts, concerts and other musical acts. • In addition to the venues identified herein, there are a number of larger sports and entertainment venues in the regional area such as the 7,000-‐seat Susquehanna Bank Center in Camden, NJ; the 10,500-‐seat Giant Center in Hershey, PA; and the 20,000-‐seat Wells 47 4. LOCAL MARKET CONDITIONS
•
Fargo Center in Philadelphia, among a number of other facilities. It is unlikely that the proposed National Velodrome at Coatesville would not compete with these larger venues on a regular basis due to their larger size and market focus. The ability of the proposed National Velodrome at Coatesville to accommodate various other types of spectator events will be dependent on its ability to offer prime dates, competitive rental rates, allow for timely and cost-‐effective event set-‐up and tear down and provide the facility amenities necessary to ensure a good patron experience, including good acoustics, sufficient food and beverage points of sale, sufficient restrooms and other related amenities. Exhibition Facilities The National Velodrome at Coatesville’s 10,000 square foot track infield will provide the community with flat floor space that can accommodate consumer shows, public shows, job fairs and other exhibition-‐related events. The table below summarizes potentially competitive facilities in the local area that provide some meaningful level of exhibition space. EXHIBITION FACILITIES
Distance
from Proposed
Exhibition Facility Location
Facility Type
Velodrome
Space
Days H otel and Conference Center
West Chester, PA
Hotel
19 mi.
10,000 s q. ft
Best Western Plus
Concordville, PA
Hotel
25 mi.
16,000 s q. ft
Crowne Plaza Valley Forge
Valley Forge, PA
Hotel
25 mi.
24,000 s q. ft
Key findings from a review of potentially competitive exhibition facilities include: • There are three (3) hotels within 25 miles of the proposed National Velodrome at Coatesville that provide a critical mass of square footage capable of hosting conventions, trade shows, consumer shows and other flat floor events. • The amount of exhibition space at these facilities ranges between 10,000 square feet and 24,000 square feet. • The Crowne Plaza Philadelphia Valley Forge offers 24,000 square feet of flexible meeting space, including 22 meeting rooms, conference center, and a state-‐of-‐the-‐art 132-‐seat amphitheater. • The Days Hotel and Conference Center in West Chester features 10,000 square feet of meeting space, including a Grand Ballroom that can host up to 300 guests. 48 4. LOCAL MARKET CONDITIONS
•
•
The Best Western Plus in Concordville offers 16,000 square feet of meeting space across seven separate meeting rooms, ranging in size from 280 square foot boardroom to a 6,440 square foot ballroom. In addition to these facilities, there are much larger exhibition facilities in the regional area including facilities such as the Pennsylvania Convention Center or the Greater Philadelphia Expo Center. It is highly unlikely that the National Velodrome at Coatesville would compete with these larger facilities to host the same events. SUMMARY Local market conditions are an important component in assessing the potential success of the proposed National Velodrome at Coatesville. A facility’s ability to attract participants, spectators, secure corporate partners and generate revenues is predicated, somewhat, on the size of the regional market area population and its spending characteristics in the context of competition within the market. A summary of key local market conditions includes: • The primary market population consists of approximately six million residents in 2013, and is expected to grow slightly over the next five years. While the secondary market is comprised of approximately 48 million residents, with population growth in the secondary market projected to slightly outpace that of the primary market over the next five years. • The proposed indoor velodrome and events center location in Coatesville is well positioned in relatively close proximity to four major markets on the Eastern Seaboard, with easily accessible forms of transportation available for regional, national, and international visitors and spectators. • Median household income levels within the primary market ($59,771) and secondary market ($62,340) of the National Velodrome at Coatesville are 21 and 26 percent higher than the U.S. median household income of $49,297. • Overall, the relatively higher income characteristics of the primary market and secondary markets indicates that the market may be at an advantage in terms of sports participation rates, and ability to purchase track memberships, event tickets, parking, concessions, merchandise and other offerings associated with the proposed velodrome and events center. • The corporate base of the market is strong, with over 8,900 companies in the primary market and over 83,000 companies located within the secondary market of the proposed velodrome. The presence of local corporate support can play a critical role in the overall success of the proposed indoor velodrome and events center through the purchase of tickets, advertising/sponsorship opportunities and underwriting events. • The local and regional market visitor infrastructure offers a wide variety of attractions and annual events/festivals that will increase the Chester County area’s marketability, and enhance the experience of traveling participants and spectators. 49 4. LOCAL MARKET CONDITIONS
•
The presence of other track cycling facilities, indoor sports complexes, hotel/convention center exhibition spaces, and spectator sport/entertainment venues in the primary and secondary market could have a significant impact on the operations of the proposed indoor velodrome and events center in Coatesville. ********** Local market conditions are considered together with an assessment of the historical operations of comparable facilities, market surveys, and interviews with potential facility users to estimate demand for the National Velodrome at Coatesville. 50 Executive Summary
1.
Introduction
2.
Cycling Overview
3.
4.
5.
6.
Estimated Demand
7.
5. Cycling
Participant
Surveys
5. CYCLING PARTICIPANT SURVEYS
While the National Velodrome at Coatesville will be multipurpose in nature, cycling will serve as the anchor for the venue and account for the majority of programmed hours. In order to measure cycling-‐specific demand for the National Velodrome at Coatesville, a comprehensive survey was conducted with cyclists registered with various local, regional and national cycling clubs to determine interest, support and likely utilization patterns for the proposed venue. Over 100 local, regional, and national cycling organizations were contacted as a part of this study in order to facilitate the distribution of an online survey to cyclists at organizations such as USA Cycling, American Track Racing Association (“ATRA”), Pennsylvania Cycling Association, Mid-‐Atlantic Bicycle Racing Association (“MABRA”), New York Bicycle Racing Association (“NYSBRA”), New England Bicycle Racing Association (“NEBRA”), among a host of other cycling organizations and clubs. A total of 884 surveys were completed. This section provides a summary of the result of the cycling participant survey including: • Place of Residence; • Demographic Profile; • Level of Cycling Participation; • Frequency of Cycling Participation; • Current Use of Velodromes; • Interest in Using the National Velodrome at Coatesville; • Reason for Not Having Interest in National Velodrome at Coatesville; • Anticipated Frequency of Use of the National Velodrome at Coatesville; • Preferred Velodrome Amenities; • Impact of Access to Nearby Train Station; • Ability of Coatesville to Become a Regional Hub for Cycling; and, • Other considerations. It should be noted that the survey results are not scientific in nature, and reflect only the attitudes, opinions and potential facility usage of those who responded to the survey. SURVEY RESPONDENT PLACE OF RESIDENCE The majority of survey respondents live in GEOGRAPHIC DISTRIBUTION
Pennsylvania, with most of those located Cycling Participant Survey
in the Philadelphia CBSA. Additional concentrations in Pennsylvania include Allentown, Lancaster and Pittsburgh. Other survey respondents were primarily located in major population centers across the region, including; Washington DC, Baltimore, MD, New York City, NY, and Boston, MA. Smaller pockets of survey-‐
respondents were also located in Syracuse, NY, Albany, NY, and New Haven, CT. 51 5. CYCLING PARTICIPANT SURVEYS
The largest number of survey respondents outside of the region were located in the Pacific Northwest and California, both of which have strong cycling communities and rank among the top of USA Cycling members and licensed riders. Other locations of respondents included Chicago, IL, Indianapolis, IN and Atlanta, GA, among others. SURVEY RESPONDENT DEMOGRAPHIC PROFILE The graphic below summarizes the demographic profile of the cycling survey participants, including their gender, age and household income. DEMOGRAPHIC PROFILE
Cycling Participant Survey
Gender
Age
75 o r older
65 to 74
Fema le 20%
Income
1%
6%
55 to 64
13%
45 to 54
Ma l e 80%
25%
26 to 34
19%
Under 25
9%
0% 10% 20% 30%
80% of respondents
are male
24%
$100k-‐$150k
27%
$75k-‐$100k
27%
35 to 44
> $150k
Median age group is
35 to 44 years
18%
$50k-‐$75k
$25k-‐$50k
< $25k
15%
10%
6%
0% 10% 20% 30%
Median income is
$75k to $100k
Approximately 80 percent of cycling participant survey respondents were male, which is similar in magnitude to the percentage of males that make up the USA Cycling membership base. The median age group of survey participants was 35 to 44 years old. The large majority of survey respondents can be classified at the masters-‐level of cycling competition (age 30 and over), which is also consistent with USA Cycling’s membership base in which 75 percent of USA Cycling members are aged 30 or higher. The median household income for survey participants was $75,000 to $100,000, which is well-‐above the national average and is similar to the income characteristics of USA Cycling’s membership base. This bodes well for the ability of cyclists to pay for track utilization and track amenities and services as well as spend discretionary dollars in the Coatesville community in connection with their visit to the velodrome. 52 5. CYCLING PARTICIPANT SURVEYS
TYPE OF CYCLING PARTICIPATION Survey respondents were asked TYPE OF CYCLING PARTICIPATION
to indicate in which of the major Cycling Participant Survey
cycling sub-‐disciplines they participate. The chart to the right Road
89%
illustrates the cycling sub-‐
42%
disciplines in which survey Mountain Biking
respondents participate. Cyclo-‐Cross
39%
Track
37%
Nearly 90 percent of survey respondents participate in road Other
8%
cycling, 42 percent participate in None
7%
mountain biking, 39 percent in cyclo-‐cross, and 37 percent BMX
2%
participate in track cycling. These Paracycling
1%
results serve confirm the emergence of road and track 0%
20%
40%
60%
80%
100%
cycling among frequent riders, and indicate that cyclists often Note: "Other" cons i s ted o f: time tri a l s , tri a thl on, touri ng, a nd ca s ua l
participate in many different disciplines of the sport. LEVEL OF CYCLING PARTICIPATION In addition to cycling sub-‐disciplines, survey respondents were also asked to indicate their typical form of cycling participation, whether they rode competitively or for fitness, recreation or commuting. The following chart illustrates the level of cycling participation indicated by survey respondents. Racing/competitive cycling was LEVEL OF CYCLING PARTICIPATION
the most popular type of Cycling Participant Survey
participation indicated by survey respondents at 79 percent. 79%
Racing/Competitive
Approximately 46 percent of respondents indicate that they Fitness
46%
ride for fitness purposes, while 37 percent participate in cycling for Recreational
37%
recreation. Lastly, approximately 21 percent of respondents Commuting
21%
indicated they use cycling as a form of commuting. 0%
20%
40%
60%
80% 100%
53 5. CYCLING PARTICIPANT SURVEYS
FREQUENCY OF CYCLING PARTICIPATION Survey respondents were asked to describe their frequency of cycling participation. The graphics below illustrates the riding frequency of cyclists who participated in the market survey. CURRENT CYCLING PARTICIPATION RATE
Overall
Weekly Riders
Non-‐Weekly Riders
Ri
des/Month
Ri des/Week
Ri de
7 d ays/week
Ri de
11%
7%
10 +
At Lea st Occa s ionally
4%
6 d
ays/week
26%
Monthl
y
4%
5 d ays/week
27% 5-‐10 times
31%
20%
4 d ays/week
3-‐4 times
41%
3 d ays/week
11%
Ri de
2 d ays/week
4%
Weekly
1-‐2 times
21%
92%
1 d ay/week
1%
0% 10% 20% 30%
0% 15% 30% 45%
92% of respondents
84% of weekly riders
Median monthly rider
ride on a weekly basis
ride 4+ days/week
rides 3-‐4 times/month
Approximately 92 percent of survey respondents indicated that they ride on a weekly basis with the remaining respondents riding occasionally, with some riding at least monthly. Of the weekly riders, 84 percent ride at least four (4) or more days per week. Of the non-‐weekly riders, the median rider rode 3 to 4 times per month. CURRENT USE OF VELODROMES Approximately 47 percent of cyclists surveyed have trained or competed in velodromes in the past. The most commonly cited velodromes and cycling tracks used included: • Valley Preferred Velodrome (Trexlertown, PA); • Kissena Valley Velodrome (Queens, NY); • Bud Harris Cycling Track (Pittsburgh, PA); • ADT Event Center (Carson, CA); • Northeast Velodrome (Londonderry, NH); • Major Taylor Velodrome (Indianapolis, IN); • Hellyer Park Velodrome (San Jose, CA); • Alpenrose Velodrome (Portland, OR); • Ed Rudolph Velodrome (Northbrook, IL); 54 5. CYCLING PARTICIPANT SURVEYS
•
•
San Diego Velodrome (San Diego, CA); and, Chicago Velo Campus (Chicago, IL). INTEREST IN USING NATIONAL VELODROME AT COATESVILLE Survey respondents were asked to indicate their level of interest in using the proposed National Velodrome at Coatesville for training or competition purposes. INTEREST IN USING NATIONAL VELODROME AT COATESVILLE
80% of Respondents Would Potentially Use
the National V elodrome at Coatesville
Definitely Likely Possibly Would Not Not
Use
Use
Use
Likely Use Use
33%
23%
24%
13%
7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Overall, 80 percent of survey respondents indicated some level of interest in using the proposed velodrome in Coatesville, including 33 percent who indicated they would “definitely use” the facility, 23 percent who would “likely use” the facility, and 24 percent who would “possibly use” the facility. REASONS FOR NOT USING THE NATIONAL VELODROME AT COATEVILLE Approximately 20 percent of respondents indicated they would not likely use the proposed National Velodrome at Coatesville. The most common reasons cited included: • Coatesville being too far away (69 percent); • Do not participate in velodrome track cycling (52 percent); • Do not compete/train indoors (21 percent); • Prefer to use other tracks (5 percent); • Planned track configuration of 200 meter/wood surface (4 percent); and, • Too expensive (3 percent). Other reasons for not using the proposed National Velodrome at Coatesville included concerns about the safety and crime in the area, inaccessibility of the location, and the steepness of the track due to the proposed 200-‐meter length. 55 5. CYCLING PARTICIPANT SURVEYS
ANTICIPATED FREQUENCY OF NATIONAL VELODROME AT COATESVILLE USE Survey respondents who indicated they would likely use the proposed National Velodrome at Coatesville were asked to specify how often they would be interested in using the facility. USE FREQUENCY OF COATESVILLE VELODROME
Frequency of Use
Year-‐Round Users
Seasonal Users
January
78%
7 d ays/week
0%
February
77%
6 d ays/week
1%
March
53%
April
17%
5 d ays/week
2%
Sea sonal
May
14%
Us e
4 d ays/week
4%
June
19%
31%
July
21%
10%
3 d
ays/week
Yea r-‐
August
20%
Round 2 d ays/week
16%
September
12%
Us e
October
21%
1 d ay/week
9%
69%
November
46%
< 1 d ay/week
59%
December
68%
0% 33% 67% 100%
0% 25% 50% 75%
Nearly 70% will use
Median year-‐round rider
Highest season use
velodrome year-‐round
will use 2 days/week
in winter months
Approximately 69 percent of respondents indicated they would be interested in using the facility on a year-‐round basis, while the remaining 31 percent were interested in using the velodrome on a more seasonal basis. For year-‐round users, the median rider would likely use the velodrome for two (2) days per week. For season users, the peak utilization months are anticipated to be November through February. The indoor nature of the proposed facility provides riders a location to train and compete regardless of inclement weather conditions. The results above indicate that most seasonal riders foresee themselves using the facility at times when the weather conditions in the area are expected to be the least favorable for outdoor cycling. Conversely, there is a clear decrease in demand during months with warmer climates, as many cyclists prefer to ride outdoors when weather permits. VELODROME AMENITIES PREFERENCES Modern velodromes offer a host of amenities that are intended to address the needs of cyclists, spectators, and other users of the facility. Survey respondents were asked to rate the importance various potential facility amenities from “1” to “7”, with “1” being not important at all, and “7” being extremely important. The chart below shows the average rating of all survey respondents for various potential amenities. 56 5. CYCLING PARTICIPANT SURVEYS
The most important IMPORTANCE OF POTENTIAL VELODROME AMENITIES
consideration for Cycling Participant Survey
survey respondents Most
Open/drop-‐in track time
5.9
was the availability of Important
open/drop-‐in track Warm up areas
5.0
time. Additional Locker r ooms/showers
4.9
amenities that were Reserved track time
4.3
important included warm-‐up areas, locker Bike/equipment storage
4.0
rooms, showers, Bike rentals
3.9
reserved track time, Medical treatment facilities
3.8
and bike / equipment storage. Amenities Restaurant/Pub
3.7
that were of lesser Fitness/conditioning space
3.7
importance to riders Nearby access to public transit
3.1
included offices, meeting rooms, a Bike repair shop
3.0
Least
bicycle repair shop and Offices/meeting r ooms
2.4
access to nearby public Important
transit. 1
2
3
4
5
6
7
Survey respondents were also asked if there are any other amenities they would like to see incorporated into the building program at the planned National Velodrome at Coatesville. Commonly cited amenities included: • On-‐site training and coaching staff; • Entry-‐level classes and clinics for all age ranges; • Junior developmental programming and clinics; • Easily accessible restrooms near the track; • Free WiFi; • Ample and easily accessible parking; • Isolated play areas for children; • Massage therapy; • Café/coffee shop/juice bar with healthy food options (i.e. organic, vegan, etc.); • Retail shop with gear, merchandise, memorabilia; • Wind tunnel testing facility; and, • On-‐site or nearby lodging/dormitories for traveling teams. 57 5. CYCLING PARTICIPANT SURVEYS
CYCLING COMPETITION ATTENDANCE The proposed National Velodrome at Coatesville is expected to host a variety of annual cycling events including local racing leagues as well as regional, national and international competitions, among other events. Survey respondents were asked their likelihood of attending potential cycling competitions in which they were NOT participants. The following chart displays the interest of survey respondents in attending prospective cycling events at the proposed facility. INTEREST IN ATTENDING INDOOR CYCLING EVENTS IN COATESVILLE
86% Positive Interest
Would Not
Not
Definitely Likely Possibly Attend
Attend
Attend
Likely Attend
Attend 5%
33%
29%
24%
8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
In total, approximately 86 percent of survey respondents indicated some level of interest in attending cycling events in which they were not competing, including 33 percent who indicated they would “definitely attend”, 29 percent who would “likely attend” and 24 percent who would “possibly attend”. Approximately 13 percent of respondents indicated they would likely not attend other cycling competitions hosted at the velodrome. The most commonly cited reasons for not attending included: • Travel time (73 percent); • Rather spend time doing something else (23 percent); • Conflicts with family time (18 percent); • Too expensive (12 percent); • Conflicts with work (6 percent); and, • Quality/level of competition (4 percent). Additionally, other reasons cited by survey respondents for not likely attending cycling competitions at the proposed National Velodrome at Coatesville included those who prefer to compete rather than spectate, lack of interest in track cycling, and preference to watch cycling at facilities closer to their home. 58 5. CYCLING PARTICIPANT SURVEYS
IMPACT OF ACCESS TO NEARBY TRAIN STATION Survey respondents were informed of the on-‐going redevelopment of the Keystone Corridor, which provides high-‐speed rail service between Harrisburg and Philadelphia, including the plans for a new train depot in Coatesville within blocks of the proposed indoor velodrome. Survey respondents were asked how access to public transportation impacts their interest in using the velodrome in Coatesville. IMPACT OF TRAIN STATION ON VELDOROME USE
42% More Likely to Use
Much More Somewhat More
No Not
Likely Likely
Impact
Use
18%
24%
53%
6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Overall, 57 percent of cyclists surveyed indicated that nearby access to public transportation would have some level of positive impact on their anticipated use of the proposed National Velodrome at Coatesville, including 33 percent who indicated they would be “much more likely” to use the facility, and 24 percent who would be “somewhat more likely” to use the facility. ABILITY OF COATESVILLE TO BECOME REGIONAL HUB FOR ALL CYCLING Proponents of the National Velodrome at Coatesville envision that Coatesville can become the hub for all forms of cycling for the region by providing a central meeting place for all indoor and outdoor cycling activities. The proposed location is in close proximity to the rolling hills countryside where many cycling enthusiasts ride and train outdoors. With the added amenities of a potential restaurant/pub, bike shop, physiotherapy, among others, the velodrome will be designed to encourage this area to become a central gathering place for cyclists, whether they use the indoor track or not. Survey respondents were informed of the vision and proposed amenities of the National Velodrome at Coatesville and asked if they could foresee themselves using the facility as a centralized hub for their cycling activities. The following chart illustrates survey respondents’ interest in utilizing Coatesville as a centralized, regional hub for cycling. 59 5. CYCLING PARTICIPANT SURVEYS
USE OF NATIONAL VELODROME AT COATESVILLE AS CYCLING HUB
78% Positive Interest
Definitely Likely Possibly Would Not
Not
Use
Use
Use
Likely Use
Use
23%
25%
30%
16%
5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
As shown above, approximately 78 percent of survey respondents indicated some level of positive interest in utilizing the proposed National Velodrome at Coatesville as a hub for their cycling activities; including 23 percent who indicated they would “definitely use” the facility, 25 percent who would “likely use” the facility, and 30 percent who would “possibly use” use the venue as their base for cycling. Approximately 21 percent of respondents indicated they would likely not use the indoor velodrome as a centralized hub for their cycling activities. The most commonly cited reasons for not using the facility included: • Travel time/distance; • Prefer other facilities or locations; • Only participate in cycling occasionally; • Inconvenient location; • Perceptions of City of Coatesville being as a “bad area”; and, • Other time commitments (i.e. work/family). ADDITIONAL COMMENTS At the conclusion of the survey, respondents were provided the opportunity to comment on the National Velodrome at Coatesville project. The following is a random sampling of comments made by survey respondents. • “I encourage the City to fully explore this use -‐ however -‐ I think that a dedicated velodrome may end up being too narrow a use. A facility that is multi-‐sport (lacrosse/soccer) and could also be used as a convention/conference facility may be the only sustainable business model.” • “Despite recent negative press associated with the Philly race -‐ I think that Dave Chauner is a vital asset to bringing this project to a reality.” 60 5. CYCLING PARTICIPANT SURVEYS
