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Market & Economic Study for Two Proposed New Soccer Stadiums In Market & Economic Study for Two Proposed New Soccer Stadiums in Downtown Baltimore, Maryland Final Report December 2010 4427 W. Kennedy Boulevard ∙ Suite 200 ∙ Tampa, Florida 33609 ∙ Phone 813.281.1222 ∙ Fax 813.315.6040 December 10, 2010 Mr. Gary McGuigan Project Executive Maryland Stadium Authority 333 W. Camden Street, Suite 500 Baltimore, Maryland 21201 Dear Mr. McGuigan: In accordance with our agreement dated December 9, 2009, Crossroads Consulting Services LLC has completed its market and economic analysis related to two proposed new soccer stadiums in downtown Baltimore. The report presented herein includes the summary of findings and principal conclusions from our research. This analysis was prepared for the Maryland Stadium Authority, City of Baltimore and Baltimore Development Corporation for their consideration of plans for two proposed new soccer stadiums in downtown Baltimore. The findings and assumptions contained in the report reflect analysis of primary and secondary sources. We have utilized sources that are deemed to be reliable but cannot guarantee their accuracy. Moreover, estimates and analysis regarding the proposed new soccer stadiums are based on trends and assumptions and, therefore, there will usually be differences between the projected and actual results because events and circumstances frequently do not occur as expected, and those differences may be material. We have no obligation, unless subsequently engaged, to update this report or revise this analysis as presented due to events or conditions occurring after the date of this report. In accordance with the terms of our engagement letter, the accompanying report is restricted to internal use by the Maryland Stadium Authority and the Baltimore Development Corporation and may not be relied upon by any third party for any purpose including financing. Notwithstanding these limitations, it is understood that this document may be subject to public information laws and as such can be made available to the public upon request. This analysis was prepared under the Consulting Standards issued by the American Institute of Certified Public Accountants (AICPA) and does not constitute an examination, compilation or agreed upon procedures in accordance with the standards established by the AICPA. As such, we do not express an opinion or any other form of assurance on whether the prospective financial statements are presented in conformity with AICPA presentation guidelines or on whether the underlying assumptions provide a reasonable basis for the presentation. Although you have authorized reports to be sent electronically for your convenience, only the final hard copy report should be viewed as our work product. We have enjoyed working on this engagement and our on-going relationship with the Maryland Stadium Authority and the Baltimore Development Corporation and look forward to the opportunity to provide you with continued service. If you have any questions regarding this report, please contact Susan Sieger at 813.281.1222. Sincerely, Crossroads Consulting Services LLC 4427 W. Kennedy Boulevard ∙ Suite 200 ∙ Tampa, Florida 33609 ∙ Phone 813.281.1222 ∙ Fax 813.315.6040 Market & Economic Study for Two Proposed New Soccer Stadiums in Downtown Baltimore, Maryland Table of Contents 1 Introduction 1 2 Overview of U.S. Soccer 6 3 Market Analysis 26 4 Comparable Facilities Analysis 72 5 Economic Analysis 98 6 Summary of Findings 114 1. Introduction 1 Introduction Municipalities and states throughout the U.S. have recognized the economic benefits associated with operating various public assembly facilities. In recent years, several stadiums, arenas, and convention centers have been developed with the use of public funds due, in part, to the ability of these venues to generate economic activity at area businesses and tax revenues for the local and State entities. In order to maximize resources, communities are increasingly seeking projects that better respond to the anticipated long-term needs of area residents and attract out-of-town visitors. As such, some communities choose to pursue public assembly facilities in order to capitalize on existing assets and enhance market opportunities by targeting a diverse set of demand generators. It is our understanding that the City of Baltimore (City) was approached by private sector parties to evaluate the merits of two proposed soccer stadium concepts which are expected to host a professional soccer club as the primary sports tenant along with a variety of other sports and entertainment activities. One proposed stadium is anticipated to be approximately 25,000 seats and would host D.C. United, a Major League Soccer (MLS) club, which currently plays at Robert F. Kennedy Memorial