PROSPECTUS: HEIGHTS SWIM CLUB, INC. AQUATICS FACILITY DEVELOPMENT January 20, 2017

Transcription

1 HEIGHTS SWIM CLUB, INC. AQUATICS FACILITY DEVELOPMENT January 20, 2017 Disclaimer Please read the following notice carefully before reading this prospectus (the Prospectus) prepared by the Heights Swim Club LLC (the Company). This notice applies to all persons who view this document. The Prospectus has been prepared solely in respect of the Company's solicitation of founding members to the Company. No shares or other securities of the Company are being offered for subscription or sale in any jurisdiction pursuant to the Prospectus. The Prospectus is being made publicly available for information purposes only and does not require any action to be taken by shareholders of the Company or the Company s Board of Directors. The Prospectus does not constitute an offer or invitation to any person to subscribe for or purchase shares or any other securities in the Company. The shares of the Company have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the Securities Act), or under any securities laws of any state of the United States and may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Forward-looking statements Some of the statements in the Prospectus include forward-looking statements which reflect the Company's and/or the Directors' current views with respect to financial performance, business strategy and future plans. Statements which include the words ''expects'', ''intends'', ''plans'', ''believes'', ''projects'', ''anticipates'', ''will'', ''targets'', ''aims'', ''may'', ''would'', ''could'', ''continue'' and similar statements are of a future or forward-looking nature. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the Company's actual actions and/or results to differ materially from those indicated in these statements. Any forward-looking statements in the Prospectus reflect the Company's current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the Company s operations, results of operations and growth strategy. These forwardlooking statements speak only as of the date of the Prospectus. The Company undertakes no obligation publicly to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to the Company or individuals acting on behalf of the Company are expressly qualified in their entirety by this paragraph. Prospective founding members should specifically consider the factors identified in the Prospectus which could cause actual results to differ before making an investment decision. Purpose of Heights Swim Club, Inc. Heights Swim Club, Inc. is organized exclusively for charitable and educational purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501 (c)(3) of the Internal Revenue Code, or the corresponding section of any future tax code. The organization consists of men and women organized under the laws of the State of Texas. The specific purpose of the corporation is to provide aquatics programs for children in the Greater Heights Community that instills confidence in swimming, water safety, and self. To build character in youths through teamwork, goal setting, and sportsmanship. To help fight obesity in children by providing a place for neighborhood to engage in physical activity. And lastly, to strengthen community in the Greater Heights area. Aquatics Facility Development 1 HEIGHTS SWIM CLUB, INC.

2 OVERVIEW - The Houston Heights has experienced economic growth in the past years including the addition of many new residents drawn by its neighborhood feel and easy access to downtown. Those individuals increasingly turn into families and desire to stay in the Heights. - Those families have consistently made investments in the neighborhood to make it more family friendly rather than flee the city center for the conveniences of the suburbs. They have invested their time and resources heavily in local public schools and neighborhood parks. - To date the neighborhood lacks aquatics facilities beyond two City of Houston pools which are short on recreational appeal and are limited to capital improvement by city budget constraints. - Lot sizes in the Heights do not allow most residents to build their own private pool without significantly impairing the greenspace on the lot. Effectively, they can spend over $30,000 for a private pool and render their yard unusable for 6 months each year. - The Greater Heights also lacks a single HOA or other civic association in position to raise the funds to develop and manage a quality aquatics facility. - The solution is the Heights Swim Club: a non-profit charity which promotes aquatics training and competition for the children of the neighborhood while offering its members continued access to club amenities throughout the year for family enjoyment and exercise. - Founding Members are needed to raise the sizable amount of capital necessary to deliver this aquatics facility to the families in the neighborhood. NEIGHBORHOOD - The Greater Houston Heights is located just northwest of downtown Houston. - The neighborhood is comprised of ~47 thousand socioeconomically diverse households including those that have lived in the neighborhood for generations as well as many new entrants. - In exchange for easier access to downtown and strong walkability, families typically have 6600 square foot lots or smaller. A private pool on such lots would cost the homeowner over $30,000 and significantly infringe on any greenspace on the property. Such pools would also be limited in size by permeability requirements from the City of Houston. - The neighborhood lacks aquatics facilities beyond two small city pools within the Neighborhood Boundaries (Stude and Love Pools). These two public pools offer few amenities, little shade, limited access (only open daily for 10 weeks), and must compete with other city priorities to secure funding for improvements. - There are no private neighborhood pools within the neighborhood boundaries. - The patchwork of neighborhood associations and limited HOAs make it difficult for aquatics facilities to be otherwise developed. In our research, none have been willing to take on the project. - For the many families that want to forgo the suburbs, live in a dense and historic community, maintain their own personal greenspace, but still have access to a quality aquatics facility for exercise and enjoyment, the Heights Swim Club is the answer. Aquatics Facility Development 2 HEIGHTS SWIM CLUB, INC.

