Sports Complex MARKET STUDY LEE'S SUMMIT, MISSOURI SUBMITTED TO:EXISTING PREPARED BY:

Transcription

1 MARKET STUDY Sports Complex LEE'S SUMMIT, MISSOURI SUBMITTED TO:EXISTING Mr. Phillip Short, Happy Valley Properties, LLC 801 NW Commerce Drove Lee's Summit, Missouri, PREPARED BY: HVS Convention, Sport& Entertainment 205 West Randolph Suite

2 Mr. Phillip Short 205 West Randolph Suite FAX Atlanta Boston Boulder Chicago Dallas Denver Las Vegas Mexico City Miami Nassau New York Newport San Francisco Toronto Vancouver Washington Athens Buenos Aires Dubai Hong Kong Lima London Mumbai New Delhi Sao Paulo Shanghai Singapore Happy Valley Properties, LLC 801 NW Commerce Drove Lee's Summit, Missouri, Dear Mr. Short: Re: Sports Complex Lee's Summit, Missouri Pursuant to your request, we herewith submit our Market Study of a Sports Complex in Lee's Summit, Missouri. We hereby certify that we have no undisclosed interest in the property, and our employment and compensation are not contingent upon our findings. This study is subject to the comments made throughout this report and to all assumptions and limiting conditions set forth herein. It has been a pleasure working with you. Please let us know if we can provide any additional services. Sincerely, HVS Convention, Sports & Entertainment Thomas A Hazinski Managing Director Catherine Sarrett Project Manager

3 Table of Contents SECTION TITLE 1. Introduction and Executive Summary 2. Market Area Overview 3. Participation Trends 4. Comparable Venues 5. Sports Complex Building Program Recommendations 6. Demand Analysis 7. Financial Analysis 8. Approach to Financing 9. Statement of Assumptions and Limiting Conditions 10. Certification Appendices A through D Overland Park Soccer Complex Documents

4 1. Introduction and Executive Summary Nature of the Assignment Methodology Happy Valley Properties, LLC and the City of Lee s Summit, Missouri ( Client ) engaged HVS Convention, Sports & Entertainment ( HVS ) to conduct a Market Study for a proposed sports complex in Lee s Summit, Missouri. The purpose of the study is to recommend a plan to develop an outdoor sports complex as a part of the View High Green Project, a mixed-use development which may also include retail, lodging, office and other land uses. This study is prepared as a companion to the Estimates of Demand for Retail, Restaurant and Lodging for the View High Green Project prepared by Real Estate Research Consultants ( RERC ). The Client would like to determine whether development of a state-ofthe-art outdoor, sports complex would generate sufficient demand from soccer and other uses to support its operation and have a positive impact on the overall demand generated by the development. In accordance with the Scope of Services, HVS performed the following tasks: 1. Conducted a site visit and client meeting with Catherine Sarrett travelling to Lee s Summit on March 6-7, During this visit, she toured the proposed site at View High Drive and I-470, visited the Overland Park Soccer Complex, met with representatives of the development group, the City of Lee s Summit, the Lee s Summit Economic Development Council, local soccer clubs, and gathered relevant data; 2. Analyzed the economic and demographic data that indicate whether and the extent to which the local market area is supportive of the proposed sports complex; 3. Interviewed current and potential users of the sports complex to understand their training and game needs and the likelihood of booking field time at the proposed facility; 4. Compiled data on 11 comparable complexes in the U.S. to inform and test the reasonableness of the building program recommendations; 5. Recommended a conceptual facility program based on the above steps; 6. Prepared an event demand and attendance forecast based on the implementation of the recommended program, and forecasted the financial operations of the proposed sports complex; and 7. Reviewed financial strategies of comparable venues and outlined potential funding options for the proposed complex. Introduction and Executive Summary 1-1 Sports Complex Market Study Lee's Summit, Missouri

5 HVS collected and analyzed all information contained in this report. HVS sought out reliable sources and deemed information obtained from third parties to be accurate. Description of Existing Facilities The proposed site for sports complex development is a parcel along the western edge of Lee s Summit roughly bounded by Interstate 470, View High Road, Bannister Road and the Little Blue River. This site is currently undeveloped. The following figure presents an aerial view of the proposed sports complex site. PROPOSED SITE AERIAL VIEW Interviews As a part of this analysis, HVS interviewed potential users of the proposed soccer complex and other stakeholders to obtain information and insight regarding the development and its demand potential. HVS interviewed the following people. Chris Travalent KC Select Soccer Club Will Coates Billy Goat Football Club Introduction and Executive Summary 1-2 Sports Complex Market Study Lee's Summit, Missouri

6 Abdullah Parker Billy Goat Football Club Rob McQueen Lee s Summit Soccer Association Tom Lovell Lee s Summit Parks and Recreation Jon Ellis Lee s Summit Lacrosse Jon Collett Challenger Sports Dan Foreman Game On Sports Jake Griesenauer Missouri Youth Soccer Association Mike Laplante Overland Park Soccer Complex HVS found strong support for the proposed sports complex among those who were interviewed. Potential users and others recognize that a premier soccer facility in Lee s Summit would enhance their ability to compete for and host larger local, regional, and national soccer tournaments. All clubs and leagues interviewed face a shortage of quality training facilities and would be willing to support the complex with a long-term use agreement provided they can negotiate a reasonable rate which is consistent and fair to all users. All potential users agree that the artificial turf would allow them to expand use and avoid weather related cancellations. The balance of this report presents more specific interview findings on a variety of topics. Market Area Analysis Overall, the market surrounding the proposed sports complex is capable of supporting its development and operation. The analysis indicates that much of the local demand for weekday training and league play would come from Lee s Summit. The proposed site is reasonably accessed from all parts of the metropolitan area. Drive-in visitors for tournaments would have good highway access and the ability to fly into a major airport when required. Given the current hotel inventory, lodging options within 10 miles of the site are adequate; however, some participants in large tournaments may be required to stay further than 10 miles from the complex, which may detract from an event s attendance. While mainly a competitor, the proposed complex would also complement other soccer fields in the area and help the market secure larger tournaments, which could increase tournament activity at other complexes. HVS has identified 32 existing soccer complexes in the Kansas City metropolitan area most often used by local soccer clubs and tournament promoters for training, league play, and tournaments. Primary competitors of the proposed complex include the Overland Park Soccer Complex, Heritage Sports Park, Legacy Park, and the Raytown Soccer Complex. HVS also identified three potential future developments; however, the future of two of these projects is uncertain. Introduction and Executive Summary 1-3 Sports Complex Market Study Lee's Summit, Missouri

7 Construction on the Swope Park Soccer Village is set to begin in This facility would compete directly with the proposed sports complex for many local tournaments as well as other local club uses. The artificial turf as well as the number of fields at the Lee s Summit complex would make it a more attractive option for these events. Participation Trends Following a period of considerable growth in popularity of soccer during the 1980s and 1990s, participation levels have been steady over the past decade. While many other popular youth sports have experienced volatile participation rates, outdoor soccer participation has remained relatively stable, and there are no indications of future instability. According the Sports and Fitness Industry Association ( SFIA ), outdoor soccer participation is strongest in geographic areas with warmer climates, most notably in the South Atlantic and Pacific regions. Missouri is in SFIA s West North Central region which has participation rates that are about average when compared to the entire U.S. Missouri s youth soccer participation, as measured by United States Youth Soccer ( USYS ) registrations, appear somewhat below average, with Missouri ranking 27 th in USYS player registrations, despite being the 18 th most populated state in the country. Following St. Louis, the Kansas City area has the second greatest number of registrations in the state of Missouri. The Kansas City soccer market is strong; however, overall registrations in MYSA s Western region have declined steadily over the past three years. Demographic analysis of the area surrounding the proposed complex suggests that the majority of use would be by the 94,000 resident of Lee s Summit. The Lee s Summit market has a significantly higher median household income than other surrounding markets, suggesting greater disposable income for recreation activities and that a greater percentage of residents of Lee s Summit would participate in programs at the sports complex. Soccer in Lee s Summit and the surrounding area may experience a modest boost in popularity with the introduction of a premier soccer complex; however, long-term participation rates will likely follow the overall population and economic trends of the market. Comparable Soccer Complexes HVS analyzed the ten comparable soccer complexes shown below. HVS selected soccer complexes in similarly-sized metropolitan markets across the United States. The analysis compares the field quantities and other amenities in each of the facilities along with other characteristics of the markets that are relevant to the success of the complex. Overland Park Soccer Complex in Overland Park, Kansas Citizens Bank Field at Progin Park in Lancaster, Massachusetts Dick s Sporting Goods Park in Commerce City, Colorado Introduction and Executive Summary 1-4 Sports Complex Market Study Lee's Summit, Missouri

8 FC Dallas Complex in Frisco, Texas Sportscore 2 in Loves Park, Illinois Mike Rose Soccer Complex in Memphis, Tennessee Reach 11 Sports Complex in Scottsdale, Arizona National Sports Center in Blaine, Minnesota San Bernardino Soccer Complex in Highland, California Richard Siegel Sports Complex in Murfreesboro, Tennessee The following figure compares the number of natural grass and artificial turf fields and other amenities in each of the comparable soccer complexes. FIGURE 1-1 COMPARABLE SOCCER COMPLEXES Complex Year Opened Size (acres) Natural Grass Fields Artificial Turf Fields Total Fields Lighted Fields Stadium Field (seats) Overland Park Soccer Park Citizens Banks Fields at Progin Park Dick's Sporting Goods Park ,000 Reach 11 Sports Complex San Bernardino Soccer Complex ,500 Richard Siegel Soccer Complex ,000 FC Dallas Soccer Complex ,500 Sportscore ,000 Mike Rose Soccer Park ,500 National Sports Center ,000 *Average ,875 * Average includes those facilities with the feature. While many of the soccer complexes have natural grass fields, recent developments are trending towards the use of artificial turf. Many complexes with natural grass are in the process of converting these fields to artificial turf to allow for longer use times and to lower maintenance costs. The use of lights is also more common in newer facilities. Many of the comparable facilities are publicly owned and operated by a city or county parks or recreation departments. Permanent tenants include local soccer clubs, soccer leagues, and collegiate teams. Other complexes are a part of a larger private development which includes a professional soccer stadium, retail, and other development. The following figure presents the ownership and operating Introduction and Executive Summary 1-5 Sports Complex Market Study Lee's Summit, Missouri

9 structure of each comparable complex. Development costs and financing information is included where available. FIGURE 1-2 OWNERSHIP AND OPERATION COMPARISON Complex Owner Operator Development Cost Funding Source(s)* Overland Park Soccer Park Overland Park, KS Overland Park, KS $37 mil 3% Hotel Tax Citizens Banks Fields at Progin Park Mass Youth Soccer Mass Youth Soccer $10 mil Naming Rights Dick's Sporting Goods Park Commerce City, CO & Kroenke Sports Kroenke Sports $131 mil PPP Commerce City & Kroenke Sports Reach 11 Sports Complex Phoenix, AZ Parks Department na San Bernardino Soccer Complex San Bernardino, CA Private na Richard Siegel Soccer Complex Murfreesboro, TN Murfreesboro, TN $12.9 mil Public Funds FC Dallas Soccer Complex FC Dallas FC Dallas $80 mil Sportscore 2 Rockford Park District Rockford Park District $2.4 mil Mike Rose Soccer Park Shelby County Private $4 mil National Sports Center *PPP = public private partnership National Sports Center Foundation National Sports Center Foundation na PPP Frisco, School District, & FC Dallas Rockford Park District & Corp. Sponsorships Public Funds and Private Donation Program Recommendations HVS developed its program recommendations with the aim of positioning the proposed complex to serve existing demand for soccer and other sport training in the Lee s Summit and surrounding Jackson County, as well as expanding the regional and national tournament opportunities for the market. An artificial turf surface and lights would allow users of the Lee s Summit complex to expand their soccer training through a longer season with fewer cancelled practices due to inclement weather. The number of fields would allow multiple clubs to enter into long-term rental agreements for weeknight field time. Similarly, multiple soccer and other sport leagues could rent fields at the complex for weekend league play. Based on the market analysis, participation trends, user interviews, and comparable venues analysis, HVS recommends the following building program. Introduction and Executive Summary 1-6 Sports Complex Market Study Lee's Summit, Missouri

10 15 regulation-size soccer fields with artificial turf and lights. Any field locations which are currently below the 100-year flood level should be raised. One of the 15 fields designated as a championship field with 500 fixed bleacher seats and fixed advertising signage opportunities. An irrigation system for cleaning and cooling of synthetic turf fields. Sufficient space between soccer fields to accommodate spectators along sidelines. Soccer warm-up areas. A main concessions stand building/field house with restrooms, offices for complex operations staff, and areas for indoor tournament registration and tournament operations. Satellite restroom facilities with concession and/or vending machine capabilities. Covered picnic areas. Multiple parking areas with approximately 1,500 surface parking spaces that can be dedicated to the sports complex during tournaments. As an optional program, HVS also investigated a scenario in which a temporary dome enclosure is used to cover two fields during the winter and summer months. Demand Projections Based on the building program recommendations presented above, user interviews, an analysis of historical tournament demand, and the market and comparable facility analyses, HVS projected the tournament demand for the proposed soccer complex. Demand projections assume that the proposed sports complex is completed on June 1, HVS estimates that tournament demand would stabilize in the third year of operation following the soccer complex opening The following figure presents the projected tournament demand and associated room nights for a stabilized year of operation. Introduction and Executive Summary 1-7 Sports Complex Market Study Lee's Summit, Missouri

11 FIGURE 1-3 STABILIZED YEAR EVENT DEMAND AND ROOM NIGHTS Stabilized Year Events State/Reg/Natl Tournaments 3 Local Soccer Tournaments 14 Other Tournaments 4 Total 21 Average Attendance State/Reg/Natl Tournaments 6,750 Local Soccer Tournaments 6,300 Other Tournaments 2,250 Total Attendance State/Reg/Natl Tournaments 20,250 Local Soccer Tournaments 88,200 Other Tournaments 9,000 Total 120,000 Room Nights State/Reg/Natl Tournaments 12,150 Local Soccer Tournaments 17,640 Other Tournaments 600 Total 30,390 In addition to tournament demand, local sports clubs would also use the proposed soccer complex for team training and league play. HVS investigated the current seasonal needs of local sports clubs and leagues and developed field rental projections based on the availability of the proposed fields. The following figure summarizes the projected field rental demand and the number of player visits generated by the complex for both the base scenario and the domed field scenario. Introduction and Executive Summary 1-8 Sports Complex Market Study Lee's Summit, Missouri

