hobart arena reauthorization committee assignment request

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TROY CITY COUNCILCOMMITTEE MEETING NOTICE

CITY HALL BASEMENT CONFERENCE ROOM

100 S. MARKET STREET, TROY, OHIO

Tuesday, January 12, 2016, 5:30 p.m.

Council as Committee of the Whole (Chaired by Council President Baker)

1.

Provide a recommendation to Council regarding increasing the authorization for the HobartArena Renovation Project from $7,350,000 to $9,650,000. Emergency legislation is requested so

that current pricing can be maintained.

Other Committees/items may be added.

1-6-2016

Cc: MayorMr. Titterington

Mr. KerberMr. FriggeRecreation Board

Department HeadsChamber of Commerce

media



5401 W. Kennedy Boulevard · Suite 755 · Tampa, Florida 33609 · Phone 813.281.1222 · Fax 813.315.6040

Market and Economic Analysis

for a Proposed New Ice Rink

in Troy, Ohio

Presented to:

City of Troy, Ohio

Presented by:

Final Report

October 2015

Exhibit III



5401 W. Kennedy Boulevard · Suite 755 · Tampa, Florida 33609 · Phone 813.281.1222 · Fax 813.315.6040

October 19, 2015

Mr. Ken Siler, Arena ManagerHobart Arena255 Adams StreetTroy, OH 45373

Dear Mr. Siler:

Crossroads Consulting Services LLC has completed its market and economic analysis regarding a proposed new ice rink adjacent to Hobart Arena in Troy, Ohio. The report presented herein includes thesummary of findings, conclusions, and recommendations from our research.

This report was prepared for the City of Troy for its decisions regarding the above referenced project. Thefindings and assumptions contained in the report reflect analysis of primary and secondary sources. Wehave utilized sources that are deemed to be reliable but cannot guarantee their accuracy. All information provided to us by others was not audited or verified and was assumed to be correct. Furthermore, estimatesand analysis regarding this project are based on trends and assumptions and, therefore, there will usually be differences between projected and actual results because events and circumstances frequently do notoccur as expected, and those differences may be material. We have no obligation, unless subsequentlyengaged, to update this report or revise this analysis as presented due to events or conditions occurringafter the date of this report. The accompanying report is restricted to internal use by the City of Troy andmay not be relied upon by any third party for any purpose including financing. Notwithstanding theselimitations, it is understood that this document may be subject to public information laws and as such can

be made available to the public upon request.

Although you have authorized reports to be sent electronically for your convenience, only the final hardcopy report should be viewed as our work product.

We have enjoyed working on this engagement and look forward to the opportunity to provide you withcontinued service in the future.

Sincerely,

rossroads onsulting Services LL



1

Table of Contents

1. Introduction 1

2. General Market Overview 4

3. Industry Trends and Potential Demand 13

4. Comparable Facility Case Studies 25

5. Competitive Market Assessment 34

6. Program and Cost Estimate 37

7. Financial Pro Forma 41

8. Limiting Conditions and Assumptions 51



2

Introduction

Project Background

Municipalities and states throughout the U.S. have recognized the economic benefits associated withoperating various public assembly facilities. There are examples of dual-ice sheet facilities throughout North America to support ice-based activities. As ice-based sports such as ice hockey, figure skating andcurling continue to grow in the U.S., date availability at local ice facilities has become a challenge in somecommunities. In markets where hockey is popular, dual ice sheets were built as early as the 1970s toaccommodate local demand. As hockey has grown in popularity nationwide dual-ice sheet facilities have been constructed in areas of the U.S. that have not traditionally been considered ice sport hubs such asFlorida. Due to the unique nature of ice rinks, there is limited peak or prime hours for user groups. Giventhat many user groups are school-aged children, hours with the greatest demand are generally weekendsand weekdays after school and cannot extend past mid-evening. Youth sports are also extending theirseasons to accommodate growing demand. While hockey and figure skating may have traditionally beenviewed as winter sports, there are now training programs, camp, clinics, leagues, tournaments andcompetitions year-round. In an effort to support residents and the increased year-round needs of ice-basedsports, communities are exploring the option of additional ice sheets to meet demand.

Troy is the county seat for Miami County. Located in southwest Ohio, Troy is proximate to several otherregional centers including Dayton, Columbus, and Indianapolis, Indiana. Troy is situated along Interstate75 and is 10 miles north of the I-75 and I-70 interchange. I-75 connects south into Dayton and Cincinnatiand I-70 connects west into Indianapolis and east into Columbus. While the City has a relatively small population base it is easily accessible to a larger region. Troy is well-known for its annual StrawberryFestival, being a destination in the Great Ohio Bicycle Adventure, and for various sports/entertainmentand community events held at Hobart Arena.

Hobart Arena is a 3,800-seat facility that opened in 1950 and serves as the community’s primary venuefor sports and entertainment. The City of Troy’s (City) Recreation Department is responsible formanagement of Hobart Arena. The venue underwent a major renovation from 1997 to 2001 that includedmany interior and exterior upgrades and replacements. In 2014, Crossroads Consulting Services LLC(Crossroads Consulting), in association with Convergence Design and The Bigelow Companies, Inc.,conducted a facility assessment that resulted in the City approving and moving forward with $7.2 millionin renovations that are currently underway.

Hobart Arena is home to the Troy Skating Club, an established figure skating club with strong ties to U.S.Figure Skating at a national level. The Troy Skating Club has hosted the U.S. Figure Skating’s NationalTheatre on Ice competition in past years. It has a history of strong leadership at the Board of Directorslevel. The Recreation Department manages and administers the Troy Bruins Youth Hockey program

which uses Hobart Arena as its primary ice rink. The Troy Youth Hockey program has both house andtravel programs for area youth age four through eighteen. The Recreation Department also manages andadministers an adult hockey program. Troy High School’s boys’ varsity hockey program utilizes HobartArena for its games and practices. Curl Troy uses multiple venues to accommodate its members andevents including Hobart Arena. Additionally, there are Learn to Skate and Basic Skills programs andopen public skating held at Hobart Arena. The Troy Skating Club hosts the annual Troy Summer Classicfigure skating competition annually in July and the Dayton Hockey Association utilizes Hobart Arena inDecember for their Silver Sticks tournament.



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Hobart Arena does not have ice available for the majority of April and May or the month of August. InApril and May, a synthetic turf floor covering replaces the ice and Hobart Arena is utilized by programsincluding the Winter Guard International, local youth soccer, local youth softball, graduation ceremonies,and annual maintenance. In addition, during April and May, staff focuses on getting the pool prepared forits summer operation. In August, the facility is generally not used for any activity when the staff focuseson operating the adjacent aquatics facility and maintenance projects at Hobart Arena.

Purpose of the Study

Given this backdrop and the City’s desire to operate Hobart Arena as effectively and efficiently as possible, the City of Troy hired Crossroads Consulting to assist it in evaluating the merits of constructinga proposed new ice rink adjacent to Hobart Arena as part of its strategic planning efforts. A second icesheet could potentially allow some ice-based activities to move from Hobart Arena opening its schedulefor additional commercial events and/or community events. This analysis focuses on assessing the potential market demand and financial implications of constructing and operating a new ice rink and potential uses for Hobart Arena with increased programmable dates.

Work Plan

Research tasks completed as part of the study effort include, but are not limited to, the following:

• Spoke with City representatives to understand their objectives for the proposed new ice rink and obtainavailable background information applicable to the performance of this study.

• Conducted interviews with stakeholders including, but not limited to, representatives from the City,existing facility operators, as well as other area groups involved in ice activities.

• Analyzed select market attributes including demographic/economic data, area employment,accessibility, and hotel statistics.

• Profiled existing and planned ice rinks in the region in terms of owner/operator physical attributes,usage characteristics, rental rate structure, and general financial operations to assess how the proposednew ice rink could potentially compete with or complement these facilities.

• Outlined key industry trends.

• Interviewed existing user groups at Hobart Arena as well as potential users of the proposed new icerink to obtain their input and perspectives on the strengths, challenges and opportunities associatedwith the proposed new ice rink.

• Analyzed usage and operating data from select comparable ice rink facilities.

• Summarized key findings related to the potential market demand for the proposed new ice rink withinthe context of the competitive environment.

• Prepared a basic outline program for the proposed new ice rink that MSA further developed alongwith a preliminary conceptual site plan and preliminary construction costs.

• Developed an estimate of usage and financial pro forma for the proposed new ice rink in a stabilizedyear and outlined potential impacts on Hobart Arena’s operation.

The remainder of this report summarizes the key findings from our research and analysis.



4

Table of Contents

1. Introduction 1










5

General Market Overview

Because general market conditions impact the operations of ice rinks, this section of the report profilesselect market characteristics including:

• Demographic/economic data

• Area employment

• Accessibility

• Hotel supply

• Supply of area facilities

Demographic and Economic Statistics

Demographic and economic indicators are pertinent to estimating demand for participant and spectator-oriented sports activities for several reasons. Event activity at the proposed ice rink is anticipated to bediverse and include multiple ice-based sports. Depending on the scope and nature of the event, the facilitywill draw both area residents as well as out-of-town attendees to tournaments and competitions.Tournament producers typically consider market characteristics as well as facility/complex elements whendeciding where to host their events. Having active, well-established local youth/adult/amateur sportsclubs, accessibility, age and income characteristics are important considerations for tournament producers.

Based on interviews with ice rink management at comparable facilities, the primary market for the proposed new ice rink is a 30-mile radius.

Map of the Primary Market

Source: mapdevelopers.com

Demographic statistics for the primary market are based on data from Claritas, a Nielsen company that provides current and projected demographics based on U.S. census figures.



6

Population

Population serves as a base from which the proposed new ice rink could draw attendance and other formsof support. The primary market has a population of more than 1.0 million people. The market experienced

a slight decrease in population between 2000 and 2015 and is projected to remain relatively consistentthrough 2020.

Age Distribution

Analysis by age group is helpful since many ice based activities are targeted toward consumers who fallwithin specific age categories. Although approximately 22% of the primary market is under 18 years old,a relatively large portion of the population (30%) is over the age of 55. The median age of the primarymarket is 39.5 which is older than that for the U.S. (37.9 years old).

Income

Income offers a broad measurement of spending potential for a specific population because it indicatesthe general ability of individuals or households to purchase a variety of goods and services including participation in, or attendance at, ice-based sports activities. Approximately 27% of the households haveincome levels of at least $75,000. The median household income in the primary market is $45,500 andthe average household income is $60,200 which is significantly lower than for the U.S., $53,700 and$74,200, respectively.



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The following table summarizes the key demographic/economic characteristics of the primary market.

Category

30-Mile Radius

(Primary Market)

Population

2000 Population 1,057,000



2020 Projection 1,041,000

Growth (2000-2010) -1.2%

Growth (2010-2015) -0.3%

Growth (2015-2020) -0.1%

Age Distribution

Under 18 Years Old 22%

18 - 24 Years Old 10%

25 - 34 Years Old 12%

35 - 44 Years Old 11%

45 - 54 Years Old 13%

55+ Years Old 31%

Median Age 39.5

Household Income Distribution

Less than $25,000 28%

$25,000 to $49,999 27%

$50,000 to $74,999 18%

$75,000 to $99,999 11%

$100,000 to $149,999 10%$150,000 or more 6%

Median Household Income $45,500

Average Household Income $60,200

Source: Claritas.

Summary of Key Demographic/Economic Characteristics



8

Area Employment

A broad workforce distribution helps lessen a community’s dependence on support from any one singleindustry segment. Employment diversification also helps a local economy withstand economic downturnsdue to dependency upon one industry; should one industry fail, there are others upon which the localeconomy can rely. There are approximately 35,500 people employed in Miami County. While MiamiCounty offers employment in various industries, employment data shown in the following table indicatesthat the workforce is primarily concentrated in manufacturing and trade/transportation/utilities jobs. Inaggregate, these industries comprise 53% of total jobs in Miami County.

