Smithfield Sporting Precinct Feasibility Study...9 Presentation to Council Smithfield Sporting Precinct Feasibility Study Page 3 Milestone 4: Consultation On Draft Feasibility Study

Prepared by: SGL Consulting Group in association with Woodhead International and Rider Levett Bucknall

Smithfield Sporting Precinct Feasibility Study July 2010

Feasibility Report Prepared for Cairns Regional Council

Attachment to Clause No. 6 SACCS Committee Meeting 11 August 2010

Smithfield Sporting Precinct Feasibility Study

T A B L E O F C O N T E N T S 1 INTRODUCTION ..........................................................................................................................1

1.1 Background .......................................................................................................................1 1.2 Study Aim and Scope .......................................................................................................1 1.3 Methodology .....................................................................................................................2 1.4 Structure of the Report .......................................................................................................3

2 DESIGN .......................................................................................................................................4 2.1 Design Brief ........................................................................................................................4

2.1.1 Relationship of Components ................................................................................................ 4 2.1.2 Components ............................................................................................................................ 4 2.1.3 Staging ...................................................................................................................................... 6

2.2 Concept Plan .....................................................................................................................7 2.3 Technical Evaluation .........................................................................................................7

3 DRAFT MANAGEMENT PLAN ......................................................................................................8 3.1 Management Structure .....................................................................................................8 3.2 Use Estimates .....................................................................................................................8

3.2.1 Indoor Sports ............................................................................................................................ 9 3.2.2 Health and Fitness ................................................................................................................. 10 3.2.3 Gymnastics ............................................................................................................................. 11 3.2.4 Youth Activities ...................................................................................................................... 11 3.2.5 Arts Activities .......................................................................................................................... 12 3.2.6 Hydrotherapy ......................................................................................................................... 12

3.3 Target Groups ..................................................................................................................13 3.3.1 Indoor Sports Courts ............................................................................................................. 13 3.3.2 Health and Fitness Centre ................................................................................................... 13 3.3.3 Youth Spaces ......................................................................................................................... 13 3.3.4 Arts and Multipurpose Spaces............................................................................................ 13 3.3.5 Hydrotherapy Pool ................................................................................................................ 13

3.4 Programs and Services ...................................................................................................14 3.4.1 Indoor Sports Courts ............................................................................................................. 14 3.4.2 Health and Fitness Centre ................................................................................................... 14 3.4.3 Youth Spaces ......................................................................................................................... 14 3.4.4 Arts and Multipurpose Spaces............................................................................................ 14 3.4.5 Hydrotherapy Pool ................................................................................................................ 14

3.5 Staff Requirements ...........................................................................................................15 3.6 Marketing Strategy ..........................................................................................................16

3.6.1 Programming ......................................................................................................................... 16 3.6.2 Pricing ...................................................................................................................................... 17

3.7 Financial Viability ............................................................................................................18 3.7.1 Assumptions ........................................................................................................................... 18 3.7.2 Operating Income and Expenditure ................................................................................ 20 3.7.3 Financial Forecasts ............................................................................................................... 21 3.7.4 Cash Flow Considerations ................................................................................................... 22

3.8 Implementation Plan .......................................................................................................23

4 CAPITAL COSTS ........................................................................................................................24 4.1 Cost Estimates ..................................................................................................................24

4.1.1 Quantity Surveyor Cost Estimates ...................................................................................... 24 4.1.2 Allowances ............................................................................................................................. 24

4.2 Sources of Funding ..........................................................................................................25


4.2.1 Queensland Sport and Recreation Major Facilities Funding Program ....................... 25 4.2.2 Australian Government - Regional and Local Community Infrastructure Program 26

4.3 Partnership Opportunities ................................................................................................26 4.3.1 Partnership Models ............................................................................................................... 26 4.3.2 Potential Partners .................................................................................................................. 27

5 SUSTAINABILITY ........................................................................................................................28 5.1 Environmental ..................................................................................................................28 5.2 Economic .........................................................................................................................28 5.3 Cultural and Social ..........................................................................................................28

APPENDIX A1: CONCEPT PLAN APPENDIX A2: SITE PLAN APPENDIX A3: STAGING PLAN APPENDIX B: QUANTITY SURVEYOR ESTIMATES

Smithfield Sporting Precinct Feasibility Study Page 1

1 I N T R O D U C T I O N

This chapter introduces the report by providing background information, the study objectives and the methodology used.

1.1 BACKGROUND

Cairns Regional Council was created on 15 March 2008, as a result of the State Government’s merger of Cairns City and Douglas Shire Councils. The Cairns Region covers 4135 km2 and extends 190 km from Bloomfield, located in Daintree National Park in the north, to Miriwinni in the south. The Cairns Region is one of the fastest growing in Australia, with more than 3 per cent annual growth. The estimated residential population at 30 June 2007 was 152,137. The region is a diverse, multicultural community, approximately 8% of the region's residents are of Aboriginal or Torres Strait Islander origin. The main community centres include Miriwinni, Babinda, Bramston Beach, Gordonvale, Edmonton, Cairns CBD, the Northern Beach suburbs, Mossman, Port Douglas, and the beachside communities of Wonga, Newell and Cooya. Smithfield is located in the northern suburbs of Cairns. The Smithfield Sporting Precinct includes a two court sports hall, with multipurpose room, a outdoor swimming complex, incorporating a 50 metre, covered 25 metre and a free form leisure pool, and playing fields. In 2007 Council commissioned a master plan for the precinct, which was endorsed by Council in July 2007. Council also resolved to undertake “a Business Case to investigate the feasibility of the priorities of the Master Plan”. The master plan’s major recommendations included:

§ Two additional multipurpose indoor sports courts

§ New health and fitness gym

§ Arts wet activity space

§ Multipurpose rooms

§ Possible future space for gymnastics

§ Integrated major precinct food and beverage hub

§ Youth space/pulse cafe style facilities

§ New program/therapy pool The approach used to prepare this report involved an accurate estimate of demand to determine the size of major market segments. In aquatic facilities this includes lap and fitness swimming, recreation aquatic play, aquatic education and therapeutic recreation. In terms of health and fitness this requires an assessment of competition and market demand for weights based fitness, cardio suite and group fitness classes. Finally, demand for indoor sports is primarily determined by the number of teams and range of sports which are interested in using the facility. Having estimated demand, appropriate designs and capital cost estimates have to be developed. These then provide the foundation upon which detailed management and marketing strategies will be prepared. Finally a financial model will provide valuable information on the long term financial sustainability of the proposed facilities.

1.2 STUDY AIM AND SCOPE

Cairns Regional Council commissioned SGL Consulting Group, Woodhead International and


Rider Levett Bucknall to prepare thee separate feasibility studies for:

a Edmonton Indoor Multi – Purpose Centre Feasibility Study.

b Edmonton Aquatic Precinct Facility Study.

c Smithfield Sporting Precinct Feasibility Study. The aim of the project is the determination of the feasibility of each of the three projects. In addition the outcomes and recommendations will provide Council with critical information for construction, facility management, capital/operational costs and asset management considerations. The feasibility studies will be used to support future funding applications for implementation. The Feasibility Studies are required to:

1 Prepare three separate feasibility studies.

2 Review and analyse the background information and planning undertaken to date.

3 Prepare a comprehensive report and recommendations that determine the feasibility of each project including recommended management models.

4 Prepare concept plans including floor plans and elevations, including staging alternatives.

5 Include quantity surveyor costs.

6 Develop the report and recommendations by undertaking stakeholder engagement, best practice and comparison of other model/facilities.