12 FIGURE 1-4 FIELD RENTAL DEMAND PROJECTIONS Number of Fields Base Scenario Hours per Week per Field Player Visits per Year Number of Fields Domed Field Scenario Hours per Week per Field Player Visits per Year Club 1 Training , ,700 Club 2 Training , ,520 Other Club/Adult Training , ,440 Misc. Field Rental , ,020 Spring Youth Leagues , ,000 Fall Youth Leagues , ,000 Spring Adult Leagues Summer Adult Leagues 2 8 1, ,536 Lacrosse Summer Club Training , ,640 Summer Camps/Clinics , ,400 Dome Rentals - winter na ,570 Dome Rentals - summer na ,570 Total 236, ,100 The proposed sports complex would generate over 200,000 annual player visits to the site. The most active periods would be during the fall and spring soccer seasons. The presence of domed fields on the site would increase player visitations by approximately 40,000 with increases occurring during the otherwise weak winter and summer months. Financial Projections HVS applied a series of revenue and expense assumptions based on projected attendance and field utilization by user groups to develop a comprehensive operating financial statement for the proposed sports complex. The following figure presents the projected operating revenues and expenses for the first year of stabilized demand 2017, for the base scenario and the domed field scenario. Projections are in inflated dollars. Introduction and Executive Summary 1-9 Sports Complex Market Study Lee's Summit, Missouri

13 FIGURE 1-5 FORECAST OF SPORTS COMPLEX REVENEUS AND EXPENSES Domed Field Base Scenario Scenario OPERATING REVENUE Facility Rental $478,000 $478,000 Food & Beverage (Gross) 210, ,000 Parking (Gross) 408, ,000 Advertising & Sponsorships 174, ,000 Hourly Field Rental 532, ,000 Total $1,802,000 $2,030,000 OPERATING EXPENSES Salaries & Benefits $404,000 $462,000 Food & Beverage Costs 137, ,000 Parking Costs 61,000 61,000 Administrative & General 44,000 48,000 Repair & Maintenance 106, ,000 Utilities 348, ,000 Insurance 64,000 70,000 Other Expense 6,000 6,000 Total $1,170,000 $1,258,000 OPERATING INCOME (LOSS) $632,000 $772,000 NON-OPERATING EXPENSES Capital Maintenance $54,000 $61,000 TOTAL NET INCOME (LOSS) $578,000 $711,000 Introduction and Executive Summary 1-10 Sports Complex Market Study Lee's Summit, Missouri

14 2. Market Area Overview This market area analysis reviews economic and demographic data that describe the overall condition of the local economy in Lee's Summit, Missouri. HVS used characteristics of the area economy and trends that indicate growth or decline to forecast the performance of a proposed Sports Complex. HVS analyzed the following indicators: population, income, sales, work force characteristics, employment levels, transportation, hotel supply, and competing facilities. Market Area Definition Lee s Summit, Missouri occupies approximately 65 square miles in western Missouri and is the sixth largest city in the Kansas City metropolitan area. Incorporated in 1877, Lee s Summit is located southeast of Kansas City, primarily in Jackson County with a small southern portion in Cass County. Since that time, the population of Lee s Summit has grown to more than 91,000 residents making it the sixth largest city in the state of Missouri. The following map identifies the city limits and the location of the proposed sports complex. MAP OF MARKET AREA Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-1

15 The market area for a recreation venue consists of the geographic region in which regular users of the facility live. Many of these potential users reside within Lee s Summit; however, given the proposed location in the western portion of the city, a significant portion of potential users may live outside the city limits. Therefore, in addition to the City of Lee s Summit, HVS also analyzed the local markets within 10, 20, and 30-minute drive times of the proposed site. The following figure identifies these areas and their boundaries within the context of the Lee s Summit market area. 10, 20, AND 30-MINUTE DRIVE TIME MAP Source: ESRI HVS used the Lee s Summit market area as well as the drive time markets to assess and understand trends in the economic climate of the area and its ability to maintain sufficient infrastructure and other amenities that support the overall appeal of the complex. Population and Income HVS used ESRI to analyze demographics of populations in Lee s Summit and within the 10-minute, 20-minute, and 30-minute drive times of the proposed sports complex. The size of the resident population surrounding a recreation facility is an important indicator of demand potential for all types of usage, including Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-2

16 tournaments, leagues, camps, clinics, outside rentals, and other recreation activities. Income levels affect the ability of a market to support a recreation facility because participants tend to be from households with higher levels of disposable income. A healthy and diversified economy provides not only employment and disposable income for a market s residents, but also helps to insulate an area from economic downturns that could negatively affect facility demand. Trends in median household income indicate growth or decline in the capacity of area residents to participate in sports. Income levels also provide a benchmark for the quality of public and private services and attractions that are necessary to attract out-of-town visitors to tournaments The following figure presents population and median household income statistics for the market area (as defined by drive times). Population growth rates and income levels for the Kansas City metro area and the entire U.S. are provided for reference. FIGURE 2-1 LOCAL MARKET AND DRIVE TIME DEMOGRAPHICS Market / Drive Time Population Median Household Income ($) Annual Growth Rate Annual Growth Rate 10-minutes 46,303 46, % 50,985 57, % 20-minutes 470, , % 52,932 60, % 30-minutes 1,295,987 1,335, % 53,100 61, % Lee's Summit 92,290 94, % 76,133 80, % Kansas City Metro 2,064,029 2,139, % 53,761 62, % United States 0.68% 50,157 56, % Source: ESRI A relatively small population lives within a 10-minute drive of the proposed sports complex; however this figure increases to nearly half a million for the 20-minute drive time. Approximately 1.3 million people, more than half that in the entire Kansas City metro area live within a 30-minute drive of the proposed facility. The median household income levels of these markets are relatively consistent with the Kansas City metro and national levels. The Lee s Summit market has a significantly higher median household income than other surrounding drive time markets, suggesting greater disposable income for recreation activities and that a greater percentage of residents of Lee s Summit would participate in programs at the sports complex. Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-3

17 Age Distribution The success of an events facility lies in its ability to develop event programming that appeals to a broad cross-section of the marketplace. A market s age distribution can be a decisive factor in determining potential event demand and provide insight into the types of events and programs that the market will support. A market with strong youth and teen populations suggest a stronger demand for family-oriented programming and higher participation rates in amateur sports programs. In general, a younger population base represents a positive sign for sports and recreation facility demand. The following figure presents the population distribution by age for each of the market areas. FIGURE 2-2 LOCAL MARKET AND DRIVE TIME AGE DISTRIBUTION Age Range 10-Minute 20-Minute 30-Minute Lee's Summit Kansas City Metro U.S % 13.2% 14.0% 14.8% 14.2% 13.0% % 18.9% 19.3% 20.2% 19.2% 20.5% % 25.8% 27.8% 26.8% 27.5% 26.4% % 27.3% 26.4% 26.6% 26.6% 26.4% Over % 14.7% 12.6% 11.4% 12.5% 13.6% Median Age Source: ESRI The population within a 10-minute drive of the proposed complex is slightly older than other surrounding markets with a much lower percentage of school age children. This analysis suggests a slightly lower propensity to participate in activities at the sports complex from residents in its immediate vicinity. Beyond the 10-minute drive time, the age range analysis indicates a relatively consistent distribution across drive time markets and within Lee s Summit. Minor variances in age distribution and the median age of these markets would not produce material impacts on sports participation rates. Recreation Spending Retail spending patterns indicate a market s ability to support a facility s revenues through facility rentals, program participation fees, and participant sports fees. The following figure presents the annual spending index for the retail segments which would contribute to the proposed soccer complexes operating revenue. The Spending Potential Index ( SPI ) is household based and represents the amount spent for a product or service relative to a national average of 100. Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-4

18 FIGURE 2-3 RETAIL SPENDING SPI INDEX Market/Drive Time Fees for Participant Sports Recreation Lesson Fees 10-minutes minutes minutes Lee's Summit Kansas City Metro Source: ESRI The higher than average spending on participant sports and recreation in Lee s Summit is consistent with the income and age distribution analyses presented above. The spending patterns from the drive time markets suggest that, despite the proximity of the proposed sports complex, residents of within a 10-minute drive would have less interest in the recreational sports programs offered at the facility. This result is consistent with the population and income demographics. Workforce Characteristics The characteristics of an area's workforce provide an indication of the overall stability of the income levels for the resident population. Areas with higher education levels and a predominance of professional occupations in a variety of industries tend to respond to and recover from market shifts more readily than those which rely on employment from a single sector, such as manufacturing. The following figures present a comparison of educational attainment and workforce industry for the markets contained in the 10, 20, and 30-minute drive times as well as the Lee s Summit and Kansas City metro markets. Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-5

19 FIGURE 2-4 EDUCATION OF RESIDENT POPULATIONS (AGE 25+) Educational Attainment 10-Minute 20-Minute 30-Minute Lee's Summit Kansas City Metro U.S. No HS Diploma 8.3% 9.2% 10.5% 4.0% 10.5% 14.8% HS Graduate 31.7% 27.9% 26.3% 23.5% 28.8% 29.6% Some College 25.0% 23.9% 22.0% 23.8% 22.4% 19.9% Associate'sDegree 7.2% 6.7% 6.5% 7.1% 6.8% 7.7% Bachelor's Degree 18.7% 20.7% 22.6% 26.7% 20.9% 17.7% Graduate/Professional Degree 9.2% 11.6% 12.1% 15.0% 10.8% 10.4% Source: ESRI The population in Lee s Summit has a significantly higher percentage of adults who have earned a bachelor s degree or higher than other surrounding drive time markets, the Kansas City metro area, and the nation as a whole. This education assessment is consistent with previous analyses regarding Lee s Summit and the drive time markets. FIGURE 2-5 RESIDENT POPULATIONS BY INDUSTRY (AGE 16+) Industry 10-Minute 20-Minute 30-Minute Lee's Summit Kansas City Metro Agriculture/Mining 0.3% 0.3% 0.4% 0.2% 0.9% 1.9% Construction 6.4% 5.7% 6.1% 6.1% 6.8% 7.4% Manufacturing 9.5% 8.8% 9.5% 8.6% 10.1% 11.2% Wholesale Trade 3.3% 3.5% 3.9% 3.8% 3.8% 3.2% Retail Trade 13.5% 11.8% 11.5% 11.0% 11.6% 11.5% Transportation/Utilities 5.6% 4.9% 4.8% 3.8% 5.6% 5.0% Information 3.6% 4.1% 4.2% 4.6% 3.7% 2.4% Finance/Insurance/Real Estate 8.3% 9.5% 9.2% 11.3% 9.3% 7.1% Professional 6.3% 8.0% 8.4% 9.7% 7.4% 6.2% Healthcare 12.0% 13.3% 12.5% 12.1% 12.3% 12.5% Educational 8.3% 8.2% 7.8% 9.6% 7.9% 9.0% Accomodation & Food Service 5.4% 5.7% 6.4% 4.8% 6.0% 6.7% Other Services 12.5% 11.4% 11.3% 10.3% 10.8% 10.8% Public Administration 5.0% 5.0% 4.0% 4.2% 4.5% 4.7% Total Workforce (16+) 22, , ,644 42,147 1,014,666 Source: ESRI U.S. Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-6

20 All markets surrounding the proposed sports complex are well diversified in a variety of industries with a high percentage of residents in management and professional occupations. The financial sector and professional sectors are strong throughout the markets, notably within Lee s Summit. Unemployment statistics provide a measure of the health of the local economy and comparisons to state and national trends. The following table presents several years of historical unemployment rates for Jackson County, the Kansas City MSA, the state of Missouri, and the entire country. FIGURE 2-6 UNEMPLOYMENT STATISTICS Year Jackson County Kansas City MSA Missouri U.S % 5.5 % 5.2 % 5.8 % Recent Month - January % 7.2 % 7.6 % 8.3 % Historically, the Jackson County unemployment rate tracked higher than that of the entire Kansas City metro area, the State of Missouri, and the U.S. Like the rest of the country, the population in Jackson County experienced a spike in unemployment in 2009 peaking at 10.7 percent in As economic conditions rebound, local unemployment is expected to gradually return to its pre-recession level. Lee s Summit, Missouri has a strong and diversified economy with a stable workforce. The results of this analysis suggest that the primary users of the facility would come from within the Lee s Summit city limits and within a reasonable driving distance of the complex. These population bases are relatively affluent and tend to spend an above average amount on the sports and recreation programs that would be offered by the complex. Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-7

21 Air and Highway Transportation Airport access is an important consideration for planners of national and large regional tournaments which attract teams from locations throughout the U.S. Airport passenger counts provide an indication of the ability of a market to support major tournaments. Trends showing changes in passenger counts also reflect local business activity and overall economic health of the area. Kansas City International Airport (MCI) is located 15 miles northwest of Kansas City, Missouri. MCI passenger terminals have a unique structure comprising three terminals in the shape of rings. Each ring has short-term parking in the center of the ring; the Kansas City Airport also has several off-site airport parking facilities. Kansas City International is not a hub of any major airline, allowing the city to benefit from ample choices of flights among many airlines, which accordingly keeps travel costs into and out of the airport relatively low. In February of 2010, MCI received the highest rank among medium-sized airports for overall passenger satisfaction by J.D. Power and Associates. Conversations with economic development representatives noted a long-term plan to consolidate MCI's three terminals into one large streamlined facility. While airport officials are currently in the planning stages of this project, the most likely scenario will be to relocate the operations of Terminal A to Terminal C, then demolish Terminal A and rebuild the consolidated terminal on its site. Officials believe that construction could be completed by The following figure illustrates recent operating statistics for Kansas City International Airport. FIGURE 2-7 AIRPORT PASSENGER TRAFFIC Year Passenger Traffic Percent Change* Percent Change** ,888, ,384,476 (5.1) % (5.1) % ,749, (0.7) ,730,909 (0.2) (0.5) ,569, ,275, ,469,892 (7.1) ,774,972 (6.6) (0.2) ,912, ,158, *Percent change from the previous year **Compounded percent change from first year of data Source: Kansas City International Airport Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-8

22 While not a major airport hub, MCI does offer nonstop flights to 45 cities throughout North America by 11 airlines. During the past decade, MCI has maintained a relatively stable level of passenger traffic. Like much of the country, the national recession reversed the modest growth from early part of the decade. Passenger levels have since been on the increase as the economy recovers. Most tournament participants and their families drive to their destinations. The Kansas City area has excellent access via major interstate highways. Interstate 70 extends through Missouri on the east/west axis running in and out of Kansas City and connecting with Interstates 355 to Wichita and Oklahoma City. Interstates 29 and 35 run north/south connecting major cities from Des Moines and Omaha to the north and Dallas and New Orleans to the south. The proposed sports complex site is adjacent to Interstate 470 which connects to Interstate 435 and encircles the metro area connecting all major roadways. Lodging Supply A sports complex s ability to attract out-of-town teams for tournaments and other programming depends greatly on the availability of nearby hotel rooms within a reasonable driving distance. Most out-of-town users of the complex would be families and youth groups travelling to Lee s Summit for a weekend tournament. These lodgers are typically price sensitive and prefer less expensive limited service properties in upper midscale, midscale, and economy properties. These hotels typically offer guest amenities such as complimentary breakfast and free internet connections. Because tournaments are weekend events when corporate demand is low, full-service hotel properties can often accommodate soccer groups as well. For the purpose of this analysis, HVS investigated hotel rooms within a ten-mile radius of the proposed sports complex. The following figure identifies the location of these 38 lodging options in relation to the proposed complex, most of which are easily accessed via major roadways. Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-9

