The Classic Center ArenaSchematic Design- Work Session

Purpose1. Introduce Schematic Design for approval2. Provide update to project budget and bond financing3. Outline the Construction Documents Phase with acknowledgement

that staff will be bringing back a request for a GMP approval at the 75% CD Phase

4. Amend the Architects not to exceed contract based on construction cost increase.

5. Convey next step actions requested from Mayor and Commission

History• Project 03: The Classic Center Arena• Passed partial funding of $34 million as part of SPLOST 2020 Referendum in November 2019• Selected in Tier 1, 2 and 3 of SPLOST Funding in February 2021• M & C Approved Architect Selection February 2021 (Perkins & Will / Smallwood)• M & C Approved CM@R Selection April 2021 (JE Dunn)• SPLOST Oversight Committee Approves Project Concept May 2021• M & C Approved Project Concept June 2021• Hosted three Public Engagement sessions and incorporated feedback into Schematic Design process

Since Project Concept Approval:• IGA with ACC Gov. provides for hotel tax % until debt service is complete• Signed Letter of Intent from Senior Condo Developer• New Air BnB state legislation, starts hotel tax collections this year• Signed Letter of Intent from ECHL Hockey team• Received three responses to Arena Energy Infrastructure RFI• Started fundraising campaign to support the Georgia House of Music, Hospitality Learning Lab and Entertainment

Endowment

4

25Concerts

10Family Shows

15Conventions

55Sporting Events

20Community

Events

Economic Impact Job Creation

Hotel RoomsEvents Drive

5

$33 MillionAnnual Economic Impact

$8.7 MillionIn Taxes from New Developments

90,000New Hotel Room Nights

600New Jobs Created

6

Schematic Design Review

Exterior South

Schematic Design Review

Exterior East

3D Representation

Office Level

• Hickory St. elevation

• Pro Hockey team to pay for Blue area build out.

• Shell space for future expansion

Event Level• 6 Locker Rooms

plus tenant locker room

• 6 Loading Docks for Show Load-In

• Ample storage for efficient event transitions

Mezzanine Level

• Shell space for future club/ballroom buildout

Concourse Level

• Foundry St. Elevation

• 38 fixed concession points of sale

• 6 telescopic rows to maximize event floor space

Suite Level• Mix of 26 Hospitality

products to maximize revenue

• Located on separate second bowl

• 919 seats on suite level

Catwalk Level

• Elevator access for efficient and safe rigging

• Designated spotlight locations for touring music acts

Pedestrian Plaza

• Connection from Foundry St. across Hickory St.

• Outdoor event space on non-event days

• Future expansion to connect with Multi-Modal

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Sustainability Update

• Hired Richard Sawyer to manage Solar Energy Procurement (SEPA) process. • Signed an agreement with Southface to provide technical assistance in determining a SEPA partner.• Issued a Request For Information (RFI)

• Received responses from 3 viable companies• They outlined options that included financing state of the art energy systems that can be funded

through a heating/cooling utility• Next step will be to issue RFP

• Perkins & Will has verified achievable sustainability goals and is seeking to achieve at a minimum a LEED Silver status.

• Looking at possibility of innovative ways to utilize the reclamation of rainwater• RFQ for solar contractors has been advertised and in the procurement process. • May be significantly cheaper to locate the solar on the roof of the parking deck instead of arena

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Project BudgetBudget Summary Totals

Expensed 2,159,289 Designated Misc. Fees and Commissioning 2,344,109 Designated Fixtures, Furniture and Equipment 4,420,846 Designated Construction 84,171,189 Designated Testing and Project Management Fees 2,980,000 Designated Public Art 320,846 Designated Design and Construction Contingency 14,909,475 Design & Construction Admin. Services 4,894,770

Project Total $116,200,524

Budget Summary Totals

Cost of Project 116,200,524Less: Levy Catering Contribution (2,700,000) Less: Hotel Learning Lab Investment (1,500,000)Less: Hockey Investment (2,500,000)Less: Senior Condo Air Rights (1,000,000)Less: Hickory St. Property Air Rights (1,000,000)

Project Subtotal $107,500,524

First Borrowing 49,035,794Second Borrowing 25,649,261SPLOST 33,320,000

Project Funding Total 108,005,055 Surplus/(Shortage) $504,531

Annual Revenue Stream – First Borrowing TotalsNew Parking Revenue (300 Parking Spaces x $1K Per Space, Partnership with ACC Gov ) 300,000Annual Portion of Hotel Tax on New Rooms (90K New Hotel Rooms at $110ADR) 410,432

Annual Collection on Air BnB Hotel Tax 400,000

Catering Agreement 200,000Ticket Fee From Arena Events ($0.50/ticket) 200,000

Arena ProForma Net Income 625,000

Arena Fundraising Campaign 150,000

Sub-total (Annual Revenue) 2,285,432Financing capacity at 2.37% interest over 30 years 49,035,794

Project Funding

Borrowing Summary• Close first bond in

November 2021• Close second bond

once private financing contracts are finalized

Annual Revenue Stream – Second Borrowing TotalsAnnual Payment for Land Lease of 1.03 Acres (Between Hickory/Willow) – Approval 8/17 200,000Annual Payment for the Senior Housing Land and Parking at East Broad - Signed LOI 200,000Hockey Tenant Net Income (Est. Net of $250K) – Signed LOI 157,194

Naming Rights Agreement (450K Per Year) 450,000

Guest Room Income – Learning Lab Hotel 188,252

Sub-total (Annual Revenue) 1,195,446Financing capacity of 2.37 interest over 30 years 25,649,262

Private Sector Direct Funding TotalsCatering Buildout Contribution – Levy (Reducing Project Cost) 2,700,000Hotel Learning Lab Investment (Reducing Project Cost) 1,500,000

Hockey Tenant Contribution 2,500,000

Senior Condo Air Rights Agreement 1,000,000

Hickory St. Property Agreement 1,000,000

Subtotal $8,700,000

Project Funding

Financing Notes:

Debt service will not begin until 2024

First year will be interest only

Full weight of financing will begin in 2025

CCA will hold a years of P&I in reserve

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Bond Financing Summary

Strategy• Only borrow necessary finances as needed to save on interest fees and leverage maximum valuefrom private funding contracts

Interest Rates• ACCGov Bond Underwriters currently estimate a range of 2.28%-2.43% based on makeup of Tax Exempt & Taxable bonds

Assumptions• Closing date of November 2021• First interest payment May 2024• Capitalized interest through May 2025• First principal payment November 2025

Timeline September

• M&C approves to back CCA bond financing

• IGA between ACCGov and CCA distributed

October• Send documents to rating agencies• M&C approve IGA• Publish validation notices 1 & 2• Receive ratings

November• Close on bond #1

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October 2023

Construction Timeline

Next StepsAugust 17th Agenda Setting Session / September 7th Voting Session• Approve Schematic design as recommended by User Group• Acknowledge the need for revision to the Project Budget• Approve Architect’s not-to-exceed contract increase• Authorize to move into the Construction Documents Phase with acknowledgement that staff

will be bringing back a request for a GMP approval at the 75% CD Phase• Approve Bond Financing supported by Private Funding and Private Sector Direct Financing