7 Produce documents of a quality to support future funding applications for implementation.

This Feasibility Report relates to the Smithfield Sporting Precinct project.

1.3 METHODOLOGY

Stages and milestones determined in the Study Brief and individual tasks to complete the feasibility studies are: STAGE 1: SITUATIONAL ANALYSIS Milestone 1: Appointment of Contractor & Project Inception Meeting 1 Project Clarification Milestone 2: Planning Analysis 1 Review Reports and Studies 2 Project Meeting STAGE 2: CONSULTATION & DRAFT FEASIBILITY STUDY Milestone 3: Draft Feasibility Study 1 Operational Review of Existing Facilities 2 Key Informant Interviews 3 Market Research 4 Focus Groups 5 Demographic Analysis 6 Comparative Assessment 7 Industry Trends 8 Demand Analysis Report 9 Presentation to Council


Milestone 4: Consultation On Draft Feasibility Study 1 Design Brief 2 Concept Design 3 Cost Estimates 4 Preliminary Draft Feasibility Study 5 Presentation 6 Community Consultation STAGE 3: FINALISATION OF FEASIBILITY STUDY Milestone 5: Final Feasibility Study 1 Final Feasibility Study

1.4 STRUCTURE OF THE REPORT

This Feasibility Report presents the findings and recommendations of the Smithfield Sporting Precinct feasibility study. It is based on data collected during the first two stages of the study. The complete Feasibility Study comprises two self contained documents: A Demand Analysis Report presents the outcomes of the first phase of Stage 2 (Milestone 3). The Feasibility Report presents the findings and recommendations of the whole study and builds on the information and assessments contained in the Demand Analysis Report (Milestones 4 and 5).


2 D E S I G N

This chapter presents the written design brief used to prepare concept plans, the concept plans and staging sequence, and an evaluation of the technical components.

2.1 DESIGN BRIEF

2.1.1 Relationship of Components

Based on the market research (refer to the Demand Analysis Report) demand exists for:

§ Extension to the Marlin Coast Recreation Centre to accommodate two air conditioned sports courts.

§ Gymnastics hall.

§ Health and fitness centre catering for 400 - 500 members, with capacity to grow as demand increases. Spaces will be required for cardio equipment, pin loaded and free weights and group fitness.

§ Crèche, to complement the health and fitness centre. When these components are designed and constructed, the two facilities – Marlin Coast Recreation Centre and Marlin Coast Swimming Complex will be physically closer together. Consequently, the opportunity exists to redesign the entrance, reception and kiosk/cafe to improve services to customers, provide better economies of scale and reduce administration overheads. In essence this will involve a single entrance, reception and kiosk/cafe serving the whole complex. No current demand has been identified for a “youth space/pulse cafe”, multipurpose room/”wet” arts area and hydrotherapy pool. They were originally included in the Master Plan based on suggestions and comments during the consultations. It is the view of Councillors that demand for these facilities either currently exists or will exist in the short to medium term. Hence, Council adopted the recommended staging outlined in the Demand Analysis Report and determined that the multipurpose and youth space be developed as Stage 2. Consequently, they are retained in the Master Plan, but should not be developed until adequate demand and use is demonstrated. The Master Plan identifies the potential redevelopment of the on-site residence as a Sports Medicine Clinic. Such a facility will complement a fully redeveloped Smithfield Sporting Precinct, particularly given the health and fitness components, hydrotherapy pool and both wet and dry activity areas. A Sports Medicine Clinic is a commercial venture, which could be partnered with a the facility contract manager and/or a private developer. Its commercial viability can be market tested, with little or no risk to Council. Space to the west of the existing building has been left undeveloped and is suitable for future expansion. This area can be designated for a commercial leisure/community venture, developed in partnership with the private sector.

2.1.2 Components

Sports Hall

§ Two court sports hall, at least 36.6m x 40.25m x 7m (to accommodate netball which has the largest court size).


§ Each court suitable of accommodating indoor sports including basketball, netball, volleyball, futsal.

§ Spectator accommodation in tiered seating along one side of court with three tiers.

§ Inclusion of basketball backboards, netball posts, nets for badminton and volleyball, and goals for futsal.

§ Dividing net to be installed between each court. Gymnastics Hall

§ Dedicated gymnastics hall 840m2 (24m x 35m), with training pit, minimum ceiling height 6m.

Health and Fitness Studio

§ Gym of approximately 350m2.

§ Group fitness studio of approximately 150m2.

§ Personal training/multipurpose area of approximately 50m2. Multipurpose Rooms

Including the existing multipurpose room, which may be retained, spaces will include:

§ Multipurpose room, approximately 660m2, with components as outlined in the Master Plan: ü Large meeting room for up to 150 persons circa 300m2 ü Small break out spaces x 3 each circa 50m2 (150m2) ü 3 x kitchenettes each circa 6m2 (20m2) ü Multiple lockable storage spaces circa 120m2 ü Amenity block serving meeting rooms/ arts wet area circa 70m2

§ Arts wet activities area (330m2)consisting of: ü Multiple lockable storage spaces circa 80m2 ü Arts Craft Activity Floor Area circa 180m2 ü Kiln Room circa 20m2 ü External drying racks circa 50m2

§ Youth space, approximately 210m2. Aquatic Component

§ Hydrotherapy/program pool – approximately 65m2, with depth 1.0m. Support Services and Administration

§ Crèche facility for up to 20 children, with capacity to expand to 40 children. Allow approximately 5m2 per child including staff and child amenities plus 7m2 per child for an outdoor play space.

§ Offices for staff (2 x 10m2) – at last one office adjacent to the health and fitness studio.

§ Reception and entry centrally located to service the total complex.

§ Kiosk/café servicing all components and adjacent to and integrated with reception, to minimise staffing in low patronage periods. Approximately 100m2 including areas for tables and chairs. Preferable for kiosk to directly serve the aquatic centre outdoor area, and provide visual supervision over aquatic components and multipurpose hall.

§ Staff room approximately 30m2.


§ Storage areas for gymnastics 50m2, sports courts 100m2, health and fitness 50m2, kiosk 10m2.

2.1.3 Staging

It is proposed that development will occur in stages as funding becomes available and demand increases. The sequencing of each stage will be determined by the funds available to Council and reaffirmation of the demand estimates. Based on the demand analysis and financial projections (refer to section 3.7) the highest priority, and hence should be designated as Stage 1, is two additional sports courts. It is also recommended that the final stage is the integration of reception and kiosk/cafe services. Sports Courts Demand currently exists for an additional indoor two court sports

stadium, to be used by basketball, netball, volleyball and possibly futsal.

Gymnastics Hall Demand exists for a larger dedicated gymnastics hall to cater for the YMCA gymnastics program and potentially for the relocation of the Cairns Community Gym.

Health and Fitness Studio A health and fitness studio complements both the aquatic centre and the multipurpose indoor courts, and is expected to be a profitable operation. The health and fitness studio should be developed as a lower priority, and hence once the sports courts and gymnastics halls have been constructed. A review of demand for health and fitness should be completed before construction.

Multipurpose Spaces No current demand has been identified for multipurpose rooms, arts wet activity area and youth space. They have been identified in the Master Plan, and therefore provision should be made for these facilities in the concept plan. Council has resolved that these components will be constructed as the second stage of redevelopment. They should be developed when adequate demand and use is demonstrated.

