Augusta Arena Market Analysis 9-17-20 Final Draft
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James Brown Arena Market Analysis September 17, 2020 Prepared for: Augusta- Richmond County Coliseum Authority 1 v Executive Summary v Chapter 1: Situation Analysis v Chapter 2: Economic, Demographic & Tourism Analysis v Chapter 3: Arena Market Analysis Table of Contents v Chapter 4: Case Studies v Chapter 5: Site Analysis v Chapter 6: Recommendations v Chapter 7: Demand and Financial Projections v Chapter 8: Economic, Fiscal and Employment Impact 2 Executive Summary 3 4 Given the global public health crisis impacting the world’s economy, the data and analysis should be considered to be from, and applicable to, the pre-COVID-19 pandemic timeframe that began in February and March of 2020. Real estate development will likely be severely dampened during the recovery period. The trends in real estate usage may also adjust, such as a stronger work-from-home dynamic, lessening the need for large office spaces Pandemic generally. At-home delivery of retail and restaurant items may impact the future of such development, accelerating a trend that was already occurring, at least in the retail space. Caveat On a positive note, during any recessionary period, the cost of labor and materials for real estate development generally declines, making projects more viable from a cost perspective. HSP suggests planning for an update and/or next step analysis once the economy has generally recovered for a measurable period. 4 KEY QUESTIONS HSP EXPLORED THE FOLLOWING KEY QUESTIONS AND THEIR IMPLICATIONS: What is the market opportunity for concerts and How will the market demographics in the 1 entertainment, indoor sports events, consumer 2 Augusta area and the region affect a new arena shows, and other kinds of events? development? What capacity and premium seating How will each recommended scenario perform and 4 3 breakdown best addresses the local market what will their impact be on the city? demographics and the regional competition? CURRENT LANDSCAPE In order to understand the viability of this new arena development in Augusta, Georgia it is critical to first understand the current situation of the local market, the condition of the current James Brown Arena, and the competitive landscape in the region. CURRENT LOCAL MARKET SITE SUPPLY & DEMAND COMPETITORS JBA The existing JBA is not There are numerous The local market is The existing James The site provides able to compete competitors in a 2-3 hour growing, has a strong Brown Arena is outdated, opportunity for a new effectively against its drive time. Most other healthcare and military outmoded and not development to create a peers, which are larger, cities in the region have presence. The competitive for many walkable destination that newer and have more developed new, larger community is looking for types of events. A new can host an array or amenities. There is arenas or renovated a gathering place and a arena will allow Augusta entertainment and event demand for larger arena existing arenas to the connection to the to compete for most offerings. A community events that the JBA cannot point that the JBA is one growing downtown area. events on a local and plaza can create pre- and accommodate. There is a of the oldest, least regional scale. post-event impact gap for a large ballroom, appealing and smallest opportunities. which can induce demand. venues in the region. ARENA DEVELOPMENT SWOT ANALYSIS 7 How External and Internal Factors Affect Project Viability INTERNAL FACTORS EXTERNAL FACTORS STRENGTHS OPPORTUNITIES § Existing book of Arena Business § James Brown Legacy § Georgia Cyber Center § Larger events POSITIVE § Healthcare § Connection to improving downtown § Augusta National Golf Club § Religious market WEAKNESSES THREATS § Lack of Attractions § Competition from Larger and Newer § Corporate Presence Facilities § NEGATIVE § Access Renovated Competitors § Existing JBA Size, Quality HEADLINES 8 The following slides summarize the key findings and headlines. In order to assess the viability of any project and make informed recommendations, there are six key elements that must be considered. THE LOCAL MARKET THE PROJECT SITE THE INDUSTRY The Augusta market has a strong The Project site presents The entertainment and hospitality military and healthcare presence. The tremendous opportunity to develop industries are changing rapidly due downtown area has slowly grown, a walkable environment, as well as to the COVID-19 pandemic. This due to the increased presence of an event plaza for pre- and post- pandemic has presented challenges quality culinary options and newly event activity (and impact). that these industries have never developed lodging options. seen before. A friendly, active environment The Augusta Marriott at the would make the James Brown While these industries will both Convention Center and the Augusta Arena development an extension of continue to evolve, one common National Golf Club are two demand the downtown area. theme seen across the country is the drivers in the local market, in addition overall focus on guest experience. to the military and corporate drivers. Creating connections to the Bell This theme includes making the Auditorium and the surrounding guest feel safe, while also offering Any new facility should be designed area with smart design is key. an array of price points, localized to leverage every strength and food experiences and pre- and post- mitigate as many weaknesses as event options that cater to many possible. demographics. 