Cascade Planning Group E. D. Hovee Land Use • Economics • & Company, LLC Development Economic and Development Services P.O. Box 372 2408 Main Street Camas, Washington 98607 P.O. Box 225 (360) 607-9816 Vancouver, WA 98660 (360) 696-9870 [email protected] [email protected] SUMMARY RESULTS To: Eric Fuller, Columbia River Economic Development Council From: Paul Dennis, AICP, Principal and Eric Hovee, Principal Subject: Economic & Fiscal Benefits Analysis of Multi-Use Facility to Attract Yakima Bears Date: July 27, 2011 Owners of the Yakima Bears are contemplating moving their single-A baseball franchise from Yakima, WA to Vancouver, WA. This relocation became possible with the departure of the Portland Beavers to Tucson, leaving the Portland-Vancouver metropolitan area unencumbered by Baseball’s neighboring county franchise rules for the first time in a century. Owners are asking local elected officials to create a new multi-use facility that not only the Bears will use and help finance, but it would be available for other public and non-profit organizations as well. Columbia River Economic Development Council (CREDC) has been asked to weigh in on the proposal. CREDC attained the professional services of Cascade Planning Group (CPG) and E.D. Hovee & Company to provide an objective analysis of the potential economic and fiscal effects of the Yakima Bears relocation proposal. Results of the analysis are summarized within this report. SUMMARY FINDINGS AND OBSERVATIONS Principal findings and observations resulting from this economic and fiscal assessment are summarized as follows: The Single-A Northwest League attendance averaged 2,943 in 2010, and averages 70 percent of capacity attendance. This attendance is in line with the 3,000 average at Single-A facilities across the country in recent years. Attendance held steady throughout the economic recession. With the relatively large population base in Clark County, proximity to Portland and size of facility, one would comfortably expect attendance of around 3,400-3,500 per game. Proposed low-end single-game ticket prices of around $7 is within the range of $6-7 for all teams in the Northwest League with the exception of the franchise in Vancouver BC market which begins at $10 and the Yakima franchise at $5.50. Other price ranges compare similarly. The proposed multi-use facility is a $22.7 million project. This is about $4 million lower than other comparable facilities constructed over the past decade, presumably in part because of the unique partnership with Clark College for land and parking during non-peak times. This allows all parties involved to realize certain economies of scale and utilize existing infrastructure. Cascade Planning Group & E.D. Hovee & Company, LLC for CREDC: Economic & Fiscal Assessment of the Yakima Bears’ Relocation Proposal Page 1 The proposed public-private funding split of 70/30 for the capital portion of the project is in line with six other stadium projects in our analysis, although two were funded heavily by adjoining universities, and two were funded completely from public resources. Construction of the facility would create about $34.5 million in direct and indirect economic activity, creating 280 direct and indirect full-time jobs during the construction phase. The team would have at least a dozen on its full-time payroll, and another 120-140 part-time employees for home games. The direct and indirect economic impact of the baseball team alone would be about $4.6 million annually after construction. The multi-use facility would serve as an attractive championship facility for tournaments of multiple sports and all ages. With an estimated average tournament impact of $400,000 and a goal of 10-15 tournaments a year, the facility’s economic impact to the community could be expected to double. Obviously, each tournament will vary in its economic impact to the local community and the estimates provided here are used to provide a relative measure of economic benefit to the local economy. The construction phase would generate about $2.3 million in taxes, and ongoing operations of the team alone would generate another $250,000 annually. Forecast tournament tax proceeds would likely raise annual tax proceeds to reach $600,000 or more. Clark College expects to save at least $60,000 in operating costs. More significantly, construction of the proposed facility would alleviate potentially costly Title IX issues and assure a robust men’s and women’s athletic program for Clark College. The facility also is expected to be integrated into Clark College educational and teaching opportunities, providing students a real-life classroom in multiple disciplines. Other potential benefits include: the facility becoming an anchor tenant in a downtown entertainment corridor as outlined in the Central Park neighborhood plan; a reduction in over-use of other grass fields in the county; economic and community benefits from other activities held at the venue; addressing a need for infrastructure to attract business and economic activity as noted in