Orange County Tourist Developm ent Tax Overview CRC TDT Sub-Com m - - PDF document

Tourist Developm ent Tax Overview CRC TDT Sub-Com m ittee Meeting

September 1, 2015

Orange County

• TDT Background
• Major Historical Uses
• Major Uses Planning & Review

1 . Convention Center ( OCCC) and Tourism Prom otion 2 . Arts & Museum s 3 . Venues

• Oversight
• Sum m ary

Presentation Outline

• TDT Background
• Major Historical Uses
• Major Uses Planning & Review

1 . Convention Center ( OCCC) and Tourism Prom otion 2 . Arts & Museum s 3 . Venues

• Oversight
• Sum m ary

Presentation Outline

TDT Background

TDT w as enacted by ordinance in 1 9 7 8 . Voters approved a referendum to:

 I m pose a 2 % Tourist Tax  Build a civic center in phases  Original Master Plan: Convention & Meeting Space w ith an Arena later

−I n 1 9 8 6 , w ith City support for the Phase I I OCCC expansion ( TDT levy increase to 3 % ) , the Arena project planning m oved dow ntow n as a hom e for the com ing NBA team

• Currently TDT levy is 6 % of lodging bill
• State Law governs uses
• Not allow ed for schools, public safety, general

governm ental services

TDT Background

TDT Background

6 % tax on short-term lodging ( under 6 -m onths) added to room bill 1 -4 % Uses in Tourist Developm ent Plan such as tourism prom otion, convention and civic center capital and O&M costs, m useum s, beach im provem ents, facilities and events for cultural tourism , sporting facilities and events, etc. 5 % Tourism prom otion, professional sports facilities and/ or convention center debt 6 % Tourism prom otion, and/ or professional sports facilities

TDT Statutory Uses:

TDT Background

Pledged for repaym ent of over $ 7 5 0 m illion of Convention Center debt until 2 0 3 1 , and funds

• ver $ 4 7 m illion of annual tourism prom otion.

1 -4 % OCCC Debt and O&M, Tourism Prom otion, Tourist Developm ent Plan uses, Arts, future grow th above 2 % paid to City for Venues ( DPAC and Citrus Bow l) 5 % OCCC Debt 6 % 5 0 % Tourism Prom otion/ 5 0 % to City for Arena Debt

Orange County TDT Uses:

FY1 6 TDT collection budget is $ 2 1 6 m illion ( all 6 percent of TDT)

• $ 1 8 0 m illion from only first to fifth percent

TDT pledged for convention center debt

TDT Background

TDT 1 -5 th Percent Projected FY 2 0 1 6 Expenses ( in m illions) :

Debt Service $ 6 9 .7 Convention Center Operations 1 5 .0 Visit Orlando Funding* * 3 1 .6 Convention Center Capital 2 4 .6 Arts 4 .3 History Center & Other 3 .8 Contract TDT Paym ent for Venues (Est.)

3 3 .0

Total $ 1 8 2 .0

TDT Background

* * Additional $ 1 5 .6 m from 6 th percent TDT = $ 4 7 .2 m total

• TDT Background
• Major Historical Uses
• Major Uses Planning & Review

1 . Convention Center ( OCCC) and Tourism Prom otion 2 . Arts & Museum s 3 . Venues

• Oversight
• Sum m ary

Presentation Outline

Historical Revenue Grow th:

9 .3 % Avg Annual TDT Grow th ( 1 9 7 9 -2 0 1 4 )

TDT Historical Revenue

TDT Historical Uses

TDT Expenditures Since Inception

OCCC (70%) Visitors Bureau (19%) Sports (Prior Contributions) (3%) Arts, Museum & Other (2%) Venues (Performing Arts & Citrus Bowl) (5%) R&RR (Reserves available for

• ther uses) (2%)

Sources/ Revenues 1 st – 5 th Cent 2 ,6 7 0 ,6 7 1 9 1 % 6 th Cent 2 2 8 ,1 2 6 8 % I nterest Earnings ( Est. 1 .2 5 % ) 3 6 ,2 3 5 1 % Revenues Total 2 ,9 3 5 ,0 3 2 1 0 0 % Uses/ Expenses OCCC 2 ,0 4 1 ,8 5 1 7 0 % Visitors Bureau 5 4 5 ,5 8 3 1 9 % Arts, Museum , & Other 5 9 ,0 3 6 2 % Sports 9 3 ,3 1 7 3 % Venues 1 4 9 ,2 6 7 5 % RR&R 4 5 ,9 7 8 2 % Expenses Total 2 ,9 3 5 ,0 3 2 1 0 0 %

* Through FY2 0 1 4 , am ounts in thousands

TDT Historical Sources & Uses

TDT Historical Major Uses

Sports (3%)

Convention Center & Marketing (89%)

Arts & Venues (6%)

• 50

100 150 200 250

1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$ Millions

1st and 2nd cent 3rd cent 4th cent 5th cent 6th cent

TDT Historical Major Uses

I nitiation of TDT m ajor uses:

• Convention Center in 1 9 7 8 voter referendum
• 1 9 8 6 O-rena in original TDT m aster plan

– Am w ay Center replaced aging O-rena

• Arts began through Orange County Arts and

Cultural Affairs Task Force

– Harvey Massey, Chair and Com m issioner Hom er Hartage, Vice-Chair – January 2 3 , 2 0 0 1 Com m issioner Ted Edw ards proposed use of TDT for Cultural Activities

W orked w ith tourism industry for prior year

TDT Historical Major Uses

I nitiation of TDT m ajor uses:

• Orlando Mayor Dyer proposals

– Citrus Bow l renovation w ith Fla. Citrus Sports – DPAC w ith the Central Florida arts com m unity

• Orange County History Museum

– County Budget process

• Tourism Prom otion

– Orange County tourism industry & Visit Orlando – Central Florida Hotel & Lodging Association

TDT m ajor uses prim arily driven by voters, elected leaders, and com m unity groups

• TDT Background
• Major Historical Uses
• Major Uses Planning & Review

1 . Convention Center ( OCCC) and Tourism Prom otion

2 . Arts & Museum s 3 . Venues

• Oversight
• Sum m ary

Presentation Outline

OCCC Planning & Review

Orange County Convention Center Background

• Mission/ Benefit: Econom ic Developm ent

– 1 .3 + m illion annual OCCC visitors – 2 .5 + Million room nights – $ 2 .1 Billion Annual Econom ic I m pact – 2 5 ,0 0 0 + local em ployees

Source: Fishkind and Associates, I nc. May 2 0 1 3 Report

• 2 nd largest convention center in the US w ith

7 m illion square ft. ( 2 m illion exhibit space)

OCCC Planning & Review

Annual Budget Process

• TDT/ OCCC budget presentation to BCC
• Capital projects review & approval process
• Tw o public budget hearings

Tourist Developm ent Council ( TDC)

• Statutory external review
• Public m eetings
• Hotel and lodging industry representatives
• Hospitality & elected governm ent leaders
• Com ptroller m akes TDT/ OCCC financial

reports

OCCC Planning & Review

OCCC Master Planning

• Stakeholder input and com m unity-w ide

involvem ent:

– OCCC Client Advisory Board – Convention Center District Stakeholders – Hospitality I ndustry Representatives

• Marketing & feasibility studies prepared

by industry consultants

• North/ South OCCC Expansion 1 9 9 8 -2 0 0 3 :