Industry Total Jobs % of Total

Manufacturing 10,021 28.2%

Trade, Transportation, and Utilities 8,808 24.8%

Leisure and Hospitality 4,295 12.1%Professional and Busines s Services 4,158 11.7%

Education and Health Services 4,104 11.5%

Construction 1,650 4.6%

Other Services 1,280 3.6%

Financial Activities 962 2.7%

Natural Resources and Mining 167 0.5%

Information 91 0.3%

Total 35,536 100%

Note: Sorted in descending order by total jobs as of September 2014.

Source: U.S. Bureau of Labor Statistics.

Non-Farm Employment by Industry as of September 2014

Miami County, OH

Area employers provide a target market for sponsorship/advertising opportunities at sports venues. TheUpper Valley Medical Center, Clopay Building Products, and F&P America are the three largest privateemployers in Miami County.

Company Industry Employees

Upper Valley Medical Center Healthcare 1,600

Clopay Building Products Manufacturing 935

F&P America Manufacturing 920

UTC Aerospace Systems Manufacturing 814

Meijer Distribution Center Logistics 800

ConAgra Foods Manufacturing 734

American Honda Logistics 631 Hobart Brothers Manufacturing 568

Industry Products Manufacturing 440

ITW Food Equipment Group Manufacturing 320

Note: Sorted in descending order by total employees.

Source: Miami County website.

Major Private Employers in Miami County, OH



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Miami County’s institutions of higher education include Edison Community College, Hobart Institute ofWelding Technology, Miami-Jacobs Career College-Troy, and Upper Valley Career Center. Theseinstitutions do not have formal ice hockey or figure skating programs but may provide opportunity for private ice rentals for club/intramural sports. The Southwest Ohio region also offers several highereducation institutions including Wright State University, University of Dayton, University of Cincinnati,Miami of Ohio, and Ohio State University, all of which have various hockey, curling and figure skating programs. While Miami of Ohio and Ohio State University have on-campus ice rink facilities, the otherthree universities utilize off-campus facilities for games and practices. These off-campus facilities includeKettering Ice Arena, Springfield Chiller, SouthMetro, and Cincinnati Gardens. These schools and theirice-related sports teams may serve to foster ice activities in the surrounding area to accommodate practices, games, and tournaments.

According to the U.S. Bureau of Labor Statistics, the unemployment rate for Miami County was 4.3% inDecember 2014 which was lower than that for both the State of Ohio (4.7%) and the U.S. (5.6%). A newice rink could provide jobs directly for staffing at the facility as well as indirectly by attracting out-of-town attendees who purchase goods and services from local businesses.

Accessibility

Local sports participants utilizing the proposed new ice rink on a regular basis for practices and gameswill likely travel by car as they are anticipated to primarily originate from within a 30-mile radius. Further,the method that competitive sporting event promoters/producers use to select venues to host their event is partially based on ease of access to a market for attendees. In addition, the location and accessibility of afacility relative to the population base can impact its marketability for certain events. Interstate 75 runsthrough Troy and connects with Bowling Green and Toledo to the north and Dayton and Cincinnati to theSouth. Interstate 70 runs south of Troy and connects to Indianapolis in the West and Columbus to theEast. Extensive interstate access to other cities in Ohio and throughout the region make Troy marketable

for events that draw drive-in attendees.

Map of Highway Access



10

Commercial air access is provided by the Dayton International Airport, which is located approximately20 miles from Hobart Arena. Major air carriers include Delta Airlines, Air Tran/Southwest, US Airways,United and American. In 2014, there were approximately 1.1 million passenger enplanements, which theFederal Aviation Administration (FAA) defines as domestic, territorial and international passengers who board an aircraft in scheduled and non-scheduled service of aircraft. Due to its proximity to other majorcities, air access is also available through Cincinnati/Northern Kentucky International Airport, PortColumbus International Airport, and Indianapolis International Airport. Proximate, convenient air accesscan be beneficial in accommodating the needs of regional/national sporting event promoters/producers,athletes/teams or their VIPs.

Hotel Supply

Tournament organizers indicated that a diverse supply of hotels is preferable to accommodate theirattendees. Participants tend to travel further and stay longer when their choice of hotel is available.

Troy, Piqua, and the North Dayton area proximate to Hobart Arena offer approximately 1,000 rooms at

various limited service and economy properties. Further south, in the greater Dayton area, there are 6,500additional rooms in full-service, limited service, and economy properties.

Hotel Name Region Rooms

Comfort Inn Miami Valley Centre Mall Piqua 124

Residence Inn by Marriott Dayton Troy Troy 96

Super 8 Vandalia / Dayton International Airport North Dayton 94

Hampton Inn Troy Troy 88

Fairfield Inn & Suites By Marriott Troy Ohio Troy 80

Motel 6 Troy Troy 80

Holiday Inn Express Hotels and Suites Dayton North Tipp City North Dayton 77

Budget Inn Troy Troy 70

La Quinta Inn Piqua Piqua 70

Holiday Inn Express Hotel & Suites Troy Troy 65

Comfort Suites Troy Troy 65

La Quinta Inn & Suites Dayton North - Tipp City North Dayton 56

Airport Inn and Parking/Dayton International Airport North Dayton 46

Total 1,011

Note: Sorted in descending order by number of rooms.

Source: Secondary research including hotel websit es.

Hotels Proximate to Hobart Arena

Based on input from current and potential ice-based users, Troy’s hotel room supply combined with thatavailable in the greater Dayton area is sufficient to meet the needs of ice-related tournaments/competitions.

Supply of Area Ice Facilities

As stated earlier, one objective of the proposed new ice rink is to host local sports organizations thatcurrently have difficulty growing their programs due to lack of available and consistent ice time. Theseorganizations include the multiple age and skills-based programs within the Troy Skating Club, TroyYouth Hockey (Troy Bruins), Troy Adult Hockey, Curl Troy, and Troy High School Hockey.



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The degree to which existing local and State facilities adequately meet the needs of this target market isan important aspect to consider when evaluating the potential demand for a new ice rink. Facility size, program elements, geographic location, configuration, age, market focus, and date availability are factorsthat impact how competitive area sports facilities may be to the proposed new ice rink in Troy.

This section profiles existing ice facilities within a 30-mile radius of Troy that host local teams and programs similar in nature to those anticipated to be held at the proposed new ice rink. As shown in thefollowing table, there are seven facilities within a 30-mile radius that can accommodate ice activityincluding Hobart Arena. Two are privately owned, two are City owned, two are owned by park districtsand one is university owned. Only two of the profiled facilities, including Hobart Arena, are operated bytheir respective City.

Facility Location Owner Operator

Hara Arena Dayton Private Venuworks

Hobart Arena Troy City of Troy City of Troy

Kettering Ice Arena Kettering City of Kettering City of Kettering

NTPRD Chiller Springfield National Trail Parks and

Recreation DistrictChiller LLC

Nutter Center Beavercreek Wright State University Wright State University

RiverScape MetroPark Dayton Five Rivers MetroPark Dis trict Five Rivers MetroPark Dis trict

South Metro Sports Center Centerville Slaps hot Properties , LLC Slaps hot Properties , LLC

Note: Sorted alphabetically.

Sources : Individual facilities; secondary research.

Troy Area Ice Facilities - Owner/Operator

Hara Arena is the only area venue that hosts a professional minor league hockey team. The NTPRDChiller and Nutter Center each host university related sports activity. Each of the other area venues primarily hosts youth/adult amateur ice sports activities. As mentioned previously, Hobart Arena is home

to local high school hockey teams as well as several amateur hockey and ice skating clubs. All of the profiled facilities with the exception of the RiverScape Metro Park in Dayton are indoor. Only the NTPRDChiller and South Metro Sports Center offer ice year-round. Area ice facilities include large arenas withspectator seating ranging from 3,700 to 9,900 as well as ice rinks with seating ranging from 250 to 700.

Facility Location Indoor-Outdoor Ice Size

Open Year Round

for Ice

Spectator

Capacity

Hara Arena Dayton Indoor 84 x 195 No 5,500

Hobart Arena Troy Indoor 85 x 185 No 3,700

Kettering Ice Arena Kettering Indoor 85 x 200 No 700

NTPRD Chiller Springfield Indoor 85 x 200 Yes 700

Nutter Center Beavercreek Indoor 85 x 200 No 9,900

RiverScape MetroPark Dayton Outdoor, covered 70 x 150 No n/a

South Metro Sports Center Centerville Indoor 85 x 200 Yes 250

Notes : Sorted aphabet ically.

n/a denotes not applicable.

Sources: Individual facilities; secondary research.

Troy Area Ice Facilities - Program Elements



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It is reported that both Hara Complex and Kettering Recreation Center are contemplating their options asto their ongoing operations. The City of Kettering indicated that it may conduct a study to determine the best use of the Kettering Ice Rink moving forward. Hara Arena originally had two ice sheets but currentlyoperates only one ice sheet. Sports and event organizers indicated that Hara Arena has not invested inmaintenance or upgrades in recent years. Both facilities host numerous figure skating and hockey programs.

Summary

An area’s demographic characteristics such as population and income statistics are indicators of the marketsize and relative capability to spend money on recreational sports and attend sporting and entertainmentevents. Based on interviews with area facilities, U.S. Figure Skating, and independent research,community ice rinks typically draw from a 30-mile radius. The population within a 30-mile radius ofTroy provides a significant base from which to draw users to a proposed new ice rink.

Regular users of sporting facilities need quick and convenient access for practices and games. From a

local user perspective, Troy is well-situated to accommodate travel from a 30-mile radius. For games,tournaments, and competitions, Troy’s geographic location, highway and air accessibility, supply andaffordability of hotel rooms, proximity to adjacent cities including Dayton, Cincinnati, and Columbus,and breadth of family-friendly attractions are compatible with desired site selection criteria for event producers. The supply and proximity of these types of amenities also serves to enhance a particulardestination’s ability to capture visitor spending by making it convenient for attendees as well as attractivefor bringing additional family/friends and/or extending their stay beyond the sporting event.

Several area ice rinks are used by local, amateur figure skating, hockey, and curling programs. Some areafacilities are primarily dedicated to university or professional team use which limits ice time for localclubs/programs. Both Hara Arena and Kettering Recreation Center host numerous figure skating and

hockey programs. If these facilities are taken offline and are no longer utilized as ice facilities, a new icerink in Troy would be well-positioned to host some of the displaced programs from those facilities. WhileHobart Arena is capable of hosting ice-related activities, its date availability limits local clubs and highschools, likewise local ice users occupy Hobart Arena on dates that could be marketed for other revenuegenerating events. A new ice rink would increase date availability at Hobart Arena by shifting some programming to the new ice rink allowing them to better accommodate other sports/entertainment targetmarkets and potentially expand Troy’s existing ice-related programs and create new programs.



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Table of Contents

1. Introduction 1










14

Industry Trends and Potential Demand

Potential demand associated with any ice rink is somewhat dependent on the attributes of the industry asa whole as well as specific target market segments. This section outlines key industry trends that may

impact operations of the proposed new ice rink as well as input from potential demand generators.

Sports Participation Trends

USA Hockey

USA Hockey is the national governing body for the sport of hockey in the U.S. It is the officialrepresentative to the U.S. Olympic Committee and the International Ice Hockey Federation (IIHF). USAHockey’s primary emphasis is on the support and development of grassroots hockey programs and hockeysafety. It is also responsible for organizing and training the men’s and women’s teams for internationaltournaments, including the IIHF World Championships and the Olympic and Paralympic Winter Games.

USA Hockey set a record for registrations in 2013-2014 with 598,841 registered players, coaches, andofficials. Total registrations increased by 7% (or 40,365 participants) between 2009 and 2014 and 13%(or 66,991 participants) in the past 10 years. Although total registrations fluctuated over the profiled period, total participation continues to grow nationally. Perhaps more importantly, player registrationsincreased by 9% between 2009 and 2014 and 17% over the past 10 years.

