BRING IT TO THE BEACH Why Were Here Todays Program Warren D. Harris, - PowerPoint PPT Presentation

BRING IT TO THE BEACH

Why We’re Here

Today’s Program Warren D. Harris, Director Virginia Beach Economic Development Peter Luukko, President/COO Comcast-Spectacor

THE PROJECT

The Project: 18,500 seat / 750,000 square foot arena in the Virginia Beach Resort & Convention District

• City-owned property • All related infrastructure in place or under development • 8 blocks from Oceanfront • 1 block from Interstate 264

Why the Resort & Convention District ? • Strategic Growth Area Plan Approved in 2008 • 8,000 hotel rooms in Resort Area • Virginia Beach Convention Center • Strong Transportation Infrastructure • Available Property for Development Laskin Gateway 19 th Street Corridor Marina District RESORT AREA MASTER PLAN

Reactions “Virginia’s the best, and we’re ready for major league sports. The time is right.” – Virginia Governor Bob McDonnell

PROJECT TIMELINE

THE MARKET

Includes 3 of Virginia’s 4 largest cities Southeastern Virginia and stretches from Virginia Beach through Norfolk, Newport News, Williamsburg, and Richmond 6 Source: Decision Data Resources

Reactions "I'm happy for the Beach. I hope this works out. A major sports team would benefit all of Hampton Roads.“ – Paul Fraim, Mayor, City of Norfolk “As the largest metropolitan area without a professional sports franchise, this could be a wonderful opportunity for the Peninsula. This would be a team that all Virginians can embrace as their own. It is my hope that our region can join the elite status of other cities with a professional team." - Chris Stuart, Hampton City Council

Southeastern VIRGINIA - 3 million people without an arena larger than 12,000 seats for NBA or NHL - 3 million people without a major league franchise - 10 Fortune 500 Companies ready to become corporate partners - Strong economic and population demographics - Proactive regional leadership committed to developing new arena

Southeastern VIRGINIA is larger than 22 markets currently with one or more professional sports franchises Source: HKS

Our Corporate Market • 10 Fortune 500 Headquarters with FORTUNE 500 HEADQUARTERS COMPARISON combined annual sales exceeding 10 $103 Billion • More than 178,000 total businesses 3 • 365 companies with annual sales of 1 at least $250 million 0 Southeastern Nashville Orlando Sacramento • 598 companies with at least 250 Virginia employees 18 Source: Fortune.com, Hoovers.com.

Designated Market Area (DMA) Comparison Source: ESRI Business Analyst Online NOTE: Virginia Beach DMA vs Oklahoma City and Richmond DMA vs Tulsa comparisons each show similar advantages DMA (Designated Market Area): • A geographic area defined by Nielsen Media Research Company as a group of counties that make up a particular television market. • These counties comprise the major viewing audience for the television stations located in their particular metropolitan area. 6 Source: Decision Data Resources

Reactions “We bring people in from all over the world to work here. Seeing this type of entertainment venue from the plane before they land would beg the immediate question, ‘What is that?’ We would answer, that is our entertainment venue built for the people of our city where we watch sports teams, band concerts, rodeos, college sports and STIHL Timbersports.” – Fred Whyte, President STIHL Inc.

OPPORTUNITIES

A CASE STUDY IN SUCCESS: VIRGINIA BEACH AMPHITHEATER - Attracts customers from entire region, with 18% of tickets sold in Richmond area - Consistently ranks as one of Live Nation’s Top 5 performing outdoor venues - Since 1996 - 400 concerts, selling more than 4 million tickets - Nominated as Venue of the Year by the Academy of Country Music

OPPORTUNITY TO CAPTURE MAJOR EVENTS - Major concerts & entertainment events - College conference championships - NCAA – Men’s & Women’s Basketball, Wrestling, Volleyball, Gymnastics - Professional sporting events - Olympic National Championships Figure Skating, Gymnastics, Wrestling - Holiday Tournaments