the recent CREDC report by TIP Strategies. ECONOMIC & FISCAL IMPACT METHODOLOGY Representatives from the Yakima Bears, public agencies, and research conducted by the consultants have provided project information that was used to determine the economic and fiscal effects of the Yakima Bears relocation proposal. The information provided is consistent with conclusions reached by other researchers. An input-output model developed by Minnesota IMPLAN Group has been combined with Clark County specific data to estimate the economic impacts for both the construction phase and the operations phase of the proposed project. Tax rate information was provided by Washington State Department of Revenue and Clark County Treasurer’s Office.i Proposed Project. The Yakima Bears are proposing a $22.7 million multiuse facility capable of seating 4,000 spectators be built as part of relocating the baseball club to Vancouver. The facility would host 38 home games as well as be available for other sporting events including soccer, baseball, and softball for local youth organizations and Clark College.ii Cascade Planning Group & E.D. Hovee & Company, LLC for CREDC: Economic & Fiscal Assessment of the Yakima Bears’ Relocation Proposal Page 2 The facility would take about 15 months to complete. Upon completion, the company expects to have at least 12 full time front office workers will operate the baseball franchise and maintain the facility on a daily basis, with each worker earning an average of $80,000 per year (in 2011 dollars). Another 120- 140 workers will be needed during actual home games consisting of security, concessioners, park guides, etc. Total payroll for these temporary workers is estimated at $200,000 per season. The baseball franchise will spend an additional $1.3 million on supplies and services related to daily business operations as well as game day activities. It is estimated that just over half these goods and services ($675,000) can be purchased locally. Approximately 40% of worker income will be spent on taxable retail goods and services. Approximately 30%-35% of full time staff income will be spent on housing and other related expenditures. Economic Impacts. Multiplier estimates are made using the IMPLAN Input-Output economic model that measures inter-industry transactions between all segments of the Clark County economy. The economic multiplier is defined as the total direct benefit plus indirect benefit divided by the direct effect.iii For example, a jobs multiplier of 2.0 means that one job could be created indirectly for every new job at the project site. Fiscal Effects. As part of this benefit analysis, major fiscal revenue sources are estimated based on direct impacts only. Those taxes include sales tax, property by type of taxing district, and state B&O tax. Not estimated with this analysis are fiscal effects associated with indirect (or multiplier) activity or development exactions/fees. What follows is a summary table depicting the quantitative assumptions utilized in this evaluation. Figure 1. Economic & Fiscal Assumptions Assumption Value Capital Investment: Construction Value $22,700,000 – Procured Locally $22,700,000 Investment per Construction Worker $126,100 Average Construction Wage $51,500 Local Procurement by Construction Workers (% of Wages) 40% Output Multiplier 1.52 Jobs Multiplier 1.54 Income Multiplier 1.45 Operations: Number of Workers 21 % Local Hires 100% Estimated On-site Payroll $1,160,000 Taxable Retail Purchases by Workers (% of Wages) 40% Estimated Annual Gross Sales $2,700,000 Annual Taxable Operations & Maintenance Expenditures $675,000 Annual Lease Payments $500,000 Output Multiplier 1.52 Jobs Multiplier 1.24 Income Multiplier 1.38 Fiscal Taxes Rates: Cascade Planning Group & E.D. Hovee & Company, LLC for CREDC: Economic & Fiscal Assessment of the Yakima Bears’ Relocation Proposal Page 3 Assumption Value State B&O Tax Rate 1.800% State B&O Tax Rate on Construction 0.484% State Sales Tax 6.5% Local Sales Tax 1.8% Leasehold Tax 12.84% Sources: Yakima Bears and public agencies including Clark County and IMPLAN. MARKET CONTEXT While a new multi-use facility in Vancouver would be envisioned to be capable of hosting a variety of sports, entertainment and other assembly events, the Yakima Bears baseball franchise is anticipated to be the anchor tenant for the facility. The Bears would provide the facility with a predictable source of utilization in addition to the various community and other special events the facility could host. Therefore, while the proposed facility is envisioned to be designed as a multi‐purpose venue, it will be important that the facility’s design reflects the Bears’ needs and the latest trends in ballpark capacity and amenities. Minor League Classification System. Professional baseball teams have been placed in various classifications since 1890. The current classification system was started in 1902 with the formation of the National Association of Professional Baseball Leagues (NAPBL), which changed its name to Minor League Baseball (MiLB) in 1999.