Year Players Coaches Officials Total

2004-2005 445,245 59,957 26,648 531,850

2005-2006 442,077 58,593 26,599 527,2692006-2007 457,038 56,383 25,978 539,399

2007-2008 468,202 54,302 26,047 548,551

2008-2009 465,975 55,448 26,866 548,289

2009-2010 474,592 55,460 28,424 558,476

2010-2011 500,579 56,358 26,325 583,262

2011-2012 511,178 58,825 24,956 594,959

2012-2013 510,279 56,836 24,303 591,418

2013-2014 519,417 56,011 23,413 598,841

Average 479,458 56,817 25,956 562,231

44,825 551 -5,011 40,365

9% 1% -18% 7%74,172 -3,946 -3,235 66,991

17% -7% -12% 13%

Source: USA Hockey.

10-Year Change

USA Hockey Registration Data - National

5-Year Change



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USA Hockey is divided into 12 geographical districts. The Mid-American Region includes Ohio, Indiana,Kentucky, Western Pennsylvania, and West Virginia. As with the national statistics, total participation inthe Mid-American Region has experienced growth. Player registrations have increased by 12% over the past five years and 29% since 2004.

In 2013-2014, Ohio led the Mid-American Region in registered players with 14,387, which represented40% of the total region. Western Pennsylvania accounted for 36% of the total registered players in theregion while Indiana, Kentucky and West Virginia combined comprised the remaining 24% of theregistered players. As a point of reference, the Troy Bruins Youth Hockey Association, administered byHobart Arena and the City’s Recreation Department, is a member of USA Hockey.

State Number % Total

Ohio 14,387 40%

Western Pennsylvania 12,862 36%

Indiana 5,922 16%

Kentucky 1,625 5%

West Virginia 1,147 3%

Mid-American Region Total 35,943 100%

Note: Sorted in descending order by state.

Source: USA Hockey.

USA Hockey - Mid-American Region

2013-2014 Registered Players by State

U.S. Figure Skating

U.S. Figure Skating (USFS) is the national governing body for figure skating in the U.S. USFS is amember of the International Skating Union (ISU), the International Federation for Figure Skating, and theU.S. Olympic Committee (USOC). USFS is comprised of member clubs, collegiate clubs, school-affiliated clubs, individual members, Friends of Figure Skating, and Basic Skills programs. The TroySkating Club is a member of the USFS and is part of the Eastern Great Lakes region.

Year Players Coaches Officials Total

2004-2005 27,897 3,721 1,889 33,507

2005-2006 28,363 3,843 1,790 33,996

2006-2007 28,642 3,498 1,753 33,893

2007-2008 29,287 3,478 1,755 34,520

2008-2009 30,094 3,526 1,737 35,357

2009-2010 32,051 3,814 1,898 37,763

2010-2011 34,666 3,995 1,891 40,552

2011-2012 35,412 4,605 1,853 41,870

2012-2013 36,040 4,240 1,688 41,968

2013-2014 35,943 4,225 1,628 41,796

Average 31,840 3,895 1,788 37,5223,892 411 -270 4,033

12% 11% -14% 11%

8,046 504 -261 8,289

29% 14% -14% 25%

Source: USA Hockey.

USA Hockey Registration Data - Mid-American Region

5-Year Change

10-Year Change



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Over the last 10 years, membership in USFS increased by 8%, from 158,000 in 2004-2005 to 171,000 in2013-2014. Over the last five years, there has been a decrease in membership of 3%. During the profiled period, USFS had the lowest membership in 2004-2005 and experienced its highest membership thefollowing year (2005-2006). The most recent Winter Olympics were held in 2006 (Turin), 2010(Vancouver), and 2014 (Sochi) and USFS membership data reflects an increase in membership duringthose corresponding Olympic seasons of 2005-2006, 2009-2010, and 2013-2014.

Year Members % Change

2004-2005 158,000

2005-2006 196,000 24%

2006-2007 185,000 -6%

2007-2008 179,000 -3%

2008-2009 170,000 -5%

2009-2010 176,000 4%

2010-2011 180,000 2%

2011-2012 173,000 -4%

2012-2013 165,000 -5%

2013-2014 171,000 4%

Average 175,300 1%

5-Year Change (5,000) -3%

10-Year Change 13,000 8%

Source: U.S. Figure Skating.

U.S. Figure Skating Membership

Approximately 65% of USFS members are 18 years old and under. The largest percentage of members(36%) falls within the 7 to 12 year old bracket. In addition, USFS indicates that 72% of their members

are females and 24% are male with 4% not indicating their specific gender.

Age Group Percent of Total

Under 6 years old 15%

7 to 12 years old 36%




51+ years old 5%

Age unknown 16%

Total 101%

Note: Amounts do not add to 100% due to rounding.

Source: U.S. Figure Skating.

U.S. Figure Skating Membership

In an interview with USFS representatives, the recent decrease in figure skating membership was partiallyattributable to the increase in demand for hockey, particularly girl’s hockey, and challenges with securingice time for figure skating. The demand for ice for hockey programs impacts the figure skating clubs andtheir access to ice to maintain and grow their programs.



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USA Curling

USA Curling is the national governing body responsible for the oversight and growth of curling. In thelatest data available, USA Curling experienced growth from its original membership data by 53%. Byregion, the highest participation rates are in Wisconsin, Grand National, Minnesota, Great Lakes, NorthDakota, and Mountain Pacific. This provides competitors and events in the area surrounding Troy andOhio. USA Curling is focused on developing their sport in the areas of youth, college, andtraining/instruction. While the numbers are relatively small and data is not available annually, there has been an increase in memberships over the time period for which data was available.

Year Membership

2001-2002 10,805

2005-2006 13,380

2009-2010 13,923

2010-2011 16,512Source: USA Curling.

USA Curling Growth

Sports and Fitness Industry Association / Physical Activity Council

The Sports and Fitness Industry Association (SFIA) in conjunction with the Physical Activity Council(PAC) conducted a nationwide survey in 2014 of individuals and households to obtain sports participationstatistics. The sample included 19,240 completed surveys.

The tables that follow summarize ice hockey and ice skating participation figures for the past five years

based on the SFIA and PAC survey results. Total participation in each sport is defined as the sum of bothcasual and CORE participants. The definition of casual and CORE participants varies by sport. Themajority of indoor sports define casual participants as those who play 1 to 50 times per year. CORE participants are defined as those who are more heavily involved in the sport and therefore participate morefrequently than the casual player.

Between 2009 and 2013, the 2014 SFIA Participation Topline Report indicated that ice hockey averaged2.2 million total participants, of which 1 million (or 46%) were categorized as casual players and 1.2million (or 56%) were considered CORE players. For ice hockey, casual participation is defined as 1-12times annually and CORE is defined as 13+ times participating in the sport annually. Based on this data,total ice hockey participation increased by 19% during this five-year period.

Category 2009 2010 2011 2012 2013

Five-Year

Average

Total 2,018 2,140 2,131 2,363 2,393 2,209

Casual 918 1,006 957 1,082 1,093 1,011

CORE 1,101 1,134 1,174 1,281 1,300 1,198

Source: 2014 SFIA Participation Topline Report .

Indoor Sports Participation Data - Ice Hockey (in 000s)



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Between 2009 and 2013, this same report indicates that ice skating averaged 11.2 million total participants.Approximately 9.5 million (or 85%) of participants were categorized as casual compared to 1.7 million(or 15%) classified as CORE participants. Similar to ice hockey, figure skating casual participation isdefined as 1-12 times annually and CORE is defined as 13+ times participating in the sport annually.Participation fluctuated over the five year period.

Category 2009 2010 2011 2012 2013

Five-Year

Average

Total 10,964 11,477 11,626 11,214 10,679 11,192

Casual 9,480 9,817 9,898 9,375 9,023 9,519

CORE 1,485 1,660 1,728 1,838 1,656 1,673

Source: 2014 SFIA Participation Topline Report.

Indoor Sports Participation Data - Ice Skating (in 000s)

Potential Demand Generators

As part of the market research conducted to identify potential demand for a proposed new ice rink in Troy,interviews were conducted with representatives from the following ice-based sports organizations:

• Colin Chaulk Hockey Camps

• Curl Troy

• Dayton Hockey Association

• Mid American District Hockey

• Ohio State High School Athletic Association

• Troy Adult Hockey

• Troy Bruins Youth Hockey

• Troy City Schools Athletics

• Troy High School Hockey

• Troy Skating Club

• U.S. Figure Skating

Interviews were also conducted with the following event promoters/producers who represent concerts,family shows, trade/consumer shows and non-ice sporting events that currently use or have utilized HobartArena:

• Awakening Events

• Classic Motorsports and Presentations

• Cooking School Show - Troy Daily News

• Dayton Performing Arts Alliance

• Feld Entertainment

• Greater Midwest Cheer Expo

• Southwest District Athletic Board(SWDAB) Wrestling District Tournament

• Variety Attractions

• VEE Corporation

• Western Ohio Home Builders Association

It is important to understand from these organizations if potential opportunities exist for new and/orexpanded event bookings at Hobart Arena based on increased date availability. Additionally, an interviewwas conducted with Serving the American Rinks (STAR), the joint venture funded by USA Hockey andUSFS, tasked with being the key industry resource for the ice facility operators.



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Ice-Based Sports Organizations

Curl Troy

Curl Troy is comprised of a group of curlers in the Miami Valley and focused on growing interest in

curling in the region. This organization conducts leagues and Learn to Curl clinics at ice facilities in thearea. The organization began in 2010 at Hobart Arena and was accepted into the Great Lakes CurlingAssociation. Curl Troy has a relationship with Five Rivers MetroParks and utilizes the outdoor venue,RiverScape MetroPark Ice Rink, as its primary ice surface. Curl Troy has a long term strategic vision to build its own curling-specific venue but plans to continue to use RiverScape MetroPark Ice Rink at thistime. Hobart Arena or a new ice rink would be of interest for some ice time particularly due to the qualitystaff and maintenance equipment at Hobart Arena. They are seeking reasonable evening and consistentice times. The sport of curling is not only sport-based but also social-based and, as such, they wouldrequire gathering space at the venue for post-event socializing that offers food and beverage.

Troy Bruins Youth Hockey

The Troy Bruins Youth Hockey program is managed by the Troy Recreation Department and HobartArena. The program has multiple participation levels which include Mite, Squirt, Pee Wee, Bantam, andMidget. There are currently approximately 155 players in the program. Although this program offerstravel and house teams, its travel team hockey programs are relatively limited resulting in a loss of playersto Dayton, Cincinnati, and Columbus. It is estimated that 10% of possible Troy participants play in otherarea hockey programs due to the lack of focus on travel-level competition programs. Consistent ice timeis a challenge with the unavailability of ice in April, May, and August as well as concert, family show,and special event programming in Hobart Arena. The lack of ice availability is a limiting factor for growthor expansion of Troy’s youth hockey programs.

It should be noted that the Troy Recreation Department strategically positions its youth and adult hockey programs to be affordable and priced lower than other local area hockey and skating programs. Thehockey programs have seen an incremental increase over the past five years but are still priced lower thanother nearby hockey programs.

Troy High School Hockey

Troy High School Hockey has a boys’ varsity hockey team that practices and plays its games at HobartArena. The school does not have a junior varsity boys’ team or a girls’ hockey program. The team playsa 35-game regular-season schedule and is part of the Southwest Ohio High School Hockey League. In2014-15, the team was able to schedule 10 of those games at Hobart Arena. The team was unable to havean equal number of home and away games due to scheduling challenges at Hobart Arena. Representatives

indicated the team would like to play an equal number of games on their home ice and have moreconsistent access for practice time.

While USA Hockey indicates that girls’ hockey is a growing sport across the U.S., it does not appear thatthere is adequate interest to develop a girls’ high school hockey program at this time. Additionally, it doesnot appear that there is enough interest in boys’ high school hockey to develop a junior varsity programat this time.



