Market and Economic Analysis Related to Future Uses of the

Market and EconomicDonald L. Tucker Center at Florida State University

4427 W. Kennedy Boulevard, Suite 200

Economic Analysis Related to Future UsesDonald L. Tucker Center at Florida State University

Final Draft ReportMay 2013

Submitted by:

4427 W. Kennedy Boulevard, Suite 200Tampa, FL 33609

Analysis Related to Future Uses of theDonald L. Tucker Center at Florida State University

4427 W. Kennedy Boulevard ∙ Suite 200 ∙ Tampa, Florida 33609 ∙ Phone 813.281.1222 ∙ Fax 813.315.6040

www.crossroads-fl.com

May 30, 2013

Mr. Cam Whitlock, PrincipalArchitects: Lewis + Whitlock206 West Virginia StreetTallahassee, Florida 32301United States of America

Dear Cam:

Crossroads Consulting Services LLC is pleased to present this market and economic analysis as part ofthe overall master planning process for the Donald L. Tucker Center. In accordance with our agreement,this report summarizes our research and analysis which is intended to assist Florida State Universitywith its decisions regarding the future operations of the facility.

The information contained in the report is based on estimates, assumptions, and information developedfrom market research, industry knowledge, input from potential demand generators, as well as otherfactors including data provided by Florida State University and other secondary sources. We haveutilized sources that are deemed to be reliable but cannot guarantee their accuracy. All informationprovided to us by others was not audited or verified and was assumed to be correct. Because theprocedures were limited, we express no opinion or assurances of any kind on the achievability of anyprojected information contained herein and this report should not be relied upon for that purpose.Furthermore, there will be differences between projected and actual results because events andcircumstances frequently do not occur as expected, and those differences may be material. We have noresponsibility to update this report for events and circumstances that occur after the date of this report.The accompanying report is restricted to internal use by Florida State University and may not be reliedupon by any third party for any purpose including financing. Notwithstanding these limitations, it isunderstood that this document may be subject to public information laws and as such can be madeavailable 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 serving you on this engagement and look forward to the opportunity to provide youwith continued service.

Sincerely,

Draft – subject to change

Draft Document – Subject to Change

Table of Contents

Table of Contents

1 Introduction & Executive Summary 1

2 Market Overview 12

3 Historical Civic Center Operations 18

4 Competitive Environment 26

5 Input from Demand Generators 29

6 Comparable Facilities Analysis 40

7 Management Options 46

8 Renovation Cost Benefit Analysis 51


1. Introduction and Executive Summary 1

Introduction and Executive Summary

Introduction

Originally opened in 1981 and renovated several times over the years, the Donald L. Tucker Center(Civic Center) offers 12,200 seats for basketball, 34 luxury suites, 468 club seats and the Spotlight Grillrestaurant. There are three different components to the facility: the main arena, the 33,915 square foot(SF) exhibition hall and the terrace.

The Civic Center is currently owned and operated by the Tallahassee-Leon County Civic CenterAuthority (Authority) which is governed by a 13-member Board. The Authority is an independentspecial district that was organized for the purpose of planning, developing, operating and maintaining acomprehensive complex of civic, governmental, educational, recreational, convention and entertainmentfacilities for the use and enjoyment of the citizens of the Tallahassee area. It does not have any taxingauthority and does not receive guaranteed funding from any entity including the City, County, and State.Historically, the City and the County mutually agreed to fund operating deficits up to a maximum of$125,000 each for a period of 40 years.

In June 2012, the Authority and Florida State University (FSU) agreed to enter into an agreement for thetransfer of the Civic Center facility to FSU. This agreement will result in the transfer of all existingbank debt to FSU. In addition, FSU will assume full operational and financial responsibility of thefacility. The Authority and FSU entered into an agreement for a one-year leaseback of the property tothe Civic Center. The Authority released the City and the County from any further responsibility to payannual operating deficits. However, the City will continue to provide $60,000 annually toward the CivicCenter’s utility costs.

As part of its agreement, FSU agreed to the formation of a community advisory board to ensure that thecommunity continues to have access to the property. From FSU’s perspective, this acquisition helps theCivic Center remain open and continue to host diverse events that benefit the community, allows theUniversity to host large scale events such as commencement and convocation and better serves themen’s and women’s basketball programs.

Infrastructure demands, public accountability, changing economic conditions, tenant needs, marketingand sales opportunities, operational efficiencies, increasing competitive market and the growing demandfor quality services by event producers and attendees are factors that pose a continuous challenge topublic assembly facilities across the country.

As part of its on-going planning efforts, FSU retained the project team of Architects: Lewis + Whitlock,Populous and Crossroads Consulting Services LLC (Crossroads) to develop a master plan for the CivicCenter which identifies renovation/enhancement options that will increase the facility’s overallmarketability, competitiveness and financial performance. The master plan outlines recommendedphysical improvements to maintain the facility’s viability as a NCAA Division I basketball arena as wellas to meet the broader sports and entertainment needs of both the University and the community.



FSU’s specific goals for the Civic Center renovation include, but are not limited to:

• Providing a better fan experience.

• Enhancing revenue and sponsorship opportunities.

• Providing an innovative setting that complements other University facilities and initiatives.

• Assisting as a recruiting asset.

• Offering superior acoustics.

• Serving as the face of the University.

The work plan included qualitative and quantitative analyses that focused on the unique attributes ofTallahassee, historical operations of the Civic Center, market supply relative to demand for the CivicCenter, potential demand segments, comparable facility operations, and cost/benefit analysis of futureenhancements.

Crossroads was responsible for the market and economic analysis portion of the overall master plan.Our work plan included, but was not limited to, the following tasks:

• Conducting interviews and/or work sessions with key stakeholders including representatives fromFSU.

• Reviewing previous studies and documentation related to the project.

• Analyzing select market attributes including demographic/economic data; higher educationinstitutions; employment base; accessibility; lodging supply; existing facilities; and plannedamenities/developments that may impact future demand for the Civic Center.

• Analyzing historical operating data for the Civic Center.

• Conducting interviews with existing and potential user groups including representatives from FSUathletics; area scholastic programs; State, regional and national youth and amateur sportsorganizations; event producers of various special athletic events; concert promoters; consumer showpromoters; family show promoters; as well as community/civic organizations.

• Analyzing operating data from comparable facilities.

• Commenting on the programmatic and supporting infrastructure recommendations from a marketperspective in order to better address potential target markets and accommodate multi-purpose eventneeds.

• Summarizing estimated project costs of the recommended renovations/enhancements and theirassociated return on investment relative to achieving FSU’s stated objectives for the Civic Center.

The remainder of this report presents the findings and principal conclusions from our research.



Executive Summary

The following provides an executive summary of the study’s findings. The detailed analysis can befound in the sections that follow.

Market Overview

An area’s demographics play a key role in its marketability for various activities. In 2012, thepopulation of Leon County (the primary market area) was nearly 280,000 compared to approximately373,000 within the four-county Core Based Statistical Area (the secondary market area). Between 2012and 2017, the population within both the primary and secondary markets is projected to experienceminimal growth – an average annual increase of less than 1.0%. The median household income isapproximately $43,000 in both the primary and secondary markets.

Tallahassee is home to several colleges and universities that are significant economic generators in thecommunity. The students, faculty, staff and visitors at these institutions represent a target market for theCivic Center.

The overall strength of the economy, diversification and size of local businesses as well as competitionfrom other existing facilities are factors that can impact premium seating sales, advertising, corporatesales and season ticket support. Approximately 30% of employment in the Tallahassee CBSA isgovernment-related. The State of Florida (non-university) has nearly 31,000 employees followed byFSU with 6,450 employees and Leon County schools with 4,450 employees. As of January 2013, theannual unemployment rate for Leon County was 6.7%, which was lower than that for the State ofFlorida (7.8%) and the U.S. (7.9%). Tallahassee’s existing reputation for higher education and Stategovernment-related business provide an opportunity for the community to retain and/or capture more ofthose visitors via an enhanced Civic Center.

Vehicular accessibility along I-10 presents opportunities to draw attendees from throughout the Stateand the region. In addition, the Tallahassee Regional Airport is an asset that can be beneficial inattracting attendees and support personnel to certain events, particularly for those people who may onlyattend a portion of the event.

The diversity and supply of hotel rooms proximate to the Civic Center can be an important factor inattracting events, accommodating attendees and generating room nights. Tallahassee has 64 hotelproperties that offer more than 5,800 hotel rooms. Although the lodging supply is diverse, availability isimpacted by factors such as the State legislative session and special events held at FSU and other areainstitutions.

Historical Civic Center Operations

The mission of the Civic Center is to operate an exceptional facility offering world class entertainmentand quality meeting space for the enrichment of the community and region. It strives to provide a safeand comfortable environment with the highest degree of service and professionalism. As such, the CivicCenter hosts a variety of event activity with varying space needs and demands for amenities/supportservices.



The Civic Center has averaged 514 events and nearly 394,000 attendees annually over the past threefiscal years which provides a solid base of future business. Event activity has generally been fairlyconsistent over the past three fiscal years with the exception of a decline in food functions andmeetings/lectures/seminars.

Over the last three years, food functions have averaged 70% of total events but only 13% of totalattendance. Sporting events and graduations have accounted for 34% and 16% of total attendance,respectively. Graduations have averaged nearly 9,200 people over the last three years followed byconcerts (3,700), family shows (3,400) and sporting events (3,200), respectively. Between FY 2009 andFY 2012, FSU men’s basketball averaged nearly 8,200 per game and FSU women’s basketball averagedalmost 2,700 per game. Other than graduations, very few events require the Civic Center’s maximumcapacity.

An analysis of lost business reports for calendar year 2012 indicates that the amount/type/availability ofspace at the Civic Center was not a primary reason for lost business. As such, increasing seatingcapacity or the amount of exhibit space does not appear to be an immediate need for the Civic Center.

According to the audited financial statements, the Civic Center has averaged operating income ofapproximately $337,000 between FY 2009 and FY 2011. Food/beverage accounted for 30% ofoperating revenue followed by reimburseable expenses (20%) and suite/club seat revenues (16%) duringthe profiled period.

Only 68% of the suites are sold indicating limited demand for the product which is likely attributable tofactors such as employment base and general economic conditions.

In FY 2012, FSU basketball accounted for 15% of total Civic Center revenues. Concessions comprisedmore than 70% of FSU basketball-related revenues. As such, future improvements should seek tofurther enhance the marketability of concessions areas.

Concerts represented approximately 49% of non-FSU arena revenues followed by family shows (27%)and Broadway shows (12%). The profit margin per event averaged $90,000 for family shows and$81,000 for concerts. Future improvements should seek to further enhance the marketability andprofitability of these event types.

Relative to financial performance, it is important to recognize that the University is performing on-goingdue diligence relative to historical financial reporting for the Civic Center. As such, some adjustmentsmay ultimately be made to historical figures which could impact the findings of this report.

Competitive Environment

The existing supply of area facilities is relatively limited. There are no competitive arenas locatedwithin 150 miles of Tallahassee other than FAMU’S Lawson Center, which is primarily dedicated touniversity-related activity.



Two new, smaller entertainment facilities are in the development stages that will offer unique settingsfor more intimate entertainment acts. Cascade Park is a joint City/County amphitheater project that isslated to open later this year. Current plans call for approximately 1,500 fixed and 2,500 lawn seats. Anew nightclub/restaurant is being planned by Live Nation as part of the College Town developmentwhich is anticipated to accommodate 2,000 people. Stakeholders view these new entertainment venuesas complementary to the Civic Center based on their program elements and target markets and suggestedthey would further enhance the area’s ability to draw more, diverse entertainment acts.

Tallahassee also offers several meeting/banquet venues including special event facilities and hotelswhich primarily host conventions, conferences, tradeshows, meetings, banquets and smaller exhibitions.FSU offers three of the four largest meeting/banquet facilities. Although the Civic Center’s size allowsit to accommodate relatively large groups, its amenities and technology are challenges for attractingcertain groups. These limitations will likely become more prominent when the University assumescomplete ownership/operation of the Civic Center given the high-quality features offered at its otherassets.

The Civic Center’s seating capacity for basketball is consistent with the median (12,500) for arenas thatcurrently or soon will host ACC men’s basketball teams. Several of the ACC arenas are significantlylarger than the Civic Center because they serve other purposes (e.g., host collegiate football orprofessional sports) or they have a historically strong men’s basketball program. In addition, the CivicCenter offers significantly more suites than the average or median of ACC arenas.

Input from Potential Demand Generators

The primary tenant at the Civic Center will continue to be the FSU men’s and women’s basketball teams.FSU men’s and women’s basketball have not historically been restricted by the Civic Center’s seatingcapacity. However, some desired improvements may achieve broader University goals (e.g., providing afirst-class recruiting tool, becoming the face of the University, etc.) that may not directly result inincreased usage or improved financial performance at the Civic Center.

Input was also obtained from existing and potential users in order to identify potential unmet demand andrequired program elements. Promoters of both arena events and meeting/exhibition events are generallypleased with customer service, food/beverage service, the facility’s downtown location, and proximity toFSU. Promoters also noted that the new ownership presents unique and positive opportunities to leveragemedia for their event activity.

Consolidation of venues and live entertainment combined with economic pressures on ticket buyers hascreated a very competitive environment for attracting concerts, family shows, Broadway shows and othersimilar spectator events. Arena event promoters noted the Civic Center’s age and lack of modernaesthetics as challenges. That said, representatives suggested that any future physical improvements takeinto account the following: the amount, proximity and pricing of parking; maintaining the current amountof floor space; and providing sufficient backstage and dressing room areas.



According to industry publications, there were 331 State/Regional and 231 National trade and professionalassociations headquartered in Florida in 2011 which provide a target market for the Exhibition Hall andMeetings Rooms. Meeting and exhibition event planners cited lack of sufficient parking, distance ofparking from venue, columns in the Exhibition Hall, lack of modern technology, and antiquated lightingsystem as physical challenges.

Both arena and meeting/exhibition promoters indicated that factors such as market size, ticket sales,average ticket price realized, cost to utilize the facility, and overall support for events would impact theirfuture decision regarding whether to play the facility/market rather than the physical building program.

Comparable Facilities Analysis

In order to assist in evaluating the types of renovations/enhancements necessary for the Civic Center toremain competitive, operating data from select new/renovated Division I arenas was analyzed. Like theCivic Center, five of the 11 profiled facilities serve as the primary arena in the market. While nine ofthe 11 (82%) profiled facilities are University-owned, only four are University-operated. The otherseven arenas are operated by private management companies. Although the Civic Center offers thesame seating capacity as the average of the peer facilities, it has significantly more suites and less clubseats as profiled facilities.

As a point of reference, Georgia Tech reopened its arena in 2012 after a $50 million retrofit. The formerAlexander Memorial Coliseum was renamed the McCamish Pavilion after a donor who gave $15 millionto help finance the renovation. Major changes included reducing the seating capacity from 9,200 to8,600; reconfiguring the seating bowl to one that mirrors the court rather than the original circularseating pattern; removing the 12 suites to provide space for a sideline club seat section; and providingimproved courtside seating. The facility also removed a concourse wall in order to provide a more openview of the court from the concourse and installed theatrical lighting.

Profiled peer arenas hosted an average of 210 events and 566,900 in total attendance. Utilization isimpacted by factors such as the physical product, market characteristics, accessibility, missionstatement, booking policy, rental and labor rate structure, regionally competitive facilities, marketingefforts and general economic conditions. The Civic Center hosted more events than all of the profiledpeer facilities but 30% fewer total attendees than the average of the profiled set.

One of the driving forces of an arena’s seating capacity is concert and other commercial activity whichcan generate substantial revenue. Some arenas can reduce their seating capacity through the use ofcurtaining. An analysis of event statistics from 2012 Pollstar reports, an industry resource that tracksbox office statistics at facilities for available acts, further supported the cost consciousness of theTallahassee market relative to entertainment events.

A comparison of select financial operations at the profiled peer facilities indicated that the Civic Centerranked fourth among the profiled facilities in terms of operating gain/loss. Based on audited financialstatements, the Civic Center realized an operating gain of $246,000 in FY 2011 while the profiledfacilities ranged from an operating gain of $711,000 to an operating loss of $1.0 million.



Management Options

There are several potential management options for arena/civic center facilities including operating as anindependent authority; operating through traditional governmental management such as a City/Countydepartmental structure; operating as a University department; or contracting with a third party thatspecializes in managing similar facilities. The management approach is important because it typicallyimpacts all aspects of operations including marketing, utilization, financial operations and overallefficiency of a facility. For instance, some publicly run facilities are limited in their capability to act asquickly as other management approaches. In addition, there is typically pressure on university assets tooperate with a high degree of fiscal responsibility.

