Gilroy Gardens Economic Impact Analysis Study

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Final Report

Gilroy Gardens Economic Impact Analysis

Prepared for:

Gilroy Gardens

Prepared by:

Economic & Planning Systems, Inc. (EPS)

November 8, 2019

EPS #192005

Table of Contents

1. INTRODUCTION AND SUMMARY OF ECONOMIC ANALYSIS RESULTS ...... 1

Introduction ...... 1 Summary of Findings ...... 2

2. GILROY GARDENS EXISTING OPERATIONS AND EXPANSION CONCEPTS ...... 5

Gilroy Gardens History and Existing Operations ...... 5 Conceptual Master Plan Opportunities ...... 5

3. ECONOMIC ANALYSIS METHODOLOGY AND RESULTS ...... 9

Input-Output Modeling Concept ...... 9 Annual Operations and Direct On-Site Visitor Spending ...... 11 Direct Off-Site Visitor Spending ...... 16 One-Time Construction Impacts ...... 20 Key Takeaways ...... 23

Appendices:

Appendix A: Visitor Direct Off-Site Spending Technical Analysis

Appendix B: Gilroy Gardens Employment and Payroll Technical Support

Appendix C: Mountainside Adventure Park Technical Support

List of Tables

Table 1 Summary of Key Outputs ...... 3 Table 2 Summary of Key Direct Operations and Expenses ...... 8 Table 3 Summary of Economic Impacts in Gilroy from Annual Operations ...... 13 Table 4 Summary of Economic Impacts in Santa Clara County from Annual Operations .... 14 Table 5 Estimated Sales Taxes Conferred to the City based on Visitor On-Site Retail Spending ...... 15 Table 6 Summary of Estimated Economic Impacts in Gilroy based on Off-Site Visitor Spending ...... 17 Table 7 Summary of Estimated Direct Off-Site Aggregate Spending Captured in Gilroy and Estimated Generated Sales Tax Revenue ...... 18 Table 8 Summary of Economic Impacts in Gilroy from One-Time Construction ...... 21 Table 9 Summary of Economic Impacts in Santa Clara County from One-Time Construction ...... 22

1. INTRODUCTION AND SUMMARY OF ECONOMIC ANALYSIS RESULTS

Introduction

Economic & Planning Systems, Inc. (EPS) has been retained by Gilroy Gardens, Inc. (Gilroy Gardens) to prepare an Economic Analysis of Gilroy Gardens existing operations and 2 potential park expansion concepts.

Gilroy Gardens, located in the City of Gilroy (City), is a nonprofit educational institution founded by Michael and Claudia Bonfante, founders of the Nob Hill Foods supermarkets. Gilroy Gardens’ missions are to educate guests and to foster a greater appreciation of horticulture and the natural environment. Gilroy Gardens currently operates a family theme park on less than 50 acres of City-owned property totaling 536 acres.

In the early to mid-2000s, Gilroy Gardens struggled financially. Gilroy Gardens then engaged Paramount Parks, Inc. (now Cedar Fair Entertainment Company [Cedar Fair]) to manage the park’s operations and provide strategic guidance on financial decisions and long-range planning. In 2007, the Gilroy Gardens Board of Directors approached the City with an offer to purchase the 536 acres of land on which Gilroy Gardens operates. In the succeeding 10 years, Gilroy Gardens experienced modest, sustainable growth supported by new attractions and diversified programming. However, Gilroy Gardens’ management has concerns regarding increasing labor costs and the potential that existing attractions will not be sufficient to increase visitation.

To ensure Gilroy Gardens’ visitation grows, Gilroy Gardens engaged Jack Rouse Associates (JRA) to prepare a Conceptual Master Plan with the goal of increasing annual visitation from approximately 450,000 to 800,000. Initial concepts include a water park expansion, a mountainside adventure park addition, a science lab learning center, and more. Currently, Gilroy Gardens is evaluating options to attract capital for 2 potential theme park expansions, including the Water Park Expansion and the Mountainside Adventure Park Addition (together, Expansion Options). Key assumptions for the Water Park Expansion are based on information developed by Gilroy Gardens and EPS; and assumptions for the Mountainside Adventure Park Addition are based on a Concept Design and Business Plan prepared by Select Contracts – a contractor that designs, constructs, and operates adventure parks, water parks, and theme parks.

As previously mentioned, Gilroy Gardens retained EPS to prepare an Economic Analysis of Gilroy Gardens existing operations and potential Expansion Options. Specifically, Gilroy Gardens desires to understand the economic benefits that current park operations and the proposed Expansion Options attribute to the City. To estimate these economic benefits, EPS estimated the economic activity generated from the Gilroy Gardens existing operations and Expansion Options as listed below.

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 Annual park operations and direct on-site visitor spending.  Direct off-site visitor spending.  One-time construction activities.1

This report presents a summary of the key findings within this Executive Summary. Within the main body of the report is a more detailed overview of Gilroy Gardens and the proposed Expansion Options, and the methodology to estimate the potential economic benefits that Gilroy Gardens provides to the City, in addition to the potential economic benefits that the Expansion Options may provide to the City, if realized.

Summary of Findings

Gilroy Gardens and the proposed Expansion Options can be key elements to the City’s Strategic Plan Goals of ensuring financial stability and cultivating revenue driven economic development. Gilroy Gardens existing operations drives outside visitation into the City, while the Expansion Options, if realized, will increase outside visitation to Gilroy, boosting economic activities in the City, such as visitor spending at shops, restaurants, and potentially lodging. The analysis presented in this Economic Analysis identifies the current estimated economic impact Gilroy Gardens provides to the City and estimates the growth of that impact should the Expansion Options in the Conceptual Master Plan be completed. Table 1 provides a summary of key outputs developed in this Economic Analysis.

Table 1 summarizes key outputs of the analysis including the following items. The body of this report provides a thorough explanation of the assumptions and analysis used to generate these findings.

 Estimated annual on-site revenues reflect the operating revenues (i.e., admission, parking, food and beverage, merchandise) generated by each park option.

 Estimated number of annual jobs supported.

— Theme Park (Salaried and Hourly) represent the number of persons employed by each park option.

— Supported by visitor spending reflects the number of persons employed in businesses outside of Gilroy Gardens based on visitor spending in off-site establishments in Gilroy (i.e., restaurants, gas stations).

 Estimated annual compensation shows the estimated wages and fringe benefits supported by the jobs described above.

 Estimated annual off-site visitor spending reflects the estimated spending that occurs by Gilroy Gardens visitors at commercial establishments in the City. This estimate reflects an average between a low and high visitor spending scenario.

1 This evaluation is relevant to only the Expansion Options since there is no significant construction activities associated with the existing park operations.

Economic & Planning Systems, Inc. (EPS) 2 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Reports\192005 Final Report 11-08-19.docx Table 1 Gilroy Gardens Economic Impact Analysis Summary of Key Outputs (2019$)

Expansion Options Mountainside Existing Water Park Adventure Park Item Operations Expansion Addition

Estimated Annual Days of Operation 172 100 364

Estimated Annual Attendance 445,500 200,000 204,600

Estimated Annual On-Site Revenues $15,370,000 $8,000,000 $17,100,000

Estimated Number of Annual Jobs Supported Theme Park - Salaried 20 2 11 Theme Park - Hourly [1] 872 294 TBD Supported by Visitor Spending in Gilroy [2] 9 5 11 Total Estimated Annual Jobs Supported 901 301 TBD

Estimated Annual Compensation Theme Park - Salaried $1,986,000 $199,000 $1,129,000 Theme Park - Hourly $5,570,000 $1,876,000 $3,063,000 Supported by Visitor Spending [2] $325,000 $169,000 $415,000 Total Estimated Annual Compensation $7,881,000 $2,244,000 $4,607,000

Estimated Annual Off-Site Visitor Spending [3] $1,766,000 $918,000 $2,252,000

Estimated Annual Indirect & Induced Economic Impacts in Gilroy [4] $53,800 $27,700 $59,300

Estimated Annual Sales Taxes Conferred to Gilroy On-Site Park Visitor Spending $56,500 $29,400 $32,200 Off-Site Park Visitor Spending [3] $11,900 $6,200 $15,200 Total Estimated Annual Sales Taxes Conferred to Gilroy $68,400 $35,600 $47,400

Expansion Options Construction Impacts Estimated Direct Construction Costs [5] N/A $20,000,000 $16,521,000 Indirect & Induced Economic Impacts in Gilroy [4] N/A $50,200 $41,500

key summ [1] In this planning phase, Select Contracts does not provide estimates for the number of hourly employees. See Table C-3 for details. [2] Reflects the annual jobs and associated compensation generated by off-site visitor spending in Gilroy establishments. These estimates reflect an average of low and high spending scenarios. See Table 6 for details. [3] Reflects an average of low and high spending scenarios. See Table 6 for details. [4] As explained in Chapter 2 of this report, indirect and induced impacts comprise the economic outputs that ripple through the local and regional economy based on changes in direct economic outputs (e.g., park operation revenues, visitor spending in local establishments, construction).

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 Estimated annual indirect and induced economic impacts in Gilroy comprises the economic outputs that ripple through the local economy based on changes in direct economic outputs.

 Estimated annual sales taxes conferred to Gilroy reflect the allocation of sales taxes conferred to the City based on visitor spending.

 Estimated direct construction costs represents the “hard” costs (i.e., materials and labor) to develop each Expansion Option. This estimate does not include soft costs (i.e., design, engineering, project management) and contingency.

As Gilroy’s dining, entertainment, recreation, and lodging options expand—as there are opportunities in Downtown, near the Premium Outlets, and along the Hecker Pass Highway— Gilroy can increase its share of captured visitor spending, realizing greater economic and fiscal benefits from retail spending and overnight stays.

As discussed in EPS’s Gilroy Place-Based Economic Development Strategy Public Review Draft Report, there is great potential for the development of a “base village” near the entrance of Gilroy Gardens. With further study, this base site could accommodate a mixed-use village offering a mix of hospitality and entertainment uses such as a hotel, restaurants, and retail suited to Gilroy Gardens and the Mountainside Adventure Park. Such concept may be key in increasing economic activity and fiscal benefits to the City. Nonetheless, the tourism-drawing Expansion Options, in conjunction with additional tourism-related developments (e.g., spas, wineries) along the Hecker Pass Highway, are critical to creating a tourism district that provides activities to justify overnight stays in Gilroy.

If the planned expansion should help tip the balance toward development of new visitor accommodations, the fiscal benefits could be considerable, for example, in rough magnitude, EPS estimates that a 125-room hotel with an average daily rate of $150 with 65 percent occupancy could generate approximately $400,000 in annual Transient Occupancy Taxes (TOT), as shown below.

Estimated Estimated Average Annual Annual No. of Daily Gross TOT Rooms Rate Occupancy Revenues TOT Rate Revenue

125 $150 65% $4,448,000 9% $400,000

In order for any investor for the Expansion Options or other potential projects on the Gilroy Gardens property to pursue any development opportunities, it will be important to investors to understand that the City is supportive and interested in working with the investors to control costs and reduce uncertainties including those related to ground lease parameters. The City has a great opportunity to engage potential partners for site disposition and development, delivering net new economic opportunities. It is recommended that further analysis be conducted to report to further evaluate the economic impacts of a larger tourism strategy involving this and other publicly controlled assets in the City.

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2. GILROY GARDENS EXISTING OPERATIONS AND EXPANSION CONCEPTS

Gilroy Gardens History and Existing Operations

Gilroy Gardens is a nonprofit educational institution whose mission is to educate and to foster a greater appreciation of horticulture and the natural environment. Gilroy Gardens founder Michael Bonfante initially opened the park in the 1970s as the Nob Hill Family Park, featuring horticultural exhibits and the well-known “Circus Trees” that are a park staple to this day. Initially, the park was open to Nob Hill Foods employees, but Michael Bonfante extended the vision for the park as he expanded it in the early 2000s and opened it to the public as the Bonfante Gardens Theme Park.2 Then in 2003, the company hired Cedar Fair to manage the park’s operations and provide strategic guidance on financial decisions and long-range planning. Under Cedar Fair, the park has added rides, attractions, and has expanded the theme park programming to make Gilroy Gardens a year-round attraction. The theme park is located on City-owned property that Gilroy Gardens leases from the City on a year-to-year basis.