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Dayton Hockey Association

The Dayton Hockey Association (DHA) has over 500 active participants which is the largest youth hockey program in the greater Dayton area. The DHA, also referred to as the Dayton Stealth, is the result ofcombining three youth organizations in the area approximately four years ago. The volunteer-managedorganization hosts both house and travel teams for youth hockey players from age four to 18. It also hasvarsity and junior varsity club high school teams. The DHA utilizes Hobart Arena, Hara Arena, KetteringIce Center, and South Metro Sports Center to host its programs. Hobart Arena hosts portions of the DHA’sannual Silver Sticks Tournament in December. The DHA is looking to grow its Hignite MemorialTournament that is traditionally held over Martin Luther King, Jr. Weekend at Hara Arena, Kettering IceArena, and NTPRD Chiller.

Association organizers indicated an interest in using a potential second ice sheet in Troy. NorthernDayton/Troy players have a need for ice time at a quality ice rink. Additionally, there is potential forcurrent tournaments to expand creating a need for additional ice. Based on distance, Troy may not be ofinterest for regular play for members who are based in the southern Dayton area.

Ohio High School Athletic Association

The Ohio High School Athletic Association's (OHSAA) mission is to regulate and administerinterscholastic athletic competition in a fair and equitable manner while promoting the values of participation in interscholastic athletics as an integral part of a student's educational experience. TheOHSAA stages the annual State and districts championships for boys’ high school ice hockey. The districttournaments are held at Nationwide Arena (Columbus), Sylvania Tam-O-Shanter, Kent State UniversityIce Arena, and Brooklyn Recreation Center (Cleveland). The State tournament is held at NationwideArena (Columbus). Representatives indicated that they are satisfied at their current locations and have asolid relationship with the Chillers management group for tournament management.

Troy Adult Hockey

The Troy Adult Drop-In Hockey program has been managed at Hobart Arena since 1983. The programruns for one hour on Sunday mornings, and has approximately 50 participants with an average of 20 players attending the weekly session. It is anticipated that the program could utilize an evening time slotduring the week for drop-in adult players and continue to utilize their Sunday time slot year-round.

The Canes & Pucks League is an adult league played on Sunday nights during a two-hour time slot from8:00 PM to 10:00 PM. The program is administered through the Troy Recreation Department with theleague offered during the Fall, Winter, and Summer. There are approximately 45 players who participate

in the League during its peak Winter session. The proposed new ice rink could allow for the adult hockeyleague to add dates and sessions.



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Mid American District Hockey

As mentioned previously, the Mid American District Hockey (MidAm) is U.S. hockey’s regionalgoverning body and development organization of youth and adult amateur hockey talent in Ohio, Indiana,Western Pennsylvania, Kentucky and West Virginia. While youth programs have traditionally been the

primary focus of MidAm, the organization is working towards developing its adult programs at all agelevels for increased recreational play. MidAm indicated that successful programs they are involved withhave full-time hockey directors that allow the maximization of year-round hockey programs at all agelevels. Representatives also indicated that a full-time hockey director has the time and ability to developgirls programs and adult programs which are experiencing growth across the district. Year-roundmarketing and program development are viewed as key efforts to successful rinks.

Colin Chaulk Hockey Camps

Colin Chaulk hosts a week-long hockey camp at Hobart Arena annually during the summer in conjunctionwith the Troy Recreation Department. Registration for the camp has remained steady over the past five

years. Although representatives did not indicate demand for expansion or growth of their camp, they didindicate that a new ice rink allows for potential expansion of hockey programs which would, in turn, benefit their camp. Representatives view Hobart Arena as a well-maintained hockey facility that continuesto serve as a good location for their Dayton area camp.

Troy Skating Club

The Troy Skating Club (TSC) has a use agreement with Hobart Arena to house their skating programs.Those programs include their Freestyle, Junior Club, Skate With Us, Friday evening and Saturday Ice,Snow Plow Sam, Basic Skills, and Bridge programs. Previously, they had run a Preschool program andthat is no longer offered due to lack of demand. The TSC indicated that they are unable to fully support

the demands of the local skating community due to a lack of consistent ice time in Hobart Arena. Theclub is unable to attract the quality coaches that are preferred due to the lack of ice time during the monthsof April, May, and August. Hobart Arena also schedules concerts, family shows and special events thatdisrupt the schedule throughout the year.

TSC hosts their annual Troy Summer Classic skating competition in early July. In 2010 and 2013, theTSC hosted the USFS’s Theatre on Ice competition. The TSC is interested in continuing its Troy SummerClassic as well as bidding on Theatre on Ice in future years should a second ice sheet be constructed.Additionally, the TSC is interested in pursuing additional competitions throughout the year. Accordingto TSC officials, membership has remained consistent and averages approximately 40 full-time membersand they administer skating programs to another 250+ people annually.

USFS

USFS is a member-based organization. Its skating clubs are responsible for promoting and producinglocal, regional, and sectional competitions. USFS produces national events such as Skate America, National Championships, and will host the World Championships in Boston, Massachusetts in 2016. Neither Hobart Arena nor the proposed new ice rink would have the seating capacity required to host anational event. In addition, the ice sheet at Hobart Arena is not large enough to host a national event.



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However, representatives indicated that Troy Skating Club has a strong presence nationally with itsleadership and is well-positioned to host local and regional competitions. Representatives mentioned thata seating capacity ranging between 1,000 and 1,500 would allow the TSC to host competitions in a newice rink. Representatives also indicated that the majority of ice rinks in North America have an ice sheetsize of 85’ x 200’ which is an NHL-sized rink. The ISU does not mandate a specific ice sheet dimension.

Having two ice sheets is essential to successfully hosting USFS-sanctioned events. One ice sheet isutilized as a warm-up or practice rink and the other is utilized as the competition facility. Having two icesheets within close proximity is important in terms of ease for skaters and event organizers and is also beneficial to the economics of hosting a figure skating competition. The local club recognizes revenuefrom renting the practice facility ice to clubs and skaters that are participating in the competition. As such,the ability to bid on events from a revenue perspective is essential to local clubs.

STAR – Serving The American Rinks

STAR is a non-profit membership organization that provides education, resources and networking

opportunities for individuals, facilities and vendors in the American ice rink industry. STAR was formedin 2000 as a joint venture between USA Hockey and USFS to foster the development, growth and successof ice skating facilities in the U.S.

Conversations with STAR officials indicated that although the building of ice rinks has seen flat growth post-recession, there has been more activity in ice rink development recently. Driving the activity is thegrowth of hockey in the U.S., according to STAR officials. The concept of a dual ice complex offers theopportunity to share staff and offer more consistent ice time for hockey and skating programs.

Consistency in public skating, Learn to Skate, learn to play hockey, and special events was cited as animportant factor in the success of these programs. Having two ice sheet options can help with consistency.

There is more opportunity to shift dates and times with more established participants such as youth hockeyteams for practices and adult leagues. Beginner programs and their ice days and times should be kept asconsistent as possible.

Having hockey director and skating director positions are important for the growth and success ofcommunity-based hockey rinks, according to STAR officials. These can be part-time or full-time positions or a combined full-time position but they are necessary for the growth and usage of communityrinks.

From a building program perspective, STAR officials indicated that recent trends in design have reducedthe emphasis on pro shops as the online gear industry is robust and customers are shopping online.

Concession areas are necessary as a customer service for daily users and tournament/competition participants and spectators.

It was noted that both USA Hockey and USFS potentially have funds available for program development but do not fund the construction of facilities.



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Concerts, Family Shows, Consumer Shows, and Non-Ice Sporting Events

As mentioned previously, interviews were conducted with event promoters representing concert, familyshow, consumer show, cheer and dance, and other non-ice based sporting event activity. Concert promoters indicated that the fall and winter seasons should be the focus for Hobart Arena’s touring eventactivity. With the opening of the Rose Music Center at The Heights in Huber Heights as well as the FrazePavilion in Kettering, and Country Concert in Fort Loramie, the summer season has tremendouscompetition. It was noted that the concert touring industry in the region has a traditional protection periodof 90 days pre-event and 30 days post-event as well as a 75-mile radius. These date protection windowsand the protection radius does not allow other venues to compete as easily for summer touring concerts.However, with the Rose Music Center having a June through September season and Country Concert being a one-weekend, summer event, it does allow Hobart Arena to compete for the late fall and winterseason concerts.

The Nutter Center at Wright State University hosts many of the touring family shows in the greater Daytonarea. Previously, some of the indoor motorsports shows were held at Hara Arena but the Nutter Centerhas a greater capacity, particularly for the highest price tickets, and larger floor dimensions. Based onthese factors, the Nutter Center is the primary home for the larger national touring family shows and isanticipated to continue to host these events in the future.

One national family show promoter indicated that Hobart Arena is located in a challenging market giventhe presence of the Nutter Center and Hara Arena. The promoter has challenges obtaining dates at the Nutter Center given its University and non-University event schedule. Although Hara Arena is currentlyviewed as a viable option, it will become less desirable over time to host family shows unlessrenovations/upgrades are made. This particular promoter had a very positive experience with themanagement team at Hobart Arena. Although Hobart Arena is a new venue for this event, the promoterexpected higher ticket sales. A variety of factors can influence ticket sales including customer awareness

of Troy and Hobart Arena and advertising strategy. There is a customer’s perception of traveling into alarger city for an event. In general, promoters find that customers who live in a suburban area will travelinto a larger city for an event but that the reverse is not as likely where urban customers will travel to asuburban venue for a family show. Promoters mentioned that they would only play Hobart Arena or avenue in Dayton, not both, with the Nutter Center being the preferred location. However, this promoterwould play Hobart Arena again if the Nutter Center was not available. The dates would likely be mid-week and a co-promotion type of rental agreement may be a viable option.

Consumer shows indicated that they are rebounding back to exhibitor and attendee levels post-economicdownturn. These levels have slowly risen and are continuing to rise. The Home Show will likely continueas a one-weekend event due to the sales cycle of home products. A potential fall show could be considered

if exhibitor and attendee numbers continue to increase and create additional demand. The Cooking SchoolShow has indicated that they are an annual event and likely would not add additional shows at this time.Their needs are being met at Hobart Arena currently.



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The Dayton Performing Arts Alliance is the producer of the Dayton Philharmonic Holiday Concert thatwas held at Hobart Arena in December. Representatives indicated that although attendance numbers didnot meet expectations, they are committed to 2015 and are adjusting marketing and ticket pricing with thegoal of increasing attendance and related revenue. The Performing Arts Alliance prefers to utilize its ownticketing arm in an effort to best analyze the ticket buying data. The Performing Arts Alliance’s goal isto create a new audience for their product in the area north of Dayton through this holiday event in Troy.

The late winter SWDAB Wrestling District Tournament continues to find Hobart Arena to be the right fitfor its tournament needs. Organizers indicated that there is potential for a possible Sectional Tournamentthe weekend before the District Tournament. Costs are an important factor for the non-profit organization.Hobart Arena has good sightlines for their tournament and fits their current event needs.

For non-hockey sports in the Troy City Schools, such as basketball or volleyball, representatives from theAthletics Department indicated that the local high school gymnasiums are sufficient to accommodate theircurrent needs from an operational and spectator capacity perspective. In addition, keeping these gamesand tournaments for both basketball and volleyball on school property is a more financially viable optionfor the schools currently.

The Greater Midwest Cheer & Dance Expo is a one-day event hosted annually at Hobart Arena inFebruary. The organization that produces these dance and cheerleading events also has events in Dayton,Fairfield, Toledo and Columbus. Event producers indicated that they enjoy a solid relationship withHobart Arena and its management staff and will continue to host their annual event in Troy. However,while the event has adjusted to Hobart Arena it is a more difficult facility to host their event due to thelimited floor space. Dance and cheer events require both a warm-up area and competition area and this ischallenging due to the limited floor dimensions in Hobart Arena.