As such, some facilities owners choose to delegate the management of facility operations to some formof third party that provides industry knowledge and representation. In addition to these benefits,management through a third party can offer stability and insulation from political influence which canbe desired attributes by customers, vendors, facility management and staff who typically prefer acontinuity of purpose and ability to function within a business environment that is not affected by eachpolitical election.

Approximately 64% of the profiled peer facilities are privately operated. University facilities that alsoserve as the primary sports/entertainment venue in the community and/or want to maximize non-university event activity are increasingly choosing to contract with a private management company.Examples of privately operated facilities include BankUnited Center, Chaifetz Arena, Ford Center, JohnPaul Jones Arena, KFC Yum! Center and PNC Arena.

As FSU continues to evaluate future operations of the Civic Center and prioritize potential renovations/enhancements, it should assess which ownership and/or management approach best meets its long-termobjectives for the facility. Moving forward, the Civic Center needs to be operated in a first-class mannerby an aggressive, experienced management team with strong industry contacts in order to enhance itsmarketability and competitiveness.

Potential benefits of operating the Civic Center through a third party management company ratherthan as a university department include, but are not limited to, providing greater latitude in staffing,compensation, contracts and incentive pay; increasing revenue generating potential; providingfinancial transparency, accountability and reporting; and allowing for greater autonomy while stillbeing funded by public and private sources. In addition, there may be an opportunity to obtain somelevel of capital support as part of the management agreement which is typically accomplished througha one-time capital improvement contribution and/or a dedicated event marketing fund.

One common apprehension for universities considering third party management is losing control ofthe asset. However, third party management is an agent of the university charged with managing andpromoting the asset. As such, the university can manage the amount and type of control that it retainsthrough the terms of its management agreement. For instance, in most private managementagreements, universities still retain ownership; approve the operating and capital budgets; provideinput and direction regarding policy; receive regular financial and management reports; and have theability to terminate the management company for cause. Typically, universities are actively involvedin the hiring and/or approval of the facility’s general manager and have a designated contract



administrator that oversees the terms of the contract and serves as liaison between the university andthe management company.

As all ownership, operational and financial responsibilities of the Civic Center transition to theUniversity; it is recommended that the University strongly evaluate the merits of third partymanagement in order to maximize utilization, marketability and financial performance. Thisrecommended management approach is based on trends in the industry, the unique nature of the asset,and the University’s stated objectives for the Civic Center.

Market Demand for Recommended Civic Center Improvements

The Civic Center has fallen behind its competitive set in terms of overall condition and patron amenities.In addition, deferred maintenance is taking a toll throughout the Civic Center. Based on variousresearch and analysis including a comparison of peer arenas at peer institutions and discussions andextensive feedback from representatives at FSU and other stakeholders, Populous prepared a detailed listof optimal building/renovation program recommendations by major area as compared to the existingCivic Center. Market research supported these recommendations, particularly relative to achieving thedesired long-term goals of the University and the broader community.

Potential Impact of Remaining Status Quo

If the facility is not improved, remaining status quo relative to capital funding will likely result in adecrease in event activity over time that yields an operating loss. The table below compares the CivicCenter historical three-year average to the estimated status quo in key metrics.

Category

Historical Three-

Year Average Status Quo

Events 514 508

Event Days 588 564

Total Attendance 393,958 365,675

Incremental Impact to Event Activity

Events -1%

Event Days -4%

Total Attendance -7%

Operating Revenues $7,016,000 $6,624,000

Operating Expenses $6,679,000 $6,749,000

Operating Gain/(Loss) $337,000 ($125,000)

Expense Coverage Ratio 105% 98%

Incremental Impact to Financial Operations

Operating Revenues -6%

Operating Expenses 1%

Operating Gain/(Loss) -137%

Notes: Status quo assumes no increase in capital funding over historical levels.

Expense coverage ratio = operating revenues/operating expenses.

Operating expenses do not include taxes, debt service or depreciation.

Historical three-year average data was provided by Civic Center management

and audited financial statements.

Comparison of Historical Three-Year Average to

Estimated Status Quo Scenario at Civic Center



Recommended Civic Center Improvements

The project team developed a list of recommended needs from both a physical/facility perspective andfrom a competitive market perspective. These needs are based on our project team’s observations of thefacility and its operations; conversations with current, former, and potential users of the facility; thecompetitive/comparable facility assessment; as well as input from FSU representatives.

Populous developed a prioritized statement of needs that addresses the key points of our project team’sanalysis. The statement of needs includes associated order-of-magnitude cost estimates for each lineitem so that the overall quantitative and qualitative financial return can be evaluated.

Recommended facility improvements were grouped into the following categories that relate to theUniversity’s stated goals for the master plan of the Civic Center as well as their relative cost andimplementation timeframe:

Base level improvements include recommendations that seek to create a better fan experience, assist as arecruiting asset, improve acoustics and position the Civic Center in a better position to become the faceof the University. As stated previously, some of these renovations/enhancements relate to requireddeferred maintenance and infrastructure improvements that would ideally be addressed within the nextone to two years in order to enhance marketability and competitive position from both the patron and theevent promoter perspective.

Intermediate level improvements focus on those improvements that can enhance revenue andsponsorship opportunities (e.g., suite and club level improvements) as well as those that address back-of-house needs.

Advanced level improvements represent a more ambitious set of facility changes that could help positionthe Civic Center for longer-term success in the marketplace. These changes involve significant upgradesto the building exterior (e.g., a new lobby addition) and/or repurposing of existing space (e.g., newmeeting rooms/prefunction improvements).

Stand-alone improvements including expansion of the basketball practice facility and the Phase II sitedevelopment can be completed at any time.

Cost estimates for this report were developed by Rider Levett Bucknell (RLB), professional costestimators and cost consultants. The cost estimates reflect total project costs including both hardconstruction costs as well as soft costs such as design fees, testing, and contingency fees. Further, thesecosts reflect the value of the improvements in 2013 and do not include any future cost escalation. Theconceptual, order-of-magnitude nature of this report precludes the development of detailed costestimates as would be expected for an actual construction project. As such, the cost estimates includedherein are compatible with the nature and scope of this study.

The table that follows summarizes the recommended Civic Center renovations/enhancements by theprioritized categories and the estimated impact to financial operations.



Category of Improvements Cost Estimate

Impact to Financial

Operations

Base level $39,565,000 Low

Intermediate level $41,387,000 Low/Moderate

Advanced level $20,473,000 Low/Moderate

Stand-Alone $19,050,000 Low/Moderate

Note: Cost estimates are not additive as different options are presented for the University's consideration.

Source: Populous.

Total Cost Estimate for the Recommended Improvements to the Civic Center

Many of the recommended improvements will result in maintaining the facility’s existing base ofbusiness as well as other qualitative benefits such as serving as a recruiting asset and providing a first-class venue for both FSU and the community rather than a direct, quantitative impact on financialoperations of the Civic Center. In addition, some revenue streams may flow to other Universitydepartments (e.g., Athletics) rather than directly to the facility’s operating bottom-line.

More detailed program and cost estimate data as well as conceptual drawings of the proposedrenovations/enhancements can be found in the Master Plan document that Populous and Architects:Lewis + Whitlock prepared under separate cover.

Impact of Recommended Civic Center Improvements on Event Activity and Financial Operations

Based on market research, the financial analysis focused on quantifying the impact of recommendedimprovements to event activity and financial operations in terms of operating revenues and expenses.The following graph compares the status quo scenario (estimated to reflect a decline over historicalCivic Center activity) to the estimated range of activity for an improved Civic Center.

Comparison of Estimated Annual Event Activity - Status Quo vs. Proposed Improvements

An improved Civic Center is estimated to generate 15% to 20% greater total attendance annually in astabilized year of operations.

365,675418,725 438,700

508540

576

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300

400

500

600

700

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100,000

150,000

200,000

250,000

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350,000

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Status Quo With Improvements (Low) With Improvements (High)

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The following table compares the estimated operating revenues and operating expenses for an improvedCivic Center to the status quo scenario in a stabilized year of operations. Operating revenues areestimated to increase by 11% to 14% relative to the status quo whereas operating expenses are estimatedto increase between 0% and 2%. Under the status quo scenario, an estimated net operating loss ofapproximately $125,000 would be required to fund on-going operations.

Category Status Quo

Operating Revenues $6,624,000 $7,334,000 - $7,528,000

Operating Expenses $6,749,000 $6,731,000 - $6,894,000

Operating Gain/(Loss) ($125,000) $603,000 - $634,000

Expense Coverage Ratio 98% 109% - 109%

Incremental Impact to Operating Gain/(Loss) $728,000 - $759,000

Notes: Expense coverage ratio = operating revenues/operating expenses.


Range With Improvements

Summary of Estimated Annual Civic Center Financial Operations

Overall Summary

Research indicates that the recommended improvements to the Civic Center will better accommodateboth FSU men’s and women’s basketball from a fan and recruiting perspective as well as retain andincrease the existing base of business at the facility that meets broader community needs. Most of theproposed improvements are synergistic to achieving both of these goals. While some enhancementsmay be outwardly obvious to facility users and patrons (e.g., new entrance, expanded lobby, new seats,etc.), others may involve deferred maintenance and back-of-house improvements but all will enhancethe marketability and long-term functionality of the Civic Center.

The competitive facility assessment indicates opportunities for increased event activity and financialperformance with the proposed renovations/enhancements. Although the proposed improvements to theCivic Center are estimated to generate both qualitative and quantitative benefits, these projects do nottypically generate a positive return on investment relative to the required debt service.

Implementing the master plan through a phased approach will enhance the Civic Center’s marketabilityand competitive position for the next 15 to 20 years. In addition, this project represents anotheropportunity for the University to positively impact the broader economy.

Because the information presented in the executive summary is extracted from the more detailedanalysis, it is important for the reader to review the report in its entirety in order to gain a betterunderstanding of the research, methodology and assumptions used. The remainder of this reportsummarizes the key findings and conclusions from our research and analysis which can serve as a toolfor the University’s on-going planning decisions related to future operations of the Civic Center.


2. Market Overview 12

Market Overview

Because general market conditions impact the Civic Center’s operations, this section of the reportprofiles select market characteristics including demographic/economic statistics, higher educationinstitutions, area employment, accessibility, and lodging supply.

Demographic/Economic Data

Demographic and economic indicators are pertinent to estimating demand for several reasons. Eventactivity at the Civic Center is diverse and includes sporting events, concerts, family shows,consumer/tradeshows as well as various other civic/community events such as meetings/seminars, andsocial functions. Depending on the scope and nature of the event, the Civic Center draws from both arearesidents and out-of-town attendees.

In addition, event promoters/producers for certain event activity such as concerts, family shows,consumer shows and special events consider a variety of factors such as population, age distribution, andincome characteristics when selecting markets to host their events. The demographic data presented inthis report is based on the primary and secondary markets for the Civic Center as defined below.Demographic statistics are provided by Claritas, a Nielsen company that provides current and projectedU.S. demographics based on U.S. census figures.

Population

Population serves as a base from which events at the Civic Center draw attendance and other forms ofsupport. Local, civic based events tend to attract attendees from a relatively close primary market areasuch as Leon County. Exhibit, flat floor events as well as sports and entertainment events typically drawfrom a broader area considered the secondary market. For purposes of this analysis, the secondarymarket is defined as the CBSA which includes Leon County, Gadsden County, Jefferson County andWakulla County. This area is also referred to as Florida’s Capital Region. Depending on the scope(e.g., State, regional, national), some events such as sports competitions/ tournaments can drawparticipants and spectators from an even larger radius.

Map of the Market Area



The table below shows the historical and projected trends in population for Leon County and the CBSA.In 2012, the population of the primary market area was nearly 280,000 compared to approximately373,000 within the four-county CBSA. As such, the secondary market area provides an incrementalpopulation of nearly 94,000 from which to draw attendees. Between 2012 and 2017, the populationwithin both the primary and secondary markets is projected to experience minimal growth – an averageannual increase of less than 1.0%.

Data Leon County Tallahassee CBSA

2000 Census 239,452 320,304

2012 Population 279,589 373,235

2017 Projection 291,025 389,467

Average Annual Growth 2000-2012 1.4% 1.4%

Average Annual Growth 2012-2017 0.8% 0.9%

Source: Claritas

Trends in Population

Age Distribution

Analysis by age group is helpful since certain events at civic centers are targeted toward consumerswho fall within specific age categories. As shown in the table below, nearly 60% of the populationwithin in Leon County is within the ages of 18 and 54 years old, which is typically a target forconcerts, sporting events, family shows and other spectator events. The broader CBSA populationhas a slightly higher median age with nearly 58% of the population is within the ages of 18 and 54.

Age Category Number % Number %

Under 18 Years Old 58,529 20.9% 78,988 21.2%

18 - 34 Years Old 100,911 36.1% 121,977 32.7%

35 - 54 Years Old 65,722 23.5% 93,300 25.0%

55+ Years Old 54,427 19.5% 78,970 21.2%

2012 Median Age 28.7 31.8

Source: Claritas.

2012 Population by Age

Leon County Tallahassee CBSA

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 includingadmission to events. As shown in the table that follows, the 2012 median household income in LeonCounty ($43,000) was slightly higher than in the broader CBSA ($42,000). In addition, nearly 15% ofthe households in Leon County have income levels of $100,000 or more.



Income Category Number % Number %

Less than $25,000 34,468 30.7% 44,950 30.8%

$25,000 to $49,999 29,246 26.1% 39,803 27.3%

$50,000 to $99,999 31,675 28.3% 41,275 28.3%

$100,000 to $149,999 10,909 9.7% 13,138 9.0%

$150,000 or more 5,805 5.2% 6,701 4.6%

2012 Median Household Income $42,959 $42,006

2012 Average Household Income $58,903 $56,793

2012 Per Capita Income $23,979 $22,723

Source: Claritas.

2012 Estimated Households by Household Income

Leon County Tallahassee CBSA

Higher Education Institutions

Tallahassee is home to several colleges and universities that are significant economic generators in thecommunity. As shown below, these institutions have a combined enrollment of more than 78,000students. These students along with faculty, staff and visitors represent a target market for attendees atthe Civic Center. In addition, Tallahassee is located proximate to the National Collegiate AthleticAssociation (NCAA) South Eastern Conference territory and FSU is a member of the Atlantic CoastConference (ACC) which may be beneficial in attracting certain collegiate and club sport tournaments.

Institute

Total

Enrollment

Florida State University 41,087

Tallahassee Community College 15,090

Florida A&M University 13,204

Keiser University 7,520

Lively Technical Institute 1,316

ITT Technical Institute 141

Total 78,358

Source: Tallahassee Economic Development Council.

Tallahassee Area Educational Institutions

Area Employment Base

A broad workforce distribution helps lessen a community’s dependency on support from any one singleindustry segment. Industry 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. While Leon County offers employment in various industries, employment datashown in the following table indicates that 30% of the workforce is concentrated in government which isexpected given that Tallahassee is the State capital. Other major employment industries includeprofessional/scientific/management/administrative and educational, health and social services.



Industry Total Jobs % of Total

Government and Government Expenditures 54,221 30%

Professional, Scientific, Management, Administrative, etc. 25,608 14%

Educational, Health and Social Services 22,504 12%

Retail Trade 17,501 10%

Arts, Entertainment, Accommodation and Food Services, etc. 17,373 10%

Finance, Insurance, Real Estate and Rental and Leasing 14,735 8%

Other Services 11,037 6%

Construction 6,721 4%

Information 3,568 2%

Wholesale Trade 2,833 2%

Manufacturing 1,994 1%

Farm Employment 357 0%

Agriculture, Forestry, Fishing and Hunting, Mining ND

Transportation and Warehousing, and Utilities ND

Total 180,872 99%Notes: ND denotes not disclosed due to confidentiality but the jobs for these industries are included in the total.

Sorted in descending order by total jobs.

Source: U.S. Bureau of Economic Analysis.

2011 Employment by Industry for Leon County

The State of Florida and the University represent the two largest employers in the Tallahassee CBSA.The largest private employers include Tallahassee Memorial Health Care and Publix Supermarkets.