23 FIGURE 2-8 MAP OF NEARBY LODGING Source: Google Maps Smith Travel Research ( STR ) maintains a database of approximately 140,000 hotel properties and 13 million hotel rooms around the world. The figure below shows the STR data collected for the 38 hotels within ten miles of the proposed soccer complex. FIGURE 2-9 PROXIMATE LODGING SUPPLY BY SIZE Size (Number of Guest Rooms) Number of Properties Number of Guest Rooms Less than , to , to to Total 38 3,608 Source: STR Approximately 3,600 hotel rooms are within 10 miles of the proposed sports complex. Most properties have fewer than 100 guest rooms. The largest hotel is the 201-room Hilton Garden Inn in Independence. The number of proximate guest rooms suggests that some overnight guests at larger tournaments would need to book lodging more than ten miles from the sports complex. The quality of the Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-10

24 lodging also indicates the market ability to support the sports complex. The following figure summarizes the lodging supply by service level. FIGURE 2-10 PROXIMATE LODGING SUPPLY BY SERVICE LEVEL Chain Scale Number of Properties Number of Guest Rooms Upscale Upper Midscale 14 1,279 Midscale Economy Independent Total 38 3,608 Source: STR The hotels surrounding the proposed soccer complex represent a mix of service levels ranging from economy to upscale properties. The largest percentage of rooms is in upper midscale hotels. Approximately 1,600 guest rooms, or 44 percent of the proximate hotel room supply, are in the midscale and economy properties typically favored by price sensitive tournament attendees. In order to successfully attract and maintain repeat tournament groups, other more upscale properties may need to offer discounted block pricing. Tournament organizers and tourism marketing organizations may need to develop programs which encourage hoteliers to offer these discounted rates via rate subsidies and other incentives. Outdoor Soccer Facilities The presence of soccer fields and complexes in Lee s Summit and the Kansas City metropolitan area represent both competitors for soccer programming, as well as potential partners in securing large tournaments. HVS interviewed local soccer clubs and leagues and researched the existing and planned soccer developments throughout the market to assess the negative and positive impacts on the proposed sports complex. HVS has identified 32 existing soccer complexes in the Kansas City metropolitan area most often used by local soccer clubs and tournament promoters for training, league play, and tournaments. The following map locates these larger soccer complexes in relation to the proposed Lee s Summit sports complex site, denoted in purple. Soccer fields used by the Kansas City Metro League are denoted in red. Fields used by the Heartland Soccer Association are denoted in blue. Other fields are denoted in green. A brief description of some of the more active complexes which regularly host tournaments follows. Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-11

25 FIGURE 2-11 MAP OF OUTDOOR SOCCER FACILITIES Source: Google Maps Legacy Park Legacy Park is a 692-acre complex which is owned and operated by Lee s Summit Parks and Recreation. The park s eight soccer fields are leased and maintained by the Lee s Summit Soccer Association ( LSSA ). The LSSA uses these fields for training as well as their home fields for KC Metro League play. In addition to the soccer fields, Legacy Park also contains twelve baseball and six softball fields, a 45,000 square foot community center, a disc golf course, an amphitheater, 4.7 miles in trails, and a 22-acre lake. Raytown Soccer Complex The Raytown Soccer Complex is home to the Raytown Soccer Club which participates in the KC Metro League. The complex can accommodate ten to twelve fields depending on size and configuration of the fields. Raytown Soccer Complex is the host site of several tournaments throughout the year, including the 2013 Spring Presidents Cup, a statewide championship event hosted by the Missouri Youth Soccer Association ( MYSA ). Kenneth Polo Fields Kenneth Polo Fields are used by the Heartland Soccer Association for league play and for several tournaments throughout the year. The fields are located just east of the Missouri-Kansas border. The complex can Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-12

26 accommodate up to 15 fields depending on the size and configuration. All fields are natural grass. Overland Park Soccer Complex The Overland Park Soccer Complex has 12 lighted artificial turf fields and is home to the Sporting Blue Valley Soccer Club and the Heartland Soccer Association. In addition to training and league play, the complex hosts approximately 20 tournaments each year, including this years United States Youth Soccer s National championship. The complex would be a primary competitor of the proposed sports complex in Lee s Summit and is discussed in greater detail in other sections of this report. Heritage Soccer Park Heritage Soccer Park in Olathe, Kansas is part of a 1,200- acre park which is owned and operated by the Johnson County Park and Recreation District. The 18-field, natural grass complex is leased by the Heartland Soccer Association for league play and also hosts several tournaments throughout the year, often in conjunction with events using the Overland Park Soccer Complex. Heritage Park also contains softball fields, an 18-hole championship golf course, a 40-acre lake and a 30-acre dog park. Lone Elm Park Lone Elm Park soccer fields are used by the Heartland Soccer Association for league play and for Kansas Rush Autumn Festival soccer tournament. They are located in Olathe, Kansas. The complex can accommodate 8 full-size fields and up to 19 fields depending on the size and configuration. All fields are natural grass. Tiffany Hills and Tiffany Springs Parks Tiffany Hills and Tiffany Springs soccer fields are used by the KC Metro League Soccer Association for league play and are the home fields for the Futura Football Club. They are located in northern Kansas City, Missouri. Combined, the two parks can accommodate 10 fields of various sizes. All fields are natural grass. Stump and Swarner Parks Stump and Swarner Park soccer fields are used by the Shawnee Soccer Club for training and games and for the Challenger Fall Classic soccer tournament. They are located in Shawnee, Kansas. Combined, the two parks can accommodate 11 fields of various sizes. All fields are natural grass. New Supply HVS has identified three potential soccer complex developments in the Kansas City metro area. Two of these developments would be located in Kansas, one in Johnson County and the other in Wyandotte County. The other potential development is an expansion of an existing complex in Jackson County, approximately 8 miles northwest of the proposed sports complex in Lee s Summit. Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-13

27 Olathe Sports Complex Overland Park based Game On Sports is working to develop a 54 acre, nine-field complex in Olathe, Kansas. In addition to the nine lighted, artificial turf fields, plans call for sand volleyball courts as well as a surrounding office, retail, and mixed use development. Unlike the Overland Park Soccer Complex which is owned and operated by the City s Recreation Department, the proposed Olathe sports complex would be managed by a private operator. The developer is hoping to agree to property tax breaks and other public support to help fund the project. The planning for this sports complex has been ongoing for over two years, and at the time of the writing of this report, the status of the project is uncertain, and no definite schedule for development is available. FIGURE 2-12 PROPOSED OLATHE SPORTS COMPLEX Wyandotte County Soccer Complex As a part of its agreement with Wyandotte County and the City of Kansas City, Kansas to build its 18,500 seat stadium, the Sporting KC soccer team agreed to fund the development of a tournament-quality youth soccer complex in the County. The stadium deal was signed in early 2010, Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-14

28 and many feel that the development of the soccer complex is long overdue. Initial plans called for an 18-field, complex in Wyandotte County Park which is near the western border of the County. Other more centrally located sites are also under consideration. Unlike the Overland Park Soccer Complex, only a portion of the fields may be artificial turf. As of the writing of this report, Sporting KC continues its planning of the complex, however, specific details and an anticipated development schedule are not available. Swope Park Soccer Village Jackson County and the City of Kansas City, Missouri have recently agreed on a deal to add seven natural grass fields to an existing three-field complex at Swope Park. In addition to the seven lighted soccer fields, current plans call for additional restrooms, bleacher seating, and improved parking. Construction is expected to begin in Conclusion and Implications for Proposed Soccer Complex Overall, the market surrounding the proposed sports complex is capable of supporting its development and operation. The analysis indicates that much of the local demand for weekday training and league play would come from Lee s Summit. The proposed site is reasonably accessed from all parts of the metropolitan area. Drive-in visitors for tournaments would have good highway access and the ability to fly into a major airport when required. Given the current hotel inventory, lodging options within 10 miles of the site are adequate; however, some participants in large tournaments may be required to stay further than 10 miles from the complex, which may detract from an event s attendance. While mainly a competitor, the proposed complex would also complement other soccer fields in the area and help the market secure larger tournaments, which could increase tournament activity at other complexes. The future development of proposed facilities in Johnson and Wyandotte County, Kansas is uncertain. The distance of the natural grass complex planned in Wyandotte County to Lee s Summit reduces its competitive impact on the sports complex. The artificial turf fields planned in Olathe, Kansas would increase competition for national and regional events, however, local tournaments and Missouri-based events would not be impacted. The Swope Park Soccer Village would compete directly with the proposed sports complex for many local tournaments as well as other local club uses. The artificial turf as well as the number of fields at the Lee s Summit complex would make it a more attractive option for these events. HVS considered the impact of existing and proposed new supply when developing the demand projections which are presented in Section 6 of this report. Market Area Overview Sports Complex Market Study Lee's Summit, Missouri 2-15

29 3. Participation Trends In this section, HVS presents an analysis of the participation trends in outdoor soccer. The purpose of this trends analysis is to provide background information necessary to assess the potential for a sports complex in Lee s Summit. This section also provides definitions of industry terms used throughout the remainder of this report. National Soccer Participation The Sports and Fitness Industry Association ( SFIA ), formerly known as the Sporting Goods Manufacturers Association, conducts annual surveys on participation in a variety of indoor and outdoor sports. SFIA produces detailed reports regarding participation levels and the demographics of those participants. SFIA segments participation by the number of times someone participates in a sport each year. The total participation number indicates all participants who have played a sport at least one time in a given year. The following figure presents the national participation rates for outdoor and indoor soccer and represents both adult and youth participation. FIGURE 3-1 NATIONAL PARTICIPATION IN SOCCER 15,000 Total Participants in 000s 10,000 5,000 Outdoor Soccer Indoor Soccer Source: SFIA Participation Trends Sports Complex Market Study Lee's Summit, Missouri 3-1

30 Over the past five years, total outdoor soccer participation has remained relatively flat, while indoor soccer participation has experienced a 9 percent growth. SFIA also tracks sports participation by yearly frequency, breaking participation into casual, regular, frequent, and core categories. The following figure presents fiveyear growth rates of the outdoor soccer participation by category. FIGURE 3-2 GROWTH OF OUTDOOR SOCCER PARTICIPATION BY CATEGORY CORE (26+ times) 5.90% Frequent (52+ times) 9.64% Regular (26-51 times) -1.37% Casual (1-25 times) 13.61% -5.00% 0.00% 5.00% 10.00% 15.00% Source: SFIA The data suggests that participation in outdoor soccer has grown significantly for both casual players who may play an occasional game of recreational soccer, as well as frequent players who are most likely members of a team with near yearround participation. For comparison, the following figures present data on the total participation and participation growth rates of a number of popular youth sports, including outdoor soccer. Participation Trends Sports Complex Market Study Lee's Summit, Missouri 3-2

31 FIGURE 3-3 NATIONAL PARTICIPATION IN OTHER SPORTS 30,000 25,000 20,000 15,000 10,000 5,000 Lacrosse Ice Hockey Tackle Football Outdoor Soccer Baseball Basketball Source: SFIA FIGURE 3-4 FIVE-YEAR GROWTH RATE IN OTHER SPORTS Tackle Football % Baseball -15.5% Basketball -4.5% Outdoor Soccer -0.3% Ice Hockey 15.8% Lacrosse 41.9% -30% -20% -10% 0% 10% 20% 30% 40% 50% Source: SFIA Participation Trends Sports Complex Market Study Lee's Summit, Missouri 3-3

32 Unlike soccer, many other youth sports, with the exception of lacrosse and ice hockey, have experienced declines in participation. Over the past five years, tackle football and baseball have experience double digit declines in participation. SFIA also produces reports with more detailed analyses of the demographics and geography of participants in each sport. For the purpose of this study, HVS investigated core participation in outdoor soccer, defined by those who participate at least 26 times a year. The following figure presents the gender, age, and household income of core outdoor soccer participants. FIGURE 3-5 CORE OUTDOOR SOCCER PARTICIPATION DEMOGRAPHICS Total # of Part. (000s) Participation Rate by Group Index vs. Total Population Total 6, % Gender Male 3, % 113 Female 2, % 88 Age 6~12 3, % ~17 1, % ~ % 99 25~ % 45 35~ % 37 45~ % 20 55~ % % 4 Household Income Under $ % 66 $25000 to $ , % 76 $50000 to $ , % 88 $75000 to $ , % 120 $ , % 142 Source: SFIA Approximately 6.4 million people, 2.2 percent of the total population, participate in outdoor soccer at least 26 times each year. Almost half of participants are under age 13 and the majority, 55 percent, are male. However, in recent years, female participation has increased significantly. In 2008, 62 percent of outdoor soccer participants were male. Participation rates decline steadily as age increases. Soccer participants tend to be from households with higher income levels and greater amounts of disposable income. Participation Trends Sports Complex Market Study Lee's Summit, Missouri 3-4

33 SFIA segments sports participation onto nine geographic regions across the U.S. The following figure maps these regions. FIGURE 3-6 SFIA GEOGRAPHIC REGION MAP Source: SFIA Missouri is located in SFIA s West North Central region along with six other states, including Kansas. The following figure presents the core outdoor soccer participation rates for each of these nine regions. Participation Trends Sports Complex Market Study Lee's Summit, Missouri 3-5

34 FIGURE 3-7 SOCCER PARTICIPATION BY REGION Region Total # of Part. (000s) Participation Rate by Group Index vs. Total Population New England % 46 Middle Atlantic % 83 East North Central % 82 West North Central % 97 South Atlantic 1, % 115 East South Central % 107 West South Central % 99 Mountain % 95 Pacific 1, % 132 Source: SFIA The West North Central region makes up around 6.5 percent of the core soccer participation in the U.S. Around 2.2 percent of the total population in the West North Central region is a core soccer participant. This figure is slightly below the U.S. average percentage. Regions with warmer climates tend to have greater participation. The South Atlantic region has the greatest participation rate. Its larger population base makes it total participation more than three times that in the West North Central region. Over the past four years, soccer participation in the West North Central region has declined by approximately 5 percent. Another source of soccer participation data is the United States Youth Soccer ( USYS ). Players competing in USYS sanctioned events must register each year with their state organization and the USYS. The following figure tracks these soccer registrations since Participation Trends Sports Complex Market Study Lee's Summit, Missouri 3-6