•
•
“The venue should have a 250 meter track to be able not hold international competitions and attract more people to train for international races. The Canadian national team is based in LA when they already have a 200 meter track near Vancouver, because LA is a standard 250.” “A velodrome is a great tool for teaching young riders to race in a controlled environment. My youngest son has been riding "the wall" at Alpenrose since he was eight. The kids that are given the opportunity to ride at the track love it and it is an easy way for parents to have the opportunity to watch their kids race.” •
•
•
•
“A velodrome would bring in people/visitors and would lead to restaurants and shops in downtown Coatesville for those visitors to utilize. An economic boost to downtown.” “An excellent addition to the community to bring visitors and income to the area. In addition, it can become a hub for cycling and fitness activities.” “Anything that can be done to build up this city and improve our reputation should be done. I have family members who are into racing and would love to be able to see them right in my town.” “As president of the Bucknell Cycling Team, I heard about this idea today and was immediately very interested to hear more. If built, it would definitely be a place that our team would train during the fall!” •
•
“Build it!!” “Building a velodrome in Coatesville, or anywhere within one hour of Philadelphia, would simply be fantastic! Looking forward to seeing this idea come to life!” •
•
“Chester and surrounding counties has a very active cycling community that would support the new facility. The Velodrome would be a great facility for the youth of the area.” “Creating a hub for cycling would likely bring significant long-‐term benefits to the Coatesville area... in terms of awareness, visitors, home sales, and retail purchases. There's a large, but relatively disorganized, cycling population across eastern PA that could easily be tapped into if there was a center of cycling activity.” •
“Cyclists spend money. And they like to hang out. A velodrome that is surrounded by coffee shops, bars, restaurants and other amenities will attract a lot of people who spend money. It has to be year-‐round programming though.” •
“Figure out multiple uses to keep the place going.” “Go velodrome!! The city needs this, the area needs this! The best part is that it is not just bicycling, but many indoor activities!” •
61 5. CYCLING PARTICIPANT SURVEYS
•
•
•
•
•
•
•
•
•
•
•
•
“Gotta have a real 5-‐yr / 10-‐yr plan to sustain with little or no income... participants will have to be built, unless you have a large enough economy to allow someone to move there and find work that was equal or better to where they were before. This is a hobby for most without an infrastructure to people to make a living.” “Governments in other countries run velodrome arenas as multi use facilities. Not for profit private enterprise.” “Great attraction to set Coatesville apart, meet a need of the cycling community which continues to grow throughout Chester County.” “Have classes and training program for beginner and kids.” “I am a parent of junior cyclist. We encourage the city to approve the velodrome project. We believe that although Valley Preferred is a great track having an indoor track on the east coast will give track riders the ability to train year round and therefore be more competitive in the international competitions. Let's make this happen!!!!” “I live far from Coatesville so some of my answers reflect that (example: would I use this area as a cycling hub), but I would drive that distance to compete as I do now in the summer for Trexlertown. Also, high speed rail from H-‐burg would greatly increase my access to the indoor velodrome.” “I run a small team and am very excited about the potential velo facility. I've traveled the country and truly believe we live in one of the best areas for cycling with one of the best cycling communities, either way thank you for the effort and good luck. I'd love to see my daughter on the track!” “It would be great to have an indoor velodrome. While I have not done track cycling, I would be more likely to do so if there was an indoor facility available for training / racing during the winter months.” “It would be nice to have a true international standard 250 meter indoor track instead of a 200 meter one. I think this will attract a lot more attention and international riders and events. National championships would also be more likely to be held here which would mean more visitors to the Coatesville area.” “It would be wonderful for us to have a second indoor velodrome in the US. Indoor tracks are a great way to develop junior racing especially over the winter months in a somewhat controlled environment. Also it could be a great venue for national and international racing.” “My usage would vary depending on the time of year. I would be far more likely to be there Oct-‐March, possible as much as 4 days a week.” “Put on some great concerts too!” 62 5. CYCLING PARTICIPANT SURVEYS
•
•
•
•
•
•
•
•
•
•
•
•
•
•
“Security is paramount; especially if cycling equipment storage is available. Also during winter months, snow/ice removal will be important.” “Take a look at the Manchester UK velodrome. I think it is very similar to the idea that you are proposing. Also a good coffee shop would be ideal.” “Thank you for providing more sport opportunities to the community beyond football, basketball, baseball, soccer, track...” “The area near the velodrome will need to be safe and well-‐lit. Access to and from will also need to be high quality and safe.” “The availability of a reasonably priced hotel, motel, B&B would increase the likelihood that I would use the track on back to back days.” “The velodrome will draw international, national, state and local attention to Coatesville and will dramatically help in restoring Coatesville to its glory.” “There's already a velodrome in Trexlertown...don't waste your time.” “This facility also could be used for other outside interest... PIAA high school basketball playoffs or finals. Or possibly small music acts or concerts. Another could be Indoor Olympic Time Trials events too.” “This is a big step in the long awaited revitalization of my home town Coatesville, PA. I can't wait for it to happen.” “This would be a great addition to Coatesville. The Valley Preferred Cycling Center is a great community park and asset for Trexlertown and has been for at least 30 years. The benefits are community fitness, and potentially early learning for children showing them the benefits of hard work and competition.” “This would be a great alternative to the Lehigh Valley outdoor velodrome. Being closer and being a year round facility makes this proposal very attractive to the Delaware Valley cycling community.” “This would be a great boost to the Coatesville community as far as tourism and jobs. What a great addition for a community.” “This would be a great opportunity for kids from Philadelphia. Getting juniors into cycling has many hurdles and a velodrome would help overcome some of the obstacles.” “This would be a wonderful opportunity for Coatesville!!! It would bring so much to the city. We live here and want the best for Coatesville and the velodrome is it!!! Don't let the opportunity pass by!!!” 63 5. CYCLING PARTICIPANT SURVEYS
•
•
•
•
•
•
“This would definitely put Coatesville on the map of even higher esteem! It is a positive venture that promotes the best in athletics. As a teacher, I can't help but support this project; as a cyclist, it simply goes deeper. DO IT! :)” “Track cycling used to be one of the most popular spectator sports in the country. It has been reduced to a niche sport but retains enormous potential for growth. It's fans are dedicated, affluent, and vocal.” “Why a 200-‐meter track instead of 250? I would be much more likely to attend events if 250 as you will be limited with a size of 200.” “Will offer local youth the opportunity to develop cycling skills and talent.” “With the right training/development programs, this would be great to boost the local economy.” “You are competing with a world class, firmly established velodrome in the same region. You should tailor your facility to offer what t-‐town doesn't. Indoor year round training, and specific cross training and weightlifting equipment available to the (cycling) public are huge steps in that direction. If you want to draw from Philadelphia, the rail connection is very important.” SUMMARY A total of 884 surveys were completed with cyclists registered with various local, regional and national cycling clubs to determine interest, support and likely utilization patterns for the National Velodrome at Coatesville. Key findings include: • Approximately 90 percent of survey respondents participate in road cycling, 42 percent participate in mountain biking, 39 percent in cyclo-‐cross, and 37 percent participate in track cycling. • Racing/competitive cycling was the most popular type of participation indicated by survey respondents at 79 percent. Approximately 46 percent of respondents indicate that they ride for fitness purposes, while 37 percent participate in cycling for recreation. • Approximately 92 percent of survey respondents indicated that they ride on a weekly basis with the remaining respondents riding occasionally, with some riding at least monthly. Of the weekly riders, 84 percent ride at least four (4) or more days per week. Of the non-‐
weekly riders, the median rider rode 3 to 4 times per month. • Approximately 47 percent of cyclists surveyed have trained or competed in velodromes in the past. • Overall, 80 percent of survey respondents indicated some level of interest in using the National Velodrome at Coatesville. 64 5. CYCLING PARTICIPANT SURVEYS
•
•
•
•
•
•
•
•
Among survey participants who indicated no interest in using the proposed indoor velodrome in Coatesville, most commonly cited reasons included Coatesville being too far away (69 percent), do not participate in velodrome track cycling (52 percent), and do not compete/train indoors (21 percent). Approximately 69 percent of respondents indicated they would be interested in using the facility on a year-‐round basis, while the remaining 31 percent were interested in using the velodrome on a more seasonal basis. For year-‐round users, the median rider would likely use the velodrome for two (2) days per week. For seasonal users, the peak utilization months are anticipated to be November through February. The most important consideration for survey respondents was the availability of open/drop-‐
in track time. Additional amenities that were important included warm-‐up areas, locker rooms, showers, and reserved track time. Overall, approximately 86 percent of survey respondents indicated some level of interest in attending cycling events in which they were not competing. Among survey participants who indicated no interest in attending events at the National Center at Coatesville, most commonly cited reasons included travel time (73 percent), rather spend time doing something else (23 percent), and conflicts with family time (18 percent). Overall, 57 percent of cyclists surveyed indicated that nearby access to public transportation would have some level of positive impact on their anticipated use of the proposed indoor velodrome. Approximately 78 percent of survey respondents indicated some level of positive interest in utilizing the National Velodrome at Coatesville as a hub for their cycling activities. ********** The results of the cycling participant surveys are considered together with the demographic and socioeconomic characteristics of the Coatesville market, an assessment of the competitive facilities in the marketplace, the historical operations of comparable facilities, and interviews with potential facility users to estimate demand. 65 Executive Summary
1.
Introduction
2.
Cycling Overview
3.
4.
5.
6.
Estimated Demand
7.
6. Estimated
Demand
6. ESTIMATED DEMAND
The estimated potential event mix and attendance levels for the proposed National Velodrome at Coatesville is presented in this section and is based on results of an analysis of the historical operating results of comparable velodromes, market surveys of cyclists, the number and types of competing facilities in the local and regional marketplace, and discussions with potential facility users. Estimated demand is presented in the following sections: • Cycling Utilization; • Non-‐Cycling Utilization; and, • Estimated Demand. CYCLING UTILIIZATION In order to estimate the potential utilization for the National Velodrome at Coatesville, interviews were conducted with Velodrome Management Group, LLC, indoor velodrome operators from around the world, local cycling associations, and potential cycling participants. Based on these discussions, the following types of cycling programming are envisioned to be hosted at the National Velodrome at Coatesville: • Track Rental • Weekly Competitions; • Professional Series Competitions; • Six-‐day Races; and, • Camps and Clinics. Track Rental The day to day programing of the National Velodrome at Coatesville will play host to track rental times as the facility will be operated as a cycling first facility. The track is envisioned to be operational 7 days a week and up to 16 hours a day (7am to 11pm) for open riding and exclusive cycling rentals when the facility has not been programmed for cycling and non-‐cycling events. During the open riding times hourly passes will be sold to cyclists’ primarily for training and recreational track riding. Exclusive track time will also be sold to teams and groups for the purpose of training and simulated racing without the distraction of recreational riders. Tracks passes for the purpose of this study and based off of comparable research and results of the participant surveys and have been projected to be sold at an average amount of $20 per hour. Along with the hourly pass, membership will be available in annual, semi-‐annual, monthly and a ten ride punch cards for the frequent cyclist. It has been projected that 125 riders, riding an average of two hours per week, will participate in the open track sessions annually. The track will also have an average of 4 exclusive rentals per week which include two hours of track rental per session. It should be noted that a 200 meter track can have up to 24 riders on the track at a time. 66 6. ESTIMATED DEMAND
Weekly Competitions The backbone of the proposed National Velodrome at Coatesville will be found in its weekly track cycling competitions. These competitions will take on many different forms of track cycle racing and will change from week to week to keep the program fresh and entertaining. Races will generally commence every Tuesday and Thursday nights spanning over an average of 40 weeks of the calendar year. It is expected that on average, 100 cyclists will compete in these races with the actual number fluctuating based on the types of races that will be programed. Examples of the types of races will vary from cycling league events, head-‐to-‐head competitions, two-‐up short distance sprints, longer distance “massed starts”, which would feature more than 30 racers on the track at a time, and amateur development races open to all ages of cyclists to compete. Cyclists competing in the weekly competitions will be awarded points over the season and those with the most points at the end of each season will win their respective category. The weekly race competitions will be designed in a format that is not only exciting and competitive for the cyclists, but entertaining for spectators to watch. Admissions will be charged for the spectators and it is projected that an average of 150 spectators a night will attend the weekly races. Professional Series Competitions It is anticipated there will be a bi-‐monthly format of racing format that will feature professional cyclists. The professional series races at the National Velodrome at Coatesville will see experienced racers from the United States, Europe and other international destinations. The professionals will compete in many of the same race formats as the weekly races and will compete for prize money each night. The design of the racing formats will encourage the spectators to get involved and cheer on their cyclist while creating and entertaining and fun environment for the spectators. The total number of professional races is estimated to average 24 competitions with an average paid attendance of approximately 750 spectators per event. Six-‐Day Races Six-‐day races started in the United Kingdom and were brought to their modern style in the United States. In the begninning, six-‐day races were a competition designed for individual cyclists, with the winner being the cyclist that could complete the most laps over a six day period while racing 24 hours a day. However, the format was later modified to allow teams of two, one rider racing while the other rested and the hours were changed from 24 hours a day to nightly racing from 6pm to 2 am. The overall winner is the team which completes most laps. A typical six-‐day program will include time trials, motor-‐paced, intermediate sprint and elimination races. In the main 'chase' or “Madison” events (so-‐called after Madison Square Garden in New York where the two-‐man format was devised), both riders may be on the track at the same time, taking turns to race, hand-‐slinging each other back into action. It is envisioned that the National Velodrome at Coatesville will host two six-‐day races annually with an average of 150 cyclists competing and up to 1,500 spectators a day. It should also be noted that the six-‐day race series format will be larger than any of the other races with the track infield set up 67 6. ESTIMATED DEMAND
in more of a festival style atmosphere. The infield will host many other activities including but not limited to private dining tables, social gathering areas, and live music. Camps and Clinics Camp and clinic programs will help foster the sport as a whole and provide access to professional track cycling instruction in techniques and safety while also helping to identify new talents for local competitions. Camps and clinics will be an important part of the longevity brought to the National Velodrome at Coatesville. The programs will be developed to not only introduce the youth to the sport of track cycling but to introduce all potential newcomers to the sport. The camps and clinics projected for the National Velodrome at Coatesville include beginner camps, youth camps, and corporate and group clinics. The beginner camps are assumed to run five sessions and include an average of 50 campers each. Youth camps are also assumed to be held over five sessions and it is expected there will be an average of 40 youth campers per camp. The corporate and group clinics are envisioned to be held as single sessions and have an average of 60 participants per session. It is estimated that 12 beginner camps, 10 youth camps and 15 corporate and group clinics will be hosted annually. NON-‐CYCLING UTILIZATION The proposed indoor National Velodrome in Coatesville is envisioned to be a multi-‐purpose facility that is capable of hosting a wide variety of non-‐cycling events on the track infield. The track infield can be utilized to meet the needs of local sports participants for games, practices, clinics, camps and other activities. The proposed venue would also have the capability to seat up to approximately 3,500 for concerts, graduations and other stage-‐based events with infield floor seating as well as host consumer shows, public shows, trade shows, job fairs and other activities on the approximate 10,000 square feet of track infield space. In order to assess potential non-‐cycling demand for the proposed National Velodrome at Coatesville, the physical and operational characteristics of comparable facilities were analyzed to determine the number and types of non-‐cycling events typically held at other velodromes. Characteristics of existing sports and entertainment facilities in the local market were also considered to determine the level of competition the National Velodrome at Coatesville could face in attracting events. Finally, interviews were conducted with a variety of potential non-‐cycling user groups. Organizations interviewed included: • West Chester Area Sports Association; • West Bradford Youth Athletics; • Cheer Excel All-‐Stars; • TCA Volleyball; • Keystone Juniors Volleyball; • Academy of Dutch Soccer; • KMC Gymnastics; and • Global Spectrum. 68 6. ESTIMATED DEMAND
West Chester Area Sports Association The West Chester Area Sports Association (“Association”) is the management body that oversees the operations of 11 sports leagues in Chester County. The association operates a complex of five enclosed lighted fields used for soccer, baseball, lacrosse, softball and football. The Association is comprised 12,000 to 13,000 annual participants from ages 6 to 80+. The President of the Association believes that their current outdoor facilities meet the needs of the Association as a whole, but indicated that individual leagues or teams could have interest in using the National Velodrome at Coatesville during the winter months as a practice facility or to host games and tournaments. Current participants travel up to two hours for tournaments, and the President believes that people in the region would definitely travel to this facility. The Association President also indicated there is a need for indoor training facilities in the area, noting the United Sport Indoor Complex as one of the only large multi-‐purpose indoor facilities in the local market that would provide the most competition. The Association also indicated that there is currently a lack of programming for youth athletics in the region and that the National Velodrome at Coatesville could help alleviate this issue. Field time and rates were indicated as the most important considerations for members of the Association, while ancillary facilities like restaurants, fitness centers and other amenities were listed as not important to the decision-‐making process. West Bradford Youth Athletics West Bradford Youth Athletics (“WYBA”) is a non-‐profit organization providing youth sports programs for 2,000 to 3,000 children per season for the Downingtown, Unionville, Coatesville and West Chester area. Their organization provides baseball, softball, tee ball, basketball, street hockey and lacrosse leagues for children between the ages of three and eighteen. The National Velodrome at Coatesville is a facility West Bradford is possibly interested in using. Being that WBYA is a non-‐profit organization, usage of Coatesville’s athletic facility would ultimately come down to pricing. The WBYA strives to keep their registration fee as low as possible so all children have the opportunity to participate in their programs. WBYA utilize their own outdoor fields for the majority of their outdoor league practices and games. Currently, soccer and basketball are the only indoor leagues organized by WBYA and would most likely use the National Velodrome at Coatesville for both practices and games. Their indoor soccer teams have one practice and one game per week. WBYA basketball leagues are played at schools in the area, at a rate of $35 an hour. Their seven week indoor soccer league utilizes the United Sport’s Training Center indoor facility. WBYA and United Sport’s Training Center have a hand-‐in-‐hand agreement to use each other’s facilities for free. WBYA noted that if there was a facility that offered the opportunity for other sports to be played indoors, they would be interested in adding more indoor leagues. An indoor winter lacrosse league is currently not offered by WBYA due to the lack of suitable facilities in the area. The WBYA could potentially utilize the National Velodrome at Coatesville to introduce indoor winter lacrosse leagues. The outdoor lacrosse teams practice two to three times a week and participate in one to two games per weekend. WBYA typically hosts one outdoor lacrosse 69 6. ESTIMATED DEMAND
