Valley Gateway Development Corporation

Appleton,

Arena Feasibility Analysis

In 2000 B&D was hired by Valley Gateway Development Corporation, a real estate development interest, to assess the market in and around Appleton, Wisconsin for an indoor arena as an anchor to a mixed-use development being planned. We began with an assessment that included a detailed regional demographic analysis; statistical research on the depth of the corporate market; interviews with sports league officials, concert and family show promoters, and meeting planners; analyses of event schedules at other facilities, and a preliminary staffing report. We then conducted a market demand analysis built on the study’s initial findings with more in-depth analysis of an arena’s potential user base; a survey of local businesses to assess interest and levels of spending tolerance to key revenue streams, such as the purchase of luxury seating, advertising, and naming rights; a survey of residents to project actual attendance and ticket price tolerance for a variety of events; a projection of general attendance and ancillary revenues and the degree to which they would change over time. The final component of the study was a financial analysis that would serve to complement our demand-based market analysis: defining operating cost assumptions; creating revenue summaries; developing financing structure assumptions based on an appropriate public versus private ownership mix, interest rates, tax allocations, private donations, and state appropriations; creating a detailed operating pro forma integrated with our development cost model enabling all analyses to be tested with the same variations in assumptions; analyzing the sensitivity of results to variations in input projections. As a result of our findings, Valley Gateway Development decided not to proceed with constructing the indoor arena facility.