Sierra Planning and Management Velodrome - Town of Milton

Velodrome Business Plan – Town of Milton vii
The results of the analysis include the assumption that normalised operations are achieved in Year 2. In year 1, there is a limit on the
achievement of potential revenues owing to the requirement for management to increase efficiency, learn on the job, develop and refine the
marketing of the facility and work to resolve scheduling conflicts between the track and the in-field. To reflect this eventuality, revenues in year
1 are discounted by 15%, while 100% of facility expenses are maintained.
Scenario 1, as a worst case scenario is unlikely to be realized. Part of the reason for its relative highly deficits is not only reduced revenues from
track, but also the leasing of fitness space to a tenant-operator rather than engaging in the operation of the fitness centre itself. Given the Town
is in the business of operating fitness centres, and scenarios 2 and 3 assume this, the gap between the worst case scenario 1 and scenarios 2 and
3 can be reduced by operating the fitness centre in scenario 1.
Scenario 2 represents the most likely financial performance scenario and is based on moderate assumptions with regard to both the revenues
achieved from track and infield, but also with regard to track compatibility issues, revenues from events, and providing food concession
operations to the private sector. In addition, labour costs in particular are raised to reflect the need for specialist employment skills associated
with the Velodrome.
Scenario 2 also reflects a modest approach to the amount of leasable tenant and retail space that can be achieved within the existing building
envelope. Scenario 2 returns a deficit in year 2 of $116,000.
Scenario 3 mirrors Scenario 2 with the exception that it reflects the impacts of incremental improvements in track revenue arising from a
moderate increase in achievable track rental rate, moderately higher share of gate revenues from events, and lower conflict between uses in the
building.
Section Executive Summary
vii