Today, Gilroy Gardens offers guests dozens of attractions including over 40 rides, water features, botanical gardens, and educational programming targeted to students in kindergarten through 5th grade. Gilroy Gardens operates from March to December, serving guests on the weekends and select holidays the spring and fall, and is generally open every day of the week, excluding the 4th of July during the summer months. Based on annual data from 2016 to 2018, Gilroy Gardens attracts approximately 450,000 visitors and employs approximately 900 persons annually. Again, based on data from 2016 to 2018, Gilroy Gardens generates approximately $15.4 million in annual revenue (in 2019 dollars) based on visitor spending on admissions, parking, merchandise, food and beverage, and games and attractions.

Described later in Chapter 3, this Economic Analysis estimates the economic benefits that the Gilroy Gardens existing operations provides to the City of Gilroy through on-site visitor spending, potential direct off-site visitor spending (i.e., spending at shops and restaurants in Gilroy), and the direct, indirect, and induced economic impacts of Gilroy Gardens’ annual operations.

Conceptual Master Plan Opportunities

While the visitation and revenues experienced in recent years reflects modest growth compared to years past, Gilroy Gardens management is concerned that the current park operations will not be sufficient to sustain increasing operational costs, particularly increases in the State of California (State) minimum wage. As mentioned in Chapter 1, Gilroy Gardens contracted JRA to prepare a Conceptual Master Plan to identify capital investment projects that can increase Gilroy Gardens’ annual attendance to a target of 800,000 visitors. To achieve this goal, Gilroy Gardens management sees an opportunity to expand the popular water attractions and to exploit the mostly unused territory of the original 536 acres that Gilroy Gardens sold to the City in 2007.

2 The theme park changed names in 2007 to become the Gilroy Gardens Family Theme Park to align its name with the identity of the community.

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Initial concepts for programming the unused portions of the property, consisting mostly of hillside property, include developing trails for hiking, downhill mountain biking, horseback riding, camping and glamping, and supporting a trail network that could connect to the Mount Madonna. With this concept, Gilroy Gardens can be a pivotal partner in increasing outdoor activity and tourism in the Hecker Pass area.

The sections below describe the Conceptual Master Plan opportunities that Gilroy Gardens management is keenly considering and pursuing to realize its goals.

Water Park Expansion

JRA’s Conceptual Master Plan identified new and expanded water features as a project that would increase annual visitation and increase per-capita revenue generation at Gilroy Gardens. Following this concept, Gilroy Gardens management is evaluating the potential to add water park features to increase summer season visitors. Gilroy Gardens’ preliminary estimates indicate that a Water Park Expansion could increase annual visitation by 200,000 guests and will generate approximately $8.0 million (2019 dollars) in annual revenue. Gilroy Gardens staff estimates the cost to construct the Water Park Expansion is approximately $20 million.

Described later in Chapter 3, this Economic Analysis estimates the economic benefits that the Water Park Expansion is estimated provide to the City of Gilroy through projected on-site visitor spending, potential direct off-site visitor spending (i.e., spending at shops and restaurants in Gilroy), and the direct, indirect, and induced economic impacts of the Mountainside Adventure Park’s annual operations and one-time construction impacts.

Mountainside Adventure Park Addition

Gilroy Gardens engaged Select Contracts to prepare a Concept Design and Business Plan for a proposed Mountainside Adventure Park. Select Contracts’ concept designs incorporates features of the JRA Conceptual Master Plan including downhill mountain biking trails and hiking trails, plus additional unique amenities such as an operating lift to transport adventure seekers to the top of the hillside, a zipline course, and more skills-based features. Also, the proposed Mountainside Adventure Park includes visitor accommodations such as a restaurant, rental and retail shops, and lounge areas.

Select Contracts’ Concept Design and Business Plan estimates that, at stabilization, the Mountainside Adventure Park Addition will draw nearly 205,000 annual visitors and will generate approximately $17.1 million (in 2018 dollars) in annual revenue. Preliminary cost estimates indicates the Mountainside Adventure Park Addition will cost approximately $16.5 million (in 2018 dollars) to construct.3

Described later in Chapter 3, this Economic Analysis indicates the economic benefits that the Mountainside Adventure Park Addition is estimated provide to the City of Gilroy through projected on-site visitor spending, potential direct off-site visitor spending (i.e., spending at shops and restaurants in Gilroy), and the direct, indirect, and induced economic impacts of the Mountainside Adventure Park’s annual operations and one-time construction impacts.

3 Estimate reflects direct hard costs (i.e., costs for the materials and construction labor) and does not include soft costs (e.g., design and engineering, project management).

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Table 2 below provides a summary of key operational data inputs, including estimated annual attendance, estimated annual on-site revenues/visitor spending, annual employees and compensation, and more.

Economic & Planning Systems, Inc. (EPS) 7 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Reports\192005 Final Report 11-08-19.docx Table 2 Gilroy Gardens Economic Impact Analysis Summary of Key Direct Operations and Expenses

Expansion Options Mountainside Existing Water Park Adventure Park Item Operations Expansion Addition

Estimated Annual Days of Operation 172 100 364

Estimated Annual Attendance [1] [2] 445,500 200,000 204,600

Estimated Annual On-Site Revenues (2019$) [3] $15,370,000 $8,000,000 $17,100,000

Estimated Revenues per Visitor (2019$) [4] $34.50 $40.00 $83.58

Estimated One-Time Economic Direct Costs [3] Hard Construction Costs [5] - $20,000,000 $16,521,000 One-Time Equipment Purchases - - $500,000

Number of Employees [6] Salaried 20 2 11 Hourly [7] 872 294 TBD Total Number of Employees 892 296 TBD

Estimated Compensation [3] [6] [8] Salaried $1,986,000 $199,000 $1,129,000 Hourly $5,570,000 $1,876,000 $3,063,000 Total Estimated Compensation $7,556,000 $2,075,000 $4,192,000

summ direct Source: Gilroy Gardens; Select Contracts; EPS.

[1] Rounded to the nearest 100. [2] Estimated annual attendance assumptions based on the information below: Existing Operations: Reflects the 3-year average attendance (2016-2018). Water Park Expansion: Gilroy Gardens estimates the proposed Water Park expansion will increase annual attendance by approximately 200,000 visitors. Mountainside Adventure Park Addition: Assumptions provided by Select Contracts. [3] Rounded to the nearest $1,000. [4] Estimated revenues per visitor assumptions based on the information below: Existing Operations and Water Park Expansion: Reflects the 3-year average (2016-2018) revenues per visitor, inflated to 2019 dollars. Mountainside Adventure Park Addition: Reflects the projected per-visitor on-site spending based on assumptions provided by Select Contracts. [5] Per correspondence with Gilroy Gardens staff, the Water Park Expansion project is anticipated to cost approximately $30 million total. This amount reflects hard costs expenses and excludes soft costs (e.g., design and engineering, project management). [6] Estimated personnel based on the information below: Existing Operations: Reflects the 3-year average personnel and wages (2016-2018). Water Park Expansion: Reflects the estimated increase in personnel and wages based on an increase of 200,000 visitors annually. Mountainside Adventure Park Addition: Assumptions provided by Select Contracts. [7] In this planning phase, Select Contracts does not provide estimates for the number of hourly employees because of a large number of input variables. See Table C-3 for details. [8] Includes fringe benefits.

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3. ECONOMIC ANALYSIS METHODOLOGY AND RESULTS

EPS prepared an Economic Analysis to evaluate the economic benefits that Gilroy Gardens existing operations provides to the City, and to analyze the potential economic benefits that the Expansion Options are estimated to provide to the City, if realized. To estimate these economic benefits, EPS estimated the economic activity generated from the Gilroy Gardens existing operations and Expansion Options as listed below.

 Annual park operations and direct on-site visitor spending to determine the economic impacts the theme park options have on the local economy and to estimate the sales tax revenues conferred to the City from on-site retail visitor spending. This analysis is based primarily on annual revenue estimates and projections provided by Gilroy Gardens and Select Contracts.4

 Direct off-site visitor spending to determine the economic impacts of visitor spending in the local economy and the estimated sales tax revenues conferred to the City from direct off- site visitor spending. This analysis is based on a rigorous evaluation of the estimated off-site visitor spending that is captured within the City. EPS based this analysis on information provided by Gilroy Gardens and Select Contracts, various tourism spending surveys, and amusement park industry economic studies.

 One-time construction impacts5 to determine the economic impacts of the construction activities in the local economy that would occur with the development of the Expansion Options.

The economic impacts analysis mentioned above relies on input-output modeling described below.

Input-Output Modeling Concept

Economic impacts comprise both direct effects and secondary (indirect and induced) effects. Direct effects represent those impacts that are attributable directly to a project, such as jobs or income generated by that project. Indirect and induced effects represent the spin-off or multiplier effects of that project.

As part of this Economic Analysis used an input/output (I/O) modeling framework to quantify Gilroy Gardens’ existing operations’ and Expansion Options one-time and ongoing contributions

4 Many hotels in the City sell Gilroy Gardens tickets to overnight guests. Gilroy Gardens potentially contributes to increases in Transit Oriented Tax (TOT) Revenues conferred to the City. At this time, there is not sufficient survey data to estimate Gilroy Gardens’ contribution to overnight stays in hotels in the City. As Gilroy’s tourism strategy strengthens, ongoing visitor surveys will be beneficial to understand the activities and attractions that engages tourists to the area. 5 This evaluation is relevant to only the Expansion Options since there is no significant construction activities associated with the existing park operations.

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to local output, employment, labor, and tourism spending.6 The I/O modeling framework is premised on the concept that industries in a geograpphic area are interdependent in the sense that they purchase output from and supply input to other industries. This Economic Analysis relies on IMPLAN (Impact Analysis for Planning) software, an I/O model that draws on data collected by the IMPLAN Group, LLC, from several state and federal sources, including the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Census Bureau. The model is widely used for estimating economic impacts across a wide array of industries and economic settings.

Regional economic impact analysis and I/O models in particular provide a means to estimate total regional effects stemming from a particular industry. Specifically, I/O models produce quantitative estimates of the magnitude of regional economic activity resulting from some initial activity (e.g., business operations or building construction). I/O models rely on economic multipliers that mathematically represent the relation between the initial change in one sector of the economy and the effect that change on economic output, income, or employment in other local industries. These economic data provide a quanntitative estimate of the magnitude of shifts in jobs and revenues in the regional economy.

Economic impacts using an I/O model are based on an initial chaange in output or employment in a specific industry sector. The model then translates the initial change into changes in demand for output from other interdependent sectors, corresponding changes in demand for inputs to those sectors, and so on. These effects commonly are described as direct, indirect, or induced effects and generally are defined as follows:

6 Excludes I/O modeling of Gilroy Garden’s existing operations one-time construction impacts since that is not applicable.

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 The direct effect represents the change in output or employment attributable to a certain economic activity.

 The indirect effect results from industry-to-industry transactions required to satisfy the direct effect. This effect is a measure of the change in the output of suppliers linked to the industry that is direct affected. For example, a restaurant purchases goods from County of Santa Clara (County) suppliers, including food, laundry services, equipment and other services.

 The induced effect consists of impacts from employee spending in the local economy. Specifically, the employees of directly and indirectly affected businesses generate this effect by purchasing goods and services in the local and regional economy. For instance, employees of these businesses spend their incomes on household needs such as groceries, retail purchases, health care, and mortgage or rent payments, all of which are considered to be induced effects.

The total impact is the sum of the direct, indirect, and induced effects. The total effect measures the impact of an activity as it “ripples” throughout the local and regional economy.

EPS used I/O modeling to estimate the economic impact of Gilroy Gardens existing operations and the Expansion Options on the local economy (within Gilroy) and the regional economy (within the County), as described in the sections below.

While the intent of this Report is to demonstrate the estimated economic impacts that Gilroy Gardens and the Expansion Options benefits to the City, this analysis also includes the economic impacts generated in the County. If the City is able to attract new economic base employers (e.g., manufacturing, industrial services), Gilroy’s share of the County’s economic output will increase with added product and service providers.

Annual Operations and Direct On-Site Visitor Spending

Direct on-site visitor spending represents the visitor purchases and transactions that occur on the theme park property. This Economic Analysis also evaluates the economic benefits that visitors’ direct off-site spending (i.e., spending at shops and restaurants in Gilroy) produces in the local economy later in this report. On-site visitor expenditures generally include theme park revenue generated from park admission, parking, merchandise, food and beverage, games and attractions, and equipment rentals. EPS used estimated or projected annual on-site visitor spending data to estimate 2 outputs:

 The local and regional economic impacts associated with the revenues generated by Gilroy Gardens existing operations and the Expansion Options.

 The estimated local sales taxes conferred to the City based on estimated or projected on-site retail spending.

