Item #06 Approval of Phase II Event Center Scope of Work the Center of Good L„
O
AGENDA ITEM COVER SHEET
Meeting Date: November 2, 2010
Item # (p
Reviewed By:
Contact Name: Russ Wagner _ Department Director:
Contact Number: X 1016 City Manager:
Subject: Phase II Event Center Scope of Work
Background Summary:
At the September 29, 2010 CRA Budget Meeting, the CRA Board discussed and approved a budget amount of
$35,000 for the next phase of the feasibility analysis for the Event Center. The attached Scope of Work for C.H.
Johnson Consulting, Inc. provides for further business, operating and financial analysis related to the proposed
Event Center, including the preparation of conceptual architectural layouts. The CRA By -Laws specify that all
purchasing procedures follow normal City requirements. In this case, the proposed dollar amount of the work
exceeds the $25,000 limit for City Manager approval.
Issue:
Should the Mayor and City Commissioners approve the Scope of Work for the CRA Phase II Event Center
Feasibility Study?
Recommendations
Staff respectfully recommends that the Mayor and City Commissioners affirm the prior CRA Board approval for
this work item and authorize approval of the attached Scope of Work for Phase II of the Event Center Feasibility
Study in the amount of $34,500.
Attachments:
Scope of Work from C.H. Johnson Consultants, Inc.
Financial Impact:
Type of Item: (please mark with an "x")
Public Hearing For Clerk's Dept Use:
Ordinance First Reading X Consent Agenda
Ordinance Second Reading Public Hearing
Resolution Regular Agenda
X Commission Approval
Discussion & Direction
Original Document/Contract Attached for Execution by City Clerk
Original Document/Contract Held by Department for Execution
Reviewed by City Attorney N/A
Reviewed by Finance Dept.MICE- _ N/A
Reviewed by 0 N/A
Phase II - Events Center Analysis Page 2
Ocoee, Florida
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SCOPE OF WORK
Our scope for Phase 2 is described below.
PHASE 2. BUSINESS PLAN DEVELOPMENT
TASK 1. PROGRAM & SITE RECOMMENDATIONS
Our initial task of work for Phase II will be to work with the City of Ocoee's
designated Architect to develop initial program recommendations identifying the
optimal mix of spaces including:
• Exhibit and meeting space (identified in Phase I)
• Pre - function and outdoor spaces
• Back of house (kitchen, parking, loading docks, etc.)
By understanding the envelope of space needed for the footprint of the Events
Center and associated land uses, such as parking and a potential hotel, will cause
site selection parameters to be developed. This will result in the creation of a site
selection matrix that will allow for the ranking of potential locations in the CRA
where the Event Center could be constructed. Having an understanding of the
minimum space requirements for the proposed events center will allow initial cost
estimates to be developed so that the City can understand the financial implications
of the events center will still providing a market supportable building.
TASK 2. FINANCIAL PROJECTIONS
Building on the market analysis and program recommendations, we will develop a
business plan that communicates the objectives for the project, while at the same
time illustrates the financial business model for the project.
As a first step, we will summarize management's plan with regard to the
ownership, governance, and management of the events center and comment on it,
based on our experience. Johnson Consulting will then work with management to
finalize its plan with regard to:
• Ownership structures, including public, private, not - for - profit, and
enterprise fund structures.
• Board structures, board appointments, and governance strategies.
• Management and service contracts.
6 East Monroe St. • 5' Floor • Chicago, Illinois 60603 • Phone: 312.447.2010 • Fax 312.444.1125
www.chjc.com • info @chjc.com
Phase II - Events Center Analysis Page 3
Ocoee, Florida
Based on the market data and demand projections, Johnson Consulting will prepare
a ten -year operating pro forma. This model will list all revenues and fixed and
variable expenses in line -item detail throughout the period of the projection, and
include data for each individual type of event. The pro forma operating statement
will include the revenue and expense items shown in the table below.