Company Total Jobs % of Total Company Total Jobs % of Total

State of Florida (non-university) 30,918 49.0% Big Bend Hospice 275 0.4%

Florida State University 6,450 10.2% General Dynamics Land Systems 250 0.4%

Leon County Schools 4,444 7.0% Comcast Cable 250 0.4%

Tallahassee Memorial Health Care Inc. 3,130 5.0% Tallahassee Primary Care Associates 229 0.4%

City of Tallahassee 2,708 4.3% Danfoss Turbocor 210 0.3%

PublixSupermarkets, Inc 2,084 3.3% Teligent EMS 166 0.3%

Leon County 1,918 3.0% GT Technologies 163 0.3%

Florida A&M University 1,888 3.0% First American Title Company 160 0.3%

Walmart Stores, Inc. 1,300 2.1% Culpepper Construction 157 0.2%

Capital Regions Medical Center 890 1.4% Tandem Health Care 152 0.2%

ACS, A XeroxCompany 852 1.3% Apalachee Center for Human Services 150 0.2%

Tallahassee Community College 796 1.3% Miracle Hill Nursing & Convalescent 147 0.2%

Capital City Bank Group 560 0.9% The Zimmerman Agency 140 0.2%

Capital Health Plan 452 0.7% Tallahassee Democrat 133 0.2%

St. Marks Powder 400 0.6% Proctor Dealerships 130 0.2%

Westminster Oaks 367 0.6% Champion Chevrolet 121 0.2%

Florida Bar 326 0.5% HealthSouth 120 0.2%

Fringe Benefits Management Company 325 0.5% T-Formations 115 0.2%

CenturyLink 278 0.4% Total 63,154 100%

Source: Tallahassee Economic Development Council.

Tallahassee CBSA Major Employers

As of January 2013, the annual unemployment rate for Leon County was 6.7%, which was lower thanthat for the State of Florida (7.8%) and the U.S. (7.9%).



Accessibility

The location and accessibility of a facility relative to the population base can impact its marketability forcertain types of events. As shown in the map below, Tallahassee is located along Interstate 10, whichprovides the major east-west access in the State and region as well as links to several other interstatesproviding north/south access.

Regional Vehicular Access

Source: www.maps.google.com.

Commercial air service is provided by the Tallahassee Regional Airport which is serviced by four majorairlines: American, Delta, United and US Airways. In 2011, the Tallahassee Regional Airport had306,000 enplanements which are defined by the Federal Aviation Administration (FAA) as domestic,territorial and international passengers who board an aircraft in scheduled and non-scheduled service ofaircraft. Providing proximate air access can be beneficial in attracting attendees and support personnelto certain events, particularly for those people who may only attend a portion of the event.

Lodging Supply

The diversity and supply of hotel rooms proximateto the Civic Center can be an important factor inattracting events, accommodating attendees andgenerating room nights. Tallahassee has 64 hotelproperties that offer more than 5,800 hotel roomsaccording to data provided by Visit Tallahassee.As shown in the adjacent table, the Northwestsection of town offers the most hotel rooms. Boththe State Capitol and the Civic Center are locateddowntown.

Location Properties Number of Rooms

Northwest 26 2,294

Southeast 18 1,614

Northeast 12 900

Downtown 7 894

Southwest 1 130

Total 64 5,832Note: Sorted in descending order by number of rooms.

Source: Visit Tallahassee.

Tallahassee Hotels

Factors such as the State legislative session and special events held at FSU and other area institutionsimpact hotel room availability for groups attending events at the Civic Center.



The Civic Center Authority entered in to various development agreements with certain private partiesfor the construction of a convention hotel and parking garage on its current site. In FY 2010 and FY2011, approximately $1.1 million of the Authority’s funds had been used for initial development anddesign of the project. Progress has been delayed due to a pending lawsuit which is currently in thesettlement stages. All parties have agreed to disburse funds held in escrow.


3. Historical Civic Center Operations 18

Historical Civic Center Operations

This section provides an overview of Civic Center operations in terms of its mission statement, historicalutilization, reasons for lost business and historical financial operations which will serve as the baselinefor assessing the impact of potential renovations/enhancements.

Mission Statement

Based on information from management, the mission of the Civic Center is to operate an exceptionalfacility offering world class entertainment and quality meeting space for the enrichment of thecommunity and region. It strives to provide a safe and comfortable environment with the highest degreeof service and professionalism.

Historical Utilization

The Civic Center’s event activity was analyzed for fiscal year (FY) 2010 through FY 2012. As shownin the following graph, the Civic Center has averaged 514 events and nearly 394,000 attendees annuallyover the past three fiscal years. Although the total number of events steadily decreased between FY2010 and FY 2012, total attendance increased in FY 2012.

Civic Center Historical Events and Attendance (FY 2010 – FY 2012)

Source: Civic Center management.

Understanding the types of events hosted at the Civic Center can help assess the need for potentialrenovations/enhancements. The following table provides a detailed summary of historical Civic Centerusage by major event type.

403,353 382,439 396,080 393,958

554510

479514

0

100

200

300

400

500

600

700

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

FY 2010 FY 2011 FY 2012 Three-Year Average

Num

ber

of

Eve

nts

To

tal

Att

end

ance



Event Type Events

Event

Days

Event

Length

Average

Attendance

Total

Attendance Event Type Events

Event

Days

Event

Length

Average

Attendance

Total

Attendance

Sporting Event 43 54 1.3 3,242 139,401 Sporting Event 37 42 1.1 3,214 118,916

Graduation 7 12 1.7 9,186 64,300 Graduation 7 13 1.9 9,257 64,800

Concert 15 16 1.1 3,467 51,999 Concert 13 16 1.2 3,010 39,131

Food Function 388 409 1.1 147 57,038 Food Function 358 379 1.1 149 53,375

Family Show 6 9 1.5 3,667 22,000 Family Show 9 13 1.4 3,556 32,000

Theatrical Performance 12 18 1.5 1,875 22,503 Theatrical Performance 10 14 1.4 1,559 15,585

Trade Show 12 23 1.9 1,308 15,700 Trade Show 14 35 2.5 1,514 21,200

Meeting/Lecture/Seminar 46 56 1.2 513 23,590 Meeting/Lecture/Seminar 35 44 1.3 424 14,827

Other 22 27 1.2 283 6,222 Other 25 30 1.2 659 16,465

Convention 3 6 2.0 200 600 Convention 2 2 1.0 3,070 6,140

Total 554 630 403,353 Total 510 588 382,439

Event Type Events

Event

Days

Event

Length

Average

Attendance

Total

Attendance Event Type Events

Event

Days

Event

Length

Average

Attendance

Total

Attendance

Sporting Event 44 53 1.2 3,164 139,214 Sporting Event 41 50 1.2 3,232 132,510

Graduation 7 13 1.9 9,114 63,800 Graduation 7 13 1.9 9,186 64,300

Concert 14 14 1.0 4,658 65,209 Concert 14 15 1.1 3,722 52,113

Food Function 331 360 1.1 136 45,040 Food Function 359 383 1.1 144 51,818

Family Show 6 9 1.5 2,764 16,585 Family Show 7 10 1.4 3,361 23,528

Theatrical Performance 11 15 1.4 1,677 18,450 Theatrical Performance 11 16 1.5 1,713 18,846

Trade Show 9 17 1.9 1,981 17,825 Trade Show 12 25 2.1 1,520 18,242

Meeting/Lecture/Seminar 35 37 1.1 330 11,545 Meeting/Lecture/Seminar 39 46 1.2 427 16,654

Other 20 25 1.3 488 9,769 Other 22 27 1.2 492 10,819

Convention 2 2 1.0 4,322 8,643 Convention 2 3 1.5 2,564 5,128

Total 479 545 396,080 514 588 393,958

Note: Sorted in descending order by three-year average total attendance.


Summary of Historical Civic Center Usage by Event Type (FY2010 - FY2012)

FY2010 FY2011

FY2012 Three-Year Average

During the profiled three-year period, activity levels for most event types fluctuated which is common at similar facilities.Graduations remained relatively consist in terms of events and attendance while the number of food functions andmeetings/lectures/seminars have steadily declined. A detailed assessment of individual events held at the Civic Center indicated thatvery few required the total available seating capacity. Those that did were primarily prime ACC men’s basketball games, graduationsand a few concerts. Although many of the exhibit oriented events required the total amount of available square footage, they canpotentially utilize the arena floor to accommodate larger events based on date availability.



As shown in the following graphs, food functions have represented the largest percentage of eventswhile sporting events and graduations, respectively, have accounted for the highest percentage of totalattendance over the last three fiscal years.

Distribution of Total Events – Three-Year Average (FY 2010 – FY 2012)


Distribution of Total Attendance – Three-Year Average (FY 2010 – FY 2012)


70%

8% 8%4% 3% 2% 2% 1% 1% 0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

34%

16%

13% 13%

6%5% 5% 4%

3%1%

0%

5%

10%

15%

20%

25%

30%

35%

40%



Graduations have realized the highest average attendance over the last three fiscal years. It will beimportant that any future renovations/enhancements do not negatively impact FSU’s ability to hostgraduations and other key events.

Average Attendance by Event Type – Three-Year Average (FY 2010 – FY 2012)


Events only using the arena component have averaged 14% of the total events and 54% of totalattendance over the last three fiscal years.

Distribution of Events and Attendance by Facility ComponentThree-Year Average (FY 2010 – FY 2012)


9,186

3,7223,361 3,232

2,564

1,713 1,520

492 427144

0

2,500

5,000

7,500

10,000

14%

86%

54%46%

0%

25%

50%

75%

100%

Arena Only Other Arena Only Other

% of Total Events % of Total Attendance



Lost Business

An analysis of lost business reports for calendar year 2012 indicates that the amount/type/availability ofspace at the Civic Center was not a primary reason for lost business. As such, increasing seatingcapacity or the amount of exhibit space does not appear to be an immediate need for the Civic Center.

Reason Events

Event

Days

Move-in/

Move-out Days

Total Use

Days

Average

Attendance

Total

Attendance

Internal Cancel 213 265 14 279 2,417 514,801

Date Released by Promoter 91 158 13 171 4,138 376,560

Chose Alternate Dates 73 113 5 118 3,239 236,432

Civic Center 100% Booked 8 13 0 13 4,404 35,230

Other 121 136 3 139 234 28,270

Lost Bid to Another City 19 19 1 20 368 6,995

Total 525 704 36 740 1,198,288

Note: Sorted in descending order by total attendance.


Summary of Lost Business Reports - CY 2012

Other reasons include group funding/unable to pay deposit, postponed, too expensive, low attendance,requested space not available, multiple date hold and poor sales/poor ticket sales.

Historical Financial Operations

Based on audited financial statements, the Civic Center has averaged operating income of approximately$337,000 over the profiled period excluding non-operating revenues and expenses. Food/beveragerevenue averaged 30% of total operating revenues and personnel costs including benefits averaged 52%of operating expenses during the profiled period.

Category FY2009 FY2010 FY2011 Amount % of Total

Operating Revenues

Food/Beverage $2,219,000 $2,077,000 $2,097,000 $2,131,000 30%

Amount Billed to Promoters and Others 1,511,000 1,362,000 1,378,000 1,417,000 20%

Suites and Club Seats 1,284,000 1,051,000 1,005,000 1,113,000 16%

Rental 686,000 600,000 591,000 626,000 9%

Service and Handling Charges 475,000 339,000 369,000 394,000 6%

Advertising and Commissions 400,000 383,000 353,000 379,000 5%

Parking 391,000 345,000 331,000 356,000 5%

Lease, Board and Regents 250,000 250,000 250,000 250,000 4%

Promotions 177,000 239,000 284,000 233,000 3%

Novelty Sales 92,000 81,000 55,000 76,000 1%

Other 69,000 28,000 26,000 41,000 1%

Total Operating Revenues 7,554,000 6,755,000 6,739,000 7,016,000 100%

Operating Expenses

Personnel Costs 3,124,000 2,913,000 2,844,000 2,960,000 44%

Benefits 489,000 585,000 498,000 524,000 8%

Utilities 732,000 660,000 657,000 683,000 10%

Catering 578,000 530,000 621,000 576,000 9%

Insurance 500,000 473,000 456,000 476,000 7%

Materials/Supplies 488,000 401,000 317,000 402,000 6%

General/Administrative 321,000 321,000 334,000 325,000 5%

Promotions 237,000 178,000 160,000 192,000 3%

Repairs/Maintenance 212,000 116,000 284,000 204,000 3%

Contracted Services 203,000 207,000 188,000 199,000 3%

Other 157,000 123,000 134,000 138,000 2%

Total Operating Expenses 7,041,000 6,507,000 6,493,000 6,679,000 100%

Operating Gain/(Loss) $513,000 $248,000 $246,000 $337,000

Note: Financials exclude non-operating income and expenses such as interest expense, letter of credit/bond fees,

interest revenue, allocation to boosters, capital contributions, depreciation and amortiziation.

Source: Audited financial statements.

Three-Year Average

Summary of Historical Civic Center Financials



Suite Revenues

Between FY 2009 and FY 2011, suite and club seat revenues averaged 16% of total Civic Centerrevenues. Potential options to optimize premium seating areas are being evaluated as part of the masterplan. As of January 2013, 23 of the available 34 suites (68%) were leased at the Civic Center – most foreither a five or ten year period. Several are leased by FSU and related entities (e.g., Seminole Boosters).

Lease Term Number %

One Year 4 17%

Three Years 1 4%

Five Years 9 39%

Seven Years 0 0%

Ten Years 9 39%

Total Sold 23 68%

Note: Total suite inventory is 34.


Civic Center Suites Sold - As of January 2013

Depending on the location and lease term, the 12 unsold suites could potentially generate between$630,000 and $700,000 annually. Relative to master planning purposes, there is not a shortage of suiteinventory but rather limited demand which is likely attributable to a combination of factors includinggeneral economic conditions and employment base.

Event Revenue Analysis

Understanding profitability by event type can assist in prioritizing potential improvements.

FSU Basketball

Revenues generated from FSU basketball accounted for 13% (or $885,000) of total Civic Centerrevenues in FY 2011 and 15% (or $1.04 million) in FY 2012.

Distribution of Civic Center Revenues – FSU Basketball vs. Non-FSU Basketball


13%

87%

15%

85%

0%

25%

50%

75%

100%

FSU Basketball Non-FSUBasketball

FSU Basketball Non-FSUBasketball

FY 2010-11 FY 2011-12



As expected, FSU men’s basketball games generate significantly more revenue than women’s games.

Distribution of FSU Men’s and Women’s Basketball Revenues

Note: Revenues exclude ticket related revenue.Source: Civic Center management.

Concessions accounts for the majority of non-ticket related revenue at FSU basketball games.

Distribution of FSU Basketball Revenues by Major Category

Note: Revenues exclude ticket related revenue.Source: Civic Center management.

The table below summarizes concessions per capita spending at FSU basketball games for FY 2011 andFY 2012.

Event Type FY 2011 FY 2012

Men's Basketball 3.36$ 4.59$

Women's Basketball 2.47$ 2.77$

All Basketball 3.02$ 4.00$

Per Cap Spending for Concessions

Any future improvements should seek to further enhance the marketability of concessions areas.

84%

16%

89%

11%0%

25%

50%

75%

100%

Men'sBasketball

Women'sBasketball

Men'sBasketball

Women'sBasketball

FY 2010-11 FY 2011-12

75%

9% 10%5%

71%

12% 11%6%

0%

25%

50%

75%

100%

Concessions Spotlight Grille Suites Parking

FY 2010-11 FY 2011-12



Non-FSU Arena Events

The following table provides a revenue analysis of non-FSU arena events held at the Civic Center between November 2010 and April2012. Combined, concerts and family shows generated approximately 79% of total attendance and 73% of the total net revenues atthe Civic Center during the profiled period. As mentioned previously, the seating capacity currently offered is adequate for themarket.

Event Type Number

Total

Attendance

Average

Attendance Revenues Expenses Gain / (Loss)

Average % by

Event Type

Average $

Per Event

Average $

Per Attendee

Concerts 15 55,876 3,725 $3,913,000 $2,703,000 $1,210,000 31% $81,000 $22

Family Shows 10 51,846 5,185 $2,190,000 $1,294,000 $896,000 41% $90,000 $17

Broadway Shows 10 13,929 1,393 $974,000 $627,000 $347,000 36% $35,000 $25

Comedy Shows 5 12,087 2,417 $653,000 $414,000 $239,000 37% $48,000 $20

Plays 1 $112,000 $53,000 $60,000 54% $60,000

FAMU Events 1 $85,000 $27,000 $58,000 68% $58,000

Charity Events 2 3,547 1,774 $67,000 $19,000 $48,000 72% $24,000 $14

Religious Events 1 $55,000 $13,000 $42,000 76% $42,000

Total 45 137,285 $8,049,000 $5,150,000 $2,900,000 36% $64,000

Event Type Number

Total

Attendance Revenues Expenses Gain / (Loss)

Concerts 33% 41% 49% 52% 42%

Family Shows 22% 38% 27% 25% 31%

Broadway Shows 22% 10% 12% 12% 12%

Comedy Shows 11% 9% 8% 8% 8%

Plays 2% 1% 1% 2%

FAMU Events 2% 1% 1% 2%

Charity Events 4% 3% 1% 0% 2%

Religious Events 2% 1% 0% 1%

Total 100% 100% 100% 100% 100%

Notes: There may be slight differences due to rounding.