The sections below describe the estimated on-site visitor spending, associated local and regional economic impacts, and associated local sales taxes conferred to the City for Gilroy Gardens existing operations and the Expansion Options.

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Gilroy Gardens Existing Operations

Gilroy Gardens provided EPS with annual attendance and revenue data for calendar years 2016 to 2018. EPS used this data to estimate the average annual theme park revenues and attendance to use as a basis for economic impact analysis modeling and to estimate the annual sales taxes conferred to the City from on-site retail sales.

Using this data, EPS estimates that Gilroy Gardens existing operations generates approximately $15.4 million (in 2019 dollars) in annual revenues and attracts approximately 445,000 annual visitors. The economic impacts generated by annual on-site revenues and estimated sales taxes conferred to the City are summarized below.

 Output: Gilroy Gardens existing operations annual revenues of $15.4 million generates an estimated additional $54,000 of indirect and induced economic impacts in the City; and approximately $7.8 million of indirect and induced economic impacts in the County annually, as shown in Table 3 and Table 4, respectively.

 Retail Sales Tax: On-site retail sales generate approximately $56,500 in annual sales tax revenues conferred to the City, as shown in Table 5.

Water Park Expansion

Gilroy Gardens anticipates that the Water Park Expansion will increase annual attendance by 200,000 visitors at stabilization. Also, Gilroy Gardens staff anticipates that the per-visitor spending for these guests will be higher than the existing operations, based on the assumption that the increase in guests will be driven by teenagers and young adults who, on average, spend more at Gilroy Gardens than other market segments, according to Gilroy Gardens staff.

With this consideration, Gilroy Gardens estimates that the Water Park Expansion will generate approximately $8.0 million (in 2019 dollars) in annual revenues. The economic impacts generated by annual on-site revenues and estimated sales taxes conferred to the City are summarized below.

 Output: Based on stabilized annual revenues of approximately $8.0 million, the Water Park Expansion is estimated generate an estimated additional $27,700 of indirect and induced economic impacts in the City; and approximately $3.4 million of indirect and induced economic impacts in the County, as shown in Table 3 and Table 4, respectively.

 Retail Sales Tax: Projected on-site retail sales at stabilization is anticipated to generate approximately $29,400 in annual sales tax revenues conferred to the City, as shown in Table 5.

Mountainside Adventure Park

Select Contracts provided EPS with projected annual attendance and revenue data for the Mountainside Adventure Park. EPS used the revenue and attendance data at stabilization (assumed to be year 3 of operation) as a basis for economic impact analysis modeling and to estimate the annual sales taxes conferred to the City from projected on-site retail sales.

At stabilization, the economic impacts generated by annual on-site revenues and estimates sales taxes conferred to the City are summarized below.

Economic & Planning Systems, Inc. (EPS) 12 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Reports\192005 Final Report 11-08-19.docx Table 3 Economic Impacts in Gilroy Gardens the City of Gilroy: Economic Impact Analysis Annual Operations Summary of Economic Impacts in Gilroy from Annual Operations [1]

Expansion Options Mountainside Existing Water Park Adventure Park Item Operations Expansion Addition

Estimated Annual Days of Operation 172 100 364

Annual Operations (Dollars) Direct $15,370,000 $8,000,000 $17,100,000

Indirect $52,300 $27,200 $58,200

13 Induced $1,500 $500 $1,100 Subtotal Indirect and Induced $53,800 $27,700 $59,300

Total Economic Output $15,423,800 $8,027,700 $17,159,300

ops impacts summ Source: Gilroy Gardens; Select Contracts; IMPLAN; EPS.

[1] Based on the estimated economic impacts generated in ZIP Code 95020.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table 4 Economic Impacts in Gilroy Gardens Santa Clara County: Economic Impact Analysis Annual Operations Summary of Economic Impacts in Santa Clara Co. from Annual Operations

Expansion Options Mountainside Existing Water Park Adventure Park Item Operations Expansion Addition

Estimated Annual Days of Operation 172 100 364

Annual Operations (Dollars) Direct $15,370,000 $8,000,000 $17,100,000

Indirect $4,420,000 $2,300,000 $4,917,000

14 Induced $3,335,000 $1,081,000 $2,225,000 Subtotal Indirect and Induced $7,755,000 $3,381,000 $7,142,000

Total Economic Output $23,125,000 $11,381,000 $24,242,000

ops impacts county Source: Gilroy Gardens; Select Contracts; IMPLAN; EPS.

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Expansion Options Bradley- Percentage Mountainside Burns Taxable Existing Water Park Adventure Park Item Tax Rate Sales [1] Operations Expansion [2] Addition

Estimated Annual Days of Operation 172 100 364

Estimated Annual Visitors [3] 445,500 200,000 204,600

Annual Park Revenues [4] [5] Admission [5] $8,327,000 $4,334,000 $12,632,500 Parking $1,092,400 $568,600 $261,900 Merchandise $1,422,600 $740,400 $896,200 Food and Beverage $4,227,800 $2,200,400 $2,322,000 Games and Attractions $300,900 $156,600 $0 Other [6] $0 $0 $989,100 Total Annual Park Revenues [7] $15,370,700 $8,000,000 $17,101,700

Estimated Sales Taxes Conferred to City of Gilroy based on Visitor On-Site Spending [8] Admission N/A N/A $0 $0 $0 Parking N/A N/A $0 $0 $0 Merchandise 1.0% 100.0% $14,230 $7,400 $8,960 Food and Beverage 1.0% 100.0% $42,280 $22,000 $23,220 Games and Attractions N/A N/A $0 $0 $0 Other N/A N/A $0 $0 $0 Total Estimated Sales Taxes $56,510 $29,400 $32,180

onsite sales tax Source: Gilroy Gardens; Select Contracts; CA Board of Equalization; EPS.

[1] Represents estimate of overall total sales of which are subject to sales taxation. For example, a small portion of total sales at a hair salon are subject to taxation, such as hair products; or food is generally not taxed unless heated on premises or intended to be consumed on the premises. Information based on California Board of Equalization Publication No. 61, "Sales and Use Taxes: Exemptions and Exclusions." [2] Reflects the same proportional spending as the existing operations, assuming total revenue generated equal to $8,000,000. [3] Estimated annual attendance assumptions based on the information below: Existing Operations: Reflects the 3-year average attendance (2016-2018). Water Park Expansion: Gilroy Gardens estimates the proposed Water Park expansion will increase annual attendance by approximately 200,000 visitors. Mountainside Adventure Park Addition: Assumptions provided by Select Contracts. [4] Rounded to the nearest $100. [5] Mountainside Adventure Park: Includes revenues from day passes, season passes, tours, and group packages. [6] Includes equipment rentals. [7] Sum may not equal the totals indicated in other tables because of rounding. [8] Rounded to nearest $10.

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 Output: Based on stabilized annual revenues of approximately $17.1 million, the Mountainside Adventure Park Addition is estimated to generate an additional $59,300 of indirect and induced economic impacts in the City; and approximately $7.1 million of indirect and induced economic impacts in the County, as shown in Table 3 and Table 4, respectively.

 Retail Sales Tax: Projected on-site retail sales at stabilization is anticipated to generate approximately $32,200 in annual sales tax revenues conferred to the City, as shown in Table 5.

Direct Off-Site Visitor Spending

A critical component of this evaluation is to estimate the amount of direct off-site visitor spending that Gilroy Gardens and the potential Expansion Options visitors may spend in the City. EPS prepared a rigorous analysis to estimate Gilroy’s capture of retail spending that local and out-of-town visitors generate associated with their trip to Gilroy Gardens. As described in the sections below, EPS used Esri GIS spatial analysis software and tourism spending surveys to correlate visitor spending capture rates by trip length. EPS used the results of this analysis to estimate the local economic impacts and potential sales taxes that may be conferred to the City associated with direct off-site spending that is captured in the City. Based on various visitor spending surveys, EPS assumes theme park visitors will spend locally on food and beverage service establishments, food stores, gasoline and local transportation, and retail sales.

Please see Appendix A for more information detailing the methodology EPS used to estimate the direct off-site visitor spending in the City.7

Gilroy Gardens Existing Operations

Using a range of low and high capture assumptions, EPS estimates that Gilroy Gardens existing operations attracts between $1.4 to $2.2 million in annual increased spending in the City by Gilroy Gardens’ estimated 445,000 patrons. The economic impacts generated by annual direct off-site revenues and estimated sales taxes conferred to the City are summarized below.

The economic impacts generated by annual direct off-site spending and estimated sales taxes conferred to the City are summarized below.

Low Estimate  Supported Employment and Compensation: Assuming current theme park visitors spend $1.4 million in direct off-site spending within the City, Gilroy Gardens visitors may support about 7 total jobs resulting in approximately $249,000 in annual wages, as shown in Table 6.

 Retail Sales Tax: Visitors’ $1.4 million in direct off-site spending within the City may generate approximately $9,100 in annual sales tax revenues conferred to the City, as shown in Table 7.

7 EPS did not estimate direct off-site visitor spending in the County since it is assumed a majority of patrons come from within the County; therefore, it is assumed their retail spending would have likely occurred within the County.

Economic & Planning Systems, Inc. (EPS) 16 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Reports\192005 Final Report 11-08-19.docx Table 6 Gilroy Gardens Economic Impact Analysis Summary of Estimated Economic Impacts in Gilroy based on Off-Site Visitor Spending [1]

Gilroy Gardens Water Park Mountainside Existing Operations Expansion Adventure Park Item Low High Low High Low High

Estimated Direct Off-Site Spending Food and Beverage Service $552,500 $889,600 $287,400 $463,300 $622,500 $1,218,400 Food Stores $129,200 $207,600 $66,300 $107,500 $143,900 $280,900 Local Transportation and Gasoline $361,400 $583,200 $187,600 $303,000 $408,000 $797,600 Retail Sales $309,200 $499,000 $161,400 $259,700 $349,900 $683,500 Total Estimated Direct Off-Site Spending $1,352,300 $2,179,400 $702,700 $1,133,500 $1,524,300 $2,980,400

Total Supported Employment [2] 17 Food and Beverage Service 5.08 8.18 2.64 4.26 5.73 11.21 Food Stores 0.40 1.91 0.21 0.33 0.45 0.87 Local Transportation and Gasoline 0.36 0.58 0.19 0.30 0.41 0.80 Retail Sales 0.93 1.50 0.48 0.78 1.05 2.05 Total 6.77 12.17 3.52 5.68 7.63 14.93

Total Supported Labor Income [3] [4] Food and Beverage Service $156,000 $251,200 $81,200 $130,800 $175,800 $344,100 Food Stores $18,800 $30,300 $9,700 $15,700 $21,000 $41,000 Local Transportation and Gasoline $39,400 $63,600 $20,400 $33,000 $44,500 $86,900 Retail Sales $34,800 $56,200 $18,200 $29,300 $39,400 $77,000 Total $249,000 $401,300 $129,500 $208,800 $280,700 $549,000

spending impacts summ Source: Table 7; IMPLAN; EPS.

[1] Based on the estimated economic impacts generated in ZIP Code 95020. [2] Reflects the total number of employees supported by off-site visitor spending, including direct, indirect, and induced spending. [3] Reflects the total labor income (including benefits) supported by off-site visitor spending, including direct, indirect, and induced spending. [4] Rounded to the nearest $100.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table 7 Gilroy Gardens Economic Impact Analysis Summary of Estimated Direct Off-Site Aggregate Spending Captured in Gilroy and Estimated Sales Tax Revenues Generated

Bradley- Percentage Gilroy Gardens Water Park Mountainside Adventure Burns Taxable Existing Operations [2] Expansion [3] Park Addition [4] Item Tax Rate Sales [1] Low High Low High Low High

Assumed Annual Visitors 445,500 200,000 204,600

Estimated Direct Off-Site Spending [5] Food and Beverage Service $552,500 $889,600 $287,400 $463,300 $622,500 $1,218,400 Food Stores $129,200 $207,600 $66,300 $107,500 $143,900 $280,900 Local Transportation and Gasoline $361,400 $583,200 $187,600 $303,000 $408,000 $797,600 Retail Sales $309,200 $499,000 $161,400 $259,700 $349,900 $683,500 Total Estimated Direct Off-Site Spending $1,352,300 $2,179,400 $702,700 $1,133,500 $1,524,300 $2,980,400 18

Estimated Sales Taxes Conferred to City of Gilroy based on Visitor Off-Site Spending [6] Food and Beverage Service 1.0% 100.0% $5,530 $8,900 $2,870 $4,630 $6,230 $12,180 Food Stores 1.0% 40.0% $520 $830 $270 $430 $580 $1,120 Local Transportation and Gasoline N/A N/A $0 $0 $0 $0 $0 $0 Retail Sales 1.0% 100.0% $3,090 $4,990 $1,610 $2,600 $3,500 $6,840 Total Estimated Sales Taxes $9,140 $14,720 $4,750 $7,660 $10,310 $20,140

summ agg spend Source: Gilroy Gardens; Select Contracts; IAAPA; Various Visitor-Based Economic Analyses (See Table A-12); California Board of Equalization; EPS.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Gilroy Gardens Economic Impact Analysis Final Report November 8, 2019

High Estimate  Supported Employment and Compensation: Assuming current theme park visitors spend $2.2 million in direct off-site spending within the City, Gilroy Gardens visitors support about 12 total jobs resulting in approximately $401,000 in annual wages, as shown in Table 6.