Summary

Individual and team ice hockey participation statistics reveal competitive hockey has a significant marketin the Mid-American region. Competitive sporting event organizers indicated strong interest in hosting avariety of ice-related events in Troy if there was an additional ice rink. These potential demand generatorsindicated the need for access to consistent ice time throughout the year. It is particularly difficult fororganizations to schedule around other venue events such as concerts, family shows, expos, and specialevents. Additionally, it is challenging to maintain consistency with their players and participants duringthe weeks in April and May and the month of August when ice is removed from Hobart Arena. In addition,the figure skating club is challenged to book consistent ice time at Hobart Arena. As such, these ice-based programs are limited in their ability to grow and expand program offerings to the community. Troy iswell-situated with excellent access to other state and regional population centers. Hockey is experiencing

growth in Ohio and the broader Mid-American region and local demand for ice time is growing. Providingan additional ice rink could better position Troy to retain and expand its existing hockey, figure skatingand curling programs as well as open up dates at Hobart Arena for other revenue generating events.



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Table of Contents

1. Introduction 1










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Comparable Facility Case Studies

This section of the report provides case studies on select ice rink facilities in terms ofownership/management structure, building program elements, event activity, financial operations, and

operating strategies obtained from direct interviews with management as well as secondary sources.

The following facilities were chosen based on their similarity in terms of facility type and market focusas well as from discussions with representatives at Hobart Arena and feedback from existing/potentialuser groups:

• Cedar Rapids Ice Arena in Cedar Rapids, Iowa

• Lakeview Arena in Marquette, Michigan

• Norway Savings Bank Arena in Auburn, Maine

• Ralston Arena in Ralston, Nebraska

• Vadnais Sports Center in Maplewood, Minnesota

While comparable case studies can provide significant data, they still only serve as a guide. Factors suchas building program/configuration, market conditions and competitive environment vary among venuesand impact operations making it difficult to find a perfect comparable facility. However, these facilitiesoffer a frame of reference in terms of common programmatic elements and certain areas of operation.

Each of the comparable facilities profiled in this section are dual ice sheet complexes. All of the facilitiesare owned by a governmental entity. Four of the profiled facilities are operated by their owner and CedarRapids Ice Arena is operated by a professional management company.

Facility Owner Operator

Cedar Rapids Ice Arena City of Cedar Rapids Venuworks

Lakeview Arena City of Marquette City of Marquette

Norway Savings Bank Arena City of Auburn City of Auburn

Ralston Arena City of Ralston City of Ralston

Vadnais Sports Center Ramsey County Ramsey County

Note: Sorted alphabetically.


Profiled Facilities - Owner/Operator Structure

All of the profiled facilities all have NHL-sized ice sheets (85’ x 200’). One ice sheet at Cedar Rapids IceArena has an Olympic-sized ice surface (100’ x 200’) which is larger than an NHL-sized surface.



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All facilities have one facility with a larger capacity for seating averaging 2,575 as well as a smaller seatingcapacity in the second ice rink (average of 477). Cedar Rapids has a United States Hockey League professional minor league tenant team. Unlike Hobart Arena, all of the profiled facilities have a regulationsize rink.

Facility Hockey Capacity Dimensions Hockey Capacity Dimensions

Cedar Rapids 4,000 85 x 200 (NHL) 200 100 x 200 (Olympic)

Ralston Arena 3,320 85 x 200 (NHL) 275 85 x 200 (NHL)

Lakeview Arena 3,100 85 x 200 (NHL) 300 85 x 200 (NHL)

Vadnais Sports Center 1,245 85 x 200 (NHL) 658 85 x 200 (NHL)

Norway Savings Bank Arena 1,210 85 x 200 (NHL) 950 85 x 200 (NHL)

Average 2,575 477

Note: Sorted in descending order by hockey capacity of Ice Sheet #1.


Profiled Facilities - ProgramIce Sheet #1 Ice Sheet #2

Other common program elements include on-site concessions, a pro shop for skate rental/repair, lockerrooms and retail space. The remainder of this section includes case studies describing each of the profiled facilities.

Ralston Arena – Ralston, Nebraska

Source: Brad Williams Photography Source: Boyd Jones Construction

The Ralston Arena is a dual-ice sheet facility that is owned and operated by the City of Ralston and openedin October of 2012. The Ralston Arena has a hockey capacity of 3,320 and an NHL-sized ice surface.The adjacent Community Rink is an NHL-sized ice surface with a spectator capacity of 275. RalstonArena has 14 suites, 177 club seats and five concession stands. The Ralston Arena ice surface is activefor eight months of the year and removed for the months of June through September. The CommunityRink has ice available throughout the year. There is a 3,500 square-foot retail space that is leased out to

a third party.

The main arena is home to a variety of programs including the United States Hockey League’s OmahaLancers, Summit League’s University of Nebraska Omaha’s Men’s Basketball program, ChampionsProfessional Indoor Football League’s Omaha Beef, Legends Football League’s Omaha Heart, andVictory Fighting Championship. The University of Nebraska Omaha’s athletic programs, including men’s basketball, will be moving into the under-construction Baxter Arena in 2015.



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The Community Rink has a variety of programs that utilize the facility as their primary venue. The RalstonSkating Academy (RSA), Junior Lancers, Omaha Hockey Club, and Aksarben Curling Club also utilizeRalston Arena as their primary facility. The RSA was created when three area skating programs joinedtogether under one umbrella when the new Arena came online. There are also adult recreational leaguesthat are run independently. The City of Ralston Parks and Recreation Department does not have programsto support ice skating activities. All instructional and learn-to-skate programs are organized andadministered through the RSA or Omaha Hockey Club.

There are 19 full-time staff members and eight part-time staff members that operate the two ice sheets.The main arena rents for $225 per hour and the Community Rink rents for $190 per hour. Food and beverage operations are handled in-house and the facility has a liquor license. The City of Ralston’sStatement of Activities for the year ending September 30, 2013 indicates operating revenues of $3.4million and operating expenses of $6.0 million for an operating loss of $2.6 million. Excludingdepreciation and amortization expenses of $1.8 million, the facility realized a net operating loss of$840,000.

Vadnais Sports Center – Maplewood, Minnesota

Source: Master Electric – Mankato, MN

The Vadnais Sports Center was developed in 2010 and was originally owned by a private organization.Ramsey County purchased the facility in 2014 and currently operates it through its Recreation Department.The Vadnais Sports Center is a two-sheet ice and sports dome facility, currently the County has a total of11 facilities with 13 sheets of ice under its management.

Both ice sheets at Vadnais are NHL size with one rink having a spectator capacity of 1,245 and the secondrink having a capacity of 658, and both are open year-round. The turf-surface dome has three individualfields and can be used for soccer, baseball, softball, lacrosse, football and other athletic activities. TheSports Center is home to the White Bear Lake Girls and Boys Hockey teams and the Mounds View BoysHockey team.

Vadnais Sports Center has five full-time staff and seasonal/temporary employees that equate to two full-time employees. The full-time staff includes an arena superintendent, three maintenance and operations positions and a park aide. Vadnais Sports Center has a concessions operation that is leased to a third partyoperator but does not have a ProShop. The County Recreation Department also has a position that workswith each of the hockey and skating organizations at their 11 venues to facilitate the needs of theorganizations, assist with ice scheduling, and maximize the purchase of ice time. The position provides acentralized leadership position for hockey, skating, and other ice-based organizations to use as a resource.The County does not provide programming.



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Organizations buy their ice time and the County focuses on providing strong management and operationsof their facilities. Hourly ice rates vary based on season and peak hours and range from $115 to $180 perhour. Tournament ice rentals are $205 per hour. There are set rates for game rentals that are pro-rated based on the number of games but begin at $700 for a single game. The two ice sheets and dome facilitywere constructed for a reported $26 million by a not-for-profit developer. The County purchased thefacility for $10.5 million. The County has not completed a full year of operation of the facility, itreportedly anticipates revenues of approximately $1.7 million and expenses of approximately $1.0 million.Of the $700,000 in estimated net revenue, an average of $500,000 will be repaid to the County’s capitalimprovement fund for 20 years and the remaining $200,000 is anticipated to be applied to contingencycosts and future capital improvements.

The staff at Vadnais is seeing a greater demand for space for dry land training including synthetic iceareas, workout rooms, and space for running and cross training. The demand for dry land training is agood fit with their facility with its two ice sheets and three-field turf dome.

The booking priority for ice begins with high school hockey games and then practices, followed by figureskating and youth hockey programs. Figure skating, in general, is also able to use ice at times that isgenerally not ideal for hockey, in particular on Sundays. Adult programs are the final group to bescheduled.

It was noted that the County provides ice facilities as a service to their community and citizens. Based onthe hourly rentals, it is challenging for their ice venues to generate net income based on ice rentals alone.Therefore, they focus on providing the best service and facilities that they can at a reasonable price fortheir community. The focus, from a contract perspective, is to secure users for the maximum amount ofice time possible with each organization.

The County has recently assembled an Arena Task Force as a response to the R-22 phase out requirements,

as mandated by the Environmental Protection Agency and its Clean Air Act. R-22 is commonly knownas Freon, a chemical that may affect the ozone layer. The R-22 phase out requires venues with an R-22ice refrigeration system and floor to be replaced in coming years. As such, the County is evaluating itsice facilities and determining best uses for these facilities in consideration of the costly and potentially prohibitive retrofits to their venues.

Cedar Rapids Ice Arena – Cedar Rapids, Iowa

Source: cedar-rapids.com Source: www.kcrg.com

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.cedar-rapids.com/partners/business-directory/view/cedar-rapids-ice-arena&ei=3s90Vdq6M4XysAWsq4KoCQ&bvm=bv.95039771,d.b2w&psig=AFQjCNGCiigvQbqi8Ed1L_kp8Xvp40Iayw&ust=1433805141647825



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The Cedar Rapids Ice Arena is owned by the City of Cedar Rapids and operated by VenuWorks, a national professional management company of arenas, convention centers and other public assembly facilities.The facility opened in 2000 and has two ice sheets. One ice sheet is NHL-sized and has a capacity of4,000 and the second ice sheet is Olympic-sized and has a capacity of 200. The RoughRiders of the UnitedStates Hockey League utilize the NHL-sized sheet as its home ice. Other primary users of the facilityinclude the Cedar Rapids Youth Hockey Association, a curling organization, figure skating club, and ahigh school.

There are four full-time employees and an average of eight part-time seasonal employees. The four full-time positions include a General Manager, Program Director, Food and Beverage Manager, and anOperations Manager. The Program Director is a key position in the organization. Originally, there wastwo full-time staff members dedicated to the development of ice-based programs as well as a HockeyDirector and Figure Skating Director. As the youth hockey and figure skating organizations became moredeveloped the necessity for a Hockey Director and a Figure Skating Director was no longer required. AProgram Director position was created to work with both the youth hockey association and figure skatingclub to cultivate their programs and to increase non-peak time business. These responsibilities include

developing roller hockey programs during non-ice times in the NHL rink, partnering with the City Parksand Recreation Department on summer Learn to Skate and Instructional Hockey programs, and creatingawareness for public skating opportunities.

The ice rate is currently $200 per hour. Facility management will be shifting to peak and non-peak hourlyrental rates. Peak hours, between 5:00 PM and 10:00 PM on weekdays and all hours on weekends will beraised to $235 per hour while non-peak hours will remain at $200 per hour.

Norway Savings Bank Arena – Auburn, Maine

Source: Hebert Construction Source: LA Future Forum

Norway Savings Bank Arena opened in November of 2013 and is owned by a private developer and leasedto the City of Auburn. Both ice sheets are NHL-sized; one has a capacity of 1,200 and the other one hasa capacity of 950. There are seven high school programs that utilize the facility for practices and games.Additionally, the Maine Gladiators, a youth hockey organization utilizes the facility and has

approximately 700 participants.

