|
Feasibility Study of a Potential New Youth and Amateur Sports Complex in Mounds View, Minnesota ●Page 55
<br />COST /BENEFIT ANALYSIS6
<br />Economic Impact Concepts &Methods
<br />The investment in a new Youth and Amateur Sports Complex project will be expected to provide quantifiable benefits.These
<br />quantifiable benefits often serve as the “return on investment”of public dollars that are contributed to develop the facility project
<br />and site.Quantifiable measurements of the effects that facility project could have on the local economy are characterized in
<br />terms of economic impacts and fiscal impacts.Direct spending represents the primary spending that would occur as a result of
<br />the construction and operations of the Youth and Amateur Sports Complex.Direct spending occurs in three ways:
<br />A primary intent of this analysis is to estimate the direct spending that could occur directly at the Youth and Amateur Sports
<br />Complex itself,in order to approximate the potential associated tax revenues generated from such spending.The vast majority
<br />of Construction and In-Facility Spending will be estimated to occur within the Mounds View area.Additionally,net new impacts
<br />will be generated throughout the Mounds View area,primarily relating to Out-of-Facility Spending (i.e.,spending occurring off the
<br />Youth and Amateur Sports Complex site by visitors to the Mounds View area on items such as hotels,restaurants,retail,
<br />transportation,etc.).
<br />From a broad perspective,gross direct spending would flow to various economic entities,including the City of Mounds View,
<br />Ramsey County and other applicable municipal government(s),restaurants,hotel operators,retail businesses and other such
<br />entities.However,some of the spending that occurs in connection with the ongoing operations of the Youth and Amateur Sports
<br />Complex project would not fully impact the local area.As such,reductions must be made to gross direct spending to reflect the
<br />amount of direct spending associated with the Youth and Amateur Sports Complex project and site improvements that are
<br />considered net new to Mounds View.These adjustments include:
<br />CONSTRUCTION SPENDING
<br />Construction materials, labor, design
<br />and professional fees, and other soft
<br />cost spending are generated during the
<br />planning and construction of the new
<br />Youth and Amateur Sports Complex.
<br />IN-FACILITY SPENDING
<br />Direct spending is generated by
<br />visitors and participants at the new
<br />sports facility during the course of
<br />annual operations. This spending occurs
<br />with respect to both event and non-event
<br />items, such as admissions, facility
<br />rentals, food and beverage, merchandise,
<br />sponsorship and advertising and
<br />retail leases.
<br />OUT-OF-FACILITY SPENDING
<br />Outside the Youth and Amateur Sports
<br />Complex itself, additional direct spending
<br />is generated in city, county and regional
<br />areas by visitors, spectators, attendees,
<br />participants, event staff and visiting
<br />facility users on lodging, food and
<br />beverage, retail, entertainment,
<br />transportation and other such items in
<br />connection with their
<br />visit to the area.
<br />LEAKAGE represents the portion of gross spending estimated to occur outside the larger geographic area
<br />considered for this analysis (Mounds View).Immediate leakage occurs when initial direct expenditures occur
<br />outside the area,such as an out-of-town Youth and Amateur Sports Complex visitor that patronizes a hotel or
<br />restaurant located outside of Mounds View.Leakage also occurs when initial local spending is used immediately
<br />to pay for goods,services,etc.outside of Mounds View.Examples of this type of secondary leakage include food
<br />and beverage profits retained by companies based outside of Mounds View.
<br />DISPLACEMENT refers to spending that would have likely occurred anyway in Mounds View without the presence
<br />of the Youth and Amateur Sports Complex.Examples of displaced spending would include spending by Mounds
<br />View residents in connection with their visit to the new Youth and Amateur Sports Complex site (registrations,food
<br />and beverage,retail items,etc.)that would have been spent in Mounds View anyway on other items (e.g.,movies,
<br />restaurants,shopping,etc.)if they did not visit the Youth and Amateur Sports Complex site.Another example of
<br />displaced spending would include out-of-facility spending by non-local individuals visiting from outside of Mounds
<br />View whose primary purpose for visiting Mounds View was something other than visiting or participating in
<br />activities at the Youth and Amateur Sports Complex itself,and who would have spent their money in some other
<br />form in Mounds View.The concept of displacement is oftentimes referred to as the substitution effect.
<br />The flow of gross direct spending is adjusted to reflect only the spending that is considered net new to the local economy (i.e.,
<br />Mounds View).The resulting spending after all adjustments is referred to throughout the remainder of this analysis as net new
<br />direct spending.
|