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Feasibility Study of a Potential New Youth and Amateur Sports Complex in Mounds View, Minnesota ●Page 54 COST /BENEFIT ANALYSIS6 Overview &Key Assumptions An analysis was completed to produce key cost/benefit estimates associated with a potential new Youth and Amateur Sports Complex in Mounds View,Minnesota inclusive of three additional full-size basketball courts adjacent to the Mounds View Community Center.Performance estimates for the Youth and Amateur Sports Complex have been presented over a 20-year projection period. For purposes of this analysis,construction is assumed to commence during 2023 and be completed in 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 year of operation (assumed 2028).The assumptions used in this analysis are based on the market research and analysis,past experience with hundreds of similar sports facility projects,local market visits and City and stakeholder-provided data,industry trends,knowledge of the marketplace and use/financial results from comparable facilities.Additional planning (i.e.,site selection,soil and environmental testing,architectural design,etc.)must be completed before more precise estimations of the Youth and Amateur Sports Complex’s ultimate construction and operating costs can be made.Also,upon completion of further planning,revenue and expense assumptions should be updated to reflect changes to the assumptions made herein. These estimates are designed to assist project representatives in assessing the financial and economic effects of a new Youth and Amateur Sports Complex and cannot be considered a presentation of expected future results.Accordingly,the analysis of potential financial operating results and economic impacts may not be useful for other purposes.The assumptions disclosed herein are not all inclusive,but are those deemed to be significant.Because events and circumstances frequently do not occur as expected,there usually will be differences between estimated and actual results and these differences may be material. COSTS (Construction &Operations) Preliminary analyses were completed to estimate order-of-magnitude construction costs and the annual financial operating performance associated with a Youth and Amateur Sports Complex in Mounds View.Construction cost estimates were generated using industry per-unit data adjusted for conditions in Mounds View and cost data of comparable youth and amateur sports facility projects,modified for time and locations. To produce the financial operating estimates,a computer-based model was developed incorporating comparable facility data and the estimated levels of utilization and attendance derived from the market analysis to generate estimates with regard to potential annual facility operations.Revenues including rentals,concessions,advertising and sponsorship revenues,and other such sources were estimated.Expenses including salaries/wages/benefits (including contracted services costs),utilities,maintenance &repair, materials &supplies,insurance,general &administrative,programming and others were estimated.The comparison of revenues and expenses enables stakeholders to evaluate the level of facility-supportable revenues or public subsidies that may be required for annual Youth and Amateur Sports Complex operations. It has been assumed that the Youth and Amateur Sports Complex in Mounds View would be publicly-owned and operated as an expansion of the Mounds View Community Center (MVCC).Figures only represent the incremental annual operations of the MVCC as a result of the development of the Youth and Amateur Sports Complex and do not include construction debt service payments,capital repair/replacement reserve funding or other non-operating income and expenses. BENEFITS (Economic Impacts &Other) The ability of an amateur sports facility to generate new spending and associated economic impact in a community is often one of the primary determinants regarding a decision by a public sector entity to participate in investing in the development and/or operation of such facilities.Beyond generating new visitation and associated spending in local communities,amateur sports complexes also benefit a community in other important ways,such as providing venues for athletic and recreation activities attended and participated in by local community members and drawing new visitation/traffic into target areas. The impact of an amateur sports facility project is maximized when out-of-town athletes/participants and family members or guests spend money in a community while visiting.This spending by visitors represents new money to the community hosting the event. This new money then creates multiplier effects as the initial spending is circulated throughout the local economy. It is important to note that spending estimates associated with the potential new Youth and Amateur Sports Complex only represent spending that is estimated to be new to the Mounds View area (net new spending),directly attributable to the operation (and existence)of the potential new Youth and Amateur Sports Complex.