One rink is open for nine months of the year (June through February) and the second rink is open yearround. During the non-ice months, Rink 1 is utilized for car shows, motorcycle shows, small concerts,community events, and off-ice dry land training. From a booking priority perspective, youth organizationshave primary booking options, followed by high schools and adult programming. Other programsutilizing the facility include groups that home-school their children which enable the facility to book non- peak ice times during weekday mornings.

http://lafutureforum.com/wp-content/uploads/2014/01/CITiceArena1P012614.jpg



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The facility is operated by City staff including eight full-time, four part-time, and three seasonal staffmembers. Full-time staff includes a General Manager, Administrative Assistant, and six IceMaintenance/Operations/Ice Resurface Machine Drivers. Facility staff manages the Learn to Skate toskate, youth hockey, and adult recreational hockey programs, as well as develop and manage year roundcamps and clinics. The region’s figure skating program is beginning to develop and the facility staff isalso looking to establish and grow the figure skating programs. The staff works closely with the highschools, adult recreation leagues, and youth leagues on booking tournaments throughout the year. A keyarea of focus is providing a balanced schedule of events with protection of Learn to Skate programs and public skate programs. Facility management believes strongly in developing new skaters through theLearn to Skate programs and by working with other youth hockey programs on maintaining consistencywith these programs throughout the year.

The facility has a concessions area, a tavern, and a pro shop of which all are leased to third party operators.The concessions operator/tavern operator does carry a liquor license that extends to the facility, as needed.The facility does not have a fitness center but utilizes the non-ice time in Rink 1 for off-ice dry landtraining. A portion of the facility’s locker rooms are leased out on a seasonal basis to local high schoolteams. The hourly rental rate at the facility is $235 per hour.

For Fiscal Year 2015, the City budgeted $1.22 million in operating revenues and $1.21 million in operatingexpenses at the facility for an estimated net operating income of $10,000. The Fiscal Year 2016 budget projects a net operating loss of $200,000 based on $1.0 million in estimated operating revenues and $1.2million in estimated operating expenses. The major revenue generators are an annual agreement withMaine Gladiators youth hockey, sponsorships, adult league fees, and private rental fees. The primaryoperating expenses include the annual lease payment to the private owner, salaries, utilities, and capitalimprovements. Norway Savings Bank has a 10-year naming rights agreement with the City for a total of$770,000.

Lakeview Arena – Marquette, Michigan

Source: www.mqtcty.org

Lakeview Arena is owned and operated by the City of Marquette. Lakeview Arena is comprised of twoarenas; the Russell Arena and Olson Arena. Both venues opened in 1974 and are NHL-sized ice sheets.There is a third ice sheet in a separate facility across the street that is managed by the same managementteam. Russell Arena has a capacity of approximately 3,100 and Olson Arena has a standing room onlycapacity of 300. The facility is home to the Marquette Figure Skating Club and Marquette Junior Hockeyas well as a Junior A team, high school teams, adult recreation leagues, public skating, and a roller hockeyteam.

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.mqtcty.org/parks-arena-winter.php&ei=_9N0Van2B8GisAXMuIHYBQ&bvm=bv.95039771,d.b2w&psig=AFQjCNFhbDm3_o7r1ES_9hhLlr6FxiZxPA&ust=1433806159660928



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All programming is managed by the Marquette Figure Skating Club and Marquette Junior Hockey.However, facility management is responsible for all special events such as food shows, circuses, rollerderby, weddings, etc. when there is not ice in the facility. There are also meeting rooms that are rentedout throughout the year. Lakeview Arena is managed by one full-time manager with part-time andseasonal staff support. There is one permanent part-time ice maintenance employee, one permanent part-time custodian as well as seven to nine seasonal part-time employees responsible for operating the iceresurfaces, supervising skate rentals, and maintenance.

Both the ice sheets in Russell Arena and Olson Arena are taken off-line from approximately April throughAugust. Rates are based on prime versus non-prime hours. Prime hours are identified as 3:00 PM to11:00 PM on weekdays and all day Saturday and Sunday when the rental rate is $170 per hour forresidents. Non-prime hours are identified as 11:00 AM to 3:00 PM Monday through Friday with a residentrate of $115 per hour. The tournament ice rental rate is $200 per hour. Non-residents rates are $50 to $70higher depending on the time and type of ice that is rented. Peak season is mid-October through mid-March. There Pro Shop and concession operations are leased out to third party operators. The Arena holdsa liquor license.

Facility management estimates that 70% to 75% of their prime hours are booked while 40% to 50% oftheir non-prime hours are booked. The 2013 financial statement reports total revenues of $458,000 andtotal expenditures of $713,000 for a net operating loss of $255,000.

Summary

The following summarizes common themes/success factors based on input from management at the profiled comparable dual ice facilities:

• Demographic/economic characteristics that support ice-related sports.

• Proximity to supporting amenities such as accommodations, restaurants, retail and entertainmentestablishments.

• Building program elements and supporting infrastructure that appropriately accommodates the desiredtarget market(s)

• Reasonable ice fees for the market.

• Technology to host games and competitions which includes scoreboards, sound system, and Wi-Fi.

• Spectator seating for at least one ice sheet so it can host larger games and competitions.

• Most facilities operate one ice sheet year round with the other operating seasonally.

• Facilities support their local community demand for ice-based sports and programs.

• Facilities are well-maintained, clean, and safe environments for families and children.

• Most facilities operate with a lean, dedicated full-time staff and augment seasonally with part-timestaff.

• There is staff that understands the unique programming needs of hockey, figure skating, and hockeyat all levels of competition and recreational programs.



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• There is an understanding and commitment for Learn to Skate/Instructional Skate programs as a pledge for feeding the pipeline of skating participants as well as keeping all levels of programs solid.

• There is a relationship with primary user organizations and a delicate balance to booking these programs.

• In many cases, there is a dedicated staff member who works closely with all user groups to ensureefficient scheduling of ice and to maximize booking of ice time.

• Most facilities have staff that focus on developing programming for non-prime ice time or off-season,non-ice events.

• Most facilities operate at a deficit.

• Most facilities are not driven by a mission to drive economic impact tournament or competition business.

• There is a growing demand for non-ice space for fitness training.



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Table of Contents

1. Introduction 1










35

Competitive Market Assessment

Previous sections of this report discussed various supply and demand factors that may influence the typeand amount of event activity that may occur at a new ice rink in Troy including select demographic and

economic characteristics, accessibility, hotel supply, area facilities, industry trends, input from potentialdemand generators and comparable facility case studies. Based on the primary and secondary researchconducted for this study, this section summarizes relative strengths, challenges, opportunities, and threatsassociated with the proposed new ice rink in Troy.

Troy’s primary market demographics including its population size, income, accessibility, affordability,and visitor amenities are strengths in terms of hosting area instructional ice-related sports as well ascompetitive event activity at the proposed new ice rink. Input from area sports organizations and existingice rinks in the primary market indicate there is demand for additional year-round ice. Offering consistentyear-round ice is necessary for local sports organizations to maintain the quality of their programs andexpand to accommodate growing demand. The possible closing of two area ice rinks could serve to

exacerbate this local need for ice time and well-position the proposed new ice rink in Troy to accommodatedisplaced programming.

The potential site location for the proposed ice rink is adjacent to Hobart Arena. Offering two ice rinksin Troy would increase the City’s marketability for competitive ice events such as tournaments and figureskating competitions that draw out-of-town visitors. Troy is located in a region experiencing steadygrowth in hockey and the City has a well-respected figure skating organization. These characteristicscould serve to enhance the ability for Troy to draw regional and/or national competitive events to the proposed new ice rink. In addition, Hobart Arena’s experienced management/operations team andexisting relationships with ice users would allow the proposed new ice rink to be programmed in a mannerthat maximizes usage and accommodates each group’s unique needs.

Challenges with the proposed new ice rink’s operation include the cost-consciousness of many amateuryouth and adult sports organizations, the reliance of local sports programs on volunteer leadership thatcan experience turnover, and the likely need for on-going operational funding. That said, shifting ice-related programs to the proposed new ice rink will increase date availability at Hobart Arena for otherrevenue generating activities. Further, sharing staff and other administrative expenses with Hobart Arenacould provide operating efficiencies for the proposed new ice rink. Combined, these benefits of operatingdual ice facilities could offset some of the proposed ice rink’s operating costs.

Preliminary Program Recommendations

Market research conducted for this analysis including input from event producers/users and interviewswith management of comparable dual ice facilities suggests that constructing a new ice rink with thefollowing building program elements and patron amenities would enhance Troy’s ability to support and potentially expand existing sports programs as well as attract new activities:



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• An NHL-sized 85’ x 200’ ice sheet

• High quality ice plant and maintenance equipment

• Well lit, safe, clean facility

•

Spectator seating for a minimum of approximately 1,000 spectators to accommodate modesttournament and competition activity which may include retractable seats for maximum flexibility

• Adequate, convenient on-site parking and appropriate parking management to accommodate trafficflow, particularly when a simultaneous event is occurring at Hobart Arena

• Restrooms and concessions

• Lobby space

• Locker rooms/lounges for teams and officials

• Locker rooms that may be available for full-season, exclusive use for select teams or programs – e.g.a high school hockey team

• On-site storage space for the facility and equipment

• Administrative space, as needed, for facility management

• PA system, scoreboard, and Wi-Fi connectivity throughout the facility

Assuming that the proposed ice rink is located adjacent to Hobart Arena, the facilities could share space,as needed, such as meeting/breakout rooms, hospitality/VIP areas, media/interview room, and banquetspace to service events.



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Table of Contents

1. Introduction 1










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Program and Cost Estimate

MSA Architects, an architectural firm selected by the City to design the current renovations to HobartArena, prepared a preliminary building program, conceptual site plan, and cost estimate for the proposed

new ice rink based on the recommended program elements outlined in the market assessment.

Building Program

Based on the recommended building programelements, MSA Architects developed the adjacent preliminary program outline taking into accountthe space necessary for the ice rink, seating,circulation, back-of-house, and support space.This program assumes that the second ice sheet is physically attached to Hobart Arena and that the

ice rink is 85’ by 200’.

Area Square Feet

Rink and Seating (1,000 seats) 28,793

Staff Office 300

Skate Rental 200

Locker Room 1 800

Locker Room 2 800

Locker Room 3 800

Locker Room 4 800 Official Locker 1 300

Official Locker 2 300

Concession 700

Men's Restroom 500

Women's Restroom 500

Storage 2,000

Circulation 4,775

Total 41,568

Source: MSA Sport.

Preliminary Program

Proposed New Ice Rink at Hobart Arena

Conceptual Site Plan

MSA Architects developed a preliminary conceptual site plan showing how, in general, the proposed newice rink could fit on the site adjacent to Hobart Arena after the on-going renovations are completed. Thisinitial site plan does not take into account certain program elements of the second ice rink that will benecessary if/when simultaneous events are held at both venues. These factors include, but are not limitedto, the following:

• Identifying a primary entrance into secondary ice sheet

• Creating a primary entrance with ticket windows, and access points for ticketed events

• Lobby / flow space for patrons entering the facility as well as throughout a tournament type of event

• Lobby / gathering space for event participants between games or competition times

• Services available in lobby space including concessions/vending area, restrooms

• Ability to run two facilities concurrently for an event

• Ability to flow patrons between both facilities without impeding back-of-house space

These issues as well as the overall recommended building program will be addressed in more detail in arevised conceptual site plan prepared by MSA Architects. The next page depicts a preliminary conceptualsite plans.



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Preliminary Conceptual Site Plan – Proposed New Ice Rink



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Cost Estimate

Based on the recommended building program and other programmatic considerations including the sharedsite with Hobart Arena, the table below presents an order-of-magnitude range of total developmentconcept costs for the proposed new ice rink prepared by MSA Architects. Building construction costs are

estimated to be approximately $5.7 million in current dollars. Factoring in professional fees andcontingency fees, the total construction cost is estimated to be approximately $7.4 million. The costs forthe owner are estimated to be approximately $269,500. The total concept cost is estimated to beapproximately $7.6 million. This total cost estimate includes expanding Hobart Arena’s existing ice sheetfrom 85’ by 185’ to 85’ by 200’. The cost estimate is preliminary in nature and will need to be refined based on more detailed architectural programming should the City choose to move forward. Currently,the construction industry is overly busy, which creates a very volatile and un-predictable biddingclimate. Construction costs are rapid rising and it is suggested that an escalation factor of 10% for every6 months from the issuance of this report.