– Mayor Martinez Blue Ribbon Com m ittee – Citizen’s Construction Oversight Com m ittee

OCCC Planning & Review

Current 2 0 1 4 -1 5 OCCC Master Planning

• I ndustry Consultant Populous, I nc.:

– Recom m end future developm ent, architectural concepts and cost estim ates for budgeting

• 2 0 1 5 Com m unity I nput/ Meetings/ Presentations:

− Monthly m eetings w ith Efficient Transportation for the Com m unity of Central Fla ( ETC) − Multiple OCCC Client Advisory Board updates − March 1 2 & June 1 1 public m eetings of the I -Drive Com m unity Redevelopm ent Agency − June 3 0 , 2 0 1 5 public BCC presentation − June 3 0 , 2 0 1 5 public presentation and input − August 2 0 m eeting w ith Visit Orlando board

OCCC & Tourism Prom otion

OCCC Marketing Staff

• Books OCCC m eetings, conventions,

exhibitions & coordinates w ith Visit Orlando Visit Orlando ( Official Tourism Association)

• Market Central Fla. tourism internationally
• Book vacations, m eetings, travel in area

attractions, lodgings, m eeting spaces

• Funded by m em bership and County TDT
• Results reported to BCC and TDC
• Record 6 2 m illion CY2 0 1 4 visitors
• $ 6 0 b annual Orange County tourism industry

• TDT Background
• Major Historical Uses
• Major Uses Planning & Review

1 . Convention Center ( OCCC) and Tourism Prom otion 2 . Arts & Museum s

3 . Venues

• Oversight
• Sum m ary

Presentation Outline

Arts Planning & Review

Arts & Cultural Affair Advisory Council

Established in 2 0 0 1 to assist the BCC in allocating county funding for arts and cultural affairs. 1 3 m em bers appointed by the BCC. Mem ber Types:

• 1 At large representative w ith arts & cultural affairs

interest or expertise

• 1 City of Orlando Representative
• 1 County Com m issioner
• 6 District Representatives ( one from each district)
• 1 Mayor’s Representative
• 1 TDC Representative
• 1 UCF Representative
• 1 United Arts of Central Florida Representative

Arts Planning & Review

Cultural Facilities Review Panel

• 5 -7 Representatives from the Advisory Council
• 3 -4 I ndustry Experts ( construction, design,

architecture, etc.)

Cultural Tourism Review Panel

• 1 2 Representatives from the Advisory Council

United Arts of Central Florida

A 5 0 1 ( c) ( 3 ) nonprofit organization and the one-stop- shop to support the arts, sciences and history in Lake, Orange, Osceola and Sem inole counties.

Arts Planning & Review

Com petitive Application Process:

• Applications are subm itted once a year; w orkshops

are provided for applicants

• United Arts verifies eligibility, contracts, m atching

fund sources, reports, and budgeting

• Panel m em bers individually score each application

in accordance w ith an established scoring m atrix

• The applications are ranked according to their

scores; the highest and low est scores are discarded, and an average score is taken

• All applicants w ho receive an eligible score are

fully funded until the funds run out

Final Step: Presented for BCC Approval

Orange County History Museum

• Museum s are a statutorily approved TDT use
• TDC approval on May 6 , 2 0 0 5
• History Center TDT funding approved during a BCC

annual budgetary process w ith tw o public hearings

• Tourist Developm ent plan am endm ent required

public hearings

• Annual TDT expense around $ 2 m per year

• TDT Background
• Major Historical Uses
• Major Uses Planning & Review

1 . Convention Center ( OCCC) and Tourism Prom otion 2 . Arts & Museum s 3 . Venues

• Oversight
• Sum m ary

Presentation Outline

Venues Planning & Review

Com m unity Venues

• Facilities ow ned and operated by

the City of Orlando − Am w ay Center − Citrus Bow l − Dr. Phillips Center for Perform ing Arts ( DPAC)

• 2 0 0 7 I nterlocal Agreem ent

− Governs funding participation

Venues Planning & Review

2 0 0 7 I nterlocal Agreem ent Com m unity Dialog

• Mayor Crotty Public Letters

– Septem ber 1 6 , 2 0 0 5 to City – Guiding Principles – Novem ber 1 5 , 2 0 0 5 to BCC and Oversight Panel – Project Details – April 2 7 , 2 0 0 6 to BCC – Discuss 6 th percent TDT request

• County Com m issioner Letters
• March 1 5 , 2 0 0 5

– First TDT & Com m unity Venues BCC Presentation

• May 6 , 2 0 0 5 – TDC Meeting

– Discussion on venues funding

• February 9 , 2 0 0 6 – TDC Venues Funding Handout

Venues Planning & Review

2 0 0 7 I nterlocal Agreem ent Com m unity Dialog

• July 2 0 0 6 – County Budget W ork Session

– BCC Presentation on 6 th Cent TDT – Second TDT & Venues BCC presentation

• Venues Presentations to BCC

– August 2 2 , 2 0 0 6 - Perform ing Arts Center – August 2 9 , 2 0 0 6 - Citrus Bow l – Septem ber 1 2 , 2 0 0 6 - Events Center – Septem ber 1 9 , 2 0 0 6 – EDC Econom ic I m pacts ( Conventions, Sports & Leisure I nternational “CSL” Econom ic I m pact Analysis of all three venues)

• Septem ber 2 9 , 2 0 0 6 – Tri-Party Letter of

Understanding m ade public

Venues Planning & Review

2 0 0 7 I nterlocal Agreem ent Com m unity Dialog

• October 3 , 2 0 0 6 – 3 rd BCC Presentation on

Venues Funding

• Novem ber 2 0 0 6 to June 2 0 0 7 – Staff

Negotiations

• OBJ & Sentinel Articles/ Supporting Editorials
• Com m unity Meetings – Venues Plan

– April 1 9 , 2 0 0 7 – District 6 – April 2 6 , 2 0 0 7 – District 3 – May 7 , 2 0 0 7 – District 1 – May 1 0 , 2 0 0 7 – District 5

Venues Planning & Review

2 0 0 7 Venues I nterlocal

• County-City-CRA funding agreem ent
• 3 years of com m unity dialog
• 1 8 m onths of negotiations
• Public Board Hearings/ Approvals

− TDC approved 6 th Cent TDT Levy June 1 5 , 2 0 0 6 − TDC approved Com m unity Venues Agreem ent on July 2 5 , 2 0 0 7 − BCC approved Com m unity Venues Agreem ent on July 2 6 , 2 0 0 7 − City of Orlando and CRA approved the Agreem ent on August 6 , 2 0 0 7

Venues Planning & Review

2 0 1 3 3 rd Am endm ent to I nterlocal Agreem ent

• Additional Uses funded w ith TDT debt:

– $ 2 5 m for Phase I I of Dr. Phillips Perform ing Arts Center – $ 1 2 m for Citrus Bow l renovation upgrades – $ 2 0 m for MLS Soccer stadium

• Uses funded w ith annual TDT cash

– $ 5 .5 m from 2 0 1 4 -2 0 1 8 for Visit Orlando and Central Florida Sports Com m ission for sports and tourism m arketing – $ 1 0 m in OCCC im provem ent projects

Venues Planning & Review

2 0 1 3 3 rd Am endm ent to I nterlocal Agreem ent

• Mayor Jacobs Public Letters

– April 1 , 2 0 1 3 - DPAC & MLS in Citrus Bow l – August 8 , 2 0 1 3 – 3 rd Am endm ent Funding