35 FIGURE 3-8 USYS PLAYER REGISTRATIONS 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Source: USYS Following a strong growth period in the 1980s and 1990s, USYS player registrations have stabilized at around 3 million. Peaking in 2008, registrations have declined slightly, most likely due to overall population trends and the aging of the large millennial generation, born between 1980 and The slight decline may also be a result of the recent economic downturn. USYS also tracks soccer registrations by state. The following figure compares total registrations for each of the 50 states. Participation Trends Sports Complex Market Study Lee's Summit, Missouri 3-7

36 FIGURE 3-9 USYS PLAYER REGISTRATIONS BY STATE 2011 Soccer registration State Pop. Rank 2011 Soccer registration State Pop. Rank 1 California 333, Iowa 32, Texas 224, Missouri 31, New York 185, Arizona 29, Pennsylvania 181, Louisiana 29, Massachusetts 174, Kansas 27, New Jersey 142, Rhode Island 25, Virginia 136, Mississippi 24, Ohio 115, South Carolina 21, Washington 113, Nebraska 20, Florida 100, Arkansas 20, Michigan 86, New Mexico 20, Georgia 76, New Hampshire 19, Connecticut 75, West Virginia 17, Illinois 73, South Dakota 15, Minnesota 73, Alabama 15, North Carolina 71, Nevada 12, Colorado 66, Idaho 11, Maryland 59, Delaware 11, Indiana 55, Vermont 10, Wisconsin 54, Montana 10, Oklahoma 40, Maine 9, Oregon 39, North Dakota 7, Utah 38, Alaska 6, Kentucky 37, Wyoming 5, Tennessee 36, Hawaii 5, Source: USYS The above figure indicates that Missouri has approximately 31,500 registered players, ranking it 27 th. Missouri is the 18 th most populated state, suggesting that USYS player registrations in Missouri are below the national average. Kansas ranks below Missouri in soccer registrations; however, its participation level is more in line with its overall state population. Missouri Soccer Participation The Missouri Youth Soccer Association ( MYSA ) is affiliated with USYS and is divided into four geographic regions: Eastern, Central, Western, and Southern. The Kansas City area is located in MYSA s Western region. Players, coaches, and team administrators can register with MYSA. The following figure presents the total MYSA registrations by region for the past four years. Participation Trends Sports Complex Market Study Lee's Summit, Missouri 3-8

37 FIGURE 3-10 MYSA TOTAL REGISTRATIONS Region Eastern 11,548 14,247 14,799 15,439 Central 4,904 4,127 4,872 4,299 Southern 4,928 4,729 6,100 5,203 Western 13,005 13,724 12,507 Source: MYSA 11,582 MYSA s Western region has experienced recent declines in the number of registrations over the past three years, however it remains a strong second to the Eastern region which includes the St. Louis market. MYSA tracks player registrations for each club in a region. The following figure presents the player registrations by club in the Western region. FIGURE 3-11 MYSA PLAYER REGISTRATIONS BY CLUB (2012) Club * Agape Soccer Club * Bayern Munich Soccer Club * Blackfire Soccer Club * Blue Springs Soccer Club * Futura Football Club 1,040 1,189 1,294 Gower Soccer Club Green Hill Soccer Club * Harambe Football Club Harrisonville Soccer Club Holden Optimist Soccer Club * KC Prime * KC Select * Lee's Summit Soccer Assoc * Metro East Soccer Club * Northland Sports Alliance * Pleasant Hill Soccer Club * Raymore-Peculiar Soccer Club 1, * Raytown Soccer Club 1, Smithville Soccer Club * Soccer Assoc of Independence * Spirit America Soccer Club St. Joseph Youth Soccer Assoc ,199 1,257 * Summit Soccer Club Weston Soccer Club 2,305 1, * Western MO Soccer League Source: MYSA Registrations Participation Trends Sports Complex Market Study Lee's Summit, Missouri 3-9

38 Of the 25 clubs in MYSA s Western region, 18 are in the Kansas City metro area and denoted by an asterisk in the figure above. In total, these 18 clubs have over 8,800 players or over three-quarters of the players in MYSA s Western region. For comparison, the Kansas Youth Soccer Association ( KYSA ) reports over 15,000 player registrations in clubs which are based in the Kansas City metro area. The majority of these clubs participate in the Heartland Soccer Association which is based at the Overland Park Soccer Complex. The largest club in KYSA is Sporting Blue Valley Soccer Club which has over 6,300 players. Conclusions and Implications for Proposed Complex Following a period of considerable growth in the popularity of soccer during the 1980s and 1990s, participation levels have remained steady over the past decade. While many other popular youth sports have experienced declining participation rates, outdoor soccer participation has remained relatively stable, and there are no indications of future instability, except to the extent that youth populations may decline in certain areas. The U.S. Census reports that the proportion of the population younger than 18 is expected to change little over the period, decreasing from 23.5 percent to 21.2 percent. According the SFIA, outdoor soccer participation is strongest in geographic areas with warmer climates, most notably in the South Atlantic and Pacific regions. Missouri is in the West North Central region which has participation rates which are about average when compared to the entire U.S. Missouri s youth soccer participation, as measured by USYS registrations, appear somewhat below average, with Missouri ranking 27 th in USYS player registrations, despite being the 18 th most populated state in the country. The Kansas City area has the second greatest number of registrations in the state of Missouri. When compared to soccer clubs in Kansas and St. Louis, the MYSA clubs based in the Kansas City area are relatively small. Based on the analyses presented in this section, the U.S. soccer market appears stable, and is unlikely to experience any major upward or downward shifts in participation. The Kansas City soccer market is strong, however overall registrations in MYSA s Western region have declined steadily over the past three years. Soccer in Lee s Summit and the surrounding area may experience a modest boost in popularity with the introduction of a premier soccer complex; however, long-term participation rates will likely follow the overall population and economic trends of the market. Participation Trends Sports Complex Market Study Lee's Summit, Missouri 3-10

39 4. Comparable Venues This section analyzes the building program characteristics of outdoor soccer complexes for the purpose of formulating facility program recommendations for a proposed sports complex in Lee s Summit Missouri. HVS reviewed the facilities, programs, and relevant market data for the following ten venues. Overland Park Soccer Complex in Overland Park, Kansas Citizens Bank Field at Progin Park in Lancaster, Massachusetts Dick s Sporting Goods Park in Commerce City, Colorado Reach 11 Sports Complex in Phoenix, Arizona San Bernardino Soccer Complex in Highland, California Richard Siegel Sports Complex in Murfreesboro, Tennessee FC Dallas Complex in Frisco, Texas Sportscore 2 in Loves Park, Illinois Mike Rose Soccer Complex in Memphis, Tennessee National Sports Center in Blaine, Minnesota While no facility or market provides a perfect match to Lee s Summit and the proposed sports complex, an analysis of the soccer fields and amenities provides insight into current industry practices and trends. All of the comparable venues host local, regional, and national tournaments as well as league play. Some facilities are used by local soccer clubs for training, while others are solely used for games and tournaments. All of the facilities are in suburban regions of median to large metropolitan areas. Unlike the proposed venue in Lee s Summit, some of the facilities are a part of a larger soccer complex which includes a Major League Soccer ( MLS ) stadium. While the stadium component of these facilities is not relevant to our analysis, their soccer complexes provide examples of recent approaches to development and operations. The analysis includes a brief description of each venue and field plans where available. Usage patterns and relevant market and demographic data are compared across all facilities. Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-1

40 Overland Park Soccer Complex The Overland Park Soccer Complex in Overland Park, Kansas opened in The $37 million complex is owned and operated by the City of Overland Park, Kansas and was funded by a three percent hike in the city s hotel tax. The 96-acre complex has 12 lighted artificial turf fields, including a 500-seat championship field. Other sports amenities include basketball and tennis courts, a skate park, and playgrounds. Overland Park Soccer Complex is home to Sporting Blue Valley Soccer Club. The club has contracted with the City for weekday training time on 10 of the 12 fields, paying $30 per field per hour. All of the club s 130 premier teams practice at the facility. The complex also hosts the Heartland Soccer Association s league play and over 20 soccer tournaments each year, including the USYS National Championship in 2010 and OVERLAND PARK SOCCER COMPLEX SITE PLAN Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-2

41 Citizens Bank Fields at Progin Park Citizens Bank Fields at Progin Park in Lancaster Massachusetts opened in The $10 million complex is owned and operated by Massachusetts Youth Soccer Association and was funded by the association along with an undisclosed naming rights agreement with Citizens Bank. The 130-acre complex has 11 natural grass fields and 5 artificial turf fields. None of the fields have lights; however, future plans for adding lights are moving forward. Citizens Bank Fields is home to 3 local soccer clubs. The complex also hosts league play for 3 local leagues and 12 soccer tournaments each year, including the USYS National Championship in CITIZENS BANK FIELDS AT PROGIN PARK SITE PLAN Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-3

42 Dick s Sporting Goods Park Dick s Sporting Goods Park in suburban Denver Colorado opened in The $131 million complex is a joint venture between Commerce City, Colorado and Kroenke Sports. Funding for the mixed-use project was shared equally between the two entities and includes a 20-year naming rights deal with Dicks Sporting Goods for $2 million per year. Kroenke Sports operates the 917-acre complex which includes 22 natural grass fields and 2 artificial turf fields. All 24 fields have lights. Dick s Sporting Goods Park is also home to an 18,000-seat stadium which is home to MLS s Colorado Rapids and hosts concerts and other events. A 200-acre mixed-use retail development is in the planning stages. Dick s Sporting Goods Park s field complex is home to an adult soccer league and is available for private rental. The complex hosts approximately 7 soccer tournaments each year. DICK S SPORTING GOODS PARK SITE PLAN Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-4

43 Reach 11 Sports Complex The Reach 11 Sports Complex in Phoenix Arizona opened in The complex is owned by the City of Phoenix and is operated by the City s Parks Department. The 63-acre complex has 17 natural grass fields and 1 artificial turf field. None of the fields has lights. The Reach 11 Complex is home to local soccer leagues and 26 soccer tournaments each year. The complex also hosts a number of tournaments in other sports, including lacrosse and field hockey. The complex s fields are solely used for league and tournament games. The facility does not allow team training on its fields. REACH 11 SPORTS COMPLEX SITE PLAN Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-5

44 San Bernardino Soccer Complex The San Bernardino Soccer Complex opened in The complex is owned by the City of San Bernardino which contracts with a private operator. The 50-acre complex has 17 natural grass fields. Four of the fields have lights. The complex is home to soccer leagues and 12 soccer tournaments each year. Six local clubs use the facility for training and recreation games. SAN BERNARDINO SOCCER COMPLEX FIELDS Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-6

45 Richard Siegel Soccer Complex The Richard Siegel Soccer Complex opened in The $12.9 million complex was funded by the City Murfreesboro, Tennessee which also owns and operates the facility. The 137-acre complex has 15 natural grass fields, including a championship stadium. Nine of the fields have lights. Other sports amenities include basketball courts and sand volleyball. The Richard Siegel Complex is home to 2 local soccer leagues and hosts 5 soccer tournaments each year, including the USYS President s Cup Championship in RICHARD SIEGEL SOCCER COMPLEX FIELDS Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-7

46 FC Dallas Complex FC Dallas Complex (formerly known as Pizza Hut Park) located in Frisco, Texas, (suburban Dallas) opened in Funding for the $80 million complex includes $55 million in public funds from the Frisco Economic Development Council, the Community Development Council, the Frisco school district, and the County. Hunt Sports Group provided $25 million in funding and operates the 117-acre complex, which includes 15 natural grass fields and 2 artificial turf fields. None of the 17 fields has lights. The FC Dallas Complex is also home to a 20,500-seat stadium which is home to the MLS s FC Dallas and will host the NCAA Division I FCS football championship through The complex is also home to the Frisco Independent School District soccer programs and hosts approximately 6 soccer tournaments each year. FC DALLAS COMPLEX SITE PLAN Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-8

47 Sportscore 2 Sportscore 2, located in Rockford Illinois, opened in The $2.4 million complex is owned and operated by Rockford, Illinois Park District and was funded by the park district along with field sponsorships from 12 local business who have an ongoing annual commitment to support the complex. The 124-acre complex has 19 natural grass fields, including a 2,000-seat championship stadium. None of the fields has lights. Other amenities include 14 practice fields, sand volleyball, and an indoor sports venue. Nearby Sportscore 1 offers an additional 9 soccer fields. The City of Rockford recently announced the approval of a 2 percent hotel tax increase to fund improvements to Sportscore 2 and other youth sports facility improvements. Sportscore 2 is home to several local soccer clubs. The complex also hosts league play and 17 soccer tournaments each year. SPORTSCORE 2 SITE PLAN Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-9

48 Mike Rose Soccer Complex The Mike Rose Soccer Complex located in suburban Memphis Tennessee opened in The $4 million complex is owned by Shelby County and privately operated. Funding for the complex came from public funds and $2.5 million in private donations secured by the facility operator. The 136-acre complex has 16 natural grass fields, including a 2,500-seat championship stadium. All of the fields have lights. The Mike Rose Complex is home to 5 soccer leagues and 10 soccer tournaments each year. The complex s fields are solely used for league and tournament games. The facility does not allow team training on its fields. MIKE ROSE SOCCER COMPLEX SITE PLAN Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-10

49 National Sports Center The National Sports Center in Blaine Minnesota opened in The complex is owned and operated by the National Sports Center Foundation. The 600-acre complex has 52 natural grass fields, including an 8,500-seat championship stadium. None of the fields has lights. Other sports amenities include an indoor sports center, golf course, track, a velodrome, and ice rinks. The National Sports Center is home to 4 soccer leagues and 9 soccer tournaments each year. It also is home to several local soccer clubs that use the facility for training. NATIONAL SPORT CENTER SOCCER FIELDS Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-11

50 Comparison of Complex Features and Operation The number and type of fields in a soccer complex depends on a variety of factors, including the size of the market, the climate, the year built, and the proposed use of the fields. The following figure compares the number of natural grass and artificial turf fields and other amenities in each of the comparable soccer complexes. FIGURE 4-1 SOCCER FIELD COMPARISON Complex Year Opened Size (acres) Natural Grass Fields Artificial Turf Fields Total Fields Lighted Fields Stadium Field (seats) Overland Park Soccer Park Citizens Banks Fields at Progin Park Dick's Sporting Goods Park ,000 Reach 11 Sports Complex San Bernardino Soccer Complex ,500 Richard Siegel Soccer Complex ,000 FC Dallas Soccer Complex ,500 Sportscore ,000 Mike Rose Soccer Park ,500 National Sports Center ,000 *Average ,875 * Average includes those facilities with the feature. Many of the comparable facilities are publicly owned and operated by a city or county recreation department. Tenants of these facilities include local soccer clubs, soccer leagues, and collegiate teams. Other complexes are a part of a larger private development which includes a professional soccer stadium, retail, and other developments. The following figure presents the ownership and operating structure of each comparable complex. Development costs and financing information is included where available. Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-12

