Greater Sudbury Synergy Project

“A world-class multi-purpose venue will play a dynamic and sustainable role by providing space for innovative activities – conferences, trade shows, performances”Feasibility Study Interim ReportSeptember, 2013

Feasibility Study - Objectives

• Assess economic impact of arts/culture, trade, convention activities

• Identify partners / users / revenue sources / economic opportunities

• Identify operating costs & revenues

• Prepare construction design options

• Study community governance & social enterprise opportunities

• Engage professional services to facilitate

Feasibility Study - Components

1. Environmental Scan, Community Consultation, Survey, Design Charrette, and Focus Groups

2. Business Case• Program and Activities Profile• Space analysis (preliminary)• Income assumptions and projections (preliminary)• Governance profile

3. Concept Design - Preliminary

4. Capital Cost Estimate and Pro-forma Financial Plan

Environmental Scan

• 2010 Sudbury Tourism supported 90 events / 202,000 participants /25,000 hotel nights /$40 M in direct spending

• Opportunity to host major conferences (mining, health, education)

• City has 14 brand hotels with >1,400 rooms (occupancy rate 67%)

• Transportation bottlenecks challenge to host large-scale events

• Greater Sudbury is positioned to become a regional urban centre

Community Consultation : What you told us

Building Site / Design:• Downtown Site will contribute to revitalization

• Keep in close proximity to existing hotels

• Ensure core supports i.e. transportation / parking / central ticketing

• Invest time and effort in architectural design (unanimous)

- convention, gallery, banquet space (550 to 1,200)

- Performing arts “excellence” (350 – 1,200)

- Workshops, meeting rooms, shared space (30 – 250 – 500)

- Efficient, flexible , friendly – easily transformed to accommodate multiple events / variety of configurations

Community Consultation : What you told us

Partnership / Promotion:• Partner with key sectors (mining, hospitality, tourism)

• Marketing & communications – brand / image / message

• Community focus /outreach (e.g.Science North)

• Attract all citizens / cultures (aboriginal, francophone, anglophone)

Governance:• Representation of key stakeholders /social entrepreneurship

• Multiple project proponents (private / public) – P3

• Operational / core business strategy - space rental/ box office

• Multiple-user participation - “No user, no market; no user, no public”

Community Consultation : What you told us

Financial Resources :• Sustainable (breakeven scenario) - taxpayers not to subsidize

• Generator for new business investment and economic wealth

• Affordable “local” ticket prices / wealth generating events

• Develop business case for multi-year financial partnership (government, business, other projects)

• Leverage economic, social, cultural assets

-Tourist attraction - Educational programs

- Shared programs / resources - Place for all cultures

GSSP Business Case“The choice to locate the Greater Sudbury Synergy Project in the heart of the City is part of a trend repeatedly observed internationally. The GSSP will enrich the commercial, economic, social and cultural sectors of Greater Sudbury and beyond. ..the key to its success will be strict management and continued respect of the ongoing interests of all partners.”

Business Case - Principles

1. Values

• Inspiring

• Inclusive

• Unifying

2. Sustainability

• Collective ownership

• Achieving social and economic objectives

• Accountable to wider community

Business Case

3. Efficient

• Wide range of activities - corporate events ,conventions, trade shows, performances, cultural celebrations, community gatherings

• Potential to integrate with other projects – Place des Arts, Art Gallery, Library, Arts Junction

4. Governance

• Cross-section of business, cultural , social interests of Greater Sudbury

• Corporate and artistic collaboration

• Community involvement

• Multi-stakeholders consensus

• Social enterprise

Success Factors (4P’s)

• People – Strong leadership / multiple partners

• Program – Innovative and versatile

• Place – Flexible configuration / location

• Plan – consistent, self-generated revenue structure

Configuration / Location

• Estimated 79, 104 square feet to accommodate –

• Flat floor, theatre (balcony, high orchestra), classrooms, rehearsal, offices, exhibition, side stage, wardrooms, loading, sound, lighting

• Technical transformation key to success

Revenue

• Capital fundraising plan supported by government / private sector.

