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STAR BOND FEASIBILITY STUDY September 2020

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STAR BOND FEASIBILITY STUDY September 2020 STAR BOND FEASIBILITY STUDY September 2020 Village East Project District Proposed Homefield Project (Project Areas 2B, 3 and 5) State Avenue and Interstate 435 Kansas City, Kansas 58533535.2 72851738.5 74663735.4 74663735.7 74663735.8 CANYON RESEARCH SOUTHWEST, INC. COMMERCIAL REAL ESTATE RESEARCH AND ANALYSIS STAR BOND FEASIBILITY STUDY VILLAGE EAST PROJECT DISTRICT PROPOSED HOMEFIELD PROJECT (PROJECT AREAS 2B, 3, and 5) STATE AVENUE AND INTERSTATE 435 KANSAS CITY, KANSAS September 2020 Prepared for: Homefield, LLC 411 Nichols Road, Suite 225 Kansas City, MO 64112 Prepared by: Canyon Research Southwest, Inc. 475 Ellicott Street #301 Buffalo, NY 14203 PR# 20-08-02 475 ELLICOTT STREET, SUITE 301 / BUFFALO, NY 14203 / (716) 327-5576 74663735.8 CANYON RESEARCH SOUTHWEST, INC. COMMERCIAL REAL ESTATE RESEARCH AND ANALYSIS September 10, 2020 Robb Heineman Homefield, LLC 411 Nichols Road, Suite 225 Kansas City, MO 64112 RE: STAR Bond Feasibility Study Village East Project District – Homefield Project; Kansas City, Kansas Mr. Heineman: In 2005, the Kansas Department of Commerce approved the allocation of STAR bonds for an approximately 380-acre STAR Bond District (with a single coterminous project area) located on the east side of Interstate 435 between the State Avenue and Parallel Parkway interchanges in Kansas City, Kansas. In August 2014, the Village East Project District was expanded to include an additional approximately 126 acres and certain adjacent right of way. The Village East Project District (the “Project District”) currently includes six separate project areas (Project Areas 1, 2A, 2B, 3, 4 and 5). The Project District is designed as a tourism-based mixed-use development. The initial phase of the Project District involved construction of the 65-acre Schlitterbahn Kansas City water park which opened in summer 2009. The Schlitterbahn Kansas City water park has closed. Current uses within the Project District include the U.S. Soccer National Training & Coaching Development Center (now known as the Pinnacle National Development Center), an auto mall, and other mixed-use components, including office, entertainment, restaurant, retail, and other commercial uses. The proposed STAR bond project within the Project District includes plans to convert Project Area 1 into a major multi-sport athletic complex known as Homefield and Homefield Outdoor. The multi-sport indoor and outdoor sports facilities will offer clinics, lessons, practices, training, and summer camps for a variety of amateur sports, as well as restaurant, bar, and entertainment spaces. A Homefield Youth Baseball Complex will occupy Project Area 4 and will include approximately eight (8) lighted fields, a scouting view tower, batting and pitching tunnels, concessions and restrooms, and Homefield Academy offices. There will also be destination retailers, retail shops, restaurants, automobile dealerships, hotels, multi-family housing, and other commercial uses developed within the Project District, as described in more detail herein. Collectively, all of these proposed projects are referred to herein as the “Homefield Project.” 475 ELLICOTT STREET, SUITE 301 / BUFFALO, NY 14203 / (716) 327-5576 74663735.8 CANYON RESEARCH SOUTHWEST, INC. COMMERCIAL REAL ESTATE RESEARCH AND ANALYSIS Pursuant to the STAR Bond Financing Act (the “Act”), Canyon Research Southwest, Inc. has prepared the attached STAR Bond Feasibility Study for the proposed Homefield Project. The proposed Homefield Project includes components in all Project Areas within the Village East STAR Bond District. Given the interrelated nature of many of the Homefield Project components, even though the Act only requires a study of the three Project Areas for which Project Plans are proposed (Project Areas 2B, 3, and 5), the attached study’s analysis covers all of the Homefield Project components in assessing the market viability of the proposed Project Plans for Project Areas 2B, 3, and 5 as well as forecasts the impact on the Kansas economy, out-of-state visitation, and STAR bond revenues and evaluates the impact on existing area businesses and active STAR bond projects. Upon review of the report, should any questions arise, or additional information requested, contact me directly at (716) 327-5576. Respectfully submitted, CANYON RESEARCH SOUTHWEST, INC. Eric S. Lander, Principal 475 ELLICOTT STREET, SUITE 301 / BUFFALO, NY 14203 / (716) 327-5576 74663735.8 T A B L E O F C O N T E N T S Page # SUMMARY OF MAJOR FINDINGS ............................................... iii INTRODUCTION .................................................................................... 1 Study Objective and Organization .......................................................... 