51 FIGURE 4-2 OWNERSHIP AND OPERATION COMPARISON Complex Owner Operator Development Cost Funding Source(s)* Overland Park Soccer Park Overland Park, KS Overland Park, KS $37 mil 3% Hotel Tax Citizens Banks Fields at Progin Park Mass Youth Soccer Mass Youth Soccer $10 mil Naming Rights Dick's Sporting Goods Park Commerce City, CO & Kroenke Sports Kroenke Sports $131 mil PPP Commerce City & Kroenke Sports Reach 11 Sports Complex Phoenix, AZ Parks Department na San Bernardino Soccer Complex San Bernardino, CA Private na Richard Siegel Soccer Complex Murfreesboro, TN Murfreesboro, TN $12.9 mil Public Funds FC Dallas Soccer Complex FC Dallas FC Dallas $80 mil Sportscore 2 Rockford Park District Rockford Park District $2.4 mil Mike Rose Soccer Park Shelby County Private $4 mil National Sports Center *PPP = public private partnership National Sports Center Foundation National Sports Center Foundation na PPP Frisco, School District, & FC Dallas Rockford Park District & Corp. Sponsorships Public Funds and Private Donation Comparison of Market Demographic and Income Data The demographic and economic climate of a soccer complex s primary market area provides a gauge of its ability to support the venue via field rentals, event rentals, and other sales. As discussed in Section 2 of this report, a size of population and level of per capita income levels can indicate the capacity of a market to support a soccer complex. Strong population growth suggests a greater potential for growth in demand-driven revenues. Population changes also often reflect underlying trends in business activity and the attractiveness of an area as a place to live and to visit. The following figure provides a comparison of population and income for the primary market of the comparable venues and the market surrounding the proposed complex in Lee s Summit. Primary market is defined as the area within a 20-minute drive time of the complex. Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-13

52 FIGURE POPULATION AND INCOME COMPARISON 20 Minute Drive Time Complex Metro Area Population Median Age Median Household Income ($) San Bernardino Soccer Complex Riverside, CA 1,027, ,672 Dick's Sporting Goods Park Denver, CO 998, ,558 National Sports Center Minneapolis, MN 968, ,848 Reach 11 Sports Complex Phoenix, AZ 822, ,663 Overland Park Soccer Park Kansas City, MO 678, ,601 FC Dallas Soccer Complex Dallas, TX 585, ,709 Mike Rose Soccer Park Memphis, TN 516, ,230 Sportscore 2 Rockford, IL 341, ,265 Citizens Banks Fields at Progin Park Boston, MA 198, ,974 Richard Siegel Soccer Complex Nashville, TN 176, ,738 Average 631, ,926 Maximum 1,027, ,709 Minimum 176, ,558 Median 631, ,039 Proposed Sports Complex Kansas City, MO 470, ,932 Source: ESRI The market surrounding the proposed sports complex has a below average population size as compared to the comparable venues. The median age is higher than average, suggesting somewhat lower demand for soccer, a primarily youthoriented sport. The median household income is also slightly lower than the average, indicating a lower amount of disposable income and less discretionary spending on such things as sports and recreation fees. Conclusions and Implications for Proposed Soccer Complex HVS used the above comparable venue analysis to help formulate program recommendation for Lee s Summit, which are presented in the Section 5 of this report. While many of the soccer complexes have natural grass fields, recent developments are trending towards the use of artificial turf. Many older complexes are in the process of converting natural grass fields to artificial turf to allow for longer use times and lower maintenance costs. The use of lights is more common in newer facilities and many existing venues are adding lights. The market surrounding the proposed complex in Lee s Summit is slightly smaller and has a lower demand potential than the average of those complexes presented in this section. Complex size as well as the demand projections which follow in Section 6 should, therefore, reflect these market characteristics. Comparable Venues Sports Complex Market Study Lee's Summit, Missouri 4-14

53 5. Sports Complex Building Program Recommendations The development recommendations presented herein describe the field counts and other important amenities for the proposed Sports Complex in Lee s Summit, Missouri. To formulate these recommendations, HVS relied on a site inspection, user interviews, an analysis of comparable and competitive soccer complex venues, and other market research. This sports complex program should serve as a guide for subsequent physical planning aimed at providing the desired facility program elements. User Interviews As presented in Section 1, HVS interviewed several potential user groups. These interviews clearly indicate that local soccer clubs, leagues, and event promoters would be willing to support the sports complex by booking multiple fields for training time, league play, and tournaments at the complex. Other key comments regarding complex programming include the following: Opinions on the need for a championship venue with fixed bleacher seating are mixed. Some feel it is an important centerpiece for hosting premiere events and attracting tournament participants. Other feel that sufficient high school and collegiate venues exist to handle demand for special events, and that a venue with larger seating capacity is not needed for a typical soccer tournament. Restroom facilities which are reasonably proximate to all fields are a necessity. Higher quality food and beverage options on or adjacent to the site would be a nice feature. Locations for banners and other temporary signage would help tournament promoters attract vendors and advertising. A temporary dome enclosure over one or two fields would have significant demand during the winter and summer months when weather precludes outdoor play. Facility Program Recommendations HVS developed its program recommendations with the aim of positioning the proposed complex to serve existing demand for soccer and other sport training in the Kansas City area, as well as expanding the regional and national tournament opportunities for Lee s Summit. The artificial turf surface and lights would allow Sports Complex Building Program Recommendations Sports Complex Market Study Lee's Summit, Missouri 5-1

54 users of the complex to expand their soccer training through a longer season and fewer cancelled practices for inclement weather. The number of fields would allow multiple clubs to enter into long-term rental agreements with facility ownership for weeknight field time. Similarly, multiple soccer and other sport leagues could rent fields at the complex for weekend league play. HVS program recommendations are aimed at creating a premier soccer venue that would be the centerpiece of a large regional or national tournament held in Lee s Summit. The artificial turf would ensure tournament officials that inclement weather would not disrupt play, a common risk for tournaments played on natural grass. Other complex features and amenities are aimed at providing a safe and pleasant experience for teams and families. Program recommendations also consider amenities which may already exist in the area to avoid duplication and potential competition. The proposed sports complex would be part of a larger mixed-use development. As such, parking, traffic flow, and pedestrian traffic should be evaluated and designed in the context of the operational needs of the adjacent development. Based on the market analysis, participation trends, user interviews, and comparable venues analysis, HVS recommends the following complex program. 15 regulation-size soccer fields with artificial turf and lights. Any fields which would be below the 100-year flood level should be raised. One of the 15 fields designated as a championship field with 500 fixed bleacher seats and fixed advertising signage opportunities. An irrigation system for the cleaning and cooling of synthetic turf fields. Sufficient space between soccer fields to accommodate spectators along sidelines. Soccer warm-up areas. A main concessions stand building/field house with restrooms, offices for complex operations staff, and areas for indoor tournament registration and tournament operations. Satellite restroom facilities with concession and/or vending machine capabilities. Covered picnic areas. Sports Complex Building Program Recommendations Sports Complex Market Study Lee's Summit, Missouri 5-2

55 Multiple parking areas with approximately 1,500 surface parking spaces that can be dedicated to the sports complex during tournaments. As an optional program, HVS also investigated a scenario in which a temporary dome enclosure is used to cover two fields during the winter and summer months. The following figure is a preliminary concept plan for the sports complex and the adjacent mixed-use development. PRELIMINARY CONCEPT PLAN OF SPORTS COMPLEX Sports Complex Building Program Recommendations Sports Complex Market Study Lee's Summit, Missouri 5-3

56 6. Demand Analysis HVS forecast the demand for the proposed Lee s Summit sports complex from opening through a stabilized year of demand. For the purposes of this analysis, HVS assumes the proposed soccer complex would open on June 1, 2014 and would take approximately three years to achieve a stabilized level of demand. These projections are based on the following research and analysis. The program recommendations presented in Section 5 of this report, Market and economic indicators outlined in Section 2, Interviews with potential users of the sports complex, Industry data and soccer participation trends, Comparable venue program and operating data, and Discussions with representatives from the Lee s Summit and other local stakeholders. User Interviews As presented in Section 1, HVS interviewed several potential user groups. These interviews clearly indicate that local soccer clubs and leagues would be willing to support the sports complex by booking multiple fields for training time, league play, and tournaments. Other key findings regarding potential demand at the complex include the following. All clubs feel that the proposed sports complex would greatly enhance Lee s Summit s ability to secure major state, regional, and national soccer tournaments. Weather issues and the resulting poor field conditions have been a problem in recent years and artificial turf would alleviate this issue. A local soccer club expressed the need for additional training fields and would be willing to commit to a long-term agreement for the use of 4 to 6 fields on a regular basis during the soccer season and a reduced number fields during the summer. Local soccer teams typically participate in two seasons, the spring season running from March through May and the fall season running from August through October. For a lighted facility, team training in a typical week during the soccer season would occur on Mondays through Thursdays from around 4:00 pm to around Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-1

57 9:00 pm. High school age teams would practice from 4:00 to 5:30 pm, and younger teams would practice during the balance of the time. After 9:00 pm, the complex could be used by adult teams and leagues. Teams have reduced training schedules during the summer, June and July. Because of the heat, training typically occurs during the morning or evening. The representative from Lee s Summit Lacrosse expressed a definite need for field time for club training. Teams currently use school fields which can be rented for relatively low rates. Although its popularity has increased significantly in recent years, lacrosse remains relatively new to the Kansas City area, and participation is a fraction of that for soccer. Clubs try to keep the costs of participation low for the players. If the clubs can obtain reasonable rental rate for fields at the complex, during their 8-week season in the fall, they would require 4 hours of training time on 2 to 3 fields on Saturdays. Challenger Sports is a Kansas-based company which hosts soccer tournaments, camps, and clinics throughout the country. Challenger Sports currently hosts 4 annual tournaments at the Overland Park Soccer Complex, all of which reach capacity and must turn teams away. The representative from Challenger Sports expressed a need for additional venues in the market for tournaments and camps, and has a definite interest in hosting events at the proposed sports complex. MYSA confirmed that there is great interest in the facility for state and regional championship events. When appropriate, MYSA would work with Kansas Youth Soccer to help secure regional and national tournaments in the Kansas City area. A typical 3-day tournament begins at 5:00pm on Friday, runs from 7:00am to 10:00pm on Saturday, and from 7:00am to 5:00pm on Sunday. Local Competition As described in Section 2 of this report, the Kansas City metro area has over 30 soccer complexes which host team training, league play, and tournaments. Public parks and schools also have fields which are used by clubs and recreation leagues. Most of these soccer complexes are natural grass and have no lighting. The Lee s Summit facility would be the only venue in western Missouri with a large number of lighted, artificial turf fields, making it a highly desirable location for both games and practice. At the time of this analysis, HVS has identified one existing facility and one proposed development which would compete directly with a Lee Summit sports Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-2

58 complex for events and other uses and may negatively affect the success of the proposed complex. First, the Overland Park Soccer Complex ( OPSC ) is a premier soccer facility with twelve lighted artificial turf fields. Since its opening in 2009, the OPSC has had tremendous success attracting major tournaments. Operated by the Overland Park Recreation Department, the OPSC is the main facility for the Heartland Soccer Association s league play and the home field of the Sporting Blue Valley Soccer Club. OPSC is approximately 30 miles from the proposed site in Overland Park, Kansas. A Lee s Summit sports complex would compete directly with OPSC for national and regional events. For certain event, the proposed Lee s Summit complex and the OPSC could potentially work together to secure larger tournament in the market. The demand and financial projections which follow reflect this competition and potential partnership. Because of its Kansas location, OPSC is not a strong competitor for Missouri-based events and local event sponsored by clubs based in Lee s Summit and throughout Jackson County. A premiere sports complex in Lee s Summit would likely capture some tournament demand from OPSC from those events which are sponsored by Missouri clubs. A second major competitor may be a proposed 9-field, artificial turf complex in Olathe, Kansas. Potentially a privately operated facility, the status of the Olathe complex is uncertain at the time of writing this report and no definite schedule for development is available. If constructed the Olathe complex may negatively affect demand at the Lee s Summit complex, however, at this time, HVS s demand projections assume that the Olathe complex is not built. Because of their proximity to the proposed Lee s Summit sports complex, other secondary competitors include Legacy Park, the Raytown Sports Complex, and Kenneth Polo Fields. This list also includes the proposed Swope Park Soccer Village development, which has construction scheduled to begin in All of these facilities have natural grass fields, making them less desirable to tournament organizers and leagues. The HVS demand and financial projections which follow consider the presence of this secondary competition Existing Tournament Demand HVS has identified 39 tournaments in the Kansas City area that have or will take place in Of the 39 tournaments, 13 are in Missouri and 26 are in Kansas. The following figure lists these tournaments by name, date, their recent host venue, and geographic base for teams which participate in the tournament. Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-3

59 FIGURE 6-1 EXISTING TOURNAMENT DEMAND IN KANSAS CITY MARKET Month Name Sponsor Location Attendee Origin Missouri Tournaments Apr Spring Presidents Cup MYSA Raytown SC State Apr Kansas City Cup Raytown SC Raytown SC Local May The Upper 90 Ray-Pec SC Kenneth Polo Fields Local May Nutmeg Tournament GSI Kenneth Polo Fields Local May KC Prime Spring Shootout KC Prime Belton, MO multiple fields Local May Patriot Cup KC Legends Legacy Park Local Jun Salsa Soccer Tournament Summit SC Kenneth Polo Fields Local June Kickin for Kids Tiffany Hills Park Local Jul KC Legends College Showcase KC Legends Raytown SC Local Aug Kansas City Cup USSSA Lee's Summit State Sep Tournament in the Woods Raytown SC Raytown SC Local Oct Missouri Mule Tournament Summit SC Hidden Valley Park Local Nov Southside Fall Shootout KC Prime Belton, MO multiple fields Local Kansas Tournaments Mar Border Battle HSA OPSC & HSP Local Mar Emerald Cup (B) Challenger OPSC Local Apr Emerald Cup (G) Challenger OPSC Local Apr KC Champions Cup HSA OPSC Local Apr Kansas Rush Crossroads Classic Kansas Rush HSP Local Apr Challenger Cup Challenger Stump & Swarner Parks Local May Mothers Day Classic BVSC & KC Select OPSC Local May Leawood Soccer Fest Challenger Leawood City Park Local May Kansas City Invitational HSA OPSC Local May Kansas State Cup KYSA OPSC State Jun Region II Presidents Cup USYS OPSC Regional Jun 3x3 Live Soccer Tour Pinnacle Sports OPSC Local Jun USASA Regional USASA OPSC Regional Jul USYS Nationals USYS OPSC National Aug KC Friendly's GSI OPSC Local Aug Midwest Kickoff Classic BVSC & KC Select OPSC Local Aug Challenger Fall Classic Challenger Stump & Swarner Parks Local Aug Heartland Midwest Classic HSA OPSC & HSP Local Sep Kansas Rush Autumn Festival Kansas Rush Lone Elm Park Local Sep Challenger sports Invitational Challenger OPSC Local Oct Midwest All Girls HSA OPSC Local Nov Heartland Invitational Girls HSA OPSC & HSP Local Nov Heartland Invitational Boys HSA OPSC & HSP Local Nov GSI College Showcase GSI OPSC Local Nov NSCAA Showcase NSCAA OPSC Local Nov Challenger Winter Showcase Challenger OPSC Local Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-4