 Retail Sales Tax: Visitors’ $2.2 million in direct off-site spending within the City generates approximately $14,700 in annual sales tax revenues conferred to the City, as shown in Table 7.

Water Park Expansion

Using a range of low and high capture assumptions, EPS estimates that the Water Park Expansion may attract between $703,000 to $1.1 million in annual increased spending in the City by the Water Park Expansion’s estimated 200,000 patrons. The economic impacts generated by annual direct off-site revenues and estimated sales taxes conferred to the City are summarized below.

The economic impacts generated by annual direct off-site spending and estimated sales taxes conferred to the City are summarized below.

Low Estimate  Supported Employment and Compensation: Assuming projected theme park visitors spend $703,000 in direct off-site spending within the City, Water Park Expansion visitors may support 3 to 4 total jobs resulting in approximately $130,000 in annual wages, as shown in Table 6.

 Retail Sales Tax: Visitors’ $703,000 in direct off-site spending within the City may generate approximately $4,800 in annual sales tax revenues conferred to the City, as shown in Table 7.

High Estimate  Supported Employment and Compensation: Assuming projected theme park visitors spend $1.1 million in direct off-site spending within the City, Water Park Expansion visitors may support about 6 total jobs resulting in approximately $209,000 in annual wages, as shown in Table 6.

 Retail Sales Tax: Visitors’ $1.1 million in direct off-site spending within the City may generate approximately $7,700 in annual sales tax revenues conferred to the City, as shown in Table 7.

Mountainside Adventure Park

Using a range of low and high capture assumptions, EPS estimates that the Mountainside Adventure Park may attract between $1.5 to $3.0 million in annual increased spending in the City by the Mountainside Adventure Park’s estimated 204,600 patrons. The economic impacts generated by annual direct off-site revenues and estimated sales taxes conferred to the City are summarized below.

The economic impacts generated by annual direct off-site spending and estimated sales taxes conferred to the City are summarized below.

Economic & Planning Systems, Inc. (EPS) 19 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Reports\192005 Final Report 11-08-19.docx Gilroy Gardens Economic Impact Analysis Final Report November 8, 2019

Low Estimate  Supported Employment and Compensation: Assuming projected theme park visitors spend $1.5 million in direct off-site spending within the City, Mountainside Adventure Park visitors may support about 8 total jobs resulting in approximately $281,000 in annual wages, as shown in Table 6.

 Retail Sales Tax: Visitors’ $1.5 million in direct off-site spending within the City may generate approximately $10,300 in annual sales tax revenues conferred to the City, as shown in Table 7.

High Estimate  Supported Employment and Compensation: Assuming projected theme park visitors spend $3.0 million in direct off-site spending within the City, Mountainside Adventure Park visitors may support about 15 total jobs resulting in approximately $549,000 in annual wages, as shown in Table 6.

 Retail Sales Tax: Visitors’ $3.0 million in direct off-site spending within the City may generate approximately $20,100 in annual sales tax revenues conferred to the City, as shown in Table 7.

One-Time Construction Impacts

One-time construction impacts are estimated based on the estimated construction costs of each Expansion Option project. EPS used the I/O modeling to estimate the economic impacts of Expansion Options projects in the City and County, as detailed below.

Water Park Expansion

Estimated to cost approximately $20.0 million direct costs, construction of the Water Park Expansion will generate the following economic impacts in the City and County:

 Annual Output: As mentioned, construction operations are estimated to generate approximately $20.0 million in direct one-time industry output. Spending in the City will result in approximately $50,200 in indirect and induced one-time impacts; whereas spending in the County will result in approximately $6.5 million in indirect and induced one-time impacts, as shown in Table 8 and Table 9, respectively.

 Employee Compensation: Of the $20.0 million in direct industry output reported above, approximately $10.2 million will be received by construction employees in the form of salary, wages and benefits. Indirect and induced employee compensation impacts in the City total approximately $19,600. However, the development of the Water Park Expansion is estimated to produce indirect and induced employee compensation of approximately $2.7 million in the County. See Table 8 and Table 9 for details.

 Annual Employment: The construction of the Water Park Expansion is estimated to generate about 111 direct jobs. While the indirect and induced job generation in the City is limited, the Water Park Expansion development is anticipated to produce about 32 indirect and induced jobs in the County. See Table 8 and Table 9 for details.

Economic & Planning Systems, Inc. (EPS) 20 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Reports\192005 Final Report 11-08-19.docx Table 8 Economic Impacts in Gilroy Gardens Gilroy: Economic Impact Analysis One-Time Construction Summary of Economic Impacts in Gilroy from One-Time Construction [1]

Expansion Options Mountainside Water Park Adventure Park Item Expansion Addition

Output Direct $20,000,000 $16,521,000

Indirect $38,900 $32,200 Induced $11,300 $9,300 Subtotal Indirect and Induced $50,200 $41,500

Total Output $20,050,200 $16,562,500

21 Employee Compensation Direct $10,242,000 $8,460,000

Indirect $15,900 $13,200 Induced $3,700 $3,100 Subtotal Indirect and Induced $19,600 $16,300

Total Employee Compensation $10,261,600 $8,476,300

Annual Employment (Person-Year Jobs) [2] Direct 111.06 91.74

Indirect 0.20 0.16 Induced 0.07 0.06 Subtotal Indirect and Induced 0.27 0.22

Total Annual Employment 111.33 91.96

construction impacts gilroy Source: Gilroy Gardens; Select Contracts; IMPLAN; EPS.

[1] Based on the estimated economic impacts generated in ZIP Code 95020. [2] Reflects the number of jobs supported by this activity in 1 year. If the construction takes 2 years, these numbers would be divided in half.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table 9 Economic Impacts in Gilroy Gardens Santa Clara County: Economic Impact Analysis One-Time Construction Summary of Economic Impacts in Santa Clara Co. from One-Time Construction

Expansion Options Mountainside Water Park Adventure Park Item Expansion Addition

Output Direct $20,000,000 $16,521,000

Indirect $2,436,000 $2,013,000 Induced $4,077,000 $3,368,000 Subtotal Indirect and Induced $6,513,000 $5,381,000

Total Output $26,513,000 $21,902,000

22 Employee Compensation Direct $10,242,000 $8,460,000

Indirect $1,126,000 $930,000 Induced $1,553,000 $1,283,000 Subtotal Indirect and Induced $2,679,000 $2,213,000

Total Employee Compensation $12,921,000 $10,673,000

Annual Employment (Person-Year Jobs) [1] Direct 111.06 91.74

Indirect 9.66 7.98 Induced 22.35 18.46 Subtotal Indirect and Induced 32.01 26.44

Total Annual Employment 143.07 118.18

construction impacts county Source: Gilroy Gardens; Select Contracts; IMPLAN; EPS.

[1] Reflects the number of jobs supported by this activity in 1 year. If the construction takes 2 years, these numbers would be divided in half.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Gilroy Gardens Economic Impact Analysis Final Report November 8, 2019

Mountainside Adventure Park

Estimated to cost approximately $16.5 million direct costs, construction of the Mountainside Adventure Park will generate the following economic impacts in the City and County:

 Annual Output: As mentioned, construction operations are estimated to generate approximately $16.5 million in direct one-time industry output. Spending in the City will result in approximately $41,500 in indirect and induced one-time impacts; whereas spending in the County will result in approximately $5.4 million in indirect and induced one-time impacts, as shown in Table 8 and Table 9, respectively.

 Employee Compensation: Of the $16.5 million in direct industry output reported above, approximately $8.5 million will be received by construction employees in the form of salary, wages and benefits. Indirect and induced employee compensation impacts in the City total approximately $16,300. However, the development of the Mountainside Adventure Park is estimated to produce indirect and induced employee compensation of approximately $2.2 million. See Table 8 and Table 9 for details.

 Annual Employment:8 The construction of the Mountainside Adventure Park is estimated to generate about 92 direct jobs. While the indirect and induced job generation in the City is trivial, the Mountainside Adventure Park development is anticipated to produce about 26 indirect and induced jobs in the County. See Table 8 and Table 9 for details.

Key Takeaways

Gilroy Gardens and the proposed Expansion Options can be key elements to the City’s Strategic Plan Goals of ensuring financial stability and cultivating revenue driven economic development. Gilroy Gardens existing operations drives outside visitation into the City. EPS estimates that of the estimated 445,500 annual visitors, nearly 90-percent travel to the theme park from beyond a 30-minute automobile trip. Once in Gilroy, these visitors increase economic activity in the City by off-site spending at Gilroy restaurants, shops, and gas stations. As Gilroy’s dining, entertainment, recreation, and lodging options expand—as there are opportunities in Downtown, near the Premium Outlets, and along the Hecker Pass Highway—Gilroy can increase its share of captured visitor spending, realizing greater economic and fiscal benefits from retail spending and overnight stays.

Further, as additional base economic sectors (e.g., small-scale manufacturing, support services) grow in the City, Gilroy’s share of indirect and induced impacts may increase. The economic impact analyses described above indicate that indirect and induced impacts of Gilroy Gardens and the Expansion Options annual operations does not currently generate a great amount of secondary effects within the City—Table 3 indicates the existing operations generates approximately $54,000 indirect and induced impacts annually in the City. However, these activities do generate substantial secondary effects in the County—Table 4 shows that the existing operations generate approximately $7.8 million in indirect and induced impacts annually

8 The annual employment generated by the one-time construction impacts reflects the number of jobs supported in one calendar year. If the project construction period takes two years, this number would be divided in half.

Economic & Planning Systems, Inc. (EPS) 23 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Reports\192005 Final Report 11-08-19.docx Gilroy Gardens Economic Impact Analysis Final Report November 8, 2019

in the County. As Gilroy’s base economic sectors increase, the secondary effects should shift locally to companies within the City.

Estimated Estimated Average Annual Annual No. of Daily Gross TOT Rooms Rate Occupancy Revenues TOT Rate Revenue

125 $150 65% $4,448,000 9% $400,000

Economic & Planning Systems, Inc. (EPS) 24 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Reports\192005 Final Report 11-08-19.docx

APPENDICES:

Appendix A: Visitor Direct Offf-Site Spending Technical Analysis

Appendix B: Gilroy Gardens Employment and Payroll Technical Support

Appendix C: Mountainside Adventure Park Technical Support

Note:

These appendices contain additional technical detail of the economic benefits that Gilroy Gardens existing operations and Expansion Options are estimated have in the City. Appendix A provides detail of the estimated visitor direct off-site spending analysis, including a description of the methodology and associated technical analysis to estimate theme park visitors’ retail spending that is captured in the City.

APPENDIX A:

Visitor Direct Off-Site Spending Technical Analysis

The following section describes the approach that was used to estimate visitor direct off-site spending that is captured in the City. This section includes a detailed description of the step-by-step approach EPS conducted to generate these results, along with detailed tables.

Visitor Direct Off-Site Spending Methodology

A critical component of this evaluation is to estimate the amount of direct off-site visitor spending that Gilroy Gardens and the potential Expansion Options visitors may spend in the City. EPS prepared a rigorous analysis to estimate Gilroy’s capture of retail spending that local and out-of-town visitors generate associated with their trip to Gilroy Gardens. EPS used Esri GIS spatial analysis software and tourism spending surveys to correlate visitor spending capture rates by trip length. EPS used the results of this analysis to estimate the local economic impacts and potential sales taxes that may be conferred to the City associated with direct off-site spending that is captured in the City. Based on various visitor spending surveys, EPS assumes theme park visitors will spend locally on food and beverage service establishments, food stores, gasoline and local transportation, and retail sales. EPS’s methodology to derive the estimated direct off-site visitor spending is detailed in the steps provided below.