Hydrotherapy Pool No current demand has been identified for a covered hydrotherapy and program pool. As with the multipurpose spaces it was identified in the Master Plan, and therefore provision should be made for it in the concept plan. A hydrotherapy pool will complement the health and fitness studio, and should therefore be completed at the same time or after it is constructed – subject to adequate demand being proven.

Support Services and Administration

Support and administration spaces will have to be provided in the at each stage of development. For example storage areas will be constructed as part of each stage of redevelopment, and the crèche should be constructed with the health and fitness studio.


A central reception/entry and cafe/kiosk will be constructed when the two facilities physically merge.

2.2 CONCEPT PLAN

A concept plan, site plan and staging plan are included in Appendix A.

2.3 TECHNICAL EVALUATION

Multi Purpose Recreation Centre

§ All courts to be air conditioned and designed for a tropical climate with adequate flow through ventilation.

§ Court surfaces to be suitable for basketball, netball, futsal, volleyball and other indoor court sports.

§ Lighting to be meet lux standards set by each sport for national level competition.

§ Natural lighting to be provided so as not to interfere with play. Health and Fitness Studio

§ All areas to be air conditioned and with adequate flow through ventilation.

§ Stage area to be included in group fitness room.

§ Free weights area to have concrete slab floor and heavy duty rubber matting.

§ Group fitness room to have a timber, sprung floor or flooring with similar characteristics. Hydrotherapy Pool

§ Pool to be mechanically heated with solar heating boosters. Capacity to heat to 34oC.

§ Air handling system will be required to circulate air in the enclosed pool during winter to minimise condensation.

§ Water treatment plant and equipment to be adequate to meet water quality guidelines.

§ All plant, equipment and electrical fittings and fixtures to be energy efficient.

§ Water harvesting to be investigated including recycling of backwash water. Multipurpose Spaces


§ Meeting rooms with wall dividers to create flexible spaces. Support Services and Administration


§ All plant, equipment and electrical fittings and fixtures to be energy efficient.


3 D R A F T M A N A G E M E N T P L A N

This chapter presents a preliminary management or business plan for the proposed redevelopment of Smithfield Sporting Precinct. It addresses management structure, staffing, marketing strategy, financial plan and implementation strategy. The management plan does not address the operation and functionality of the existing Marlin Coast Swimming Centre. It is assumed that the facility will continue to operate as the regional competition pool, and continue to host major swimming events and competitions. Council may wish to include this feature in future management contracts/leases, to protect the interests of competitive swimming in Cairns.

3.1 MANAGEMENT STRUCTURE

Both Marlin Coast Recreation Centre and Marlin Coast Swimming Complex are autonomous leisure facilities managed independently. When all facilities proposed to be constructed, are built, the two facilities will be integrated with a single entry and reception area. Until this occurs, they will operate independently with two entrances and two distinct car parks. A discussion of management models and how they might apply to Smithfield Sporting Precinct is included in the Demand Analysis Report, which notes that the most appropriate management model for a multipurpose wet and dry leisure centre in Smithfield is one which the best elements of commercial and volunteer management are combined in a synergetic and complementary manner. Consequently, the recommended approach is to:

1 Retain separate contract management/lease arrangements for the Marlin Coast Recreation Centre and Marlin Coast Swimming Complex while the current facilities exist in their current configuration

2 Synchronise the two management contracts/leases so that they have common commencement and termination dates.

3 Standardise the terms and conditions of both management contracts/leases so they are consistent. It will specify the rights and responsibilities of Council and the contractor in all aspects of the operation of the facilities. Minor variations will be apparent in the attached Schedules to the documents.

4 Advertise the two management contracts/leases simultaneously, and provide applicants with the option of tendering for either one or both contracts. Assess all tenders on a “best value” basis to Council and the local Smithfield community.

5 Reassess the terms and conditions of both management contracts/leases when additional facilities have been funded and are in the planning stage.

6 Integrate the management of wet and dry facilities when the facility is fully redeveloped and physically integrated.

3.2 USE ESTIMATES

A variety of techniques are used to assess use of the proposed facility, including: § Results of the telephone survey § Existing use of facilities § Proposed use projected by sporting associations § Expected use based on similar facilities in Cairns and other venues throughout Australia


§ Population projections Whilst these projections are based on best available information, they remain as estimates. Competent, professional or volunteer management will be required to ensure that these estimates are met. The following use estimates are projected actual use at December 2009.

3.2.1 Indoor Sports

1 Basketball Mulgrave Coastal Basketball Association believes that additional courts are definitely needed as the Association struggles for court time. It currently uses Marlin Coast Recreation Centre on Thursday for senior competition, Friday for junior competition and Saturday for junior development programs. In addition to the indoor courts at Marlin Coast Recreation Centre, the Association uses an outdoor bitumen court at the Smithfield State High School for junior development programs because it cannot gain access to the centre. Expansion to four courts allow expansion of competitions, particularly juniors, and development programs.

2 Netball Two netball associations may potentially operate in Smithfield. Cairns Netball Association operates from outdoor courts in Cairns CBD at Martin Street. The Association has considered conducting netball competitions at the new futsal stadium at Redlynch, although no firm decision has been made. Given long standing personality issues between personnel at Cairns Netball and Marlin Coast Netball, Cairns Netball does not envisage conducting netball competitions at Smithfield. Marlin Coast Netball is based at Marlin Coast Recreation Centre. All social netball competitions are conducted by the YMCA, and Marlin Coast Netball are responsible for managing representative teams and conducting carnivals. The YMCA believes that both senior and junior netball programs can be expanded with the development of two additional courts.

3 Volleyball Cairns Volleyball Association has indicated it will introduce a volleyball program if it is given court space at a reasonable rental.

4 Futsal Northern Australia Futsal Association has stated it will relocate its programs and activities to the new Redlynch sports centre. However, the YMCA has suggested that scope and demand exists to introduce a social futsal competition for both adults and juniors at Marlin Coast Recreation Centre.

5 Indoor Sports 21% of respondents to the telephone survey had played an indoor sport in the previous 12 months. Participation was higher among males than females (26% compared with 17%), and greater among the under 40 year age group than older respondents (33% compared with 10%). The most popular sports netball (22%), soccer/futsal (22%), cricket (14%), basketball (13%) and volleyball (6%). 56% of these players said they would either definitely or are likely to use the proposed Smithfield facility. It was also found that 68% are likely to use the Smithfield facility at least weekly (ie regularly in a team). Based on this data, and using 2006 census data for the northern suburbs sub region, estimates of participation are summarised in Table 3.1. In translating these team numbers into court


usage, an 11 team competition can play one night over 5 x 45 minute time slots, with one bye each week.

Table 3.1: Estimated Participation by Residents Aged over 15 years in Indoor Sports

Total Players Likely to Use Smithfield Regular Players Teams Soccer/futsal 383 214 146 21 Cricket 243 136 93 13 Volleyball 104 58 40 6 Netball 383 214 146 18 Basketball 226 127 86 12

The 2006 Survey of Children's Participation in Cultural and Leisure Activities found that the participation rates for the most popular indoor sports were:

Activity Males Females Total Netball 0.1% 17.3% 8.5% Basketball 7.4% 5.7% 6.6% Soccer (indoor) 3.3% 1.1% 2.2% Cricket (indoor) 0.9% 0.1% 0.5% Volleyball 0.5% 0.4% 0.4% Badminton 0.3% 0.2% 0.3%

Based on this data, and using 2006 census data for the southern suburbs sub region, estimates of participation are summarised in Table 3.2.