60 Existing Missouri soccer facilities will host 11 local and 2 state tournaments in The most active complexes are the Raytown Soccer Complex with 4 tournaments and Kenneth Polo Fields with 3 tournaments. The OPSC clearly dominates the Kansas-based tournaments with 21 tournaments, including 17 local, 1 state, 2 regional, and 1 national event. Tournament Demand Projections The information revealed in the market overview, user interviews, and analysis of comparable facilities indicates that the development of a sports complex in Lee s Summit could increase the number of major tournaments which come to Lee s Summit. The complex would also be a popular location for tournaments hosted by local soccer clubs, allowing some tournaments to expand and accommodate a greater number of teams. The following figure presents the tournament demand projections for the soccer complex program described in Section 5. The projections assume that the soccer complex opens June 1, Demand projections are for 5 years with demand stabilizing in 2017, three years after opening. A description of tournament types and demand assumptions follow. FIGURE 6-2 TOURNAMENT DEMAND PROJECTIONS Events State/Reg/Natl Tournaments Local Soccer Tournaments Other Tournaments Total Average Attendance State/Reg/Natl Tournaments - 6,750 6,750 6,750 6,750 Local Soccer Tournaments 6,300 6,300 6,300 6,300 6,300 Other Tournaments - 2,250 2,250 2,250 2,250 Total Attendance State/Reg/Natl Tournaments - 13,500 13,500 20,250 20,250 Local Soccer Tournaments 25,200 50,400 75,600 88,200 88,200 Other Tournaments - 4,500 6,750 9,000 9,000 Total 30,000 70, , , ,000 State/Regional/National Tournaments State, regional, and national soccer tournaments are those sponsored by United States Youth Soccer ( USYS ), US Club Soccer, the United States Specialty Sports Association ( USSSA ), and the Missouri Youth Soccer Association ( MYSA ). Tournaments hosted by these organizations typically rotate locations, booking a venue one to two years in advance of the Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-5

61 tournament. Discussions with MYSA confirm that the proposed sports complex would significantly increase Lee s Summit s chances of being placed in the tournament rotation. Potential tournaments which may select Lee s Summit include the USYS s Missouri Cup, Region II Championship, and National Championship. The USYS also hosts a President s Cup seriess including the Missouri President ss Cup, Region II Cup, and the National Cup. It is likely that the proposed complex would have to team with another soccer venue to compete for regional and national tournaments which typically require a greater number of fields than found in a single complex. The following figures present the primary locations for USYS state, regional, and national events for the past four years and the locations for this year s events. FIGURE 6-3 USYS NATIONAL TOURNAMENT SERIES LOCATIONS Missouri Cup 2013: Springfield 2012 :Springfield 2011: St. Louis (SLYSA/Sportport) 2010: Lee s Summit 2009: Springfield Region II Championship 2013: Des Moines. IA 2012 : Saginaw, MI 2011: Fox Cities, WI 2010: Beaver Creek, OH 2009: Sioux Falls, SD National Championship 2013: Overland Park, KS 2012 : Rock Hill, SC 2011: Phoenix, AZ 2010: Overland Park, KS 2009: Lancaster, MA Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-6

62 FIGURE 6-4 USYS PRESIDENT S CUP SERIES LOCATIONS Missouri Presidents Cup 2013: Raytown & St. Louis (Lou Fusz) 2012: Raytown & St.Louis (Sportsport) 2011: Springfield & St. Louis (Sportsport) 2010: Springfield 2009: Did not take place Region II Cup 2013: Overland Park, KS 2012 : Overland Park, KS 2011: South Bend, IN 2010: Verona, WI 2009: Verona, WI Presidents Cup 2013: Auburndale, FL 2012 : Sacramento, FL 2011: Des Moines, IA 2010: Murfreesboro, TN 2009: Raleigh, NC USYS also hosts a Kohl s cup series, which due to the small number of teams that signed up for the event, was not held for the past few years. US Club Soccer hosts a National Cup series which rotates to various cities throughout the U.S. This series does not have a Missouri championship, and its regional tournament has been hosted by Libertyville, Illinois for the past several years. US Club Soccer also hosts a collegiate showcase and a Champions Cup, which are typically hosted in the southeastern part of the country. USSSA hosts a number of state, regional, and national tournaments throughout the U.S and has a strong presence in the Kansas City area. The organization recently announced that the 2013 Kansas City Cup will be held in Lee s Summit. This demand category may also include boys and girls Missouri State High School soccer championship tournaments, which include four teams in each of the three classes. Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-7

63 HVS projects that the proposed soccer complex would be able to attract an average of three national, regional, and state soccer tournaments each year. For the purpose of this analysis, the HVS model assumes an average of 150 teams at each tournament with 15 players per team. The model further assumes that each player brings an average of two spectators to the event. The attendance figures shown above include players, coaches, and spectators. Local Soccer Tournaments Local soccer tournaments include those tournaments hosted by local soccer clubs. While local teams play in these tournaments, many events attract teams to the Kansas City area from neighboring states and are, therefore, generators of room nights and visitor spending in the market. Currently, there are 11 local tournaments on the Missouri side. Just as the OPSC dominates the tournament market in Kansas, the proposed sports complex in Lee s Summit could similarly become the primary venue for many of these local tournaments, most of which are already using facilities in Jackson County. HVS estimates that 10 of the 11 existing local tournaments would use the proposed sports complex. HVS further assumes that the presence of the sports complex would encourage clubs and tournament organizers to create 4 additional soccer tournaments which would use the complex. The HVS model assumes an average of 140 teams at each local tournament with 15 players per team. The model further assumes that each player brings an average of two spectators to the event. The attendance figures shown above include players, coaches, and spectators. Other Tournaments Other tournaments include local, state, and regional tournaments in sports other than soccer, including ultimate, lacrosse, field hockey, and football. The other category also includes soccer showcase events. Based on the performance of comparable venues and scheduling, HVS estimates that the complex would be able to accommodate four other tournaments with an average of 50 teams. As with soccer tournaments, the model assumes 15 players per team and 2 spectators per player. HVS reviewed the OPSC s 2012 and 2013 tournament schedules to confirm the reasonableness of the above tournament demand projections. The following figure summarizes the schedules. Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-8

64 FIGURE 6-5 OPSC 2013 TOURNAMENTS Number of Events Tournament Type State/Regional/National 2 4 Local Other 6 5 Total Events State, Regional, and National tournaments are typically rotating events, and are therefore, not consistent from year to year. The 2013 OPSC tournament schedule includes the USYS National Championships and two regional events, while 2012 had only one regional event and no national events. Given the above tournament demand at the OPSC, demand projections for the proposed Lee s Summit complex appear reasonable in light of continued competition from the OPSC for certain tournaments. Field Rental Demand HVS investigated the current seasonal needs of local soccer clubs and leagues and developed field rental projections based on the availability of the proposed complexes fields. Field rentals include the following user groups. Club Training HVS projects that the proposed complex would contract with two local soccer clubs for regular, in-season training held Monday through Thursday nights. One club would commit to the use of 5 fields, while the other club would commit to the use of 4 fields. This training would occur for 20 to 22 weeks from early August through October and from March through the end of May. HVS further assumes that other local clubs would rent additional fields on an as-needed basis during this same period. Youth Soccer Leagues HVS projects that a local youth soccer league would commit to use the facility on weekends for its league games. League play would use 10 fields over 2 days from early August through October and from March through May for a total of 14 weeks. Adult Soccer Leagues HVS projects that a local adult soccer league would commit to use the facility for its league games. League play would use 2 fields for one evening each week during an 8-week spring league season and for 2 evenings each week during an 8-week summer league season. Lacrosse HVS projects lacrosse team would rent 2 fields for training one day a week for 8 weeks during the fall season. Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-9

65 Summer Club Training HVS projects that a combination of soccer and other sports clubs would rent field time on 5 fields for summer training. Summer training would run for 8 weeks during June and July. Summer Camps/Clinics HVS projects that summer camp and clinic programs would commit to the use of 8 fields for camps running Monday through Friday for 8 weeks during June and July. The following figure summarizes the projected field rental demand. FIGURE 6-6 FIELD RENTAL DEMAND PROJECTIONS Number of Fields Days per Week Hours per Week per Field Number of Weeks Use Months Club 1 Training Aug-Oct and Mar-May Club 2 Training Aug-Oct and Mar-May Other Club/Adult Training Aug-Oct Spring Youth Leagues Mar-May Fall Youth Leagues Aug-Oct Spring Adult Leagues Mar-May Summer Adult Leagues Jun-Jul Lacrosse Sep-Oct Summer Club Training Jun-Jul Summer Camps/Clinics Jun-Jul HVS prepared an annual calendar to show sports the potential complex usage for a typical year. HVS based calendar on existing league and tournament schedules as well as assumptions regarding new uses. The following monthly schedules are intended to show seasonal usage patterns and a potential event schedule which accommodates the various users of the sports complex. The actual dates of individual events may vary. Because state, regional, and national tournaments rotate locations each year, the following calendar provides the potential dates for these events based on historical scheduling. Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-10

66 January February March Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat April May June Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Easte Local Tournaments Team Training and Miscellaneous Field Rentals Summer Camps/Clinics Adult League Play Other Tournaments Potential State/Regional/National Tournament Date League Play Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-11

67 July August September Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat October November December Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Local Tournaments Team Training and Miscellaneous Field Rentals Summer Camps/Clinics Adult League Play Other Tournaments Potential State/Regional/National Tournament Date League Play Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-12

68 Training & League Player Visits HVS calculated the potential player visitation to the complex for club training, leagues, and summer camps. These visits represent individual daily visits. Over the course of a year, the same players visit the complex multiple times. The projections presented below include each of these potential visits. FIGURE 6-7 PLAYER VISITS Group Days per Week Number of Fields Teams /Groups per Field Sessions per Day Players per Team Players per Week Number of Weeks Total Players Club 1 Training , ,700 Club 2 Training , ,520 Other Club/Adult Training , ,440 Misc. Field Rental , ,020 Spring Youth Leagues , ,000 Fall Youth Leagues , ,000 Spring Adult Leagues Summer Adult Leagues ,536 Lacrosse Summer Club Training , ,400 Summer Camps/Clinics , ,200 Total Player Visits 236,500 Domed Field Scenario HVS projected demand for an optional scenario in which two of the fields are temporarily covered with a domed structure in the winter from December through February and in the summer from June through August. The dome would allow these fields to be used during periods when weather conditions limit the use of outdoor fields. A portion of the summer demand for club training and summer camps would shift to the domed fields thus reducing the demand for outdoor fields during the summer months. The following figures present the field rental projections and the projected player visits for the domed field option. Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-13

69 FIGURE 6-8 FIELD RENTAL PROJECTIONS DOMED FIELD SCENARIO Number of Fields Days per Week Hours per Week per Field Number of Weeks Use Months Club 1 Training Aug-Oct and Mar-May Club 2 Training Aug-Oct and Mar-May Other Club/Adult Training Aug-Oct Spring Youth Leagues Mar-May Fall Youth Leagues Aug-Oct Spring Adult Leagues Mar-May Summer Adult Leagues Jun-Jul Lacrosse Sep-Oct Summer Club Training Jun-Jul Summer Camps/Clinics Jun-Jul Dome Rentals - winter Dec-Feb Dome Rentals - summer Jun-Aug FIGURE 6-9 PLAYER VISITS DOMED FIELD SCENARIO Days per Week Number of Fields Teams /Groups per Field Sessions per Day Players per Team Players per Week Number of Weeks Total Players Club 1 Training , ,700 Club 2 Training , ,520 Other Club/Adult Training , ,440 Misc. Field Rental , ,020 Spring Youth Leagues , ,000 Fall Youth Leagues , ,000 Spring Adult Leagues Summer Adult Leagues ,536 Lacrosse Summer Club Training , ,640 Summer Camps/Clinics , ,400 Dome Rentals - winter , ,570 Dome Rentals - summer , ,570 Total Player Visits 275,100 Tournament Room Night Projections HVS calculated the potential generation of room nights by tournament held at the proposed sports complex. These room nights represent induced demand for the local market as a direct result of the sports complex. Since several of the local club tournaments are already held in the market, many of these gross room nights are already in the market. In order to calculate room nights, HVS first estimated the Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-14

70 room nights generated by each type of tournament. The following figure presents the assumptions used to generate room night estimates. FIGURE 6-10 ASSUMPTIONS FOR TOURNAMENT ROOM NIGHTS Type Lodgers per Percent Nights per Room Lodgers Lodger State/Reg/Natl Tournaments % 3.00 Local Soccer Tournaments % 2.00 Other Tournaments % 1.00 The following figures presents the resulting room night generation through 2017, the first year of stabilized demand. FIGURE 6-11 ROOM NIGHT ESTIMATES Type State/Reg/Natl Tournaments 0 8,100 8,100 12,150 Local Soccer Tournaments 5,040 10,080 15,120 17,640 Other Tournaments Total 5,040 18,480 23,670 30,390 In a stabilized year, HVS estimates that the soccer complex would generate approximately 30,400 room nights in the local area market. Some of these room nights would result from contracted blocks with tournament groups and others would result from individual hotel reservations. The Overland Park Convention and Visitors Bureau ( CVB ) collects data on local room nights generated by OPSC tournaments. In the 2012 report on operations, the CVB reported an estimated 25,000 to 30,000 local room nights generated by the OPSC. This figure includes only those rooms booked in local hotels, and therefore, does not capture rooms booked outside of the room block agreements. The above room night projections reflect the total, metro-wide, room nights booked as a result of the tournaments held at the proposed complex. Event demand is often cyclical, based on rotation patterns and market conditions. Therefore, HVS recommends interpreting the demand projections as a mid-point of a range of possible outcomes and over a multi-year period rather than relying on projections for any one specific year. Demand Analysis Sports Complex Market Study Lee's Summit, Missouri 6-15