1 Village East Project District Plan ............................................................ 4 The Homefield Project ............................................................................ 5 MARKET STUDY .................................................................................... 9 Tourism Destination Market Analysis .................................................... 10 Kansas City Area Attractions ................................................... 10 Tourism Market Trends ............................................................ 12 Athletic Facilities Market Analysis ......................................................... 18 Sports Participation ................................................................... 18 Comparable Athletic Facilities ................................................. 21 Assessment of Potential Market ............................................... 23 Facility Evaluation .................................................................... 24 Conclusions ............................................................................... 26 Automobile Dealership Market Analysis ................................................ 27 Auto Mall Concept ................................................................... 27 Kansas New Vehicle Dealership Franchise Law ...................... 27 Competitive New Vehicle Dealerships ..................................... 29 Site Evaluation .......................................................................... 32 Lodging Market Analysis ........................................................................ 34 Kansas City Transient Lodging Tax Revenues ........................ 34 Competitive Hotel Market ....................................................... 35 Site Evaluation ......................................................................... 37 Retail Market Analysis ............................................................................ 38 Retail Trade Area Defined ....................................................... 38 Kansas City Retail Market Overview ...................................... 39 Kansas City MSA Retail Pull Factor ....................................... 43 Retail Space Demand Estimates .............................................. 44 Competitive Retail Market ....................................................... 46 Site Evaluation ......................................................................... 47 Conclusions ............................................................................................. 48 MARKET IMPACT STUDY ............................................................... 51 Project Positioning and Unique Quality................................................... 51 Synergy with Area Businesses and Attractions ....................................... 52 Impact on Comparable Market Area Businesses .................................... 53 Estimated Customer/Visitor Counts ........................................................ 57 Estimated Retail Sales Potential............................................................... 66 Impact on Active Kansas STAR Bond Projects ...................................... 73 Canyon Research Southwest, Inc. i 74663735.8 T A B L E O F C O N T E N T S (Continued) Page # ECONOMIC IMPACT STUDY .......................................................... 85 Construction-Phase .................................................................................. 86 Operational-Phase ................................................................................... 90 STAR BOND REVENUE PROJECTIONS .................................... 93 STAR Bond Revenues ............................................................................. 93 Supportable Bond Debt Estimate ............................................................ 99 ADDENDA ................................................................................................. 104 Exhibit A: Canyon Research Southwest, Inc. Client Roster ................. 105 Exhibit B: Canyon Research Southwest, Inc. ........................................ 108 List of Public Financing Projects Exhibit C: Resume of Eric S. Lander, Principal .................................... 110 Canyon Research Southwest, Inc. Canyon Research Southwest, Inc. ii 74663735.8 SUMMARY OF MAJOR FINDINGS Sales Tax Revenue (“STAR”) bond financing is being sought to assist in funding a portion of the Village East Project District (“Project District”) located on the east side of Interstate 435 between the State Avenue and Parallel Parkway interchanges in Kansas City, Kansas. The Project District incorporates Project Areas 1, 2A, 2B, 3, 4, and 5 designed for a mix of sports, entertainment, retail, restaurant, lodging, automobile dealership, office, healthcare,
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