WHANGANUI VELODROME REVIEW October 2020 Confidential © SGL FUNDING LTD 2020 1 Contents EXECUTIVE SUMMARY ............................................................................................................................ 5 1.0 OBJECTIVE AND METHODOLOGY .............................................................................................. 13 1.1 Original Review Objectives ................................................................................................... 13 1.2 Preliminary Review ............................................................................................................... 13 1.3 Revised Process Immediately Following the Preliminary Review ......................................... 13 1.4 Consequent Revised Overall Objective/Focus and Methodology ........................................ 14 1.5 Summary of Methodology Elements and Timeframe ........................................................... 15 1.6 Clarity on the Review Process – What It Is and What It Isn’t ................................................ 15 1.7 Acknowledgements ............................................................................................................... 17 2.0 PRELIMINARY REVIEW .............................................................................................................. 18 2.1 Purpose and Summary Feedback .......................................................................................... 18 2.2 Preliminary Review Approach and Specific Observations .................................................... 18 SGL Commentary 1........................................................................................................................ 19 2.3 This Project Has Been the Victim of a Changed Positioning and also ‘Almost Funding Success’ Over an Extended Period of Time, Where Original Premises Do Not Now Hold ............... 19 SGL Commentary 2........................................................................................................................ 20 2.4 Subsequent Whanganui Steering Group Feedback and Revised Process ............................. 20 3.0 LEARNINGS FROM OTHER VELODROMES ................................................................................. 21 3.1 Summary Tables of Key Information for Other Velodromes ................................................ 22 3.2 Observations ......................................................................................................................... 24 3.2.1 Population Catchment .................................................................................................. 24 3.2.2 Facility Functionality ..................................................................................................... 24 3.2.3 Indicative Capital Costs ................................................................................................. 24 3.2.4 Operational Sustainability ............................................................................................. 24 SGL Commentary 3........................................................................................................................ 25 4.0 NEEDS CASE AND PROJECT DEVELOPMENT PROCESS .............................................................. 26 4.1 Overview ............................................................................................................................... 26 4.2 What Were and Are the Key Questions? .............................................................................. 26 4.3 Had and Has the Needs Case for the Proposed Utilisation for the Proposed Facility Been Validly Answered? ............................................................................................................................. 27 4.4 Covering the Whanganui Velodrome Needs Assessment Report – GLG November 2019 ... 28 SGL Commentary 4........................................................................................................................ 30 5.0 OPERATING EXPENDITURE ........................................................................................................ 31 © SGL FUNDING LTD 2020 2 5.1 Basis of Indicative Annual Cost Estimation ........................................................................... 31 5.2 Velodrome Annual Operating Costs – Indicative Estimate Only........................................... 32 5.3 Comparison of Annual Operating Expenditure Estimates to Avantidrome Financial Statements for FY2019...................................................................................................................... 34 SGL Commentary 5........................................................................................................................ 34 6.0 OPERATING REVENUE ............................................................................................................... 35 6.1 Basis of Indicative Annual Revenue Estimation .................................................................... 35 Velodrome Annual Revenue – Indicative Estimate Only .................................................................. 36 6.2 Material Revenue Items ........................................................................................................ 38 6.2.1 Sponsorship Discussion ................................................................................................. 38 SGL Commentary 6........................................................................................................................ 39 6.2.2 Concert Discussion ........................................................................................................ 39 SGL Commentary 7........................................................................................................................ 41 6.3 Indicative Estimate of Annual Operating Financial Performance ......................................... 41 SGL Commentary 8........................................................................................................................ 42 7.0 OWNERSHIP, GOVERNANCE AND MANAGEMENT ................................................................... 42 8.0 CAPITAL FUNDING ..................................................................................................................... 43 8.1 Principal Information Sources ............................................................................................... 43 8.2 Proposed Capital Funding ..................................................................................................... 43 8.3 Review of Capital Funding Achievability ............................................................................... 45 8.3.1 From Interview with Jenni Giblin, Giblin Group, 17 June 2020 .................................... 45 8.3.2 Capital Funding for Avantidrome, Cambridge .............................................................. 46 8.3.3 Overview of Possible Capacity by Funder ..................................................................... 47 SGL Commentary 9........................................................................................................................ 49 8.4 Summary ............................................................................................................................... 50 8.4.1 Basis of Funding Experience for SGL Comments ........................................................... 50 8.4.2 Fundamental Requirements for Capital Funding Success ............................................ 50 8.4.3 Overall Capital Funding Challenge ................................................................................ 50 9.0 OVERALL CONCLUSIONS ........................................................................................................... 52 9.1 Summary Findings ................................................................................................................. 52 9.2 Possible Alternative Development Options .......................................................................... 52 APPENDICES .......................................................................................................................................... 53 1 Interview/Key Meeting Record ..................................................................................................... 53 2 Information Review....................................................................................................................... 54 © SGL FUNDING LTD 2020 3 3 Other Velodromes ......................................................................................................................... 56 NEW ZEALAND ...................................................................................................................................... 56 Avantidrome ......................................................................................................................................... 56 Invercargill Velodrome .......................................................................................................................... 59 AUSTRALIA ............................................................................................................................................ 61 Adelaide Super-Drome .......................................................................................................................... 61 Anna Meares Velodrome 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