71 7. Financial Analysis HVS uses a proprietary financial operating model to estimate revenues and expenses at sports facilities. This model quantifies the key variables and operating ratios that determine revenue potential and expenses levels. Unless otherwise indicated, the model assumes an annual inflation rate of 3.0 percent applies to both revenues and expenses. Events Revenues Event revenue line items for the proposed sports complex include facility rental, food and beverage sales, and parking. The model uses a series of revenue assumptions based on attendance or occupied days that reflect the projected utilization levels of the soccer fields as presented in Section 6 of this report. To formulate the revenue assumptions, HVS relied on industry information, knowledge of the performance of comparable venues, and information on price levels from local area sources. We have adjusted the assumptions for inflation and other anticipated trends in price levels. The figure below summarizes the revenue assumptions for the proposed sports complex by event type. A brief description of the each revenue item follows. All figures are in 2013 dollars. FIGURE 7-1 EVENT REVENUE ASSUMPTIONS (IN 2013 DOLLARS) Type Facility Rental Food & Beverage (Gross) Parking (Gross) per per per Event Attendee Event State/Reg/Natl Tournaments $30,375 $2.40 $20,250 Local Soccer Tournaments 21, ,900 Other Tournaments 5, ,750 Facility Rental HVS estimated the daily field use for each of the three tournament types and applied an hourly rental fee per field per hour. For the purpose of this analysis, HVS assumes tournament rental fees are consistent with market rates are similar facilities. The following figure outlines the field utilization by tournament type. Financial Analysis Sports Complex Market Study Lee's Summit, Missouri 7-1

72 FIGURE 7-2 TOURNAMENT RENTAL ASSUMPTIONS (IN 2013 DOLLARS) Type Fields Field Hours Regional/National Rate ($/Field/Hr) Total Fee per Event Day One Day Two Day Three Day Four 6 30 Total $30,375 Local Day One Day Two Day Three 6 30 Total $21,375 Other Day One 4 48 Day Two 4 24 Total $5,400 Food and Beverage HVS assumes that sports complex s concession stand would be open for all tournament days. Gross sales are based on the total number of attendees by tournament type. The longer duration of the national and regional tournaments leads to higher per attendee spending. Parking HVS assumes a $10 per car/per weekend charge for on-site parking during tournaments. HVS further assumes an average of 3 passengers per car and that all parking demand would be accommodated by on-site parking spaces. Approximately 10 percent of parking would be complimentary for tournament officials, organizers, and other attendees. Non-Event Revenues In addition to event revenues described above, the proposed soccer complex would also earn the following non-event revenues. Hourly Field Rental Field rental is the revenue collected from the various user groups which rent field time, including youth soccer clubs, soccer leagues, summer camps, and other users. HVS used the field time demand projections presented in Section 6 and applied an hourly rate per field. The following figure presents the assumed hourly rates per field charged to each user group in 2013 dollars. Financial Analysis Sports Complex Market Study Lee's Summit, Missouri 7-2

73 FIGURE 7-3 HOURLY FIELD RENTAL RATES (IN 2013 DOLLARS) Rental Fee ($/hour) Club 1 Training 45 Club 2 Training 45 Other Club/Adult Training 75 Spring Youth Leagues 40 Fall Youth Leagues 40 Spring Adult Leagues 75 Summer Adult Leagues 75 Lacrosse 45 Summer Club Training 45 Summer Camps/Clinics 50 * Dome Rentals - winter 120 * Dome Rentals - summer 90 * Domed field scenario only The above figures are the assumed hourly rental rates for a regulation sized soccer field. The model assumes that for training, soccer clubs would place multiple teams on each field, depending on the age of players and size of the team. Advertising This line item includes revenue from the sale of fixed advertising signage on scoreboards, fixed signage, and marquee displays. The advertising rates that a facility is able to charge are dependent upon the estimated number of events and the total attendance. The advertising revenue assumptions are based on industry averages. Advertising revenue estimates should be reassessed as design of advertising elements progresses. Operating Expenses HVS estimated operating expenses as a blend of fixed costs and variable percentages of operating revenues as summarized in the figure below. HVS based these fixed and variable assumptions on comparable facility expense data and other industry standards. The following figure presents these fixed and variable expense assumptions for the proposed facility program for the base scenario and the domed field scenario. A brief description of each expense line item follows. Financial Analysis Sports Complex Market Study Lee's Summit, Missouri 7-3

74 FIGURE 7-4 Expenditure EXPENSE ASSUMPTIONS BASE SCENARIO Percentage Revenue Fixed Expense for Base Year Operating Expense Salaries & Benefits $348,438 Food & Beverage Costs 65.0% of Food & Beverage (Gross) Parking Costs 15.0% of Parking (Gross) Administrative & General 1.5% of Total Operating Rev $15,000 Repair & Maintenance 2.0% of Total Operating Rev $60,000 Utilities $300,000 Insurance $55,000 Other Expense $5,000 FIGURE 7-5 EXPENSE ASSUMPTIONS DOMED FIELD SCENARIO Expenditure Percentage Revenue Fixed Expense for Base Year Operating Expense Salaries & Benefits $398,438 Food & Beverage Costs 65.0% of Food & Beverage (Gross) Parking Costs 15.0% of Parking (Gross) Administrative & General 1.5% of Total Operating Rev $15,000 Repair & Maintenance 2.0% of Total Operating Rev $60,000 Utilities $314,000 Insurance $60,000 Other Expense $5,000 Salaries & Benefits This line item includes salaries for permanent full and parttime employees dedicated to administration, marketing, building operations, and other functions. The following figure presents proposed staffing levels for the complex. The model calculates benefits at 25 percent of base salaries. Financial Analysis Sports Complex Market Study Lee's Summit, Missouri 7-4

75 FIGURE 7-6 SOCCER COMPLEX STAFFING BASE SCENARIO COMPLEX OPERATIONS FTE Salary Total Salary Compl ex Ma na ger 1 60,000 60,000 Complex As s t manager 2 45,000 90,000 Concess ions manager ,000 18,750 Concess ions Attendants 2 10,000 20,000 Operations Staff/Labor 2 30,000 60,000 Security / Parking Director ,000 30,000 TOTALS ,750 Benefits 25% 69, ,438 FIGURE 7-7 SOCCER COMPLEX STAFFING DOMED FIELD SCENARIO COMPLEX OPERATIONS FTE Salary Total Salary Complex Ma nager 1 60,000 60,000 Complex As s t ma na ger 2 45,000 90,000 Concess ions manager ,000 18,750 Concess ions Attendants 2 10,000 20,000 Operations Staff/Labor 3 30,000 90,000 Security / Parking Director 1 40,000 40,000 TOTALS ,750 Benefits 25% 79, ,438 Food & Beverage Costs For concession sales, HVS estimates that the raw costs of food and beverage sold at 65 percent of gross sales revenue. Administrative & General Office and administrative operations incur day-today facility expenses. Such expenses typically include travel, telephone, printing, postage, permits, supplies, and other miscellaneous services. Repair & Maintenance This category includes both routine and one-time field and other maintenance expenses that are primarily the responsibility of in-house facility operations personnel. It also includes activities, such as snow removal, often contracted out to third parties. HVS estimates the fixed portion of repair and maintenance expense at $4,000 per field. Financial Analysis Sports Complex Market Study Lee's Summit, Missouri 7-5

76 Utilities Utilities, including electricity, gas, water, and other charges necessary to operate the complex. HVS estimates utilities at $20,000 per outdoor field and $27,000 for fields which are temporarily domed during the year. Insurance Insurance expense includes the general insurance required to operate the complex. HVS assumes that tournaments sponsors and other users would be required to provide proof of insurance for risk related to their operations. Other Other expenses include miscellaneous and non-recurring expenses that are not included in the above categories. In addition to the above operating expenses, HVS assumes an annual contribution to a capital maintenance reserve equal to 3 percent of total operating revenues. This capital maintenance reserve is intended for general repair and replacement of the lights and other structures at the sports complex. This reserve is not intended for the routine replacement of artificial turf fields which typically takes place ever 7 to 12 years and presently costs between $350,000 to $450,000 per field. HVS recommends creating a turf replacement fund as a part of the development budget. The OPSC has plans to replace their 12 fields over three years beginning in Original OPSC planning did not include a turf replacement fund, and management has recently begun contributing to a new fund which will reduce reliance on hotel tax collections to fund the scheduled replacement costs. Operating Pro Forma The figures below present the ten-year financial projections for the proposed soccer complex for the base scenario and the domed field option. The projections for both scenarios are in inflated dollars beginning June 1, Financial Analysis Sports Complex Market Study Lee's Summit, Missouri 7-6

77 FIGURE 7-8 PROJECTED FIVE-YEAR FINANCIAL OPERATIONS BASE SCENARIO EVENT REVENUE $ % of Total $ % of Total Facility Rental $91, % $265, % $375, % $478, % $492, % Food & Beverage (Gross) 39, % 118, % 164, % 210, % 217, % Parking (Gross) 80, % 224, % 324, % 408, % 421, % Advertising & Sponsorships 159, % 164, % 169, % 174, % 179, % Hourly Field Rental 426, % 439, % 452, % 466, % 480, % Total $795, % $1,210, % $1,484, % $1,736, % $1,788, % OPERATING EXPENSES Salaries & Benefits $370, % $381, % $392, % $404, % $416, % Food & Beverage Costs 25, % 77, % 107, % 137, % 141, % Parking Costs 12, % 34, % 49, % 61, % 63, % Administrative & General 28, % 35, % 39, % 43, % 45, % Repair & Maintenance 80, % 90, % 97, % 104, % 107, % Utilities 318, % 328, % 338, % 348, % 358, % Insurance 58, % 60, % 62, % 64, % 66, % Other Expense 5, % 5, % 6, % 6, % 6, % Total $896, % $1,009, % $1,089, % $1,167, % $1,202, % OPERATING INCOME (LOSS) ($101,000) -12.7% $201, % $395, % $569, % $586, % NON-OPERATING EXPENSES Capital Maintenance $24, % $36, % $45, % $52, % $54, % Total $24, % $36, % $45, % $52, % $54, % TOTAL NET INCOME (LOSS) ($125,000) -15.7% $165, % $351, % $517, % $533, % $ % of Total $ % of Total $ % of Total Financial Analysis Sports Complex Market Study Lee's Summit, Missouri 7-7

78 FIGURE 7-9 PROJECTED FIVE-YEAR FINANCIAL OPERATIONS DOME FIELD SCENARIO EVENT REVENUE $ % of Total $ % of Total Facility Rental $91, % $265, % $375, % $478, % $492, % Food & Beverage (Gross) 39, % 118, % 164, % 210, % 217, % Parking (Gross) 80, % 224, % 324, % 408, % 421, % Advertising & Sponsorships 159, % 164, % 169, % 174, % 179, % Hourly Field Rental 635, % 654, % 674, % 694, % 715, % Total $1,004, % $1,426, % $1,706, % $1,965, % $2,024, % OPERATING EXPENSES Salaries & Benefits $423, % $435, % $448, % $462, % $476, % Food & Beverage Costs 25, % 77, % 107, % 137, % 141, % Parking Costs 12, % 34, % 49, % 61, % 63, % Administrative & General 31, % 38, % 42, % 47, % 48, % Repair & Maintenance 84, % 94, % 102, % 109, % 112, % Utilities 333, % 343, % 353, % 364, % 375, % Insurance 64, % 66, % 68, % 70, % 72, % Other Expense 5, % 5, % 6, % 6, % 6, % Total $977, % $1,092, % $1,174, % $1,255, % $1,293, % OPERATING INCOME (LOSS) $27, % $334, % $532, % $710, % $731, % NON-OPERATING EXPENSES Capital Maintenance $30, % $43, % $51, % $59, % $61, % Total $30, % $43, % $51, % $59, % $61, % TOTAL NET INCOME (LOSS) ($3,000) -0.3% $291, % $481, % $651, % $670, % $ % of Total $ % of Total $ % of Total Financial Analysis Sports Complex Market Study Lee's Summit, Missouri 7-8

79 For comparison purposes, HVS obtained recent operating data from the OPSC. The following figure presents the OPSC s operating revenues and expenses for the past two years. FIGURE 7-10 OPSC OPERATING REVENUES AND EXPENSES Revenues Tournaments $367,450 $371,950 Pra cti ce 223, ,379 Games 160, ,240 Camps /Clinics 42,350 34,220 Tenant Leases 71,694 72,232 Concess ions 300, ,554 Sponsorship (gross) 75,000 74,750 Total Revenues $1,241,644 $1,349,325 Expenses Staff Wages $342,431 $384,422 Pers onal Services 78,574 84,852 Commoditi es 42, ,976 Concess ion Supplies 135, ,577 Contractual Services 179, ,231 Electric 232, ,217 Total Expenses $1,011,114 $1,077,275 Net Operating Income $230,530 $272,050 Source: Overland Park Soccer Complex The OPSC currently covers its expenses and produces a small net operating income. HVS financial projections are consistent with historical OPSC data with the following variances. The proposed sports complex in Lee s Summit has 15 fields versus the 12 fields at the OPSC. Field rental and hourly rental revenue projections are therefore higher for the Lee s Summit complex HVS projections assume that the proposed complex in Lee s Summit would charge for parking at tournaments. The OPSC does not charge any parking fees. The Lee s Summit complex would have a limited concessions menu as compared to that offered at the OPSC. The reduced concessions operation yields a lower concessions revenue for the Lee Summit complex. The corresponding food and beverage costs are also lower. At $150,000, projected advertising and sponsorship revenues at the Lee s Summit complex are higher that historical revenues at the OPSC, which have Financial Analysis Sports Complex Market Study Lee's Summit, Missouri 7-9

80 averaged around $75,000 in gross revenues annually. HVS assumes that as a part of a larger, mixed-use development, the Lee s Summit complex would have greater potential for sponsorship agreements with retail and other corporate tenants. The Lee s Summit financial projections reflect a stand-alone operation. Since the OPSC is operated by Overland Park s Parks and Recreation Department, HVS assumes that certain administrative expense association with the OPSC operation are covered by the general Parks and Recreation budget. These expenses may include liability insurance premiums, legal fees, and other general administrative expenses. HVS financial projections are intended to show the expected levels of revenues and expenses over a ten-year period. Projections show smooth growth over time. However, event demand and booking cycles are not always smooth. Business can be affected by unpredictable local and national economic factors. Event demand is often cyclical, based on rotation patterns and market conditions. Therefore, HVS recommends interpreting the financial projections as a mid-point of a range of possible outcomes and over a multi-year period rather than relying on projections for any one specific year. Financial Analysis Sports Complex Market Study Lee's Summit, Missouri 7-10