3 NEIGHBORHOOD BOUNDARIES: - For the purposes of this prospectus and the formation of the club as a legal entity, the neighborhood boundaries were defined as Interstate 45 on to the East, the 610 North Loop to the North, T.C. Jester Boulevard to the West, and Interstate 10 to the South. This was largely based on addresses received during a Feasibility Survey which over 300 families responded to. - In the event that there is significant interest from potential Founding Members from near but outside these neighborhood boundaries, such boundaries could be redrawn to include those interested neighborhoods. However, it is the Board s intention to target building an aquatics facility within the currently stated boundaries. - This map shows current boundaries as well as public schools and Love Pool, the home pool for the Heights Hammerheads Swim Team in 2017 (more below). ANTICIPATED FACILITIES - Based on feedback from the Feasibility Survey, the following site amenities would be prioritized: o Family Play Pool o Lap Pool o Kiddie Pool o Locker Rooms o Snack Shack o Clubhouse - Additional amenities would be considered based on actual site dimensions and characteristics, capital raised, and other more specific feedback from Family Members. o Once a parcel of land is purchased, it is anticipated that we will survey the Founding Members to determine a final set of amenities to be included in the design Ammenties Scores Play Pool (3-5') 25M Lap Pool Kiddie Pool (<3') 50M Lap Pool Splash Pad Water Slide Diving Board Locker Room Snack Shack Clubhouse Tennis Courts Workout Facilities Sand V'ball B'ball Courts Swim Classes Swim Team Parties / Cookouts Morning Adult Swim Aquatics Facility Development 3 HEIGHTS SWIM CLUB, INC.

4 - After the closing of the Feasibility Survey, there was significant feedback that a heated lap pool would be desirable to allow for year-round use. To maximize on the Club s purpose, it is anticipated that at least the Lap Pool would be heated for year-round use. - Additionally, an inflatable pool cover / dome could be purchased at a reasonable price (~$40K) to keep down the costs of heating the pool in the winter months and provide comfort to the swimmers. SWIM TEAM - Heights Swim Club will be the permanent home of the Heights Hammerheads summer swim team. The team has already been established and will compete in the summer of For the 2017 season, the Hammerheads will rent pool time from the City of Houston at Love Pool. - The parents of 92 neighborhood children have already communicated their interest in joining the Hammerheads. - Similar to the characteristics that promote the development of the Club, there are no summer swim teams offered within the neighborhood boundaries. Participation on the Heights Hammerheads summer swim team will not be limited to Family Members of the Heights Swim Club, but open to anyone living within the neighborhood boundaries. Additionally, every summer season registration for the swim team will be open to a specififed number of swimmers outside the neighborhood boundaries as determined by the board. - The Swim Team will launch as a summer program practicing in the evenings in May and mornings in June. - Additionally, the Club plans to offer other aquatics programs to youth of the neighborhood after the establishment of the permanent facility. If the lap pool becomes available year-round, these programs will become available to youths of the neighborhood year-round. ENTITY STRUCTURE - The Heights Swim Club has been established as a 501(c)3 Non-Profit Charity. As such, the club will have non-profit status as it relates to property taxes from the Harris County Appraisal District. Contributions to the club would likely be tax deductible (please consult your tax professional). - Depending on the specifics of individual programs, donations to the Heights Swim Club may be eligible for certain company match programs. Please check with your program s administrator for details. - The Club currently has a three-member Board of Directors but will likely add Directors / Officers as need dictates. MEMBERSHIP - Full Family Memberships would be made available to ~350 families with priority given to those within the neighborhood boundaries. Such Family Memberships would include full access to Club facilities during working hours. Aquatics Facility Development 4 HEIGHTS SWIM CLUB, INC.