• County Com m issioner Letters
• CSL Econom ic I m pact Study of MLS
• Orlando Sentinel Supporting Editorials

Venues Planning & Review

2 0 1 3 Am endm ent to I nterlocal Agreem ent

• Three days of Presentations from staff,

Venues and MLS representatives:

– August 6 , 2 0 1 3 – August 9 , 2 0 1 3 – October 2 2 , 2 0 1 3

• Public Board Hearings/ Approvals

– TDC vote August 9 , 2 0 1 3 – BCC vote October 2 2 , 2 0 1 3

• TDT Background
• Major Historical Uses
• Major Uses Planning & Review

1 . Convention Center ( OCCC) and Tourism Prom otion 2 . Arts & Museum s

3 . Venues

• Oversight
• Sum m ary

Presentation Outline

Ongoing Oversight

Ongoing Oversight and Review

• City Mayor’s Citizens Oversight Com m ittee

– Mem bers include construction and hotel industry professionals, and other com m unity business leaders – Public Meeting held quarterly – Venues project progress and financial inform ation distributed each m eeting – Annual reporting of project expenditures

• Com ptroller and County staff review of DPAC

( February 2 0 1 1 )

• Com ptroller’s Audit: “Lim ited Review of the

Events Center” ( Oct. 2 0 1 1 )

Ongoing Oversight

Ongoing Public Meetings/ Hearings: TDC and/ or County Com m ission

– OCCC financial statem ents – Visit Orlando tourism prom otion updates – Central Florida Sports Com m ission reports – Florida Classic m arketing report – “State of the Arts” reports

City of Orlando

– Venues annual budgets – Venues spending and audited financial reports

• TDT Background
• Major Historical Uses
• Major Uses Planning & Review

1 . Convention Center ( OCCC) and Tourism Prom otion 2 . Arts & Museum s

3 . Venues

• Oversight
• Sum m ary

Presentation Outline

TDT Sum m ary

• TDT Enacted and used pursuant to Fla. Statute

– Local 1 9 7 8 TDT Vote for OCCC and Arena plan – TDT uses approved by elected BCC w ith appointed TDC advisory input – Bed tax paid by tourists to benefit com m unity – Legal concerns w ith 2 0 1 5 TDT Charter proposal

• 9 8 % of TDT spent on four m ajor uses

– Convention Center and Tourism Prom otion uses fulfill TDT econom ic developm ent m ission – Sports and Arts are specific statutory uses and com m unity benefits that attract business – Venues are com m unity benefits for residents that attract business and build a better Orlando

TDT Sum m ary

• TDT Uses are subject to com m unity dialog

– Proposals publicly discussed at length – Arts funding already has a com petitive application process – Professional cost and benefit studies review ed – Approvals at public m eetings – public hearings – Many project approvals require superm ajority BCC vote

• Flexibility in uses is valuable

– Current processes provide flexible support for successful events and facilities – Charter provisions are inflexible and difficult to am end w hen elected officials seek to support com m unity initiatives

TDT Sum m ary

• Ongoing Oversight

– Public progress updates, financial reporting and auditing, citizen oversight boards, and consultant review s

Historic Summary of TOT Revenues and Expenses (in thousands) Through 2014

1st through 5th Cent 6th Cent Interest earnings (estimated)* Other Revenues Total

• 1. occc

Debt Service Debt Reserve (From Cash) Convention Center Reserve 2002 Cash Contribution Operating Subsidy CIP Total 2. Visitors Bureau 3. Arts, Museum & Other Arts & Culture History Museum Other (Miscellaneous Incentives) Total 4. Sports (Prior Contributions) Arena 1 (0-Dome) Citrus Bowl (prior) T

• ta I Sports

5. Venues Venues (Performing Arts & Citrus Bowl) Citrus Bowl Reserves Amway Center Total Venues

6.

R&RR (Reserves available for other uses) Expenses Total: Notes: * Interest earnings at 1.25% 2,670,671 228,126 36,235 2,935,032 1,399,678 57,641 58,500 90,800 152,965 282,266 2,041,851 545,583 29,567 23,492 5,977 59,036 49,682 43,635 93,317 34,118 12,500 102,649 149,267 45,978 2,935,032 91% 8% 1% 0% 100% 48% 2% 2% 3% 5% 10% 70% 19% 1% 1% 0% 2% 2% 1% 3% 1% 0% 3% 5% 2% 100%

·Local Option Tourist Tax Levies in Florida's Counties

Local Option Tourist Tax Levies in Florida's Counties

Estimation of Realized and Unrealized Tax Revenues

r 30, 2015

• f Economic and Demographic Research. 2014 Local Government Financiallnfonnation Handbook. Table: 2015 Local Option Tourist I Food and Beverage I Tax Rates in Florida's
• Researdl. 2014 Local Government Financiallilformation

Projected 2015 Florida TOT Collections

Percent of 2015 TOT Projecion State TOT Orange County TOT $203,068,524 28.86% Statewide TOT $703,662,725

Orange County Convention Center The Story Behind The Numbers

FISH KIND

& ASSOCIATES

Prepared for: Orange County Convention Center Prepared by: Fishkind & Associates, Inc. 12051 Corporate Blvd. Orlando, Florida 32817 407-382-3256 May 2013

Orange County Convention Center- The Story Behind the Numbers

The Economic Impact of the Orange County Convention Center (OCCC) exceeds $2.2 Billion each year. Tens of thousands of workers are employed and millions of people visit the Metropolitan area as a result of OCCC. In this section Fishkind & Associates,

• Inc. conducted a survey of OCCC business partners. The survey was conducted so

that we may discuss the ways in which these business and employment linkages are made and highlight the threads which weave through the local economy in an effort to bring to light "The Story Behind the Numbers" as it applies to OCCC. At the outset of the Convention Center story is a $2.3 billion construction budget over the past 15 years. With 2 million square feet of floor space under roof, OCCC is the third largest convention center in the United States. Construction activity has employed crane operators, cement manufacturers, building materials companies such as dry wall, roof material and structural steel companies. At a time when the construction industry has been hard hit, OCCC has budgeted nearly $200 million more for ongoing capital construction in the coming five years. With OCCC open for business, the operational program to attract and support world class convention and tradeshow activity takes place. OCCC employs more than 600 persons directly. OCCC employees market, schedule and provide logistical services to convention and tradeshow organizers. OCCC staff performs a wide variety of jobs. These duties include maintenance of the facility; supervising set-up and take-down activity for convention & tradeshows; Account Executive; Event Coordinator, Business Services Representative; technicians; capital planning; business specialists; all jobs requiring a high degree of skill to support convention and tradeshow activity which draws more than 1 million delegates to the market each year. The average full time convention center employee earns $40,100 per year in direct salary with an additional 40% paid in the form of health and insurance benefits. Hundreds of part time personnel are employed on a seasonal or per job basis. The Convention Center budget exceeds $50 million per year and represents the organizational component driving and supporting all activity at the Convention Center. The logistics of convention and tradeshow activity is highly complex and requires a myriad of specialty businesses and service providers. It is estimated there are more than 500 separate local businesses who provide direct services to convention and tradeshow exhibitors. Much of the registration fees paid by convention/tradeshow delegates are spent locally to pay for the services these local businesses provide, supporting local employment. 1