• Optimal self-generated revenue Based on full occupancy via

- Rental of space

- net income from box office, merchandising, food services

• Choosing a multipurpose venue needs to consider costs of transforming space from one format to another

Market: Meetings, Conventions & Conferences

• 2010 Sudbury Tourism hosted 90 events, 202,000 participants, 25,000 hotel room nights, $40 M direct spending

• Total of current N.E. Ontario convention / arts market is 1,201,295 participants / expected Sudbury share approx.94,000

• Of 1,068,000 total tourists, 102,000 came for business – 38,000 for conventions (less than 3%)

• Lack of a conference hosting facility is presumed reason for low number of convention visitors. Represents a tremendous opportunity for Greater Sudbury to increase tourism through implementation of a destination convention venue.

Market: Arts and Culture

• 2012, nearly 1/2 M people participated in cultural events through more than 2,000 activities presented by 31 organization.

• Participation rate of 1 visit per capita (167,000) is twice that of NE Ontario, but half of Provincial rate.

• 25 venues in Greater Sudbury can accommodate performing arts and conventions with seating ranging from 150 to 600.

• “Arts projects with the best chance for success in revitalizing underused downtowns .. target local communities as well as visitors “

Impact: (5 Year Projection)

• Incremental annual increase (avg. 15%) for convention and cultural markets will provide GS with 60,000 additional visitor with an estimated economic impact of $35M

• Added value to CGS and NE Ontario (services, jobs ) through creation of new enterprises i.e. food services, sound and lighting production. Others…

- Airport / Shuttle transportation

- Accommodation (four or five star hotel)

- Incentive event organizers (private hosted events)

Program (Year One)

• Over 125 events / functions representing 506 activity days per year can be accommodated in a given year, many simultaneously:

• 25 Conferences, conventions, trade shows (37 days)

• 22 Special events (30 days)

• 30 meetings with break-out (30 days)

• 36 concerts / performing arts (48 days)

• 171 days classes / 100 days rehearsals

• 2 exhibitions (90 days)

• 17 offices located on premises

Building Program

• GSSP space estimated at 79,104 sq. ft.

• New Construction value based on market $300 / sq. ft. (incl. structure, mechanicals, plumbing

• Total construction value $23.7 M.

• Can accommodate other projects/ uses e.g. meeting rooms, classrooms, storage, rehearsal, auditorium

Income Assumptions

• Three-fold revenue scenario based on rental income and variable convention related i.e. food/ beverage, ticket sales, merchandising

a) Fixed Income:

- Flat floor / theatre configuration (1000-1200)

- Small theatre (300-500 seats)

- Classroom / rehearsal.

- Exhibition Hall

- Office rental (market rates)

Income Assumptions

b) Variable Income:

- 10% of gross ticket sales

- 25% of net merchandising

- 40% of net catering (conventions / corporate events

Note: Financial gross options to be further elaborated in next development phase (pro-forma)

Governance: Partnership / Collaboration

• P3 enterprise model - balanced / sustainable

• Partnerships -economic benefit for all

• Social enterprise… Business, tourism, arts; food & beverage; marketing; technical services

• Multiple users / public participation

• Appropriate groups / organizations as stakeholders -Sudbury Tourism Partnership, Chamber, SAMSSA, GSDC, Regional Presenters , Galleries, Symphony

Next Steps

• Concept Design (Component 3):

- Determine footprint – size, structure, resource requirements

- Input, comments of community, stakeholders/ partners

- Assumptions (credible) / scenarios (various)

• 3D Video Animation:

- Effective tool to present to Sudbury community

- Obtain buy-in / community participation

Next Steps

• Capital and Operational Analysis / Pro-Forma (Component 4):

(i) Operating budget based upon Building Program (Component 2)

(ii) Projected start-up project management costs (capital)

- historic ratios – earned, contributed, government revenues

- Draft operating budget – programming; H.R.; marketing; infrastructure; confirmed revenue/ funding

Questions?

Thank you!