5 - Family Members would pay a one-time Initiation Fee (funding an ongoing capital campaign, expected to be between $1,000 and $10,000) and annual dues (to fund the Club s operational expenses as well as support youth programs). Families must pay dues annually to maintain membership. - Family Members would also receive voting rights in the Club specifically related to electing officers and other Club mandated approvals. - In the event that a family is temporarily moved out-of-state, it is expected that families may be able to maintain their membership by paying reduced annual dues while living elsewhere. Specifics of an Absentee dues program will be determined by majority vote of all Family Members once the first 350 Family Memberships have been filled. - Family Memberships would be non-transferrable and non-refundable. REAL ESTATE - During the feasibility phase of the project, a Real Estate Committee was formed to evaluate potential site locations (both those currently on the market and/or speculative), determine the size of land needed, and identify other obstacles in the procurement / development of the land. - Consensus is that the Club would need at least one acre of land to provide the amenities desired by the survey respondents though a location greater than an acre would also be desirable and a smaller site might be considered. - Additionally, as the Club would be heavily used during only a part of the Capital Contribution Assessment year, it would be preferable to have a site with access to parking that could be $295 K rented from adjacent property owners 100 $148 K $140 K 59 during peak season. $90 K $120 K $50 K - Within the neighborhood boundaries, 6 6 $ K 2 4 the Real Estate Committee s professional 0 opinion it that a suitable site could be procured for $35-$75 per square foot. Variables that would affect land pricing include centrality of the location within Total Contribution Families the neighborhood boundaries, appropriateness of the site for other commercial uses, access to parking, and other improvements that could be utilized. - The real estate committee will be able to get specific feedback from brokers regarding sites that might be available or coming available within the neighborhood boundaries once we have funding in place. $140 K $350 K $300 K $250 K $200 K $150 K $100 K $50 K $ K FINANCING LAND PURCHASE AND DEVELOPMENT - Until the Club has sufficient operational record it is anticipated that it will be unable to borrow funds at a competitive rate. Additionally, the Club desires to minimize debt levels to minimize risks to the Club and ensure a quality experience for its members - That said, of the 390 survey responses received in a short 2-week survey, almost one quarter of survey respondents communicated interest in contributing $5000 or more to a capital campaign for the Swim Club Aquatics Facility Development 5 HEIGHTS SWIM CLUB, INC.

6 - To protect the Club s long term viability, the Club intends to do the following: o Purchase a parcel of land within the neighborhood boundaries in cash collected from Founding Members Target funds to be raise are derived from a 1 acre site at $75 per square foot: $3.27MM Actual property purchased may be for less than $3.27MM if an attractive property can be found for a better price Engagement with a broker would not begin until $2.0 MM had been committed from the Founding Members Founding Members would commit to contribute at or above $10,000 when a property is identified to purchase by the Board Once a family agrees to a contribution at or above $10,000, they would receive continuous updates on sites being considered. The board would solicit feedback from the Founding Members on desirability of the potential sites. Such funds would not be due until the board recommends making an offer on a specific property. At that time, funds would be directly deposited into the Club s bank account Founding Members would be exempt from paying Initiation Fees when the club is opened Once a property purchased, the Club will have the option to use the land as collateral to finance any additional costs associated with building the facilities Founding Members would elect a design board of no more than 5 members to make recommendations on design options It is anticipated that it will take a minimum of 6 months to complete pre-construction inclusive of Design, Financing, Permitting, and Bidding the Construction Contract o Preconstruction of a lap pool only could be expedited to have that amenity ready for the summer of 2018 while the rest of the design is still being finalized. FINANCING ONGOING OPERATIONS - After construction has begun, the board will meet to review anticipated ongoing operational costs and determine the following: o Initiation Fees: One-Time cost for any non-founding Member to become Family Members for the Club. These funds will serve as an ongoing source of capital. The Board will determine how to allocate such funds (maintenance, new facilities, etc.) but will always consider paying down construction or other debts as the default if no consensus can be reached. o Annual Membership Dues: Annual Membership Dues should be designed to cover the anticipated operational expenses for that year with allowance for contingency. The operating budget should include funds to allow need-based scholarships for non-club Member children in the neighborhood to participate on the Swim Team as well as the youth aquatic programs Aquatics Facility Development 6 HEIGHTS SWIM CLUB, INC.