Stadium (RFK Stadium) in Washington, D.C. The proposed site is located along the Middle Branch of the Patapsco River within the Westport Waterfront community and would be part of a proposed $1.1 billion mixed- use development envisioned to include office and retail space, 2,000 residential units, a 500-room hotel and 10,000 parking spaces. The Westport Waterfront development includes 42 acres of waterfront property along the west shore of the Middle Branch from Waterview Avenue to just south of Interstate 95. The Turner Development Group and the Carlyle Group are developing this site. The stadium is anticipated to be an element that could generate a critical mass of attendees to the development in an effort to revitalize the area. The other proposed stadium is anticipated to be 7,000 to 10,000 seats and would host the Crystal Palace Baltimore soccer club of the United States Soccer Federation (USSF) Division-2 Professional League (D-2 Pro League), which has historically played at the Navy-Marine Corps Memorial Stadium on the campus of the Naval Academy in Annapolis and University of Maryland-Baltimore County (UMBC) Stadium, among others. The site for this proposed stadium is privately owned and located in the Carroll Camden area just southwest of M&T Bank Stadium and Oriole Park which could further enhance the sports district. The map that follows shows the general site locations for the proposed new soccer stadiums, both of which are near existing Maryland Transit Administration (MTA) light rail stops and proximate to I-95, I-395 and MD 295. 1. Introduction 2 Map of General Site Locations for the Proposed New Soccer Stadiums * # Notes: # denotes the proposed D.C. United Stadium site at Westport. * denotes the proposed Crystal Palace Baltimore Stadium site in the Carroll Camden area. Given the unique nature of these proposed projects and their potential to generate significant economic activity to local and State jurisdictions, the City asked the Maryland Stadium Authority (MSA) and the Baltimore Development Corporation (BDC) to jointly oversee a study that assesses whether construction of one or both of the proposed new soccer stadiums appears warranted from a market demand perspective; whether the opportunity exists to combine these concepts; as well as what the on-going operations of the proposed stadiums could potentially generate in incremental economic and fiscal impacts. Established by the State General Assembly in 1986, the MSA’s mission is to plan, finance, build and manage sports and entertainment facilities in Maryland; provide enjoyment, enrichment, education, and business opportunities for citizens; and develop partnerships with local governments, universities, private enterprise, and the community. Its projects promote historic preservation, adaptive reuse, community redevelopment, cultural arts, and civic pride. In planning selected projects, MSA has the latitude to negotiate with other government jurisdictions, and other departments within the State. Its mandate includes creating public-private partnerships for financing and operating facilities. 1. Introduction 3 The BDC is a 501(c)(3) corporation under contract with the City to provide economic development services. The BDC’s organizational structure is designed to be flexible and responsive to the changing needs of its customers - the existing business and development community and businesses considering Baltimore as a new location. The BDC’s mission is to create a robust and sustainable economy for Baltimore by: • Retaining and expanding existing businesses • Expanding the tax base by facilitating new real estate development opportunities • Promoting thriving business districts • Attracting new businesses • Supporting cultural resources The BDC is guided by its mission and by the core principle that a city must build on its strengths. Its approach to economic development includes market-driven, strength-based initiatives based on an assessment of the City’s capacities and assets. Given this backdrop, Crossroads Consulting was commissioned to assess specific market and economic issues associated with developing and operating two potential new soccer stadiums in downtown Baltimore. Although presented as one study, the merits of each stadium concept were evaluated separately based on the anticipated site location, general seating capacity, primary sports tenant and other potential user groups, and economic considerations. 1. Introduction 4 The following graphically illustrates the general methodology used to develop our findings and conclusions. Overview of Study Methodology • Youth Participation Overview of U.S. • MLS Soccer • USSF D-2 Pro League • USL First Division • Input from area stakeholders • General market characteristics Market Analysis • Area sports and entertainment
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