81 8. Approach to Financing The purpose of this section is to discuss potential funding options for the proposed sports complex in Lee s Summit, Missouri. This analysis discusses public and private funding sources that could provide the developers with a menu of funding mechanisms which may stand alone or be combined with one another to form a complete funding strategy. As in most communities, a high level of commitment and a coordinated community-wide effort that includes municipal, county, and state governments, along with the private sector, may be necessary to fund this project successfully. Public Funding Sources Projects that are relatively small or that municipal governments finance with rapidly growing tax bases are sometimes paid for directly out of appropriated funds. This type of pay-as-you-go financing is not common for large projects. In Lee s Summit, as in most municipalities, the difficulty of providing sufficient revenues to pay for the entire project during the construction period may effectively eliminate the pay-as-you-go option. Governments, authorities, or public benefit corporations may issue revenue bonds which are repaid from specific tax sources and do not have a general claim on public resources. For public facility projects that are not supported by their net operating income, municipal governments often use taxes or fees that derive from the activities or businesses that are most likely to use or otherwise benefit from the facility. Hotel room occupancy taxes, sales taxes, car rental fees, parking taxes, prepared meal taxes, airport access fees, and development fees are the revenue sources most commonly used to repay debt service for venue revenue bonds. In addition, municipal governments frequently use these tax sources to finance ongoing operating and marketing needs of the facility. The types of bonds used for particular projects depend on the size of the investment, lending rates, the creditworthiness of the borrowing entity, and the availability of revenue sources to repay the debt. The mix of revenue sources selected for particular projects depends on the comparative level of existing taxes or fees, as well as what is considered to be both fair and feasible under the unique political and economic circumstances of each development. Bond Financing Strategies Absent some form of grant funding, the development of the proposed sports complex would most likely require the City to issue some type of long-term debt to fund its development and construction. In addition to project funding requirements, costs of issuance could add as much as two percent to the total Approach to Financing Sports Complex Market Study Lee's Summit, Missouri 8-1

82 funding requirement. For revenue bonds, the need to borrow debt reserve funds could add another five to ten percent to the total issuance. Certain types of revenue bonds that rely on revenue sources that are generated by the project may require borrowing capitalized interest to fund debt service payments during and shortly after the construction period. Consequently, the amount of debt issued is almost always greater than the amount of development costs. The primary types of bond financing mechanisms are general obligation bonds and revenue bonds. They are described below. Gross Receipts Tax (GRT) Improvement Bonds - Long-term bonds that pledge the gross tax receipts of the county. This type of debt would provide a strong credit and relatively low borrowing costs for the project. The use of GRT bonds is typically reserved for projects perceived to benefit the population as a whole, such as educational, environmental, transportation, or correctional facilities. In lieu of financing an entire project through GRT bonds, some alternative uses of GRT debt might include: (i) restricting it to a portion of the project costs such as land acquisition, site preparation, and transportation access; (ii) creating a short-term means of paying for some or all construction costs until revenues triggered by the new facility are realized; and/or (iii) providing a guarantee to back-stop a new revenue source that is not initially creditworthy on its own or results in a lower bond rating without the backing of the gross receipts tax. Revenue Bonds - Various taxes, fees, or other dedicated revenues could secure revenue bonds for the new sports complex. Many of the recent sports and convention projects throughout the U.S. have used this financing structure, and tailored it to fit the specific requirements of the involved state and local governments. Municipal governments can pledge revenue from existing or projected taxes and fees to support the repayment of debt on projects. Bonds that are backed by such sources are called revenue bonds because the revenue from these taxes and fees provide the ability to pay back debt. The interest rates paid on revenue bonds would vary depending on the reliability of the chosen revenue source. Interest rates will also vary from one municipality to another depending on their credit ratings and the level of credit support provided to the bondholders. Revenue Source for Financing Debt If the City uses revenue bonds to finance a project, it must decide which revenue source or sources are appropriate and feasible for paying off the bonds. The following points summarize the characteristics of various taxing tools available for the proposed sports complex in Lee s Summit. Approach to Financing Sports Complex Market Study Lee's Summit, Missouri 8-2

83 Real Estate Ad Valorem Tax A general property tax increase could provide a secure and stable base of funds to finance the construction of the proposed sports complex. Increases in property tax rates often require a voter referendum, thus making this a more difficult method to successfully implement. Hotel Tax Hotel taxes have the major advantage of primarily taxing out-of-town visitors rather than local residents. The Overland Park Soccer Complex has its debt service paid by a dedication of 3 percent of hotel tax revenues. Lee s Summit currently imposes a 5 percent tax on transient lodging in addition to state, county, and local sales taxes. The State of Missouri does not impose a statewide hotel tax. The combined tax burden on transient accommodations in Lee s Summit varies by location but is approximately percent, below the average of 14 percent for hotels throughout the country. By comparison, a higher state sales tax in Kansas and a 9 percent hotel guest tax push the total burden on transient lodging in Overland Park, Kansas to percent, one of the highest total lodging tax rates in the country. Gross Receipts Taxes - Sales taxes provide strong credit structures because they are relatively predictable and tend to track inflation and economic growth. A general sales tax increase or expansion of the base could provide a strong incremental revenue stream. However, these taxes are often difficult to implement because they primarily tax local residents and require a referendum and/or state legislative approval. Sales taxes can generate large amounts of revenue, but also burden the local economy. In some cases, municipalities have used a general sales tax increase over a fixed period to finance major capital projects such as sports venues and convention centers. This quick-pay method enables municipalities to generate the necessary revenue over a short period, but a general sales tax is a blunt taxing instrument that does not always provide a good match between who bears the burden of the tax and who benefits from it. Prepared Meals Tax Taxes on prepared meals (i.e. restaurants) have been used in several cities, particularly to support the costs of convention and sporting facilities. Like hotel taxes, they are directed toward beneficiaries of the project and to some extent, non-residents. A subset of an overall sales tax, meals taxes can also generate substantial revenue. In some cases, it can be difficult to define the appropriate geographic boundaries within which such a tax should be applied. Development Fees / Land Lease Income - Fees for the right to develop projects near the proposed sports complex or elsewhere in the surrounding area could conceivably be used to assist in funding the complex. These so-called linkage fees have been imposed in other cities where available land adjacent to a sports facility or convention center is at a premium. Development fees or land lease income from hotels, parking decks, retail stores, and other uses that can benefit from being Approach to Financing Sports Complex Market Study Lee's Summit, Missouri 8-3

84 adjacent to a major public assembly project are sometimes available to help fund project costs. Tax Increment Financing - Tax increment financing ( TIF ) is a tool that allows a certain portion of the incremental increase in tax revenues from a project to be used for developments that will benefit that project. Projections are based on the incremental property tax value of the ancillary economic development projects that are triggered by a major new facility. The tax base of a defined area (the TIF District) surrounding the project is frozen and any increases in the future tax base are used to repay TIF bonds. Depending on the size and scope of the TIF District, this concept may be useful as a means of offsetting a portion of the future debt service on bonds or providing an additional backstop for another primary revenue source. TIF strategies can also be used to support ancillary hotel developments in some communities. Lease Financing Lease financing, or certificate of participation financing, could be backed by any of the revenue sources previously discussed. Government Grants Private Funding Sources The Land Water Conservation Fund ( LWCF ) provides matching grants to local governments for the development of the outdoor recreation area and facilities. The purpose of the funding program is to assist in preserving the availability of quality outdoor recreation facilities for all residents of the U.S. Funding from the LWCF can be used for two purposes, facility development and land acquisition. Since 1965, 122 projects in Jackson County have received over $11.1 million in grant funding. This includes a 1980 grant of $133,000 to Lee s Summit for the Miller Fields Park Development and a recent $83,000 grant to Lee s Summit for a volleyball court renovation. Corporate sponsorship and deals are becoming more common in amateur sports facilities. Funds from corporate sponsors can be used to help fund development costs or subsidize operations. A corporate sponsorship can include naming right agreements, in which a single entity agrees to pay an annual fee for the sole rights to name the facility. Another option is for several corporations to provides funds, either one-time or annually, in exchange for some form of recognition as a sponsor the complex. Each of these corporate sponsor options have been successfully implemented in community recreation projects, including soccer complexes. The following figure presents some recent deals. Approach to Financing Sports Complex Market Study Lee's Summit, Missouri 8-4

85 FIGURE 8-1 CORPORATE SPONSORSHIP DEALS Complex Existing Deals Location Year Opened State Farm Sports Village Bakersfield, CA 2011 US Cellular Sports Complex Medford, OR 2008 Ci ti zens Ba nk Fi el ds a t Progi n Pa rk Lanca ster, MA 2007 Sportscore 2 Rochester, IL 2001 Mike Ros e Soccer Compl ex Memphis, TN 2001 Deal Terms 5 yea r agreement, pai d in 2 ins ta llments with a total value of $500,000 6 yea r agreement pa id annual ly wi th a total value of $650,000 5 yea r nami ng rights wi th Citi zens Bank, dollar value undisclosed. Progin Park named for land donation. 12 corporate s pons ors have ongoing annua l funding commitment for field sponsorship Priva te opera tor s ecured $2.5 mi lli on in corporate and priva te donati ons In addition to the above naming sponsorship agreements, deals are being sought for several amateur sports venues across the country, including the Overland Park Soccer Complex, the Hampton Roads Soccer Complex, and the Franklin Pasture Sports Complex. These facilities are seeking naming rights deals which range in value from $250,000 to $1 million. Several grant programs administered by private organizations are available to assist in the funding of sports and recreation developments. Many of these programs are designed for counties, municipalities, and other non-profit organizations. U.S. Soccer Foundation Since 1995, the U.S. Soccer Federation has awarded over $50 million in grants to more than 600 organizations throughout the country. In recent years, the foundation has awarded an average of 60 grants per year. Field grants are segregated into specific elements as detailed below. Synthetic Turf Grants range from $50,000 to $200,000 and can be applied to new field construction or the upgrade of existing fields. Lighting Grants are up to $50,000 for the purchase of Musco Lighting products. Irrigation Grants are up to $15,000 for the purchase of Hunter Irrigation products. Irrigation systems can be installed with synthetic turf for cleaning and cooling purposes. Approach to Financing Sports Complex Market Study Lee's Summit, Missouri 8-5

86 Planning Grants are $8,000 for engineering and site planning services provided by Clough Harbor Associates. General Mills Champions for Healthy Kids Grant The General Mills Foundation distributes 50 grants each year to non-profit organizations for projects which improve nutrition and physical fitness in youth. Healthy Kids Grants are limited to $10,000. Finish Line Legacy Grants The Finish Line Youth Foundation awards grants to non-profit organizations for the improvement and/or renovation to existing facilities and grounds which are used for youth athletic programs and camps. Grants range from $10,000 to $75,000. Next Steps A comprehensive financing plan to move the sports complex project forward requires further research and discussion, which is beyond the scope of this study. The annual financing cost is highly dependent upon the specific structure of the financing plan and additional analysis is required to develop a more detailed plan. Approach to Financing Sports Complex Market Study Lee's Summit, Missouri 8-6

87 9. Statement of Assumptions and Limiting Conditions 1. This report is to be used in whole and not in part. 2. No responsibility is assumed for matters of a legal nature. 3. We have not considered the presence of potentially hazardous materials on the proposed site, such as asbestos, urea formaldehyde foam insulation, PCBs, any form of toxic waste, polychlorinated biphenyls, pesticides, or lead-based paints. 4. We have made no survey of the property, and we assume no responsibility in connection with such matters. Sketches, photographs, maps, and other exhibits are included to assist the reader in visualizing the property. It is assumed that the use of the land and improvements is within the boundaries of the property described, and that there is no encroachment or trespass unless noted. 5. All information, estimates, and opinions obtained from parties not employed by HVS are assumed to be true and correct. We can assume no liability resulting from misinformation. 6. Unless noted, we assume that there are no encroachments, zoning violations, or building violations encumbering the subject property. 7. All mortgages, liens, encumbrances, leases, and servitudes have been disregarded unless specified otherwise. 8. We are not required to give testimony or attendance in court by reason of this analysis without previous arrangements, and only when our standard per diem fees and travel costs are paid prior to the appearance. 9. If the reader is making a fiduciary or individual investment decision and has any questions concerning the material presented in this report, it is recommended that the reader contact us. 10. We take no responsibility for any events or circumstances that take place subsequent to the date of our field inspection. 11. The quality of a sport and event facility's on-site management and organization that market the facility have a direct effect on a complex s economic viability. The forecasts presented in this analysis assume responsible ownership, competent management and effective marketing and sales. Any departure from this assumption may have a significant impact on the projected operating results. Statement of Assumptions and Limiting Conditions Sports Complex Market Study Lee's Summit, Missouri 9-1

88 12. Our responsibility is limited to the client, and use of this report by third parties shall be solely at the risk of the client and/or third parties. The use of this report is also subject to the terms and conditions set forth in our engagement letter with the client. 13. This report was prepared by HVS Convention, Sports & Entertainment, a division of HVS Global Hospitality Services. All opinions, recommendations, and conclusions expressed during the course of this assignment are rendered by the staff of these two organizations, as employees, rather than as individuals. 14. This report is set forth as a feasibility and market study of the Sports Complex; this is not an appraisal report. Statement of Assumptions and Limiting Conditions Sports Complex Market Study Lee's Summit, Missouri 9-2

89 10. Certification The undersigned hereby certify that, to the best of our knowledge and belief: 1. that the statements of fact presented in this report are true and correct to the best of our knowledge and belief; 2. that the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions; 3. that we have no (or the specified) present or prospective interest in the property that is the subject of this report and no (or the specified) personal interest with respect to the parties involved; 4. that we have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment; 5. that our engagement in this assignment was not contingent upon developing or reporting predetermined results; 6. that this report sets forth all of the limiting conditions (imposed by the terms of this assignment) affecting the analyses, opinions, and conclusions presented herein; 7. that the fee paid for the preparation of this report is not contingent upon our conclusions, or the occurrence of a subsequent event directly related to the intended use of this report; 8. that Catherine Sarrett personally inspected the property described in this report; 9. that no one other than those listed above and the undersigned prepared the analyses, conclusions, and opinions concerning the real estate that are set forth in this market and feasibility study; and 10. that our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. Certification Sports Complex Market Study Lee's Summit, Missouri 10-1

90 Thomas Hazinski Managing Director Catherine Sarrett Project Manager Certification Sports Complex Market Study Lee's Summit, Missouri 10-2