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HomeMy WebLinkAboutRes 2025-05-1771 Contract with CSL for Market and Financial Feasibility Study for StartCenterCITY OF ANNA, TEXAS RESOLUTION NO. ?oZ 5 - 05 - I q /I A RESOLUTION OF THE CITY OF ANNA, TEXAS AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONTRACT WITH CONVENTIONS, SPORTS & LEISURE INTERNATIONAL (CSL) TO CONDUCT A MARKET AND FINANCIAL FEASIBILITY STUDY IN THE AMOUNT NOT TO EXCEED SIXTY-FIVE THOUSAND DOLLARS AND ZERO CENTS ($65,000). WHEREAS, CSL will conduct a market and financial feasibility study related to the potential development of Multisport Venue in Anna, and, NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1. Recitals Incorporated. The recitals above are incorporated herein as if set forth in full for all purposes. Section 2. Approval and Authorization of Agreement. The City Council of the City of Anna, Texas, authorizes the City Manager to award the contract for market and financial study in an amount not to exceed $65,000 on behalf of the City of Anna, Texas. PASSED AND APPROVED by the City Council of the City of Anna, Texas on this 13t" day of May 2025. ATTEST: ti APPROVED: L.- ' , "' THE CITY OF / City Secretary Carrie Land Anna yor Pete Cain 1913 April 18, 2025 Mr. Bernie Parker Director of Economic Development City of Anna P.O. Box 776 120 W. 7" St. Anna, TX 75409 Dear Mr. Parker: Conventions, Sports & Leisure International ("CSL") is pleased to present this proposal to the City of Anna ("City' or "Client") to conduct a market and financial feasibility study related to the potential development of the proposed StarCenter Multisport Anna ("StarCenter"). The remainder of this letter provides the scope of services we are prepared to provide, our professional fees, study timing, and conditions of our work. SCOPE OF SERVICES It is our understanding that the City is currently assessing a potential partnership with the Dallas Stars ("Stars") to develop a StarCenter that could include a variety of indoor recreation options such as ice rinks, courts, turf fields, and other such amenities to accommodate local, regional, and national users. Based on this understanding, we have developed a scope of service that will provide the City with the necessary information and analyses to make informed decisions regarding the market and financial viability of a proposed StarCenter. Our scope of service has been divided into the following three (3) phases: Phase I. Market Analysis Phase II. Financial Operating Projections Phase III. Economic & Fiscal Impacts At the outset of the engagement, our team will meet with members of the City, the Stars, and any other relevant stakeholders in an initial planning meeting to establish the organizational framework to ensure the study's outcome will meet the Client's objectives. Specifically, we will: Review the project timeline; Develop roles and responsibilities; Determine the format and content of our deliverable products; Conventions, Sports & Leisure International One Cowboys Way, Suite 325 • Frisco, TX 75034 • Telephone 972.491.6900 • Facsimile 972.491.6903 Mr. Bernie Parker April 18, 2025 12 Establish a working group which will include representatives of the City, Stars, CSL, and other stakeholders; Tour proposed site(s), the community, and existing sports and recreation facilities in Anna; Conduct meetings with a variety of project stakeholders, including but not limited to City administration, parks and recreation, economic development, local youth sports representatives, school district representatives, elected officials, and community leaders, among others to identify projects goals and objectives; If applicable, review architectural renderings, StarCenter building program estimates, site plans, anticipated utilization, estimated revenues and expenses, and other available projected information; Collect for review and analysis available historical information for existing sports and recreation centers in the City, including physical components/offerings, programs offered, fee structure, annual utilization, operating revenues and expenses, project costs and funding sources, and other such applicable information; Coordinate future meeting schedule; and, Modify the work plan, if necessary, to reflect any appropriate changes arising from the information obtained in the tasks noted above. The following pages provide a detailed description of our scope of services and the approach to be applied to each project task. Phase I. Market Analysis As a means of assessing the market demand for the proposed StarCenter and its various potential space offerings, we will implement a multi -faceted assessment that focuses on specific needs and characteristics of users that would likely utilize such a venue. The comprehensive analysis has been developed to provide an evaluation of the demand for the StarCenter based on detailed research and analysis of the marketplace and not based solely on national and industry averages and trends. This phase consists of the following six (6) tasks. Task 1— Review of Existing Recreation Offerings Understanding the existing recreation offerings (both publicly and privately owned/operated) in the local and regional market will be vital in determining the feasibility of the proposed StarCenter in Anna. In this task, we will review the current recreation facilities (building program and conditions), programs, utilization/participation levels, fee structures, operating revenues and expenses, and other such available information to create an existing community profile and serve as a baseline in guiding the market research. The information evaluated as part of this task will also serve as a vital step in identifying the impact of the proposed StarCenter on different user groups, existing community assets, etc. Mr. Bernie