Table 3.2: Estimated Participation by Children in Indoor Sports in Edmonton

Regular Players Teams Netball 8 246 Basketball 7 191 Soccer (indoor) 7 64 Cricket (indoor) 7 14 Volleyball 7 12

3.2.2 Health and Fitness

The household telephone survey found 23% of respondents were a member of, or had used a health and fitness club in the last 12 months. Further analysis found use by selected groups of respondents was:

Males 17% Females 28% Respondents aged under 40 years 27% Respondents aged over 40 years 19%

Assuming a catchment of the Smithfield, Trinity Park, Trinity Beach and Yorkeys Knob suburbs, a participation rate of 23% equates to 1951 participants. Of these 76% stated they would definitely or are likely to use a health and fitness centre in Smithfield, or 1483 people. It is the opinion of the consulting team that this is the maximum number of potential members in the catchment area. It is conservatively projected that membership will be in the order of 600 members.


3.2.3 Gymnastics

Currently, approximately 150 children participate in a gymnastics classes conducted by the YMCA at Marlin Coast Recreation Centre. The YMCA report that the program is constrained by lack of adequate space and available time. Cairns Community Gym operates from the Cairns PCYC, and has suffered from declining membership due to a variety of factors beyond its control. It currently has approximately 70 members and is interested in sharing a dedicated gymnastics facility at Marlin Coast Recreation Centre. The club is currently paying $1,700 per month to use the PCYC and rent equipment. It primarily caters for boys gymnastics due to the lack of equipment and facilities for girls gymnastics. Until recently, when the club had equipment for girls it had in the order of 180 members. Barron Valley Gymnastics Club has a high quality gymnastics program catering for approximately 400 children. It offers a comprehensive gymnastics program for boys and girls, and operates from a dedicated gymnastics centre. The club does not believe it will be affected by the development of a gymnastics hall at the Marlin Coast Recreation Centre. The ABS publication Children's Participation In Cultural And Leisure Activities (April 2009) measured participation by 5 – 14 year old children in a range of leisure activities. It found that the participation rate by boys and girls in organised gymnastics was 1.7% and 7.6%, respectively. Based on the 2006 population of children in the northern sub region surrounding Smithfield, the projected number of boy and girl participants in gymnastics was 25 and 110, respectively. These projections are far lower than the number of children reported to be in gymnastics clubs in Barron Valley, Smithfield and Cairns. This suggests that the catchment for a gymnastics program is much greater than for other types of leisure activities, probably due to the specialist nature of gymnastics facilities. It also means that it will be difficult to project future participation if a dedicated gymnastics hall is constructed. It is also known that the success of a gymnastics program is dependent upon factors such as the quality of the facility and equipment, the quality of coaches and the dedication of volunteers (mainly parents). Given the gymnastics market as described above, it is clear there is demand for a gymnastics facility to cater for the Cairns Community Gym and the YMCA gymnastics program. If these two programs amalgamate, a core base of gymnastics programs exist which may be satisfied with a gymnastics hall at Marlin Coast Recreation Centre. The two main issues are:

1 The level of revenue which will be generated, which will be based on a monthly rental in excess of the amount paid by Cairns Community Gym. An alternative model is that adopted at Barron Valley Gymnastics Club, in which Council guaranteed a loan obtained by the Club to fund the development of the gymnastics hall.

2 The most appropriate location for a third dedicated gymnastics hall in Cairns, given the proximity of Marlin Coast Recreation Centre to Barron Valley Gymnastics Club. Both facilities will have catchment areas which substantially overlap. From a regional perspective, a more central location within Cairns may be more appropriate.

3.2.4 Youth Activities

Whilst community youth space is in short supply in Cairns, no specific demand for youth spaces in the Smithfield area have been identified by Council.


The Federal Government has provided funds for the development of youth facilities in Edmonton. The model proposed for Edmonton may be applicable to Smithfield. It will offer a variety of employment, health, wellbeing, social and emotional services, in a “one stop shop”. It will play an important role as a community hub by establishing partnerships with not for profit agencies, health, education and employment agencies to provide for the complex and varied needs of young people. Once this model has been tested in Edmonton it may be applied to Smithfield. Given that 26% of the northern sub region is aged between 10 and 29 years, suggests that demand exists for youth services delivered locally.

3.2.5 Arts Activities

No demand has been identified for specific community arts facilities in Smithfield. However, community arts groups often have difficulty finding suitable and affordable space to conduct their activities. There is no reason to believe that Smithfield is any different to other communities in Australia. It is likely that a well designed community arts space will be well used, if appropriately priced. Traditionally, community arts groups pay relatively low fees to hire venues, although they are often willing to pay relatively high rates for tuition.

3.2.6 Hydrotherapy

Rehabilitation and therapy, primarily involves supervised and unsupervised gentle exercise in warm water. A hydrotherapy pool is heated and specifically designed for the therapeutic use of people having severe and multiple disabilities, people rehabilitating after surgery, people with arthritis and people who may benefit from the therapeutic properties derived from gentle exercise in warm water. The recommended temperature for a hydrotherapy pool is 34oC which is warmer than a lap pool or teaching pool. The size of a hydrotherapy pool will depend upon the number of people expected to use the pool at the same time and other intended uses. The depth should allow people to exercise whilst standing. A spa pool often complements a health and fitness facility. They normally have equipment to create turbulent water, and are used for passive recreation and relaxation, rather than exercise. Spa pools tend to be warmer than hydrotherapy pools, as people are not moving and exercising. In assessing use of a hydrotherapy pool other factors to be considered include:

§ It is possible to have the two uses (relaxation and therapy) in one well designed pool.

§ Spa pools are used by a wider age and ability spectrum of users, as they are a relaxation and fun facility compared with hydrotherapy pools.

§ A hydrotherapy pool has greatest affinity with health and fitness facilities, whereas spa pools relate equally well to health and fitness and aquatic facilities.

§ A well designed hydrotherapy pool which incorporates features of a spa pool will increase use without increasing operating costs.

No specific demand has been identified for a hydrotherapy/exercise pool at Smithfield. This type of pool is used by physiotherapists and occupational therapists in rehabilitation programs and to aid mobility. Whilst all age groups require rehabilitation, mobility issues tend to be related to age, particularly people aged over 65 years. Consequently, this age group is


likely to be the primary user of a hydrotherapy pool. The northern suburbs sub region has a slightly older age profile than the Cairns Regional Council population. At the 2006 census, almost 1,500 people were aged 65 years or more, representing 7.5% of the northern suburbs sub region and 12% of this age group in Cairns. This suggests that a potential market for a hydrotherapy pool exists, although it will be relatively small, and dependent upon use and promotion by physiotherapists and occupational therapists.

3.3 TARGET GROUPS

3.3.1 Indoor Sports Courts

The primary market for indoor sports is expected to be the northern suburbs sub region, although sports programs will attract from a large part of Cairns if it is high quality and complements other sporting programs elsewhere in Cairns. Within this catchment the main target groups will be: § Young people in junior sports programs, usually aged from about 10 years to 18 years. § Adults competing in social sports programs. § Schools using the sports courts for lessons, and for inter school sports competitions. § Sporting associations which hire court space to conduct training and sports

competitions.

3.3.2 Health and Fitness Centre

The primary market for health and fitness facilities is expected to be the Smithfield, Trinity Park, Trinity Beach and Yorkeys Knob suburbs. Within this catchment the main target groups are: § Gen X and Y adults § Baby Boomers

3.3.3 Youth Spaces

The primary market for youth spaces is expected to be the northern suburbs sub region. Within this catchment the main target groups are: § School age young people § Young people “at risk” § Young people in transition from school to employment § Young people in tertiary education

3.3.4 Arts and Multipurpose Spaces

The primary market for arts and multipurpose spaces is expected to be the northern suburbs sub region. Within this catchment the main target groups are arts and community groups based in the sub region.

