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Laconia Sports Complex Laconia Sports June 21, 2019 Complex – Market and Financial Feasibility Analysis 1 Executive Summary v Chapter 1: Project Orientation v Chapter 2: Economic, Demographic and Tourism Analysis v Chapter 3: Local Inventory and Condition Assessment v Chapter 4: Demand Analysis and Stakeholder Feedback v Chapter 5: Regional Sports Facilities Analysis Table of Contents v Chapter 6: Sports Tournaments and Opportunity Analysis v Chapter 7: Case Studies v Chapter 8: Support Amenities - Hotel & Restaurant Analysis v Chapter 9: Site Analysis v Chapter 10: Conclusions v Chapter 11: Partnerships & Funding v Chapter 12: Demand & Financial Projections v Chapter 13: Economic, Fiscal, and Employment Impact Analysis 2 Executive Summary 3 Key Questions The Lakeshore Redevelopment Planning Commission (Client) engaged the Hunden Strategic Partners Team (HSP), including design professionals from NBBJ, to investigate the feasibility of developing a sports complex at the Lakes Region site in Laconia, New Hampshire (Project). The study aims to answer the following key questions: § What is the market opportunity for a new indoor or outdoor sports complex development in Laconia? § What is the existing supply of sports and recreation facilities in Laconia and the surrounding area? Is there a gap in quality or size of facilities? What is the level of local demand for a new sports facility or complex? § What is the existing state and greater regional supply of sports complexes capable of hosting impactful tournaments and events? Is there a gap in supply that a new facility in Laconia could accommodate? What is the opportunity to host major state and regional tournaments? § How is the area hotel market performing and what support amenities exist in the area? What does this mean for the market opportunity for a new sports facility or complex? § Based on the comprehensive market analysis, what are the conclusions and recommendations? Should multiple scenarios be considered? § What are the pros and cons of the potential development site? 4 Headlines § An adequate supply of indoor and outdoor sports complexes exist in New Hampshire and throughout New England. Laconia’s population base, lack of branded hotel rooms, and proximity to larger markets will make it difficult to attract large regional tournaments. § The hotel market in Laconia and surrounding cities is performing fairly well with solid rates and occupancies over 60 percent. Hotel performance is driven by strong summer months due to leisure activities in the region. The gaps in hotel performance occur during the shoulder seasons and winter months. The gap suggests that an indoor sports complex could have positive impact on hotel performance during the shoulder seasons and winter months. § Locally, the lack of available, quality indoor athletic facilities presents a major challenge for area clubs to train and practice during the season and throughout the offseason, both for indoor as well as outdoor sports. § HSP’s analysis indicates that opportunity exists for a new sports complex to both accommodate local demand and drive sports tourism to the site. § While sports facilities are impactful, they often do not break even operationally, necessitating the investment upfront and ongoing support of outside forces. Most of the spending that occurs from a facility generally happens in lodging, restaurants, attractions and retail. Attracting private capital to such facilities is difficult, even if they are busy and impactful. 5 Headlines § HSP’s analysis suggests that there is enough demand generated by Laconia area organizations to fill a new court/gymnasium facility in the evenings throughout the winter season. This demand would drive significant rental revenue to any new indoor complex. The development of a flexible indoor court complex would likely also result in the creation of new local and regional events. § Based on the comprehensive market analysis, HSP recommends that a 4-court indoor facility be developed. The facility would offer 4 regulation basketball courts which can be converted to 8 volleyball courts. Such a facility could accommodate weekly use for flat-floor sports, as well as smaller regional weekend events. While such a facility would be able to accommodate other flat-floor activities such as pickleball, wrestling, robotics, and Esports, the primary benefit would be to Laconia area sports organizations. § While there is also demand for outdoor fields to accommodate soccer, lacrosse and other field sports, this demand may not be enough to generate a fiscal return on investment due to issues with an uneven site (more expensive to develop) and already occupied hotel rooms with high rates in the summer months. The sloped site will greatly influence the cost and viability of outdoor facilities that will take up more land than an indoor facility. § While there is a demand for ice and indoor turf fields, the cost to develop such a facility is much greater and offers less flexibility for various sports which limits potential impact. Additionally, there is an adequate supply of ice and indoor turf within a 60 mile radius. 