7 FACILITIES USAGE AND SCHEDULE Summary of the Draft Operational Budget is included in the appendix of this presentation. Please for more details. - In order to support the mission of the Club, provide Members with the desired amenities, and control costs, it is important to consider the seasonal schedule for the pools to prevent overcrowding and maximize usage. - There was passionate feedback that the open season for the Family Play Pool must be longer than the current swim season for city pools, approximately ten weeks from Memorial Day until early August. - Additionally, with approval from the Family Members, the board would consider renting the pool to nearby USA swimming clubs during the offseason to help offset the expenses of winterizing the pool, i.e. heating the pool and/or purchasing an exterior dome structure. - Therefore, the Anticipated Annual Swim Club Calendar (note that there will likely be one closed day per week for pool maintenance): SEASON: Preseason Swim Season Extended Season Off Season STARTS: Last Wknd April Last Wknd of May First Wknd of Sept. Mid Oct to End May WEEKS: DAYS: Weekdays Weekends Weekdays Weekends Weekdays Weekends All Days Adult Swim 5am to 4pm 5am-11am 5am-7am 5am-11am all day 5am-11am all day Swim Team 4pm-8pm 7am-11am (June only) Open Swim Fri: 3pm-9pm 11am-9pm 11am-9pm 11am-9pm Fri: 3pm-9pm 11am-9pm - - ANTICIPATED TIMELINE FOR CLUB ESTABLISHMENT: - The Club has set the following target dates for key milestones in establishing the Club: o December 2016: Establish Club as legal entity <complete> o January 2017: Gain admission into Local Swim League (tentatively Memorial Spring Branch Swim Conference) <presentation to MSBSC is scheduled for January 29> Gain 501(c)3 tax exempt status <complete> Publish Prospectus. Begin soliciting Founding Members <complete> o February 2017: Identify Summer Swim Team Coach Target having at least 100 swimmers signed up for summer Swim Team Target at least 30 Founding Member o March 2017: Target at least 90 Founding Member o April 2017: Swim Team Practice Begins Target 200 Founding Members. Begin working with Broker to identify location. o June 2017: Swim Meets throughout the month Aquatics Facility Development 7 HEIGHTS SWIM CLUB, INC.

8 OTHER NOTES: o 2 nd Quarter 2017: Identify site of future Swim Club o 4 th Quarter 2017: Construction Begins o May 2018: Swim Club opens for operations - In order for the Club to begin operation in support of its mission in May of 2018, the amenities of the Club may be launched in phases. First priority would be the Lap Pool, shade structures, and potentially Locker Rooms. The Family Play Pool would have second priority. All other amenities including the Clubhouse would receive final priority and may not be available until If the club is unable to identify $2MM in capital from the Founding Members by April of 2017 or identify a suitable site for the Club in the second quarter of 2017, tall of the above dates will be pushed back and a new timeline will be circulated, but it would be unlikely the Club would have its own pool until the summer of Please be generous, don t delay your commitment, and tell your friends to join you. Aquatics Facility Development 8 HEIGHTS SWIM CLUB, INC.

9 DRAFT OPERATIONAL BUDGET: Aquatics Facility Development 9 HEIGHTS SWIM CLUB, INC.