Presented by: Proposed Sports and Event Complex in Coeur d ...

Facility Fee
A potential means of reducing the public sector’s participation in project funding could involve
the assessment of a facility fee on tickets sold to events at the proposed facility, with proceeds
used to pay down debt associated with construction. Several sports and entertainment venues
throughout the country assess these fees as a means of covering operating expenses, paying for
capital repairs and/or repaying debt. Facility fees can be a politically popular funding method, as
the fees are paid only by those who directly utilize the facility by attending events.
One potential facility fee scenario would involve the assessment of a surcharge of $1.00 on every
ticket sold at the facility. This level of facility fee may be supportable, but a facility fee may also
be difficult to impose on high school sports and other events with low ticket prices, as a $1.00
fee represents a larger percentage of the total ticket cost as compared to more expensive tickets
to events like concerts and family shows. Also, many of the high school, collegiate and amateur
events included in the utilization estimates consist of postseason games, tournaments and other
special events that are subject to competitive bid. The implementation of a facility fee on these
events may hinder the arena’s ability to successfully bid on events.
As such, two facility fee scenarios have been developed to provide project an analysis of the
potential ability of differing levels of facility fees to cover debt associated with the arena.
Scenario A assumes a $1.00 surcharge on all paid tickets to concerts, family shows, touring
sports, college sports and high school sports. Scenario B assumes the fee would not be
implemented at college and high school sports events. Neither scenario assumes a facility fee on
amateur sports events, as many of the attendees of these events would be participants who would
not pay an admission fee. Further, it is assumed that a facility fee would not be assessed at
community and flat floor event, as many of these events would not be ticketed. The following
table summarizes the 20-year NPV of revenues that could be generated under each facility fee
scenario based on the attendance estimates presented in the Market Demand Analysis.
Funding Potential of a Facility Fee
Estimated
Annual 20-Year
Revenue NPV (1)
Scenario A
Base $127,000 $1,457,000
High 167,500 1,921,000
Scenario B
Base $72,000 $826,000
High 100,000 1,147,000
(1) Assumes a 6.0 percent discount rate over 20 years.
Feasibility Analysis of a New Sports and Event Complex in Coeur d’Alene
Funding Analysis
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