Economic Impact Analysis of the Proposed Community Venues Presented to: The Metro Orlando Economic Development Commission Presented by: August 15, 2006 August 15, 2006 Mr. Charlie Sloan Executive Vice President Business Development Metro Orlando Economic Development Commission 301 East Pine Street, Suite 900 Orlando, FL 32801 Dear Mr. Sloan: We have completed the economic impact analysis of the proposed Community Venues in Orlando. The attached report summarizes the study’s research and analyses, and is intended to assist the Metro Orlando Economic Development Commission (“MOEDC”) in evaluating the potential economic impacts related to the construction and on-going operations of the proposed Community Venues and should not be used for any other purposes. The information contained in this report is based on estimates, assumptions and other information developed from research of the market, knowledge of the public assembly facility industry and other factors, including certain information you have provided. All information provided to us by others was not audited or verified and was assumed to be correct. Because procedures were limited, we express no opinion or assurances of any kind on the achievability of any projected information contained herein and this report should not be relied upon for that purpose. Furthermore, there will be differences between projected and actual results. This is because events and circumstances frequently do not occur as expected, and those differences may be material. We have no responsibility to update this report for events and circumstances occurring after the date of this report. We sincerely appreciate the opportunity to assist you with this project, and would be pleased to be of further assistance in the interpretation and application of the study’s 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 Executive Summary i 1.0 Introduction 1 2.0 Local Market Overview 3 3.0 Economic Impact Analysis 11 4.0 Non-Quantifiable Impacts Analysis 32 Appendix 1. Peer Market Overview and Detail Appendix 2. Charitable Impact Overview Economic Impact of Community Venues Executive Summary Executive Summary The Orlando market is internationally recognized as one of the premier destinations in the world with an array of world class attractions and resorts. Orlando’s diversity of attractions and amenities provide visitors with a first-class experience, making the Orlando area one of the most successful tourist destinations in the world. The area’s significant inventory of tourist amenities, coupled with the area’s world-class, modern airport and newly expanded convention center, Orlando has also become one of the top convention destinations in America. However, while the market provides for excellent tourist and convention attractions and amenities, the market does not provide the community with modern, competitive arts, entertainment and sports venues that are consistent with the market’s world class status. Due to a lack of amenities and features found in similar facilities in other markets, Orlando’s current public assembly venues are unable to attract major economic impact events such as major Broadway touring events, NCAA championship events, major professional All-Star games, conference football championship games, and other events that result in significant national and international exposure. The growing competition for these types of events and the number of newer facilities located in other markets has placed Orlando at a significant disadvantage in terms of the area’s ability to attract such events. In an effort to provide the highest quality arts, entertainment and sports venues for residents of and visitors to the Orlando area, the City of Orlando and Orange County are currently considering significant investments in a variety of new or renovated Community Venues, including: • A renovated Florida Citrus Bowl Stadium; • A new Performing Arts Center complex; and • A new Events Center that would host a wide variety of events, such as concerts, family and cultural shows, and sports events, including Orlando Predators and Orlando Magic home games. These facilities (collectively, “the Community Venues” or “the Venues”) could have significant economic and fiscal impacts on the community by attracting and retaining high impact events, while also improving the overall quality of life for residents and businesses. In order to quantify the impacts the Community Venues could have on the local area, the Metro Orlando Economic Development Commission (MOEDC) retained CSL International (CSL) to develop estimates of the potential economic and fiscal impacts related to the Community Venues. The remainder of this summary provides an overview of the results of the analyses undertaken as part of this project as well as an overview of the proposed Community Venues. As this is only a summary, the entire report and related appendices should be read in its entirety to fully understand the results outlined herein. Economic Impact of Community Venues i Executive Summary The quantified impacts in this report include direct spending, indirect spending, jobs, personal earnings and tax revenues related to the construction and operation of each of the Community Venues and their respective tenants. The assumptions underlying the estimates of economic and fiscal impacts presented herein are based on historical and/or projected future operations of the facilities as well as industry data from similar projects around the country. Economic Impact Analysis • The presence of arts, entertainment and sports venues, and their resident tenants, can provide significant impacts to a community. The direct, economic impacts related to such facilities takes place in the form of spending related to facility and tenant operations as well as spending by patrons outside the facility before and after events at local restaurants, retail shops, hotels and other establishments. • The estimated overall impacts related to each of these three components are presented in the following exhibit. The Community Venues include a renovated Citrus Bowl, a new Events Center and new Performing Arts Center. Estimated Economic Impacts Community Venues - Combined Community Venues Construction Operations Period (1) Annual (2) NPV (3) Economic Impacts Direct Spending $595,137,500 $416,305,000 $6,187,000,000 Total Output $1,142,531,000 $619,373,000 $9,884,000,000 Earnings $452,886,000 $247,079,000 $3,946,000,000 Jobs 10,800 7,500 n/a Fiscal Impacts Sales Taxes State n/a $24,249,000 $357,070,000 County n/a $2,021,000 $29,771,000 TDT Revenues n/a $3,512,000 $52,323,000 n/a - not applicable (1) Estimated impacts that would take place over three to four year construction period (2) Reflects on-going impacts from operations that would be generated each year over the life of the Venues (3) Assumes 3% growth per year and a 6% discount rate over 20 years. (4) County tax revenues generated within the Downtown CRA are diverted in their entirety to the Downtown CRA • The construction of the Community Venues is estimated to generate approximately $1.1 billion in local economic impact, including approximately $452.9 million in personal earnings, and would support approximately 10,800 jobs during the three to four year construction period. Economic Impact of Community Venues ii Executive Summary • The operations of the proposed Venues would generate approximately $619.4 million in output per year, including approximately $247.1 million in earnings and supporting approximately 7,500 jobs per year. This level of spending would also generate approximately $24.2 million in State sales taxes, $2.0 million in County sales taxes and $3.5 million in County Tourist Development Tax (TDT) revenues per year. • Considering the impacts over time, the operations of the Venues would generate approximately $9.9 billion in total output, $3.9 billion in earnings, $357.1 million in State sales taxes, $29.8 million in County sales taxes and $52.3 million in County TDT revenues. • It is also anticipated that the development of these types of venues would spur additional development in the downtown area. Assuming such development occurs as envisioned by project representatives, spending at the ancillary development is estimated to generate approximately $7.0 billion in total output and $2.3 billion in personal earnings over 20 years. This spending would generate approximately $58.3 million in State sales taxes, $4.9 million in County sales taxes and $7.2 million in County TDT. In addition, this development could result in significant property tax revenues for each of the various taxing entities in downtown Orlando. It is important to note that the City of Orlando has received a $17 million federal grant that has been earmarked for street-scaping the Church Street corridor, which will be the central corridor linking the Community Venues. • The following exhibit summarizes the estimated impacts from each of the individual Community Venues. The assumptions utilized in developing these impacts are based on the historical operations of the existing venues as well as the estimated future operations of the proposed Venues and the operations of similar facilities throughout the country. Estimated Economic Impacts Community Venues - Individual Annual (1) NPV (2) Citrus Bowl OPAC Events Center Total Citrus Bowl OPAC Events Center Total Economic