Attendance data was not available for all events.


Percent of Total

Profit Margin

Revenue Analysis for Non-FSU Arena Events Held at the Civic Center (November 2010 - April 2012)


4. Competitive Environment 26

Competitive Environment

One factor to consider when evaluating potential renovations/enhancements is the existing supply ofarea facilities. Facility size, program elements, configuration, geographic location, age, market focusand date availability are factors that impact how competitive or complementary area facilities are to arenovated/enhanced Civic Center. While this section provides an overview of select local and Statefacilities that offer elements similar in nature to those at the Civic Center, it is not meant to be an all-inclusive inventory of facilities. Because one of the University’s primary objectives for assumingoperations of the Civic Center is to maintain the facility’s viability as a NCAA Division I basketballarena, this section also profiles the attributes of arenas that currently host ACC men’s basketball teams.

North Florida Sports/Entertainment Facilities

North Florida offers several venues that host various sports and entertainment events. As shown in thefollowing table, the Civic Center has the second largest seating capacity among the profiled venues.Four of the profiled arenas host university athletics. FSU’s Ruby Diamond Concert Hall, Fallon Theatreand Moore Auditorium typically host smaller concerts, performing arts and entertainment acts.Similarly, FAMU’s Lee Hall Auditorium and TCC’s Fred Turner Auditorium offer more intimateseating capacities and serve as each school’s primary performing arts venue. Located adjacent to theFSU Student Union Center, the Oglesby Union Amphitheater was recently renovated and provides lawnseating for up to 5,000. None of the other profiled venues are located within 150 miles of Tallahasseewhich is pertinent because many entertainment acts require a minimum radius between venues whichtypically ranges anywhere between 50 and 100 miles.

Facility Location

Seating

Capacity Primary Uses

Jacksonville Veterans Memorial Arena Jacksonville 15,000 Sports; entertainment

Civic Center Tallahassee 12,200 FSU athletics; sports; entertainment; community events

Stephen O'Connell Center Gainesville 11,700 UF athletics; entertainment

Metropolitan Park Jacksonville 10,000 Concerts; festivals; community events

Pensacola Bay Center Pensacola 10,000 Trade shows; sports; meetings; banquets; community events

Al Lawson Jr. Multipurpose Center Tallahassee 9,600 FAMU athletics, entertainment

UNF Arena Jacksonville 5,800 UNF athletics; NBA Magic training; entertainment

Oglesby Union Amphitheater Tallahassee 5,000 FSU events; concerts; special events

Ruby Diamond Concert Hall Tallahassee 1,260 FSU performing arts; entertainment; lectures

Lee Hall Auditorium Tallahassee 1,200 FAMU events, entertainment, lectures

Fred Turner Auditorium Tallahassee 495 TCC performing arts; entertainment; lectures

Richard G. Fallon Theatre Tallahassee 490 FSU performing arts; entertainment

Moore Auditorium at Olgesby Union Tallahassee 376 FSU student/faculty activities

Note: Sorted in descending order by seating capacity.

Sources: Individual facilities; secondary research.

North Florida Sports/Entertainment Venues

A new amphitheater, Cascade Park, is a joint City/County project that is slated to open this year indowntown Tallahassee. Current plans call for approximately 1,500 fixed and 2,500 lawn seats. The CVBanticipates booking 10 larger shows annually while the City will handle local, community events. Effortswere made to partner with Live Nation but the national promoter declined.



In January 2012, ground breaking occurred for College Town, a planned residential, dining, shoppingand entertainment district to be located just south of the FSU campus. The project, which is scheduledfor completion in fall 2013, is intended to link downtown Tallahassee to the FSU campus while creatinga vibrant urban-renewal community. The new development will be complementary to FSU’s currentcampus environment.

College Town will feature three- to five-story, urban-designed buildings surrounded by tree-lined,cobblestone pedestrian streets. The community will also offer restaurants, entertainment, shopping andresidential options. With 136,000 SF of residential and commercial space planned, College Town willfeature 71 loft-style apartments designed for upscale student housing and season ticket-holders. Inaddition, the new community's entertainment complex will feature a mix of retail, dining and shoppingspace. A new nightclub/restaurant is being planned by Live Nation as part of the College Towndevelopment which is anticipated to accommodate 2,000 people.

Stakeholders view these new entertainment venues as complementary to the Civic Center based on theirprogram elements and target markets and suggested they would further enhance the area’s ability to drawmore, diverse entertainment acts.

In addition to the profiled venues, there are several other sports/entertainment venues in the State andthe region which can accommodate similar activity and ultimately represent potential competition to theCivic Center from a macro supply perspective.

Local Meeting/Banquet Venues

Tallahassee offers a variety of venues that host a diverse set of event activity including conventions,conferences, meetings, banquets, seminars, and other special events.

Facility Location

Operating

Entity

Breakout

Rooms

Total

Function

Space SF

Civic Center (Exhibition Hall) Downtown University 6 33,915

FSU Conference Center FSU Campus University 11 20,000

University Center Club FSU Campus University 8 19,900

Oglesby Union Indoor Meeting/Ballroom FSU Campus University 18 15,940

Tallahassee Auto Museum Northeast Private 3 15,000

Oglesby Union Outdoor Plazas/Green FSU Campus University n/a 12,000

Challenger Downtown Non-Profit 6 9,400

Marriott Northeast Private 5 7,520

Ramada Northeast Private 9 6,500

Double Tree Downtown Private 7 6,000

FSU Alumni Center FSU Campus University 8 5,895

Hotel Duval Downtown Private 8 5,865

Goodwood Carriage House Conference Center Northeast Non-Profit 3 5,000

TCC Capital Center Downtown University 5 4,500

Governor's Inn Downtown Private 2 940

Average (Excluding Civic Center) 7 9,600Sources: Individual facilities; secondary research.

Local Meeting/Banquet Facilities



The Civic Center, FSU Conference Center, University Center Club, and Oglesby Union offer the largesttotal function space, respectively. The FSU Conference Center is the area’s most technologicallyadvanced meeting and learning facility. As such, this facility hosts academic conferences as well asgovernment, non-profit, corporate and community events. The University Center Club is an upscalevenue that overlooks Bobby Bowden Field at Doak Campbell Stadium. Although similar in size to theFSU Conference Center, this facility can host significantly larger groups. The Oglesby Union offers a10,000 SF ballroom divisible by three in addition to 15 breakout rooms for various uses. In addition tothis indoor space, the Oglesby Union offers several outdoor areas including the Union Green,Woodward Plaza, and a courtyard for a variety of uses.

While the Tallahassee Auto Museum can both accommodate approximately 1,000 guests, the amount ofbreakout space limits its ability to host certain groups. The Challenger, which is located within walkingdistance of the State Capitol, offers meeting space with advanced audio-visual services such as video-conferencing. Although located in a picturesque setting, the FSU Alumni Center offers limitedtechnological capabilities for group business. Several hotels offer meeting/banquet space - the largest ofwhich is the Marriott with 7,500 SF of total function space.

ACC Basketball Arenas

The following table profiles key attributes of arenas that currently host ACC men’s basketball as well asthose which will host teams that will be joining the ACC over the next two seasons.

School Arena

Seating

Capacity Suites Club Seats

Syracuse University Carrier Dome 34,600 41 0

North Carolina State University PNC Arena 21,600 61 2,000

University of Louisville KFC YUM! Center 22,100 75 2,400

University of North Carolina Dean Smith Center 19,700 0 0

University of Maryland Comcast Center 17,600 18 0

University of Virginia John Paul Jones Arena 14,900 19 0

Wake Forest University Lawrence Joel Veterans Memorial Coliseum 14,400 18 0

University of Pittsburgh Petersen Events Center 12,500 17 2,000

Florida State University Civic Center 12,200 34 468

University of Notre Dame The Joyce Center 11,400 0 5,000

Clemson University Littlejohn Coliseum 11,000 0 0

Virginia Polytechnic Institute Cassell Coliseum 9,800 0 0

Duke University Cameron Indoor Stadium 9,300 0 0

Boston College Conte Forum 8,600 8 0

Georgia Institute of Technology Hank McCamish Pavilion 8,600 0 300

University of Miami BankUnited Center 8,000 25 0

Average (Excluding the Civic Center) 14,940 19 780

Median (Excluding the Civic Center) 12,500 17 0

Notes: Sorted in descending order by seating capacity.

Notre Dame, Pittsburgh and Syracuse will join the ACC in the 2013-14 season.

Maryland is scheduled to depart the ACC in the 2014-15 season when Louisville will join.


Profile of ACC Men's Basketball Arenas

Several of the arenas that are or will be hosting ACC teams are significantly larger than the Civic Centerbecause they were built to serve other purposes (e.g., the Carrier Dome and PNC Arena) or they have ahistorically strong men’s basketball program that can support a larger seating capacity (e.g. KFC YUM!Center and Dean Smith Center). The Civic Center’s seating capacity is consistent with the medianseating capacity of 12,500 and is adequate to meet the needs of FSU’s basketball programs.


5. Input from Demand Generators 29

Input from Demand Generators

As part of the market research, interviews/surveys were conducted with existing and potential users whorepresent sports, entertainment and exhibit/meeting events. Existing and potential users were asked howthe Civic Center could be improved to enhance their event’s marketability, overall ingress/egress and/orrevenue generation. Potential users were also asked what program elements and/or destination attributesare necessary to attract their event(s) to the Civic Center and, if interested, what their typical eventstatistics are. The input obtained is not intended to be statistically valid but rather provides a basis forevaluating what potential renovations/enhancements are required/desired by users in order to positivelyimpact future Civic Center usage.

Arena Users

FSU Athletics

The primary tenant at the Civic Center will continue to be the FSU men’s and women’s basketballteams. As such, it is important to understand their requirements in terms of seating capacity and otherrelated amenities, particularly in relation to the University’s stated objectives for the master plan. Forinstance, some desired improvements may achieve broader University goals (e.g., providing a first-classrecruiting tool, becoming the face of the University, etc.) that may not directly result in increased usageor improved financial performance at the Civic Center.

FSU Men’s Basketball

As shown in the following graph, FSU men’s basketball has consistently ranked below the ACC averagein both total season attendance and average attendance per game.

Comparison of FSU Men’s Basketball Season Attendance to ACC Average

Sources: ACC; NCAA.

126,359117,381

139,904 137,047130,173

174,723 173,118164,541 161,579

168,490

0

50,000

100,000

150,000

200,000

2008-09 2009-10 2010-11 2011-12 Four-YearAverage

FSU ACC Average



Comparison of FSU Men’s Basketball Average Attendance to ACC Average

Sources: ACC; NCAA.

Average attendance as a percent of arena capacity helps mitigate differences in arena size. As shownbelow, FSU men’s basketball has averaged 67% of its arena capacity during the profiled four seasonscompared to a conference average of 78%.

Comparison of Men’s Basketball Average Attendance as a % of Arena Capacity

Sources: ACC; NCAA.

7,8977,336

9,327

8,062 8,156

10,483 10,3359,872 9,551

10,060

0

4,000

8,000

12,000

2008-09 2009-10 2010-11 2011-12 Four-Year Average

FSU ACC Average

99%

92%88%

77% 77% 77%

73%69%

67%

62% 61%

56%

0%

20%

40%

60%

80%

100%

Duke NorthCarolina

VirginiaTech

Maryland Average Clemson GeorgiaTech

WakeForest

Virginia FloridaState

NC State BostonCollege

Miami

100%



The tables below illustrate total and average attendance by individual ACC team. FSU men’s basketball ranked among the lower thirdof ACC teams in terms of total attendance for each of the profiled seasons. FSU’s average attendance per game ranked 5th in the2010-11 season.

Team Total Rank Total Rank Total Rank Total Rank Total Rank

North Carolina 315,519 1 337,934 1 287,155 1 362,867 1 325,869 1

Maryland 306,858 2 268,673 2 268,380 2 224,090 3 267,000 2

NC State 242,206 3 224,131 3 220,457 3 257,638 2 236,108 3

Virginia 173,716 5 172,389 6 172,659 5 168,349 4 171,778 4

Wake Forest 181,832 4 177,498 4 174,781 4 138,802 7 168,228 5

Duke 158,338 6 158,338 7 158,338 6 149,024 6 156,010 6

Virginia Tech 150,627 7 176,159 5 142,907 7 151,113 5 155,202 7

Clemson 135,619 8 151,442 8 140,917 8 125,249 9 138,307 8

Florida State 126,359 10 117,381 10 139,904 9 137,047 8 130,173 9

Georgia Tech 127,583 9 127,669 9 97,523 10 73,933 11 106,677 10

Boston College 105,418 11 90,394 11 90,509 11 79,985 10 91,577 11

Miami 72,599 12 75,411 12 80,963 12 70,854 12 74,957 12

Total 2,096,674 2,077,419 1,974,493 1,938,951 2,021,884

Average 174,723 173,118 164,541 161,579 168,490

FSUas a % of ACC Average 72% 68% 85% 85% 77%


North Carolina 21,035 1 17,786 1 19,144 1 20,159 1 19,531 1

Maryland 17,048 2 16,792 2 14,910 2 13,182 3 15,483 2

NC State 13,456 3 13,184 3 13,779 3 13,560 2 13,495 3

Wake Forest 12,122 4 11,833 4 9,199 7 8,675 6 10,457 4

Virginia 10,219 5 10,141 5 10,156 4 10,522 4 10,259 5

Duke 9,314 7 9,314 7 9,314 6 9,314 5 9,314 6

Virginia Tech 9,414 6 9,272 8 8,932 8 8,395 7 9,003 7

Clemson 8,476 8 9,465 6 8,289 9 7,828 9 8,515 8

Florida State 7,897 9 7,336 10 9,327 5 8,062 8 8,156 9

Georgia Tech 7,505 10 7,979 9 6,095 10 4,929 10 6,627 10

Boston College 5,548 11 5,317 11 5,324 11 4,705 11 5,224 11

Miami 4,537 12 4,713 12 4,763 12 3,936 12 4,487 12

Average 10,483 10,335 9,872 9,551 10,060

FSUas a % of ACC Average 75% 71% 94% 84% 81%

Note: Sorted in descending order by four-year average.

Source: NCAA.

Summary of ACC Men's Basketball Total Season Attendance by Team

2008-09 2009-10


2010-11 2011-12 Four-Year Average

Summary of ACC Men's Basketball Average Attendance by Team


5. Potential Demand Generators 32

FSU Women’s Basketball

The following graphs compare FSU’s women’s basketball total and average attendance per game to theACC average in both categories. FSU women’s basketball has consistently attracted slightly less totalattendance than the ACC average.

Comparison of FSU Women’s Basketball Total Attendance to ACC Average

Sources: ACC; NCAA.

By contrast, average attendance at FSU women’s basketball games has been slightly above the ACCaverage.

Comparison of FSU Women’s Basketball Average Attendance to ACC Average

Sources: ACC; NCAA.

44,35141,378 40,049

33,985

39,941

46,865

41,413 41,63038,734

42,161

0

20,000

40,000

60,000

2008-09 2009-10 2010-11 2011-12 Average

FSU ACC Average

2,9572,586 2,670

2,4282,660

2,884

2,485 2,473 2,4212,568

0

1,000

2,000

3,000

4,000

2008-09 2009-10 2010-11 2011-12 Average

FSU ACC Average



As shown below, FSU women’s basketball has averaged 22% of its arena capacity during the profiledfour seasons compared to an average of 24%.

Comparison of Women’s Basketball Average Attendance as a % of Arena Capacity

Sources: ACC; NCAA.

59%

36%34%

28%

24% 24% 23%22%

17%15%

13%

8%6%

0%

10%

20%

30%

40%

50%

60%

Duke NorthCarolina

Maryland NC State Average VirginiaTech

Virginia FloridaState

GeorgiaTech

BostonCollege

Miami Clemson WakeForest



The tables below illustrate total and average attendance for women’s basketball by individual ACC team. FSU women’s basketballhas consistently ranked 5th or 6th among the 12 ACC teams in terms of both total and average attendance per game.