8 HEADLINES 9 The following slides summarize the key findings and headlines. In order to assess the viability of any project and make informed recommendations, there are six key elements that must be considered. THE DEMAND THE SUPPLY THE CASE STUDIES Mid-tier entertainment shows and Outside of the Augusta Marriott at the The analysis of comparable arenas concerts are generating strong Convention Center, the Augusta area around the country highlighted that demand in the Augusta area. Touring lacks quality, large meeting and the inclusion of modern amenities, routes for major shows and concerts entertainment facilities. especially premium spaces and will affect this demand, but market seating, whether as enclosed suites, professionals believe that a new, The supply of relevant competitive or open spaces, is a key to the larger and improved arena will be arenas is abundant outside of a two- success of arena development. The able to strongly compete as a hour drive from Augusta. The majority of the comparable arenas secondary venue to host more and competitive arenas are located in had sports tenants. These tenants larger events. Many shows need an major cities, university towns, and help with event demand and the end-stage capacity of 10,000 and so coastal areas. sale of premium options, as well as this drives design. naming rights. The reality is that the competitive The Convention Center is unable to Flexibility is another common theme accommodate all the demand from facilities are newer, higher quality and in new arena development. The regional organizations, religious offer more options than the JBA. If ability to host a diverse mix of event groups, state associations, and lost Augusta does nothing, it will fall types will enhance the chances of an business looking for meeting space. further behind. arena’s success. 9 Recommendations § HSP recognizes that the new arena is a once in a lifetime opportunity to reinvigorate the entertainment and event- hosting scene in Augusta. As such, there is an opportunity to accomplish several additional goals: § Expand the types and sizes of events that can be hosted in Augusta, including events beyond the typical arena event, such as larger conventions, consumer shows, tradeshows and tournaments that are too big to be held in existing local facilities. As such, HSP is recommending a connected multipurpose event complex that offers more types of spaces that, when combined, offer a menu of options for all manner of events that cannot be held today. § Enhance the pre- and post-event atmosphere and physical space so that going to event becomes an opportunity for attendees to “linger longer” before and after, spend more money and time, extend their stay and create more impact on Augusta. This will allow the project to enhance downtown Augusta and become a more impactful node of activity. § A new public space curated with shade trees and structures, as well as other public amenities, will allow for the area to be a true public asset year-round, not just during events. § Enlarge the new arena so it can host more and and larger events compared to the existing JBA. § Enhance the new arena with amenities, suites, club areas and other unique experiences currently not offered. These will allow the community a choice of experiences and price points that add value to their ticket, as well as the community at large. These options will also generate more potential income for acts and the facility, enhancing its popularity and sustainability. 10 11 Adjacent Outdoor Event Space A key development of the proposed recommendations is the inclusion of an outdoor event space/festival area that could be programmed for local community events or ancillary entertainment events to the events happening at the new arena or the Bell Auditorium. Due to this, HSP analyzed outdoor event spaces adjacent to major entertainment/event facilities around the country to better understand how these spaces increase community engagement and provide additional event days for the complex. Some key points from this analysis include: § Retail/Restaurant § Public Art § Indoor/Outdoor Flexibility § Walkability/Connection § Community Presence/Theme § Shade structures and greenspace to soften the urban fabric § Year-round programming of activities and events on the plaza to keep the complex activated 11 12 Naming Rights: Recommended Naming rights have become more and more prevalent in the stadium/arena development market. These negotiations provide major brands/corporations with tremendous national exposure and encourage these businesses to engage in the local community where the venue is located.