These service providers help build exhibits, provide lighting, telecommunications services, marketing, audio visual services, provide adjunct staff for booth renters, offer transportation and hotel services, security, catering, and decorating. Each one of these specialty areas gives rise to unique businesses located throughout the community. The range of these businesses includes local "home grown" companies as well as international service conglomerates. Many of these are businesses have grown up in the community with the Convention Center over the past 25 years. For these companies there has evolved what is now a decades old working relationship with

• OCCC. Cultivating these working business relationships is part of the reason OCCC is

so successful nationally. OCCC is supported by strong community business partners. Businesses involved in these services often report more than half of their annual revenues derive from OCCC related work. Annual revenues of these convention center dependent businesses reach into the millions of dollars in sales per company per year, supported by conventioneer and exhibitor fees. Jobs for more than 4,400 workers directly depend on these businesses who are closely integrated with the smooth functioning of each convention and tradeshow from opening day to closing day plus 3 to 5 days on both sides of the event for set up and break down. The total spending for these services exceeds $370 million annually and represents more business activity and revenue than is spent by delegates in hotel roomnight revenues associated with these events. This coupled with other convention related spending helps diversify the local economy. As a convention or tradeshow opens the delegates and guests and in many instances accompanying family members arrive. Attendance is one of the most visible of statistics

• f OCCC. Over the course of a year, more than 1 million delegates attend bringing with

them more than 600,000 guests or family members. With a length of stay in excess of 2 days, the number of hotel roomnights booked is 2.3 million annually. This translates into more than 6000 supportable hotel rooms - that's more than a dozen 500-room hotels! Hotel revenues also exceed $320 million annually and support nearly 6,000 direct hotel jobs, in addition to the spending described from other OCCC events partners. DelegateNisitor spending ripples throughout the regional community as attendees and guests purchase gifts, eat at local restaurants, and enjoy many of the community's local attractions. Retailing directly supported by delegate and accompanying visitor expenditures again adds another $300 million to the local economy. This supports 3,200 retail industry jobs locally which include store managers, inventory, distribution and warehouse jobs, sales representatives and financial accounting positions. The number of retail stores directly supported by convention and tradeshow delegate and guest spending is estimated to be 500 retail establishments.

2

Transportation services include limousine, taxi and rental cars, to-and-from airport travel, as well as in-town travel to restaurants and attractions. In addition there are convention and tradeshow special events for which transportation services are often hired out with bus service to golf, parks, dinner rides and other excursions to local area sites. The movement of people to and from and within the market represents the Transportation services contribution to the economy and accounts for $135 million in economic activity. The highly visible aspects of conventions and tradeshows are the visitors, and occupied hotel roomnights. Support services and retailing, each, are as large a sum in and of themselves in terms of jobs and spending as hotel activity. The combination of all of these activities gives rise to the $1.2 billion direct economic impact created by the Orange County Convention Center and direct support of more than 15,600 jobs. Based

• n a survey of these businesses two-thirds provide their employees with health benefits,

paid vacations and retirement plans, while others also offer free parking and discounted meals.

Multiplier Effect

The importance of this economic activity cannot be overstated as convention tradeshow spending represents new money being brought into the community from the outside. The injection of new money into the local economy by the Convention/Tradeshow industry, through visitor spending and event sponsor spending, is defined as a basic sector industry. Basic sector industries have an important secondary effect called the multiplier effect. The multiplier effect occurs as direct spending is respent within the local economy. By recirculating these dollars the value of a basic sector dollar is multiplied in the local economy. The multiplier effect for the Orange County Convention Center comes about as retail, hotel, transportation and business services dollars are all respent in the local community. Thus, the workers in each of these industries spend their wages on housing, food, education and retail purchases as well. In addition to paying wages, local businesses spend their revenues on equipment, supplies, and materials needed to serve their customers. While some of this spending naturally

• ccurs outside the local economy, the multiplier effect results in nearly a doubling of

total economic activity locally, flowing from OCCC. In this way the $1.2 billion OCC direct economic impact becomes a $2.1 billion total economic impact, supporting 25,600 jobs. 3

Construction

Additional economic impacts flow from the ongoing OCCC capital maintenance program. Capital maintenance expenditures include re-roofing, air conditioning upgrades, carpet replacement, security and information system enhancements, and maintenance to exterior walls among upgrades to many other aspects and facilities within the Convention Center buildings. At a time when the construction industry still feels the lingering effects of the recession and housing bubble aftermath, new commercial construction jobs are vital to the community. Hundreds of workers will be hired each year to complete these capital construction jobs. Over five years the combined direct and indirect economic impacts of the capital maintenance program is equivalent to one additional year of hotel revenues, more than $300 million in total impacts. It should also be known many of the Convention/Tradeshow support businesses also have their own ongoing capital maintenance programs for building upgrades. Annual spending is typically from $10,000 per year to 500,000 per year in capital construction spending per business. These spending levels represent additional economic benefits largely accruing to the local construction industry which are typically not counted in standard economic impact analyses and may easily represent a doubling or more of local construction spending than is currently accounted for in the OCCC capital maintenance budget impact analysis.

Community Involvement and Participation

The Convention Tradeshow industry is a local industry, with local impacts. There are almost 50% more full time convention/tradeshow related workers as there are daily visitor/attendees in the market, on average. While attendee/visitors are transient, the businesses and workers employed are local and remain in and part of the community. As well, the economic and community benefits from the workers and business activity remain in the community, supporting schools and charitable organizations throughout the region. All of the key businesses and service providers surveyed for this discussion report volunteer work, fund raisers, charitable giving, community participation and involvement beyond simply hiring workers and providing convention/tradeshow logistics and support services. Many companies make direct cash contributions to special community causes such as Central Florida Head Start, 100 Black Men of Florida Foundation, and United Way. Others support their employees in volunteering efforts with Habitat For Humanity, Give 4

Kids the World, or working with employees setting volunteer goals resulting in over 20,000 hours logged of community volunteer service. Some companies engage at the educational level sponsoring "Partners in Education", specialized training programs in the UCF Rosen School of Hospitality, recruitment programs at Mid-Florida Tech, Valencia College and UCF as well as local culinary programs. The community givebacks flowing from the convention/tradeshow industry are large and reflect the level of depth, commitment and involvement Convention Center and related businesses and workers have with the community at large. Large scale promotional efforts and world class facilities are needed to maintain the high level of interest and awareness with event sponsors so the next convention or tradeshow will take place here. By supporting and maintaining this business sector, the entire community benefits from cultural and recreational facilities such as the new Magic Basketball arena, the planned renovations at the Bob Carr Performing Arts Center and the planned Citrus Bowl improvements. These community amenities are also world class recreational and cultural facilities which largely benefit local residents. The number of workers directly and indirectly associated with OCCC convention and tradeshow activity is as large as the population of a small city. The Orange County Convention Center is an integral economic "City" within the Orlando regional economy, benefitting tens of thousands with jobs, providing local government with millions in annual surplus tax revenues which keeps existing taxes low, while contributing $2.1 billion in overall economic activity. 5

( )

01-04-'13 13:57 FROM-Business Office 407-685-9858 T-148 P0001/0009 F-883

6th PennY Funding Split Proposal for Marketing and C~nuntulity

Facilities

The Tourism Industry completely ·supports Mayor Crotty's proposal to increase the

tourist development tax (TDT) by adding the 6th penny a,nd splitting the proceeds. equally· between tourism promotion and. the conununity facilities. In· order to niaximizy. the·

benefit to all parties and increas·e our tourism numbers, we would like to prop9se an . arrangement to ')ump start" tourism for the first two years as the plans for the community facilities ~e being discussed and finalized. while still providing a 50/50% split over time:

The highlights of

• ur proposal include the folloWing:
• 1. Supplement the COlmty's existing $5.5 million annual tourism advertising budget

(the "Baseline Matketing ·Budget") by spending an estimated additional $52 .nrillion over the next two years on a marketing campaign designed to induce more

.. to'Urists to visit Central Florida, and make permanent the $4 million supplemental

CVB funding that has been occurring.annuaily since '1999.

