Desert Discovery Center – Operating Plan
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ConsultEcon, Inc. Economic Research and Management Consultants July 2017 Desert Discovery Center – Operating Plan Prepared by: ConsultEcon, Inc. Prepared for: Desert Discovery Center Scottsdale July 2017 ConsultEcon, Inc. Economic Research and Management Consultants July 2017 TABLE OF CONTENTS Section Page TABLE OF CONTENTS i LIST OF TABLES ii LIST OF FIGURES v EXECUTIVE SUMMARY BUSINESS PLAN FOR THE DESERT DISCOVERY CENTER 1 Section I INTRODUCTION AND ASSUMPTIONS I-1 Section II SITE EVALUATION II-1 Section III DESERT DISCOVERY CENTER CONCEPT III-1 Section IV RESIDENT MARKET AREA DEFINITION AND ANALYSIS IV-1 Section V TOURISM MARKET V-1 Section VI SELECTED CONSERVATION AND EDUCATION DESTINATION CASE STUDIES VI-1 Section VII DESERT DISCOVERY CENTER ATTENDANCE POTENTIAL VII-1 Section VIII DESERT DISCOVERY CENTER OPERATING POTENTIAL VIII-1 APPENDIX A PRELIMINARY PROGRAM OF DDC SPACES A-1 Appendix B DERIVATION OF ESTIMATED SCOTTSDALE ANNUAL TOURISM VOLUME B-1 Appendix C DETAILED CASE STUDIES C-1 Appendix D REVIEW OF SELECTED SOURCES OF NON-OPERATIONAL FUNDS D-1 Appendix E REVIEW OF PRINCIPAL REVENUE CATEGORIES FOR SCIENCE CENTERS E-1 Appendix F PRELIMINARY MARKETING STRATEGY F-1 Desert Discovery Center i ConsultEcon, Inc. Economic Research and Management Consultants July 2017 LIST OF TABLES Table Page Table II-1 Traffic Patterns on SR 101 in Scottsdale SR101 Average Annual Daily Traffic Log 2011-2015/16 II-5 Table IV-1 Population Trend in the Resident Market Area, 2010, 2016, 2021 Proposed Desert Discovery Center IV-4 Table IV-2 Median Age and Percent of Population by Age Group in the Resident Market Area, 2016 Proposed Desert Discovery Center IV-5 Table IV-3 Estimated Number of Children Aged 5-17 in Resident Market Area, 2016 and 2021 Proposed Desert Discovery Center IV-6 Table IV-4 Resident Market Household Profile, 2016-2021 Proposed Desert Discovery Center IV-7 Table IV-5 Percent of Resident Market Area Households by Income Group, 2016-2021 Proposed Desert Discovery Center IV-8 Table IV-6 Percent of Resident Market Area Households by Income Group, 2016 Proposed Desert Discovery Center IV-9 Table IV-7 Resident Market Area Participation in Active Lifestyle Activities, 2016 Proposed Desert Discovery Center IV-10 Table IV-8 Resident Market Area Participation in Active Lifestyle Activities, 2016 Proposed Desert Discovery Center IV-11 Table V-1 Percent of Parties Containing Persons of Different Age Demographics 2009, 2012, 2015 V-14 Table V-2 Top Visitor States of Origin Participation in Active Lifestyle Activities, 2016 Proposed Desert Discovery Center V-15 Table V-3 Top Visitor States of Origin Participation in Leisure and Education Activities, 2016 Proposed Desert Discovery Center V-16 Table V-4 Scottsdale Visitors Activity Participation, 2010-2015 V-17 Table V-5 Selected Cultural and Nature Based Attractions Phoenix Metropolitan Area (Ranked by Attendance if Available) V-20 Desert Discovery Center ii ConsultEcon, Inc. Economic Research and Management Consultants July 2017 LIST OF TABLES (continued) Table Page Table VI-1 Review of Selected Case Study Characteristics VI-2 Table VI-2 Facility Size Characteristics of Selected Case Studies VI-4 Table VI-3 Market Population and Attendance of Selected Case Studies VI-6 Table VI-4 Adult Ticket Prices of Selected Case Studies VI-7 Table VI-5 Operational Characteristics of Selected Case Studies VI-8 Table VI-6 Personnel Spending Characteristics of Selected Case Studies VI-8 Table VII-1 Stable Year Preliminary Attendance Potential Desert Discovery Center VII-7 Table VII -2 Early Year Attendance Factors and Attendance Growth Pattern Desert Discovery Center VII-10 Table VII-3 Stable Year Monthly Attendance Distribution Desert Discovery Center VII-11 Table VII-4 Peak On-Site Population and Parking Demand Analysis Desert Discovery Center VII-12 Table VIII-1 Stable Year Admissions Analysis in Current Dollars Desert Discovery Center VIII-6 Table VIII-2 Attendance Distribution and Ticket Price Assumptions Desert Discovery Center VIII-7 Table VIII-3 Programs and Events Attendance and Revenue Potential Desert Discovery Center VIII-10 Table VIII-4 Operating and Revenue Assumptions, In Current Dollars Unless Noted Desert Discovery Center VIII-11 Table VIII-5 Revenue Potential Desert Discovery Center VIII-15 Table VIII-6 Illustrative Personnel Positions and Salaries Desert Discovery Center VIII-18 Desert Discovery Center iii ConsultEcon, Inc. Economic Research and Management Consultants July 2017 LIST OF TABLES (continued) Table Page Table VIII-7 Illustrative Annual Operating Expenses Desert Discovery Center VIII-20 Table VIII-8 5-Year Operating Expenses in Future Dollars Desert Discovery Center VIII-24 Table VIII-9 Net Income Summary Desert Discovery Center VIII-25 Table VIII-10 Comparison of Desert Discovery Center Operating Characteristics with Case Studies VIII-26 Table A-1 Preliminary Program of DDC Spaces A-1 Table B-1 Estimates of Number of Overnight Tourists to Scottsdale Market Area Hotels and Resorts B-1 Table B-2 Estimates of Number