tournament per year. The Chester County Lacrosse Association dictates which teams and age group hosts the tournaments each season. WBYA officials indicated that in order for indoor sports practice and games to be run properly in the National Velodrome at Coatesville, their core needs would be nets and boards around the playing fields. WBYA also indicated the most important amenities for their programs to be successful include court/field time, office/meeting rooms, warm up areas, and medical facilities. The restaurant/pub and nearby access to public transit were also noted as amenities that could improve the experience of participants and spectators. Cheer Excel All-‐Stars Cheer Excel All-‐Stars is a competitive cheer organization comprising about 75 members. The organization will be moving into a new facility in early to mid-‐April, but currently has a lease with Metzler’s Gymnastics for $1,750 a month. Cheer Excel All-‐Stars are satisfied with the gymnastics facility they are leasing, but are excited to move into their new facility. Current members of Cheer Excel are willing to travel 20 minutes for practice and about two hours each direction for competitions. The Cheer Excel organization indicated that the proposed National Velodrome at Coatesville is a facility they are definitely interested in using. The travel cheer teams practice about three days per week and participate in 14 competitions over the course of the year; however, their organization would most likely use the National Velodrome at Coatesville for competitions only. Cheer Excel All-‐Stars are interested in hosting at least one competition per year, but their new practice facility is not capable of hosting these types of event, and could foresee utilizing the National Velodrome at Coatesville for this purpose. Cheer Excel also noted that the transportable nature of their equipment would allow them to host competitions in multi-‐purpose facilities. Aside from their transportable equipment, in order to host a competition Cheer Excel has a few specific core needs such as a cheer floor (spring), dead floor (no spring) and warm up room for tumbling. Other elements needed to host cheer competitions include judges, photographers and videographers and Cheer Excel indicated that they would be responsible for outsourcing personnel for the event. TCA Volleyball TCA Volleyball is club volleyball organization with over 200 members. The club season runs from November to June along with two to three camps available in the off season months from June to November. TCA Volleyball has a year-‐round contract with United Sports Training Center, and although they are satisfied with the facility, they are not happy with the small amount of time they are given. TCA also feels the rate they pay per court per hour ($40 to $60) is high. As a result, TCA is interested in using the National Velodrome at Coatesville. TCA’s existing contract with United Sports is set to expire soon and TCA expressed interest in evaluating a new contract with the proposed National Velodrome at Coatesville. Ideally, TCA would like to be able to work out an agreement where they have a year round contract and are able to use the courts on a regular basis. 70 6. ESTIMATED DEMAND
TCA Volleyball always practices in one location and some members currently travel as far as two hours to practice. TCA member travel nationwide for tournaments and generally host 10 to 12 tournaments per season. Club practices require four to six courts a night, Monday through Thursday, while four to five courts are need for hosting tournaments. Teams typically pay between $180 and $200 for each tournament entry. Specific core needs for programming practices and tournaments include nets, poles, courts with official lines, folding tables, chairs and scoreboards (hand flip or electric). Keystone Juniors Volleyball Keystone Volleyball is an organization from Broomall, PA with 250 members. Their organization plays year round, but their club season lasts from November to June along with grade school leagues that operate from September to November. Keystone is currently satisfied with their two practice facilities and locations, paying a rate of $45-‐$50 per court, per hour. Coatesville would be too far and not ideal for Keystone Volleyball to change locations for practice. However, Keystone Volleyball indicated their organization would be interested in hosting tournaments and possibly camps at the National Velodrome in Coatesville. Keystone Volleyball currently hosts five to six tournaments per year at United Sports Training Center. Their organization is satisfied with United Sports facility due to access of a large amount of courts, but they are open to looking elsewhere to host competitions. Keystone Volleyball invites around 40 to 45 teams per tournament filling eight to nine courts. The minimum number of courts they would need to host a tournament would be two but ideally, they would like to have eight to nine. Other core needs for hosting their volleyball activities are nets, poles, scoreboard, referee stand, tables and chairs. The average amount for all equipment needed per court is around $5,000. They feel the most important amenities related to the indoor facility are court/field time, warm up areas and restaurant/pub to enhance the experience for participants, family, and other spectators. Academy of Dutch Soccer Academy of Dutch Soccer is an organization with an undisclosed member base located in Downingtown, PA. Their organization currently uses two facilities in Lionville, PA, both of which they are satisfied with; however, they indicated an interest in expanding their club. Members of the organization are willing to drive 30 to 90 minutes for practices. The National Velodrome at Coatesville is a facility they would consider using, but would prefer to see the proposed location before they would commit to using the facility. If the facility and location were satisfactory to the Academy of Dutch Soccer, the organization would envision using the National Velodrome at Coatesville for practice, games and tournaments, but the dimensions of the field must meet FIFA regulations. The organization practices seven days a week, including evenings during the weekday and all day on weekends. The amount of competitions the Academy of Dutch Soccer participates in depends on the league. In order for the Academy of Dutch Soccer to run a successful program their core needs would be a soccer specific field (FIFA), two 11 v 11 goals, two 8 v 8 goals, 4 v 4 goals and 3 v 3 goals. The rate they would expect to pay for the facility depends on the size of field. As far as amenities, Academy of Dutch Soccer feel 71 6. ESTIMATED DEMAND
offices/meeting rooms, warm up areas, equipment storage, medical treatment facilities and fitness/conditioning are the most important needs for their organization in the velodrome facility. KMC Gymnastics KMC Gymnastics is an organization located in Kennett Square, PA with 150 competition gymnasts and 800 recreational gymnasts. The organization has their own gym, but indicated that they have outgrown the space and are looking to expand into other facilities. KMC leadership indicated that there is a strong need for an indoor training facility near Kennett Square. Coatesville is 20 minutes from their current location, indicating that the location may be too far to use as a practice facility, but that they would possibly use the National Velodrome at Coatesville to host competitions. Their competition season runs from November through April. In order to host a competition they would need a large open area approximately 12,000 to 15,000 square feet. Global Spectrum Global Spectrum is a wholly owned subsidiary of the Comcast Spectator organization which is a Philadelphia based sports and entertainment company. The company manages and operates public assembly facilities throughout the United States and Canada, such as arenas, civic and convention centers, stadiums, university convocation center, trade and exposition centers, community ice rinks and theaters. Some of the local arenas and stadiums currently managed by Global Spectrum are: • Wells Fargo Center; • Liacouras Center at Temple University in Philadelphia, Pennsylvania; and, • PPL Park in Chester, Pennsylvania, a Philadelphia suburb. Discussions with Global Spectrum centered on the possibilities of bringing non-‐cycling events to the events center on an annual basis. While the capacity of the proposed National Velodrome at Coatesville is smaller than most arenas a niche market may exists for smaller regional events. Global Spectrum representatives indicated that the following event activity would likely be attracted to the facility: local high school and amateur sports competitions like gymnastics, wrestling, fencing, volleyball, tennis, boxing, and basketball games and tournaments, local expo events such as flea markets, antique and gun shows, and the possibility of hosting smaller regional concerts. 72 6. ESTIMATED DEMAND
Event Demand Summary The proposed National Velodrome Estimated Event Utilization
at Coatesville is anticipated to The National Velodrome at Coatesville develop and/or attract both cycling and non-‐cycling programming. 2016
2017
2018
2019
2020
Based on market research results, Cycling Events
the table on the right summarizes Tuesday Night Races
40 40 40 40 40
the estimated event activity for the Thursday Night Races
40 40 40 40 40
proposed National Velodrome at Pro Race Series
24 24 24 24 24
12 24 24 24 24
Coatesville for the first five years of 6 Day Race Series (2 Annual Events)
Beginner Camp
12 12 13 13 14
operations. Youth Camp
10 10 11 11 12
Corporate/Group Events
15 15 16 16 17
Overall, it is estimated that the Total number of Annual Cycling Events 153 165 168 168 171
proposed National Velodrome at Coatesville could host 276 events in Non-‐Cycling Events
its first year of operations, including 3 3 3 5 5
track cycling races, camp and clinics Concerts
Athletic Events
25 25 25 25 25
as well as non-‐cycling events Athletic Practices
80 80 80 80 80
concerts, athletic events, athletic Consumer Shows/Expos
5 5 5 5 5
practices, consumer shows and Private Parties/Rentals
10 10 10 10 10
expos, private rentals and other Total Non-‐Cycling Events
123
123
123
125
125
such events. It should be noted that out of the total of events many Total Events
276
288
291
293
296
of the events may run concurrent to each other and that each event does not represent distinct and different calendar days. Total attendance projected for the National Velodrome at Coatesville is estimated to be 150,000 in the first year of operations and growing to 165,000 by the fifth, or stabilized, year of operations as shown in the table on the next page. 73 6. ESTIMATED DEMAND
Estimated Attendance Utilization
The National Velodrome at Coatesville 2016
2017
2018
2019
2020
Cycling Participants and Spectators
Participants:
Training
12,900
13,223
13,553
13,892
14,239
Weekly R
aces
12,000
12,000
12,000
12,000
12,000
Pro S
eries R
aces
7,200
7,200
7,200
7,200
7,200
6 Day Race Series (2 Annual Events) 3,600
3,600
3,600
3,600
3,600
Beginner Camps
3,000
3,000
3,575
3,575
4,200
Youth Camps
2,000
2,000
2,475
2,475
3,300
Corporate Events
900
900
880
880
1,020
Subtotal
41,600
41,923
43,283
43,622
45,559
Spectators:
Training
6,450
6,611
6,777
6,946
7,120
Weekly Races
6,400
6,720
6,922
7,060
7,060
Pro Series Races
13,200
13,860
14,276
14,561
14,561
6 Day Race Series (2 Annual Events) 21,120
22,176
22,841
23,070
23,300
Beginner C
amps
1,500
1,500
1,788
1,788
2,100
Youth C
amps
1,000
1,000
1,238
1,238
1,650
Corporate Events
-‐
-‐ -‐ -‐
-‐
Subtotal
49,670
51,867
53,840
54,662
55,791
Total Cycling Attendance
91,270
93,790
97,123
98,284
101,351
Non-‐Cycling Event Participants and Spectators
Concerts
7,650
7,650
7,650
12,750
12,750
Athletic Events
37,500
37,500
37,500
37,500
37,500
Athletic Practices
2,500
2,500
2,500
2,500
2,500
Consumer Shows/Expos
10,000
10,000
10,000
10,000
10,000
Private Parties/Rentals
500
500
500
500
500
Total Non-‐Cycling Attendance
58,150
58,150
58,150
63,250
63,250
Total Annual Attendance
149,420
151,940
155,273
161,534
164,601
Cycling participants and spectators are projected to account for 91,000 visitors, or about 61 percent of the total projected attendance, to the National Velodrome at Coatesville in the first year of operations. Non-‐cycling events are estimated to attract 58,000 people to the National Velodrome at Coatesville, accounting for about 39 percent of the total annual attendance in the first year of operations. 74 Executive Summary
1.
Introduction
2.
Cycling Overview
3.
4.
5.
6.
Estimated Demand
7.
7. Projected
Financial
Operations
7. PROJECTED FINANCIAL OPERATIONS
The purpose of this section is to present estimated operating revenues and expenses for the National Velodrome at Coatesville for the first five years of operations. Since detailed facility design, configuration, and cost estimates have not yet been finalized, the assumptions used in this analysis are based on the results of the market analysis, industry trends, knowledge of the marketplace, financial results from comparable facilities and discussions with Authority officials and other project stakeholders. This presentation is designed to assist the Authority and other project representatives in estimating the financial attributes of the proposed National Velodrome at Coatesville and cannot be considered to be a presentation of expected future results. Accordingly, this analysis may not be useful for any other purpose. The assumptions disclosed herein are not all inclusive, but are those deemed to be significant; however, there will be differences between estimated and actual results, because events and circumstances frequently do not occur as expected, and these differences may be material. The presentation of financial operating results is divided into the following components: • Five-‐Year Financial Pro Forma; • Key Operating Revenue Assumptions; • Key Operating Expense Assumptions; and, • Sensitivity Analysis. Key assumptions used to estimate the potential financial operations of the National Velodrome at Coatesville include, but are not limited to the following: • The National Velodrome at Coatesville will be constructed and fully operational starting with the 2016 calendar year. •
The facility will contain between 2,750 and 4,000 total seats consisting of a combination of 2,000 to 3,000 fixed seats surrounding the permanent cycling track and between 750 and 1,000 temporary seating within the infield of the cycling track. •
The facility will be developed as a quality, state-‐of-‐the-‐art venue with the necessary acoustics, loading docks, suitable event related utilities, temporary stage and rigging capacities, athletic fields/courts and back-‐of-‐house space to accommodate the needs of various types of events and users. •
The velodrome track will be constructed according to industry standards and will be designed to allow for access to the infield for event center events. •
The facility will be constructed in a manner that will be generally acceptable to the non-‐
cycling event promoters and operators. •
Future competing indoor velodromes will not be constructed within regional proximity to the National Velodrome at Coatesville. •
The facility will be owned by the Authority and will be exempt from property taxes. •
All cycling and non-‐cycling opportunities will be aggressively marketed, providing competitive rental rates and, as necessary, co-‐promoting or initiating in-‐house promotions to maximize the usage of the venue. This could include exclusive or 75 7. PROJECTED FINANCIAL OPERATIONS
preferred booking arrangements with organizations that guarantee a certain number of events will be booked each year. •
The commercial retail will be aggressively marketed and creditable tenants will be found to lease the available retail spaces. •
The National Velodrome at Coatesville will be operated by a competent facility management team with extensive cycling industry experience along with relationships with key cycling associations and future participants. •
Ample parking will be available to accommodate demand (on-‐site or off-‐site within walking distance). Additional detailed physical development planning must be completed before more precise estimations of the proposed National Velodrome at Coatesville’s operating costs can be made. Also, upon completion of preliminary planning, revenue and expense assumptions should be updated to reflect changes to assumptions made herein. These changes could significantly affect the analysis of future operating results. FIVE-‐YEAR FINANCIAL PRO FORMA The table on the following page presents the estimated operating revenues and expenses for the first five years of operations for the National Velodrome at Coatesville, assuming the venue will be fully operational by 2016. In its first year of operations the National Velodrome at Coatesville is estimated to generate operating revenues of approximately $1.9 million and incur operating expenses of $2.16 million, resulting in net operating loss of approximately $280,000. The operating performance of the velodrome and events center is expected to improve throughout the first five years of operations as the venue reaches a stabilized year of operations. By year five, the venue is estimated to generate revenues of $2.3 million and incur operating expenses of $2.5 million, resulting in operating loss of approximately $200,000. It is important to note that these estimates do not include payments associated with any potential debt service related to the facility or a capital reserve account that will be necessary to maintain the velodrome in order to preserve its status as the pre-‐eminent indoor velodrome in the county. The commercial retail space that will surround the National Velodrome at Coatesville has been projected to lessen the loss of the velodrome operations as they are constructed and leased out to tenants. In the first year of operation the rental revenues have been estimated to be $172,000 growing to $483,000 with the full build out and all rental leases are fulfilled. The addition of the rental revues will bring the first year net loss of the National Velodrome at Coatesville to an estimated $172,000 growing to an estimate net income of $275,000 in the fifth year of operations before any debt service or capital reverses. 76 7. PROJECTED FINANCIAL OPERATIONS
Estimated Operating Revenues and Expenses
The National Velodrome at Coatesville
2016
2017
2018
2019
2020
Revenues:
Membership Fees
$193,000
$229,004
$239,219
$249,916
$261,119
Track Rental
$224,000
$234,725
$249,129
$261,015
$273,484
Equipment Rentals
$87,700
$89,200
$94,200
$96,701
$105,611
Cycling Competition Registrations $189,000
$177,000
$182,310
$187,779
$193,413
Cycling Spector Admissions
$441,200
$463,260
$477,158
$497,244
$505,580
Event Center Income
$79,885
$81,982
$84,141
$103,765
$106,578
Sponsorships
$157,500
$162,200
$167,100
$172,100
$177,300
Camps/Clinics
$105,500
$105,500
$121,514
$125,160
$155,058
Concessions
$380,140
$397,368
$413,882
$495,604
$512,717
Other
$25,000
$25,800
$26,600
$27,400
$28,200
Total
$1,882,925
$1,966,039
$2,055,254
$2,216,683
$2,319,059
Expenses:
Salaries & Wages
$573,500
$590,700
$608,400
$626,700
$645,500
Operations/Programming
$345,100
$360,400
$382,300
$395,700
$429,100
Utilities
$329,800
$339,700
$349,900
$360,300
$371,200
Maintenance & Repair
$168,300
$173,300
$178,500
$183,900
$189,400
Materials and Supplies
$107,700
$110,900
$114,200
$117,700
$121,200
Insurance
$289,400
$298,100
$307,000
$316,200
$325,700
Concessions
$247,091
$258,289
$269,024
$322,142
$333,266
General and Administrative
$100,000
$103,000
$106,100
$109,300
$112,600
Total
$2,160,891 $2,234,389 $2,315,424 $2,431,942 $2,527,966
($277,966) ($268,350) ($260,170) ($215,259) ($208,907)
Net Velodrome Income (Loss) Retail Rental Income
$171,500
$204,750
$406,625
$460,375
$482,625
($106,466)
($63,600)
$146,455
$245,116
$273,718
EBITDA
The remainder of this section presents an overview of key revenue and expense assumptions used to estimate the potential financial operating results of the National Velodrome at Coatesville and a sensitivity analysis to determine the impact that varying key assumptions can have on the financial operations of the venue. The full financial model (including all key assumptions) is presented in Appendix A. KEY OPERATING REVENUE ASSUMPTIONS Revenue sources generated by the National Velodrome at Coatesville are expected to consist of membership fees, track and equipment rentals, registration fees, spectator admissions, event center 77 7. PROJECTED FINANCIAL OPERATIONS
income, food and beverage, cycling camps and clinics, commercial retail rental income, sponsorships and other income. A brief description of each revenue source is provided below. Velodrome Membership Fees It is expected that memberships will be sold to the local cycling participants to use the track during open riding sessions for training and recreational uses throughout the calendar year. It is also anticipated that during the open riding track time, hourly passes will be available for purchase by the general public. These memberships will be beneficial to the velodrome by allowing the hourly track time to be purchased up front by the most frequent riders at a reduced offering through an annual membership program. The memberships projected in the financial analysis for the National Velodrome at Coatesville have been broken down into four main categories: 1) annual memberships; 2) semi-‐annual memberships; 3) monthly memberships; and 4) ten session punch cards. The types and number of memberships sold assumed in this study are based on an analysis of the comparable velodromes memberships, results of the potential user surveys, discussions with velodrome operators and industry track cycling trends. For purposes of this analysis, the velodrome membership price and sold assumptions for track time in the initial year of operations at the National Velodrome at Coatesville are as follows, $400 for an annual membership with 100 sold, $325 for a semi-‐annual membership and 150 sold, $65 for a monthly memberships and 100 sold and 150 sold ten ride punch card for $175 each. Track Rental It is envisioned that the National Velodrome at Coatesville will be operated as a cycling first facility. A major component to the operations of the facility will be the open track rental time for cyclist training and recreational riding. The facility will operate 7 days a week and up to 16 hours in any given day. During these operational hours, track time will be available for the general public to purchase at an hourly rate that will grant the cyclist a pass for track use. It should be noted that an industry standard 200-‐meter track could accommodate up to 24 riders at a time on the track during these open track times. Along with the open general public track times, exclusive track rentals are very important to track cycling teams and will also be available at the National Velodrome at Coatesville. These exclusive track rental times are typically sold to larger groups and cycling teams. In order to train and practice simulated races as a team. By allowing exclusive access to the track, teams can train while not being distracted by other cyclists. For purposes of this analysis, average velodrome track rental rates are assumed to be $20 per hour for a general hourly rental pass and it was projected that an average of 250 hours of track time will be purchased per week over 40 weeks of the year. Exclusive track rental rates were assumed to be $150 a session and include 2 hours of track time with an average of 4 exclusive track sessions per week over the 40 weeks of cycling. It should also be noted that open and exclusive track rentals were projected to be limited at times throughout the year, thus allowing the events center to allocate programing time for other events to take place within the facility. 78 7. PROJECTED FINANCIAL OPERATIONS