3.3.5 Hydrotherapy Pool

The primary market for a hydrotherapy pool is expected to be the Smithfield, Trinity Park, Trinity Beach and Yorkeys Knob suburbs. Within this catchment the main target groups are:


§ Older adults with mobility problems § People in rehabilitation programs § Physiotherapists and occupational therapists in the northern suburbs sub region

3.4 PROGRAMS AND SERVICES

3.4.1 Indoor Sports Courts

Core programs will be junior and senior sports competitions in basketball, volleyball, netball and futsal.

§ Junior sports will be programmed for weekday 4 pm to 6 pm, with competitions extending on Friday night to approximately 9.30 pm, and Saturday mornings 8 am to 1 pm.

§ Adult sport will be programmed for weekdays (Monday to Thursday) 6 pm to 10 pm, and Sunday afternoon or evening, say 4 pm – 8 pm,

§ Junior and senior training will be programmed at times not allocated to competitions.

§ Events and tournaments will be programmed as they occur, and are likely to involve weekend competitions.

§ School use will be programmed from 9 am to 3 pm on school term weekdays.

3.4.2 Health and Fitness Centre

Activities offered in the health and fitness studio will include:

§ Weight training (including use of cardio equipment, pin loaded and free weights)

§ Group exercise

§ Personal training

§ Age specific programs for older adults and young teenagers

3.4.3 Youth Spaces

No specific activities have been identified as being delivered in the youth space. Based on the “Edmonton” model described above (refer to Demand Analysis Report and section 3.2.4), a “one stop shop” for young people may be developed. However, no data has been provided on likely use, and no group or organisation has indicated it will supervise or manage the space.

3.4.4 Arts and Multipurpose Spaces

No specific activities have been identified as being delivered in the arts and multipurpose space. It is likely that it will be hired by arts and community groups to conduct arts activities and for community meetings and forums. However, no data has been provided on likely use.

3.4.5 Hydrotherapy Pool

It is expected that programs to be offered in the hydrotherapy pool will include:

§ Individual and group therapeutic and rehabilitation programs


§ Hire by physiotherapists and occupational therapists for patient treatment

§ Relaxation sessions

3.5 STAFF REQUIREMENTS

Both Marlin Coast Recreation Centre and Marlin Coast Swimming Complex are autonomous leisure facilities managed independently. Consequently, each facility has their own staffing structure and staff. When all facilities proposed to be constructed, are built, the two facilities will be integrated with a single entry and reception area. At this time a single staffing structure can be implement, if a single agency is appointed to manage the total complex. All the proposed activity areas, including the hydrotherapy pool, are a natural extension of the Marlin Coast Recreation Centre. Hence, they should be placed under the management of the organisation responsible for this Centre. Additional staffing to manage and supervise these facilities will therefore report to the Manager of the Marlin Coast Recreation Centre. If and when the two facilities are integrated with the development of a common reception and kiosk/cafe, savings can be made to the staffing structure by eliminating duplication of Customer Service staff and the reclassification of one of the Manager’s position to act as a team leader/coordinator, reporting to the Centre Manager. When fully operational with all components developed, it is expected that a Centre Manager will be appointed to manage and coordinate all activities in the Centre. The Manager will be supported by Coordinators for Health and Fitness and Aquatics. As the proposed development of the multipurpose leisure and aquatic centre will be staged, the staffing structure will also be staged to reflect the complexity of the facility. Component Senior Staff Operational Staff Two court multipurpose sports hall

Additional salary for Manager to reflect increased size of the facility

No additional Customer Service staff, extra hours for cleaners, and additional program coordinators for in-house sports competitions

Health and Fitness studio Additional salary for Manager to reflect increased size of the facility Full time Health and Fitness Coordinator

Group fitness instructors Gym instructors Membership consultants

Gymnastics Hall No additional senior staff No additional staff Multipurpose spaces for youth, community and arts activities

No additional senior staff No additional staff

Hydrotherapy pool No additional senior staff Additional hours to be allocated to maintenance and cleaning of pool

Integrated reception and cafe/kiosk

No additional senior staff Reclassification of cafe/kiosk team leaders, and possible reduction in number of staff hours

Operational staff will include gym and group fitness instructors, sports programmers, gymnastics instructors, receptionists/customer services officers, cleaners and clerical staff, in


addition to swim teachers and lifeguards. Whilst the Manager and Coordinators are likely to be permanent full time staff, few operational staff will be full time, and many operational staff, particularly instructors, will be employed on a casual basis. No industry guidelines exist from the staffing of health and fitness facilities. However, the Royal Life Saving Society Australia “Guidelines for Safe Pool Operation” provide specific supervision standards for swimming pools. It is assumed that these Guidelines are currently being followed by Council and the current management group at Marlin Coast Swimming Centre.

3.6 MARKETING STRATEGY

Major target markets for each component of the indoor recreation centre are discussed above. At this early stage it is not realistic to prepare a promotion strategy. Summarised below are discussions on programming and pricing, which are used to prepare financial projections. 3.6.1 Programming

1 Sports hall Sports halls have three major types of activities; competitions conducted by sports associations, competitions conducted by management and special events, functions and tournaments. The last category will include country, state and national sports championships, and non sporting events such as festivals and exhibitions. Indications from the various sporting associations suggest that a significant proportion of available court hours will be occupied by organised sporting clubs or associations. It is very difficult to project demand for special events, as they are often awarded on a tender basis or are organised by promoters. Social sports competitions are much easier to predict, particularly given the existing programs in Cairns. It is expected that junior competitions will be conducted on week days from 4pm to 6pm, and adult competitions are held from 6pm. Weekends tend to be used for junior sport and for club training. Competitions can be conducted for various age groups and social adult competitions are conducted for male, female and mixed gender teams.

2 Gymnastics Hall It is expected that the gymnastics hall will be used by the existing YMCA gymnastics program, and potentially by the relocated Cairns Community Gym. The program will be self sufficient, in that it will provide all the gymnastics equipment and directly employ instructors. A fixed rental will be aid for use of the dedicated gymnastics hall.

3 Health and Fitness Group fitness classes are mainly conducted in three time bands: Early morning (6am) Mid morning (9am and 10 am) Evening (6pm to 8pm) Personal training is offered to meet the time constraints of customers and is conducted at any time the weights and cardio area is open. General weights and cardio sessions are available at all time the health and fitness studio is open. Ideally this area will be supervised at all times, however it is more likely due to budgetary constraints that it will be supervised at peak periods (5pm to 8pm on weekdays).


The crèche will be open during weekday mornings to provide care for children of caregivers participating in activities at the Centre.

4 Multipurpose Spaces Multipurpose spaces will be available for hire by youth, community and arts agencies and groups. It is not envisaged that substantial direct programming will be undertaken by Centre Management. However, some activities may be organised under the auspice of Centre Management.

5 Hydrotherapy Pool It is expected that use will primarily be by patients of physiotherapists and occupational therapists, supplemented with casual use by people undertaking rehabilitation exercises. Therapeutic and rehabilitation activities will be conducted mainly on weekday mornings. At other times the pool can be used on a casual basis for relaxation (ie as a spa pool). 3.6.2 Pricing The review of competing facilities in Cairns included existing pricing structures. This information has provided a basis for the market prices summarised below. Health and fitness prices in Cairns are lower than in metropolitan areas, and may reflect the number of facilities in Cairns, and hence competition based on price. Sports halls tend to be priced on a similar basis to other facilities throughout Australia.