1. Develop visitor spending segments. EPS grouped theme park visitors by the distance in which they travel to Gilroy Gardens and the Expansion Options. Visitor spending surveys indicate that groups who travel to a destination from out-of-town spend more on retail and other categories than local visitors. To achieve this, EPS used Esri GIS spatial analysis software to develop a drive-shed analysis based on data that Gilroy Gardens provided which includes the billing ZIP Code for Gilroy Gardens season pass holders. This information contained approximately 66,600 transactions. For the Gilroy Gardens existing operations and Water Park Expansion visitor segmentation, EPS used the geographical distribution of these season pass holders as a proxy to correspond with the distance in which all annual visitors travel to the theme park. For the Adventure Park Expansion visitor segmentation, EPS used information provided by Select Contracts, which EPS adjusted to distinguish between local and non-local visitors. Table A-1 provides a summary of the visitor origin by distance from Gilroy Gardens; and Table A-2 through Table A-4 provides supporting technical analysis. 2. Develop daily per-visitor direct off-site spending assumptions. Using the spending segments that EPS developed in Step 1 described above, EPS estimated the average daily per-visitor spending assumptions based on various visitor spending surveys, amusement park industry reports, and per-capita revenue estimates provided by Gilroy Gardens and Select Contracts. EPS obtained a 2018 North America Economic Impact Study on Amusement Parks, Water Parks, and Family Entertainment Centers prepared by the International Association of Amusement Parks and Attractions (IAAPA). IAAPA’s surveying indicates that in 2017, the amusement park industry generated an estimated direct revenue of $6.8 billion dollars in California, of which 70-percent was attributed to attraction spending (on-site spending) while 30-percent was attributed to off-site visitor spending. EPS used this survey assumption to estimate the total potential per-visitor direct off-site spending based on on-site per-visitor spending assumptions provided by Gilroy Gardens and Select Contracts. Next, EPS applied a range of capture rates to acknowledge that day-trip, domestic, and international visitors will not generate all of their daily direct off-site spending in Gilroy. These capture rates are based on conservative assumptions developed by EPS and other considerations, such as the amount groups spend depending on their trip length from a destination. Then, EPS allocated this direct off-site spending captured in Gilroy to retail sectors based on tourism and visitor spending surveys contracted by Visit California, the U.S. Department of the

Economic & Planning Systems, Inc. (EPS) A-1 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Reports\192005 Final Report 11-06-19.docx Visitor Direct Off-Site Spending Technical Analysis Appendix A November 8, 2019

Interior, and the City of Santa Monica. For the Mountainside Adventure Park expansion option, EPS developed an additional assumption that is anchored to per-visitor average daily rates for hotels in the greater Bay Area Region. EPS assumes these visitors are likely spending more on direct off-site spending; however, to be conservative, EPS applied a decreased capture factor for these visitors. Tables A-5 through Table A-8 summarize the potential per-visitor direct off-site spending captured in Gilroy assumptions; and Table A-9 through Table A-14 provides supporting technical analysis. 3. Calculate the total estimated direct off-site visitor spending captured in Gilroy. Using the estimated Gilroy capture of per-visitor direct off-site spending assumptions developed in Step 2, EPS calculated the estimated aggregate annual spending captured in Gilroy based on the estimated and projected annual visitors, by spending segment (Step 1). The potential range of aggregate spending is summarized in Table A-15 through Table A-17.

Economic & Planning Systems, Inc. (EPS) A-2 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Reports\192005 Final Report 11-06-19.docx Table A-1 Gilroy Gardens Economic Impact Analysis Summary of Visitor Origin

Gilroy Gardens Water Park Mountainside (Existing Operations) Expansion [1] Adventure Park [2] Percentage Percentage Percentage Item Amount [3] of Total [4] Amount [3] of Total Amount [3] of Total [5]

Local ( < 30 Minute Drive) 53,000 12.0% 24,000 12.0% 15,600 7.6%

Day Trip Commute 30-60 Minute 219,000 49.2% 98,000 49.2% 64,000 31.3% 1-2 Hours 117,000 26.2% 52,000 26.2% 50,800 24.8% 2-4 Hours 44,000 9.9% 20,000 9.9% 18,700 9.1% Subtotal Day Trip Commute 380,000 85.3% 170,000 85.3% 133,500 65.2% A-3 Domestic & International Traveler [6] 12,000 2.7% 5,000 2.7% 55,500 27.1%

Total 445,500 100.0% 200,000 100.0% 204,600 100.0%

visitor origin Source: Gilroy Gardens; Select Contracts; Esri GIS; EPS.

[1] For the purposes of this analysis, EPS assumes the visitor origin proportions for the Water Park Expansion are equal to the Gilroy Gardens existing operations. [2] Based on data provided by Select Contracts, except for the breakdown of visitors traveling within 1 hour of the attraction. Select Contracts did not break down origin by <30 minutes and 30-60 minutes. EPS estimated this based on the proportional split of the Gilroy Gardens existing operations. [3] Rounded to the nearest 1,000. [4] See Table A-2 for a summary of the drive-shed analysis for Gilroy Gardens 2018 season pass holders. [5] See Table A-3 and Table A-4 for details regarding the Mountainside Adventure Park visitor origin assumptions. [6] EPS estimated the distance that visitors travel to Gilroy Gardens based on a spatial analysis of the ZIP Code data for season passholders. The percentage of visitors reflected in the Existing Operations scenario here represents ZIP Codes that could not be located or ones located beyond a 4-hour trip from Gilroy Gardens. For the purposes of this analysis, these visitors are grouped into the 2-4 Hours category.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-2 Gilroy Gardens Economic Impact Analysis Gilroy Gardens Season Pass Holder Visitor Origin - 2018 [1]

% of Total % of Total Auto. Season Item Amount Commuters Passholders

Automobile Commuters Local <30 Mins 7,987 12.3% 12.0% Day Trippers 30 Min-1 Hour 32,724 50.5% 49.2% 1-2 Hours 17,453 27.0% 26.2% 2-4 Hours 6,576 10.2% 9.9% Subtotal Day Trippers 56,753 87.7% 85.3% A-4 Total Automobile Commuters 64,740 100.0% 97.3%

Domestic Travelers 1,826 2.7%

Total 2018 Season Passholders 66,566 100.0%

gg visitor origin Source: Gilroy Gardens; Esri; EPS.

[1] See Map A-1 for an illustration of this analysis.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Map A-1 Gilroy Gardens Drive-Shed Analysis

Drive Times

< 30 minutes

30 minutes to 1 hour

1 to 2 hours

2 to 4 hours Visitors to Gilroy Gardens - 2018 1 - 117

118 - 395

396 - 901

902 - 2,772

2,773 - 4,998 ^ Gilroy Gardens Esri, HERE, Garmin, © OpenStreetMap contributors, and the GIS user community

Miles This map contains information from sources we believe to be reliable, but we make no representation, 0 20 40 80 warranty, or guarantee of its accuracy. This map is published for use by Economic & Planning ° Systems, Inc. and its cilents only. Redistrubtion in whole or part to any third party without prior written consent of Economic & Planning Systerms, Inc. is strictly prohibited. A-5 Table A-3 Gilroy Gardens Economic Impact Analysis Mountainside Adventure Park Visitor Origin Assumptions

Projected Annual Attendance % of Total Mountain Annual Item Bikers Sightseers Total Attendance

Automobile Commuters Local <30 Mins [1] 4,834 10,790 15,624 7.6% Day Trippers 30 Min-1 Hour 19,805 44,210 64,015 31.3% 1-2 Hours 19,000 31,809 50,809 24.8% 2-4 Hours 1,992 16,678 18,670 9.1% Subtotal Day Trippers 40,797 92,697 133,494 65.2% A-6 Total Automobile Commuters 45,631 103,487 149,118 72.9%

Domestic Travelers 34,984 15,013 49,997 24.4%

International Travelers 2,102 3,386 5,488 2.7%

Total Projected Annual Visitors 82,717 121,886 204,603 100.0%

ap visitor origin Source: Select Contracts.

[1] Select Contracts visitor penetration analysis included less than 1 hour as the nearest visitor category. To estimate the percentage of visitors projected to attend the Mountainside Adventure Park from within a 30-minute drive-shed, EPS used the same percentage allocation prepared for Gilroy Gardens season ticket holders as a proxy. See Table A-4 for details.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-4 Gilroy Gardens Economic Impact Analysis Stratification of Local Automobile Visitors

Mountainside Adventure Park Gilroy Gardens 2018 Projected Annual Attendance Season Passholders [1] Mountain Item Bikers Sightseers Total Amount % of Total

Visitors Commuting within 1 Hour Less than 30 Minutes [1] 4,834 10,790 15,624 7,987 19.6% 30-60 Minutes 19,805 44,210 64,015 32,724 80.4% Total 24,639 55,000 79,639 40,711 100.0%

ap local visit A-7 Source: Select Contracts; Gilroy Gardens; EPS.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-5 Gilroy Gardens Gilroy Gardens Economic Impact Analysis Current Operations Estimated Per-Visitor Spending - Gilroy Gardens Current Operations

Gilroy Capture of Visitor Spending Local Visitor Day Trip Visitor A Day Trip Visitor B Day Trip Visitor C Item Assumption Amount Low High Low High Low High Low High

Drive-Shed < 30 Minutes 30-60 Minutes 1-2 Hours 2-4 Hours

Estimated On-Site Per-Visitor Spending [1] $34.50

Direct Per-Visitor Spending [2] Direct Attraction Spending 70.0% $34.50 Direct Off-Site Spending 30.0% $14.79 Total Direct Visitor Spending 100.0% $49.29 A-8 Percentage Gilroy Capture Factor (Net New) [3] 5% 15% 35% 55% 35% 55% 35% 55%

Visitor Distance Factor [4] 0.50 0.75 1.00

Estimated Direct Off-Site Spending [5] % of Total Food and Beverage Service 40.9% $6.04 $0.30 $0.91 $1.06 $1.66 $1.59 $2.49 $2.11 $3.32 Food Stores 9.4% $1.40 $0.07 $0.21 $0.25 $0.39 $0.37 $0.58 $0.49 $0.77 Local Transportation and Gasoline 26.8% $3.96 $0.20 $0.59 $0.69 $1.09 $1.04 $1.63 $1.39 $2.18 Retail Sales 22.9% $3.39 $0.17 $0.51 $0.59 $0.93 $0.89 $1.40 $1.19 $1.86 Total Estimated Direct Off-Site Spending 100.0% $14.79 $0.74 $2.22 $2.59 $4.07 $3.89 $6.10 $5.18 $8.13

gg current spending Source: Gilroy Gardens; IAAPA; Various Visitor-Based Economic Analyses (See Table A-12); EPS.

[1] Reflects the 2016 to 2018 3-year average per-visit spending per park attendee, escalated to 2019 dollars. Includes expenditures for admission, parking, merchandise, food & beverage, and games & attractions. See Table A-9 for details. [2] According to the International Association of Amusement Parks and Attractions (IAAPA), amusement park, water park, and family entertainment center visitors in California spend approximately 70 percent on attraction activities and 30 percent on off-site activities. [3] Reflects the percentage basis that a visitor's trip to Gilroy Gardens will realize unique economic activity in the City of Gilroy. For instance, a visitor native to Gilroy does not generate unique economic activity because they already live, and presumably conduct economic activities, in Gilroy (e.g., shopping, dining out). [4] The National Park Survey (NPS) prepared a survey that indicates local day-trip visitors spend half the amount that non-local day-trip visitors spend. The estimated direct off-site per-day spending for various day-trip visitors is adjusted to correspond to the NPS analysis. See Table A-11 for details. [5] Percentage allocation of estimated direct off-site spending is based on various tourism-based economic analyses. See Table A-12 for details.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-6 Gilroy Gardens Water Park Expansion Economic Impact Analysis Estimated Per-Visitor Spending - Water Park Expansion

Gilroy Capture of Visitor Spending Local Visitor Day Trip Visitor A Day Trip Visitor B Day Trip Visitor C Item Assumption Amount Low High Low High Low High Low High

Drive-Shed < 30 Minutes 30-60 Minutes 1-2 Hours 2-4 Hours

Estimated On-Site Per-Visitor Spending [1] $40.00

Direct Per-Visitor Spending [2] Direct Attraction Spending 70.0% $40.00 Direct Off-Site Spending 30.0% $17.14 Total Direct Visitor Spending 100.0% $57.14 A-9 Percentage Gilroy Capture Factor (Net New) [3] 5% 15% 35% 55% 35% 55% 35% 55%

Visitor Distance Factor [4] 0.50 0.75 1.00

Estimated Direct Off-Site Spending [5] % of Total Food and Beverage Service 40.9% $7.00 $0.35 $1.05 $1.23 $1.93 $1.84 $2.89 $2.45 $3.85 Food Stores 9.4% $1.62 $0.08 $0.24 $0.28 $0.45 $0.43 $0.67 $0.57 $0.89 Local Transportation and Gasoline 26.8% $4.59 $0.23 $0.69 $0.80 $1.26 $1.20 $1.89 $1.61 $2.52 Retail Sales 22.9% $3.93 $0.20 $0.59 $0.69 $1.08 $1.03 $1.62 $1.38 $2.16 Total Estimated Direct Off-Site Spending 100.0% $17.14 $0.86 $2.57 $3.00 $4.72 $4.50 $7.07 $6.01 $9.42

wp exp spending Source: Gilroy Gardens; IAAPA; Various Visitor-Based Economic Analyses (See Table A-12); EPS.