Cycling Competition Registrations Cycling competitions will be the cornerstone of the cycling operational programing at the National Velodrome at Coatesville. Various competitions of all levels will be held multiple times a week throughout the year and offer track cyclists a multitude of competitions. Generally, the track cycling competitions consists of a low entry fee usually around $10 to $25 dollars per cyclist to enter the nightly competition. The revenues generated from the entry fees will be used primary for the events operational costs and to create a small purse for the winners of the event. For purposes of this analysis, two races per week over 40 weeks of the year with an average of 100 competitors per night were projected. Other competitions projected for the National Velodrome at Coatesville containing registration fees consist of 24 annual pro series type races and two larger 6 day race series with registrations averaging $25 per competitor. Spectator Admissions With the cycling races a main component of the programing of the facility, the opportunity to charge admissions to these competitions becomes a direct source of revenue for the National Velodrome at Coatesville. The weekly race series is projected to bring approximately of 100 to 250 spectators to the facility per night with an average admission of $5 per spectator. The larger pro series and bi-‐
annual 6-‐ day races are expected to draw 1,500 per event with an average admission of $10 per event day. It should be noted that the level of competition set for each race may determine the final admission cost for the spectators. The greater the competitions, the larger the daily admissions may be for each race. Equipment Rentals Equipment rentals are another source of daily income for the National Velodrome at Coatesville. The specific equipment needed to train and compete on a cycling track usually consists of a specialized velodrome cycle, helmets and cycling shoes. Due to the fact that velodrome bicycles are specific to track cycling and, on average, are more expensive than a road/recreational bicycles, many of the participants will opt to rent a bicycle for use on the track. For the purpose of this analysis it was projected that 2,500 bicycles, 1,000 bicycle helmets, and 1,500 cycling shoes will be rented at the National Velodrome at Coatesville annually. Rental fees for bicycles, helmets, and shoes are projected at $15 for the bicycles and $5 per rental for each of the helmets and shoes. For those who opt to bring their own track bicycle to the velodrome, the facility will have an opportunity to rent locker/storage space for the bicycles which will create an additional opportunity for facility revenues. Lockers will allow the cyclists to have a safe and secured storage option for their bicycles. It has been projected that 30 lockers will be rented with an annual fee of $400 per locker. 79 7. PROJECTED FINANCIAL OPERATIONS
Camps/Clinics With the construction of the National Velodrome at Coatesville, a new option for cycling will be brought to the region and it is anticipated that new interest in track cycling will be generated. This leads to the opportunity to reach a new a whole new customer that is new to track cycling. To capitalize on induced demand, a comprehensive camp and clinic program will be developed and marketed to the community. The revenues realized with the creation of the camps and clinic program can be very beneficial to the overall financial feasibility of the velodrome. The camps and clinic program can include, but are not limited to, beginner rider programs, youth after school and summer camps and corporate and group clinics. For the purpose of this analysis the following projections have been made regarding the camp and clinic programs offered at the National Velodrome at Coatesville. Beginner camps will consist of 12 annual camps with average of 50 campers per camp at a cost of $75 per camper. Ten youth camps a year have been projected at a cost of $50 per camp and each camp will average 40 campers. Corporate and group clinics will average 15 annual sessions with 60 participants at an average fee of $45 per participant. Event Center Income The National Velodrome at Coatesville management will have ability to use the track infield space, which is approximately 10,000 square feet, for non-‐cycling events and activities. This option allows the facility to improve its marketability in the area as it is able to accumulate events that require a large space with a limited number of fixed and temporary seating. It is assumed that the Coatesville Velodrome and Events Center would host and estimated number of 125 non-‐cycling events annually. These events consist of athletic practices, athletic events, smaller concerts, consumer shows and expos, and private parties and rentals. Estimated Event Center Income
Based on an analysis of the local market place and The National Velodrome at Coatesville other comparable velodromes around the world, it is anticipated that the facility will charge a flat Annual Average Rental Total Rental
Events
Income
Income
rental rate to the third party events and all direct Non-‐Cycling Events
expenses related to each event will be the Concerts
3
8,000
24,000
responsibility of the third party renting the Athletic Events
25
1,000
25,000
facility. Projected rental income for the non-‐
Athletic Practices
80
200
16,000
cycling events is shown in the table on the Consumer Shows/Expos 5
2,000
10,000
Private Parties/Rentals 10
500
5,000
following page. Total Non-‐Cycling Events
123
80,000
Food and Beverage Concessions revenue consists of food and beverage sales during all events hosted at The National Velodrome at Coatesville. Gross food and beverage sales are estimated based on projected attendance and per capita concession revenue assumptions by event type. Per capita concession spending assumptions were based on an analysis of per capita spending at comparable velodromes and industry standards. Gross per capita food and beverage spending assumptions ranged from $0.35 for camps/clinics to $12.00 for concerts. 80 7. PROJECTED FINANCIAL OPERATIONS
Sponsorships Sponsorship revenues include general venue signage, track sponsors, facility founding partners and other advertising as well as event title sponsorships, title sponsorship of series races, facility naming rights, pouring rights and other sponsorships. Sponsorship revenues were analyzed for other comparable indoor velodrome venues. Based on these benchmarks and recognizing the potential value of a naming rights sponsor, it is estimated that the National Velodrome at Coatesville could generate approximately $160,000 in gross sponsorships revenues in the first year of operations. The ability to generate this level of estimated revenue assumes that facility naming rights and title sponsorship of a race series will be secured. Other Income Other income includes revenues generated from cycling event merchandise sales, parking income from larger cycling events, credit card fees and other miscellaneous such sources. Other income is estimated to be $25,000 in the first year of operations. 81 7. PROJECTED FINANCIAL OPERATIONS
KEY OPERATING EXPENSE ASSUMPTIONS Operating expenses at the National Velodrome at Coatesville typically comprise two broad categories: direct event expenses and indirect (or overhead) expenses. Direct event expenses include costs such as food and beverage, cycling competition expenses and purses, parking, event and facility marketing, and other event-‐specific expenses. Indirect overhead expenses include non-‐
event related costs such as administrative salaries and benefits, utilities, insurance, repairs and maintenance, building materials and supplies and other such costs. Direct Event Expenses Direct event expenses represent event-‐specific expenses associated with operating the National Velodrome at Coatesville and include food and beverage expenses, parking expenses, event marketing and other event expenses. Food and Beverage Food and beverage operations can be operated either in-‐house or outsourced to a third-‐party provider. In order to estimate expenses associated with providing these services, operating margins experienced at other comparable event venues with respect to food and beverage expenses were reviewed. Based on industry standards, costs associated with food and beverage operation costs were assumed to be 65 percent of gross food and beverage sales. Event Marketing Event marketing expenses include those expenses associated with advertising events to be hosted at the National Velodrome at Coatesville. Such expenses include radio and newspaper advertisements, billboard advertisements and other marketing methods. It has been assumed that management of The National Velodrome at Coatesville will seek to minimize its risk and will be selective in its co-‐promotion or self-‐promoted bookings and that venue’s website, email database and local press will be used to effectively minimize event marketing expenses. Event Expenses Event expenses are expected to comprise event staff wages and benefits as well as other overhead expenses that are directly tied to an event. Event staff salaries and benefits include expenses associated with part-‐time event personnel. Typical event personnel required to service an indoor velodrome and event center can include, but are not limited to police, emergency medical technicians, box office personnel, ushers, ticket takers, security, stagehands, janitorial crews and other such staff. Other event related expenses include expenses such as utilities, contract services, advertising and promotions, equipment rental, insurance and other such expenses. In order to estimate these expenses, the expense level of comparable venues was reviewed to determine reasonable average expenses per event. 82 7. PROJECTED FINANCIAL OPERATIONS
It should be noted that for purposes of this analysis, the event programing expenses presented herein were assumed to be 60 percent of the cycling related revenues and the non-‐cycling event expenses are responsibility of the promoter. As a result, the non-‐cycling revenues presented in this analysis does not include gross ticket sales, but rather only the venue’s revenue from facility rent. Indirect (Overhead) Expenses Overhead expenses represent non-‐event specific expenses associated with operating the National Velodrome at Coatesville and include administrative salaries and benefits, utilities, insurance, repairs and maintenance and building materials and supplies. Administrative Salaries and Benefits Salaries, wages and benefits include expenses for full-‐time personnel, excluding event-‐related personnel expenses. Based on market research, the typical indoor velodrome has a full and part-‐time (non-‐event) staff of approximately 10 full-‐time equivalent positions, including seven full-‐time positions (General Manager, Track and Program Manager, Camp and Clinic Manager, Operations Manager, two Maintenance Engineers, a Custodian and an Administrative Assistant) and two part-‐time positions (Event Coordinators). Salaries are estimated to range from $25,000 to $85,000 per year, depending on the position. Benefit costs, which are in addition to salaries, are assumed to be 30 percent of salaries and wages. General and Administrative General and administrative expenses include a variety of expenses expected to be incurred during the operations of the National Velodrome at Coatesville. Based on comparable facilities and industry standards examples of general and administrative expenses including advertising, camp and clinic expenses, postage, printing, service agreements, technology, supplies and other costs are included in the general and administrative expenses. Other Overhead Expenses Other overhead expenses include utilities, insurance, internet and phones and general repairs and maintenance. Based on comparable research and industry standards it has been assumed that the Authority-‐owned facility would not incur property taxes. Capital Reserves The projections formed for the National Velodrome at Coatesville did not take into account a capital reserve funding. Capital reserve funds are generally established by facility owners in order to cover the costs of future facility repairs and upgrades. Capital reserves may be funded by a variety of sources, including facility operations or tax revenues. Industry standards typically dictate that a capital reserve should be established in the amount of one-‐half percent of hard construction costs. 83 7. PROJECTED FINANCIAL OPERATIONS
Retail Income The National Velodrome at Coatesville building plan includes the construction of up to 29,500 square feet of commercial retail space. It has been projected that the retail space will be occupied with tenants over the first five years that the velodromes is in operation. Based on results of a retail demand study, it has been assumed that the retail rental rates will be $14.00 per square foot triple net for the initial year of the tenants lease. A triple net lease (Net-‐Net-‐Net or NNN) is a lease agreement on a property where the tenant agrees to pay all real estate taxes, building insurance, and maintenance on the property in addition to any normal fees that are expected under the agreement (rent, utilities, etc.). This form of lease is most frequently used for commercial freestanding buildings. For the purpose of this analysis it has been assumed that the 29,500 square feet of retail space will be leased over the first five years of operations and the initial year of each triple net retail space income will increase annually from $14 a square foot to a maximum of $16.50 per square foot annually. The following assumptions were made with regards to the amount of leased retail space per year for the National Velodrome at Coatesville: year one 12,250 square feet will be leased, year two a total of 13,750 square feet will be leased, year three will see 26,750 square feet of retail leased, year four and beyond projects the entire 29,500 square feet of retail will be leased. It should also be noted that once the maximum amount of $16.50 per square foot has been reached the leases will grow annually by 2.5%. The addition of the commercial retail spaces can bring a greater number of potential participants to the National Velodrome at Coatesville and will help reach sustainable operating levels for the facility. This additional revenue will be critical to the ability of the velodrome to be financially positive in its day to day operations. A market analysis of the retail development can be found in the Appendix B. SENSITIVITY ANALYSIS The National Velodrome at Coatesville will be dependent on many factors aligning and working together for the facility to reach its full potential of profitability. The main factors that may affect the overall profitability are as follows: growing demand for competitive track cycling, the ability to attract other non-‐cycling events to the event center and leasing the 30,000 square feet of retail surrounding the velodrome. Various risks associated with these factors can adversely affect the financial performance of the National Velodrome at Coatesville, leading to potential variations in overall revenues and expenses, the number of participants, venue sponsors, event attendance, retail tenant spaces, and profit margins. These risks could include, but are not limited to: • The track cycling industry is dependent on relationships with key cycling promoters, local cycling associations and clubs, and access to the national and international cycling communities, any adverse changes in these relationships could adversely affect the financial operations of the National Velodrome at Coatesville. •
The National Velodrome at Coatesville will compete with other forms of entertainment for consumers’ discretionary spending and within the cycling industry and other non-‐cycling events. 84 7. PROJECTED FINANCIAL OPERATIONS
•
Existing and future competitive venues may offer more favorable terms in order to book non-‐cycling event center activity which could adversely affect the marketability of the National Velodrome at Coatesville. •
General economic conditions could worsen which could cause consumers to reduce discretionary spending, sponsors to limit their advertising expenditures and retail collapse forcing vacancies in the commercial retail spaces. •
Unfavorable changes in labor conditions which may require The National Velodrome at Coatesville to spend more to retain and attract key employees. •
There are inherent risks associated with producing track cycling and other event center events. As a result, personal injuries and accidents could occur and the venue could be subject to claims and liabilities for personal injuries. •
The attractiveness of The National Velodrome at Coatesville could deteriorate over time due to the age of the venue and/or deferred maintenance issues. To gain an understanding of the potential impact to The National Velodrome at Coatesville’s estimated net operating income associated with fluctuations in key study assumptions, a sensitivity analysis has been completed. The sensitivity analysis compares the operating revenue, operating expenses and resulting net income from operations before any applicable debt service payments that could result based on differing event levels, attendance levels and changes to operating expense, retail rentals and naming rights assumptions. The table on the following page summarizes the results of the sensitivity analysis. As summarized in the table, variations in several event, attendance and/or financial metrics could result in higher operating losses or reduced profit margins. Additionally, the sensitivity analysis addresses the impacts of debt servicing obligations of a mortgage. The impact of a set-‐aside capital reserve has also been included in the sensitivity analysis. There is potential for the proposed facility to owe property taxes, an annual estimate of property tax expense has been incorporated into the sensitivity analysis. The impact of any debt repayments, capital reserve payments and taxes considerably affects the financial outlook of the proposed facility; reducing the first year net income from an operating loss of $106,466 to an operating loss of $1.0 to $1.4 million, depending on the annual debt service requirement. A more detailed breakdown of these impacts is detailed is in the sensitivity analysis. The Authority and or project stake holders should be prepared to allocate some portion of its annual budget to a “rainy day” fund (perhaps up to $250,000) to cover potential shortfalls in the event that the financial performance of the National Velodrome at Coatesville falls short of projections in a given year. 85 7. PROJECTED FINANCIAL OPERATIONS
SENSITIVITY*ANALYSIS
The*National*Velodrome*at*Coatesville
2016
2017
2018
2019
2020
$2,677,058
$2,431,942
$245,116
$2,801,684
$2,527,966
$273,718
Base*Analysis
The&following&is&a&five<year&projection&of&finanial&operations&for&the&proposed&indoor&
&center&in&Coatesville&using&assumptions&formed&in&the&&baseline&model.
Total&Operating&Revenues
Total&Operating&Expenses
Net&Income&(Loss)&From&Operations
$2,054,425
$2,160,891
($106,466)
$2,170,789
$2,234,389
($63,600)
$2,461,879
$2,315,424
$146,455
Reduced*Concerts*>*None
The&following&is&a&five<year&projection&of&finanial&operations&for&the&proposed&indoor&velodrome/events&
center&in&Coatesville&assuming&a&scenario&with&no&concert&demand.
$1,938,740
$2,101,221
($162,481)
$2,051,633
$2,172,929
($121,296)
$2,339,148
$2,252,120
$87,029
$2,550,646
$2,366,739
$183,907
$2,671,479
$2,460,807
$210,672
Increased*Concerts*>*Total*of*6*Events*Each*Year
center&in&Coatesville&assuming&elevated&concert&demand&of&six&annually.
$2,170,110
$2,220,561
($50,451)
$2,289,945
$2,295,849
($5,904)
$2,584,609
$2,378,727
$205,882
$2,803,471
$2,497,145
$306,325
$2,931,889
$2,595,125
$336,764
Reduced*Spectator*Admissions*>*30*percent*reduction
&in&Coatesville&&assuming&a&scenario&30%&fewer&annual&attendees.
$1,891,525
$2,141,040
($249,515)
$1,998,782
$2,212,920
($214,138)
$2,283,691
$2,292,647
($8,956)
$2,491,259
$2,408,135
$83,123
$2,612,090
$2,503,318
$108,772
Increased*Spectator*Admissions*>*30*percent*increase
The&following&is&a&five<year&projection&of&finanial&operations&for&the&proposed&indoor&velodrome/events
&center&in&Coatesville&assuming&a&scenario&of&30&percent&more&annual&attendees.
$2,322,925
$2,194,470
$128,455
$2,454,341
$2,270,705
$183,636
$2,755,664
$2,353,951
$401,713
$2,982,653
$2,472,135
$510,517
$3,115,423
$2,569,660
$545,762
Reduce*Event*Center*Income*>*No*Non>Cycling*Events
&center&in&Coatesville&assuming&a&scenario&with&no&non<cycling&events.
$1,733,115
$2,003,965
($270,850)
$1,840,140
$2,072,755
($232,616)
$2,121,610
$2,148,940
($27,331)
$2,326,881
$2,260,465
$66,416
$2,441,302
$2,351,344
$89,958
Reduced*Commercial*Real*Estate*Rental*Revenues*>*50*percent*reduction*in*occupancy
center&in&Coatesville&assuming&a&scenario&of&30&percent&more&annual&attendees.
$1,968,675
$2,160,891
($192,216)
$2,068,414
$2,234,389
($165,975)
$2,258,566
$2,315,424
($56,857)
$2,446,871
$2,431,942
$14,928
$2,560,372
$2,527,966
$32,406
No*Naming*Rights*Agreement
&center&in&Coatesville&&assuming&a&scenario&with&no&facility&naming&rights&agreement.
$1,994,425
$2,160,891
($166,466)
$2,108,989
$2,234,389
($125,400)
$2,398,179
$2,315,424
$82,755
$2,611,458
$2,431,942
$179,516
$2,734,084
$2,527,966
$206,118
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ Sensitivity Analysis continues on to next page -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 86 7. PROJECTED FINANCIAL OPERATIONS
SENSITIVITY,ANALYSIS
The,National,Velodrome,at,Coatesville,(Continued)
2016
2017
2018
2019
2020
Base,Analysis,with,Debt,Service
The&following&is&a&five9year&projection&of&finanial&operations&for&the&proposed&indoor&velodrome/
events&center&in&Coatesville&assuming&annual&debt&service&on&a&$5.0&million,&209year&mortage
&&with&5%&interest&rate.&(Annual&debt&service&of&approximately&$401,213)
$2,054,425
$2,562,104
($507,679)
$2,170,789
$2,635,602
($464,813)
$2,461,879
$2,716,636
($254,758)
$2,677,058
$2,833,155
($156,097)
$2,801,684
$2,929,179
($127,495)
Base,Analysis,with,Debt,Service
events&center&in&Coatesville&assuming&annual&debt&service&on&a&$10.0&million,&209year&mortage
&&with&5%&interest&rate.&(Annual&debt&service&of&approximately&$802,426)
$2,054,425
$2,963,317
($908,892)
$2,170,789
$3,036,815
($866,026)
$2,461,879
$3,117,849
($655,971)
$2,677,058
$3,234,368
($557,310)
$2,801,684
$3,330,392
($528,708)
Base,Analysis,with,Capital,Reserve
The&following&is&a&five9year&projection&of&finanial&operations&for&the&proposed&indoor&&velodrome/
events&center&in&Coatesville&assuming&annual&capital&reserve&of&0.5%&of&estimated&project&costs
&($27.5&million),&&grown&at&a&3%&annual&rate.&(First&year&capital&reserve&of&$135,000)
Capital&Reserve
$2,054,425
$137,500
$2,298,391
($243,966)
$2,170,789
$141,625
$2,376,014
($205,225)
$2,461,879
$145,874
$2,461,297
$582
$2,677,058
$150,250
$2,582,192
$94,866
$2,801,684
$154,757
$2,682,724
$118,961
Base,Analysis,with,Real,Estate,Tax
events&center&in&Coatesville&assuming&annual&property&tax&rate&of&13.458&Mills&on&an&assumed&$27.5&
million&property&value,&depreciated&over&a&409year&term.&(First&year&real&estate&tax&of&$366,606)
$2,054,425
$2,534,286
($479,861)
$2,170,789
$2,598,449
($427,660)
$2,461,879
$2,670,149
($208,270)
$2,677,058
$2,777,333
($100,274)
$2,801,684
$2,864,022
($62,337)
Base,Analysis,with,Debt,Service,,Capital,Reserve,,&,Real,Estate,Tax
&on&a&$10.0&million,&209year&mortage&with&5%&interest&rate;&a&capital&reserve&equal&to&0.5%&of&
estimated&project&costs&($27.5&million),&grown&at&a&3%&annual&rate;&and&annual&property&tax&of&
13.458&Mills&on&an&assumed&$27.5&million&property&velue,&depreciated&over&a&409year&term.