1 Sports hall Sports halls are either charged on an hourly basis or per participant. The prices below are based on the current charge for indoor sport at Marlin Coast Recreation Centre and the market rate for high quality sports hall hire.

Team game fee $60.00 Social sport (court/hour) $37.00 Social sport training (court/hour) $27.00 Major events $50.00

2 Gymnastics Given the facility is a dedicated gymnastics hall, it will be permanently set up for gymnastics. It is appropriate to set a fixed rent for use by the resident gymnastics group. Based on the current rent payable by Cairns Community Gym for a substandard facility and restricted access, a fee of at least $2,000 per month is reasonable. If an hourly rate is charged it should be similar to the charge for the sports hall - $37 per hour.

3 Health and Fitness Health and fitness studios tend to have a range of entry prices. The main price categories are:

Monthly membership $52.00 Casual gym entry $10.00 Casual group fitness $11.00 Concession group fitness $8.50

4 Multipurpose Space The current charges for the multipurpose room are:

Full room per hour $50.00 Half room per hour $30.00

These charges seem relatively high, and may be beyond the financial capacity of small youth, community and arts groups. Discounts may need to be offered to some groups,


particularly those which are regular and frequent users.

5 Hydrotherapy It is usual to charge a small fee for use of the hydrotherapy pool by casual users. However, members of the health and fitness club will expect to have use of the hydrotherapy pool included in their membership fee. A fee in the order of $10 is reasonable, for a single casual use, with discounts available for concession pass holders.

3.7 FINANCIAL VIABILITY

A financial model has been constructed to assess the financial implications of redeveloping the proposed Smithfield Sporting Precinct. This model does not include the existing income and expenditure for the operation of the Marlin Coast Recreation Centre, by the operator (YMCA) or by the owner (Cairns Regional Council).

3.7.1 Assumptions

In constructing the financial model a series of assumptions have been made:

1 All income and expenditure assumptions and usage assumptions are based on the situation at May 2010. No allowance has been made for inflation or population increases between May 2010 and when the facility is constructed and opened.

2 Income and expenditure detailed in the model is additional to existing income and expenditure for the operation of the Marlin Coast Recreation Centre, by the operator (YMCA) and the owner (Cairns Regional Council).

3 All components are open and operating at May 2010. In reality, the facility will be developed as and when funds become available, over a number of years. During the intervening period it is expected that prices and costs will rise and balance each other out. However, population increases are likely to increase occupancy and usage, hence increasing revenues.

4 It will be constructed in stages as funds become available to Council, and will comprise six distinct components.

Two court multipurpose sports hall Health and Fitness studio Gymnastics Hall Multipurpose spaces for youth, community and arts programs Hydrotherapy pool New reception and kiosk/cafe

5 Hydrotherapy pool income is based on:

Total Attendances 900 Older age population (65+ years) 1,500 Participation rate 10% Visits per person pa 6 Adult entry $10.00 Concession entry $6.50 Concession percentage of use 75%

The ratio of adults to concession is based on a guesstimate.


6 Kiosk sales is based on 12% of turnover in the sports hall, gymnastics hall, health and fitness studio and hydrotherapy pool and a profit margin of 40%.

7 Health and fitness revenue is based on 600 members paying $624 pa or $52 per month.

8 Sports hall revenue is based on:

Peak hours (weekdays) 6:30pm – 9:30pm Shoulder hours (weekdays) 4:00pm – 6:30pm 9:30pm – 10:30pm Shoulder hours (Saturday) 9:00am – 3:00pm Off peak hours (weekdays) 9:00am – 4:00pm 10:30pm - 11:00pm Off peak hours (Saturday) 3:00pm – 6:00pm Off peak hours (Sunday) 9:00am – 10:00pm Operating weeks pa 48 Peak time court hire per hour $37.00 Shoulder time court hire per hour $37.00 Off peak time court hire per hour $30.00 Occupancy peak times 80% Occupancy shoulder times 70% Occupancy off peak times 10%

9 It is expected that the multipurpose courts will be used for a variety of events and tournaments such as regional and national championships. It can also be used for community events such as multi cultural festivals. These should be regarded as important but unreliable revenue sources. Hence no allowance for these activities has been included in the financial projections.

10 It is projected that the multipurpose space will be used for 10 hours per week over a 48 week year and an hourly rental of $30 per hour will be levied.

11 No allowance has been made for use of the crèche, as it is a marketing tool or extra benefit to promote to users of the health and fitness and day time sports hall users.

12 After school and holiday programs have been incorporated within the occupancy of the multipurpose sports courts.

13 Senior staff to be employed during each phase of redevelopment are:

Position Salary EFT Manager (Total extra salary) $25,000 0.20 Proportion payable Two court sports hall $10,000 40% Health and Fitness Studio $12,500 50% Gymnastics hall $2,500 10% H&F Sales Consultant $40,000 0.50 H&F Coordinator $45,000 0.50

14 Operational staff to be employed at each stage of development are:

Position Hours per week Wage Weeks per annum Reception/kiosk – Health and Fitness 15 $19.50 52 Crèche staff – H&F (2 on duty) 15 $19.50 50


Position Hours per week Wage Weeks per annum Gym instructors - Phase 2 12 $20.50 50 Group Fitness instructors - Phase 2 25 $35.00 50

15 Salary overhead costs are based on:

Workers compensation 3% Payroll tax 6% Superannuation 9% Leave provisions 5%

16 Operating expenses are based on a combination of the actual costs incurred by Casa Leisure (a leisure management company owned by Phillip Gray the Project Manager for this feasibility study), and known costs experienced at other indoor sport and aquatic centres.

17 No allowance has been made for insuring the building, however an allowance has been provided for public liability, professional indemnity and contents insurance.

18 An allowance has been made for leasing of health and fitness equipment at a purchase price of $175,000.

19 Depreciation of the building has been included and is based on an effective life of 50 years which equates to an annual allowance of 2% of the estimated capital development cost.

20 Gymnastics equipment will be provided by the resident gymnastics club.

3.7.2 Operating Income and Expenditure

Based on the assumptions above a base case, profit and loss scenario has been constructed, and is summarised in Table 3.3. Key points to note from the table are:

§ All components except the gymnastics hall will operate at a profit before depreciation. The total operating profit before depreciation is projected to be $60,053.

§ Depreciation will add $256,932 to the operating expenditures, although this is usually a non cash item.