Maryland 133,336 1 101,062 1 87,745 2 96,401 1 104,636 1

Duke 93,639 2 76,322 2 88,667 1 75,054 2 83,421 2

Virginia 58,122 4 65,506 3 57,908 3 63,039 3 61,144 3

North Carolina 74,404 3 51,855 4 52,995 4 44,710 4 55,991 4

Florida State 44,351 5 41,378 5 40,049 6 33,985 6 39,941 5

Virginia Tech 31,621 7 40,485 6 40,100 5 33,593 7 36,450 6

NC State 34,377 6 37,331 7 30,563 8 41,504 5 35,944 7

Georgia Tech 19,967 9 20,271 8 36,011 7 13,545 11 22,449 8

Boston College 24,892 8 20,058 9 20,461 9 11,852 12 19,316 9

Miami 17,523 11 13,791 11 18,491 10 22,515 8 18,080 10

Wake Forest 17,980 10 17,697 10 11,673 12 14,981 9 15,583 11

Clemson 12,168 12 11,201 12 14,899 11 13,625 10 12,973 12

Total Attendance 562,380 496,957 499,562 464,804 505,928

Average Attendance 46,865 41,413 41,630 38,734 42,161

FSU as a % of ACC Average 95% 100% 96% 88% 95%


Maryland 8,889 1 4,812 1 5,161 2 5,356 2 6,055 1

Duke 6,689 2 4,770 2 5,216 1 5,361 1 5,509 2

Virginia 3,419 4 3,853 3 3,048 3 3,152 3 3,368 3

North Carolina 3,916 3 2,881 4 2,944 4 2,630 4 3,093 4

Florida State 2,957 5 2,586 5 2,670 5 2,428 6 2,660 5

Virginia Tech 1,976 7 2,381 6 2,359 6 2,584 5 2,325 6

NC State 2,292 6 2,333 7 2,183 7 2,306 7 2,278 7

Georgia Tech 1,331 9 1,448 8 2,118 8 1,042 9 1,485 8

Boston College 1,464 8 1,433 9 1,364 9 790 11 1,263 9

Miami 974 11 726 12 925 11 1,407 8 1,008 10

Wake Forest 999 10 983 10 687 12 788 12 864 11

Clemson 761 12 800 11 931 10 908 10 850 12

Average Attendance 2,884 2,485 2,473 2,421 2,568

FSU as a % of ACC Average 103% 104% 108% 100% 104%

Note: Sorted in descending order by four-year average.

Source: NCAA.

Summary of ACC Women's Basketball Total Season Attendance by Team


Summary of ACC Women's Basketball Average Attendance by Team




Arena Event Promoters/Producers

Feld Motorsports

Feld Motorsports, the largest promoter of indoor motorsports, holds its Monster Jam at the Civic Centerannually. The Civic Center’s seating capacity is sufficient for their needs. Safety is the single mostimportant criteria to the promoter. Having the ability to retract the first few rows of seats to create asafety barrier of six to eight feet from floor to first row of seating is optimal. The promoter seeksflexible and creative rental terms and anticipates continuing to host this event at the Civic Center.Historically, attendance has been sufficient to warrant an annual event in the market with two weekendperformances. Adequate parking, floor access for large vehicles, dressing room access for showparticipants and the current floor space are requirements to accommodate the show.

Feld Entertainment

Feld Entertainment hosts the Ringling Brothers and Barnum & Bailey Circus and Disney Live events atthe Civic Center. The Ringling Brothers Circus is the gold unit which is a smaller production thattravels via road rather than train. The gold unit is a less expensive production and allows FeldEntertainment to play smaller markets. From a production perspective, the existing Civic Center issufficient for the circus and Disney Live.

Promoter representatives mentioned that any physical improvements to the backstage, loading dock, andparking lot areas would positively impact their events. One specific challenge noted was that the marketdoes not typically generate the same amount of revenues as other similarly sized markets. The ability tocross promote with the FSU campus including faculty and staff is viewed as a positive, particularlyopportunities to leverage media inventory.

Cirque Du Soleil

Cirque Du Soleil has played the Civic Center in recent years with its high-quality, artistic entertainmentshows. Cirque Du Soleil has two types of shows: resident and touring. The resident shows play in thesame city for a set amount of time generally in multi-year terms. Cities that are currently home toresident shows include Las Vegas, Nevada, Los Angeles, California, and Orlando, Florida. The touringshows are split into two distinct types of shows – arena shows and big top shows. The productions aredesigned to play either an indoor arena or a tented type of venue in an open outdoor environment.

From a production perspective, the venue is able to accommodate both their front-of-house and back-of-house needs. The routing of a Cirque Du Soleil is based on the ability to play in profitable markets.Two issues affect all venues and routing in Florida: there are two big top shows that regularly playMiami and Tampa and there is a resident show in Orlando that plays year-round. These two issuesprovide limited windows for how Cirque Du Soleil is routed in the region.

Promoter representatives indicated that they play Tallahassee as they travel from Gainesville to NewOrleans, Louisiana. From a routing perspective, this is ideal for both the venue and the show.However, representatives indicated that Tallahassee is a tertiary market. Although Gainesville andJacksonville are not particularly strong markets, they do provide a natural route and are markets thatthey envision playing at some point in the future.



Beginning in 2014, there will only be one touring production of Cirque Du Soleil in North Americacreating a smaller inventory of possible tour dates. This will, most likely, create fewer regularopportunities for the Civic Center to host Cirque Du Soleil shows as the most profitable markets willbecome the most desirable markets to play.

The crew and artists associated with the touring show are flexible in creatively utilizing backstage spacefor dressing rooms, production and managers offices, and catering. Any reduction of back-of-housespace would be a concern to large-scale shows especially one like Cirque Du Soleil that has over 100people traveling with them. If a physical therapy room could be made available it would be ideal fortheir needs.

Vee Corporation

Vee Corporation is a family show promoter with events including Sesame Street Live. According torepresentatives, the Civic Center staffing and labor is higher than average. These expenses impactwhere they route their acts and is likely a major factor in why they have not played the Civic Center inthe last seven years.

AEG Live

AEG Live is an international concert and live event promotions company. AEG Live is responsible forsome of the largest concert events in the U.S. AEG Live promotes one to two concerts per year in theCivic Center. Representatives indicated that the venue is strategically located as shows route across theSoutheast. According to representatives, although the Civic Center is an older facility with less modernamenities, it meets the needs of most touring concerts from a production perspective.

AEG Live representatives mentioned that the Civic Center’s challenges are market driven, not program-related. The relatively small market size combined with the inability to sell a higher ticket price makethe economics difficult for many acts to play Tallahassee over other more profitable markets. As such,Tallahassee is often only considered when acts add more dates. Representatives stated that anyreduction in the number of backstage dressing rooms and production rooms would be detrimental inattracting concert activity to the venue.

World Wrestling Entertainment

World Wrestling Entertainment (WWE) has historically played the Civic Center every two years. Thevenue meets the needs of their live touring show from a production perspective and Tallahassee’slocation was viewed as a positive from a routing perspective. Ticket sales do not warrant that the eventbe held in Tallahassee on an annual basis. Ultimately, ticket sales dictate market potential, not venueenhancements. If sales grow then WWE management would likely respond and look to add more showsinto the market.

WWE representatives have experienced situations where a new owner comes in and creates new revenuestreams through facility fees or additional fees. They cautioned that these types of fees are paid for bythe fans and with a market that is strained to support shows now it may be detrimental to the venue.



SB2N Entertainment

SB2N Entertainment is a promoter and producer of a variety of international concerts and events. SB2Npromoted the Yo Gabba Gabba children’s show at the Civic Center. Tallahassee is a convenient routefor events. Representatives of SB2N indicated that they had a positive experience hosting their event atthe Civic Center and are excited about the marketing and cross-promotional opportunities with FSUonce it assumes ownership. Ultimately, the sales figures determine whether a show will play a marketor not. However, a strong and dynamic marketing support team can be advantageous to attractingpromoters to a market.

Icon Entertainment

Icon Entertainment is the primary promoter of Jeff Dunham, a highly popular comedic entertainerworldwide who played the Civic Center in 2008 and February 2013.

Icon Entertainment representatives cited that the Civic Center meets the needs of the tour from aproduction perspective and routing through Tallahassee is convenient for the tour. The show will playEstero, Kissimmee, Tampa, and Columbus, Georgia in 2013. Icon purposefully did not route throughJacksonville or Gainesville to provide more opportunity for Tallahassee to be successful.

Ticket sales in 2008 were not strong. Icon representatives were hoping that the second time in themarketplace would result in increased ticket sales which is the trend nationally. The promoter wasconfident that between the positive shift in the economy since 2008 and playing the market for a secondtime they would see stronger sales. This year’s date was not competing with FSU football and was aSunday afternoon matinee show which typically sells as well as a Saturday evening performance. Theshow is sold out in most markets in North America with Tallahassee being among the weakest.

The Icon representative feels that the marketplace is the concern and its lack of interest in shows that aretrending sell-outs in most markets including Florida markets. The aesthetics of the venue does not tendto distract an eager ticket buyer, rather ticket sales determine where a show will continue to route.

Leon County Graduations

Leon County Schools host five of their graduations at the Civic Center including Lincoln High School,Chiles High School, Rickards High School, Godby High School, and Leon High School. Attendance atthe graduation ceremonies range from 6,000 to 12,000 based on the school size.

Representatives from Leon County Schools indicated that they have always been pleased with the CivicCenter and are appreciative that the graduation dates are protected and available annually. The overallexperience is positive and they anticipate the continuation of their events at the Civic Center.

Representatives indicated that they have a challenge with a lack of sufficient parking for their events.They choose to utilize floor speakers and do not use the house speakers and have complaints about theacoustics for those located farthest from the stage. They also see a slight increase on an annual basis fortheir event costs but their budgets rarely rise to meet these increases.



Meeting Rooms and Exhibition Hall Event Users

Florida Department of Law Enforcement

The Florida Department of Law Enforcement utilized the Civic Center Exhibition Hall for many years tohost their certification examinations. They held events once per month with attendance ranging from100 to 400. Event representatives liked the site logistics including the parking, the access to restroomsand had minimal technology requirements.

The Florida Department of Law Enforcement recently moved all of their monthly events out of the CivicCenter Exhibition Hall to the Florida Public Safety Institute in Havana, Florida where they were able toget more favorable rental terms which resulted in significant cost savings.

East Coast Shows

East Coast Shows has been promoting consumer shows at the Civic Center Exhibition Hall for nearly 20years. The Boat Show utilized the Exhibition Hall and outside terrace for 19 years. They have ceasedpromoting the Boat Show recently primarily due to a diminishing number of boat retailers in theTallahassee area. The Boat Show is dependent on having vendors display their products and theeconomic downturn saw many of the vendors go out of business.

East Coast Shows representatives noted that challenges for the Boat Show included the amount ofavailable parking when FSU was playing a home game at the Civic Center and the price of parking.

The Home Show continues to be held at the Civic Center Exhibition Hall. Although the columns in theExhibition Hall, the lack of modern technology, and the antiquated lighting system are not preferable,they are able to work around those issues. The single biggest challenge for the Home Show is the priceof parking and accessibility to spaces.

The Rotary Club of Tallahassee

The Rotary Club of Tallahassee hosts a weekly luncheon and business meeting in the meeting rooms ofthe Civic Center. They have been meeting at the Civic Center for many years and anticipate similarevent activity for the foreseeable future. The Rotary Club of Tallahassee has approximately 125 to 150people attend their weekly meetings.

The promoter of the event indicated that management has been accommodating to their needs,particularly when there was a booking conflict. The food and beverage services were cited as being ofhigh quality and they are generally satisfied with the service.

Rotary representatives indicated that the facility is dated, the lighting is not warm and inviting, and theparking lot location creates a long walk for their attendees. Ideally any renovation would seek toaddress these issues. Strengths of the Civic Center include the food and beverage service, free parking,and the pricing structure for their event. They plan to continue to host their events at the Civic Center.



Tallahassee Fitness Festival

The Tallahassee Fitness Festival is produced and promoted by Eventions, LLC which is a regional eventplanner. Five Fitness Festivals have been hosted at the Civic Center and a sixth event is planned for2013. The one-day event utilizes the Exhibition Hall and the Meeting Rooms and has 150 vendors andapproximately 2,000 attendees. Strengths include the downtown location, the Civic Center staff, andpositive brand association with Civic Center that their sponsors feel is beneficial. The event promotercited the availability of parking, the walking distance from the parking lot to the Exhibition Halls andthe Meeting Rooms and the cost of parking as challenges – particularly for gala-type events.

From a physical perspective, the Exhibition Hall was referred to as a “concrete jungle” with poorlighting and acoustics. The costs associated with making the Exhibition Hall and Meeting Rooms moreappealing to vendors and attendees are expensive. From a manpower perspective, it is expensive andtime-consuming to host events at the Civic Center. Additionally, the promoter is concerned with therental cost and terms finding that there are many add-on expenses where other venues they work withinclude those ancillary costs such as pipe and drape or linens.

The promoter has experienced challenges with having arena-based events occurring at the same time astheir Fitness Festival. They have had the circus and an FSU basketball game occur on the same day astheir event. There have been noise issues with the sounds from the arena being heard in the MeetingRooms and Exhibition Hall. The promoter has explored other options for hosting this event. Desiredrequirements include contiguous space, more modern furnishings, lighting, and technology as well asavailable, close parking to the venue.

Tallahassee Society of Association Executives

The Tallahassee Society of Association Executives (TSAE) organizes events throughout the Tallahasseearea for their members including roundtables, education sessions, study groups, monthly luncheons, andan annual trade show and meeting. Events are held at a wide variety of venues on the FSU campus, theCivic Center, local governmental buildings, and cafes. The TSAE recently hosted their 25th AnnualTrade Show and Education Day at the Civic Center Exhibition Hall and Meeting Rooms. They also hostseveral regular meetings at the Civic Center in the meeting rooms.

The younger membership base of the TSAE is looking for new locations to host their events. Thebiggest challenge for the TSAE is the outdated condition of the Civic Center, and more specifically, theExhibition Hall and Meeting Rooms. Although the service and food/beverage operations are strong, it isdifficult to overcome the physical aesthetics of the venue. TSAE continues to utilize the Civic Centerbecause of its size and the lack of alternative options in Tallahassee. The cost to utilize the Civic Centeris another concern, particularly relative to the quality of amenities offered and the composition of theTallahassee market (e.g., state employees).


6. Comparable Facilities Analysis 40

Comparable Facilities Analysis

In order to help gauge the types of renovations/enhancements necessary for the Civic Center to remaincompetitive, operating data from newer/renovated Division-I arenas was analyzed based on interviewswith management, industry resources, published reports and our internal database. The data shown inthis report is based on available information for each of the profiled facilities. It should be noted that notall facilities are directly comparable to the Civic Center but can still offer a frame of reference forprogram and operating strategies. In addition, individual facilities are not identified in the comparativeoperating tables and graphs because some information was provided confidentially.

Ownership/Operating Structure

The table below summarizes the ownership/operator structure of the profiled peer facilities. Similar tothe Civic Center, five of the 11 profiled facilities serve as the primary arena in the market.

Arena University

Primary Arena

Serving the Market Owner Operator

Auburn Arena Auburn University Yes University University

Bank United Center University of Miami No University Private

Chaifetz Arena Saint Louis University No University Private

Comcast Center University of Maryland No University University

Ford Center University of Evansville Yes City Private

Hank McCamish Pavilion Georgia Institute of Technology No University University

John Paul Jones Arena University of Virginia Yes University Private

KFC YUM! Center University of Louisville Yes Authority Private

Mizzou Arena University of Missouri Yes University University

UCF Arena University of Central Florida No University Private

USF Sun Dome University of South Florida No University Private

Note: Sorted in alphabetical order by arena name.

Sources: Facility management; secondary research.

Profiled Peer Facilities

While nine of the 11 (82%) profiled facilities are University–owned, only four are University-operated.The other seven arenas utilize private management companies to operate their asset.

Ownership/Management Structure at Profiled Facilities

Sources: Individual facility management; other research.

82%

9% 9%

36%

64%

0%0%

20%

40%

60%

80%

100%

University Private/Authority Public

Ownership Management



Building Program

As shown in the following table, the Civic Center is the oldest of the profiled arenas and offers a slightlylower seating capacity for basketball than the profiled set. Newer arenas also offer loge seating which istypically comfortable seats that are located on the front several rows of the arena and separated from thegeneral seating.