$2,054,425
$3,474,212
($1,419,787)
$2,170,789
$3,542,500
($1,371,711)
87 $2,461,879
$3,618,448
($1,156,570)
$2,677,058
$3,730,009
($1,052,950)
$2,801,684
$3,821,205
($1,019,521)
Executive Summary
1.
Introduction
2.
Cycling Overview
3.
4.
5.
6.
Estimated Demand
7.
Appendix A.
Event Center
Analysis
APPENDIX A. EVENTS CENTER ANALYSIS
As an alternative to the development of a state-‐of-‐the-‐art indoor velodrome that could accommodate both cycling and non-‐cycling events, the Coatesville Redevelopment Authority is also interested in exploring the viability of a dedicated event center (in lieu of velodrome development) that would be designed to primarily accommodate concerts, comedic performances, family shows and other entertainment events. Project stakeholders envision that an event center in Coatesville could seat approximately 3,000 to 5,000 for concerts and other entertainment events, but also provide flexibility to host other events such as consumer shows, trade shows and other events requiring a large flat floor space that could be created with retractable seating. This section outlines the key findings of the market and financial potential for an events center that could be developed in lieu of an indoor velodrome. This analysis includes case studies of similar facilities operating in other markets, an assessment of the competitive landscape in which an events center in Coatesville would operate, and input from event promoters that could potentially book events at a new events center in Coatesville in to order to estimate potential demand and financial performance of an events center in Coatesville. EVENT CENTER CASE STUDIES An assessment of the physical, operating and financial characteristics of comparable venues provides a framework from which to benchmark the potential operations of a dedicated events center in Coatesville. The venues included in this analysis consist of facilities that are similar in size to the prospective facility in Coatesville, several of which are located in markets similar in size to the Coatesville market. Physical, operating, and financial characteristics were obtained and reviewed for the following event centers: • SRC Arena (Syracuse, NY); •
Sands Bethlehem Event Center (Bethlehem, PA); •
Cabarrus Arena & Events Center (Concord, NC); •
Reno Events Center (Reno, NV); •
Pontchartrain Center (Kenner, LA); and, •
Enid Event Center and Convention Hall (Enid, OK). 88 APPENDIX A. EVENTS CENTER ANALYSIS
SRC ARENA Key Characteristics: SRC Arena Location: Year Opened: Project Cost: Ownership: Management: Tenants: Capacity: Convention Space: Exhibition SF: Ballroom SF: Meeting SF: Total Sellable SF: Events: Syracuse, NY 2011 $22.0 MM Onondaga County OCC OCC, YMCA 6,500 (total) 4,000 (retractable) 2,500 (event floor) *60,000 0 1,500 61,500 181 *Exhibition SF includes main event floor space when seating is retracted. Located in Syracuse, New York, the SRC Arena at Onondaga Community College (“OCC”) opened in 2011. The multipurpose facility features a main floor with 60,000 square-‐feet of event space (when seating is retracted) that can accommodate flexible seating for up to 6,500 people, with 4,000 retractable seats and room for 2,500 temporary seats located on the event floor. Arena seating is arranged in a u-‐shape with two sets of retractable seats located on the north and south sides of the 89 APPENDIX A. EVENTS CENTER ANALYSIS
arena floor with approximately 15 rows on each side that can accommodate 1,500 people each. Additional retractable fixed seating is located on the west side of the facility with room for 1,000 event attendees. SRC Arena is a multi-‐purpose facility capable of hosting anything from sporting and community events to national concerts and shows. The event center has three flex courts (basketball, volleyball, tennis, and other sports), multi-‐purpose meeting rooms, a 5,000 square-‐foot fitness center, and a six-‐lane 200-‐meter indoor track, along with areas that can accommodate long jump and pole-‐vault events. SRC Arena cost $22 million to construct and was funded with equal participation by Onondaga County and the Onondaga Community College. The facility was financed with general obligation bonds funded by the County with the understanding that the school would pay half of the debt service obligations. SRC Arena entered into a partnership with Southwest YMCA, who is allowed to operate out of the 5,000 square-‐foot fitness center. The YMCA furnished the facility with equipment in exchange for the use of space. All YMCA membership fees are attributed to SRC Arena and OCC. Facility management indicated that SRC Arena has filled a need in the market, noting that there was no indoor track facility in the area and vocal demand for some kind of exercise/track and field facility. Additionally, management indicated that SRC Arena fills a need in the market for consumer shows, high school athletics, graduations, and performing arts shows. SRC Arena management cited the ability of the facility to be multi-‐faceted and suitable for several event types as being critical to their operations. The SRC Arena will host approximately 56 events in 2012/13, which will occupy 181 event days. Of the 181 event days on the SRC Arena calendar, the YMCA, a primary tenant of the facility, occupies the facility for 32 days. Main competitors identified by facility management include the Turning Stone Resort and Casino in Keene, New York (outside of Albany) and the Oncenter complex in Syracuse, New York. Since the SRC Arena opened, SMG, one of the industry’s largest public assembly facility management companies, has been contracted by Onondaga County to manage the Oncenter facility complex, which includes convention center space, the War Memorial Arena (7,000 seats), and the performing arts theater space (2,100 seats). The Oncenter competes with the SRC Arena primarily for events that require meeting and ballroom space, but the outdated nature of the Oncenter facility is a competitive advantage for SRC Arena. Turning Stone Resort and Casino was identified as the main competitor for all event types, and SRC Arena management suggested that the venue is able to pay more for concert/entertainment events than the SRC Arena. The Turning Stone Resort and Casino, which features a 6,000-‐seat arena and three club venues capable of hosting events of various sizes, is able to pay above market rates for spectator events due to its ability to drive revenue from attendees through hotel stays, gambling, restaurants, clubs and other sources. SRC Arena facility management indicated that Turning Stone absorbs much of the concert demand in the area. SRC Arena management indicated that their conference, meeting, and ballroom events have typically been the most profitable, while sporting events typically run lower margins. Other event types the facility has had success with include performing arts and occasional concert/entertainment events. Attendance at performing arts shows is typically between 800 and 1,400 people. Major concert events held since the facility opened included hip-‐hop artist Bow Wow and international touring act Riverdance. Average tickets sold for these two events were 2,058, 90 APPENDIX A. EVENTS CENTER ANALYSIS
with gross ticket revenue of $94,079 per event. The facility has also hosted several sporting events, including professional bull riding that attracted approximately 5,000 in paid attendance. In its first full year of operation, the SRC Arena hosted a more modest outside ticketed event schedule than that which was previously targeted. In its first six months of operations, the arena booked 68 event days, with 60 percent of those events being either college or high school related. Due to the ownership structure of the facility, many significant operational expenses are subsidized by OCC, including debt service, insurance, and utilities, among other expenses. In it’s first year of operations, SRC Arena an operated at a deficit of approximately $150,000. Facility management attributed much of the deficit to startup costs and a shortened event schedule. However, because SRC Arena is owned by Onondaga Community College, certain expenses such as utilities, insurance, and debt service are not reflected in the SRC Arena’s financial reporting. Including these costs, it is estimated that SRC Arena would operate a deficit of $250,000 to $400,000 annually. Operational issues identified by facility management include the lack of on-‐site kitchen and catering facilities. Cooking for events is done off-‐site at the OCC cafeteria and causes some logistical issues. Management believes that an enhanced food service operation would attract more galas, community and corporate dinners, and similar events to the facility. SANDS BETHLEHEM EVENT CENTER Key Characteristics: Sands Bethlehem Event Center Location: Bethlehem, PA Year Opened: 2012 Ownership: Sands Casino Resort/ Vision Entertainment Management: SMG Tenants: None Capacity: 3,500 Convention Space: Exhibition SF: *8,255 Ballroom SF: 10,100 Meeting SF: 12,200 Sellable SF: 30,555 Events: Total Attendance: *88 127,600 *Exhibition SF includes main event floor space when seating is retracted. *Event total based on Pollstar reporting. May exclude certain events. 91 APPENDIX A. EVENTS CENTER ANALYSIS
The Sands Bethlehem Events Center is connected to the Sands Casino Resort in south Bethlehem, Pennsylvania. The facility is primarily a concert/entertainment venue and has a partnership with Live Nation, the country's largest booking agency, and features top entertainment that often plays much larger venues. According to facility management, the facility appeals to a wide variety of tastes and was designed for all aspects of entertainment, including types of music for all ages along with sporting events (boxing, TNA Wrestling, among others) and family shows. The venue has attracted musical acts such as Alan Jackson and The Beach Boys' 50th anniversary reunion tour, comedians Jay Leno and Don Rickles, nationally televised boxing and other sporting events, conventions, trade shows and more. The main entrance to the facility features the Vision Bar, an upscale bar that serves as a meeting place before and after events. The Vision Bar also operates as a restaurant during the day and a nightclub on weekends. The bar accommodates up to 1,100 people before and after concerts and opens at 4 p.m. on concert days for ticket holders. Inside the events center, there are two permanent snack bars with standard food and drink offerings on either side at the back of the facility, and several portable bars located on the events center floor. The events center features free parking on the surface lot adjacent to the venue with spaces for 1,800 vehicles. The casino offers valet parking at the entrance and a free 5,000-‐space parking deck connected to its building. The events center floor is a 65’ by 127’ space (8,255 square-‐feet) with a flat, smooth concrete floor designed to accommodate trade shows and conventions. The floor was recently covered with sound-‐absorbing vinyl composite tile to improve sound quality and provide a better surface for hosting private and corporate events. Additional upgrades include two large, high-‐definition LED screens that flank both sides of the stage to improve the experience for event-‐goers. The venue utilizes blocks of sound-‐absorbing material on the walls to provide for clear sound and an enjoyable experience for concertgoers. The events center has a standing room capacity for general admission shows of 3,500, and a reserved-‐seating capacity of 2,250 with chairs set up on the floor and the side wings. Additional configurations include a mix of general admission standing room areas and reserved seating along the side wings. Risers can also be erected at the back of the events center for better viewing. At the back of the events center, there are seven VIP luxury suites approximately 22 feet above the event floor, with a total of 136 padded theater seats, food and drink service and restrooms. Suite patrons have access to a private veranda overlooking the Vision Bar. Facility ownership indicated a goal of hosting 150 shows annually. Since opening in May of 2012, the venue has held 88 total ticketed events according to Pollstar, which does not include private events. The average tickets sold for each one of these events was 1,450 with gross ticket revenues of $87,882 per show. Facility management indicated that events draw regionally, attracting people from New York, northern New Jersey and Harrisburg. 92 APPENDIX A. EVENTS CENTER ANALYSIS
CABARRUS ARENA & EVENTS CENTER Key Characteristics: Cabarrus Arena & Events Center Location: Year Opened: Project Cost: Ownership: Management: Tenants: Capacity: Convention Space: Exhibition SF: Ballroom SF: Meeting SF: Sellable SF: Events: Total Attendance: Concord, NC 2002 $25.1 MM Cabarrus County SMG None 3,300 (sports) 5,500 (concerts) *104,600 0 5,000 109,600 *207 220,100 *Exhibition SF includes main event floor space when seating is retracted. *Includes all event types (concert, sporting event, tradeshow, conference, graduations, among others.) Located 14 miles north of Charlotte, North Carolina, the Cabarrus Arena & Event Center opened in 2002. The facility is currently owned by Cabarrus County and operated by the private management company, SMG. The facility includes an arena with a seating capacity of 3,000 for sports events and 5,500 for concerts. The complex also incorporates exhibit space totaling 105,000 square feet, as well as 5,000 square feet of meeting space. Seven furnished suites are also available. The facility had a minor league basketball tenant in the past but currently has no tenant franchises. In a recent fiscal year, the Cabarrus Center hosted 207 event days, including 89 days of events that utilized the main events center space. Cabarrus Center events included primarily flat floor events, circuses, dance competitions and other such events. The facility rarely hosts concerts or other touring events 93 APPENDIX A. EVENTS CENTER ANALYSIS
due to the presence of dedicated concert venues in the City of Charlotte including Fillmore Charlotte, Belk Theater, and Tremont Music Hall among others and other larger facilities like Time Warner Cable Arena and Verizon Wireless Amphitheater. The facility was built at a cost of $25.1 Cabarrus/Arena/&/Events/Center
million and was funded by Cabarrus July/1,/2011/to/June/30,/2012/Lead/Income/Statement
County. The County issued certificates of FY12
participation (COP’s) to finance $19.8 Forecast
million of the project. The remaining $5.3 million of project costs were funded Event/Income
upfront using existing funds from the Direct/Event/Income
County’s general fund. Rental'Income
$416,680
Service'Income
'''''''''''''621,466
Property tax revenues are used to finance Service'Expenses
''''''''''''(512,339)
debt service since the facility does not Total'Direct'Event'Income
'''''''''''''525,807
generate an operating profit. The facility has historically sustained operating losses Ancillary/Income
F&B'Concessions
'''''''''''''123,065
of approximately $500,000 to $700,000 F&'Catering
'''''''''''''106,034
per year. Novelty'Sales
'''''''''''''''''4,468
Parking:'Self'Parking
'''''''''''''129,228
Other'Ancillary
R
Total'Ancillary'Income
'''''''''''''362,795
Total/Event/Income
'''''''''''''898,306
Other/Operating/Income
'''''''''''''''21,637
Adjusted/Gross/Income
'''''''''''''919,943
Operating/Expenses
Employee'Salaries'and'Wages
Benefits
Net'Employee'Wages'and'Benefits
General'and'Administrative
Operations
Repair'&'Maintenance
Supplies
Insurance
Utilities
SMG'Management'Fees
Total'Operating'Expenses
'''''''''''''575,758
'''''''''''''162,575
'''''''''''''738,333
'''''''''''''''87,477
'''''''''''''''47,701
'''''''''''''108,050
'''''''''''''''56,167
'''''''''''''''51,200
'''''''''''''314,518
'''''''''''''121,645
''''''''''1,525,185
Net/Income/(Loss/From/Operations)
////////////(605,242)
Source:'Cabarrus'County,'North'Carolina
94 APPENDIX A. EVENTS CENTER ANALYSIS
RENO EVENTS CENTER Key Characteristics: Reno Events Center Location: Year Opened: Project Cost: Ownership: Management: Tenants: Capacity: Convention Space: Exhibition SF: Ballroom SF: Meeting SF: Sellable SF: Events: Total Attendance: Reno, NV 2005 $28.5 MM City of Reno Reno-‐Sparks CVA NBA D-‐League 7,000 *56,000 0 4,954 60,954 *53 163,018 *Exhibition SF includes main event floor space when seating is retracted. *Number of events dased on RSCVA annual report. The $28.5 million Reno Events Center (“REC”) opened in 2005 as the first phase of a downtown Reno facility expansion that included the development of the National Bowling Stadium and the Downtown Reno Ballroom adjacent to the REC. The REC is owned by the City of Reno and operated by the Reno-‐Sparks Convention and Visitor Authority (“RSCVA”). The RSCVA also operates the National Bowling Stadium, Reno-‐Sparks Livestock Events Center and the Reno-‐Sparks Convention Center. The facility was developed as a public/private partnership that included the City and the RSCVA as well as four downtown casino resort properties. The location in downtown Reno is within three blocks of approximately 6,600 hotel rooms. The REC consists of a flexible, multi-‐purpose space with a seating capacity of up to 7,500 for concerts, including telescopic stadium seating, balcony and floor seats. A total of 4,000 telescopic seats are available in the stadium seating and balcony areas, and 3,500 portable seats can be configured on the floor. Retracting the facility’s seats results in 56,000 feet of exhibition space, allowing the REC to host conventions, trade shows, consumer shows and other flat floor events. The REC floor can handle up to 310 booths and has accommodated tradeshows with over 3,000 95 APPENDIX A. EVENTS CENTER ANALYSIS
attendees. Management reports that many tradeshows host their main event at the REC and have breakout sessions and banquets at the casino hotels across the street. The second floor contains retractable walls that allow the space to be configured into nine meeting rooms or suites that can range from 400 to 850 square feet, or a total of 4,954 square feet of available space. The facility also features two loading docks, six dressing rooms, and two event and promoter offices. The REC is home to the Reno Bighorns of the NBA Development League, which hosts 26 home games a year at the REC. Other than tenant events, the flexible nature of the facility allows it to host a variety of family, sports, rodeo and flat floor events. The annual event schedule is fairly evenly split between tradeshows and concerts/spectator events. While the facility can seat up to 7,500 for concerts, the majority of concerts held at the Center have historically played to a somewhat smaller seating configuration (6,000 to 6,500 seats). Since opening, the REC has averaged 16 ticketed concert/spectator events a year, with an average of 4,945 tickets sold and gross ticket revenues of $328,205 per show. In 2012, the REC generated nearly $1.4 million in operating revenues and incurred approximately $1.9 million in expenses, resulting in a total net operating deficit of $435,000. PONTCHARTRAIN CENTER Key Characteristics: Pontchartrain Center Location: Kenner, LA Year Opened: 2005 Ownership: City of Kenner Management: SMG Tenants: None Capacity: 3,700 Convention Space: Exhibition SF: *34,600 Ballroom SF: 11,500 Meeting SF: 14,681 Sellable SF: Events: 60,781 *400 *Exhibition SF includes main event floor space when seating is retracted. *Includes all event types (concert, sporting event, tradeshow, conference, graduations, among others.) The Pontchartrain Center is a 4,100-‐seat events center located in Kenner, Louisiana. The location is approximately 15 miles from New Orleans' French Quarter, five miles from the Louis Armstrong International Airport, and close to more than 6,000 hotel rooms. The Pontchartrain Center is operated by SMG, and serves as a multi-‐purpose events center. 96 APPENDIX A. EVENTS CENTER ANALYSIS
The Pontchartrain Center hosts an average of 400 events each year, and programming includes concerts, sporting events, conventions, trade shows, meetings, and corporate events among other spectator and community events. The facility offers a variety of seating configurations and portable stage sizes for concerts, sporting events, graduations and other events varying from a minimum seating of 800 to a maximum of 3,700. The facility offers approximately 61,000 square-‐feet of total sellable space, which includes a flexible main exhibit floor of 41,600 square-‐feet when seating is retracted, with the ability to section off 11,500 square-‐feet of ballroom space. An additional 14,681 square-‐feet of meeting space (divisible into seven rooms) is available adjacent to the main event floor. The venue features 1,700 total parking spaces that spread across four separate controlled by the Center, an additional 900 parking spots are available at a nearby casino that is occasionally used for overflow parking. Equipped with operable walls, the venue can be configured into a variety of independent spaces that can accommodate intimate gatherings of 50 to large events with 3,700 patrons. The Center provides space for over 280 exhibit booths with a ceiling height of 35 feet in first floor Halls A, B, and C and 12 feet in the meeting rooms which allows for exhibits of nearly any size. Eighteen by eighteen foot roll-‐up doors at both north and south entrances cater to over-‐sized mobile equipment utilized in the operation of many event types. The Center's 9,750 square feet lobby and 25,000 square feet glassed mezzanine lobby overlook Lake Pontchartrain, and is utilized for post or pre-‐function gatherings and for registration accommodations. Complete electrical and other utility services are located in the lobby and in the main halls. Both permanent and portable concession facilities serve patrons efficiently with the flexibility of opening to both the lobby and assembly area. The facility also features a full-‐service kitchen operated by Messina's Catering/Concessionaire, the Center's in-‐house caterer, and is utilized for several event types. Since opening in 1991, the Pontchartrain Center has operated at a deficit every year. The Pontchartrain Center generates approximately $1.3 million in annual revenue while costing $1.7 million to operate annually. SMG and the City of Kenner recently negotiated a new five-‐year management deal that is projected to save Kenner at least $95,000 annually. The new deal is a performance-‐based contract that eliminates the required annual management fee. SMG will only be paid if its management fee if the city subsidy is less than $350,000. SMG will receive 100 percent of the first $75,000 it reduces the operating deficit and a sliding percentage of further deficit reductions. 97 APPENDIX A. EVENTS CENTER ANALYSIS