• 2. Beginning .

in fiscal year 2009 ~d for ten years thereafter, the county shall continue to supplement the Baseline Marketing Budget by spending 50 percent of the 6th penny, less 1/1 oth of the actual extra amount advanced in. the first two

years, on tourism promotion so that hy fiscal year 2018 the 50/50% split of

the 61h permy is realized. Beyond FY 2018, the 6th pelllly revenue will be split equally

between tourism pro!flotion and the community facilities.

• 3. Prioritize the use of all toprist development taxes received by .the county

(including both the existing 5% levy and the additional 1% increase) as follows:

• a. Meet all obligations related to projects ·

aheady fmanced by TDT (including operating and maintenanc~ costs of such projects);

• b. Provide continued fi.Inding to organizations, programs and events that

currently-receive TDT funding; ·

.

• c. Adequately fund reserVes;
• d. Subject to achieving the projected 2.4% .annua] growth rate. fund the

Baseline Marketing Budget and the additional marketing amounts described in pnragxaphs 1• and 2 above;

• e. Fund the construction or improvement of other eligible community

facilities within Orange Co1.41ty as. a~thorized

by law; and

• f. No additional TDT coriunitments will be made that would impact or

change the priority of the amount ofTDT funding for tourism promotion.

• 4. Based on preliminary estimates, we believe this proposal will generate up to $500

million in bond proceeds for the conununity facilities, after taking into account

the spending· priorities outlined above. The hospitality ~dustry

fuliy supports the

use of the bond proceeds for a myriad ofproposed community projects and takes great pride in proactively partnering with local government leaders to develop this plan, which shall improve the ·quality of life in Central Florida while

simultaneously promoting a healthy and vibrant economy.

407-685-9858 T-148 P0002/0009 F-883

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Orlando Sentinel

What's not to like?

April 22, 2007

Yes, Orange County taxpayers, you really can get a new downtown arena, performing-arts center and refurbished Florida Citrus Bowl, and it doesn't have to cost you a penny Indeed, we can't think of any other community in Florida or elsewhere that is able to say that. It's mostly because this community has a hotel tax and 50 million tourists each year. The tourists can sometimes cause headaches in the form of traffic jams. But, in this case, the community can get something back -- something that will greatly improve the quality of life here. Just remember that as the debate over these important venues intensifies in the next few weeks and some politicians start their grandstanding. Here are a few myths you hear repeated again and again -- and why you shouldn't believe them. MYTH #1 Orange County taxpayers will foot the bill for these venues. REALITY: You can't get a better deal than free and, except for a handful of downtown Orlando property owners, these state-of-the-art venues will cost local taxpayers nothing. That's because Orange County's tax on hotel rooms, paid almost entirely by tourists, will cover more than $540 million for these venues. Private donors-- primarily the Orlando Magic Basketball team-- will pay at least $146 million, and there's also state sales taxes and interest. The only local taxes used will be about $160 million collected in a special taxing district created years ago to revitalize downtown Orlando. All the money collected in this small district comes mostly from businesses and must be spent downtown. Rather than attack these venues, opponents such as Orange County Commissioner Fred Brummer ought to be explaining why they would deny generations of residents $1.1 billion of badly needed entertainment venues at virtually no cost to them.

MYTH #2 The money for these venues could be spent on schools, roads or police. REALITY: Florida law allows hotel taxes to be spent only on convention centers, sports stadiums and arenas, auditoriums and museums, tourism promotion and to run visitor bureaus. A few counties have stretched the definition to improve roads around convention centers, but the tax simply can't be used to solve transportation problems. It's designed to promote tourism and give communities the money they need to build the kind of amenities that improve the quality of life. Trying to change the state law would be crazy. Even though Orange County collects $162.8 million a year in tourist taxes, almost all of that is being used to pay off $1 billion owed on the Orange County Convention Center. Just imagine what would happen if Tallahassee lawmakers could tap Orange County's hotel tax; you can bet it would be divvied up for projects in Miami, Pensacola and parts in between, leaving locals with next to nothing. Besides, after spending more than $1.5 billion over the years on the convention center and tourist promotions, isn't it time residents benefited from the tourist tax? MYTH #3 This is a sweetheart deal for the Magic and, if they leave town, the taxpayers are on the hook. REALITY: The Magic will pay $50 million in construction costs, help finance $100 million in debt for 30 years and pay for all cost overruns in the arena's construction. On top of that, the Magic will pay $1 million a year in rent for 25 years and pay $1.75 million -- increasing by 3 percent a year-- from revenues generated by suites, advertising and naming rights. Magic owner Rich DeVos' $10 million gift to build the performing-arts center makes him the project's second-largest private contributor. Leave town? Under this plan, the Magic have promised to stay in Orlando for 25 years, and they've committed to make debt payments for five years longer than that. And, remember, local taxpayers aren't paying anything toward the arena, so they can't get stuck with the bill. And while they're criticizing the Magic's contribution to these venues, could critics please explain why wealthy hoteliers get the benefit of a $1.5 billion convention center without having paid anything toward its construction? MYTH #4 The Florida Citrus Bowl is used for only two events a year. REALITY: In addition to the New Year's Day Capital One Bowl game and the Champs Sports Bowl, the stadium is also home to the annual Florida Classic game between Bethune-Cookman University and Florida A&M -- all three bring in thousands of visitors each year. But there are more than 70 community events held at the stadium each year. A renovated stadium will also attract more nationally recognized events, like NCAA conference championships and pre-season professional football games. As commissioners begin holding community meetings on these venues, there will be plenty of chances to push hot buttons like taxes and spending public money on professional sports. The truth is, these three venues present an unprecedented opportunity for city and county

• commissioners. By following the lead of Orlando Mayor Buddy Dyer and Orange County Mayor

Rich Crotty, they can build entertainment venues that rival any in Florida, and they can do it at virtually no cost to local taxpayers.

