Questions re: Dillon Stadium Development Proposal Civic Mind
Please provide additional information on your 'agreement' with CIAC.
Our plan for Dillon Stadium begins with Connecticut Interscholastic Athletic Conference schools as an initial, primary user group. We would work to build an annual calendar of at least 50 high school athletic contests as well as state tournament and championship games. These events would include Hartford Schools and regional events such as alumni and rivalry games, friendlies and invitationals.
As part of this plan to become the region’s athletic epicenter, we have identified various services and cost-saving measures to support CIAC schools. We intend to provide marketing and communication services, donor database development and group purchasing power for equipment and apparel. We would also establish a grant program for participating towns for recreation and athletic infrastructure.
Why does this refer to Civic Mind as the “developer and operational manager of Dillon Stadium”?
Civic Mind has continued to work on the Dillon Stadium project since its engagement was terminated in 2014 — knowing the opportunity would present itself again — either as part of a resolution of our outstanding litigation or in an eventual re-bid of the project.
After initial dialogue with the CIAC, we prepared a non-binding LOI outlining our relationship and goals in the event Civic Mind became the developer and operational manager of Dillon Stadium again.
In short, this letter may be better characterized as a letter of support designed to demonstrate the CIAC’s partnership and support for our community-based plan as we continued to mobilize stakeholders behind our efort. The CIAC was fully aware Civic Mind was not the current developer and operational manager.
If you have any questions regarding the veracity of this account, please call Karissa Niehof, Executive Director of the CIAC, directly at (203) 250-1111. What assumptions have you made in concluding that a Division II soccer team cannot sustain the Stadium?
Over the last decade I have engaged numerous leagues, including the WPS, NWSL, W- League, USL, NASL, MLS and US Soccer, in extensive discussions regarding potential franchises in Hartford. In 2012, I led an expansion efort of Women’s Professional Soccer before watching it fold and become the NWSL. We were only denied entry as a founding member of the NWSL due to Dillon Stadium’s deep level of disrepair.
In 2014, I engaged the USL to bring a W-League and USL team to Hartford. I also explored the potential of a NASL franchise. Between these leagues, we had chosen to pursue a USL team because of their US Soccer afliation and the opportunity of a women’s team in their women’s league, the W-League. Of note, the USL’s W-League has since folded.
In addition to my thorough evaluation of the soccer industry landscape, I possess unique institutional knowledge of the City of Hartford, Dillon Stadium and the community and political dynamics regarding our sports venues. All said, my assessment and assumptions regarding Division II viability is as follows:
North American Soccer League (NASL)
The NASL, as a league, is not sustainable and the risk increases exponentially for an upstart team. The league is in such dire straits, they are ofering funding to new franchisees — essentially subsidizing them — because, at present, the NASL does not possess enough teams, with only 8, to operate as a sanctioned league. For added context, in 2014 the NASL was asking for a $3-5m franchise fee.
Since 2011, 9 teams have folded or left the league.
Secondly, the NASL would efectively eliminate the possibility of a NWSL franchise in Hartford due to their ongoing feud with US Soccer.
United Soccer League (USL)
In 2017, USL teams hosted just 16 home events annually. The average league attendance was 4,301 per game with a mean of just 3,167 per game.
Cincinnati was a dramatic outlier with an average of 21,199 fans per game while the second highest attendance dropped 45% to 11,569 (Sacramento) and the third highest attendance dropped 59% to 8,613 (Louisville). Hartford Sports Group estimates attendance of 100,000 annually — or 6,250 fans per game — an ambitious 45% increase of the league average — or within the top 6 in the whole league. However, the reality is:
21 of the 30 teams averaged less than 5,000 fans per game.
7 of the 30 teams averaged attendance of less than 2,000 per game.
The bottom 2 teams averaged just 632 (New York) and 869 (Vancouver) fans.
Using the league average of 4,301, a USL team in Hartford would see approximately 68,816 fans. By comparison, the three-day Hartford Jazz Festival attracts 70,000 people.
Since 2011, 13 clubs have folded or left the league. It is also widely known most teams are operating at a loss.
Conclusion #1 — The league has not demonstrated the strength, attendance or sustainability to warrant leading the development or operation of a public stadium.
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Of the 30 teams, only 9 operate in venues with a capacity of 10,000 or more.
• 3 are NCAA stadiums (Lehigh, Cincinnati, Richmond)
• 3 are MLS afliated teams operating in MLS stadiums (Orlando, Portland, Salt Lake)
• 2 have 7+ tenants (Ottawa, Rochester)
Of the 30 USL teams, only 6 teams are the sole tenant of their venue.
• 2 have a total capacity of ~2,000 (Charlotte and Toronto)
• 2 have a total capacity of ~5,000 (Colorado Springs and Charleston)
• San Antonio’s venue, with a capacity of 8,200, was initially privately funded — then purchased by the City of San Antonio for $21 million — an unjustifiable model for Hartford.
• Phoenix, with a capacity of 6,200, is privately funded.
Conclusion #2 — There is no existing, comparable model in which a USL team sustains a venue. In other words, it would be unprecedented for a USL team to exclusively develop and manage a stadium. Exit Strategy
Finally, when thinking of the project’s sustainability, we must consider the potential exit strategy.