Parker April 18, 2025 13 Task 2 — Demographic & Socioeconomic Analysis In assessing the potential level of support for the proposed StarCenter, we will analyze the demographic and socioeconomic characteristics of Anna and the surrounding regional area. We will identify historical, current and projected characteristics and trends specific to the area such as population, age stratification, household income, employment, cost of living, corporate base, tourism, transportation and accessibility, and other market and economic trends. Each of the demographic socioeconomic variables will be detailed by drive time or mile radii (depending on historical participation data) in order to determine the most appropriate market area for the proposed StarCenter. The evaluation of these characteristics will serve as an important component for our analysis since these indicators serve as a gauge for existing and anticipated demand in the marketplace. Task 3 — Recreation & Sports Industry Trends In this task, CSL will assess recreation and sports industry trends and determine how these trends could impact the short- and long-term market potential for the proposed StarCenter. Specific trends analyzed will include, but will not necessarily be limited to national, regional and local trends for youth and adult sports and recreation activities including participation rates by activity, frequency of participation, participant demographic characteristics, participant socioeconomic characteristics, spending on amateur sports activity, and other such data for a variety of indoor and outdoor sports and recreational activities. This analysis will assist in identifying and quantifying the target market for programming at the proposed StarCenter on a local and regional basis. Task 4 — Comparable eenchmarking A review of the physical, operational, and financial characteristics of comparable facilities will be critical in providing a general informational background and programmatic perspective from which to assess the potential utilization, building program, and financial operations of the proposed StarCenter. We will focus primarily on newly constructed StarCenters and recreation facilities located in similar -sized markets to Anna (and the regional area) but will also identify other existing and planned facilities located throughout North America, as appropriate, to provide additional means of comparison. Interviews will be conducted with managers and other facility representatives to obtain information (to the extent available) such as: • Year opened; • Owner/operator; • Partner organizations and/or tenants; • Total square footage, - Number and size of courts, ice rinks, fields, and other physical components; • Support facilities and participant/spectator amenities; • On -site parking inventory; • Programming offered and utilization/attendance levels broken down by user groups; • Pricing and fee structure; Mr. Bernie Parker April 18, 2025 �4 • Naming rights and sponsorship opportunities and revenue; • Financial operating data; • Total project costs and funding sources; • Ancillary amenities; • Best practices and lessons learned; and, • Other appropriate data, as identified. Through this analysis, we will identify which facilities have experienced the greatest success or failures and explore the underlying reasons. Task 5 — Potential User Interviews In performing an analysis of the potential utilization for any project, CSL relies on industry research data, comparable facility data, historical community participation rates, and information provided from potential users of the type of facility under consideration. Typically, CSL employs a survey procedure that focuses on potential facility users to quantify the likelihood of market segments utilizing a facility, and the specific amenities they may require. CSL will work closely with project representatives to identify local, regional, and national user groups that could be targeted for the proposed StarCenter in addition to the Dallas Stars. Data compiled will include the current local and regional market facilities utilized, type of programming desired, market capture area, potential utilization/attendance, frequency of utilization, seasonality of utilization/events, anticipated fee/pricing structure, necessary building program elements to accommodate utilization, other necessary ancillary amenities, and other factors influencing potential facility utilization. This type of analysis provides quantified estimates by market segment of the number and types of programming that could utilize the proposed StarCenter on an annual basis. Task 6 — Estimated Utilization & Building Program Recommendations Based on the research conducted in the previous tasks, we will make recommendations regarding the market potential for the proposed StarCenter. These recommendations will include overall needs in the market for various facilities/offerings, the market -supportable programming and utilization, as well as the appropriate building program elements to maximize demand and revenue potential. Specific recommendations will include but will not be limited to: Demand & Utilization: • Appropriate facility programming broken down by individual user segment/activity; • Estimated annual utilization broken down by individual programming element; • Anticipated user origin (i.e. local, regional, and national); • Seasonality of anticipated utilization; • Recommended pricing structure for various programming and uses; • Suggested amenity mix to maximize demand/marketability/revenues; and, Mr. Bernie Parker April 18, 2025 �5 • Other estimates. Building Program: • Market -supportable number of courts, ice sheets, fields and/or other indoor/outdoor components; • Required square footage and size/flexibility of various individual programming spaces; • On -site parking spaces; and, • Other factors influencing the potential size and configuration of market viable facilities. Phase II. Financial Operating Projections In this phase, we will develop financial operating projections related to the development of the proposed StarCenter. The model assumptions will be based on the estimated levels of programming, proposed pricing and fee structure, and building program (i.e. size, court/ice sheet/fields inventory, etc.). Financial estimates will be developed to reflect a variety of development/operating scenarios. The models will present the estimated operating results representing the initial years of operations under each operational scenario. Operating revenues and expenditures related to the proposed StarCenter will be quantified by program type and source, including those outlined below: • User fees/admission • Private rentals • Partner lease payments • Parking • Concessions/catering • Merchandise • Naming rights • Sponsorships and advertising • Other • Salaries & wages • Utilities • Repairs & maintenance • Administration • Marketing and advertising • Contract services • Debt service • Capital reserve • Other We will prepare our financial projections in such a manner that allows us to conduct sensitivity analyses with various key assumptions (user levels, fee structure, facility configuration, operating expenses, etc.) to identify areas of potential project risk and reward. The models will provide a clear picture of any financial commitments, including operating costs, capital improvements and maintenance costs, required during the early years of the project and through mature operations. Phase III. Economic & Fiscal Impacts Based on anticipated StarCenter utilization, building program, project costs, and financial operating projections, CSL will quantify the potential economic and fiscal impacts generated by the construction and ongoing operations of the venue. The economic impacts will be conveyed through measures of net new direct spending, total output (direct, indirect and induced spending), jobs and personal earnings. Fiscal Mr. Bernie Parker April 18, 2025 16 impacts are measured in terms of the tax revenues that could accrue to the City (and other entities, as appropriate). The following primary analyses will be conducted through this analysis: Direct Spending Analysis In evaluating these impacts, the first important step involves defining and quantifying the existing sources of direct spending. This direct spending is generated throughout the construction and operation of the StarCenter. CSL's analysis will address the following primary types of spending: • Construction -Related Spending- Spending that takes place during the construction of the StarCenter on materials, labor and wages, and other such expenditures. • Operations -Related— includes the annually recurring impacts from the operations of the StarCenter (and potential tenants/partners), including spending in the community through salaries and benefits, general and administrative costs, materials and supplies, travel and accommodations, marketing and advertising efforts, and other activities. • In -Facility - includes purchases made by attendees for admission, user fees, concessions, novelties, parking, etc. taking place within the facilities or directly related to facility utilization. • Ancillary Community - takes place by StarCenter attendees, event personnel/traveling parties, volunteers, away teams and officials, and other personnel in other local businesses in conjunction with facility activity and generally includes transactions at area restaurants, hotels and other service businesses. The analysis will also address "leakage" (spending that immediately leaves the area/does not impact the local area) and "displacement" (the portion of spending related to the facilities that is taking the place of spending already taking place in another form in the area). Indirect Economic Impact Analysis The types of spending noted above reflect the "direct" economic impacts of the proposed StarCenter. Indirect economic impacts are also generated as this initial round of spending re - circulates through the local economy. CSL's analysis will include the calculation of these indirect impacts through the use of economic multipliers. By applying the multipliers, the analysis will provide estimates of the following measures of economic impact: • total output represents the total of the direct, indirect and induced effects of estimated direct spending; • personal earnings represent the wages and salaries earned as a result of the estimated total spending; and, • employment represents the number of jobs generated as a result of the estimated total spending (jobs may be full- or part-time). Mr. Bernie Parker April 18, 2025 17 Fiscal Impact Analysis In addition to generating direct and indirect spending, earnings and employment, the construction and operations of the StarCenter can generate a significant level of taxes to the City and other entities, as identified. CSL's analysis will include a quantification of the taxes generated by the construction and ongoing operations of the facilities. Taxes quantified as part of this analysis include, but are not limited to: • Sales tax; • Hotel/lodging tax; • Food and beverage tax; • Rental car tax; • Admission/ticket tax; • Property tax; and, • Other taxes, as identified. PROFESSIONAL FEES AND EXPENSES Professional fees for the scope of services presented herein will be $60,000 and are based on the estimated hours required to complete the study and the skill levels of assigned personnel based on the scope of services presented herein. In addition to professional fees, we would require reimbursement of out-of-pocket expenses incurred in the performance of these services. Out-of-pocket expenses could