A T Fe T C T D a T Fe T C T D Assessment of Events Center
Total Page:16
File Type:pdf, Size:1020Kb
AtfEtCtdAssessment of Events Center and Convention Facility Development Initiatives in Sioux Falls Presented to the: Sioux Fa lls Even ts Cen ter Tas k Force September 23, 2009 September 23, 2009 Mr. Michael Cooper Director City of Sioux Falls Planning Department 224 W. Ninth Street City Hall – Second Floor Sioux Falls, SD 57117 Dear Mr. Cooper: Conventions, Sports & Leisure International (CSL) has completed a market demand and facility development feasibility study regarding an assessment of events center and convention facility development initiatives in Sioux Falls. The research conducted as part of this study includes analysis of local market conditions, historical Sioux Falls Convention Center and Sioux Falls Arena operations, competitive and comparable markets and facilities and market demand characteristics specific to the Sioux Falls market. The attached report presents our research, analysis and findings and is intended to assist the Sioux Falls Events Center Task Force, the City of Sioux Falls, the Sioux Falls Convention and Visitors Bureau and other involved parties in evaluating various issues pertaining to potential development of a new events center and/or expanded convention facilities. The analysis presented in this report is based on estimates, assumptions and other information developed from in-person interviews, industry research, surveys of potential facility users and analysis of competitive/comparable facilities and communities. The sources of information, the methods employed and the basis of significant estimates and assumptions are stated in this report. Some assumptions inevitably will not materialize and unanticipated events and circumstances may occur. Therefore, actual results achieved will vary from those described and the variations may be material. We sincerely appreciate the assistance and cooperation we have been provided in the completion of this report and would be pleased to be of further assistance in the interpretation and application of our findings. Very truly yours, CSL International Conventions, Sports & Leisure International 1907 East Wayzata Boulevard • Suite 250 • Wayzata, MN 55391 • Telephone 952.476.5900 • Facsimile 952.476.0005 - Table of Contents - ______ I. Introduction ........................................................................................................1 II. Events Center Analysis ......................................................................................2 Historical Sioux Falls Arena Operations Analysis ......................................2 Competitive/Regional Facilities...................................................................4 Comparable Market Arenas .........................................................................7 Market Demand Analysis ..........................................................................18 Building Program Analysis ........................................................................29 Financial Analysis ......................................................................................39 III. Convention Center Analysis ............................................................................44 Industry Trends and Characteristics Analysis ............................................44 Local Market Attractions and Resources ...................................................54 Analysis of Historical SFCC Operations ...................................................62 Competitive and Comparable Facilities and Markets ................................73 Market Demand and Building Program Analysis ......................................88 Financial Analysis ....................................................................................107 IV. Economic and Fiscal Impacts .....................................................................111 Appendix A – Competitive Arena Case Studies Appendix B – Comparable Arena Case Studies Appendix C – Financial Operating Estimates Assessment of Events Center and Convention Facility Development Initiatives in Sioux Falls Table of Contents I. Introduction Conventions, Sports & Leisure (CSL) has completed a market and facility development feasibility study regarding an assessment of events center and convention industry facility development initiatives in Sioux Falls. This report outlines the key findings associated with the analysis of local market conditions, historical Sioux Falls Arena (Arena) and Sioux Falls Convention Center (SFCC) operations, comparable and regional markets and facilities and market demand characteristics specific to the Sioux Falls market. The study process consisted of detailed research and analysis, including a thorough set of market-specific information derived from the following: • Local market visit and site tours. • In-person interviews/meetings with Sioux Falls event facility and visitor industry representatives. • Analysis of event and financial operating data from the existing Arena, SFCC and other local convention and event facilities. • Research and analysis of local market conditions and national and regional industry trends. • A review of historical SFCC and Arena operating data. • Analysis of data from 17 identified competitive and comparable convention facilities and markets, six competitive arena facilities and markets and nine comparable arena facilities and markets. • Interviews with meeting planners for state, regional and national conventions, tradeshows, conferences and other events. • Interviews with representatives of various promoters and organizations representing potential sources of events center utilization. • Analysis of financial and operating information for several existing convention facilities and arenas comparable to the SFCC and Arena. When evaluating the feasibility of a spectator and flat floor event facilities, communities throughout the country have differed in the specific criteria that best reflect the definition of “feasible” for their community. Facility criteria such as operating profit, room night generation, economic impact and serving as a community gathering place have all been used as criteria, individually or in combination, by communities evaluating the merits of a project. The research data, information and analysis provided through this study is intended to allow the Sioux Falls Events Center Task Force (Task Force), the City of Sioux Falls (City), Sioux Falls Convention and Visitors Bureau (SFCVB) and other community constituents to draw their own informed conclusions concerning the feasibility of a new Events Center and/or an expanded convention center in Sioux Falls. Assessment of Events Center and Convention Facility Development Initiatives in Sioux Falls Introduction Page 1 II. Events Center Analysis In 2005, CSL completed an analysis of the feasibility of developing a new indoor Events Center in Sioux Falls. The study focused on a 10,000 to 12,000-seat venue with a hockey/basketball-type configuration. As the current Task Force continues to evaluate potential Events Center development, CSL has revisited and refined the findings of the previous study, resulting in an updated market and financial feasibility analysis, focusing on an Events Center with approximately 12,000 seats. The purpose of this chapter is to summarize the results of this research, assisting the Task Force in making informed decisions regarding future indoor spectator facility development in Sioux Falls. Historical Sioux Falls Arena Operations Analysis Sioux Falls Arena opened in 1961 and serves as the primary sports and entertainment facility in the Sioux Falls area. Sioux Falls Arena’s seating capacity varies depending on its configuration, including 4,700 seats for football and hockey; 6,100 seats for basketball; and 7,000 seats for end stage concerts. The Arena is currently home to three sports tenant franchises: the D-League Skyforce, the United States Hockey League (USHL) Stampede and the Indoor Football League (IFL) Storm. The Arena also hosts a variety of non-tenant sporting events, concerts, family shows and other events, and occasionally hosts conventions and other such events in conjunction with the adjacent Convention Center. Sioux Falls Arena has become outdated in comparison to more modern facilities in Sioux City, Fargo, Omaha and several other Upper Midwestern cities. The facility lacks many of the amenities and physical characteristics typically associated with more modern arenas. The relative weaknesses of Sioux Falls Arena include: • Relatively small capacity, which limits the events that can be hosted; • Basketball-specific design, which results in poor sightlines and limited capacity for hockey, football and other events requiring a larger floor size; • Relatively small floor, which is unable to accommodate a full-size hockey rink or arena football field; • Lack of modern premium seating offerings such as permanent private suites and club areas; • Inadequate ceiling rigging for stage acts; • Inadequate back-of-house space such as locker rooms and storage space; • Inefficient changeover capabilities, which limits the Arena’s ability to host different types of events in quick succession; and, • Poor handicap accessibility. Assessment of Events Center and Convention Facility Development Initiatives in Sioux Falls Events Center Analysis Page 2 The following is an analysis of the historical operations of Sioux Falls Arena, including event and attendance levels, financial performance and other key operating data. Events and Attendance The following exhibit summarizes event and attendance