If the venue is initially designed by and for a Division II league, and the franchise moves or folds — as 22 have since 2011 — the City of Hartford could be exposed to the shortfalls of the franchise including incurred debt obligations and ongoing maintenance while being left with a weak negotiating position in future negotiations with a replacement team.
For all of the reasons above, it is our determination that a team-led development — particularly a Division II team— is a speculative and risky endeavor, and ultimately, unsustainable. Who is providing the $5 million in Private Investment in Years 1, 4 and 8?
As described in our initial response, our working pro forma is designed to demonstrate our financial modeling, while a true and accurate financial plan is unable to be fully developed without further discussion with the CRDA and the City of Hartford. Just as with the venue’s design, the public-private partnership and our pro forma can not be constructed in a vacuum.
We are prepared to invest the private funding necessary to complete Phase 1-A, a minimum contribution of $1,500,000, as part of a sustainable financing plan for Dillon Stadium’s redevelopment. Our investment is conditional on achieving parking agreements, the ability to serve beer and the overall terms of our land lease agreement with the City of Hartford.
The capital improvements associated with Phase 1-A include a new playing surface, upgrading the light systems and sound system improvements, food truck and vendor infrastructure, achieving ADA and building code compliance, and establishing venue security.
Operational funding will be derived from the programming of existing local and regional user groups and the corresponding fees and sponsorship support. This approach creates community ownership and develops a truly self-sustaining model.
Phase 1-A In our working pro forma model, the $5m figure is not a concrete number, but represents the requirement for a substantial private capital contribution to begin the next phase. We would fund or finance advancing to the next phases based on increased demand, executed contracts and sponsorship development.
In our plan, Phase 1 will be split into two parts estimated at a total of $6 to $9 million. We would fully detail the sources and uses as a product of our public participation process and partnership development meetings with the City of Hartford and CRDA.
Our approach is pragmatic and patient, utilizing time, transparency and participation to build trust and support with our community and stakeholders. Entering the next phase is not dictated by a pre-determined length of team (ie: Years 1, 4 and 8), but rather based on mutually agreed upon criteria such as demand, signed tenants, user groups, attendance, resource development and projected growth. In other words, if the venue is maximized and sustainably operated at Phase 1 — we recognize this as success — and would not enter Phase 2 until the aforementioned criteria were met. That said, we hope to achieve each phase within 3-4 years as modeled in the working pro forma (Years 1, 4 and 8).
What return do they get on their investment in order to obtain Civic Mind’s projected revenue?
The debt service payment coupon will be no more than 7%.
How are the capital funds determined?
As a social enterprise, we understand the venue more holistically and are committed to making fiscally responsible, demand-driven capital improvements to the venue.
There are a number of factors that will determine our capital funds including the finalized sources and uses of funds, what portion of the funds are philanthropic, the operating agreement of the social enterprise and the finalized community benefits plan. Our reinvestment strategy will also be further defined as a result of the public participation process and the goals and timelines identified in partnership with the City of Hartford and CRDA as well as capital improvement, revenue sharing and lease agreements with tenants.
How are the “Projected Uses” (Design + Development, Operational + Management) related to actual building operations? Civic Mind’s budget represents the management, marketing, operations stafng and administrative expenses while Stantec’s budget represents the design and development of the venue and park.
These fees do not represent the costs such as utilities, insurance, maintenance, as we do not know these costs, if they are directly incurred or reimbursed to the City of Hartford, or subject to union labor. Correspondingly, our pro forma does not include operating revenue such as ticketing, concessions, parking or merchandising.
Credentials and relevant experience of the proposed management team.
Our plan proposes an extensive planning and public participation process (6-12 months) requiring the staf identified in our response. Additionally, this process will develop agreements with CRDA and the City of Hartford, fully detail the park’s user groups, schedule an annual calendar of events, design the venue, define our construction schedule, establish a financial plan and funding cycle, create a shared timeline, build a brand identity and marketing plan, establish our operations plan and create our community benefits plan.
Our management team is comprised of Hartford-based community experts, venue design and operations professionals, Connecticut soccer industry experts and support from a municipal and community task force. We would on-board additional operations and marketing personnel as demand warranted. 2018 Calendar
January through March Agreements + Contracts — CRDA, City of Hartford — Zoning, Permits — Contractors, Vendors — Parking Lots
April through November Enter Phase 1A Construction — Playing Surface — Lighting and Sound System Improvements — Food Truck and Vendor Infrastructure — ADA accessibility and Building Code compliance — Venue Security
February through December Planning — Venue Design — Public Participation + Outreach — Scheduling User Groups + Tenants — 2019 Calendar Development
Project Management — Existing Programming — Brand Identity Development — Digital Platform Development
Projected 2019 Calendar of Events CIAC — September to October — ~30-40 Events — Daily High School Athletic Events CIAC — March to June — ~20-30 Events — Daily High School Athletic Events CIAC — State Tournaments + Special Events Community Programming — April to November Adult Recreation Leagues — April to November PDL (Hartford City FC) — May to July — 6 Events — Weekend 2x/month USL (Hartford Sports Group) — April to October — 16 Events — Weekend 2x/month