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0 COST / BENEFIT ANALYSIS DRAFT COPY <br />Overview & Key Assumptions <br />An analysis was completed to produce key cost/benefit estimates associated with a potential new Youth and Amateur Sports <br />Complex in Mounds View, Minnesota. Performance estimates for the Youth and Amateur Sports Complex have been presented over <br />a 20-year projection period. For purposes of this analysis, construction is assumed to commence during 2023 and be completed in <br />2024, while the first full year of operations is assumed to be 2025. A stabilized year of operation is assumed to occur by the fourth full <br />year of operation (assumed 2028). The assumptions used in this analysis are based on the market research and analysis, past <br />experience with hundreds of similar sports facility projects, local market visits and City and stakeholder -provided data, industry trends, <br />knowledge of the marketplace and use/financial results from comparable facilities. Additional planning (i.e., site selection, soil and <br />environmental testing, architectural design, etc.) must be completed before more precise estimations of the Youth and Amateur <br />Sports Complex's ultimate construction and operating costs can be made. Also, upon completion of further planning, revenue and <br />expense assumptions should be updated to reflect changes to the assumptions made herein. <br />These estimates are designed to assist project representatives in assessing the financial and economic effects of a new Youth and <br />Amateur Sports Complex and cannot be considered a presentation of expected future results. Accordingly, the analysis of potential <br />financial operating results and economic impacts may not be useful for other purposes. The assumptions disclosed herein are not all <br />inclusive, but are those deemed to be significant. Because events and circumstances frequently do not occur as expected, there <br />usually will be differences between estimated and actual results and these differences may be material. <br />COSTS (Construction & Operations) <br />Preliminary analyses were completed to estimate order -of -magnitude construction costs and the annual financial operating <br />performance associated with a Youth and Amateur Sports Complex in Mounds View. Construction cost estimates were generated <br />using industry per -unit data adjusted for conditions in Mounds View and cost data of comparable youth and amateur sports facility <br />projects, modified for time and locations. <br />To produce the financial operating estimates, a computer -based model was developed incorporating comparable facility data and the <br />estimated levels of utilization and attendance derived from the market analysis to generate estimates with regard to potential annual <br />facility operations. Revenues including rentals, concessions, advertising and sponsorship revenues, and other such sources were <br />estimated. Expenses including salaries/wages/benefits (including contracted services costs), utilities, maintenance & repair, <br />materials & supplies, insurance, general & administrative, programming and others were estimated. The comparison of revenues and <br />expenses enables stakeholders to evaluate the level of facility -supportable revenues or public subsidies that may be required for <br />annual Youth and Amateur Sports Complex operations. <br />It has been assumed that the Youth and Amateur Sports Complex in Mounds View would be publicly -owned and operated as an <br />expansion of the Mounds View Community Center (MVCC). Figures only represent the incremental annual operations of the MVCC as <br />a result of the development of the Youth and Amateur Sports Complex and do not include construction debt service payments, capital <br />repair/replacement reserve funding or other non -operating income and expenses. <br />BENEFITS (Economic Impacts & Other) <br />The ability of an amateur sports facility to generate new spending and associated economic impact in a community is often one of <br />the primary determinants regarding a decision by a public sector entity to participate in investing in the development and/or operation <br />of such facilities. Beyond generating new visitation and associated spending in local communities, amateur sports complexes also <br />benefit a community in other important ways, such as providing venues for athletic and recreation activities attended and participated <br />in by local community members and drawing new visitation/traffic into target areas. <br />The impact of an amateur sports facility project is maximized when out-of-town athletes/participants and family members or guests <br />spend money in a community while visiting. This spending by visitors represents new money to the community hosting the event. <br />This new money then creates multiplier effects as the initial spending is circulated throughout the local economy. <br />It is important to note that spending estimates associated with the potential new Youth and Amateur Sports Complex only represent <br />spending that is estimated to be new to the Mounds View area (net new spending), directly attributable to the operation (and <br />existence) of the potential new Youth and Amateur Sports Complex. <br />Cam, L Feasibility Study of a Potential new Youth and Amateur Sports Complex in Mounds View, Minnesota 9 Page 54 <br />