ENID EVENT CENTER & CONVENTION HALL Key Characteristics: Enid Event Center & Convention Hall Location: Year Opened: Project Cost: Ownership: Management: Tenants: Capacity: Convention Space: Exhibition SF: Ballroom SF: Meeting SF: Sellable SF: Events: Total Attendance: Enid, OK 2013 $24.0 MM City of Enid Global Spectrum None 4,000 (total) 3,400 (sports) 33,500 14,000 5,500 53,000 TBD TBD *Exhibition SF includes main event floor space when seating is retracted. The Enid Event Center is a 4,000 seat events center located between the Cherokee Strip Conference Center and Convention Hall in downtown Enid, Oklahoma, approximately 86 miles north of Oklahoma City and 116 miles east of Tulsa. The facility opened on June 15, 2013 with the Greater Enid Chamber of Commerce Business Expo. Enid Event Center and Convention Hall are owned by the City of Enid. Global Spectrum manages Enid Event Center and Convention Hall and Enid Convention and Visitors Bureau. The $17.4 million events center was built as a part of the $24 million Enid Renaissance project, which included the renovation of Convention Hall and the addition of 1,100 additional parking spaces in the downtown area. The Convention Hall is a state-‐of-‐the-‐art 53,000 square foot facility with over 11,000 square foot Grand Ballroom, 3,000 square foot Junior Ballroom, and over 5,500 square feet of meeting rooms. Originally built in the 1920’s, the facility started as a convention hall, and was later transformed into a sporting venue and has hosted events ranging from a local basketball tournament for over 40 years to a campaign speech from George Bush in 1992. The transformed space was built to accommodate conventions, trade shows, banquets, receptions, special events, and meetings. Enid Event Center is a multi-‐purpose arena facility with a total seating capacity of 4,000 and 3,400 for sporting events. The Center will be utilized to host concerts; family shows, sporting events, 98 APPENDIX A. EVENTS CENTER ANALYSIS
consumer shows and more. Retractable seating platforms with affixed seats will allow for flexibility, which allows for a 33,500 square foot event floor. ********** The physical and operating characteristics of several venues that could provide models for incorporating flexible flat floor and spectator event space into a facility in Coatesville. This type of multi-‐purpose facility is often a preferred option in markets that seek to accommodate a wide variety of facility needs in one structure. Below is a summary of major physical and operating characteristics of the comparable facilities identified in this study: • Five of the six facilities reviewed in this section were entirely funded by public entities, with the exception being Sands Bethlehem Event Center. On average, construction costs for the comparable event centers was approximately $24.9 million, and ranged in cost from $22.0 million to $28.5 million. • Most event centers operated at a deficit ranging from $400,000 and $700,000 annually. • Of the six comparable event centers included in this analysis, large facility management companies operated four, with SMG accounting for three venues and Global Spectrum operating the remaining facility. • Event centers reviewed hosted between 53 and 400 event days annually, with an average of 186 event days. Annual attendance for these facilities ranged from 127,600 to 220,100, with an average annual attendance of 170,240. Facilities with a stronger focus on ticketed spectator events (i.e. Sands Bethlehem Event Center, and Reno Events Center) were utilized for far fewer event days than facilities that are utilized primarily for trade shows, community events, meetings, and other similar events. • Concert seating capacity for comparable events center reviewed range from 3,700 to 7,000 (including both retractable/fixed seats and available floor seating) with an average of 5,033 seats. • Total sellable space for comparable event centers ranged from 30,500 square-‐feet to 109,600 square-‐feet, with an average for all venues of approximately 62,732. • Event floor exhibition space, when all seating is retracted, for these facilities ranged from 8,255 to 104,600 square-‐feet, with an average of approximately 49,493 square-‐feet for all events centers. • All event centers reviewed included ancillary meeting space adjacent to the main event floor. Meeting room space for all event centers ranged from 1,500 square-‐feet to 14,681 square-‐feet, with an average of 7,305 square-‐feet of meeting room space. 99 APPENDIX A. EVENTS CENTER ANALYSIS
DEMOGRAPHICS An important component in assessing the current and future market potential of the events center in Coatesville is the demographic and socioeconomic profile of the local and regional market. 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 local and regional market population, age distribution, household income and corporate base When compared to the proposed National Velodrome in Coatesville, the potential multi-‐purpose events center is narrower in scope in terms of its ability to draw from outside the local and regional area. The National Velodrome in Coatesville would be only the second indoor velodrome in the United States, and the only indoor velodrome on the East Coast. The National Velodrome in Coatesville would have the ability to draw from a substantial area for regional, national and international events. Due to the nature of programming at multi-‐purpose event centers, the proposed events center in Coatesville will likely draw primarily from a local and regional base within a 50-‐mile radius of the site location. Key local and regional demographic and socioeconomic market characteristics that may impact the viability of the proposed events center in Coatesville include: • The population for the 50-‐mile radius around the proposed events center in Coatesville is approximately 7,035,463, which is comprised of over 2,650,000 households. • Median age for residents living within 50 miles of the proposed events center in Coatesville is approximately 38.3 years. • Median household income for the 50-‐mile radius is approximately $57,300, making it higher than the national average of approximately $50,000. (City of Coatesville -‐ $37,017, Chester County -‐ $85,554). COMPETITION The number and type of local and regional facilities that would possibly compete for the limited supply of events, spectators, and attendees within the marketplace will impact the market potential for an events center in Coatesville. The purpose of this section is to assess facilities in the primary market area that could provide some level of competition to the proposed events center. Spectator Entertainment Venues The following table summarizes local and regional theatres, clubs, performing arts centers, and other spectator-‐based entertainment venues that that could potentially compete with the proposed events center at Coatesville. This analysis focuses on fixed seating venues of 1,000 or more seats within 50 miles of Coatesville. 100 APPENDIX A. EVENTS CENTER ANALYSIS
SPECTATOR2ENTERTAINMENT2VENUES
Competitive2Facilities
Facility
Location
Facility2Type
FirstEnergy+Stadium
Reading+Eagle+Theater
The+Silo
Sovereign+Center
Sovereign+Perf.+Arts+Center
Harrah's+Chester
PPL+Park
Long's+Park+Amphitheater
American+Music+Theatre
Tower+Theatre
Academy+Of+Music
Club+Evolution
Dell+Music+Center
Electric+Factory
Esther+Boyer+Theater
Festival+Pier
Finnigan's+Wake
Irvine+Auditorium
The+Liacouras+Center
Merriam+Theater
Theatre+Of+The+Living+Arts
Trocadero+Theatre
Union+Transfer
Citizens+Bank+Park
The+Liacouras+Center
Lincoln+Financial+Field
Mann+Center+for+Performing+Arts
Veterans+Stadium
Wells+Fargo+Center
Keswick+Theatre
MainGate+Night+Club
Allentown+Fairgrounds
Miller+Symphony+Hall
Memorial+Hall
Toyota+Arena+West
York+Hardware+Bar
TD+Bank+Amphitheater+At+Bensalem
York+Fair+Grandstand
GIANT+Center
Hersheypark+Stadium
Hershey+Theatre
Hersheypark+Arena
Music+Box+Theatre
The+Star+Pavilion+At+Hersheypark+Stadium
ArtsQuest+Center+at+SteelStacks
Levitt+Pavilion+SteelStacks
Musikfest+Cafe+At+ArtsQuest+Center
Sands+Bethlehem+Event+Center
Stabler+Arena
Reading,+PA
Reading,+PA
Reading,+PA
Reading,+PA
Reading,+PA
Chester,+PA
Chester,+PA
Lancaster,+PA
Lancaster,+PA
Upper+Darby,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Philadelphia,+PA
Glenside,+PA
Allentown,+PA
Allentown,+PA
Allentown,+PA
York,+PA
York,+PA
York,+PA
Bensalem,+PA
York,+PA
Hershey,+PA
Hershey,+PA
Hershey,+PA
Hershey,+PA
Hershey,+PA
Hershey,+PA
Bethlehem,+PA
Bethlehem,+PA
Bethlehem,+PA
Bethlehem,+PA
Bethlehem,+PA
Sports+Stadium
Auditorium+/+Theatre
Club
Arena
Casino
Sports+Stadium
Amphitheatre
Club
Amphitheatre
Club
Amphitheatre
Club
Arena
Club
Club
Club
Sports+Stadium
Arena
Sports+Stadium
Amphitheatre
Sports+Stadium
Arena
Club
Amphitheatre
Arena
Arena
Club
Amphitheatre
Amphitheatre
Arena
Sports+Stadium
Arena
Amphitheatre
Amphitheatre
Amphitheatre
Club
Arena
101 Distance
From
Coatesville
Seating
Capacity
25+mi.
25+mi.
25+mi.
25+mi.
25+mi.
26+mi.
26+mi.
26+mi.
26+mi.
29+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
35+mi.
36+mi.
46+mi.
46+mi.
46+mi.
47+mi.
47+mi.
47+mi.
47+mi.
47+mi.
48+mi.
48+mi.
48+mi.
48+mi.
48+mi.
48+mi.
50+mi.
50+mi.
50+mi.
50+mi.
50+mi.
+++++9,000
+++++4,500
+++++1,200
+++++8,900
+++++1,821
+++++1,000
+++26,902
+++50,000
+++++1,607
+++++2,800
+++++2,897
+++++1,000
+++++7,000
+++++2,500
+++++1,900
+++++5,500
+++++1,500
+++++1,246
+++10,000
+++++1,841
+++++1,000
+++++1,200
+++++1,000
+++43,500
+++10,000
+++68,532
+++14,000
+++55,000
+++21,000
+++++1,374
+++++1,850
+++14,500
+++++1,198
+++++2,500
+++++5,500
+++++1,200
+++++5,000
+++11,000
+++12,000
+++30,000
+++++1,940
+++++9,062
+++++1,800
+++++7,400
+++++3,000
+++++2,500
+++++1,000
+++++3,500
+++++6,700
Key findings from potentially competitive spectator-‐based sports and entertainment venues include: • There are 49 public assembly venues that have 1,000 or more seats within 50 miles of the proposed events center in Coatesville. Approximately 57 percent of these venues have seating capacities below 5,000, while 18 percent are venues between 5,000 and 10,000 seats. These venues are primarily theaters and focus on hosting performing arts, concerts and other musical acts. • There is no dedicated event center with 1,000 or more seats within a 25-‐mile span of Coatesville (nearest venues are located approximately 25 miles away in Reading, PA). Entertainment venues within 25 miles of Coatesville are club/theater venues that are small in nature and have less than 1,000 seats. • Many of the regional competitive venues have management and/or promotion partnerships with major concert/event promoters such as Live Nation (Theatre of Living Arts, Tower Theater, Electric Factory), AEG (Keswick Theatre), and Bowery Presents (Union Transfer). • The presence of promoter partnerships with concert venues in the Philadelphia market, existing relationships with booking agents, and potential radius clause conflicts could negatively impact the ability of the proposed events center in Coatesville to attract concerts and entertainment events on a regular basis. • The ability of the proposed events center at Coatesville to accommodate various other types of spectator events will be dependent on its ability to offer prime dates, competitive rental rates, allow for timely and cost-‐effective event set-‐up and tear down and provide the facility amenities necessary to ensure a good patron experience, including good acoustics, sufficient food and beverage points of sale, sufficient restrooms and other related amenities. Exhibition Facilities It is envisioned that an events center in Coatesville could provide the community with flat floor space that can accommodate conventions, trade shows, consumer shows, corporate gatherings and banquets, job fairs and other similar events. The table below summarizes potentially competitive facilities in the regional area that provide some meaningful level of exhibition space. EXHIBITION1FACILITIES
Competitive1Facilities
Distance
From
Exhibition1
Facility
Location
Facility1Type
Coatesville
Space
Days%Hotel%and%Conference%Center
West%Chester,%PA
Hotel
19%mi.
10,000%sq.%ft
Hotel
21%mi.
23,450%sq.%ft
Lancaster%Host%Resort%&%Conference%Center Lancaster,%PA
Best%Western%Plus
Concordville,%PA
Hotel
25%mi.
16,000%sq.%ft
Crowne%Plaza%Valley%Forge
Valley%Forge,%PA
Hotel
25%mi.
24,000%sq.%ft
Greater%Philadelphia%Expo%Center%
Upper%Providence,%PA Expo%Center
28%mi. 240,000%sq.%ft
Convention%Center
28%mi.
90,000%sq.%ft
Lancaster,%PA
Lancaster%County%Convention%Center
Pennslyvania%Convention%Center
Philadelphia,%PA
102 Convention%Center
44%mi.
315,000%sq.%ft
Key findings from a review of potentially competitive exhibition facilities include: • There are four (4) hotels within 25 miles of the proposed events center in Coatesville that provide a critical mass of square footage capable of hosting conventions, trade shows, consumer shows, corporate gatherings and other flat floor events. • The amount of exhibition space at these facilities ranges between 10,000 square feet and 24,000 square feet. • In addition to these facilities, there are much larger exhibition facilities in the regional area including facilities such as the Pennsylvania Convention Center or the Greater Philadelphia Expo Center. It is highly unlikely that the events center in Coatesville would compete with these larger facilities to host the same events. EVENT PROMOTER INTERVIEWS In order to determine the needs of potential user groups integral to the venue’s long-‐term success, a significant number of interviews were conducted with various external groups. The purpose of these interviews was to solicit feedback on essential topics relating to the proposed project’s viability—
overall feasibility, market demand, location attractiveness, facility needs, and other strategic factors. The potential events center in Coatesville should aim to accommodate as many external community events as possible to generate essential revenue streams and provide an economic boost to the area. Approximately 58 organizations were contacted for the purposes of this study. Potential external user groups identified and surveyed as part of this study included: concert promoters, brokers, and consultants; athletic associations and teams; and association trade/consumer shows, conventions, conferences, meetings and other events. Ticketed Spectator Events The proposed events center could potentially be designed with spectator seating in order to accommodate various sports and entertainment events. This could consist of fixed seating in a typical arena configuration. Alternatively, the facility could incorporate removable or retractable seating, allowing for a higher degree of event flexibility. Ticketed spectator events are sports or entertainment events that utilize the event floor. These events primarily include concerts, professional and minor-‐league sports, family shows, and other similar events. Events would draw from the local populace as well as patrons from across the county and region, depending on the popularity and size of the event. The following is a discussion of the potential for spectator events at an events center in Coatesville. Concerts & Performing Arts A new events center in Coatesville could potentially provide the local market with a larger venue for indoor concerts than is currently offered in Chester County. Concerts held in the region in the past 103 APPENDIX A. EVENTS CENTER ANALYSIS
typically have been held at indoor theaters, arenas and outdoor amphitheaters located in Philadelphia. Concert promoters, consultants, brokers, and other industry professionals were contacted to discuss the likelihood of using an events center in Coatesville. Most respondents indicated that they are skeptical of the proposed events center’s viability as a concert venue due to market saturation, poor location, and substantial barriers to entry. Many of the concert industry professionals contacted for this study indicated that, even with the presence of a new events center, they would still be hesitant to bring concert events to Coatesville. Key reasons included: • Radius clauses (60-‐100 miles) are a significant obstacle to attracting recognized acts for a venue of the proposed size; • Coatesville has a stigma, according to many promoters, as a small, depressed, and unsafe area; and, • The proposed size of the events center in Coatesville would place it in competition against numerous other concert venues with considerable drawing power and incumbent advantages. Several concert promoters indicated that a multi-‐purpose, rather than concert-‐focused, venue would be more appropriate in Coatesville. In order for a new venue of this size to compete as a concert and ticketed event venue, a formal booking relationship with an influential promoter or concert venue operator such as Live Nation or AEG may be required for the venue to succeed in attracting concerts. However, these promoters have established relationships with other facilities in the area, which may preclude or make it difficult to establish a similar relationship at an events center in Coatesville. While some promoters indicated an oversaturation of entertainment venues in the Philadelphia market, several promoters surveyed would like to see an additional facility in the Philadelphia area. Some promoters contacted have noted a trend that more performing arts-‐oriented shows are often squeezed out of venues into other locales, and believe a multi-‐purpose events center like the one proposed in Coatesville, could fill a need for these types of shows. Promoters will need to be assured that event center management will effectively market and operate the events to their constituents, as the events will rely on visitors more than local residents to support the event. Therefore, the number of concerts held at the events center will ultimately depend largely on the willingness of facility management to aggressively pursue concerts and attract promoters and booking agents to bring touring acts to the venue. A formal partnership agreement with a well-‐known live music promoter or venue operator like AEG or Live Nation could be beneficial in attracting a consistent stream of touring acts to the venue. Based on discussions with concert industry professionals, event and attendance levels of comparable facilities, and a review of local market conditions, it is estimated that the events center in Coatesville could attract approximately 10 concerts annually with average total attendance of 3,000 spectators. 104 APPENDIX A. EVENTS CENTER ANALYSIS
Family Shows Family shows are events that cater to spectators of all ages and include a wide variety of events such as Sesame Street Live, Disney on Ice, Harlem Globetrotters, circuses and various others. These events are usually held over a run of consecutive days, averaging two to six performances per stop. Family show touring seasons often run between October and May and generally draw attendance of over 2,000 patrons per performance. Family shows largely cater to local residents, and the local population of the Coatesville area could be sufficient to support such touring events. While the City of Coatesville has a small population base and lower than average median household incomes, family shows appear to provide a good fit with the demographic characteristics of the local populace of Chester County as a whole; which is among the wealthiest counties in Pennsylvania and has over 500,000 residents. Further, there is a lack of small to medium sized venues, with seating of 1,000 seats or more, in the 25-‐mile radius surrounding Coatesville. Due to the lack of competition in the local market, and demographic characteristics of Chester County, family shows could represent a source of potential utilization for an events center in Coatesville. Through discussions with event promoters, review of the operations of comparable venues, analysis of market demographics and competitive landscape, and previous industry knowledge, it is estimated that the proposed events center in Coatesville could host 10 family/miscellaneous events annually with average attendance of 1,000 per show. Sporting Events An events center in Coatesville could potentially accommodate ticketed sporting and recreational activities including tournaments, games, and other activities for which the venue could be rented. Events that could be held at the events center include, but are not limited to, minor-‐league and professional sports, wrestling, rodeo, boxing and MMA, among others. Tenant sports, such as professional or collegiate hockey or basketball, often represent a primary source of utilization for an event facility with spectator seating. However, it is unlikely that a new events center in Coatesville could serve as a home venue for a professional, minor league or collegiate sports tenant. While events such as wrestling and exhibitions are generally one-‐time performances, other events such as rodeos and motocross events have the potential to play several consecutive performances at each tour stop. These types of events often find success in niche markets and may have the ability to draw non-‐local patrons, and therefore may not have the same population or demographic requirements of certain other events. If a rodeo or motorsports event finds success in a market one year they are more likely to return the following year and potentially use additional event days. A number of sport organizations indicated they already host annual events in Philadelphia and would unlikely use a new facility in Coatesville. It appears that the needs of many organizations are already met with existing facilities. Event organizers consider a Coatesville events center more suitable for middle/high school athletic tournaments and events. Needs are minimal, and the new venue would meet capacity requirements for most athletic tournaments and games, the exception 105 APPENDIX A. EVENTS CENTER ANALYSIS
being some of the larger state tournaments. The venue would be particularly well suited for county and regional tournaments (i.e. wrestling and other sports). Based on discussions with event promoters, event and attendance levels at comparable facilities, and a review of local market conditions, it is estimated that the events center in Coatesville could host approximately six spectator sports events annually with average total attendance of 2,250. Non-‐Spectator Sports Depending on the size and configuration of the proposed events center in Coatesville, non-‐spectator sports events could potentially utilize the facility. These events are participant-‐driven rather than spectator-‐driven, and the proposed events center in Coatesville could accommodate several multi-‐