It's time to move forward with venues

Premium content from Orlando Business Journal Date: Monday, July 16, 2007, 12:00am EDT As July 26 approaches -- the fateful date when Orange County commissioners will vote

• n whether or not to move forward with building a new performing arts center and arena,

and renovating the Citrus Bowl-- a flurry of "education" is taking place all over town. Education is good, we say. It makes us all better informed. And it can also prove to be enlightening. So here's a couple of "huhs?" you may not know about the $1.1 billion proposed community venues, according to an economic impact study done by CSL International:

• The construction of

the three venues is estimated to generate $1.1 billion in local economic impact, including $452.9 million in personal earnings and the support

• f 10,800 jobs during the three- to four-year construction period.
• When up and running, the operations of

the proposed venues would generate about $619.4 million annually, including $247.1 million in earnings and the support of 7,500 jobs per year. This level of spending also would generate an estimated $24.2 million in state sales taxes, $2 million in county sales taxes and $3.5 million in tourist development tax revenues per year. So far, most Central Floridians seem to support the concept of a performing arts center, but balk at the costs involved with a new downtown arena and renovations to the Citrus Bowl. "The Magic need to pay more!" some cry, while others wonder what purpose the Citrus Bowl serves anyway, especially in light of the University of Central Florida now building its own football stadium on campus. So let's take a look at some numbers, starting with the arena deal. The Magic have agreed to pay $50 million in cash upfront toward the building of a new

• arena. The NBA team also has agreed to pay another $60 million in long-term lease and

revenue payments and $29.5 million in financing arrangements.

Any cost overruns from the construction of a new arena also will come out of the NBA team's pockets. How's that compare with other markets? When the FedEx Forum was built for the Memphis Grizzlies in 2004, the team paid no upfront costs. And when the SBC Center in San Antonio was built in 2002, the Spurs paid $28.5 million upfront. There are other recent examples -- but you get the picture. And that doesn't even include the fact that the Magic wouldn't be the only ones benefiting from a new arena. We might actually manage to land a few big-name concerts and shows, rather than watch them go to neighboring cities with better venues. Selling the concept of Citrus Bowl renovations is a little tougher because fewer of us ever visit the facility. But without renovations, we could lose the Capital One and the Champs Sports bowls. With the renovations, we not only can keep the events we already have but might, in fact, gain a few more. So where does this leave us? Orlando is a growing, thriving city standing on the cusp of even greater things in the near future. We already have a world-class airport, theme parks and resorts, and an economy any number of

• ther cities would give their right arm to have.

The bottom line: We can't afford to miss this opportunity. It's time to move forward with achieving the first-class status Orlando deserves.

The EDC was the facilitator of an Economic Impact Analysis related to our region's three proposed community venue projects: refurbishment of the Florida Citrus Bowl Stadium and development of a new Orlando Performing Arts Center and Orlando Events Center. The EDC was asked by Orange County and the City of Orlando to manage this study on behalf of our community and the three venues. The study was conducted by CSL International, a consulting group based in Minnesota that specializes in convention, sports and leisure facilities. Key points from the study are as follows:

• CONSTRUCTION IMPACT: Construction of the Community Venues is estimated to

generate approximately $1.1 billion in local economic impact and would support approximately 10,800 jobs during the three to four year construction period.:.

• ANNUAL IMPACT: Combined operations of the proposed Venues would generate

approximately $619.4 million in total output annually. This includes approximately $247.1 million in wages and would support approximately 7,500 jobs per year.

• TAX IMPACT: Combined operations of the proposed Venues would generate

approximately $24.2 million in State sales taxes; $2.0 million in County Sales taxes; and $3.5 million in County Tourist Development Tax (TOT) revenues annually.

• lONG TERM IMPACT: Over time, the operations of the venues are expected to generate

approximately $9.9 billion in total output; $3.9 billion in earnings; $357.1 million in State sales tax; $29.8 million in County sales tax; and $52.3 million in County TOT revenues.

• ADDITIONAL IMPACT: It is also anticipated that the build out of these venues would

spur additional development in and around the downtown area. Those impacts are reported in the study as ancillary development estimates. From the economic development perspective, we believe that world-class entertainment venues contribute to the overall attractiveness of a region as we work to attract top-tier companies and talent.

Economic Impact Analysis

• f

the

Proposed Community Venues

Presented to:

The Metro Orlando Economic Development Commission

Presented by: August 15, 2006

August 15, 2006

• Mr. Charlie Sloan

Executive Vice President Business Development

CONVENTION~S SPORTS~

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LEISURE

Metro Orlando Economic Development Commission 301 East Pine Street, Suite 900 Orlando, FL 3280 1 Dear Mr. Sloan: We have completed the economic impact analysis of the proposed Community Venues in

• Orlando. The attached report summarizes the study's research and analyses, and is

intended to assist the Metro Orlando Economic Development Commission ("MOEDC'') in evaluating the potential economic impacts related to the construction and on-going

• perations of the proposed Community Venues and should not be used for any other

purposes. The information contained in this report is based on estimates, assumptions and other information developed from research of the market, knowledge of the public assembly facility industry and other factors, including certain information you have provided. All information provided to us by others was not audited or verified and was assumed to be

• correct. Because procedures were limited, we express no opinion or assurances of any

kind on the achievability of any projected information contained herein and this repoti should not be relied upon for that purpose. Furthermore, there will be differences between projected and actual results. This is because events and circumstances frequently do not occur as expected, and those differences may be material. We have no responsibility to update this report for events and circumstances occurring after the date

• fthis report.

We sincerely appreciate the opportunity to assist you with this project, and would be pleased to be of further assistance in the interpretation and application of the study's findings. Very truly yours, CSL International

Collvenlions, Sports & Leisure International 1907 East Wayzata Boule••ard, Suite 250 • IVay=ata, MN 55391 • Telephone: 952.476.5900 • Facsimile: 952.476.0005

Table of Contents Executive Summary 1.0 Introduction 2.0 Local Market Overview

3

3.0 Economic Impact Analysis

11

4.0 Non-Quantifiable Impacts Analysis 32 Appendix 1. Peer Market Overview and Detail Appendix 2. Charitable Impact Overview Economic Impact of Community Venues

Executive Summary Executive Summary The Orlando market is internationally recognized as one of the premier destinations in the world with an array of world class attractions and resorts. Orlando's diversity of attractions and amenities provide visitors with a first-class experience, making the Orlando area one of the most successful tourist destinations in the world. The area's significant inventory of tourist amenities, coupled with the area's world-class, modern airport and newly expanded convention center, Orlando has also become one of the top convention destinations in America. However, while the market provides for excellent tourist and convention attractions and amenities, the market does not provide the community with modern, competitive arts, entertainment and sports venues that are consistent with the market's world class status. Due to a lack of amenities and features found in similar facilities in other markets, Orlando's current public assembly venues are unable to attract major economic impact events such as major Broadway touring events, NCAA championship events, major professional All-Star games, conference football championship games, and other events that result in significant national and international exposure. The growing competition for these types of events and the number of newer facilities located in other markets has placed Orlando at a significant disadvantage in terms of the area's ability to attract such events. In an effort to provide the highest quality arts, entertainment and sports venues for residents of and visitors to the Orlando area, the City of Orlando and Orange County are currently considering significant investments in a variety of new or renovated Community Venues, including:

• A renovated Florida Citrus Bowl Stadium;
• A new Performing Arts Center complex; and
• A new Events Center that would host a wide variety of events, such as concerts,

family and cultural shows, and sports events, including Orlando Predators and Orlando Magic home games. These facilities (collectively, "the Community Venues" or "the Venues") could have significant economic and fiscal impacts on the community by attracting and retaining high impact events, while also improving the overall quality of life for residents and

• businesses. In order to quantify the impacts the Community Venues could have on the

local area, the Metro Orlando Economic Development Commission (MOEDC) retained CSL International (CSL) to develop estimates of the potential economic and fiscal impacts related to the Community Venues. The remainder of this summary provides an

• verview of the results of the analyses undertaken as pmi of this project as well as an
• verview of the proposed Community Venues. As this is only a summary, the entire

report and related appendices should be read in its entirety to fully understand the results

• utlined herein.