of Tourists in Targeted Market Segments B-2 Table C-1 Arizona-Sonora Desert Museum C-1 Table C-2 Desert Botanical Garden C-7 Table C-3 High Desert Museum C-16 Table C-4 Las Vegas Springs Preserve C-23 Table C-5 Living Desert C-32 Table E-1 Average Operating Revenue Sources by Location, Size, and Operating Expenses (Average Percent of Total) E-3 Table E-2 Public Funds Sources by Location, Size, and Operating Expenses (Average Percent of Total) E-4 Desert Discovery Center iv ConsultEcon, Inc. Economic Research and Management Consultants July 2017 LIST OF FIGURES Figure Page Figure 1 Regional Accessibility in Phoenix Metropolitan Area 2 Figure 2 Map of McDowell Sonoran Preserve Lands and Trails 4 Figure II-1 Regional Accessibility in Phoenix Metropolitan Area II-2 Figure II-2 Map of Location of Proposed Desert Discovery Center II-3 Figure II-3 Map of McDowell Sonoran Preserve Lands and Trails II-4 Figure II-4 Aerial View of Proposed Desert Discovery Center Site II-6 Figure II-5 Depictions of the McDowell Sonoran Preserve II-8 Figure II-6 Total Trail Count by Calendar Year II-9 Figure II-7 Individual Trail Count by Calendar Year II-10 Figure II-8 Total Trail Count by Month, 2013-2017 McDowell Sonoran Preserve Trails II-12 Figure II-9 Individual Trail County by Month, 2014-2016 McDowell Sonoran Preserve Trails II-13 Figure IV-1 Resident Market Areas for the Proposed Desert Discovery Center IV-2 Figure V-1 Trend in Arizona Domestic Overnight Visitors (in millions) by Non-Resident and Resident Visitors, 2002-2015 V-4 Figure V-2 Trend in Arizona Domestic Overnight Visitors (in millions) by Leisure and Business Visitors, 2002-2015 V-5 Figure V-3 Monthly Phoenix Sky Harbor International Airport Passenger Traffic, Phoenix Sky Harbor International Airport, 2014-2016 V-8 Figure V-4 Monthly Bed Tax Collections as a Percent to Total Annual Bed ax Collections, City of Scottsdale, 2011-2016 V-12 Desert Discovery Center v ConsultEcon, Inc. Economic Research and Management Consultants July 2017 LIST OF FIGURES (continued) Table Page Figure C-1 Arizona-Sonora Desert Museum Entrance C-5 Figure C-2 Crowning Saguaro Outdoor Exhibit at the Arizona-Sonora Desert Museum C-5 Figure C-3 Gift Shop at the Arizona-Sonora Desert Museum C-6 Figure C-4 Chihuly Exhibit at the Dessert Botanical Garden C-13 Figure C-5 Chihuly Exhibit at the Desert Botanical Garden C-14 Figure C-6 Exhibit at the Desert Botanical Garden C-14 Figure C-7 Desert Botanical Garden Trail Map C-15 Figure C-8 Entrance to Raptors of the Desert Sky at the High Desert Museum C-22 Figure C-9 High Desert Museum Map C-22 Figure C-10 Las Vegas Springs Preserve Lobby C-30 Figure C-11 Las Vegas Springs Preserve Café C-30 Figure C-12 Desert Living Center at the Las Vegas Springs Preserve C-31 Figure C-13 Living Collection at the Las Vegas Springs Preserve C-31 Figure C-14 Village WaTuTu Gift Shop at The Living Desert C-37 Figure C-15 The Living Desert Map C-38 Figure E-1 Operating Revenue Sources, 2015 (Average Percent of Total) E-2 Desert Discovery Center vi ConsultEcon, Inc. Economic Research and Management Consultants July 2017 EXECUTIVE SUMMARY BUSINESS PLAN FOR THE DESERT DISCOVERY CENTER This report presents a business plan for Desert Discovery Center (DDC) to be located adjacent to the McDowell Sonoran Preserve Gateway in Scottsdale, Arizona. The DDC business plan reflects the 2017 DDC concept, operating concept, proposed operating partnerships, site and architectural plans and concepts, Exhibition Concept Design, project scale and target capital cost and the relationship of DDC to its site and the overall McDowell Sonoran Preserve. The full design analyses and concepts are presented under separate cover, and are the specific project concept that this business plan is based on. This business plan also reflects input received from the DDC design team and Desert Discovery Center Scottsdale (DDCS), the not- for-profit organization that is leading the planning for and fundraising the 501(c)(3) organization, charged with developing the plans for DDCS and raising support and funding for its successful development. The research and analysis undertaken in preparing this DDC business plan were based on the following tasks: ♦ Evaluate, from a market and operating perspective, the site and facility concepts; ♦ Analyze the resident and tourist markets available to support DDC; ♦ Research the experience of other desert and arid place interpretive centers for their operating experiences and practices, and their success strategies; ♦ Analyze the attendance potential of DDC as currently planned; ♦ Estimate the operational revenue potential of the DDC concept as planned given its attendance potential and operating plan; ♦ Prepare a personnel plan and pro-forma operating budgets commensurate with DDC’s operating opportunity, the physical and exhibit plans and to support DDC’s success and fulfillment of its mission and objectives; ♦ For all baseline pricing, revenue and operating factors, unless otherwise noted, amounts are inflated from 2017 value of the dollar to 2021 estimated future value to reflect the planned opening date in October 2021.