purpose sports courts capable of hosting events such as basketball and volleyball tournaments, wrestling meets, martial arts competitions, cheerleading, gymnastics and other such events. Due to the presence of several large indoor sports complexes in the region that include United Sports Training Center, Competitive Edge Sports, and Spooky Nook Sports. The events center in Coatesville is anticipated to have modest potential to be utilized as a non-‐spectator sports venue. Through discussions with sports associations and potential users of the facility, review of event and attendance levels of comparable facilities, and analysis of market demographics and competitive landscape, and previous industry knowledge, it is estimated that the proposed events center in Coatesville could host 10 non-‐spectator sports events annually with average attendance of 500 per event. Trade Shows, Conventions & Conferences The proposed events center could be designed with the ability to provide flat floor space and breakout rooms to host conventions, conferences, meetings and other similar events. As noted earlier, several area hotels offer meeting and banquet space, ranging from 10,000 square feet to 24,000 square feet. The proposed facility could potentially host conventions and conferences featuring state and regional associations and SMERF organizations that are too large to be accommodated by existing event space in the local market, but do not require the large-‐scale offerings of bigger convention center facilities in Philadelphia. The majority of Coatesville’s convention, conference and meeting activity is comprised of social, military, educational, religious and fraternal (SMERF) events. These organizations tend to be cost-‐
conscious, which makes Coatesville’s relatively low hotel room and event facility rental rates especially attractive. SMERF event attendees are often willing to drive four to five hours to attend an event, which opens Coatesville to many neighboring metropolitan areas in the region. These types of events often require breakout space in addition to the main assembly venue. While the proposed facility’s main event space could host large group functions, some level of smaller meeting and banquet rooms would likely be required to accommodate meal functions and small-‐group sessions. In markets similar in size to Coatesville, the multi-‐purpose facility is typically the primary spectator and flat floor event venue in its community. Therefore, the ancillary flat floor space at 106 APPENDIX A. EVENTS CENTER ANALYSIS
these venues is used not only as support space for large conferences and meetings, but also to host smaller meetings and events that utilize only the flat floor space. In order to assess the potential demand to hold conventions, conferences and meetings at a new events center in Coatesville, surveys of state and regional associations and SMERF organizations were conducted. The surveys were conducted with the meeting planners for each organization. The purpose of the surveys was to assess each organization’s likelihood of holding an event in Coatesville in the future and to understand their specific facility and market requirements. Initially, event planners were asked to indicate the likelihood of their organization using the proposed events center in Coatesville, assuming it and the hotel inventory meets the needs of their event(s). A variety of associations, both local and regional, were surveyed. These groups hold trade shows, conferences, exhibits, and other events annually, or on a regular basis. Professional associations and other groups contacted expressed interest in a Coatesville event center as a potential site to host events as part of a multi-‐year rotation or an annually recurring event. Professional organizations and other similar groups traditionally hold trade and consumer shows. Exhibit-‐based shows are typically open to the general public and generally draw from the local, and sometimes regional, area. These shows frequently include events such as auto shows, gun shows, career fairs, and others. Similarly, professional organizations host business-‐to-‐business targeted trade shows as part of a longer conference or convention. Large event floor space is required for trade shows. Corporate event planners could also potentially utilize facilities in Coatesville. Corporate event attendees are typically willing to drive no more than two hours to attend an event. Coatesville’s relatively convenient location to major metropolitan areas, and Philadelphia’s large corporate base enhance the potential for Coatesville to host corporate events. However, larger convention center facilities located in Philadelphia could limit demand for an events center in Coatesville. Conventions and conferences can span several days and are traditionally held by professional associations and corporations. Many of these groups tend to hold annual events that rotate among various locations in a given region. As mentioned, exhibits often accompany the convention or conference itself. These events typically require a large event floor space, separate dining area, and large meeting rooms. A challenge associated with capturing large meeting and conference events is the lack of a headquarters hotel located adjacent to the proposed events center in Coatesville. Several conventions and conferences require a full-‐service hotel to be attached to or located in the immediate vicinity of the convention venue. Many of those surveyed indicated that attached hotels are preferred, but not required. If there is not an attached hotel, those interviewed noted a need for a hotel(s) within a short walking distance of the venue. While the proposed events center site is located near several Chester County hotels, it is likely that shuttles would be required to transport event attendees from the hotels to the events center and back. Those surveyed would consider a shuttle service, but for most, it is strongly preferred that the parking lot is adjacent to or within immediate walking distance of the venue. Many organizations may perceive this as a disadvantage when considering Coatesville versus other potential event markets. 107 APPENDIX A. EVENTS CENTER ANALYSIS
Regarding the venue itself, easy loading is an important requirement for hosting conventions and trade shows indicated by those surveyed. Steps make the venue difficult to access, so ramps (ideally flat ground) are the best from a loading/unloading perspective. Inside the venue, several organizations mentioned that exhibitors commonly request complimentary Wi-‐Fi and meeting space that is close to the event floor rather than in a completely separate part of the building. Lastly, separate dining space if often needed. It can sometimes be on the event floor (in the form of food concessions or sit-‐down banquet), but a separate room is usually preferred. In general, the Philadelphia suburbs are a suitable, and even preferable, location for many conventions and trade shows based on the discussions with local and regional associations. Several of the organizations contacted could be interested in hosting one of their conferences or events at a venue in Coatesville as part of a multi-‐year rotation. Based on these discussions, a review of the operations of comparable event centers, analysis of local market conditions, and knowledge of the industry, it is estimated that the events center in Coatesville could host approximately 10 convention/trade show events, averaging three days per event, with 1,000 visitors per event day. Additionally, the events center in Coatesville is estimated to host eight consumer/expo shows annually, averaging three days per event, with 2,000 visitors per event day. It is also estimated that the events center in Coatesville would attract 25 other events (i.e. meetings, dinners, banquets, etc.), averaging two days per event, with 100 visitors per event day. ESTIMATED DEMAND Based on interviews conducted with a number of local, regional, and national event planners and promoters, along with the knowledge of other potential event markets, historical event levels at existing local facilities and comparable facilities in other markets, industry trends, and previous experience estimates were developed regarding the number of events and annual attendance levels that could be achieved at a new events center in Coatesville. The following exhibit summarizes these estimates. Estimated0Event0Utilization
Events0Center0in0Coatesville0
Average Annual
Average
Total
Annual Days0Per
Event
Daily
Annual
Events
Event
Days Attendance Attendance
Arena/Spectator0Events:
Concerts
10
1
10
3,000
30,000
Spectator0Sports0Events
6
1
6
2,250
13,500
Non7Spectator0Sports
10
3
30
500
15,000
Family/Miscellaneous0Events
10
1
10
1,000
10,000
Total0number0of0annual0arena/spectator0events
36
1.6
56
1,223
68,500
Flat0Floor0Events:
Conventions/Trade0Shows
10
3
30
1,000
30,000
Consumer/Expo0Shows
8
3
24
2,000
48,000
Other0Events
25
2
50
100
5,000
Total0number0of0annual0exhibition0events
43
2.4
104
798
83,000
Total0Events
79
2.0
160
947
151,500
As shown, a new events center in Coatesville is estimated to host approximately 79 events on an annual basis, comprising 160 annual event days, with total attendance of approximately 151,500. These event and attendance levels would likely be on par with or slightly lower than industry utilization standards for an events center, but reflect the challenges associated with operating a venue in Coatesville in the context of the highly competitive Philadelphia regional market. FINANCIAL PROJECTIONS The intent of this section is to provide an estimate of the potential operating results of a new events center in Coatesville in the first five years of operations. Since detailed facility design, configuration, and cost estimates have not yet been finalized; the assumptions used in this analysis are based on the results of the market analysis, industry trends, knowledge of the marketplace, financial results from comparable facilities and discussions with Authority officials and other project stakeholders. This presentation is designed to assist in estimating the financial operations of the proposed events center. Therefore, this analysis may not be useful for any other purpose. The assumptions disclosed herein are not all inclusive, but are those deemed significant to the operations of the facility. However, there will be differences between estimated and actual results, due to the fact that events and circumstances frequently do not occur as expected, and these differences may be material. As is the case in all studies of this type, the estimated results are based on competent and efficient facility management and assume that no significant changes in the various event markets will occur beyond those set forth in this report. Key assumptions used to estimate the potential financial operations of the events center in Coatesville include, but are not limited to the following: • The events center in Coatesville will be constructed and fully operational starting with the 2016 calendar year. • The facility will contain approximately 4,500 total seats consisting of a combination of 3,000 retractable fixed seats in the main exhibit hall, and 1,500 temporary floor seats. • The venue will feature up to 60,000 square-‐feet of flexible space potentially comprised of flat-‐floor exhibit space, meeting rooms, a ballroom, and other similar spaces. • The facility will be developed as a quality, state-‐of-‐the-‐art venue with the necessary acoustics, loading docks, suitable event related utilities, temporary stage and rigging capacities, athletic fields/courts and back-‐of-‐house space to accommodate the needs of various types of events and users. • The facility will be constructed in a manner that will be generally acceptable to event promoters and operators. • There will be no future event centers constructed within regional proximity to the proposed facility in Coatesville. 109 APPENDIX A. EVENTS CENTER ANALYSIS
•
The facility will be owned by the Authority and will be exempt from property taxes. •
All event opportunities will be aggressively marketed, providing competitive rental rates and, as necessary, co-‐promoting or initiating in-‐house promotions to maximize the usage of the venue. This could include exclusive or preferred booking arrangements with organizations that guarantee a certain number of events will be booked each year. •
A competent facility management team will operate the event center and possess extensive entertainment industry experience along with having relationships with key event promoters and future users of the venue. Ample parking will be available to accommodate demand (on-‐site or off-‐site within walking distance). •
As previously mentioned, additional detailed physical development planning must be completed before more precise estimations of the proposed event center operating costs can be made. Also, upon completion of preliminary planning, revenue and expense assumptions should be updated to reflect changes to assumptions made herein. These changes could significantly affect the analysis of future operating results of a potential events center in Coatesville. The table below presents the estimated operating revenues and expenses for the first five years of operations for the events center in Coatesville, assuming the venue will be fully operational by 2016. Estimated.Operating.Revenues.and.Expenses
Events.Center.in.Coatesville
2016
2017
2018
2019
2020
Revenues:
Rent
$553,000
$570,000
$587,000
$604,000
$622,000
Facility9Fee
54,000
54,000
54,000
54,000
54,000
Naming9rights
90,000
92,700
95,500
98,300
101,300
Food9and9beverage
134,000
138,000
142,000
146,000
150,000
Parking
116,000
124,000
128,000
132,000
136,000
Advertising
113,000
116,000
119,000
123,000
127,000
Merchandise
34,000
35,000
37,000
38,000
39,000
Other9Revenue
25,000
25,750
26,523
27,318
28,138
Total9Revenues
$1,119,000
$1,155,450 $1,189,023
$1,222,618
$1,257,438
Expenses:
Salaries9&9wages
$650,000
$670,000
$690,000
$710,000
$732,000
Utilities
325,000
335,000
345,000
355,000
366,000
General9&9administrative
150,000
155,000
159,000
164,000
169,000
Repairs9&9maintenance
100,000
103,000
106,000
109,000
113,000
Management9Fee
100,000
103,000
106,000
109,000
113,000
Insurance
60,000
62,000
64,000
66,000
68,000
Materials9&9Supplies
50,000
52,000
53,000
55,000
56,000
Other
50,000
52,000
53,000
55,000
56,000
Total9Expenses
$1,485,000
$1,532,000 $1,576,000
$1,623,000
$1,673,000
Net9Income9from9Operations
($366,000)
($376,550)
($386,978)
($400,382)
($415,562)
The events center in Coatesville is estimated to generate operating revenues of approximately $1.1 million and incur operating expenses of $1.5 million, resulting in net operating loss of approximately $366,000 in its first year of operations. By year five, the venue is estimated to generate revenues of $1.3 million and incur operating expenses of $1.7 million, resulting in operating loss of approximately $460,000. It is important to note that these estimates do not include payments associated with any potential debt service related to the facility or a capital reserve account that will be necessary to maintain the events center in order to preserve its status as one of the pre-‐eminent indoor multi-‐purpose venues in the region. SENSITIVITY ANALYSIS The events center in Coatesville will be dependent on several factors aligning and working together for the facility to reach its full potential of profitability. Factors that may affect the overall profitability include the following: • The ability of the events center to establish relationships with key concert and event promoters, which could adversely affect the ability of the venue to attract concerts and other spectator events • The events center in Coatesville will compete with other forms of entertainment for consumer’s discretionary spending. • Existing and future competitive facilities may offer more favorable terms in order to book concerts and other spectator event activity, which could adversely impact the marketability of the events center in Coatesville. • General economic conditions could worsen which could cause consumers to reduce discretionary spending, and sponsors to limit their advertising expenditures. • Unfavorable changes in labor market conditions, which could require the events center in Coatesville to spend more to retain and attract key employees. • The attractiveness of the events center in Coatesville could deteriorate over time due to the age of the venue and/or deferred maintenance issues. To gain an understanding on the potential impact to the events center in Coatesville’s estimated net operating income associated with fluctuations in key study assumptions, a sensitivity analysis has been completed. The sensitivity analysis compares the operating revenue, operating expenses and resulting net income from operations before any applicable debt service payments that could result based on different concert event levels and naming rights assumptions. Additionally, the sensitivity analysis addresses the impacts of debt servicing obligations of a mortgage, and impact of a set-‐aside capital reserve. There is potential for the proposed facility to owe property taxes, an annual estimate of real estate tax expense has been incorporated into the sensitivity analysis. 111 APPENDIX A. EVENTS CENTER ANALYSIS
SENSITIVITY-ANALYSIS
Events-Center-in-Coatesville
2016
2017
2018
2019
2020
$1,222,618
$1,623,000
($400,382)
$1,257,438
$1,673,000
($415,562)
Base-Analysis
The$following$is$a$five/year$projection$of$finanial$operations$for$the$proposed$events$center$
in$Coatesville$using$assumptions$formed$in$the$$baseline$model.
$1,119,000
$1,485,000
($366,000)
$1,155,450
$1,532,000
($376,550)
$1,189,023
$1,576,000
($386,978)
Reduced-Concerts-4-None
The$following$is$a$five/year$projection$of$finanial$operations$for$the$proposed$events$center
$in$Coatesville$assuming$a$scenario$with$no$concert$demand.
$780,000
$2,101,221
($1,321,221)
$806,450
$2,172,929
($1,366,479)
$828,023
$2,252,120
($1,424,097)
$852,618
$2,366,739
($1,514,121)
$878,438
$2,460,807
($1,582,369)
Increased-Concerts-4-Total-of-20-Events-Each-Year
$in$Coatesville$assuming$elevated$concert$demand$of$six$annually.
$1,459,000
$2,220,561
($761,561)
$1,504,450
$2,295,849
($791,399)
$1,546,023
$2,378,727
($832,705)
$1,591,618
$2,497,145
($905,527)
$1,636,438
$2,595,125
($958,687)
No-Naming-Rights-Agreement
$$in$Coatesville$assuming$a$scenario$with$no$facility$naming$rights$agreement.
$1,029,000
$2,160,891
($1,131,891)
$1,062,750
$2,234,389
($1,171,639)
$1,093,523
$2,315,424
($1,221,901)
$1,124,318
$2,431,942
($1,307,624)
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ Sensitivity Analysis continues on to next page -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 112 $1,156,138
$2,527,966
($1,371,828)
SENSITIVITY/ANALYSIS
Events/Center/in/Coatesville/(Continued)
2016
2017
2018
2019
2020
$1,222,618
$2,024,213
($801,595)
$1,257,438
$2,074,213
($816,775)
Base/Analysis/with/Debt/Service
The!following!is!a!five9year!projection!of!finanial!operations!for!the!proposed!events!center
!in!Coatesville!assuming!annual!debt!service!on!a!$5.0!million,!209year!mortage
!with!5%!interest!rate.!(Annual!debt!service!of!approximately!$401,213)
$1,119,000
$1,886,213
($767,213)
$1,155,450
$1,933,213
($777,763)
$1,189,023
$1,977,213
($788,190)
Base/Analysis/with/Debt/Service
The!following!is!a!five9year!projection!of!finanial!operations!for!the!proposed!events!center!
in!Coatesville!assuming!annual!debt!service!on!a!$10.0!million,!209year!mortage!
with!5%!interest!rate.!(Annual!debt!service!of!approximately!$802,426)
$1,119,000
$2,287,426
($1,168,426)
$1,155,450
$2,334,426
($1,178,976)
$1,189,023
$2,378,426
($1,189,403)
$1,222,618
$2,425,426
($1,202,808)
$1,257,438
$2,475,426
($1,217,988)
Base/Analysis/with/Capital/Reserve
The!following!is!a!five9year!projection!of!finanial!operations!for!the!proposed!events!center
!in!Coatesville!assuming!annual!capital!reserve!of!0.5%!of!estimated!project!costs!($27.5!million),
!grown!at!a!3%!annual!rate.!(First!year!capital!reserve!of!$137,500)
$1,119,000
$1,622,500
($503,500)
$1,155,450
$1,673,625
($518,175)
$1,189,023
$1,721,874
($532,851)
$1,222,618
$1,773,250
($550,632)
$1,257,438
$1,827,757
($570,320)
Base/Analysis/with/Real/Estate/Tax
The!following!is!a!five9year!projection!of!finanial!operations!for!the!proposed!!events!center
!in!Coatesville!assuming!annual!property!tax!rate!of!13.458!Mills!on!an!assumed!$27.5!million!!
property!value,!depreciated!over!a!409year!term.!(First!year!real!estate!tax!of!$373,395)
$1,119,000
$1,858,395
($739,395)
$1,155,450
$1,896,060
($740,610)
$1,189,023
$1,930,725
($741,703)
$1,222,618
$1,968,390
($745,772)
$1,257,438
$2,009,056
($751,618)
Base/Analysis/with/Debt/Service,/Capital/Reserve,/&/Real/Estate/Tax
The!following!is!a!five9year!projection!of!finanial!operations!for!the!proposed!events!center!in!Coatesville
!assuming!annual!debt!service!on!a!$10.0!million,!209year!mortage!with!5%!interest!rate;!
a!capital!reserve!equal!to!0.5%!of!estimated!project!costs!($27.5!million),!grown!at!a!3%!annual
!rate;!!and!annual!property!tax!of!13.458!Mills!on!an!assumed!$27.5!million!property!value,
!depreciated!over!a!409year!term.
$1,119,000
$2,798,321
($1,679,321)
$1,155,450
$2,840,111
($1,684,661)
113 $1,189,023
$2,879,025
($1,690,002)
$1,222,618
$2,921,066
($1,698,448)
$1,257,438
$2,966,239
($1,708,801)
Executive Summary
1.
Introduction
2.
Cycling Overview
3.
4.
5.
6.
Estimated Demand
7.
Appendix B.
Retail Analysis
TABLE OF CONTENTS I.
Introduction ..................................................................................................................... 1 II. Methodology .................................................................................................................. .2 III. Market Conditions........................................................................................................... 4 IV. Retail Demand ................................................................................................................ 6 V. Site Assessment ............................................................................................................. 10 VI. Conclusions/Recommendations .................................................................................... 11 I.
