Sierra Planning and Management Velodrome - Town of Milton

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Velodrome Business Plan – Town of Milton 33 � Site planning considerations, including the effective use of site gradient in an attempt to reduce building costs 6.4 KNOWN CAPITAL COST RISKS The current capital cost estimates, as well as the proposed funding sources to meet the likely range of capital costs is subject to revision as design-specifics are addressed. There are several principles with respect to the capital cost estimates which are drawn upon in the financial feasibility analysis included in this report. These are as follows: � The approximate building budget of $40 million is based upon some 122,000 sq. ft. gross floor area (GFA). The assumptions of the financial and the current functional programming exercise is to determine what functional spaces and occupancies can be achieved within the existing building envelope rather than adding to the overall footprint of the building. � While the analysis of demand for use of the facility indicates broad range of demand and high levels of utilization, as well as opportunities for achieving retail and commercial office tenancies, the financial analysis is tempered by the likelihood that not all the potential opportunities can be accommodated within the existing building envelope. Therefore the financial scenarios vary in terms of the extent to which these revenue generating spaces (commercial leases, retail, and other) are achievable. The assumptions with respect to achievable lease space are as follows based on the alternative scenarios of financial performance contained in Section 7:0: Exhibit 19 1 Scenario (sq. ft.) 2 3 Commerical Retail 500 1,000 2,000 Food Concession 500 500 500 Office Lease Space 600 2,000 3,000 Fitness (public) 2,000 2,000 2,000 Fitness (Dedicated CAA/NCCH) 1,200 1,200 1,200 Business Plan | January 2012 Sierra Planning & Management 33
Sierra Planning & Management 34 34 Velodrome Business Plan – Town of Milton 7 ASSESSMENT OF VELODROME REVENUES AND EXPENSES 7.1 BASELINE ASSUMPTIONS The assessment of financial feasibility for the velodrome requires recognition of a number of baseline assumptions contained in the projections of both revenues and expenses. These include the following key elements. � The financial feasibility of the operations is not measured in terms of the ability of the facility to necessarily generate a positive net operating income. As a municipal facility which represents a legacy facility for community use and for the sport of cycling in Canada. This facility represents a public investment similar to other public buildings. Many of those do not have operating account which provide a revenue neutral or surface revenues over costs, that require some level of subsidy to meet annual deficits from facility and program operation. Notwithstanding, the facility is different than some other public buildings in that it represents a spectator events centre which can be expected to hold a range of Provincial, National and International cycling events. As such, the facility will generate revenues from ticketed events and will draw visitors from a range of geographic markets outside the local area – including international visitation of teams competing in events and spectators. The velodrome is therefore a unique building which has the potential to create significant economic impacts. � As an events centre, the velodrome should not be compared to other event centres such as multiuse sports and entertainment centres which accommodate far larger spectator user audiences and much larger number of event days per year. The economic impact of the velodrome should therefore be judged on its merits taking into account the relative differences in the scale between it and major sporting venues elsewhere in the GTA and across the Country. � The specifications of the building are as presented in the existing functional space program which is the subject of the current request for proposals for the design, construction and financing of the building. These specifications are subject to review by the Town of Milton currently to ensure that the Town’s full range of needs to meet its role as a cycling venue and community legacy facility are achieved. � The track is to be designed to a standard which achieves Category 1 for homologation by UCI. With respect to the homologation of the facility as a whole, the current seat count of 1,500 permanent seats and 750 temporary seats for a total of 2,250 seats is assumed to result in the achievement of a Category 2 status. We understand that Toronto2015, with IO and the PDC are currently assessing the potential to achieve a greater number of seats in the facility. Specifically, we understand that the design process is underway to determine whether seating in excess of 2,500 seats can be achieved. � The achievement of sufficient seating to host international events cannot be overestimated in terms of its impact on legacy provided by this facility. Based on the existing seat count, the business plan assumes that the velodrome in Milton can achieve a number of events which are typical of Category 2 facilities. Business Plan | January 2012
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Sierra Planning and Management Velodrome - Town of Milton

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