include, but are not limited to, transportation, lodging and meals associated with travel related to the project, printing and postage, demographic reports, economic impact multipliers ($500), and other such expenses. TIMING We are prepared to commence this engagement upon receipt of a notice to proceed. Our project schedule is highly dependent on the availability of key individuals for interviews and discussions, receipt of materials requested, and review time of the report for approval. Unless unusual circumstances arise, we will complete the study within twelve (12) weeks. We anticipate completing this study in full, performing all work as set forth herein. In the event that a decision not to proceed occurs within the timeframe of this engagement, we will cease our work and bill you for time and expenses incurred to date. Mr. Bernie Parker April 18, 2025 18 CONDITIONS OF WORK Information and Data CSL is entitled to assume, without independent verification, the accuracy of all information and data that the Client provides to CSL. All information and data to be supplied will be complete and accurate to the best of the Client's knowledge. CSL will use information and data furnished by others if CSL in good faith believes such information and data to be reliable; however, CSL shall not be responsible for, and CSL shall provide no assurance regarding, the accuracy of any such information or data. CSL shall be providing advice and recommendations to the Client; however, all decisions in connection with the implementation of such advice and recommendations shall be the Client's responsibility. CSL shall have no responsibility for any decisions made by the Client relating to CSL's services hereunder. CSL shall have no responsibility for any assumptions provided by the Client, which assumptions shall be the Client's responsibility. The reports may include estimates of annual operating results based upon courses of action that the Client expects to take prior to and during the period under analysis. The Client is responsible for representations about its plans and expectations, and for the disclosure of significant information that might affect the estimated results. A financial forecast presents, to the best of CSL's knowledge, the project's expected results of operation and cash flows for the forecasted period. It is based on CSL's assumptions reflecting conditions that we anticipate to exist and the course of action that CSL expects to take during the forecast period. Client is responsible for representations about plans and expectations and for disclosure of significant information that might affect the ultimate realization of the forecasted results. Reports Any reports prepared by CSL are valid only when presented in their entirety and only for the purpose stated therein. It is expressly understood that (a) CSL's reports, suggestions, analyses and conclusions, if any, do not, in whole or in part, constitute a fairness or solvency opinion and (b) CSL will not perform any review, audit or other attestation procedures with respect to financial information as defined by the American Institute of Certified Public Accountants and will not issue any opinion, report or other form of assurance with respect to any financial information. There will usually be differences between the estimated and actual results because events and circumstances frequently do not occur as expected, and those differences may be material. Should the Client have any reservations with regard to the estimates, we will discuss them with the Client before the report is issued. Any partially completed work products and drafts presented to the Client are for internal use only. Confidentiality CSL will preserve the confidential nature of information received from the Client in accordance with CSL's established policies and practices. The Client agrees not to reference CSL's name or any reports, analyses or other documents prepared by CSL, in whole or in part, in any document distributed to third parties without CSL's prior written consent. The Client agrees that any reports, analyses or other documents prepared by CSL will be used only in compliance with these terms, conditions, applicable laws, and regulations. Mr. Bernie Parker April 18, 2025 ?z7o �9 Property To the extent that CSL utilizes any of its property (including, without limitation, proprietary databases, proprietary information, any hardware or software) in connection with its services, such property shall remain the property of CSL, and the Client shall not acquire any right or interest in such property. CSL shall have ownership (including, without limitation, copyright ownership) and all rights to use and disclose its ideas, concepts, know-how, methods, techniques, processes and skills, and adaptations thereof (including, without limitation, generalized features of the sequence, structure and organization of any works of authorship) in conducting its business, and the Client shall not assert or cause to be asserted against CSL or its personnel any prohibition or restraint from so doing. LIMITATION ON WARRANTIES THIS IS A CONSULTING SERVICES AGREEMENT. DUE TO THE INHERENT UNCERTAINTY INVOLVED WITH PREDICTING FUTURE EVENTS AND LOCAL/INDUSTRY CONDITIONS, CSL MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE FINDINGS OR RECOMMENDATIONS CONTAINED WITHIN ANY OF ITS ANALYSES, INCLUDING ANY ESTIMATES AND DISCLAIMS, AND CLIENT HEREBY EXPRESSLY WAIVES, ANY AND ALL CLAIMS BASED ON ANY POSSIBLE REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. LIMITATION ON DAMAGES CSL, ITS MEMBERS, PRINCIPALS, DIRECTORS, OFFICERS, EMPLOYEES, PARENT COMPANY AND AFFILIATES SHALL NOT BE LIABLE TO THE CLIENT FOR ANY LOSSES, DAMAGES, CLAIMS, LIABILITIES, COSTS, OR EXPENSES IN ANY WAY ARISING OUT OF OR RELATING TO THIS ENGAGEMENT FOR AN