Category Estimated Cost/BudgetConstruction Costs

Building Construction

Site Development (Demolition, Sitework, New) $250,000

New Building Construction (One Story) $5,403,800

Subtotal $5,653,800

Profess ional Fees

Architecture & Engineering $565,400

Reimbursable Expenses $282,700

Subtotal $848,100

Construction Costs - Total $6,501,900

Construction Contingency $848,100

Grand Total - Construction Costs $7,350,000

Costs by Owner

Furniture, Fixtures, Equipment (FF&E) $50,000

Audio Visual Equipment (Scoreboard) $50,000

Specialty Equipment (e.g., Ice Mats , Das her boards , etc.) $50,000

Legal Advertising $3,000

Environmental Testing $10,000

Survey $10,000

Geotech/Borings $6,000

Special Inspections $0

Geotech $8,000

Structural $8,000

Permits/Fees $0

Building $15,000

Tap/Connection Fees $15,000Document Printing $20,000

Moving $0

Land Acquisition $0

Cost by Owner - Total $245,000

Owner Contingency $24,500

Grand Total - Cost by Owner $269,500

Total Concept Cost $7,619,500

Source: MSA Sport.

Preliminary Concept Cost Estimate

Proposed New Ice Rink at Hobart Arena



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Table of Contents

1. Introduction 1










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Financial Pro Forma

As with many communities, financial considerations associated with construction, on-going operationsand maintenance often dictate whether a particular project is deemed viable and whether a phased

development approach may be necessary. Further, the operating strategy plays a critical role in theoperations of similar facilities. With respect to financial performance, it is important to understand thatsimilar ice rinks realize an operating deficit. However, one of the primary reasons for developing thesetypes of facilities is to serve a community need much like a public library, aquatic center, or park. Inaddition, offering two ice rinks can increase Troy’s marketability for competitive ice-related sportingevents that can draw out-of-town visitors.

Crossroads assisted the City in developing a hypothetical, order-of-magnitude estimate of operatingrevenues and operating expenses before taxes, depreciation and debt service for a proposed new ice rinkin Troy for a stabilized year of operations. This analysis is also based on certain hypothetical assumptions pertaining to operations of the facility, usage levels and other related financial assumptions agreed to by

the City. The accompanying analysis was prepared for internal use by the City for its consideration of plans for a proposed new ice rink and should not be used or relied upon for any other purpose includingfinancing of the project.

The analysis performed was limited in nature and, as such, Crossroads does not express an opinion or anyother form of assurance on the information presented in this report. As with all estimates of this type, wecannot guarantee the results nor is any warranty intended that they can be achieved. The estimates ofrevenues and expenses are based on the anticipated size, location, quality and efficiency of the potentialnew ice rink. Since these estimates and assumptions are based on circumstances that have not yettranspired, they are subject to variation. Further, there will usually be differences between estimated andactual results because events and circumstances frequently do not occur as expected, and those differencesmay be material.

As shown in the table below, it is estimated that the proposed new ice rink will operate at a deficit beforetaxes, debt service and depreciation in a stabilized year of operations. Although these estimates onlyreflect the operations associated with the proposed new ice rink, assumptions used in the analysisregarding shared resources with Hobart Arena are outlined throughout this section.

Category

Net Operating Revenues $342,000 - $386,000

Net Operating Expenses $444,000 - $483,000

Estimate of Net Operating Revenues Over ($102,000) - ($97,000)

Net Operating Expenses

Reserve for Replacement $17,000 - $19,000

Net Operating Loss Before Taxes,

Debt Service and Depreciation ($119,000) - ($116,000)

Expense Coverage Ratio 77% - 80%

Note: Expense coverage ratio equals operating revenues divided by operating expenses.

Proposed New Ice Rink in Troy

Estimate of Annual Financial Operations

Range



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This financial estimate is based on information from primary and secondary sources including, but notlimited to, general market data; existing and planned facilities in the area; input from area stakeholders;historical Hobart Arena ice operations; input from existing and potential users; the preliminary building program provided in the previous section; information on comparable facilities; as well as input from theCity. This analysis represents a net operating revenue and operating expense assessment and is subject tochange depending on the actual building program, contractual agreements with service providers, andfurther refinements regarding operating strategies for the proposed new ice rink.

General Assumptions

Based on input from the City, the following assumptions were used to develop the estimates of eventactivity and financial operations:

• The proposed site is adjacent to Hobart Arena in order to take advantage of shared human and physical resources.

• The building program outlined previously which generally consists of an NHL sized ice sheet with

a minimum of approximately 1,000 spectator seats.

• The City owns and operates the proposed new ice rink jointly with Hobart Arena.

• The proposed new ice rink is staffed with additional personnel who specialize inmarketing/management of community based ice programming as well as ice sporting events andhas established contacts and strong relationships with regional/national sporting event promoters.

• The Troy Skating Club continues to have viable leadership and will expand its programs includingLearn-to-Skate.

• The Troy High School hockey team continues to offer varsity hockey and potentially expand itshockey programs.

•

The Troy Recreation Department builds upon its current programs and expands to offer newhockey programs.

• The proposed new ice rink primarily focuses on hosting local community based ice activities.

• The facility is aggressively marketed and management develops ice related programming as wellas special events (e.g., corporate skates, birthday parties, etc.).

• The facility will be aggressively marketed by the City and Miami County Convention & VisitorsBureau.

• A high level of quality customer service is provided.

• The site location is adequate in terms of visibility, ingress and egress, parking, safety and othersimilar issues.

• No other similar, competitive facilities are built in the region.

• No major economic fluctuations or acts of nature occur that could adversely impact the dynamicsof the project.

• This analysis does not include an estimate for taxes, debt service or depreciation.

• Amounts are presented in current dollars and reflect a stabilized year of operations.



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It should be noted that these assumptions are preliminary and will continue to be refined as decisionsrelated to the building program, site location and other operating characteristics evolve.

Estimated Usage/Event Activity

The following table shows the hypothetical estimate of utilization for the proposed new ice rink in astabilized year based on the market research discussed previously. Subsequent to construction, ice rinkstypically experience a “ramp up” period to a stabilized level of activity which occurs for several reasons.For instance, some groups that book their event years in advance may not want to risk that construction isdelayed and not completed in time for their event. In addition, some groups may choose to let management“fine tune” its operations before scheduling an event at a newly constructed venue. However, it isimportant to recognize that the overall utilization at any ice rink is typically dependent on a number offactors (e.g., market size; accessibility; nearby amenities; size, configuration and quality of the facilitiesoffered; effectiveness of the management team in booking the facility; date availability; cost, etc.) and israrely consistent. As such, the utilization estimate presented herein represents a stabilized year ofoperations.

Category Total

Peak Ice Season September - March

Available Hours Per Day 15

Number of Peak Hours Available Per Year 2,555

Estimated Number of Peak Hours Used Per Year 2,123

Estimated % of Available Peak Hours Used 83%

Number of Non-Peak Hours Available Per Year 2,920

Estimated Number of Non-Peak Hours Used Per Yea 1,473

Estimated % of Available Non-Peak Hours Used 50%

Number of Total Hours Available Per Year 5,475

Estimated Number of Total Hours Used Per Year 3,595

Estimated % of Total Hours Used 66%


Estimate of Usage/Event Activity

It is assumed that the proposed ice rink operates year-round with a peak season from September to Marchand off-peak months the remainder of the year. Daily operating hours are assumed to be 7:00 AM to10:00 PM with peak hours occurring from 3:00 PM to 10:00 PM. Primary users of the facility are assumedto be the Troy Skating Club and Troy Hockey Association each utilizing the ice year-round allowing forexpansion of their existing programs and the addition of new programs. Usage by the Troy High Schoolhockey team is assumed to include seven more games annually as well as additional practice sessions

during the peak season. Given that one of the objectives is to support instructional and recreationalcommunity use, the Canes & Pucks adult amateur league, camps/clinics, hourly rentals, and public skatingtime is also assumed to expand by adding more sessions year-round. Finally, the proposed new ice rinkis assumed to allow Troy to host three hockey tournaments and one figure skating competition in additionto the three competitive events Hobart Arena currently hosts. Combined, this activity is estimated to resultin an annual occupancy of 66% for the proposed new ice rink. This includes 83% occupancy during peakhours and 50% occupancy during non-peak hours over the course of a stabilized year.



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It is important for the ice rink to be marketed aggressively with new participants being introduced to ice- based sports and a focus on retaining beginning skaters. A key factor in the success of programs directedat new skaters is consistency of class schedules. The primary challenge with the ice schedule at HobartArena is its lack of a consistent schedule due to concert, family show, and special event programming. Ayear-round ice sheet, with permanent ice, allows for consistent access to ice. Equally important ismaintaining a consistent class schedule. A disruption in class schedule equates to losing interested parentsand new-to-the-sport adults, according to management at comparable facilities. Learn to Skate, BasicSkills, and youth programs should have schedules that do not shift from their allotted date and time slots.

Currently, Hobart Arena ice is programmed for approximately 1,500 hours per year. Based on theassumptions outlined above, the proposed new ice rink would allow the community to more than doubleits ice programming to 3,595 hours per year.

Net Operating Revenues

The following table shows the estimated net operating revenues for the proposed new ice rink in a

stabilized year of operation:

Category

Facility Rental $284,000 - $319,000

Advertising & Sponsorship 32,000 - 37,000

Concessions 12,000 - 14,000

Other 14,000 - 16,000

Total Net Operating Revenues $342,000 - $386,000


Range

Estimate of Net Operating Revenues

Net Operating Revenue Assumptions

Facility Rental – Facility rental at ice rinks is primarily derived from ice rental that is charged per hour.Rates are usually dependent on peak vs non-peak times and the type of user. For instance, localcommunity groups are often given discounted rates whereas tournaments or tenant teams often pay higherrates. Comparable ice rinks have published hourly rates ranging from $115 to $235; however, their actualrates per usage hour are often lower based on negotiated rates.

Facility management will likely negotiate rental terms for events/tournaments based on factors such as

potential economic impact and/or the ability to execute multi-year contracts. Based on comparable facilitydata, ice rental typically represents the most significant revenue source. Ice rental revenue is largelydependent on the mix of business (e.g., tournaments versus local leagues) and mission of the facility (e.g.,local league use versus economic impact).

Comparable ice rinks also rent the facility for special events such as birthday parties or team socials. Inaddition, tenant teams including local leagues and/or scholastic teams commonly rent facility space suchas locker rooms or storage space.



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Advertising & Sponsorship – Advertising and sponsorship opportunities are diverse and can range fromtemporary signage at a single event to permanent signage on scoreboards or dasher boards to advertisingin a program to sponsoring team uniforms to sponsoring an entire event/tournament. Typically eventssponsored by outside organizations do not share revenues with the facility owner/operator. However,

advertising and sponsorship revenue generated from events that are organized/sponsored by the facilityoperator (assumed to be the City in this case) is usually retained by the facility and is a function of theevent activity as well as aggressiveness of the management approach in terms of the amount and type ofadvertising and sponsorships sold.

Concessions – The operation and management of concession sales are generally handled by one of twomethods. The first method allows an independent concessionaire exclusive rights to facility events withthe facility taking either a percentage of gross sales or a flat fee per month. The second method allowsfor the facility owner to own and operate the concession service. Under this method, the facility ownercaptures all food and beverage sales but also incurs expense items related to purchase and maintenance ofequipment, labor costs and costs of goods sold. It is assumed that the proposed ice rink concessions will

be operated in-house in conjunction with Hobart Arena food/beverage operations. During a non-gamesituation such as a practice or learn-to-skate program when there are a limited number of players/skaterson the ice, concession stands are generally not open. Concession stands are typically open for games andcompetitions/tournaments or when a high number of participants/spectators are anticipated. For purposesof this analysis, a net concession amount is estimated taking into account the cost of goods sold.

Other Revenues – This line item includes revenue generated from vending machines, skatesharpening/rental, ATM fees, and equipment rental for social events, etc.