Arena University

Year Built/

Renovated

Seating

Capacity Suites

Club

Seats

KFC YUM! Center University of Louisville 2010 22,100 75 2,400

Comcast Center University of Maryland 2002 17,500 18 0

Mizzou Arena University of Missouri 2004 15,100 24 1,000

John Paul Jones Arena University of Virginia 2006 14,900 19 0

Civic Center Florida State University 1999 12,200 34 468

Chaifetz Arena Saint Louis University 2006 10,100 16 1,450

USF Sun Dome University of South Florida 2012 10,000 0 600

UCF Arena University of Central Florida 2007 9,500 16 500

Ford Center University of Evansville 2011 9,320 21 515

Auburn Arena Auburn University 2010 9,100 12 627

Hank McCamish Pavilion Georgia Institute of Technology 2012 8,600 0 300

BankUnited Center University of Miami 2003 8,000 25 0

Average of Peer Facilities 12,200 21 700

Notes: Sorted in descending order by seating capacity.

Seating capacities vary by individual source but provide an order of magnitude comparison.


Profiled Peer Facilities - Building Program Elements

Utilization

The following graph depicts the total number of events and attendance hosted at profiled peer arenas.Utilization is impacted by factors such as the physical product, market characteristics, accessibility,mission statement, booking policy, rental and labor rate structure, regionally competitive facilities,marketing efforts and general economic conditions. As shown, profiled arenas host an average of 210events and 566,900 attendees annually. The Civic Center hosted more events than all of the profiledpeer facilities but 30% fewer attendees than the average of the profiled set.

Summary of Utilization at Profiled Peer Facilities


1,2

00

,30

0

56

6,9

00

49

1,5

00

41

8,0

00

39

6,1

00

38

3,9

00

34

1,0

00

253

210

145

270

479

140

242

0

100

200

300

400

500

0

250,000

500,000

750,000

1,000,000

1,250,000

Arena 1 Average Arena 2 Arena 3 Civic Center Arena 4 Arena 5

To

tal

Eve

nts

To

tal

Att

end

ance



Overview of Concert/Commercial Event Activity

One of the driving forces of an arena’s seating capacity is concert and other commercial activity whichcan generate substantial revenue. Some arenas can reduce their seating capacity through the use ofcurtaining. Pollstar is a trade publication covering the worldwide concert industry and retainsinformation primarily from the agents, managers and promoters who are producing concerts and otherentertainment acts. Their online resource provides a list of acts playing at specific venues for the pasttwo decades along with detailed box office statistics for available acts. As a point of reference, thefollowing tables summarize reported event attributes from 2012 Pollstar reports for the profiled arenasfor which data was available; not all acts report detailed event statistics. The majority of profiled arenasare privately managed.

Arena Events Performances

Tickets

Sold

Average

Attendance/

Performance

Gross Ticket

Sales

Average

Ticket

Price

KFC Yum Center 18 19 189,173 9,956 $12,526,956 $66

Chaifetz Arena 24 43 146,348 3,403 $6,183,255 $42

John Paul Jones Arena 17 21 86,286 4,109 $4,622,735 $54

Ford Center 9 14 64,188 4,585 $3,163,757 $49

USF Sun Dome 9 13 34,911 2,685 $1,833,342 $53

UCF Arena 11 11 42,977 3,907 $1,298,687 $30

Civic Center 4 4 17,213 4,303 $667,912 $39

Mizzou Arena 1 1 7,905 7,905 $456,880 $58

BankUnited 1 1 6,690 6,690 $448,110 $67

Average 10 14 66,188 4,728 $3,466,848 $52

Note: Sorted in descending order by gross ticket sales.

Source: Pollstar.

Summary of 2012 Pollstar Reports for Profiled Peer Facilities

The tables that follow provide the 2012 Pollstar report for each facility including a list of the artists.

Headline Artist Events Performances

Tickets

Sold

Average

Attendance/

Performance Capacity %

Gross Ticket

Sales

Average

Ticket

Price

Van Halen 1 1 17,048 17,048 17,048 100% $1,544,983 $91

Jimmy Buffett 1 1 18,150 18,150 18,150 100% $1,528,752 $84

Bruce Springsteen 1 1 16,699 16,699 20,491 81% $1,394,816 $84

Roger Waters 1 1 12,547 12,547 14,666 86% $1,295,669 $103

Justin Bieber 1 1 16,334 16,334 16,344 100% $1,158,153 $71

Red Hot Chili Peppers 1 1 13,186 13,186 15,299 86% $761,089 $58

KISS/Motley Crue 1 1 6,050 6,050 9,401 64% $672,485 $111

Dave Matthews 1 1 10,301 10,301 12,449 83% $639,514 $62

Carrie Underwood 1 1 10,069 10,069 10,538 96% $593,576 $59

Miranda Lambert 1 1 13,100 13,100 13,100 100% $578,575 $44

Eric Church 1 1 10,549 10,549 10,549 100% $423,078 $40

Sugarland 1 1 7,543 7,543 9,114 83% $386,105 $51

New Edition 1 1 6,957 6,957 8,572 81% $375,380 $54

Big Time Rush 1 1 5,917 5,917 8,340 71% $321,445 $54

Harlem Globetrotters 1 2 10,697 5,349 10,322 52% $259,758 $24

Jeff Dunham 1 1 5,428 5,428 5,428 100% $246,974 $46

Tour of Gymnastics 1 1 5,157 5,157 6,496 79% $217,760 $42

Royal Comedy Tour 1 1 3,441 3,441 7,808 44% $128,844 $37

Total 18 19 189,173 9,956 $12,526,955 $66

KFC Yum Center - 2012 Pollstar Report




Tickets

Sold

Average

Attendance/


Gross Ticket

Sales

Average

Ticket

Price

Cirque du Soleil 1 6 8,719 1,453 3,833 38% $505,707 $58

Muse 1 1 7,708 7,708 7,708 100% $461,930 $60

Def Leppard/Poison 1 1 6,055 6,055 6,625 91% $454,805 $75

Phish 1 1 7,425 7,425 9,978 74% $445,500 $60

Disney on Ice 1 7 22,842 3,263 5,988 54% $436,790 $19

Batman Live 1 6 9,945 1,658 5,706 29% $413,664 $42

The Black Keys 1 1 9,097 9,097 9,097 100% $403,784 $44

Blake Shelton 1 1 7,590 7,590 7,590 100% $383,718 $51

Eric Church 1 1 8,420 8,420 8,420 100% $296,315 $35

Phineas and Ferb 1 4 11,305 2,826 3,650 77% $291,108 $26

Tour of Gymnastics 1 1 5,248 5,248 6,893 76% $286,369 $55

Mike Epps 1 1 5,169 5,169 6,523 79% $278,678 $54

Rickey Smiley 1 1 4,752 4,752 6,415 74% $268,988 $57

Bassnectar 1 1 4,987 4,987 4,987 100% $198,652 $40

Wiz Khalifa 1 1 4,294 4,294 5,030 85% $174,381 $41

Steve Harvey 1 1 3,396 3,396 4,157 82% $166,138 $49

Fred Hammond 1 1 3,903 3,903 6,679 58% $155,150 $40

Mel Waiters 1 1 2,962 2,962 5,084 58% $143,938 $49

Mac Miller 1 1 3,774 3,774 6,581 57% $116,994 $31

Royal Comedy Tour 1 1 2,196 2,196 4,579 48% $98,735 $45

Smashing Pumpkins 1 1 2,153 2,153 4,197 51% $96,019 $45

OMG Girlz 1 1 2,416 2,416 9,773 25% $61,130 $25

TNA Wrestling 1 1 644 644 2,513 26% $24,830 $39

Showdown Drumline 1 1 1,348 1,348 8,907 15% $19,932 $15

Total 24 43 146,348 3,403 $6,183,254 $42


Tickets

Sold

Average

Attendance/


Gross Ticket

Sales

Average

Ticket

Price

Dave Matthews Band 1 2 23,961 11,981 13,864 86% $1,554,153 $65

Bruce Springsteen/E Street Band 1 1 9,931 9,931 13,000 76% $921,966 $93

Jason Aldean 1 1 13,416 13,416 13,416 100% $631,262 $47

Miranda Lambert 1 1 8,410 8,410 8,410 100% $333,242 $40

Eric Church 1 1 7,911 7,911 8,507 93% $321,043 $41

Foxworty/Engval/Larry 1 1 5,463 5,463 6,352 86% $240,795 $44

Mamma Mia 1 1 1,938 1,938 2,199 88% $104,147 $54

Riverdance 1 1 1,981 1,981 4,515 44% $96,549 $49

Celtic Woman 1 1 1,646 1,646 3,158 52% $77,884 $47

Fiddler on the Roof 1 1 1,630 1,630 2,230 73% $76,800 $47

Disney Live 1 2 3,269 1,635 2,045 80% $64,642 $20

The Harlem Globetrotters 1 1 1,630 1,630 6,770 24% $49,058 $30

Young Frankenstein 1 1 932 932 2,201 42% $41,357 $44

Steve Aoki 1 1 1,492 1,492 3,790 39% $37,211 $25

TNA Wrestling 1 1 705 705 4,816 15% $26,522 $38

Sesame Street Live 1 3 1,127 376 8,984 4% $25,282 $22

Newsboys 1 1 844 844 2,176 39% $20,822 $25

Total 17 21 86,286 4,109 $4,622,734 $54

Chaifetz Arena - 2012 Pollstar Report

John Paul Jones Arena - 2012 Pollstar Report




Tickets

Sold

Average

Attendance/


Gross Ticket

Sales

Average

Ticket

Price

Elton John 1 1 10,088 10,088 10,088 100% $950,995 $94

Cirque du Soleil 1 6 9,357 1,560 3,026 52% $509,635 $54

Lady Antebellum 1 1 9,399 9,399 9,399 100% $448,950 $48

James Taylor 1 1 4,393 4,393 5,000 88% $290,598 $66

Eric Church 1 1 8,157 8,157 8,157 100% $287,160 $35

Jeff Dunham 1 1 6,452 6,452 6,452 100% $280,662 $44

Rowdy Frynds/Hank Wm 1 1 4,186 4,186 6,000 70% $212,376 $51

Winter Jam 1 1 8,549 8,549 8,549 100% $94,557 $11

Harlem Globetrotters 1 1 3,607 3,607 8,527 42% $88,824 $25

Total 9 14 64,188 4,585 $3,163,757 $49


Tickets

Sold

Average

Attendance/


Gross Ticket

Sales

Average

Ticket

Price

Elton John 1 1 10,009 10,009 10,009 100% $906,665 $91

Florence & The Machine 1 1 4,580 4,580 6,819 67% $198,318 $43

The Kings Men 1 1 4,043 4,043 6,245 65% $157,488 $39

Fresh Music Festival 1 1 2,882 2,882 6,336 45% $148,897 $52

Mythbusters 1 1 2,799 2,799 4,916 57% $119,987 $43

The Story Tour 1 1 3,006 3,006 4,955 61% $111,448 $37

Wiz Khalifa 1 1 2,814 2,814 5,295 53% $96,862 $34

Sesame Street Live 1 5 3,920 784 3,816 21% $79,649 $20

Luminate/Beckah Shae 1 1 858 858 6,256 14% $14,028 $16

Total 9 13 34,911 2,685 $1,833,341 $53


Tickets

Sold

Average

Attendance/


Gross Ticket

Sales

Average

Ticket

Price

Miranda Lambert 1 1 6,513 6,513 7,110 92% $306,736 $47

Eric Church 1 1 5,456 5,456 6,066 90% $193,363 $35

Rise Against 1 1 5,251 5,251 6,357 83% $189,509 $36

Mac Miller 1 1 3,810 3,810 8,003 48% $149,002 $39

Casting Crowns 1 1 4,231 4,231 7,949 53% $129,851 $31

Lynyrd Skynyrd 1 1 1,732 1,732 5,581 31% $84,650 $49

Meek Mill/Tyga 1 1 1,858 1,858 7,789 24% $73,892 $40

Pretty Lights 1 1 2,637 2,637 4,848 54% $73,322 $28

Winter Jam 1 1 4,513 4,513 9,200 49% $47,484 $11

Aziz Ansari 1 1 6,522 6,522 8,002 82% $42,706 $7

Alesso 1 1 454 454 8,010 6% $8,172 $18

Total 11 11 42,977 3,907 $1,298,686 $30


Tickets

Sold

Average

Attendance/


Gross Ticket

Sales

Average

Ticket

Price

Miranda Lambert 1 1 6,620 6,620 6,760 98% $295,333 $45

Eric Church 1 1 5,540 5,540 7,377 75% $196,375 $35

Casting Crowns 1 1 3,367 3,367 5,000 67% $89,678 $27

Riverdance 1 1 1,686 1,686 1,809 93% $86,526 $51

Total 4 4 17,213 4,303 $667,912 $39

Ford Center - 2012 Pollstar Report

Sun Dome at University of South Florida - 2012 Pollstar Report

University of Central Florida Arena - 2012 Pollstar Report

Tucker Civic Center - Pollstar 2012




Tickets

Sold

Average

Attendance/


Gross Ticket

Sales

Average

Ticket

Price

Rascal Flatts 1 1 7,905 7,905 9,000 88% $456,880 $58

Total 1 1 7,905 7,905 $456,880 $58


Tickets

Sold

Average

Attendance/


Gross Ticket

Sales

Average

Ticket

Price

Drake 1 1 6,690 6,690 6,690 100% $448,110 $67

Total 1 1 6,690 6,690 $448,110 $67

Bank United Center - 2012 Pollstar Report

Mizzou Arena - 2012 Pollstar Report

Note: Sorted in descending order by gross ticket sales at facility.

As shown, profiled arenas commonly host concerts, comedy acts, touring sports events, and familyshows. Attendance and average ticket prices can vary significantly based on factors such as capacity,local/regional competition, and area demographics.

Financial Operations

Comparing financial performance at comparable facilities can offer a good frame of reference fromwhich to benchmark historical and projected financial operations of the existing Civic Center and anypotential enhancements/renovations. It is important to recognize that facilities vary in their methods offinancial reporting and, as such, not all categories or line items are uniformly reported. Consequently,for purposes of this analysis, adjustments have been made to the financial information as reported by thefacilities in order to try to make the data as consistent as possible for comparative purposes. Forinstance, operating revenues do not include any public funding or tax revenue such as hotel/motel taxcollections for any of the profiled facilities. Similarly, facility operating expenses exclude depreciationexpense, debt service, large asset purchases, and any effect of taxes.

The following table illustrates operating revenues, operating expenses and operating gain/(loss) for theprofiled peer facilities. Individual facilities are not identified in the comparative tables because someinformation from privately operated facilities was provided confidentially. Operating expenses atcompetitive/comparable facilities can vary significantly based on factors such as building program, sitesize, management structure, event activity, age of venues, energy efficiency resources, and contractedservices. The Civic Center’s financial operating gain ranks fourth among six profiled facilities whichranged from operating income of $711,000 to an operating loss of $1.0 million.

Arena

Operating

Revenues

Operating

Expenses

Operating

Gain / (Loss)

1 $9,031,000 $8,320,000 $711,000

2 $1,405,000 $851,000 $554,000

3 $1,878,000 $1,461,000 $417,000

Civic Center $6,739,000 $6,493,000 $246,000

4 $7,200,000 $8,000,000 ($800,000)

5 $2,022,000 $3,042,000 ($1,020,000)

Average (excluding Civic Center) $4,307,200 $4,334,800 ($27,600)

Median (excluding Civic Center) $2,022,000 $3,042,000 $417,000Note: Sorted in descending order by operating gain.


Summary of Financial Operations at Profiled Peer Facilities


7. Management Alternatives 46

Management Alternatives

There are several potential management options for arena/civic center facilities. While the governancestructure should play a significant role in oversight, establishing and administering policy as well asmaintaining accountability for the facility, the management team should be responsible for overseeingthe day-to-day operations of the facility including implementing the mission statement and operatingpolicies. Consequently, the management approach is important because it typically impacts all aspectsof operations including marketing, utilization, financial operations and overall efficiency of a facility.For instance, management’s ability to effectively negotiate rental rates and be flexible in implementationof the booking policy can directly impact utilization, financial performance and/or economic impactgenerated from the venue. In some instances, publicly run facilities are limited in their capability to actas quickly as other management approaches.

As such, some facilities owners choose to delegate the management of facility operations to some formof third party that provides industry knowledge and representation. In addition to these benefits,management through a third party can offer stability and insulation from political influence which canbe desired attributes by customers, vendors, facility management and staff who typically prefer acontinuity of purpose and ability to function within a business environment that is not affected by eachpolitical election.

Examples of existing management options at arena/civic center facilities include, but are not limited to,the following:

Operating as an independent authority.

Operating through traditional governmental management such as a City/County departmentalstructure.

Operating as a University department.