[1] Assumption provided by Gilroy Gardens. [2] According to the International Association of Amusement Parks and Attractions (IAAPA), amusement park, water park, and family entertainment center visitors in California spend approximately 70 percent on attraction activities and 30 percent on off-site activities. [3] Reflects the percentage basis that a visitor's trip to Gilroy Gardens will realize unique economic activity in the City of Gilroy. For instance, a visitor native to Gilroy does not generate unique economic activity because they already live, and presumably conduct economic activities, in Gilroy (e.g., shopping, dining out). [4] The National Park Survey (NPS) prepared a survey that indicates local day-trip visitors spend half the amount that non-local day-trip visitors spend. The estimated direct off-site per-day spending for various day-trip visitors is adjusted to correspond to the NPS analysis. See Table A-11 for details. [5] Percentage allocation of estimated direct off-site spending is based on various tourism-based economic analyses. See Table A-12 for details.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-7 Gilroy Gardens Mountainside Adventure Park - Economic Impact Analysis Local & Day Trip Visitors Estimated Per-Visitor Spending - Mountainside Adventure Park (Local & Day Trip Visitors)

Gilroy Capture of Visitor Spending Local VisitorDay Trip Visitor A Day Trip Visitor B Day Trip Visitor C Item Assumption Amount Low High Low High Low High Low High

Drive-Shed < 30 Minutes 30-60 Minutes 1-2 Hours 2-4 Hours

Estimated On-Site Per-Visitor Spending [1] $83.58

Direct Per-Visitor Spending [2] Direct Attraction Spending 70.0% $83.58 Direct Off-Site Spending 30.0% $35.82 Total Direct Visitor Spending 100.0% $119.40 A-10

Percentage Gilroy Capture Factor (Net New) [3] 5% 15% 35% 55% 35% 55% 35% 55%

Visitor Distance Factor [4] 0.50 0.75 1.00

Estimated Direct Off-Site Spending [5] % of Total Food and Beverage Service 40.9% $14.64 $0.73 $2.20 $2.56 $4.03 $3.84 $6.04 $5.12 $8.05 Food Stores 9.4% $3.38 $0.17 $0.51 $0.59 $0.93 $0.89 $1.39 $1.18 $1.86 Local Transportation and Gasoline 26.8% $9.59 $0.48 $1.44 $1.68 $2.64 $2.52 $3.96 $3.36 $5.27 Retail Sales 22.9% $8.21 $0.41 $1.23 $1.44 $2.26 $2.16 $3.39 $2.87 $4.52 Total Estimated Direct Off-Site Spending 100.0% $35.82 $1.79 $5.38 $6.27 $9.86 $9.41 $14.78 $12.53 $19.70

ap spending 1 Source: Gilroy Gardens; IAAPA; Various Visitor-Based Economic Analyses (See Table A-12); EPS.

[1] Reflects the Mountainside Adventure Park projected per-visit spending per Mountainside Adventure Park attendee at stabilization. See Table A-13 for details. [2] According to the International Association of Amusement Parks and Attractions (IAAPA), amusement park, water park, and family entertainment center visitors in California spend approximately 70 percent on attraction activities and 30 percent on off-site activities. [3] Reflects the percentage basis that a visitor's trip to Gilroy Gardens will realize unique economic activity in the City of Gilroy. For instance, a visitor native to Gilroy does not generate unique economic activity because they already live, and presumably conduct economic activities, in Gilroy (e.g., shopping, dining out). [4] The National Park Survey (NPS) prepared a survey that indicates local day-trip visitors spend half the amount that non-local day-trip visitors spend. The estimated direct off-site per-day spending for various day-trip visitors is adjusted to correspond to the NPS analysis. See Table A-11 for details. [5] Percentage allocation of estimated direct off-site spending is based on various tourism-based economic analyses. See Table A-12 for details.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-8 Mountainside Adventure Park - Gilroy Gardens Domestic & International Economic Impact Analysis Visitor Estimated Per-Visitor Spending - Mountainside Adventure Park (Domestic & International Visitor)

Gilroy Capture of Adjusted Visitor Spending Item Assumption Amount Amount [1] Low High

Estimated Per-Visitor Hotel Average Daily Rate [2] $75.00

Percentage Gilroy Capture Factor (Net New) [3] 5% 15%

Estimated Direct Off-Site Spending [4] % of Total Lodging/Accommodations 30.6% $75.00 - - - A-11 Arts, Entertainment and Recreation 10.9% $26.69 - - - Food and Beverage Service 23.9% $58.71 $58.71 $2.94 $8.81 Food Stores 5.5% $13.56 $13.56 $0.68 $2.03 Local Transportation and Gasoline 15.7% $38.43 $38.43 $1.92 $5.76 Retail Sales 13.4% $32.90 $32.90 $1.65 $4.94 Total Estimated Direct Off-Site Spending 100.0% $245.30 $143.61 $7.19 $21.54

ap spending 2 Source: Gilroy Gardens; IAAPA; Various Visitor-Based Economic Analyses (See Table A-12); EPS.

[1] The estimated amount in which a long-distance visitor is adjusted, assuming the visitor is staying overnight in the greater Bay Area Region (i.e., San Francisco, San Jose), and the visitor's on-site spending at the Mountainside Adventure Park is assumed to comprise the total allocated spending (albeit greater than) for Arts, Entertainment and Recreation spending. As such, these two categories are zeroed out to reflect these assumptions. [2] Reflects the estimated per-visitor hotel average daily rate for an average group size of 3.0 persons. See Table A-14 for details. [3] Reflects the percentage basis that a visitor's trip to the proposed Mountainside Adventure Park will realize unique economic activity in the City of Gilroy. [4] Percentage allocation of estimated direct off-site spending is based on various tourism-based economic analyses. See Table A-12 for details.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-9 Gilroy Gardens Economic Impact Analysis Gilroy Gardens Attendance and Revenue Data

2016 2017 2018 3-Year Avg. (2019$) Escalation to Escalation to Escalation to Item Amount 2019$ [1] % of Total Amount 2019$ [1] % of Total Amount 2019$ [1] % of Total Amount % of Total

Annual Attendance Gate Purchase 49,834 - 10.5% 45,357 - 11.2% 35,436 - 7.8% 43,542 9.8% One-Time Online Sale 53,153 - 11.2% 43,948 - 10.8% 57,900 - 12.7% 51,667 11.6% Season Pass 248,560 - 52.4% 210,012 - 51.8% 290,982 - 63.7% 249,851 56.1% Complimentary 35,246 - 7.4% 31,322 - 7.7% 28,309 - 6.2% 31,626 7.1% Group Sale 87,577 - 18.5% 74,537 - 18.4% 44,428 - 9.7% 68,847 15.5% Total Annual Attendance 474,370 - 100.0% 405,176 - 100.0% 457,055 - 100.0% 445,533 100.0%

Escalation Assumption [1] 11.4% 7.4% 4.0%

Annual Park Revenues

A-12 Admission $8,014,265 $8,930,172 54.8% $6,939,896 $7,450,718 52.9% $8,268,140 $8,600,092 54.7% $8,326,994 54.2% Parking $1,093,405 $1,218,364 7.5% $982,282 $1,054,584 7.5% $965,597 $1,004,364 6.4% $1,092,437 7.1% Merchandise $1,420,847 $1,583,228 9.7% $1,162,644 $1,248,222 8.9% $1,380,913 $1,436,354 9.1% $1,422,601 9.3% Food and Beverage $3,814,042 $4,249,928 26.1% $3,774,041 $4,051,835 28.7% $4,212,640 $4,381,771 27.9% $4,227,845 27.5% Games and Attractions $286,041 $318,731 2.0% $269,313 $289,136 2.1% $283,545 $294,929 1.9% $300,932 2.0% Total Annual Park Revenues $14,628,600 $16,300,423 100.0% $13,128,176 $14,094,495 100.0% $15,110,835 $15,717,510 100.0% $15,370,809 100.0%

Annual Revenues per Attendee Admission $16.89 $18.83 54.8% $17.13 $18.39 52.9% $18.09 $18.82 54.7% $18.69 54.2% Parking $2.30 $2.57 7.5% $2.42 $2.60 7.5% $2.11 $2.20 6.4% $2.45 7.1% Merchandise $3.00 $3.34 9.7% $2.87 $3.08 8.9% $3.02 $3.14 9.1% $3.19 9.2% Food and Beverage $8.04 $8.96 26.1% $9.31 $10.00 28.7% $9.22 $9.59 27.9% $9.49 27.5% Games and Attractions $0.60 $0.67 1.9% $0.66 $0.71 2.0% $0.62 $0.65 1.9% $0.68 2.0% Total Annual Rev. per Attendee $30.83 $34.36 100.0% $32.39 $34.79 100.0% $33.06 $34.39 100.0% $34.50 100.0%

attend rev Source: Gilroy Gardens; Bureau of Labor Statistics; EPS.

[1] Based on the February to February increase in Consumer Price Index For All Urban Consumers (San Francisco-Oakland-Hayward). See Table A-10 for details.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-10 Gilroy Gardens Economic Impact Analysis Escalation Assumption - Consumer Price Index

CPI All Items % Increase Item (1967 Base) from 2019

April 2019 906.300 0.0% April 2018 871.318 4.0% April 2017 844.164 7.4% April 2016 813.347 11.4% April 2010 700.002 29.5%

cpi

A-13 Source: Consumer Price Index for All Urban Consumers, Bureau of Labor Statistics.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-11 Gilroy Gardens Economic Impact Analysis Visitor Spending by Visitor Segment (2017$)

Average Average Average Number of Spending Spending per People per Person Item Party per Day per Party per Day

Local Day Trip $41.72 2.9 $14.39

Non-Local Day Trip $90.00 3.0 $30.00

nps spending

A-14 Source: 2017 National Park Visitor Spending Effects, National Park Service, US Department of the Interior.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-12 Gilroy Gardens Economic Impact Analysis Visitor Spending by Category

Dean Runyan California Travel Impacts Study (2017$) National Park Visitor Santa Monica Visitor Monterey Co. [1] San Benito Co. [1] Santa Clara Co. Solano Co. [2] Spending (2017$) Profile (2017$) Average Item Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total

Day Visitor Spending by Category [3] ($ Millions) ($ Millions) ($ Millions) ($ Millions) ($ Millions) ($ Millions) Food & Beverage Service $874 53.7% $32 46.2% $1,674 51.5% $219 49.3% $3,700 35.6% $537 37.8% $1,173 40.9% Food Stores $73 4.5% $11 15.3% $169 5.2% $33 7.3% $1,300 12.5% $40 2.8% $271 9.4% Local Transportation and Gasoline $226 13.9% $14 20.8% $644 19.8% $72 16.1% $3,600 34.6% $49 3.5% $768 26.8% Retail Sales $455 28.0% $12 17.6% $762 23.5% $122 27.3% $1,800 17.3% $792 55.9% $657 22.9% Total $1,628 100.0% $69 100.0% $3,249 100.0% $445 100.0% $10,400 100.0% $1,418 100.0% $2,868 100.0%

Overnight Visitor Spending by Category [4] Lodging/Accommodations $733 26.8% $13 13.4% $1,783 30.7% $97 14.2% $5,900 32.6% $461 23.5% $1,498 30.6% Arts, Entertainment and Recreation $376 13.7% $16 16.0% $782 13.5% $141 20.6% $1,800 9.9% $85 4.3% $533 10.9% Food & Beverage Service $874 31.9% $32 32.7% $1,674 28.8% $219 32.1% $3,700 20.4% $537 27.3% $1,173 23.9% Food Stores $73 2.7% $11 10.8% $169 2.9% $33 4.8% $1,300 7.2% $40 2.0% $271 5.5% Local Transportation and Gasoline $226 8.3% $14 14.7% $644 11.1% $72 10.5% $3,600 19.9% $49 2.5% $768 15.7% Retail Sales $455 16.6% $12 12.4% $762 13.1% $122 17.8% $1,800 9.9% $792 40.3% $657 13.4% Total $2,737 100.0% $98 100.0% $5,814 100.0% $683 100.0% $18,100 100.0% $1,963 100.0% $4,899 100.0%

spending survey Source: California Travel Impacts (2000-2017), Dean Runyan Associates, Inc.; 2017 National Park Visitor Spending Effects, National Park Service, US Department of the Interior; Santa Monica 2017 Summary Tourism Economic & Fiscal Impacts, Visitor Profile, Lauren Schlau Consulting and CIC Research, Inc.; EPS.