AGGREGATE AMOUNT IN EXCESS OF THE FEES PAID BY THE CLIENT TO CSL FOR ITS SERVICES. IN NO EVENT SHALL CSL, ITS MEMBERS, PRINCIPALS, OR EMPLOYEES BE LIABLE FOR CONSEQUENTIAL, SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, OR EXEMPLARY LOSS, DAMAGE, COST, OR EXPENSE (INCLUDING, WITHOUT LIMITATION, LOST PROFITS AND OPPORTUNITY COSTS). THE PROVISIONS OF THIS LETTER SHALL APPLY REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, STATUTE, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE), OR OTHERWISE, AND SHALL SURVIVE THE COMPLETION OR TERMINATION OF THIS ENGAGEMENT. Findings and Recommendations Any findings and recommendations presented as a part of this engagement will reflect the analysis of primary and secondary information provided by you and other involved parties. Information provided by third parties will not be audited or verified, unless otherwise noted, and will be assumed to be correct. As any projected information provided as a part of this engagement will be based on various trends and assumptions, there will be differences between the information presented and actual results because events and circumstances frequently do not occur as expected and those differences may be material. Indemnification The Client and its affiliates shall indemnify and hold harmless CSL, its members, principals, directors, officers, employees, parent company and affiliates from and against any and all causes of actions, losses, damages, claims, liabilities, costs, and expenses (including, without limitation, legal fees and expenses) Mr. Bernie Parker April 18, 2025 10 which may be asserted, brought against, paid or incurred by any of them at any time in any way arising out of or relating to CSL's services, except to the extent it is finally judicially determined that such losses have resulted from the willful misconduct of CSL. Subsequent Work CSL, by reason of the performance of its services, is not required to furnish additional work or services, or to give testimony, or to be in attendance in court with reference to the assets, properties, or business interests in question. CSL will have no responsibility to update any report, analysis, or other document relating to its services for any events or circumstances occurring subsequent to the date of such report, analysis, or other document. Cooperation The Client shall cooperate with CSL in connection with the performance of its services hereunder, including providing CSL with reasonable and timely access to the Client's information, data, and personnel. Non -Exclusivity Nothing in this Letter shall be construed as precluding or limiting in any way the right of CSL to provide consulting or other services of any kind or nature whatsoever to any person or entity as CSL in its sole discretion deems appropriate. Force Maleure CSL shall not be liable for any delays or failures to perform its services resulting from circumstances or causes beyond its reasonable control, including, without limitation, fire or other casualty, act of God, strike or labor dispute, war, or other violence, or any law, order, or requirement of any governmental agency or authority. Independent Contractor CSL is an independent contractor and not an employee, Agent or partner of Client. CSL is not authorized directly or indirectly to represent to any person that Consultant has the authority to bind the Client to any agreement or course of conduct. However, CSL shall have the right to use subcontractors, as necessary. Inconsistencies In the event of any conflict or inconsistency between the provisions set forth in this Letter and any other documents, the provisions of this Letter shall govern. Complete Agreement This Letter constitutes the entire agreement between the Client and CSL with respect to the subject matter thereof and hereof, and supersedes all other oral or written representations, understandings, and agreements between the Client and CSL relating to the subject matter thereof and hereof. This Letter cannot be changed, except by written instrument signed by both the Client and CSL. This Letter shall be binding on the Client and CSL, and the Client's and CSL's permitted successors and assigns; however, neither the Client nor CSL may assign this Letter without the prior written consent of the other, except that the Client and CSL may assign this Letter to any successor to all or substantially all of the business or assets of such party. Mr. Bernie Parker April 18, 2025 � 11 Governing Law The Letter shall be governed by and construed under the laws of the State of Texas. Counterparts This Letter may be executed in counterparts, or by facsimile or telecommunicated counterparts, each of which shall be deemed an original and both of which, when taken together, shall constitute the same agreement. Consent and Good Faith Dealings The parties hereby covenant, each to the other, that each will deal with the other equitably, and will take into account the reasonable commercial expectations of the other in the exercise of rights and obligations hereunder. When consent or approval is requested for any action, the party from whom approval is sought shall give full and fair consideration to the financial issues raised by the other party and shall act in a fair, timely and non -capricious manner. Unless other indicated specifically in this Letter, consent and approvals shall not be unreasonably withheld, delayed or conditioned. If you are in agreement with the aforementioned, please indicate by signing in the space provided below, and returning this letter to CSL International. If you would like to discuss this letter, please contact Adam Kerns at (972) 571-7323 or akerns@cslintl.com. Very truly yours, - — J�r//lli car�G CSL International Acknowledged and Accepted by: CITY OF ANNA �yt�N, Dry Printed N e 'Signature C-4 Title Date