Introduction DiSalvo Development Advisors, LLC (DDA) has prepared the following market analysis for ancillary retail development of a planned velodrome facility in Coatesville, Pennsylvania. It is DDA’s experience that sporting/entertainment venues, when coupled with large scale ancillary development plans, can be effective catalysts for changing perceptions, sustaining already vibrant areas, and attracting additional investment and redevelopment. While it is important to consider the market viability of retail development on its own merits, it is equally important to assess the project within the context of a larger mixed‐use entertainment district where certain development can create additional market opportunities that may not otherwise exist. This interplay of different types of development is a key consideration of our analysis. The development area under consideration is west of Downtown Coatesville, separated by Brandywine Creek (see highlighted area in map below). The site has nearly 1,000 feet of frontage along Lincoln Highway (including the Riverwalk and splash park) and a depth of 400‐ to 500‐feet up to the historic train overpass, known as Coatesville High Bridge. Additional parking is planned for the area north of the train overpass. The scope of DDA’s analysis is based on the velodrome’s ancillary retail/restaurant use of up to 30,000 square feet as identified in a proposed amended development program provided by the Chester County Economic Development Council. The amended development program includes 12,000 square feet of restaurant use (4,000 square feet is non‐
retail space for brewing) and an additional 18,000 square feet of other retail space. Velodrome Site Location Map, Coatesville, PA
1 | P a g e II.
Methodology DDA’s conclusions are based on identification of a competitive market area specific to the site, the delineation of a primary trade area encompassing the majority of patrons expected to spend retail/restaurant dollars at the site, a comprehensive field survey of retail properties within the market, and an analysis of supply/demand factors to identify market‐supported opportunities and qualify our recommendations. Competitive Market Area Defined The Competitive Market Area (CMA) is the specific geographic area as determined during the course of our analysis which contains facilities likely to be considered as alternatives to the proposed site. The CMA for retail development at the site is the Lincoln Highway Corridor extending from State Route 10 east to State Highway 322. The CMA includes the City of Coatesville, Caln Township, Valley Township, and portions of Downingtown Borough and Sadsbury Township. The subject site, and to a greater extent, the City of Coatesville, is situated between the two competing and overlapping retail trade areas of Parkesburg and Downingtown. This is evident with retailers such as Home Depot and Bottom Dollar located in shopping centers on both ends of the corridor. These communities also contain regional shopping centers. This limits opportunities for conventional large‐
scale retail development in Coatesville. Commercial development is further limited in the central area of the corridor by terrain issues, railroad tracks, and lack of available land with the type of depth required for most retailers. However, the subject site, commonly referred to as the “Flats”, because of its flat terrain represents a unique opportunity for development in the Coatesville area. 2 | P a g e Identification of Market Conditions All competing retail developments within the CMA have been surveyed and were personally inspected by a principle of DiSalvo Development Advisors. Our comprehensive survey allows for consideration of a wide variety of product alternatives for the proposed project as it relates to the entire market. Given the scale of the proposed development, our survey of retail space included multi‐tenant retail centers of more than 20,000 total square feet. Supply/Demand Analysis The report includes an analysis of demographic and consumer spending characteristics with an analysis of existing and planned development (supply) and retail sales relative to consumer spending (demand). A Primary Trade Area is identified which represents a geographic area where we anticipate the majority of support for retail at the site will originate. Consideration also has been given to external support components given the unique concept and anticipated regional attraction of the planned velodrome at the site. The Primary Trade Area is iden fied as a 7‐minute drive‐ me from the site or approximately a 3‐mile radius. The area differs from the CMA which reflects only compe ve retail development largely limited to Lincoln Highway/Lancaster Avenue. Considera ons for the Primary Trade Area were compe on, accessibility, and area appeal. In DDA’s opinion, the prior 5‐mile trade area radius choosen in the 2010 Retail Market Analysis of the downtown area was too aggressive considering the current condi on of downtown, with its high vacancies, lack of a marketable mix of merchandise and apparent deferred maintenance. Primary Trade Area 3 | P a g e III.
Market Conditions (Supply) DDA staff identified seven shopping centers within the CMA totaling more than 600,000 square feet. Slightly more than 55,000 square feet of retail space was available at the time of the survey accounting for a 9.1% vacancy rate. The vacancy rate reflects a relatively healthy retail market. Shopping Center Airport Village King & Lloyd Center Barley Station Caln Plaza Caln Village Thorndale Center The Shops at Wedgewood Total Total Square Feet 70,531 31,620 40,000 52,835 110,000 271,000 31,200 607,186 Available Square Feet 17,322 0* 0 2,700 10,600 16,101 8,400 55,123 Vacancy Rate 24.6% 0.0% 0.0% 5.1% 9.6% 5.9% 26.9% 9.1% *Unable to verify lack of availability. Appeared to be a vacancy, but the space was not marketed. Of the seven shopping centers in the CMA, four with more than 500,000 square feet of retail space are anchored by grocery stores. The remaining three unanchored retail centers average 34,273 square feet in size and are generally older retail strip centers. DDA is aware that there are restrictive use agreements for existing and prospective tenants among at least three of the grocery‐anchored shopping centers. Airport Village, Caln Village, and Thorndale Center have grocery anchor tenants that have restrictive uses written into their leases, limiting the type of tenant that can lease space at the shopping centers. While we recognize that grocery stores generally enhance the marketability of a shopping center, the restrictive uses can also hinder 11,000 sf vacant space, adjacent Giant Eagle, Thorndale Center
the owner’s ability to lease space, especially the vacant spaces adjacent the grocery with more than 10,000 square feet. An additional five shopping centers were identified on the periphery of the CMA totaling 1.5 million square feet of retail space. The overall vacancy rate of the periphery shopping centers is very low at 3.3%. 4 | P a g e Survey of Shopping Centers Periphery of CMA Coatesville, PA Total Available Square Shopping Center Square Feet Feet Ashbridge Square 376,000 26,200 Ashbridge Commons 97,000 3,887 Brandywine Square 612,000 16,000 Mill Town Square 51,898 6,097 West Sadsbury Commons 441,419 0 Total 1,578,317 52,184 Vacancy Rate 7.0% 4.0% 2.6% 5.9% 0.0% 3.3% A review of all the available retail space at the 12 area shopping centers shows limited availability among the 3,000 to 6,000 square foot stores and an abundance of larger spaces with 8,000 square feet or greater. Vacant Store Size (in square feet) Less than 1,500 1,500 – 2,999 3,000 – 4,499 4,500 – 5,999 6,000 – 7,499 7,500 – 8,999 9,000 and higher Total Number of Available Spaces 4 8 2 0 2 1 4 21 Total Available Net Square Feet 5,026 18,125 7,487 0 13,097 8,000 55,572 107,307 Very few of the available spaces are divisible into smaller retail stores. Ashbridge Square and Brandywine Square have among the largest vacant store spaces in the area with store sizes of 18,200, and 16,000 total square feet, respectively. As the shopping center locations map below shows, the majority of retail space is concentrated on the eastern edge of the CMA. The lack of development in the western corridor is attributable to retailers wanting to be closer to the Downingtown/Exton market because of the higher consumer spending power combined with the lack of available land for additional development. 5 | P a g e Lease rates in the area are typically published as negotiable with the exception of some of the older spaces, available for $13 to $15 per square foot triple net. According to local brokers, lease rates at the regional shopping centers in Downingtown and West Sadsbury/Parkesburg typically range in the $16 to $20 per square foot range. United Sports Training Center on Marshallton‐Thorndale Road in Downingtown (photo on right) was also visited by staff, since it is a sports facility with a retail component. The facility has two smaller spaces of 775 square feet and 1,575 square feet available for lease at a rate of slightly less than $14/square foot (modified net). While management has been able to attract some fitness‐oriented tenants because of the training center, it is not a competitive retail center because it lacks traffic volume and the “retail” space has little, if any, presence to the passersby. IV.
Retail Demand In 2012 there were an es mated 32,540 residents within the Primary Trade Area (7‐minute drive‐ me from site). The popula on is projected to increase 3.5% over the next five years to 33,682. During this same period households are projected to increase from 11,837 to 12,237 households (3.4%). Summary Population Households Families Average Household Size Owner Occupied Housing Units Renter Occupied Housing Units Median Age Households by Income Median Household Income Average Household Income Per Capita Income Census 2010 32,164 11,719 7,975 2.66 7,518 4,201 35.3 2012 $46,958 $60,828 $22,670 2012 32,540 11,837 8,022 2.67 7,349 4,488 35.5 2017 $55,857 $70,592 $26,186 2017 33,682 12,237 8,229 2.67 7,752 4,485 36.0 Source: ESRI, Incorporated The Per Capita Income in the Primary Trade Area is low at $22,670 in 2012. The Per Capita Income for Chester County is $39,433. The employment to resident popula on base in the Primary Trade Area is low at .28, however, one of Chester County’s largest employers ArcelorMittal is directly across from the site and employs 871 persons (Source: ArcelorMittal, Corporate Responsibility Report 2011 and verified by phone). 6 | P a g e Resident Spending v. Retail Sales DDA reviewed consumer spending and es mated retail sales within the trade area to assess support levels for addi onal retail at the site. It has been our experience that the best and most immediate opportunity to increase retail in a neighborhood is to focus future tenancy efforts on underserved retail types. Underserved retail types are those in which local resident spending well exceeds local retail sales within that par cular retail type. This consumer spending excess, o en referred to as “leakage,” reflects an area’s lost retail sales occuring outside of the trade area. Retail leakage exists among most other retail categories within the Primary Trade Area. There are several considera ons when assessing whether retail leakage represents an opportunity for addi onal retailers in the area, and more specifically at the site.  Amount of retail leakage necessary to support an addi onal retailer in a par cular category – Retail categories such as florists and drinking places (no food), do not likely have enough retail leakage to support addi onal stores.  Capacity of the site to support this type of retailer – Certain retailer types require too much space to be accommodated at the site: home improvement stores and grocery/supermarkets.  Appropriateness of retailer for the overall merchandizing mix – Retailers should be chosen that compliment the velodrome. Examples of inappropriate uses for the site includes gasoline sta ons and used merchandise stores.  Site area a ributes necessary to a ract retailer ‐ Department stores, while an under‐represented retail type in the market, are not likely candidates for the site or Downtown Coatesville because the area does not have the necessary site criteria to support a department store (size, parking, significant na onal‐chain retail base, high traffic volume). Many of the department store sales to local residents occur in Downingtown and Exton. Clothing stores and accessories stores generally follow the same site criteria. Local resident spending compared to es mated retail sales within the Primary Trade Area is provided on the following page. 7 | P a g e Local Consumer Spending v. Es mated Retail Sales Primary Trade Area Velodrome Site, Coatesville, PA Industry Summary Motor Vehicle & Parts Dealers Furniture & Home Furnishings Stores Electronics & Appliance Stores Bldg Materials, Garden Equip. & Supply Stores Food & Beverage Stores Grocery Stores Specialty Food Stores Beer, Wine & Liquor Stores Health & Personal Care Stores Gasoline Stations Clothing & Clothing Accessories Stores Sporting Goods, Hobby, Book & Music Stores Sporting Goods/Hobby/Musical Instr Stores Book, Periodical & Music Stores General Merchandise Stores Department Stores Excluding Leased Depts. Other General Merchandise Stores Miscellaneous Store Retailers Florists Office Supplies, Stationery & Gift Stores Used Merchandise Stores Other Miscellaneous Store Retailers Food Services & Drinking Places Full‐Service Restaurants Limited‐Service Eating Places Demand (Consumer Spending) $59,880,545 $7,747,914 $9,836,609 $11,140,101 $60,136,302 $54,501,005 $1,956,700 $3,678,597 $9,835,115 $40,310,335 $9,819,733 $3,846,979 $2,392,435 $1,454,544 $28,142,876 $13,493,778 $14,649,098 $6,400,618 $389,293 $3,510,056 $203,083 $2,298,185 $41,026,793 $20,484,630 $13,498,305 Supply (Retail Sales) $77,756,451 $11,657,979 $10,630,026 $4,762,231 $44,875,999 $43,749,846 $460,521 $665,632 $5,834,467 $23,849,878 $4,615,606 $615,133 $463,768 $151,365 $13,000,647 $0 $13,000,647 $1,446,145 $199,326 $655,072 $123,262 $468,485 $11,336,529 $6,032,647 $4,707,610 Retail Leakage/ (Retail Surplus) ‐$17,875,906 ‐$3,910,065 ‐$793,417 $6,377,871 $15,260,303 $10,751,159 $1,496,180 $3,012,964 $4,000,649 $16,460,457 $5,204,127 $3,231,846 $1,928,667 $1,303,179 $15,142,229 $13,493,778 $1,648,451 $4,954,472 $189,967 $2,854,984 $79,821 $1,829,700 $29,690,264 $14,451,983 $8,790,695 Source: ESRI, Incorporated It is DDA’s opinion that the retail categories listed below (and corresponding leakage) present the best opportunity for tenants at the site:  Restaurants and Limited‐Service Ea ng Places ($23,242,678)  Health & Personal Care ($4,000,649)  Office Supplies ($2,854,984)  Spor ng Goods ($1,928,667)  Other General Merchandise ($1,648,451)  Specialty Food Stores ($1,496,180)  Books, periodicals, music ($1,303,179) Restaurants and limited‐service ea ng places clearly represent the largest opportunity for tenants at the site. Local residents are spending more than $23 million dollars on sit‐down (full‐service) and casual (limited‐service) restaurants located outside the trade area. With restaurant sales within a neighborhood environment typically averaging $200 to $300 per square foot, restaurant sales of $23.3 million could support 77,700 to 116,500 total square feet of restaurant space. Capturing 20% of those lost sales would support up to 23,300 total square feet of restaurant space. 8 | P a g e The retail leakage among the remaining tenant opportuni es reflects support for much more modest amounts of retail space. Based on the es mated leakage amounts and typical retail sales per square foot, support for these other retailers will likely equate to individual stores sizes as small as 1,200 square feet (ice cream parlor/yogurt store/coffee shop) to no more than approximately 4,500 square feet (small general merchandise combined with health & personal care goods). Bicycle shops are o en located in lower quality retail space because of affordability. Certainly retail spaces at the velodrome are an ideal synergy for a bicycle shop. However, the ability of the store to support higher lease rates may disuade bicycle businesses from loca ng at the site. Considera on should be given to dedica ng a small interior space at the velodrome for this specialty use versus incorpora ng within the conven onal retail space. The planned train sta on redevelopment, including some level of retail, is expected to be more of a benefit to the Downingtown Bicycle store in the King & Lloyd Center
area rather than a drain on retail support from the subject development. The poten al addi onal traffic generated from the redevelopment will poten ally bolster sales at the site. Considera on should be given to extending the exis ng bike lanes on Lincoln Highway up to the site. It is important to note that the above comparison does not take into account employee spending. With nearly 900 persons employed at ArcelorMittal across the street from the site, DDA conserva vely es mates that there is an addi onal $1 million in restaurant and convenience goods spending from this workforce. Also, the visitor traffic to the velodrome and nearby hotel of which many are neither local residents or employees, represents another significant source of support for addi onal retail/restaurant support at the site. Additionally, office development is planned adjacent the hotel potentially bringing more daytime office workers and potential spending into the marketplace. Non‐retailers also present tenant opportunities at the site. For example, there are a significant number of physical therapy and fitness‐oriented tenants in the market who would be attracted to a location serving the western area of the corridor. Other non‐retailer tenant types include medical offices such as dentists, optometrists and financial institutions who prefer a retail location with high visibility. Physical therapy tenant at Thorndale Shopping Center
9 | P a g e V.
Site Assessment The site is competitive with existing retail centers in terms of visibility and traffic volumes. According to the Pennsylvania Department of Transportation (PennDot), traffic volumes along Lincoln Highway averaged 13,000 cars per day (prior traffic counts show more than 17,000 ADT). Combined with the traffic counts on Manor Road/1st Avenue the site is a very marketable retail location. According to ESRI Incorporated, a national demographer, in 2012 there was an estimated population of 25,990 persons within two miles of the site. The proximate population base is adequate for most restaurateurs and other retailers considering a site location. The site’s adjacency to Downtown Coatesville will someday benefit from future downtown redevelopment efforts. However, currently there is no appreciable concentration of retail/restaurants downtown which will benefit from its connectivity. In fact, in its current state, the downtown is perceived by many as unsafe and is more of a detriment to the site. The site lacks easy and safe pedestrian connectivity with the downtown because it is difficult for pedestrians to traverse 1st Avenue (see photo on right). The newly constructed Courtyard Marriott is 1.2 miles north of the site. The right tenant mix at the site could attract hotel guests looking for nearby restaurants and convenience goods. The site is adjacent River Walk, a splash park and walking trail along the Brandywine Creek. This type of amenity has proven beneficial to many shopping centers across the country and should be incorporated into the overall site plan. Parking needs to be easily accessible to the splash park to be utilized by mothers with babies and/or toddlers. 10 | P a g e Downtown in background, view from bridge
Splash park at River Walk VI.
Conclusions/Recommendations Based on current market conditions, spending patterns, and site characteristics, it is DDA’s opinion that a market exists to support the 26,000 square feet of planned retail space attached to the velodrome (4,000 is non‐retail space for brewing), as follows: Recommended Recommended Tenant Mix Approximate Square Feet* Brew Pub Restaurant 8,000 Restaurants (2) 8,000 to 9,000 Specialty Food 1,000 to 1,500 Convenience/Health & Beauty/General Merchandise/Sports 3,500 to 4,500 Non‐Retail Businesses (2 to 3) 5,500 to 6,500 Total
26,000 to 29,500 *Total does not include brewery space and potential bicycle shop in non‐retail space within the velodrome facility. The recommended tenant mix is anchored by restaurants accounting for more than 60% of the retail space. Three restaurant tenants provide a critical mass which will enhance the center as a dining and entertainment destination. NOTE: The tenant mix is recommended based on current market conditions and will not necessarily reflect the end‐
state tenant mix. Site plan considerations All retail space at the center should have visibility from Lincoln Highway. The retail/restaurant tenants should be positioned to be adequately accommodated for regular truck delivery service. Design of the large tenant space at the brew pub should consider adaptability into two or more similar spaces in the event the brew pub vacates the space. The eastern edge or end‐cap of the retail should be a food‐oriented tenant that can have outdoor seating adjacent the existing splash park at River Walk. Security is a perceived issue in the area. Security measures including lighting, proximate parking, and some setback from Lincoln Highway are important factors. Lease rates The preliminary estimates of $16.50 Triple Net (NNN) per square foot for the retail space are in‐line with rates charged in more modern shopping centers in the area. An early discount on lease rates may be necessary to attract the first tenants and absorb the space within a timely matter. A tiered lease schedule may be considered in which the first year rent is $14.00 NNN per square foot, graduating to $16.50 NNN over a three‐year period. 11 | P a g e The amended development program includes plans for 8,000 square feet for a restaurant and another 4,000 square feet of non‐retail space for its brewing space within the velodrome. The restaurant and brewery space is underwritten at $15 per square foot NNN and $8 per square foot, respectively. In DDA’s opinion, if this space is property designed, the market lease rate for the restaurant space should be at least $16.50 NNN, especially since this restaurant will benefit from event concessions. Pending the ability to attract a bicycle shop to the retail space, additional consideration may be given to incorporating a small bicycle repair/sales business in the velodrome at a discounted rate. This space will not have the visibility and finishings of the other retail space. Uses, Applications, and Assumptions Although this report represents the best available attempt to identify the current market status and future market trends, note that most markets are continually affected by demographic, economic, and developmental changes. Further, this analysis has been conducted with respect to a particular client's development objectives, and consequently has been developed to determine the current market's ability to support those particular objectives. For these reasons, the conclusions and recommendations in this study are applicable only to the subject site identified herein, and only for the potential uses for that site as described to us by our client. This study represents a compilation of data gathered from various sources, including the properties surveyed, local records, and interviews with local officials, real estate professionals, and major employers, and the use of secondary demographic material. Although we judge these sources to be reliable, it is impossible to authenticate all data. The analyst does not guarantee the data and assumes no liability for any errors in fact, analysis, or judgment. The conclusions contained in this report are based on the best judgments of the analysts; we make no guarantees or assurances that the projections or conclusions will be realized as stated. 12 | P a g e

interest in using national velodrome at coatesville

Transcription

Similar documents

which cannot be changed. We would advise velodrome for the track

Cycling tour in Chezk Republic

Cycling fun

My name is David Barrionuevo, from Madrid, Spain.

03 CPT002 - 2012v1 Cycling Overview

full Bridge Road Brewers flyer here

Velodrome Publishing 2016

Citizen participation in active transport: Chile experience

Untitled

What`s on guide cycling special