[1] Monterey and San Benito Counties are included based on their proximity to Gilroy. [2] Solano County is included based on similar attributes to Gilroy as being an agriculturally focused area on the periphery of the San Francisco Bay Area. Also, Solano County has a major amusement park destination in Six Flags Discovery Kingdom, located in Vallejo, and a Premium Outlet Center in Vacaville. Therefore, Solano County may provide a similar visitor spending profile to Gilroy. [3] For Gilroy Gardens day visitors, EPS removed expenditure categories associated with overnight or longer term stays, including Lodging; Visitor Air Transportation; and Arts, Entertainment and Recreation. Arts, Entertainment and Recreation is removed because it is assumed a majority of entertainment spending occurs at Gilroy Gardens. [4] Excludes Visitor Air Transportation expenditure category.

A-15

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-13 Gilroy Gardens Economic Impact Analysis Mountainside Adventure Park Annual Attendance and Revenues Projections

Item Amount [1] % of Total

Annual Attendance Mountain Bikers 82,718 40.4% Sightseers 121,886 59.6% Total Annual Attendance 204,604 100.0%

Annual Park Revenues Visitor Day Use Pass $6,303,696 36.9% Season Pass $1,690,000 9.9%

A-16 Group Package Sale $1,374,838 8.0% Zipline Tour $1,681,920 9.8% Bike Lessons $1,582,056 9.3% Equipment Rentals $989,116 5.8% Food and Beverage $2,321,952 13.6% Merchandise $488,832 2.9% Parking $261,888 1.5% Photo Sales $407,360 2.4% Total Annual Park Revenues $17,101,658 100.0%

Total Annual Revenues per Attendee $83.58 -

ap rev Source: Select Contracts.

[1] Reflects annual attendance and park revenues at stabilization.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-14 Gilroy Gardens Economic Impact Analysis Hotel Costs per Visitor

Item Bay Area

Average Daily Rate (ADR) [1] $225.00

Average Persons per Group [2] 3.0

Average Accommodations Spending per Person $75.00

hotel person Source: Visitation data compiled by Visit Gilroy, based on Smith Travel Research reports;

A-17 Hotel News Now; Silicon Valley Business Journal; 2017 National Park Visitor Spending Effects, National Park Service, US Department of the Interior.

[1] Reflects a conservative estimate of the 2018 annual ADR for San Francisco and the San Jose area, based on various hotel and Bay Area business articles citing reports prepared by CBRE and Smith Travel Research. [2] Based on the average persons per party, according to the 2017 National Park Visitor Spending Effects report.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-15 Gilroy Gardens Gilroy Gardens Economic Impact Analysis Current Operations Estimated Direct Off-Site Aggregate Spending Captured in Gilroy - Gilroy Gardens Current Operations

Local Visitor Day Trip Visitor A Day Trip Visitor B Day Trip Visitor C [1] Total Low High Low High Low High Low High Low High Per- Per- Per- Per- Per- Per- Per- Per- Visitor Visitor Visitor Visitor Visitor Visitor Visitor Visitor Item Spending Total Spending Total Spending Total Spending Total Spending Total Spending Total Spending Total Spending Total Total Total

Drive-Shed < 30 Minutes 30-60 Minutes 1-2 Hours 2-4 Hours

Estimated Percentage of Total Visitors [2] 12.0% 49.2% 26.2% 12.6% 100.0% Estimated Annual Attendance (Rounded) [3] 53,500 219,000 116,800 56,200 445,500

Estimated Direct Off-Site Spending [4] [5] Food and Beverage Service $0.30 $16,100 $0.91 $48,700 $1.06 $232,100 $1.66 $363,500 $1.59 $185,700 $2.49 $290,800 $2.11 $118,600 $3.32 $186,600 $552,500 $889,600 Food Stores $0.07 $3,700 $0.21 $11,200 $0.25 $54,800 $0.39 $85,400 $0.37 $43,200 $0.58 $67,700 $0.49 $27,500 $0.77 $43,300 $129,200 $207,600 Local Transportation and Gasoline $0.20 $10,700 $0.59 $31,600 $0.69 $151,100 $1.09 $238,700 $1.04 $121,500 $1.63 $190,400 $1.39 $78,100 $2.18 $122,500 $361,400 $583,200 Retail Sales $0.17 $9,100 $0.51 $27,300 $0.59 $129,200 $0.93 $203,700 $0.89 $104,000 $1.40 $163,500 $1.19 $66,900 $1.86 $104,500 $309,200 $499,000 Total Estimated Direct Off-Site Spending $0.74 $39,600 $2.22 $118,800 $2.59 $567,200 $4.07 $891,300 $3.89 $454,400 $6.10 $712,400 $5.18 $291,100 $8.13 $456,900 $1,352,300 $2,179,400

agg gg spend Source: Gilroy Gardens; Select Contracts; IAAPA; Various Visitor-Based Economic Analyses (See Table A-12); California Board of Equalization; EPS.

[1] This category of day-trip visitor includes park attendees from beyond a 4-hour drive. [2] EPS spatially analyzed the origin of 2018 season passholders to use a proxy for visitor origin assumptions. See Table A-2. [3] Reflects the 3-year total average attendance (2016-2018). See Table A-9 for details. [4] See Table A-5 for the estimated per-visitor spending assumptions. [5] Total amounts are rounded to the nearest $100.

A-18

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-16 Gilroy Gardens Gilroy Gardens Economic Impact Analysis Water Park Expansion Estimated Direct Off-Site Aggregate Spending Captured in Gilroy - Water Park Expansion

Drive-Shed < 30 Minutes 30-60 Minutes 1-2 Hours 2-4 Hours

Estimated Percentage of Total Visitors [2] 12.0% 49.2% 26.2% 12.6% 100.0% Estimated Annual Attendance (Rounded) [3] 24,000 98,300 52,400 25,200 200,000

Estimated Direct Off-Site Spending [4] Food and Beverage Service $0.35 $8,400 $1.05 $25,200 $1.23 $120,900 $1.93 $189,700 $1.84 $96,400 $2.89 $151,400 $2.45 $61,700 $3.85 $97,000 $287,400 $463,300 Food Stores $0.08 $1,900 $0.24 $5,800 $0.28 $27,500 $0.45 $44,200 $0.43 $22,500 $0.67 $35,100 $0.57 $14,400 $0.89 $22,400 $66,300 $107,500 Local Transportation and Gasoline $0.23 $5,500 $0.69 $16,600 $0.80 $78,600 $1.26 $123,900 $1.20 $62,900 $1.89 $99,000 $1.61 $40,600 $2.52 $63,500 $187,600 $303,000 Retail Sales $0.20 $4,800 $0.59 $14,200 $0.69 $67,800 $1.08 $106,200 $1.03 $54,000 $1.62 $84,900 $1.38 $34,800 $2.16 $54,400 $161,400 $259,700 Total Estimated Direct Off-Site Spending $0.86 $20,600 $2.57 $61,800 $3.00 $294,800 $4.72 $464,000 $4.50 $235,800 $7.07 $370,400 $6.01 $151,500 $9.42 $237,300 $702,700 $1,133,500

agg wp spend Source: Gilroy Gardens; Select Contracts; IAAPA; Various Visitor-Based Economic Analyses (See Table A-12); California Board of Equalization; EPS.

[1] This category of day-trip visitor includes park attendees from beyond a 4-hour drive. [2] EPS spatially analyzed the origin of 2018 season passholders to use a proxy for visitor origin assumptions. See Table A-2 for details. [3] Reflects the estimated increase in annual visitors for the Water Park expansion. [4] See Table A-6 for the estimated per-visitor spending assumptions. [5] Total amounts are rounded to the nearest $100.

A-19

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table A-17 Gilroy Gardens Mountainside Economic Impact Analysis Adventure Park Estimated Direct Off-Site Aggregate Spending Captured in Gilroy - Mountainside Adventure Park

Local Visitor Day Trip Visitor A Day Trip Visitor B Day Trip Visitor C Domestic and International Visitor Total Low High Low High Low High Low High Low High Low High Per- Per- Per- Per- Per- Per- Per- Per- Per- Per- Visitor Visitor Visitor Visitor Visitor Visitor Visitor Visitor Visitor Total Visitor Total Item Spending Total Spending Total Spending Total Spending Total Spending Total Spending Total Spending Total Spending Total Spending [5] Spending [5] Total Total

Drive-Shed < 30 Minutes 30-60 Minutes 1-2 Hours 2-4 Hours N/A

Estimated Percentage of Total Visitors [1] 7.6% 31.3% 24.8% 9.1% 27.1% 100.0% Estimated Annual Attendance (Rounded) [2] 15,600 64,000 50,800 18,700 55,500 204,600

Estimated Direct Off-Site Spending [3] [4] Food and Beverage Service $0.30 $4,700 $0.91 $14,200 $2.56 $163,800 $4.03 $257,900 $3.84 $195,100 $6.04 $306,800 $5.12 $95,700 $8.05 $150,500 $2.94 $163,200 $8.81 $489,000 $622,500 $1,218,400 Food Stores $0.07 $1,100 $0.21 $3,300 $0.59 $37,800 $0.93 $59,500 $0.89 $45,200 $1.39 $70,600 $1.18 $22,100 $1.86 $34,800 $0.68 $37,700 $2.03 $112,700 $143,900 $280,900 Local Transportation and Gasoline $0.20 $3,100 $0.59 $9,200 $1.68 $107,500 $2.64 $169,000 $2.52 $128,000 $3.96 $201,200 $3.36 $62,800 $5.27 $98,500 $1.92 $106,600 $5.76 $319,700 $408,000 $797,600 Retail Sales $0.17 $2,700 $0.51 $8,000 $1.44 $92,200 $2.26 $144,600 $2.16 $109,700 $3.39 $172,200 $2.87 $53,700 $4.52 $84,500 $1.65 $91,600 $4.94 $274,200 $349,900 $683,500 Total Estimated Direct Off-Site Spending $0.74 $11,600 $2.22 $34,700 $6.27 $401,300 $9.86 $631,000 $9.41 $478,000 $14.78 $750,800 $12.53 $234,300 $19.70 $368,300 $7.19 $399,100 $21.54 $1,195,600 $1,524,300 $2,980,400

agg ap spend Source: Gilroy Gardens; Select Contracts; IAAPA; Various Visitor-Based Economic Analyses (See Table A-12); California Board of Equalization; EPS.

[1] Based on a visitor penetration analysis, prepared by Select Contracts. See Table A-3 for details. [2] Total projected annual attendance is based on assumed stabilization. Based on information prepared by Select Contracts. [3] See Table A-7 and Table A-8 for the estimated per-visitor spending assumptions. [4] Total amounts are rounded to the nearest $100.