6 Recommended Program The adjacent table summarizes the recommended program based on market conditions and opportunity. The projection model for the scenario assumes that the Laconia sports facility will primarily cater to basketball, volleyball, and indoor flat floor sports (wrestling, dance, etc.). These event projections include various sized tournaments that are assumed to rent the entire facility for multiple days over a weekend, as well as smaller single day events. Projections also include Events midweek court rental hours for practice, training, and leagues at the facility. Overall, HSP projects the indoor complex to host 63 events and more than 2,700 additional rental hours per year by stabilization (Year 5). Family and friends accompany most of the participants. Tour naments are assumed to bring between one and 1.6 spectators per participant. Trends show that the younger the participant, the more family and friends accompany the participant to Attendance the event. By stabilization, HSP projects more than 77,000 total attendees at the facility driven by events. Financial Projections The model assumes events will pay daily, hourly or facility rental fees to use the facility, based on fees charged at comparable facilities. This model assumes a $5 gate fee per car for weekends tournaments. As shown, rental fees are projected to be the largest revenue source, increasing to roughly $370,000 by Year 10. Impact The table to the right shows a summary of estimated combined 20- year impacts for the recommended complex. The net new spending for the Project totals $221 million over the 20-year period, $64 million in new earnings, 186 new full-time equivalent jobs, and more than $1.5 million in new taxes collected from the ongoing spending over 20 years. The construction impact will be more than $7 million on materials and labor, most of which will accrue to the local economy and local workers. The 25 job-years will be a temporary boom for the local economy. Chapter 1: Project Orientation 12 Project Orientation The Lakeshore Redevelopment Planning Commission (Client) engaged the Hunden Strategic Partners Team (HSP), including design professionals from NBBJ, to investigate the feasibility of developing a sports complex on the state-owned Lakes Region Facility site in Laconia, New Hampshire. The Client is interested in understanding how a sports facility could best serve the community through improved quality of life, additional overnight stays, new jobs and a boost in economic impact to Laconia. 13 Redevelopment Commission Feedback Initial feedback from the Client provided insight to the history of the Project as well as the goals of the study. § A new sports complex would align with § The City, county and state will likely not invest Laconia’s reputation as a tourism destination significant money into the Project; private o A population of about 16,000 grows to sector involvement will have to play a role roughly 35,000 in the summer § There have been past attempts to activate this o There are plenty of restaurants and specific parcel of land without success entertainment to support additional § Overall academic enrollment in the region has tourists been declining – the Project could help attract § The site is in an opportunity zone younger families to the area § § It is important to determine what would Indoor sports have been a challenge to happen with the Lakes Region Mutual Fire Aid accommodate, so the region is losing athletes Building if a new facility is built on that site in the winter months 14 Chapter 2: Economic, Demographic and Tourism Analysis 15 Laconia Regional Area The adjacent figure shows Laconia’s location within the greater New England region. Laconia is 45 miles north of Manchester, 60 miles northwest of Portsmouth, 85 miles west of Portland, and 94 miles north of Boston. Lake Winnepesaukee is the largest lake in the state and third largest in New England, making it a popular summer destination. New Hampshire Lakes Region Laconia has relatively fast and easy access to locations along the north-south oriented I-93 corridor. However, points east or west of the City tend only to be accessible by two-lane highways which slows travel time. The area is halfway between the population centers to the south and southeast. The area is home to a Tanger Outlets shopping center, which is popular with visitors due to no state sales tax. Laconia Drive-time Map The population increases from over 75,000 to nearly four million from a 30-minute drive- time to a two hour drive-time. Average household income surpasses $100,000 in this same two-hour drive-time area. Population & Growth Rates Population and Growth Rates Laconia is the county-seat of Population Percent Change Belknap County and part of 2000 2010 2018 2023 Projected 2010 - 2018 United States 281,421,906 308,745,538 330,088,686 343,954,683 6.9% the Laconia New Hampshire New Hampshire 1,235,786 1,316,470 1,374,067 1,408,984 4.4% Micropolitan Statistical Area.
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