Mid-Markets, Major Pizzaz: Venues Getting It Right August 16, 2021 Table of Contents

Mid-Markets, Major Pizzaz: Venues Getting it Right August 16, 2021 Table of Contents 01 Introduction Savannah, Georgia 02 Rapid City, South Dakota 03 Augusta, Georgia 04 Henderson, Nevada 2 1 Introduction Design and Development Speakers Rob Hunden Don Dethlefs HB Brantley Troy Westover CEO, Hunden Sports, Recreation, HB Brantley, Facilities Manager, Strategic Partners, and Entertainment Project Executive City of Henderson Inc. Practice Leader, Consultant Perkins & Will [email protected] Don.Dethlefs@perk [email protected] Troy.Westover@city inswill.com ofhenderson.com hundenpartners.com | © 2021 HSP 4 2 Savannah & Rapid City Enmarket Arena Savannah, Georgia Size 216,000 Hockey Capacity 7,200 Construction Cost $130 million Cost per Seat $18,000 Cost per square ft. $600 EnmarketSavannahArena Arena Savannah, GA EnmarketSavannahArena Arena Savannah, GA Enmarket Arena Savannah, GA Enmarket Arena Savannah, GA Enmarket Arena Savannah, GA The Monument Arena Rapid City, South Dakota Size 226,000 Hockey Capacity 9,662 Construction Cost $112 million Cost per Seat $11,591 Cost per square ft. $476 TheRapid Monument City Arena- Rapid City Arena Rapid City, South Dakota The Monument - Rapid City Arena RapidRapid City, City South Arena Dakota TheRapid Monument City Arena- Rapid City Arena Rapid City, South Dakota TheRapid Monument City Arena- Rapid City Arena Rapid City, South Dakota The Monument - Rapid City Arena Rapid City, South Dakota The Monument - Rapid City Arena Rapid City, South Dakota James Brown Arena, 3 Augusta, GA ARENA DEVELOPMENT SWOT ANALYSIS 20 How External and Internal Factors Affect Project Viability INTERNAL FACTORS EXTERNAL FACTORS STRENGTHS OPPORTUNITIES § Existing book of Arena Business § James Brown Legacy § Georgia Cyber Center § Larger events POSITIVE § Healthcare § Connection to improving downtown § Augusta National Golf Club § Religious market WEAKNESSES THREATS § Lack of Attractions § Competition from Larger and Newer § Corporate Presence Facilities NEGATIVE § Access § Renovated Competitors § Existing JBA Size, Quality Regional Drive- Times The city is the economic and cultural center of an area an hour in almost any direction comprising 862,500 people, averaging $52,250 per household annually. Residing within a two-hour drive are 3,189,000, and a three-hour drive captures Atlanta, Charlotte, Greenville, Charleston and Savannah, totaling over 15,000,000. Augusta is the largest urban complex within a one-hour drive-time of downtown. Four-lane highways bring long-distance travelers from Atlanta, Columbia, Macon, Savannah by way of Statesboro. Direct high-speed access from the Greenville and Uplands region and Charleston area is hampered by an outdated two-lane road network, and thus, Interstate 20 is the only true long- distance highway through Augusta. 21 Population Distribution The Southeastern U.S. is not known for large cosmopolitan centers outside of Atlanta and Charlotte, however, as this nighttime light-sensitivity map illustrates, cities and towns cover the landscape, and the combined rural and mid-sized urban populations are far more substantial than it generally gets credited by outsiders. Many of the cities on this map are experiencing rapid growth, especially the larger urban areas, yet their growth is “flying under the radar" of national awareness. The television markets of Georgia and the Carolinas are show, with Augusta’s market outlined in red. The urban area’s sprawl is evident and appears to be similar in size to Savannah, Macon, and other cities, with room to grow. 22 Regional Competitive Arena Map HSP identified the regional competitive arenas within a 3-hour drive from the new James Brown Arena. Colonial Life Arena, located roughly 76 miles from the new JBA, is the closest competitive arena. The supply of competitive arenas becomes abundant outside of a 2-hour drive time from the new James Brown Arena. The competitive set consists of an array of arena types such as major city arenas, university arenas and coastal arenas. 23 Augusta Regional Arena Competitors by Relevance and Capacity # of Large Premium Employers in End- Capacity Seats per TV Market TV TV Market Miles from Stage per 1,000 Premium Large Venue Location Population Households (over 100) Augusta Capacity Capacity People Suites Seats Employer Colonial Life Arena Columbia, SC 1,120,656 365,850 1,934 76 18,000 13,000 16.1 45 872 0.45 Bon Secours Wellness Arena Greenville, SC 2,359,791 787,930 5,006 115 15,000 10,200 6.4 30 1,400 0.28 North Charleston Coliseum North Charleston, SC 933,068 309,250 2,048 143 13,000 8,200 13.9 -- -- -- Savannah Arena* Savannah, GA 967,051 315,400 2,544 121 9,437 8,300 9.8 13 617 0.24 Macon Coliseum Macon, GA 650,576 211,110 1,792 121 9,000 6,800 13.8 -- -- -- Average 1,206,228 397,908 2,665 115 12,887 9,300 12.0 29 963 0.32 Implied Augusta Arena Augusta, GA 748,759 241,000 1,934 -- 8,977 -- 12.0 17 627 0.32 *Under Construction Source: Pollstar, Various Venues Regional Competitors HSP evaluated the regional arena competitive set and narrowed it down to these five regional competitors. HSP believes that these five competitors are by Relevance and the most relevant to the new James Brown Arena due to the type of shows they host, capacity, and markets that they are involved in. The average Capacity capacity for this competitive set is roughly 13,000. 