A-20

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APPENDIX B:

Gilroy Gardens Employment and Payroll Technical Support

Table B-1 Gilroy Gardens Economic Impact Analysis Existing Annual Wages

2016 2017 2018 Average No. of Salaries Salaries No. of Salaries Salaries No. of Salaries Salaries No. of Salaries Plus Fringe Item Employees (2016$) [1] (2019$) Employees (2017$) [1] (2019$) Employees (2018$) [1] (2019$) Employees (2019$) [1] Benefits [2]

Escalation Assumption [3] 11.4% 7.4% 4.0% 18.2%

Gilroy Resident Personnel Salaried Personnel 8 $518,080 $577,289 8 $526,206 $564,939 8 $551,890 $574,048 8 $572,092 $675,955 Hourly Personnel 445 $2,301,675 $2,564,720 648 $2,217,478 $2,380,699 530 $2,495,233 $2,595,413 541 $2,513,611 $2,969,958 Subtotal Gilroy Resident Employees 453 $2,819,755 $3,142,009 656 $2,743,684 $2,945,638 538 $3,047,123 $3,169,461 549 $3,085,703 $3,645,913

Non-Gilroy Resident Personnel Salaried Personnel 12 $754,367 $840,580 13 $852,555 $915,309 12 $765,653 $796,393 12 $850,761 $1,005,217 Hourly Personnel 287 $1,374,686 $1,531,792 439 $1,364,222 $1,464,637 266 $1,376,052 $1,431,298 331 $1,475,909 $1,743,861 Subtotal Non-Gilroy Resident Personnel 299 $2,129,053 $2,372,372 452 $2,216,777 $2,379,946 278 $2,141,705 $2,227,691 343 $2,326,670 $2,749,077

Total Personnel

B-1 Salaried Personnel 20 $1,272,448 $1,417,869 21 $1,378,761 $1,480,248 20 $1,317,543 $1,370,441 20 $1,422,853 $1,681,172 Hourly Personnel 732 $3,676,361 $4,096,512 1,087 $3,581,700 $3,845,336 796 $3,871,285 $4,026,711 872 $3,989,520 $4,713,818 Total Personnel 752 $4,948,808 $5,514,381 1,108 $4,960,461 $5,325,584 816 $5,188,828 $5,397,152 892 $5,412,373 $6,394,990

existing wage Source: Gilroy Gardens; Bureau of Labor Statistics; EPS.

[1] Does not include fringe benefits. [2] Based on the percentage that benefits comprise the total payroll for the Mountainside Adventure Park personnel. [3] Based on the February to February increase in Consumer Price Index For All Urban Consumers (San Francisco-Oakland-Hayward). See Table A-10 for details.

Prepared by EPS 11/8/2019 Z:\Shared\Projects\SAC\192000\192005 Gilroy Gardens Economic Impact Analysis\Models\192005 m10.xlsx Table B-2 Gilroy Gardens Economic Impact Analysis Estimated Water Park Expansion Annual Wages

2016-2018 Average Water Park Expansion Estimated Average Annual Estimated Average Annual Additional Payroll Payroll per New Payroll per Payroll Item Amount (2019$) [1] Employee [2] Employees Employee [2] (2019$)

Estimated Annual Visitors [2] 445,500 200,000 Percentage Increase in Annual Visitors 44.9%

Total Personnel Salaried Personnel [3] 20 $1,681,172 $84,100 2 $84,100 $168,200 B-2 Hourly Personnel [4] 872 $4,713,818 $5,400 294 $5,400 $1,587,600 Total Personnel 892 $6,394,990 296 $1,755,800

wp exp wages Source: Gilroy Gardens; EPS.

[1] See Table B-1 for details. [2] Rounded to the nearest $100. [3] Estimated new salaried personnel includes a factor of 0.25 to account for non-variable positions (e.g., General Manager). [4] Estimated new hourly personnel includes a factor of 0.75 to be conservative.

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APPENDIX C:

Mountainside Adventure Park Technical Support

Table C-1 Page 1 of 2 Gilroy Gardens Capital Economic Impact Analysis Expenditures Mountainside Adventure Park Capital Expenditures

Item Amount Category

Build Out Costs Restaurant/Café Building $928,800 Construction of new commercial structures, including farm structures Back of House Buildings $307,800 Construction of new commercial structures, including farm structures Hilltop Café $1,103,760 Construction of new commercial structures, including farm structures Storage/Staff Building $1,069,200 Construction of new commercial structures, including farm structures Safety Railings $148,500 Construction of other new nonresidential structures Direction & Safety Signage $195,000 Construction of other new nonresidential structures Soft Landscaping (e.g., plants, flowers) $61,560 Construction of other new nonresidential structures Hard Landscaping (e.g., gravel paths, walkways) $68,250 Construction of other new nonresidential structures Parking $244,080 Construction of other new nonresidential structures Trails $1,025,595 Construction of other new nonresidential structures Lighting $225,000 Construction of other new nonresidential structures Hillside Roadways $750,000 Construction of new highways and streets Infrastructure (e.g., plumbing, mechanical, power) $1,838,264 Construction of other new nonresidential structures Project Preliminaries (e.g., flights, accommodations) $183,826 N/A Subtotal Build Out Costs $8,149,635

Equipment Costs C-1 FFE $400,000 Construction of other new nonresidential structures Lockers $100,000 Construction of other new nonresidential structures Chair Lift $6,200,000 Construction of other new nonresidential structures Kitchen $350,000 Construction of other new nonresidential structures Bikes $220,000 Retail - Sporting goods, hobby, musical instrument and book stores Low Ropes Course for Summit $195,000 Construction of other new nonresidential structures Zip Line $1,200,000 Construction of other new nonresidential structures Pads, Helmets, Armor $30,000 Retail - Sporting goods, hobby, musical instrument and book stores Vehicles (e.g., heavy equipment, AVTs, vehicles) $250,000 Retail - Motor vehicle and parts dealers AV Equipment/CCTV $110,000 Construction of other new nonresidential structures Subtotal Equipment Costs $9,055,000

Soft Costs Design & Engineering $1,895,000 Assumed to be included in construction - not included in analysis Project Management $585,000 Assumed to be included in construction - not included in analysis Impact Fees $250,000 Assumed to be included in construction - not included in analysis Approvals $2,000,000 Assumed to be included in construction - not included in analysis Project Expenses $240,000 Assumed to be included in construction - not included in analysis Shipping, Logistics & Customs $150,000 Assumed to be included in construction - not included in analysis Subtotal Softs Costs $5,120,000

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Item Amount Category

Pre-Opening Expenses Marketing and Advertising $500,000 Assumed to be temporary activity - not included in analysis Pre-Opening Management $390,000 Assumed to be temporary activity - not included in analysis Pre-Opening Staff $322,465 Assumed to be temporary activity - not included in analysis Ticketing & Operating System $270,000 Assumed to be temporary activity - not included in analysis Kitchen & Bar Stock $7,500 Assumed to be temporary activity - not included in analysis Back of House Equipment (e.g., desks, computers) $45,000 Assumed to be temporary activity - not included in analysis Floats $2,500 Assumed to be temporary activity - not included in analysis Uniforms $32,800 Assumed to be temporary activity - not included in analysis Recruitment & Training $16,400 Assumed to be temporary activity - not included in analysis Safety Equipment $70,000 Assumed to be temporary activity - not included in analysis Information Technology $75,000 Assumed to be temporary activity - not included in analysis Radio Equipment $30,000 Assumed to be temporary activity - not included in analysis Legal and Administration $350,000 Assumed to be temporary activity - not included in analysis Equipment Spares $150,000 Assumed to be temporary activity - not included in analysis Merchandise Stock $51,327 Assumed to be temporary activity - not included in analysis RFID Card Stock $35,000 Assumed to be temporary activity - not included in analysis Telephones $17,500 Assumed to be temporary activity - not included in analysis C-2 Cleaning $30,000 Assumed to be temporary activity - not included in analysis Subtotal Pre-Opening Expenses $2,395,493

Contingency and Cashflow Contingency $1,720,463 N/A Interest Payments $300,000 N/A Working Capital $1,000,000 N/A Subtotal Contingency and Cashflow $3,020,463

Total Capital Expenditures $27,740,591

Capital Expenditures Pivot Table Category Sum of Amount Assumed to be included in construction - not included in analysis $5,120,000 Assumed to be temporary activity - not included in analysis $2,395,493 Construction of new commercial structures, including farm structures $3,409,560 Construction of new highways and streets $750,000 Construction of other new nonresidential structures $12,361,249 N/A $3,204,290 Retail - Motor vehicle and parts dealers $250,000 Retail - Sporting goods, hobby, musical instrument and book stores $250,000 Grand Total $27,740,591

Reflects direct costs used in IMPLAN Analysis

capex Source: Select Contracts.

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Item Amount Category

Activities Revenue Adult Sightseeing Day Use Pass $2,452,800 Other amusement and recreation industries Child Sightseeing Day Use Pass $350,400 Other amusement and recreation industries Adult Bike Park Day Use Pass $3,232,440 Other amusement and recreation industries Child Bike Park Day Use Pass $268,056 Other amusement and recreation industries Subtotal Activities Revenue $6,303,696

Ancillary Revenue Private Bike Lesson $478,296 Other amusement and recreation industries Group Bike Lesson $1,103,760 Other amusement and recreation industries Zipline Tour $1,681,920 Other amusement and recreation industries Bike Park Annual Season Pass $1,000,000 Other amusement and recreation industries Bike Park Summer Season Pass $490,000 Other amusement and recreation industries Bike Park Winter Season Pass $200,000 Other amusement and recreation industries

C-3 Kids Group Package $142,963 Other amusement and recreation industries Adult Group Package $404,055 Other amusement and recreation industries Group Lesson Package $827,820 Other amusement and recreation industries Beverage $855,456 Other amusement and recreation industries Food $1,466,496 Other amusement and recreation industries VIP Parking $261,888 Other amusement and recreation industries Branded Merchandise $488,832 Other amusement and recreation industries Bike Rental $717,444 Other amusement and recreation industries Safety Equipment Rental $220,752 Other amusement and recreation industries Locker Rental $50,920 Other amusement and recreation industries Sponsorship Sales $0 N/A Photo Sales $407,360 Other amusement and recreation industries Subtotal Ancillary Revenue $10,797,962

Total Annual Revenue $17,101,658

Revenues Pivot Table Category Sum of Amount N/A $0 Other amusement and recreation industries $17,101,658 Grand Total $17,101,658

revenues Source: Select Contracts.

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Item Quantity Salary Amount Category

Salaried Personnel FTE Per FTE General Manager 1.00 $150,000 $150,000 Other amusement and recreation industries Technical Manager 1.00 $80,000 $80,000 Other amusement and recreation industries HR Manager 1.00 $90,000 $90,000 Other amusement and recreation industries Finance Manager 1.00 $90,000 $90,000 Other amusement and recreation industries Group Sales & Marketing Manager 1.00 $87,000 $87,000 Other amusement and recreation industries Kitchen Manager 1.00 $60,000 $60,000 Other amusement and recreation industries Guest Services Supervisor 1.00 $60,000 $60,000 Other amusement and recreation industries Account Staff 1.00 $60,000 $60,000 Other amusement and recreation industries Marketing/Sales Staff 2.00 $60,000 $120,000 Other amusement and recreation industries IT Staff 1.00 $60,000 $60,000 Other amusement and recreation industries Subtotal Salaries 11.00 $857,000 Medical and 403 Match 16.70% $143,119 Workers Compensation Premium 7.12% $61,018 PR Taxes FICA/FSUTA 7.95% $68,132 Total Salaried Personnel $1,129,269

Hourly Personnel [1] Hours [1] Per Hour Line Cooks 8,760 $18.00 $157,680 Other amusement and recreation industries Kitchen Staff 8,760 $16.00 $140,160 Other amusement and recreation industries Restaurant Staff 11,680 $16.00 $186,880 Other amusement and recreation industries Bike Instructors 11,680 $24.00 $280,320 Other amusement and recreation industries Bike Mechanics 5,840 $22.00 $128,480 Other amusement and recreation industries Lift Operators 13,140 $16.00 $210,240 Other amusement and recreation industries Patrol Staff 11,680 $20.00 $233,600 Other amusement and recreation industries Zip Line Staff 11,680 $16.00 $186,880 Other amusement and recreation industries Guest Service Staff 13,140 $17.00 $223,380 Other amusement and recreation industries Retail/Rental Staff 5,840 $18.00 $105,120 Other amusement and recreation industries Trail Staff 11,680 $22.00 $256,960 Other amusement and recreation industries Activity Supervisor 2,920 $24.00 $70,080 Other amusement and recreation industries Maintenance Supervisor 2,920 $24.00 $70,080 Other amusement and recreation industries Security 8,760 $18.00 $157,680 Other amusement and recreation industries Technicians/Mechanics 2,920 $22.00 $64,240 Other amusement and recreation industries Maintenance & Landscaping 2,920 $18.00 $52,560 Other amusement and recreation industries Park Cleaners 2,920 $17.00 $49,640 Other amusement and recreation industries Subtotal Salaries 137,240 $2,573,980 Medical and 403 Match 0.00% $0 Workers Compensation Premium 7.12% $183,267 PR Taxes FICA/FSUTA 11.87% $305,531 Total Hourly Personnel $3,062,779

Total Personnel $4,192,048

payroll Source: Select Contracts.

[1] In this planning phase, Select Contracts does not provide estimates for the number of hourly employee because of a large number of input variables, including local labor regulations for part-time workers, hours of operation, and seasonal and daily visitor fluctuations, among other considerations.

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