Contracting with a third party that specializes in managing similar facilities.

Each of these alternative approaches to management can be found within the public assembly facilityindustry and are discussed in more detail on the pages that follow.

Independent Authority

In many states, an authority is a political subdivision of one or more governmental entities (e.g., City,County and/or State) that is allowed by an act of local or state legislature. Authorities are usuallygoverned by a Board of Directors that provides oversight and accountability. The Civic Center iscurrently managed under this structure by the Tallahassee-Leon County Civic Center Authority until thesale of the asset to FSU is finalized this summer. The KFC Yum! Center at Louisville University andPNC Arena at North Carolina State University are examples of arenas owned by an authority structure.However, both of these venues are operated by third party management companies.



This form of management structure is typically pursued when a fiscal resource is created or allocated bya unit(s) of government and when an inter-local agreement is pledged to the authority for specificpurposes. In many cases, the authority is tasked with the planning, design, financing, construction,operations and improvement to a designated project(s).

One primary objective of creating an authority can be to obtain a funding source that can allow for theindependent operations of the facility. This approach has value if there is a political consensus and willhelp to identify a revenue stream from existing or new fiscal sources that can help stabilize theoperations of a public assembly facility and provide for its long-term improvement and maintenance.

While authorities often provide autonomy and independence, they are typically most effective when theycontrol a revenue source that is dedicated to funding operations and/or retiring debt service. Authoritiescan also be beneficial when multiple jurisdictions and/or entities are involved in the funding and/oroperations of public assembly facilities.

Traditional Governmental Management

Historically, public assembly facilities are one of the few public assets that operate in a semi-businessatmosphere requiring contractual agreements, frequent short term lease/use of facilities by customers,management of part-time and temporary staff resources for numerous events and partnership with thirdparty vendors and tenants. These operating conditions are unique within the public services provided bygovernment whose natural inclination is to apply one set of guidelines to all municipal departments.

Unlike many municipal services where citizens do not have a choice, event promoters/producers have avariety of facilities to choose from when deciding where to host their event. In addition, attendees havea variety of options where they can spend their discretionary income. Given the competitiveness amongarenas/civic centers, these facilities need to operate in a manner that is consistent with well-establishedindustry practices.

As with any governmentally run facility, the goals and objectives may change with each political cycle.For instance, the number and diversity of events may be the primary objective of one official and fiscalperformance may be the priority of another. These changes in the facility objectives can be counter-productive if not managed effectively. As such, clearly defining a mission statement that reflectscommunity consensus and operating objectives (e.g., generating economic impact) can allow a facility toset forth an operating and marketing strategy that is consistent and long-term in implementation. Thisapproach also can provide a more stable environment for event promoters/producers when considering afacility for future use. In general, governmentally operated facilities are more successful whenmanagement has the ability and the authority needed to aggressively operate and book the facilitywithout incurring onerous procedures.

An example of a governmentally run facility is the Lawrence Joel Veterans Memorial Coliseum, hometo Wake Forest University’s men’s and women’s basketball programs. This facility is currently ownedby the City of Winston-Salem and operated through the Winston-Salem Public Assembly FacilitiesCommission, an 11 member volunteer commission of the City. However, Wake Forest University is inthe process of negotiating a deal with the City to own and operate the facility.



University Department

Collegiate facilities are sometimes owned and operated by the University. Examples include AuburnArena, Comcast Center and Mizzou Arena. Universities typically manage a facility that they own.They are often overseen by the broader University facilities or athletics departments.

The university structure appears to work well with facilities that want the ability to solicit donations andvolunteer labor hours from a defined set of users and/or alumni who typically have higher disposableincomes. Annual memberships, sponsorships and other forms of ongoing support can be collected fromthe private or public sector, typically through a foundation. In many cases, donations are taxdeductible. Further, tenants can maintain a high level of input into the facility’s usage and futuredevelopment when a relatively small group of university stakeholders represent the Board. Universitydepartments can also provide legal and/or tax advantages relative to other options.

Because most universities are dependent on external funding from private or public sources such asgovernment grants and direct donations, ongoing funding is one of the challenges of a universitystructure. Any changes to the funding of the overall entity can impact the ability to hire and retain staffas well as sustain facility operations. University department structures are typically more effective whenthey have a dedicated source of funding for ongoing operations and/or retiring debt service such as anendowment or athletics facilities fees charged to the student population.

Third Party Management Company

Many municipalities around the country utilize the services of a private management company (e.g.,AEG, Global Spectrum, SMG, etc.) to manage the operations of their facilities. Examples of privatelyoperated facilities include Bank United Center, Chaifetz Arena, Ford Center, John Paul Jones Arena andthe KFC Yum! Center.

Private management companies can address a variety of needs and issues confronted by universities that,in many cases, result in a more effective and efficient means of facility operations than university runvenues. Although some comparable facilities realize an operating deficit, these facilities are usuallydeveloped because of the broader university and community objectives they can achieve. Consequently,these facilities typically aim to attract events that draw patrons from outside the immediate market areawho spend money on hotels, restaurants, and other similar services. Given these unique economics andthe financial constraints for many universities, there is sometimes a conflict for the management teamwhich struggles to balance hosting events that operate at a profit and positively impact the facility’sfinancial performance, accommodating tenant team needs, and hosting events that do not necessarilycontribute positive cash flow but generate significant economic impact to a community.

As such, private management of a public assembly facility may be more effective under certainconditions which include, but are not limited to, the following:

University policy constraints may limit a university’s ability to retain and hire qualified personnelthat are experienced in the industry and compensated for their skill set relative to other similarpositions in the industry.



Union labor will be involved and the university is unable or unwilling to negotiate a favorablecontract for rates.

Efficient operations will likely be hampered by strong political/university influence and operatingautonomy is desired.

Facility management will likely be unable to effectively negotiate rates and other concessions andconsequently would not be as competitive with other facilities because of university constraints innegotiating financial terms with event promoters.

Contract approval requirements would likely be onerous and time consuming.

Universities have limited funds for significant maintenance requirements and/or capitalimprovements to facilities and a third party contractor agrees to provide funding as part of itsmanagement agreement.

Typically the management company charges a base management fee in addition to a performance orincentive fee. The performance or incentive fee is capped at the annual base management fee amountand is usually tied to measurable operating results such as increasing the number of events and/orattendance and/or improving the financial operations as compared to a baseline benchmark target.

Private management contracts have become more common at collegiate facilities in recent years and, assuch, facility owners are demanding more from them. Some universities have required the managementcompany to commit capital funds for the project to help ensure they have a vested interest in itsoperational success. Sources of such commitments may include naming rights, sponsorships andadvertising contracts. Private management contracts are including an increasingly higher portion of thefee based on performance. Various regulations restrict management contracts for facilities financed bytax exempt bonds which include, but are not limited to, the following:

Limiting performance or incentive fees to the negotiated base fee.

Limiting the term of the agreement.

Excluding distribution of profits to the management company.

One common apprehension for universities considering third party management is losing control of theasset. However, third party management is an agent of the university charged with managing andpromoting the asset. As such, the university can manage the amount and type of control that it retainsthrough the terms of its management agreement. For instance, in most private management agreements,universities still retain ownership; approve the operating and capital budgets; provide input and directionregarding policy; receive regular financial and management reports; and have the ability to terminate themanagement company for cause. Typically, universities are actively involved in the hiring and/orapproval of the facility’s general manager and have a designated contract administrator that oversees theterms of the contract and serves as liaison between the university and the management company.

Potential risks associated with third party management include, but are not limited to, the following:

The university does not control all aspects of its asset including hiring of personnel, determining theevent mix, ensuring quality service and overseeing ongoing repairs and maintenance of the facility.



Third party management could potentially be less sensitive to users, especially those that are locallybased and do not generate significant financial profitability or economic impact.

As the University continues to explore the merits of improvements, it should evaluate which ownershipand/or management approach best meets its long-term objectives for the facility. The Civic Centershould seek to be operated in a first-class manner by an aggressive, experienced management team withstrong industry contacts in order to enhance its competitiveness which could be accomplished by any ofthe profiled management options. As with any business operation, there are several approaches tomanaging facilities, each of which has advantages and disadvantages depending on the situation.

Typically there is pressure on most university assets to operate with a high degree of fiscalresponsibility. Potential benefits of operating the Civic Center through a third party managementcompany rather than as a university department include, but are not be limited to, providing greaterlatitude in staffing, compensation, contracts and incentive pay; increasing revenue generatingpotential; providing financial accountability and reporting; and allowing for greater autonomy whilestill being funded by public and private sources.

As all ownership, operational and financial responsibilities of the Civic Center transition to theUniversity; it is recommended that the University strongly evaluate the merits of third partymanagement in order to maximize utilization, marketability and financial performance. Thisrecommended management approach is based on trends at collegiate arenas, the unique nature of theasset, and the University’s stated objectives for the Civic Center.

It is important to recognize that the structuring of certain contractual agreements such as managementagreements can impact the tax status. As stated previously, the mission of the venue should beestablished and supported by the terms of any management agreement.


8. Renovation Cost Benefit Analysis 51

Renovation Cost/Benefit Analysis

Building Program Recommendations

Based on various research and analysis including a comparison of peer arenas at peer institutions anddiscussions and extensive feedback from representatives at FSU and other stakeholders, Populousprepared a detailed list of optimal building/renovation program recommendations by major area ascompared to the existing Civic Center. The following table summarizes feedback on theseprogrammatic and supporting infrastructure recommendations from a market perspective:

Element ObservationsSpectator Facilities New seats are needed to enhance fan experience

Diversifying seating options and increasing versatility isadvantageous

Number of suites can be reduced Adding more loge seats and club seating areas presents an

affordable alternative for both donors and non-donors Branding the student section is an affordable upgrade that

meets desired goals Total seating capacity should not be reduced

Meeting and Exhibit Space Upgrading overall quality and circulation of all space willenhance customer and promoter experience and allow forbetter integration with existing FSU facilities

Technology and lighting upgrades are needed Expansion does not appear warranted in the short-term

relative to potential upside demand, other priorities and order-of-magnitude development costs

Overall quality of space needs to be improved

Food and Retail Facilities Updated and more student-friendly concession stands willimprove customer experience and revenue generatingcapability

Integrated team store can enhance FSU fan experience andFSU branding but should be relatively limited square footageas its revenue generating capability is minimal

Circulation/Back of House Space Improves operational functionality and customer service Back-of-house support space should not be reduced

Technology Upgrades Implementing technological upgrades will improveoperational functionality and customer experience and be anexpectation relative to other FSU facilities

Improving acoustics and lighting throughout the facility is apriority to enhance overall marketability



Objectives of any potential renovations/enhancements are to meet the University’s stated goals andenhance overall marketability and competitiveness without fundamentally changing the total seat count.As stated earlier, relatively few events held at the Civic Center approach total seating capacity –typically key FSU men’s basketball games and a limited number concerts. Despite these demandfactors, some promoters noted there needs to be a critical mass of sellable seats available at the facilityfor them to consider it a viable venue to play, particularly in a tertiary market like Tallahassee.Ultimately, profitability dictates what events play what markets. In some instances, a smaller seatingcapacity can be mitigated by the management team’s ability to leverage its relationship with promoters.

Populous developed two options for seating reconfigurations as part of the master plan. Both of therecommended options presented by Populous maintain the total seat count while improving the qualityand type of seating at the Civic Center.

Category Existing Existing End-Stage

Lower Bowl - General Seating 6,666 6,600 - 6,700 5,600 - 5,700 5,652 5,600 - 5,800 5,500 - 5,600

Suite/Club Seat Level 1,471 1,400 - 1,500 1,800 - 1,900 1,037 1,200 - 1,300 1,200 - 1,300

Upper Bowl - Club Seating 3,504 3,900 - 4,000 3,900 - 4,000 2,711 2,700 - 2,900 2,800 - 2,850

Total 11,641 11,900 - 12,200 11,300 - 11,600 9,400 9,500 - 10,000 9,500 - 9,750

Category Existing Existing End-Stage

Lower Bowl 57% 55% - 55% 50% - 49% 60% 59% - 58% 58% - 57%

Suite/Club Seat Level 13% 12% - 12% 16% - 16% 11% 13% - 13% 13% - 13%

Upper Bowl 30% 33% - 33% 35% - 34% 29% 28% - 29% 29% - 29%

Total 100% 100% - 100% 100% - 100% 100% 100% - 100% 100% - 100%

Note: Suite/club seat level includes general seating, suites, loge seating, club seating, and restaurant.

Source: Populous.

Comparison of Civic Center Seat Count - Existing vs. Recommended

Option 2 Option 1

Percent of Total

Option 1 Option 2 Option 1 Option 2

Option 1 Option 2

Preventative Maintenance

On-going preventive maintenance and capital upkeep of arenas/civic centers are imperative for theirlong-term marketability and financial efficiency. It is clear that deferred maintenance is taking a tollthroughout the Civic Center. As such, many of the items identified in our project team’s recommendedbase level improvements would come under the heading of deferred or preventive maintenance. Ideally,the University should seek to address these items as soon as possible.

Preliminary Construction Cost Estimates

The project team developed a list of recommended needs from both a physical/facility perspective andfrom a competitive market perspective. These needs are based on our project team’s observations of thefacility and its operations; conversations with current, former, and potential users of the facility; thecompetitive/comparable facility assessment; as well as input from FSU representatives. This assessmenttakes into account opportunities and threats to the mission of the Civic Center that will need to beaddressed in the future.

Populous developed a prioritized statement of needs that addresses the key points of our project team’sanalysis. The statement of needs includes associated order-of-magnitude cost estimates for each lineitem so that the overall quantitative and qualitative return on investment can be evaluated.

Recommended facility improvements were grouped into the following categories that relate to theUniversity’s stated goals for the master plan of the Civic Center as well as their relative cost andimplementation timeframe:



Base level improvements include recommendations that seek to create a better fan experience, assist as arecruiting asset, improve acoustics and position the Civic Center in a better position to become the faceof the University. As stated previously, some of these renovations/enhancements relate to requireddeferred maintenance and infrastructure improvements that would ideally be addressed within the nextone to two years in order to enhance marketability and competitive position from both the patron and theevent promoter perspective.

Intermediate level improvements focus on those improvements that can enhance revenue andsponsorship opportunities (e.g., suite and club level improvements) as well as those that address back-of-house needs.

Advanced level improvements represent a more ambitious set of facility changes that could help positionthe Civic Center for longer-term success in the marketplace. These changes involve significant upgradesto the building exterior (e.g., a new lobby addition) and/or repurposing of existing space (e.g., newmeeting rooms/prefunction improvements).

Stand-alone improvements including expansion of the basketball practice facility and the Phase II sitedevelopment can be completed at any time.

Cost estimates for this report were developed by RLB, professional cost estimators and cost consultants.RLB is part of the architectural consultant team working with Populous and Architects: Lewis +Whitlock to develop cost estimates associated with the design concepts generated for the Civic CenterMaster Plan. The cost estimates reflect total project costs including both hard construction costs as wellas soft costs such as design fees, testing, and contingency fees. Further, these costs reflect the value ofthe improvements in 2013 and do not include any future cost escalation. The conceptual, order-of-magnitude nature of this report precludes the development of detailed cost estimates as would beexpected for an actual construction project. As such, the cost estimates included herein are compatiblewith the nature and scope of this study.

The table that follows summarizes the recommended Civic Center renovations/enhancements by theprioritized categories along with the estimated cost by line item where appropriate, the generalrelationship of the improvement to the University’s goals, and the estimated impact to financialoperations. Many of the recommended improvements will result in maintaining the facility’s existingbase of business as well as other qualitative benefits such as serving as a recruiting asset and providing afirst-class venue for both FSU and the community rather than a direct, quantitative impact on financialoperations of the Civic Center. In addition, some revenue streams may flow to other Universitydepartments (e.g., Athletics) rather than directly to the facility’s operating bottom-line.