Table 3.3: Base Case Profit and loss Scenario

Sports Hall

Gym Hall

Health and Fitness

Hydro Pool

Multipurpose Space

Total

INCOME Court Hire Fees $97,559 $24,000 $0 $0 $0 $121,559 H&F Memberships $0 $0 $340,364 $0 $0 $340,364 Adult hydro $0 $0 $0 $2,045 $0 $2,045 Concession hydro $0 $0 $0 $3,989 $0 $3,989 Youth Space $0 $0 $0 $0 $14,400 $14,400 Kiosk net profit $5,321 $1,309 $18,565 $329 $0 $25,525 TOTAL $102,880 $25,309 $358,929 $6,363 $14,400 $507,881


Sports Hall

Gym Hall

Health and Fitness

Hydro Pool

Multipurpose Space

Total

EXPENDITURE Staff Manager (Extra) $10,000 $2,500 $12,500 $0 $0 $25,000 H&F Coordinator $0 $0 $22,500 $0 $0 $22,500 H&F Instructors $0 $0 $68,700 $0 $0 $68,700 Sales Consultant $0 $0 $20,000 $0 $0 $20,000 Creche $0 $0 $43,875 $0 $0 $43,875 Reception/Kiosk $0 $0 $15,210 $0 $0 $15,210 Sub Total $10,000 $2,500 $182,785 $0 $0 $195,285 Staff Overheads Staff Uniforms $250 $0 $1,000 $0 $0 $1,250 Leave provisions $500 $125 $9,139 $0 $0 $9,764 Workcover $300 $75 $5,484 $0 $0 $5,859 Payroll tax $600 $150 $10,967 $0 $0 $11,717 Superannuation $900 $225 $16,451 $0 $0 $17,576 Sub Total $2,550 $575 $43,041 $0 $0 $46,166 Maintenance Maintenance $10,000 $10,000 $5,000 $2,000 $2,000 $29,000 Cleaning $12,500 $12,500 $5,000 $0 $2,000 $32,000 Pool chemicals $0 $0 $0 $1,500 $0 $1,500 Security $500 $500 $500 $0 $0 $1,500 Utilities $12,000 $12,000 $15,000 $2,000 $5,000 $46,000 Sub Total $35,000 $35,000 $25,500 $5,500 $9,000 $110,000 Administration Tele comm. $500 $100 $4,000 $0 $0 $4,600 Insurance $2,000 $2,000 $2,000 $0 $0 $6,000 Advertising $1,000 $0 $10,000 $0 $0 $11,000 Legal and account $1,000 $0 $1,000 $0 $0 $2,000 General admin $1,000 $250 $2,500 $0 $500 $4,250 Bank charges $1,000 $100 $1,000 $0 $0 $2,100 Payroll & accounts $2,500 $250 $5,000 $0 $0 $7,750 Mgmt supervision $1,500 $500 $2,500 $0 $0 $4,500 Miscellaneous $1,000 $250 $1,500 $0 $500 $3,250 H&F equip lease $0 $0 $50,928 $0 $0 $50,928 Sub Total $11,500 $3,450 $80,428 $0 $1,000 $96,378 TOTAL $59,050 $41,525 $331,753 $5,500 $10,000 $447,828

Profit/Loss $43,830 -$16,216 $27,176 $863 $4,400 $60,053 Depreciation $69,290 $39,934 $13,950 $45,160 $88,598 $256,932

Profit inc deprec. -$25,460 -$12,758 -$13,087 -$61,376 -$84,198 -$196,879

3.7.3 Financial Forecasts

Various scenarios have been prepared based on increases or decreases in patronage and entry prices, to test the base case profit and loss scenario (excluding depreciation).


1 Sports Hall Decrease

20% Decrease

10% Base Case

Increase 10%

Increase 20%

Break Even

Court Hire Price per hour

$23,254 $33,542 $43,830 $54,118 $64,406 Peak: $21.30 Shoulder: $21.30 Off peak: $17.25

Occupancy $23,254 $33,542 $43,830 $54,118 $64,406 Peak: 46% Shoulder: 40% Off peak: 6%

2 Gymnastics Hall Decrease

20% Decrease

10% Base Case

Increase 10%

Increase 20%

Break Even

Court Hire Price

-$21,278 -$18,747 -$16,216 -$13,685 -$11,154 $39,600 pa

3 Health and Fitness Studio Decrease

20% Decrease

10% Base Case

Increase 10%

Increase 20%

Break Even

Entry Price -$59,462 -$$25,426 $8,610 $42,647 $76,683 $608 pa Membership -$59,462 -$$25,426 $8,610 $42,647 $76,683 585 members

4 Multipurpose spaces Decrease

20% Decrease

10% Base Case

Increase 10%

Increase 20%

Break Even

Court Hire Price

$1,520 $2.960 $4,400 $5,840 $7,280 $21 ph

Occupancy $1,520 $2.960 $4,400 $5,840 $7,280 7 hrs/week

5 Hydrotherapy Pool Decrease

20% Decrease

10% Base Case

Increase 10%

Increase 20%

Break Even

Entry Price -$409 $227 $863 $1,500 $2,136 $8.70 Attendances -$409 $227 $863 $1,500 $2,136 775

6 Overall When redevelopment of the Smithfield Sporting Precinct is completed the expected operating profit, before depreciation, is projected to be $60,053. To eliminate the existing operating subsidy paid by Council to the YMCA for managing the Marlin Coast Recreation Centre, price rises or increases in use above that projected in the base case of 1.5% will be required.

3.7.4 Cash Flow Considerations

Based on the assumptions used in the financial model, the new components in the redeveloped Smithfield Sporting Precinct will operate at a profit if the two additional indoor sports courts are constructed in the first stage. The only component which will not operate at a profit is the gymnastics hall, unless Council


can negotiate a contract with a gymnastics club to pay a rental which covers all operating costs. Whilst modelling of the impact of integrating the Marlin Coast Recreation Centre and Marlin Coast Swimming Centre has not been undertaken. It is expected that cost savings will be achieved by the integration, primarily through reduced staff costs. Combined with increased profitability of the “dry” components, it will result in an overall reduction in the subsidy payable by Council. These cash flow considerations assume that depreciation is not funded as a cash item, and is a balance sheet item only.

3.8 IMPLEMENTATION PLAN

To progress this project from feasibility to operation will require a careful step by step approach. At each step in the process a decision will have to be made by Council as to whether to proceed with the next step.

1 Synchronise the termination dates of the current leases for both Marlin Coast Recreation Centre and the Marlin Coast Swimming Centre so they both terminate on 30 June 2011.

2 Endorse Feasibility Study

3 Synchronise the leases/management contracts by using standard terms and conditions, including the term, for the Marlin Coast Recreation Centre and Marlin Coast Swimming Centre.

4 Call for Expressions of Interest in partnering the development, management and funding of Smithfield Sporting Precinct, based on standard terms and conditions.

5 Seek funding from State/Federal Government to develop initial stages

6 Finalise funding for Stage 1

7 Prepare detailed plans and building specifications

8 Prepare, advertise and let tender for construction of Stage 1

9 Evaluate partnering opportunities

10 Subject to the outcome of Expressions of Interest for partnering opportunities, prepare, advertise and let tender for management rights for the Marlin Coast Recreation Centre and Marlin Coast Swimming Centre

11 Monitor operating performance of Stage 1

12 Reassess demand for future stages and subject to adequate demand being found, repeat steps 2 – 5 for each stage

13 Monitor operating performance of each stage as it is developed.


4 C A P I T A L C O S T S

4.1 COST ESTIMATES

4.1.1 Quantity Surveyor Cost Estimates

A copy of the quantity surveyor cost estimates are included in Appendix B. The estimates are inclusive of preliminaries and margin, contingencies and professional fees. They are based upon measured quantities to which applied rates and conditions we currently believe applicable as at June 2010 have been applied. It is priced on the basis of a competitively tendered project amongst suitably sized contractors using a traditional form of procurement. The estimate is based on the SGL Design Brief dated March 2010 and Woodhead concept plan and perspectives received June 2010. Note the following exclusions from the estimate, which may need to be considered in any overall project feasibility; § Demolition and site remediation § Sporting equipment § Legal costs and holding costs § Loose furniture and equipment § Murals and works of art § Work outside site boundaries § Staging / phasing costs § Statutory fees § Power authority augmentation costs § Escalation in costs beyond June 2010 § Goods and Services Tax The estimated capital development cost of each stage is summarised below. The cost of is estimated to be $12,846,600. The estimated cost of each stage is:

Services Infrastructure $500,000 Two Court Sports Hall $3,339,500 Gymnastics Hall $1,759,800 Health and Fitness $1,871,700 Hydrotherapy $697,500 Arts/youth $1,817,900 Crèche $373,200 Cafe/reception $2,487,000 Total $12,846,600

The estimated capital cost includes a contingency sum of 10%. Council has requested that a contingency sum of 40% be included, which increases the total capital development cost to $16,350,218.