Net Operating Expenses

The following table shows the estimated net operating expenses for the potential new ice rink in astabilized year of operation:

Category

Salaries & Wages $128,000 - $142,000

Benefits 42,000 - 47,000

Utilities 180,000 - 190,000

Repairs & Maintenance 28,000 - 30,000

Materials & Supplies 24,000 - 26,000

General & Administrative 18,000 - 20,000

Sales & Marketing 16,000 - 18,000

Insurance 8,000 - 10,000

Total Net Operating Expenses $444,000 - $483,000

Range


Estimate of Net Operating Expenses



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Net Operating Expenses Assumptions

Salaries & Wages – Although the staffing requirements and subsequent salaries and wages can representa significant expense, permanent full-time staffing plans can vary. This variance in staffing levels isgenerally attributed to multiple factors. One factor relates to the management philosophy of maintainingevent-related personnel as full-time or part-time staff. Another factor relates to the management and physical relationship the facility might have to other facilities. Ownership/management structure also plays a role in the staffing plan where a facility operated by the local parks and recreation department canoften share administrative and maintenance costs with the broader municipal department. The overallmission of the facility, the level of competition, and primary uses can also impact staffing levels. Inaddition, the extent that contracted services and/or seasonal/part-time labor are used also impacts staffingat similar facilities.

Because it is assumed that the proposed new ice rink will be co-managed with Hobart Arena, some of thestaffing, general/administrative, and operations responsibilities are assumed to be absorbed by existingHobart Arena personnel. With the addition of an ice facility that would be operated year-round and to best maximize the utilization of a new community asset, it is recommended that a full-time Ice ProgramsDirector and a part-time Ice Programs Marketing/Administrator be added to the existing staff at HobartArena. These positions would be responsible for the growth and development of ice programs and eventacquisition at both the proposed new ice rink and at Hobart Arena.

The Ice Programs Director’s primary role would be to create and implement a strategic plan designed tomaximize utilization and revenue opportunities. Elements of this plan may include: enhancing existinghockey and learn-to-skate programs; applying for grants for program development through USFS andUSA Hockey; creating and marketing ice programs to the greater Troy / Piqua / Dayton community toencourage participation; serving as liaison with the Troy Skating Club and current user groups tomaximize their customer experience and hours; attracting new user groups; coordinating the scheduling

of ice time and locker room usage; developing special events; and working with the Ice ProgramsMarketing Administrator on scheduling and marketing outreach efforts. It is anticipated that this positionwould work with the Miami County CVB and other community business resources to attract and retainadditional tournaments, competitions, and special events to Troy.

Hobart Arena currently operates with six full-time staff that are augmented by permanent part-time andseasonal employees. The full-time staff also maintain and operate the Troy Aquatic Park seasonally. Afull-time staff position at Hobart Arena is currently responsible for coordinating and scheduling theRecreation Department’s youth and adult hockey programs. If a second ice sheet is added, additionaloperational, maintenance, and support staff would be necessary to accommodate an expanded ice programming schedule and year-round operations. For purposes of this analysis, it is further assumed that

one full-time operations staff and several part-time, seasonal staff are added to assist with special events,monitor ice, operate skate rental/sharpening shop, etc.

Benefits – Benefits are estimated to be 33% of the salaries and wages.

Utilities – Utilities, which include water, sewer, and electric, generally represent one of the highestexpense items for these types of facilities and can be variable depending upon the level of utilization anddecisions concerning energy systems and management.



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Repairs & Maintenance - This line item includes labor and equipment associated with maintaining thefacility and the general grounds. Facility management at comparable facilities stressed the importance ofappropriate funding for this line item in order to maintain quality ice and be marketable forregional/national tournaments/competitions.

Materials & Supplies - This line item includes materials such as office, janitorial, and event relatedsupplies.

General & Administrative – This line item includes various general expenses used in the day-to-daymanagement of the proposed ice rink such as travel, communications, technology, postage, membershipdues, etc.

Sales & Marketing – Providing a new ice rink alone will not bring events to the venue. An aggressivemarketing strategy will need to be implemented to better allow the proposed facility to diversify andenhance its event base, particularly for tournaments/competitions. It is recommended and assumed thatthe facility establishes an annual dedicated marketing budget for programming and event developmentthat can be used to attract, develop, host and/or sponsor large sporting events/tournaments to the proposednew facility. This is consistent with industry practices and is considered important to enhance programming and revenue generating opportunities.

Insurance – Insurance expenses vary among facilities due to factors such as utilization, facility programelements as well as the amount and type of coverage. Based on input from the City, this analysis assumesthat property, casualty, and liability insurance needs associated with the proposed new ice rink are primarily covered under the City’s current policy.

Reserve for Replacement – It is recommended that the facility plan for an annual payment specificallydesignated as a reserve for replacement fund in order to safeguard its investment. This fund is intended

to cover any extraordinary annual/future capital repairs or improvements to the facility. For purposes ofthis analysis, the reserve for replacement fund is estimated to be 5% of operating revenues.

Taxes, Debt Service and Depreciation - This analysis does not estimate any operating expenses related totaxes, debt service, or depreciation.

Impact on Hobart Arena’s Operation

The addition of a year-round ice facility will impact the operations of Hobart Arena in multiple ways. Itis anticipated that more date availability will be created at Hobart Arena with the ice-based programsshifting to the new facility. As such, the management of Hobart Arena will need to develop a strategy to

create more programming opportunities for these dates. Additional programming opportunities includeconcerts, family shows, dual-ice sheet hockey tournaments, dual-ice figure skating competitions,additional sporting competitions such as wrestling, basketball or volleyball, banquets, consumer shows,turf-based athletic programs, and dry land off-ice training programs. The revised strategic plan shouldinclude an increased marketing budget.



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Hobart Arena will also benefit from decreased costs associated with hosting additional event activity, particularly in terms of event changeovers, as the second ice sheet allows Hobart Arena to maintain aconcrete floor for the majority of the year. Hosting ice-related activities on a daily basis in the proposednew ice rink will decrease the time and cost associated with event changeovers from ice to non-iceactivities. This can benefit Hobart Arena’s internal financial operations from an efficiency perspectiveand, if some savings are passed on to non-ice event promoters, can enhance its marketability.

Despite increased date availability and lower event related costs for non-ice events, there is currentlyconsiderable competition in the marketplace for concerts in the summer months from similarly sizedfacilities such as Fraze Pavilion (4,300) and the new Rose Music Center at The Heights (4,200). TheFraze Pavilion, which opened in 1991, is an established amphitheater in the summer concert routing whilethe Rose Music Center, which opened in 2015, has quickly established itself as a summer destination. Thelandscape for indoor venues is also competitive with the Nutter Center and its built-in captive marketingaudience of college students and facilities in Cincinnati and Columbus. However, with a newly remodeledand upgraded Hobart Arena and more available dates, Hobart Arena has the potential to capture additionalconcerts, particularly with aggressive marketing.

From a recreational sports programming perspective, Hobart Arena would have opportunity to explore theexpansion of indoor turf-based athletic programs such as winter soccer, softball or lacrosse. Currently,the Troy Recreation Department does not offer these programs and there may be opportunity to beginthese off-season programs for residents.

Based on the planned facility improvements at Hobart Arena, there is an opportunity to rebrand the facilityand the market to the national/regional concert and family show touring industry. An improved facilityand significantly more open dates should be communicated to the events industry both locally andnationally. Many facilities across the country have partnerships with national promoters such as Live Nation, AEG, and/or regional promoters. A preferred relationship with a promoter with broader reach

may represent a partnership that can be beneficial to both a promoter and Hobart Arena. Another optionis for management to buy talent and promote the act in-house which involves more risk but may berequired in some instances given the facility size and market attributes. Regardless, developing a solidrelationship and enhanced presence with concert and family show booking agents is recommended tomaximize entertainment programming.

It is recommended that the City work with concert promoters and agents, family show promoters, localand regional organizations, as well as convention and tourism organizations to find events to fill the HobartArena schedule. There is an emerging promoter in the industry for secondary and tertiary marketsspecifically in the concert industry and discussions with this new promoter could be advantageous.

From an operational perspective, parking and traffic management will need to be addressed. For instance,

although the two facilities can be programmed so that two major events do not occur at the same time, theimpact of the flow of skaters, players, and teams requiring access to parking for the second ice sheet whilean event is occurring at Hobart Arena will need to be strategically planned.

From a long-term planning perspective, management should consider the impact and cost implications ofretrofitting the current Hobart Arena ice floor from its current 85’ x 185’ dimensions to a standard 85’ x200’ dimension to place the facility in a position to attract regional and sectional figure skating and hockeyevents.



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It is anticipated that Hobart Arena will be able to host approximately six to eight incremental new eventsannually based on the additional date availability, a reduction in event related cost, and an aggressivemarketing/pricing strategy to promoters/event producers. These events may be consumer shows, concerts,family shows, sporting events, or other types of special events.

Summary

Based on the assumptions outlined in this report, it is estimated that the proposed new ice rink will operateat a deficit which is similar to other governmental initiatives for assets such as parks and libraries thatrequire a significant capital investment by the public as well as on-going funding for maintenance. As a point of reference, the proposed new facility is estimated to cover between 77% and 80% of its operatingexpenses with operating revenues. It is assumed that the proposed ice rink realizes operating efficienciesfrom shared staffing, administrative and maintenance costs with Hobart Arena. However, there shouldstill be a dedicated staff at the proposed new ice rink with experience operating similar facilities.

As noted previously, the financial pro forma and related assumptions in this report are preliminary andwill continue to be refined as decisions related to the building program and other operating characteristicsevolve.



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Table of Contents

1. Introduction 1










Limiting Conditions and Assumptions

This analysis is subject to our contractual terms, as well as the following limiting conditions and assumptions:

• This analysis has been prepared for the City of Troy, Ohio (Client) for its internal decision-making purposesassociated with a proposed new ice rink adjacent to Hobart Arena and should not be used for any other purposeswithout the prior written consent of Crossroads Consulting Services LLC.

• The findings and assumptions contained in the report reflect analysis of primary and secondary sources. Wehave utilized sources that are deemed to be accurate but cannot guarantee their accuracy. No information provided to us by others was audited or verified and was assumed to be correct.

• Although the analysis includes findings and recommendations, all decisions in connection with theimplementation of such findings and recommendations shall be the Client’s responsibility.

• Estimates and analysis regarding the proposed new ice rink are based on trends and assumptions and, therefore,there will usually be differences between the projected and actual results because events and circumstancesfrequently do not occur as expected, and those differences may be material.

• This analysis does not constitute an audit, a projection of financial performance, or an opinion of value orappraisal in accordance with generally accepted audit standards. As such, we do not express an opinion or anyother form of assurance. Any estimates or ranges of value were prepared to illustrate current and potential futuremarket conditions.

• Although this analysis utilizes various mathematical calculations, the final estimates are subjective and may beinfluenced by our experience and other factors not specifically set forth in this report.

• We have no obligation, unless subsequently engaged, to update this report or revise this analysis as presenteddue to events or circumstances occurring after the date of this report.

• The quality of ownership and management of the proposed new ice rink has a direct impact on its economic performance. This analysis assumes responsible and competent ownership and management. Any departure

from this assumption may have a significant impact on the findings in this report.

• Current and anticipated market conditions are influenced by a large number of external factors. We have notknowingly withheld any pertinent facts, but we do not guarantee that we have knowledge of all factors whichmight influence the operating potential of the proposed new ice rink. Due to quick changes in the externalfactors, the actual results may vary significantly from estimates presented in this report.

• The analysis performed was limited in nature and, as such, Crossroads does not express an opinion or any otherform of assurance on the information presented in this report. As with all estimates of this type, we cannotguarantee the results nor is any warranty intended that they can be achieved.

• The analysis is intended to be read and used in whole and not in part. Separation of any section or page fromthe main body of the report is expressly forbidden and invalidates the analysis.

• In accordance with the terms of our engagement letter, the accompanying report is restricted to internal use bythe City of Troy and may not be relied upon by any third party for any purpose including any matter pertainingto financing.

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