Economic Impact of Community Venues i

Executive Summary The quantified impacts in this report include direct spending, indirect spending, jobs, personal earnings and tax revenues related to the construction and operation of each of the Community Venues and their respective tenants. The assumptions underlying the estimates of economic and fiscal impacts presented herein are based on historical and/or projected future operations ofthe facilities as well as industry data from similar projects around the country. · Economic Impact Analysis

• The presence of arts, entertainment and sports venues, and their resident tenants, can

provide significant impacts to a community. The direct, economic impacts related to such facilities takes place in the form of spending related to facility and tenant

• perations as well as spending by patrons outside the facility before and after events

at local restaurants, retail shops, hotels and other establishments.

• The estimated overall impacts related to each of

these three components are presented in the following exhibit. The Community Venues include a renovated Citrus Bowl, a new Events Center and new Performing Arts Center.

Estimated Economic Impacts Community Venues. Combined Community Venues Construction Operations Economic Impacts Direct Spending Total Output Earnings Jobs Fiscal Impacts Sales Taxes State County TOT Revenues n/a- not applicable . Period <'l $595,137,500 $1,142,531,000 $452,886,000 10,800 n/a n/a n/a

(l) Estimated impacts dmt would take place over three to four year construction period

Annual <

$4 I 6,305,000 $619,373,000 $247,079,000 7,500 $24,249,000 $2,021,000 $3,512,000 (2) Reflects on-going impacts from operations that would be generated each year over the life of the Venues (3) Assumes 3% growth per year and a 6% discount rate over 20 years. NPY(Jl $6,187,000,000 $9,884,000,000 $3,946,000,000 n/a $357,070,000 $29.771,000 $52,323,000 (4) County tax revenues generated within the Downtown CRA are diverted in their entirety to the Do>vntown CRA

• The construction of the Community Venues is estimated to generate approximately

$1.1 billion in local economic impact, including approximately $452.9 million in personal earnings, and would support approximately 10,800 jobs during the three to four year construction period. Economic Impact of Community Venues

ii

Executive Summary

• The operations ofthe proposed Venues would generate approximately $619.4 million

in output per year, including approximately $247.1 million in earnings and supporting

7,500 jobs per year. This level of spending would also generate approximately $24.2 million in State sales taxes, $2.0 million in County sales taxes and $3.5 million in County Tourist Development Tax (TDT) revenues per year.

• Considering the impacts over time, the operations of the Venues would generate

approximately $9.9 billion in total output, $3.9 billion in earnings, $357.1 million in State sales taxes, $29.8 million in County sales taxes and $52.3 million in County TDT revenues.

• It is also anticipated that the development of these types of venues would spur

additional development in the downtown area. Assuming such development occurs as envisioned by project representatives, spending at the ancillary development is estimated to generate approximately $7.0 billion in total output and $2.3 billion in personal earnings over 20 years. This spending would generate approximately $58.3 million in State sales taxes, $4.9 million in County sales taxes and $7.2 million in County TOT. In addition, this development could result in significant property tax revenues for each ofthe various taxing entities in downtown Orlando. It is important to note that the City of Orlando has received a $17 million federal grant that has been earmarked for street-scaping the Church Street corridor, which will be the central corridor linking the Community Venues.

• The following exhibit summarizes the estimated impacts from each of the individual

Community Venues. The assumptions utilized in developing these impacts are based

• n the historical operations of the existing venues as well as the estimated future
• perations of the proposed Venues and the operations of similar facilities throughout

the country.

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Economic Impact of Community Venues

s

iii

Executive Summary

• It is important to note that the impacts presented herein represent the gross impacts

generated by the facilities and related development. A portion of this spending and the related impacts currently occurs in the current market due to the presence of the existing venues and events. The development of these venues will significantly enhance the existing level of economic activity and ensure the impacts continue to

• ccur for the foreseeable future. It is also important to consider the long-term future

viability of the events that currently take place at the existing facilities. In today's highly competitive environment, it is likely that one or more of the events or tenants would not remain economically viable. This would result in the loss of a significant portion of the impacts currently being generated by the Citrus Bowl, TD Waterhouse Centre and the Bob Carr Performing Arts Centre.

• In addition to the quantifiable impacts related to the Community Venues discussed

above, such facilities also generate significant intangible benefits to the overall

• community. While these benefits cannot be directly quantified, they must also be

considered in a comprehensive review of the benefits derived from the proposed Venue developments. Examples of such benefits include:

• Significant national and international exposure for the Orlando area related to the

events held at the Community Venues will generate.

• The availability of high quality venues that cari host a variety of events aJso plays a

significant role in business and individual decisions to remain in or to relocate to the Central Florida area. With the area's recent and projected future growth,' it will be ever more critical to provide residents and businesses with a world class community that offers a variety of entertainment and education options. ·

• Additional potential intangible benefits to the Orlando area include:

);-

Providing state-of-the-art facilities for patrons and users;

);-

Enhancing community pride, self image, exposure and reputation;

);-

Enhancing economic growth and ancillary private sector development spurred by the operations and activities associated with the Community Venues;

);-

Diversifying consumer-oriented activities for area families and individuals attending events;

);-

Providing assets that can augment the community's world class convention center, attractions, accommodations and international airport. Local Market Overview

• The Citrus Bowl has served the Orlando area since 1936 as host to a variety of

football and other events. Currently, the stadium hosts the Capital One Bowl and Champs Sports Bowl, as well as the Florida Classic and a variety of other events including concerts, motor sports, soccer matches, high school football and drum corps competitions. Economic Impact of Community Venues

iv

Executive Summary

• Despite several renovations and expansions over the years, the Citrus Bowl has

become outdated in terms of amenities and revenue generating opportunities, significantly impacting the long-term viability of not only the stadium but also Florida Citrus Sports and the bowl games and other events held at the facility.

• Without major renovations, it is possible that the Capital One Bowl and the Champs

Sports Bowl would be moved to lower profile games or could be relocated to other· markets with stadiums capable of accommodating the games, while the facility would continue to decline and likely become economically unviable.

• Bob Carr Performing Arts Centre, which originally opened in I 925 as the Municipal

Auditorium, currently hosts the Orlando Philharmonic, Orlando Ballet, ·Orlando Opera, Festival of Orchestras and a variety of Broadway performances and other

• events. While the Centre hosts over 180 events per year, the venue lacks many of the

technical characteristics required by world class performance artists while also lacking patron amenities consistent with Orlando's status as a world class destination.

• Despite serving a regional population of almost two million people, downtown

Orlando currently offers only one true performing arts center, with a total of only 2,450 seats for the market. Most similar markets offer an average of approximately 5,500 total performing arts seats. The Linda Chapin Theater, which is located within the Orange County Convention Center, offers a secondary performing arts venue within the community. However, given the primary focus of the complex on convention and conference-related events, the Theater has not proven to be a viable location alternative that attracts a local audience and event support.

• With three resident organizations and a variety of other events with only one theatre,

scheduling has become a major issue at the. Centre. In today's highly competitive entertainment environment, this has placed significant economic pressure on the Centre's resident organizations arid touring events. It is unique for a community to have professional companies in all three disciplines of

• pera, ballet and symphony. It

is equally unique for a city with all three of these companies without a wo.rld class facility to serve and house them.