4.1.2 Allowances

In addition to the quantity surveyor cost estimates, allowances have been made on a “best guess” basis for those items not costed.


Exclusion Comment Demolition and site remediation Site clearance is included in the QS estimate, and

no demolition or site remediation due to contaminated soil is expected.

Sporting equipment Fixed sporting equipment such as electronic scoreboards, nets, posts and backboards are included in QS estimate. Loose items are excluded, and are not usually part of a fit out of a sports centre.

Legal costs and holding costs No allowance. Loose furniture and equipment The QS estimate includes items such as master key

system and backbone power and data cabling, and fit out of kiosk. Loose furniture such as office equipment and IT equipment is usually the responsibility of the operator and/or costed separately.

Murals and works of art No allowance. Work outside site boundaries No allowance. Staging / phasing costs QS estimates are based on staging the facility,

hence no allowance is required. Statutory fees Likely to be in the order of $30,000+. Power authority augmentation costs Costs can be unpredictable and based on

information from Cairns Regional Council can be anywhere from $4,000 to $400,000.

Contingency A contingency allowance of 10% is included in the QS estimate. Council has requested it be increased to 40% ie approximately $3,500,000.

4.2 SOURCES OF FUNDING

Funding for projects such as the Smithfield Sporting Precinct may be available from the State and/or Federal Governments.

4.2.1 Queensland Sport and Recreation Major Facilities Funding Program

Total budget allocation is $30M per year, with a maximum grant of $1.5M. An Expression of Interest (EOI) is submitted as a preliminary application to describe the nature of the project, including funding arrangements i.e. demonstrating the need for the project and the fact that the organisation has its funding in place. The detailed application phase, follows the Expression of Interest stage. Council is invited to submit a thorough application for financial assistance. Applications to the fund should be for less than $1.5m as it is not of national significance. It should be noted that this funding program is currently under review with the results of the review to be published in 2010.


4.2.2 Australian Government - Regional and Local Community Infrastructure Program

The Government recently announced an additional $220M for the Regional and Local Community Infrastructure Program with $100M being provided to local government across Australia on a set formula basis. The remaining $120M is available for new infrastructure projects with a minimum grant of $1M.

4.3 PARTNERSHIP OPPORTUNITIES

4.3.1 Partnership Models

1 City of Brisbane Council has entered in to two agreements (PPPs) with the YMCA Brisbane: Perry Park is a two court indoor stadium and health and lifestyle centre. The site for construction is currently controlled (via a lease agreement with Council) by a soccer club – the soccer club is in the process of transferring the head lease to the YMCA and will have a sub lease arrangement under the YMCA to operate its facility. The term of lease with Council is 30 years. The cost of the new facility is $8M with $4M being allocated by the Queensland State Government (through the Major Facilities Fund, achieved on the basis that the facility will have national significance by “housing” the National Wheelchair Basketball Team) and the remaining funds being supplied by the YMCA. Acacia Ridge, a gymnastics facility (700m2). Term of lease with Council is 30 years. YMCA is funding the construction. Council has recently completed construction of three aquatic centres which have been provided on a PPP arrangement including the Runcorn Aquatic Centre. It was constructed by Council and opened this year. This facility has been leased to a private operator for a 30 year period on the basis that the operator adheres to Council’s “Community Service Obligation” re: entry pricing and is responsible for certain aspects of the maintenance program (excluding major capital works). The general trend with joint developments involving local government and private/not-for-profit organisations is that Council provides the land on a long term lease (varies depending on the venture and the degree of community benefit). Length of lease agreements vary depending on the degree of financial contribution from the private/not-for-profit sector i.e. up to five years (no capital contribution); over five years (with a capital contribution) with the length being decided based on service provided and profit sharing arrangements.

2 Belgravia Leisure Belgravia Leisure has numerous examples across Australia of partnerships with local government. The most recent example in Queensland is the Albany Creek Leisure Centre which consists of an aquatic centre and new health and lifestyle centre. The health and lifestyle centre was recently constructed at a cost of $3.3M in a joint venture


arrangement between Belgravia and the Moreton Bay Council. The aquatic centre and health and lifestyle centres have differing lease agreement periods. The lease agreement for the health and lifestyle centre is 20 years and for the aquatic centre is 5 years.

4.3.2 Potential Partners

No potential partner has been identified for the total redevelopment of the Smithfield Sporting Precinct. However, partnering opportunities exist for components:

1 Both the current lessee of the Marlin Coast Recreation Centre and sub lessee of the Marlin Coast Swimming Centre may be interested in investing in specific components with a view to obtaining a long term lease/contract. For example the YMCA may be interested in funding the health and fitness equipment. The Swimming Centre sub lessee may be interested in contributing towards the cost of the hydrotherapy pool (although this has been assumed to be more closely alied to the health and fitness component).

2 Cairns Community Gym and/or the YMCA may be interested in adopting the model used by Barron Valley Gymnastics Club to build its gymnastics hall. Under this model Council provided a guarantee for a loan obtained by the Club. The club also provided all the gymnastocs equipment to fit out the facility.


5 S U S T A I N A B I L I T Y

This chapter provides a summary of actions to ensure the facility is sustainable.

5.1 ENVIRONMENTAL

Actions required to ensure environmental sustainability include:

§ Design to take advantage, and account, of the tropical climate of Cairns.

§ Energy efficient plant, equipment, fittings and fixtures.

§ Optimum use of natural light and ventilation.

§ Recycling and harvesting of water both from external sources (rain) and internal sources (eg backwashing).

§ Energy efficient building materials.

§ Potential use of recycled building materials where possible.

§ Orientation of the building on the site to maximise natural ventilation and minimise the impact of the sun.

§ Use of solar heating for pool heating and hot water systems.

5.2 ECONOMIC

Actions required to ensure economic sustainability include:

§ Negotiate a management contract/lease which provides Council with known long term financial commitment.

§ Include commercial elements to complement Council’s community service obligations.

§ Minimise the amount of debt to be funded from operating revenues.

§ Ensuring both Marlin Coast Recreation Centre and Marlin Coast Swimming Centre operate in a complementary, rather than competitive way.

§ Obtain highly competent and proven managers for the new facility.

5.3 CULTURAL AND SOCIAL

Actions required to ensure cultural and social sustainability include:

§ Develop programs and services targeted to the local community.

§ Encourage local community and sporting groups to use the facility.

§ Ensure that pricing does not preclude large numbers of local residents from using the facility.


A P P E N D I X A 1 : C O N C E P T P L A N




A P P E N D I X A 2 : S I T E P L A N


A P P E N D I X A 3 : S T A G I N G P L A N


A P P E N D I X B : Q U A N T I T Y S U R V E Y O R E S T I M A T E S




Documents

Smithfield Sporting Precinct Feasibility Study...9 Presentation to Council Smithfield Sporting Precinct Feasibility Study Page 3 Milestone 4: Consultation On Draft Feasibility Study