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New Morro Bay Aquarium Market and Economic Feasibility Study

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New Morro Bay Aquarium Market and Economic Feasibility Study ConsultEcon, Inc. Management & Economic Insight January 23, 2018 New Morro Bay Aquarium Market and Economic Feasibility Study Prepared by: ConsultEcon, Inc. Prepared for: Central Coast Aquarium January 2019 ConsultEcon, Inc. Management & Economic Insight January 23, 2018 TABLE OF CONTENTS Section Page TABLE OF CONTENTS i LIST OF TABLES ii LIST OF FIGURES iv EXECUTIVE SUMMARY 1 Section I INTRODUCTION AND ASSUMPTIONS I-1 Section II PROJECT DESCRIPTION II-1 Section III MARKET CONTEXT III-1 Section IV REVIEW OF SELECTED COMPARABLE AQUARIUMS IV-1 Section V PRELIMINARY ATTENDANCE AND ECONOMIC POTENTIAL V-1 New Morro Bay Aquarium i ConsultEcon, Inc. Management & Economic Insight January 23, 2018 LIST OF TABLES Table Page Table 1 Preliminary Net Income Potential Summary New Morro Bay Aquarium 6 Table III-1 Population Trend in the Resident Market Area, 2010, 2018, 2023 New Morro Bay Aquarium III-4 Table III-2 Population Age Profile in the Resident Market Area, 2018 New Morro Bay Aquarium III-5 Table III-3 Estimated Number of School Age Children in Resident Market Area, 2018 New Morro Bay Aquarium III-6 Table III-4 Educational Attainment of Population over 25 years old, 2018 Estimate New Morro Bay Aquarium III-6 Table III-5 Resident Market Household Profile, 2018 New Morro Bay Aquarium III-7 Table III-6 Percent of Resident Market Area Households by Income Group, 2018 New Morro Bay Aquarium III-8 Table III-7 Seasonality of Trips to SLO County, FY 2015 III-12 Table III-8 Arrival Method to San Luis Obispo County, FY 2015 III-14 Table III-9 Morro Bay/SLO CAL Area Museums & Attractions New Morro Bay Aquarium III-18 Table III-10 Size and Attendance Characteristics of California AZA-Accredited Aquariums New Morro Bay Aquarium III-22 Table IV-1 Selected Location Characteristics of Benchmarked Facilities Morro Bay Aquarium IV-2 Table IV-2 Selected Market Characteristics of Benchmarked Facilities Morro Bay Aquarium IV-4 Table IV-3 Selected Sizing Characteristics of Benchmarked Facilities Morro Bay Aquarium IV-5 Table IV-4 Selected Operating Characteristics of Benchmarked Facilities Morro Bay Aquarium IV-6 New Morro Bay Aquarium ii ConsultEcon, Inc. Management & Economic Insight January 23, 2018 LIST OF TABLES (continued) Table Page Table V-1 Visitation Potential Estimates New Morro Bay Aquarium V-6 Table V-2 Early and Stabilized Year Attendance Trends New Morro Bay Aquarium V-7 Table V-3 High Day Facility Sizing Parameters in Stabilized Year New Morro Bay Aquarium V-8 Table V-4 Admissions and Membership Analysis in 2018 Dollars in Mid Range Stabilized Year New Morro Bay Aquarium V-9 Table V-5 Attendance and Visitor Spending Assumptions at Mid Range Attendance Potential New Morro Bay Aquarium V-10 Table V-6 Operating Assumptions in Stabilized Year Mid-Range in 2018 Dollars New Morro Bay Aquarium V-11 Table V-7 Preliminary Earned Revenue Potential Estimate Stabilized Mid Range Attendance New Morro Bay Aquarium V-12 Table V-8 Illustrative Personnel Positions and Salaries New Morro Bay Aquarium V-13 Table V-9 Illustrative Stabilized Year Operating Expenses in 2018 Dollars New Morro Bay Aquarium V-14 Table V-10 Operating Expenses in Mid Range Attendance Potential Scenario New Morro Bay Aquarium V-15 Table V-11 Preliminary Net Income Potential Summary New Morro Bay Aquarium V-16 New Morro Bay Aquarium iii ConsultEcon, Inc. Management & Economic Insight January 23, 2018 LIST OF FIGURES Figure Page Figure II-1 ConsultEcon Photos of Old Morro Bay Aquarium Interior II-2 Figure II-2 Central Coast Aquarium II-3 Figure II-3 Regional Context San Luis Obispo County, California II-6 Figure II-4 City of Morro Bay II-7 Figure II-5 Site of Morro Bay Aquarium Morro Bay Aquarium II-9 Figure II-6 Street View of Morro Bay Aquarium Morro Bay Aquarium II-10 Figure II-7 View of the Wharf at Former Morro Bay Aquarium II-11 Figure II-8 View of Morro Bay from Aquarium II-12 Figure II-9 Map of Street Access to Morro Bay Aquariums Central Coast Morro Bay Aquarium II-13 Figure II-10 Morro Bay Public Transit Bus Route Map Central Coast Morro Bay Aquarium II-14 Figure II-11 Morro Bay Public Transit Trolley Route Map Central Coast Morro Bay Aquarium II-15 Figure II-12 Local Context II-17 Figure II-13 Site Map for Central Coast and Morro Bay Aquariums Central Coast Morro Bay Aquarium II-18 Figure II-14 AADT Traveling South or West on CA RTE-1, 2016 Central Coast Morro Bay Aquarium II-20 Figure II-15 AADT Traveling North or East on CA RTE-1, 2016 Central Coast Morro Bay Aquarium II-21 Figure