8. Renovation Cost Benefit Analysis

Recommendation

Site improvements

Required deferred maintenance and infrastructure enhancements per ICES report

New video scoreboard and ribbon boards

New sound system

Acoustical treatment in arena seating bowl

New arena way-finding and graphics

Meeting/exhibit hall cosmetic updates

Wireless infrastructure enhancements

Arena seat replacement (if no seating overlays are planned)

Total

Recommendation

Arena seat replacement (if not done in base level improvements)

Seating bowl overlays/arena improvements

Suite and club level improvements

Courtside club

Back of house/loading dock/locker room expansion

Total

Recommendation

New lobby addition

New meeting rooms/prefunction improvements

Total

Recommendation

Basketball practice facility expansion

Phase II (build-out) site development

Total

More detailed program and cost estimate data as well as conceptual drawings of the proposed renovations/enhancements can be fin the Master Plan document that Populous and

Draft Document – Not for Distribution

Cost

Estimate

Better Fan

Experience

Enhance

Revenue/

Sponsorship Innovative

Recruiting

Asset

Great

Acoustics

7,432,000$ a a

Required deferred maintenance and infrastructure enhancements per ICES report 11,507,000$ a

4,442,000$ a a a a

635,000$ a a a a

1,024,000$ a a a a

566,000$ a a a

10,311,000$ a

365,000$ a a

3,283,000$ a a

$39,565,000

Cost

Estimate

Better Fan

Experience

Enhance

Revenue/


Recruiting

Asset

Great

Acoustics

19,164,000$ a a

1,377,000$ a a

14,029,000$ a a a

2,823,000$ a a a

3,994,000$ a a

$41,387,000

Cost

Estimate

Better Fan

Experience

Enhance

Revenue/


Recruiting

Asset

Great

Acoustics

4,881,000$ a a a

15,592,000$ a a

$20,473,000

Cost

Estimate

Better Fan

Experience

Enhance

Revenue/


Recruiting

Asset

Great

Acoustics

19,050,000$ a a

TBD a a a

$19,050,000

University Goals

University Goals

University Goals

University Goals

Recommended Base Level Improvements

Recommended Intermediate Level Improvements

Recommended Advanced Level Improvements

Recommended Stand-Alone Improvements

More detailed program and cost estimate data as well as conceptual drawings of the proposed renovations/enhancements can be fin the Master Plan document that Populous and Architects: Lewis + Whitlock prepared under separate cover.

54

Great

Acoustics

Face of the

University

Impact to

Financial

Operations

a Low

a Low

Low

a Low

a Low

Low

Low

Low

Low

Great

Acoustics

Face of the

University

Impact to

Financial

Operations

Low

Low

Moderate

Moderate

Low

Great

Acoustics

Face of the

University

Impact to

Financial

Operations

a Low

Moderate

Great

Acoustics

Face of the

University

Impact to

Financial

Operations

a Lowa Moderate

More detailed program and cost estimate data as well as conceptual drawings of the proposed renovations/enhancements can be f oundunder separate cover.


Financial Analysis

A facility’s physical state relative to that of its competitive supply has an impact on its marketability,resulting financial performance and return on investment. This sectionrecommended improvements at the Civic Center to event activity and financial operations.

Crossroads Consulting developed anhistorical operating revenues and operating expenses before taxes, depreciation and debt servicewith the recommended improvementsrelated assumptions are based on information from primary and secondary sources including, but notlimited to, historical Civic Center operations, geusers and area stakeholders as well as data on comparable facilities. This analysis is also based oncertain hypothetical assumptions pertaining to operations of theother related financial assumptions provided by and agreed to byprepared for internal use by FSU for its planning efforts related to future operations ofand should not be used or relied upon for any other purpose.

The analysis performed was limited in nature and, as such,opinion or any other form of assurance on the information presented in this report. As with all estimatesof this type, we cannot guarantee the results nor is any warranty intended that they can be achieved. Theestimates of operating revenues andefficiency of the renovated/enhanced facilitycircumstances that have not yet transpired, they are subject to variation. Further, there will usually bedifferences between estimated and actual results because events and circumstances frequently do notoccur as expected, and those differences may be material.

The University continues to review the accuracy of historical financial reporting for the Civic Center.As such, any future adjustments to historical figures could impact the findings of this report.

General Assumptions

General assumptions used in this analysis include, but are not limited to, the following:

The recommended improvements

The facility is operated by a private management company.

The facility is aggressively marketed.

A high level of quality customer service is

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

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

It should be noted that these assumptions are preliminary in nature and will continue to be refined asdecisions related to the building programcharacteristics continue to evolve.


physical state relative to that of its competitive supply has an impact on its marketability,resulting financial performance and return on investment. This section discusses the impact of the

the Civic Center to event activity and financial operations.

developed an order-of-magnitude estimate that compares the Civic Center’soperating revenues and operating expenses before taxes, depreciation and debt service

improvements for a stabilized year of operations. The financial estimate andrelated assumptions are based on information from primary and secondary sources including, but not

operations, general market attributes, input from existing/potentialarea stakeholders as well as data on comparable facilities. This analysis is also based on

certain hypothetical assumptions pertaining to operations of the Civic Center, attendance levels andother related financial assumptions provided by and agreed to by FSU. The accompanying analysis was

FSU for its planning efforts related to future operations ofr relied upon for any other purpose.

The analysis performed was limited in nature and, as such, Crossroads Consulting does not express anopinion or any other form of assurance on the information presented in this report. As with all estimates

pe, we cannot guarantee the results nor is any warranty intended that they can be achieved. Therevenues and operating expenses are based on the anticipated size, quality and

renovated/enhanced facility. Since these estimates and assumptions are based oncircumstances that have not yet transpired, they are subject to variation. Further, there will usually bedifferences between estimated and actual results because events and circumstances frequently do not

s expected, and those differences may be material.



improvements outlined earlier are completed.

is operated by a private management company.

aggressively marketed.

A high level of quality customer service is maintained.

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


these assumptions are preliminary in nature and will continue to be refined asdecisions related to the building program, broader development plan and other operating

Not for Distribution

55

physical state relative to that of its competitive supply has an impact on its marketability,discusses the impact of the

the Civic Center to event activity and financial operations.

that compares the Civic Center’soperating revenues and operating expenses before taxes, depreciation and debt service to those

for a stabilized year of operations. The financial estimate andrelated assumptions are based on information from primary and secondary sources including, but not

existing/potentialarea stakeholders as well as data on comparable facilities. This analysis is also based on

, attendance levels and. The accompanying analysis was

FSU for its planning efforts related to future operations of the Civic Center

does not express anopinion or any other form of assurance on the information presented in this report. As with all estimates

pe, we cannot guarantee the results nor is any warranty intended that they can be achieved. Theexpenses are based on the anticipated size, quality and

se estimates and assumptions are based oncircumstances that have not yet transpired, they are subject to variation. Further, there will usually bedifferences between estimated and actual results because events and circumstances frequently do not




these assumptions are preliminary in nature and will continue to be refined asand other operating



Market research suggests that remaining static will likely resultattendees over time, resulting in an operating loss.commercial events (e.g., concerts, family shows,Civic Center. The table below compares thestatus quo in key metrics.

Category

Events

Event Days

Total Attendance


Events

Event Days

Total Attendance

Operating Revenues

Operating Expenses

Operating Gain/(Loss)

Expense Coverage Ratio


Operating Revenues

Operating Expenses







Impact to Event Activity

The financial analysis is based on several factors including an estimate of utilization forrecommended improvements that was developed from the research previously referenced.to renovation, event activity typically experiences a “ramp up”which occurs for several reasons. For instance, some groups that book their enot want to risk that a facility’s construction is delayed and not completed in time for their event. Inaddition, some groups may choose to let management “fine tune” its operations before hosting an eventat a renovated/enhanced facility. However, it is important to recognize that the overall utilization at anyfacility is typically dependent on a number of factors (e.g., market size; accessibility; nearby amenities;size, configuration and quality of the facilities offered; efthe facility; date availability; cost, etc.) and is rarely consistent.utilization shown in the following table compares an improvedfor a stabilized year of operations.



arket research suggests that remaining static will likely result in a decline of event activity andattendees over time, resulting in an operating loss. The largest decrease is estimated to

(e.g., concerts, family shows, and theatrical performances) historically held at theThe table below compares the Civic Center historical three-year average to the estimated

Historical Three-

Year Average Status Quo

514 508

588 564

393,958 365,675


-1%

-4%

-7%

$7,016,000 $6,624,000

$6,679,000 $6,749,000

Operating Gain/(Loss) $337,000 ($125,000)

Expense Coverage Ratio 105% 98%


-6%

1%

Operating Gain/(Loss) -137%






The financial analysis is based on several factors including an estimate of utilization forthat was developed from the research previously referenced.

to renovation, event activity typically experiences a “ramp up” period to a stabilized level of activitywhich occurs for several reasons. For instance, some groups that book their event years in advance maynot want to risk that a facility’s construction is delayed and not completed in time for their event. Inaddition, some groups may choose to let management “fine tune” its operations before hosting an event

d facility. However, it is important to recognize that the overall utilization at anyfacility is typically dependent on a number of factors (e.g., market size; accessibility; nearby amenities;size, configuration and quality of the facilities offered; effectiveness of the management team in bookingthe facility; date availability; cost, etc.) and is rarely consistent. As such, the estimated range of

following table compares an improved Civic Center to the status quo scenario


56

in a decline of event activity andis estimated to occur in

historically held at theyear average to the estimated

Status Quo

508

564

365,675

-1%

-4%

-7%

($125,000)

98%

-6%

1%

-137%


The financial analysis is based on several factors including an estimate of utilization for thethat was developed from the research previously referenced. Subsequent

period to a stabilized level of activityvent years in advance may

not want to risk that a facility’s construction is delayed and not completed in time for their event. Inaddition, some groups may choose to let management “fine tune” its operations before hosting an event

d facility. However, it is important to recognize that the overall utilization at anyfacility is typically dependent on a number of factors (e.g., market size; accessibility; nearby amenities;

fectiveness of the management team in bookingAs such, the estimated range of

Civic Center to the status quo scenario


Category

Events

Sporting Event

Graduation

Concert

Food Function

Family Show

Theatrical Performance

Trade Show

Meeting/Lecture/Seminar

Other

Convention

Total

Impact to Events

Total Attendance

Sporting Event

Graduation

Concert

Food Function

Family Show

Theatrical Performance

Trade Show

Meeting/Lecture/Seminar

Other

Convention

Total

Impact to Total Attendance

Summary of Estimated Civic Center Event Activity

Remaining status quo will likely yield a loss of events and attendance at thefacilities continue to improve their physical product and overall customer experience. By contrast, theevent activity reflected in this analysis isaddition, the recommended facility improvements combined with continued development/redevelopment efforts to the surrounding area are anticipated tothe University.

Impact to Financial Operations

The following table compares the estimated operating revenues and operating expenses forCivic Center to the status quo scenario

Category

Operating Revenues

Operating Expenses


Expense Coverage Ratio

Incremental Impact to Operating Gain/(Loss)





Status

Quo

41 41 - 41

7 7 - 7

10 15 - 17

365 375 - 400

5 7 - 8

Theatrical Performance 8 11 - 12

11 12 - 12

Meeting/Lecture/Seminar 39 45 - 50

20 24 - 26

2 3 - 3

508 540 576

32 68

6% 13%

Total Attendance

131,200 139,400 - 139,400

64,400 64,400 - 64,400

37,000 60,000 - 68,000

52,925 54,375 - 58,000

17,000 23,800 - 27,200

Theatrical Performance 13,600 18,700 - 20,400

17,600 18,000 - 18,000

Meeting/Lecture/Seminar 17,550 20,250 - 22,500

10,000 12,000 - 13,000

4,400 7,800 - 7,800

365,675 418,725 438,700

Impact to Total Attendance 53,050 73,025

15% 20%


Summary of Estimated Civic Center Event Activity

Remaining status quo will likely yield a loss of events and attendance at the Civic Centerfacilities continue to improve their physical product and overall customer experience. By contrast, theevent activity reflected in this analysis is anticipated to be incremental net new to the community. Inaddition, the recommended facility improvements combined with continued development/redevelopment efforts to the surrounding area are anticipated to generate broader financial benefits to

The following table compares the estimated operating revenues and operating expenses forto the status quo scenario in a stabilized year of operations.

Status Quo

$6,624,000 $7,334,000 - $7,528,000

$6,749,000 $6,731,000 - $6,894,000

Operating Gain/(Loss) ($125,000) $603,000 -

98% 109% -

Incremental Impact to Operating Gain/(Loss) $728,000 - $759,000






57

Civic Center as competitivefacilities continue to improve their physical product and overall customer experience. By contrast, the

anticipated to be incremental net new to the community. Inaddition, the recommended facility improvements combined with continued development/

generate broader financial benefits to

The following table compares the estimated operating revenues and operating expenses for an improved

$7,528,000

$6,894,000

$634,000

109%

$759,000



Operating Revenues

The following table compares the estimated operatingCivic Center in a stabilized year of operations

Category

Operating Revenue

Food/Beverage

Amount Billed to Promoters and Others

Suites and Club Seats

Rental

Service and Handling Charges

Advertising and Commissions

Parking

Lease, Board and Regents

Promotions

Novelty Sales

Other

Total Operating Revenue

Impact to Operating Revenue

Summary of Estimated Annual Civic Center Operating Revenues

Operating Expenses

The following table compares the estimated operatingCivic Center in a stabilized year of operations

Category

Operating Expenses

Personnel Costs

Benefits

Utilities

Catering

Insurance

Materials/Supplies

General/Administrative

Promotions

Repairs/Maintenance

Contracted Services

Other

Total Expenses

Impact to Operating Expenses

Summary of Estimated Annual Civic Center Operating Expenses


the estimated operating revenues by major line item for anin a stabilized year of operations to the status quo scenario:

Status Quo

$1,982,000 $2,238,000 - $2,301,000

Amount Billed to Promoters and Others 1,346,000 1,488,000 - 1,530,000

1,057,000 1,146,000 - 1,180,000

595,000 657,000 -

Service and Handling Charges 374,000 414,000 -

Advertising and Commissions 360,000 398,000 -

331,000 374,000 -

250,000 250,000 -

221,000 245,000 -

71,000 81,000 -

37,000 43,000 -

$6,624,000 $7,334,000 $7,528,000

Impact to Operating Revenue 11%


Summary of Estimated Annual Civic Center Operating Revenues

the estimated operating expenses by major line item for anin a stabilized year of operations to the status quo scenario:

Status Quo

2,960,000 2,812,000 - 2,871,000

524,000 498,000 -

683,000 717,000 -

547,000 605,000 -

524,000 547,000 -

402,000 422,000 -

325,000 341,000 -

202,000 211,000 -

231,000 214,000 -

199,000 219,000 -

152,000 145,000 -

$6,749,000 $6,731,000 $6,894,000

Impact to Operating Expenses 0%


Summary of Estimated Annual Civic Center Operating Expenses


58

for an improved

$2,301,000

1,530,000

1,180,000

670,000

426,000

409,000

384,000

250,000

252,000

82,000

44,000

$7,528,000

14%


for an improved

2,871,000

508,000

751,000

634,000

547,000

422,000

341,000

221,000

224,000

223,000

152,000

$6,894,000

2%



Overall Summary

Research indicates that the recommendedboth FSU men’s and women’s basketball from a fan and recruiting perspective as well as retain andincrease the existing base of business at theproposed improvements are synergistmay be outwardly obvious to facility users and patrons (e.g.etc.), others may involve deferred maintenance and backthe marketability and long-term functionality of the Civic Center.

The competitive facility assessment indicates opportuperformance with the proposed renovations/enhancementsCivic Center are estimated to generate both qualitative and quantitative benefits, these projects do nottypically generate a positive return on investment relative to the required debt service.

Implementing the master plan throughand competitive position for the next 15 to 20 years. In addition, topportunity for the University to positively impact


ecommended improvements to the Civic Center will better accommodateboth FSU men’s and women’s basketball from a fan and recruiting perspective as well as retain andincrease the existing base of business at the facility that meets broader community needs. Most of theproposed improvements are synergistic to achieving both of these goals. While some enhancementsmay be outwardly obvious to facility users and patrons (e.g., new entrance, expanded lobby, new seats,etc.), others may involve deferred maintenance and back-of-house improvements but all will

term functionality of the Civic Center.

etitive facility assessment indicates opportunities for increased event activity and financialrenovations/enhancements. Although the proposed improvements to the

Civic Center are estimated to generate both qualitative and quantitative benefits, these projects do nottypically generate a positive return on investment relative to the required debt service.

gh a phased approach will enhance the Civic Center’s mand competitive position for the next 15 to 20 years. In addition, this project representsopportunity for the University to positively impact the broader economy.


59

better accommodateboth FSU men’s and women’s basketball from a fan and recruiting perspective as well as retain and

that meets broader community needs. Most of theic to achieving both of these goals. While some enhancements

new entrance, expanded lobby, new seats,house improvements but all will enhance

nities for increased event activity and financialsed improvements to the

Civic Center are estimated to generate both qualitative and quantitative benefits, these projects do nottypically generate a positive return on investment relative to the required debt service.

enhance the Civic Center’s marketabilityhis project represents another

Documents

Market and Economic Analysis Related to Future Uses of the