EVENT SYNERGY Arena and Convention Center - Booking synergy with adjacent Convention Center creates attractive venue package for sports and large assembly/ exhibitions; over 500,000 visitors/delegates in 2011 - Fan Fests, US Gymnastics, US Figure Skating - Religious conventions, corporate meetings, political conventions

Reactions “The ACC’s footprint will soon stretch across nine contiguous states and as we look ahead we certainly welcome quality venues to consider as host locations for our conference championships and tournaments. We have two conference members – University of Virginia and Virginia Tech – that are located within the state which would make Virginia Beach an attractive location.” – John Swofford, Atlantic Coast Conference (ACC) Commissioner

THE PARTNERS

Comcast-Spectacor

Comcast-Spectacor Established 1967 General Partnership 1996 $4 billion revenue 2011

Organized for Success

Global Spectrum A Worldwide Leader in Venue Management with 112 Venues Last Fiscal Year: 12,251 events Event attendance over 20.9 million Over $323 million in gross ticket sales Over $633 million in gross revenue

Hampton Roads Presence Managed by Global Spectrum Since 2001 Total Events: 1,226 Total Attendance: 4,090,402 Managed by Global Spectrum Since 2007 Total Events: 2,445 Total Attendance: 483,551 Managed by Live Nation Since 1996 Total Events: 452 Total Attendance: 4.5 million

Live Nation Largest Produces Producer & 20,000 Shows Promoter of Annually for Live Music More than Events in the 2,000 Artists World Globally Own, Operate, Spends $3.2 Have Booking Billion Annually Rights and/or in Talent Equity Interest Acquisitions in 142 Venues

Initial Proposal for Virginia Beach Arena • Comcast-Spectacor/Global Spectrum will lease, operate and program arena (concerts, athletic events, family shows, corporate events, community programs) • Comcast-Spectacor /Global Spectrum will commit to pursuing a professional sports franchise for the arena • 25 year lease term • Guarantee annual lease payment • More than 200 events annually • 1.4 million visitors annually • Guarantee annual operating costs

FINANCIAL PRINCIPLES

- VBDA will negotiate and present to City Council a term sheet that will ensure all City financial obligations are met in accordance with these principles. The Virginia Beach Arena will: - - Generate sufficient revenues to meet all debt service obligations as well as generate excess revenue to the City - - Substantially increase existing City revenue streams (ie, Admissions Tax, Hotel & Lodging Tax, Restaurant Tax, Sales Tax, Business License Fees, etc) - - Qualify for financial support and participation from the Commonwealth of Virginia

• Arena development fee • Ticket sales • Admissions tax • Food & concessions • Parking • Media, advertising & sponsorships • Naming rights • Sales of suites, club and courtside seating, etc • Merchandising • Rental payments • Sales tax • Business property tax • Business License Fees

ECONOMIC IMPACT

Source: Dr. James V. Koch

Impact to Hampton Roads • One-time Only Construction-related Jobs: 560 • One-time Only Construction Impact: $279 million Source: Dr. James V. Koch

NEXT STEPS

VBDA to review proposal & report back to City Council in October, to include: • Review & negotiate financial structure • Develop & present draft term sheet to City Council • Identify available State resources/contributions • Conduct outreach to community stakeholders • Actively engage & inform the public Comcast-Spectacor/Live Nation • Negotiate proposal with City/VBDA • Negotiate with potential arena tenants

IN CONCLUSION

• Opportunity to develop an estimated $350 million,18,500 seat arena • Partnership with two of the top entertainment companies in the world • Guaranteed partner for 25 years • Guaranteed lease revenues • Guaranteed operational costs • New regional economic generator • $98 million first year economic impact • 1,230 new year-round jobs / 560 construction jobs • $279 million impact from construction

• Signature development for Resort Area • Over 200 annual events • 1.4 million visitors • Year-round activity to resort area • Regional & statewide attraction • New national & international exposure • Year-round capitalization of public and private assets • New entertainment opportunities • Unique opportunity to join cities hosting major league sports teams

BRING IT TO THE BEACH