24 Capturable Arena Market Augusta’s current capturable area is shown in the adjacent map. Nearby arenas with higher quality amenities and larger capacities are pulling from the shared population between the existing arenas. 25 Current Arena Market The map to the right shows the capturable area of 75% of the attendees to the JBA. Most visitors are heavily clustered within the Augusta area, but a small portion will drive from the southwest where highways are readily accessible. 26 Current Arena Market The adjacent map indicates the origin of clusters of the top 75 percent of attendees at James Brown arena (show on the previous slide). 27 Capturable Arena Market Augusta’s new capturable market relative to nearby arenas is shown in the adjacent map. This new capturable area factors in a new arena development. 28 Recommendation 29 Scenarios Recommendations The primary recommendation for the development of the new James Brown Components Primary Secondary Arena includes the development of Arena rentable meeting space. This meeting End-Stage Capacity 10,000+ 10,000+ space will provide a connection from the Lower Bowl Capacity 6,500 6,500 James Brown Arena to the Bell Premium Seats 1,050 1,050 Auditorium. Suites 12 12 The secondary recommendation mimics Meeting Space (Bell Auditorium Connection) the preferred recommendation, without Ballroom (sf) 20,000 -- meeting space. Meeting Rooms 12 -- Meeting Rooms (sf) 1,200 -- Each recommendation includes a Boardroom (sf) 500 -- connection of the JBA to the Bell and an outdoor entertainment/festival area Other between the JBA and the Bell. Connection to Bell Auditorium Yes Yes Outdoor Event Plaza Yes Yes Source: Hunden Strategic Partners, S.P.A.C.E, Perkins & Will 29 Arena The arena and meeting space complex is expected to host more than 300 events Events & Event Days per year during stabilization and more than 400 event days per year. Arena Attendance HSP projects that the arena and meeting space complex will attract approximately 254,000 attendees in the stabilized year. Most attendees are expected to come from concerts, family shows and graduations. Arena Projection & Proforma Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Arena-Only Proforma (does not include Bell Auditorium) Revenue (000s) - Arena Only Rent/Net Ticket Rev $ 691 $ 804 $ 894 $ 994 $ 1,023 $ 1,041 $ 1,059 $ 1,078 $ 1,096 $ 1,115 Premium Seating $ 531 $ 536 $ 540 $ 544 $ 555 $ 537 $ 547 $ 558 $ 569 $ 581 Net Concessions/Catering $ 791 $ 923 $ 1,029 $ 1,158 $ 1,193 $ 1,217 $ 1,241 $ 1,266 $ 1,291 $ 1,317 Net Parking $ 151 $ 154 $ 150 $ 153 $ 156 $ 159 $ 162 $ 165 $ 168 $ 172 Naming Rights $ 275 $ 281 $ 286 $ 292 $ 298 $ 304 $ 310 $ 316 $ 322 $ 329 Advertising & Sponsorship (net) $ 260 $ 265 $ 271 $ 276 $ 281 $ 287 $ 293 $ 299 $ 305 $ 311 Facility Service Fee $ 386 $ 403 $ 403 $ 414 $ 422 $ 431 $ 439 $ 448 $ 457 $ 466 Other $ 54 $ 59 $ 63 $ 68 $ 70 $ 71 $ 72 $ 74 $ 75 $ 76 Total $ 3,138 $ 3,424 $ 3,635 $ 3,899 $ 3,998 $ 4,045 $ 4,123 $ 4,203 $ 4,284 $ 4,367 Expenses (000s) - Arena Only Salaries, Wages & Benefits $ 1,615 $ 1,647 $ 1,680 $ 1,714 $ 1,748 $ 1,783 $ 1,819 $ 1,855 $ 1,892 $ 1,930 General & Admin $ 255 $ 260 $ 265 $ 270 $ 275 $ 281 $ 287 $ 292 $ 298 $ 304 Utllities $ 466 $ 475 $ 485 $ 494 $ 504 $ 514 $ 525 $ 535 $ 546 $ 557 Repairs & Maintenance $ 257 $ 262 $ 268 $ 273 $ 278 $ 284 $ 290 $ 296 $ 301 $ 307 Insurance $ 180 $ 184 $ 188 $ 191 $ 195 $ 199 $ 203 $ 207 $ 211 $ 216 Advertising & Other $ 91 $ 93 $ 95 $ 97 $ 99 $ 101 $ 103 $ 105 $ 107 $ 109 Management Fee $ 212 $ 216 $ 221 $ 225 $ 229 $ 234 $ 239 $ 244 $ 248 $ 253 Total $ 3,077 $ 3,138 $ 3,201 $ 3,265 $ 3,330 $ 3,397 $ 3,465 $ 3,534 $ 3,605 $ 3,677 Net Operating Income $ 62 $ 286 $ 434 $ 634 $ 668 $ 648 $ 659 $ 669 $ 679 $ 690 Reserves (Authority Funded) $ 126 $ 137 $ 145 $ 156 $ 160 $ 162 $ 165 $ 168 $ 171 $ 175 Source: Hunden Strategic Partners HSP projects that the arena and meeting space complex will generate annual operating revenue of $3.1 million in Year 1 and increase revenues to more than Arena $4.3 million by Year 10. Certain key revenue items are shown as ‘net’, including Pro Forma concessions & catering, parking and advertising & sponsorship. Operating expenses are projected to total more than $3 million in Year 1 and increase to more than $3.6 million by the end of the period, resulting in positive net operating income prior to setting aside capital reserves.

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