III-1 San Luis Obispo County Population Density New Morro Bay Aquarium III-2 Figure III-2 Resident Market Area Definition New Morro Bay Aquarium III-3 Figure III-3 Primary Trip Purpose to San Luis Obispo County, FY 2015 III-11 New Morro Bay Aquarium iv ConsultEcon, Inc. Management & Economic Insight January 23, 2018 LIST OF FIGURES (continued) Figure Page Figure III-4 Arrival Method to San Luis Obispo County, FY 2015 III-13 Figure III-5 Total Visitor Spending Trends in Morro Bay from 2014 to 2017 III-16 Figure III-6 Hotel and Motel Occupancy and Room Nights (000) FY 2015-2016 III-17 Figure III-7 Wide-range view of Attraction Locations New Morro Bay Aquarium III-20 Figure III-8 Close-range View of Attraction Locations New Morro Bay Aquarium III-21 Figure III-9 Map of AZA-accredited Aquariums in California New Morro Bay Aquarium III-23 Figure III-9a Zoomed in view of Attraction Locations, Southern Cal/L.A. area New Morro Bay Aquarium III-24 Figure III-9b Zoomed in view of Attraction Locations, Northern Cal/SF area New Morro Bay Aquarium III-25 Figure IV-1 Examples of Public Private Partnerships IV-9 New Morro Bay Aquarium v ConsultEcon, Inc. Management & Economic Insight January 23, 2018 EXECUTIVE SUMMARY This report reviews the preliminary market and economic feasibility of a new Morro Bay Aquarium to be rebuilt at 595 Embarcadero in Morro Bay with both “main street” access and direct water access in Morro Bay at the rear of the building. The new Morro Bay Aquarium is planned to be operated by the Central Coast Aquarium (CCA) in Avila Beach in collaboration with the City of Morro Bay and California Polytechnic State University, San Luis Obispo (CalPoly). Project Description For the purposes of this market and economic feasibility analysis, the new Morro Bay Aquarium is assumed to be 4,000 square feet (SF) in size with 7,500 gallons of exhibit water. A preliminary description of the visitor experience has been developed that focuses on interpreting uniqueness of Morro Bay within aquarium tanks, with touch tanks and other interpretive displays as well as an opportunity for CalPoly to exhibit some of their research. It is planned that the Aquarium will offer educational on-the-water experiences in Morro Bay working with local boat tour and water sports’ operators. CCA would be an excellent operator of the Morro Bay Aquarium as they have a proven track record of high-quality aquarium operations, they know the local market and have knowledgeable local staff. The success of the CCA in terms of it programming and content within a limited physical space is due to having passionate and knowledgeable staff as explainers: this is critical to the success of the new Morro Bay Aquarium, also within a limited physical space. Site Context Morro Bay is a centrally located coastal city in San Luis Obispo County. It is 15 miles northwest of San Luis Obispo and 25 miles north of Avila Beach—where the CCA is located. Morro Bay is off of California State Route 1, which spans a greater portion of the California Coastline, in addition to linking cities like San Luis Obispo and Avila Beach to Morro Bay. The site of the Morro Bay Aquarium is at the former Morro Bay Aquarium located at 595 Embarcadero in the city center of Morro Bay. The Morro Bay Aquarium site is well positioned in the city in reference to commercial areas and public transit, in addition to having waterfront access from a wharf in the rear of the building. Limiting to the potential aquarium is the availability of parking, which is a city-wide challenge. There are on-street parking options, a small 11-car parking lot adjacent to the building, as well as further car parks. Overall, the Morro Bay Aquarium has an excellent site with its prime location on the commercial Embarcadero, its access to the ocean will, and the City’s connectivity to California State Route 1. New Morro Bay Aquarium 1 ConsultEcon, Inc. Management & Economic Insight January 23, 2018 Resident Market The Resident Market Area for the new Morro Bay Aquarium is defined as residents of San Luis Obispo County. The Resident Market Area population has the following demographic characteristics: ♦ A median age of 40.5; a population somewhat older than that of the State of California and the U.S. as a whole. ♦ A population in a key market segment – children ages 5 to 17 - that is projected to increase by approximately 3.0 percent over the period 2018 to 2023 – a rate that is higher than both that of the State and the U.S. as a whole. ♦ In 2018, 35.7 percent of the population over 25 years old had attained bachelors and advanced degrees, which was a higher percent of population than in California, and the U.S.
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