Revenue Expenses
Ticket Sales Payroll and Related
Space Rentals Utilities
Concessions Repairs and Maintenance
Novelties Advertising and Marketing
Advertising Building Security
Parking Revenue Insurance
Premium Seating Management Expense
Naming Rights Reserves for Replacement
Other Revenue Other Expenses
The analysis will document or comment on management's or our recommended
approach to delivery of services, such as staffing, food and beverage, parking, and
other major line items affecting the operation, leaving the reader with a clear
understanding of how the complex will earn and spend money and what the
expected financial picture will be at the end of each year. To the extent that public
dollars are to be used to support operations, capital improvements, or other items,
these sources will also be considered and integrated into the financial analysis. As
appropriate, we may also offer a specific discussion regarding revenue sources that
are available to event centers, including benefactor naming rights, premium
seating, and other specialized revenue streams such as advertising, and if
applicable, based on market conditions, project the amounts that can be generated
throughout the projection period. We will also work directly with City of Ocoee
finance staff and their bond counsel during a half -day workshop to analyze the
funding options that best accommodate the City's needs in bringing the
development of the events center to fruition.
TASK 3. ECONOMIC AND FISCAL IMPACT ANALYSIS
To the extent that state and local governments will be participating in the project,
part of the return is measured in economic benefits of the project. Johnson
Consulting has performed a number of economic impact studies in markets for
various facilities, ranging from convention centers to arenas to fairgrounds. For this
project, it may be important to determine where impacts would occur, as this data
6 East Monroe St. • 5 Floor • Chicago, Illinois 60603 • Phone: 312.447.2010 • Fax 312.444.1125
www.chjc.com • info @chjc.com
Phase II - Events Center Analysis Page 4
Ocoee, Florida
can be used to advance the project through the public review and approvals
process. It may also be helpful in obtaining final funding grants and ongoing
operating support. For this analysis, we will:
• Identify from where attendance will likely originate.
• Indicate the volume of hotel room nights generated by the project.
• Identify where spending will most likely be captured.
• Use the IMPLAN model (an input- output model of the local economy) to
estimate indirect and induced spending and employment impacts of the
proposed facility for both the projected events and attendees in a stabilized
year of operations, based upon the demand projections and the construction
of the facility.
• Summarize local and state tax structures, including all relevant State,
County, City, and other municipal taxes that may be appropriate.
• Analyze the impact of the one -time construction activity.
• Anticipated spin -off development in response to catalyst project.
TASK 4. SUMMARY OF FINDINGS; DRAFT REPORT AND WORKSHOP
At the completion of the above analysis, Johnson Consulting will:
• Develop a "triple bottom line" analysis for the project, measuring:
- Capital budget summarization
- Annual debt service levels
- Annual ongoing operating costs
- Economic and fiscal impacts, and
- Social benefits
We will also develop a comprehensive report describing its findings and
recommendations.
This information will be used to facilitate a workshop with client representatives.
The topics to be covered will include:
• Review of the Consulting team's report
• Matrix of findings, helping stakeholders make decisions about
priorities, phasing and strategies to choose the best components of
the projects
I I
6 East Monroe St. • 5th Floor • Chicago, Illinois 60603 • Phone: 312.447.2010 • Fax 312.444.1125
www.chjc.com • info @chjc.com
Phase II - Events Center Analysis Page 5
Ocoee, Florida
• Unique ways to make the projects enhance the destination for more
tourism
• Implications of the findings and recommendations
• Financing considerations (public and private funding requirements
based on the gap identified from the operating projection; availability
of tax exempt financing), and
• Other information, as appropriate.
SCHEDULE
We can complete the Phase 2 work within five to six weeks. We will schedule the
following work sessions:
• Kick -off meeting with staff and consultants.
• Meeting with Conventional Wisdom and the City Architect
• A midpoint in person meeting with City staff to discuss initial
findings and to conduct the half -day finance options workshop with
City finance staff and bond counsel.
• A Phase 2 findings workshop with CRA staff followed by a
presentation to the CRA board of directors and City Commissioners.
We are prepared to commence work at your request and will complete the project
in the period stated above.
FEES
The fees for Phase 2 of this engagement will be $34,500, lump sum, inclusive of
expenses and inclusive of the required allowance for Conventional Wisdom.
We request a $15,000 mobilization payment at the beginning of the engagement,
and the balance will be billed monthly.
6 East Monroe St. • 5` Floor • Chicago, Illinois 60603 • Phone: 312.447.2010 • Fax 312.444.1125
www.chjc.com • info @chjc.com