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PROFESSIONAL SOCCER STADIUM August 2016

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PROFESSIONAL SOCCER STADIUM August 2016 FEASIBILITY STUDY: PROFESSIONAL SOCCER STADIUM August 2016 Conventions, Sports & Leisure International 7501 Lone Star Drive, Suite 200 • Plano, TX 75024 • Telephone 972.491.6901 • Facsimile 972.491.6903 August 2016 Mr. Jeff Mosley Louisville Metro Government Office of the Mayor 527 W. Jefferson Street Louisville, KY 40202 Dear Mr. Mosley: Conventions, Sports & Leisure International (“CSL”) and Legends are pleased to present this report addressing the feasibility of developing a professional soccer stadium in Louisville. The attached report summariZes our research and analyses and is intended to assist the Louisville Metro Government and other project stakeholders with making informed decisions. The information contained in this report is Based on estimates, assumptions and other information developed from research of the market, knowledge of the sports industry and other factors, including certain information that the Louisville Metro Government, Louisville City FC and others have provided. All information provided to us by others was not audited or verified and was assumed to Be correct. Because procedures were limited, we express no opinion or assurances of any kind on the achievaBility of any projected information contained herein, and this report should not Be relied upon for that purpose. Furthermore, there will Be differences Between projected and actual results. This is Because events and circumstances frequently do not occur as expected, and those differences may Be material. We have no responsiBility to update this report for events and circumstances occurring after the date of this report. We sincerely appreciate the opportunity to assist you with this project, and would Be pleased to Be of further assistance in the interpretation and application of the study’s findings. Very truly yours, CSL International Conventions, Sports & Leisure International 7501 Lone Star Drive, Suite 200 • Plano, TX 75024 • Telephone 972.491.6901 • Facsimile 972.491.6903 TABLE OF CONTENTS 1. INTRODUCTION ................................................................................................................................................................................................................ 1 2. OVERVIEW OF PROFESSIONAL SOCCER & LOUISVILLE CITY FC .................................................................................................................................................... 3 3. LOCAL MARKET CHARACTERISTICS ..................................................................................................................................................................................... 14 4. SOCCER-SPECIFIC STADIUM CASE STUDIES ........................................................................................................................................................................... 27 5. ESTIMATED DEMAND AND BUILDING PROGRAM RECOMMENDATIONS ....................................................................................................................................... 40 6. FINANCIAL PRO FORMA ................................................................................................................................................................................................... 47 7. ECONOMIC AND FISCAL IMPACTS ....................................................................................................................................................................................... 59 8. FUNDING OPTIONS ......................................................................................................................................................................................................... 66 APPENDIX A: MLS OPPORTUNITY AND IMPACT .......................................................................................................................................................................... 76 APPENDIX B: SITE ANALYSIS ................................................................................................................................................................................................... 81 1 1. Introduc,on DRAFT 1. 1. INTRODUCTION In 2013, a local investor group with minority ownership ties to the third division United Soccer As the community assesses the viability of a soccer-specific stadium to meet USL standards, League’s (“USL”) Orlando City Soccer Club bought a majority stake in the team in 2014 and the Louisville Metro Government is also considering the long-term potential that a successful moved it to Louisville after Orlando was awarded a Major League Soccer (“MLS”) franchise. USL franchise could lead to the market being considered for an MLS franchise (the first division of professional soccer) in the future, similar to other newly-minted MLS markets that The 2015 season marked Louisville City FC’s (“LCFC”) inaugural year in USL. LCFC plays its proved themselves in second or third division professional soccer such as Orlando, Montreal, home games at Louisville Slugger Field in downtown Louisville. The 13,131-seat Louisville Portland and Vancouver. Based on Louisville’s population and media market size relative to Slugger Field is a minor league ballpark that has been home to the Louisville Bats, a Triple-A other markets and lack of competition from other professional teams in the market, many affiliate of the Cincinnati Reds, since 2000. Owned by the Louisville Metro Government, community leaders believe MLS is Louisville’s most realistic opportunity at landing a major Louisville Slugger Field is operated by the Bats under a 20-year lease. LCFC serves as a professional sports franchise. secondary tenant under a five (5) year lease with the Bats through December 2019. As a next step in evaluating the merits of developing a soccer-specific stadium, the Louisville LCFC’s inaugural 2015 season was met with much success as the team averaged 7,032 fans Metro Government engaged Conventions, Sports & Leisure (“CSL”) and Legends to conduct a per game, ranking second highest among 24 USL teams and more than double the league feasibility study for the initial development of stadium meeting USL standards with longer- average attendance. The team also achieved on-field success by making the playoffs and term considerations of expanding to accommodate MLS should the opportunity arise. reaching the Eastern Conference finals. Entering its second season of play in 2016, LCFC has increased its season ticket base from its inaugural season and has achieved higher attendance in its initial home games this season compared to the same number of initial games during STUDY COMPONENTS Professional Soccer Stadium Feasibility last season. Local Competitive Despite its initial success in the stands and on the field, LCFC’s long-term viability in Louisville Market Venue Conditions Landscape is dependent on the development of a soccer-specific stadium. Under current conditions, LCFC sustains a sizeable operating loss due to the current facility configuration and lease Professional Comparable agreement which limits the revenue opportunities for the team, limits its ability to schedule Soccer Stadium Overview Benchmarking additional soccer matches and other revenue generating events, and results in higher than Utilization, normal game-day costs due to the conversion of the field between baseball and soccer. Building Program, Event Further, it is a stated goal of USL and MLS league representatives to have every franchise play Project Site & Organizer Orientation Project Interviews in a soccer-specific stadium in which they are the prime tenant in order to achieve financial Costs stability. As a result, the Louisville Metro Government is evaluating the merits of developing a soccer- specific stadium to better accommodate the needs of LCFC and ensure its long-term Financial Pro Forma, sustainability in the marketplace. Through stadium development, the Louisville Metro Economic and Fiscal Impact & Government is also seeking to spur additional development in a manner consistent with the Funding/Management Options positive impacts created by Louisville Slugger Field and the KFC Yum! Center. 1 2. 1. INTRODUCTION In order to evaluate the feasibility of a new soccer-specific stadium, CSL met with City and team officials, toured the community and potential stadium sites, reviewed LCFC’s historical operations, reviewed USL and MLS league operations, assessed local market conditions, researched comparable new soccer-specific stadiums, conducted interviews with potential stadium users and evaluated potential stadium sites. Research results were used to estimate potential demand, identify general stadium programming elements necessary to accommodate demand and meet USL standards, estimate stadium development costs, develop a financial pro forma, quantify potential economic and fiscal impacts and identify potential funding options. The study’s findings are presented in the following sections: 1. Introduction 2. Overview of Professional Soccer & Louisville City FC 3. Local Market Characteristics 4. Soccer-Specific Stadium Case Studies 5. Estimated Demand and Building Program Recommendations 6. Financial Pro Forma 7. Economic and Fiscal Impacts 8. Funding Options Appendix A: MLS Opportunity and Impact Appendix B: Site Analysis The remainder of this report outlines the key findings of the market and financial feasibility study for a new soccer-specific stadium in Louisville. The report should be read in its entirety to obtain the background, methods and
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