• The TO Waterhouse Centre has served as the Orlando area's primary indoor sports

and entertainment venue since its opening in 1989. The Centre currently hosts a broad array of events such as concerts, family shows, other sports and other events and is also the home of the NBA's Orlando Magic and the Orlando Predators of the

• AFL. The Centre has become outdated and.does not provide the square footage or

spectator amenities ofiered by most major event centers.

• There are several newer facilities located throughout the southeastern United States

that are currently competing directly with the Centre for a variety of touring events. The age, size and lack of amenities limit the a~ility

• f the Centre to attract various

high-impact events that require larger venues or better amenities than can currently be accommodated in Orlando. Economic Impact of Community Venues

v

Executive Summary

• The TD Waterhouse Centre ranks as the oldest arena among the peer markets, and has

the smallest capacity and square footage of any venues that host an NBA or NHL franchise.

• Several markets of similar size and characteristics to the Orlando area have

recognized the benefits of building performing arts centers, stadiums and event

• centers. These benefits include the ability to better compete with other markets for

major impact events as well as providing residents with quality arts, .sports and entertainment venues.

• The development of these new facilities would provide the economic stability

required to maintain the existing events that currently utilize the Bob Carr Centre, TD Waterhouse Centre and Citrus Bowl and would also enable Orlando to attract the types of major events that cannot currently be accommodated by the Centre. Such facilities would provide world class venues for area residents and visitors· alike, commensurate with Orlando's status as a world class destination market.

• The Orlando market currently falls well behind those markets considered most

comparable and/or competitive with the Orlando market in terms of performing arts centers, stadiums and event center facilities.

• All of Orlando's existing facilities lack the types of

modern amenities found at newer facilities, including patron amenities as well as user amenities. In each of the peer markets, the communities have made concerted efforts using public funds to improve the overall quality of life of residents by providing state-of-the-art venues that can accommodate a broad array of events that are appealing to the entire population. Economic Impact of Community Venues

vi

Table of Contents

CONFIDENTIAL

For Discussion Purposes Only Subject to Change

I. Executive Summary .................................................... 3

• II. Project Overview........................................................ 7
• Ill. MLS Overview

............................................................. 12

IV

.. Study Methodology

.................................................. 21

• V. Stadium Construction Impacts

.................................. 27

• VI. Overall Economic and Fiscal Impacts

...................... 31

• VII. Summary of Economic Impacts

................................ 42

• VIII. Additional Community Impacts

............................. 43

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CONFIDENTIAL

For Discussion Purposes Only

Subject lo Change

The Orlando market is internationally recognized as one of the premier destinations in the world, with an array of world class attractions and resorts. Orlando's diversity of attractions and amenities provide visitors with a first-class experience, making the Orlando area one of the most sucessful tourist destinations in the world. The area's significant inventory of tourist amenities, coupled with the area's modern international airport and newly expanded Orange County convention center, has also made Orlando one of the top convention and tourist destinations in America. However, while the market provides for excellent tourist and convention amenities, the market does not provide the community with access to a broad spectrum of professional sports leagues and/or teams. Currently, the only true tier one professional sports team residing In the Orlando/Orange County market is the NBA's Orlando Magic, currently playing in the new Amway Center. The nearest

• ther tier one professional sports franchises are located more than lX hours drive away, with the NFL's Tampa Bay Buccaneers and

Jacksonville Jaguars and MLB's Tampa Bay Rays. The Orlando sports fan is starved for another true tier one professional sports team to call their own! Major League Soccer (MLS) would be a perfect tier one pro sports fit for Central Florida. The area is a hot bed for youth soccer, with the 2nd highest participation levels in the country for a major metropolitan area. Over the past two years Orlando City Soccer Club (OCSC) has capitalized on Orlando's thirst for top-class pro sports and has proven It can attract significant crowds to their games.

OCSC currently has the highest attendance of any U.S. soccer franchise outside of MLS. In addition, the attractiveness of the Central

Florida market to MLS and the excellent operation OCSC runs has made OCSC the front-runner In securing an expansion franchise. However, if OCSC is to succeed in bringing a second major league sports franchise to Orlando/Orange County, it is deemed imperative to be able to provide MLS leadership with a clear plan for the construction of a 20,000 seat multi-purpose venue designed to host, as its primary tenant, an MLS team and its operations. The continued, high-quality and profitable growth of MLS has been driven in part by the construction of what the league terms "soccer-specific stadiums." In truth these stadiums are not "soccer-specific" but are multi-purpose facilities where soccer is the major

• tenant. From the first "soccer-specific stadium" in 1999 (Columbus Crew) to the league's most recent stadiums, MLS has continued to

provide a permanent home for its clubs and a lasting community asset for the local fans. Most of the league's current soccer-specific stadiums are a product of public and private partnerships, creating a solid connection between MLS ownership and the public sector.

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Executive Summary

CONFIDENTIAL

For Discussion Purposes Only

Subject to Change

This facility (or "the Venue"}, can have significant economic and fiscal impacts on the community by attracting and retaining high- impact events, while also improving the overall quality of life for residents and businesses. In order to quantify the impacts the Venue could have on the local area, the ownership of OCSC retained CSL International (CSL) to refine estimates of the potential economic and fiscal impacts related to the Venue. The remainder of this summary provides an overview of the results of this analysis and an

• utline of the benefits of the Venue to the community as a whole.

" The quantified impacts in this report include direct spending, indirect spending, jobs, personal earnings and tax revenues related to the construction and operation of the Venue and its tenant. The assumptions underlying the estimates of economic and fiscal impacts presented herein are based on historical and/or projected future operations of the facilities as well as industry data from similar MLS projects around the country.

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It is important to note that this report is deemed a Phase J Economic and Fiscal Impact Study that is generic to the overall benefits to the community associated wlth the acquisition of an MLS franchise itself, irrespective of the actual physical location of the Venue. Phase II Is planned to be a full-feasibility study by CSL, that will be tailored to a specific venue location and will provide analysis of the various economic drivers that will be applicable to that location. In summary, the construction of a multi-purpose venue would very clearly be a valuable community asset, with the ability not only to house as its primary tenant an MLS franchise, but to host a wide variety of other local sports events, (lacrosse, high school football, rugby etc), concerts and other outdoor venue-related conventions and opportunities, in a facility much more intimate than the current Florida Citrus Bowl. The multi-purpose venue would have a rough proposed seating capacity of 20,000 and would include 25 tuxury suites, 1,000 premium club seats and a multitude of other venue-specific features such as party decks, private meeting/viewing spaces and the like. Stadium construction costs are estimated to be $96 million. In projecting venue usage, a conservative estimate is 687,500 ln attendance annually over 47 events and, of those 47, approximately 27 of those events directly related to MLS games played by the home tenant.

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CONFIDENnAL

For Dlscussloo Purposes Only Subject to Chlloge

It is estimated that the presence of a new multi-purpose venue will produce a 30-year NPV estimated net new direct spending of $710 million to the City of Orlando, $463 million to Orange County and $281 million to the State of Florida as demonstrated by the detalled methodology contained within the body of this report. In addition, it is estimated that the presence of a new multi-purpose venue wlll produce a 30-year NPV estimated tax revenues of $9.1 mitlion to the City of Orlando, $28.8 million to Orange County and $16.1 million to the State of Florida also as demonstrated in more detail within the body of this report . It is also anticipated that the development of this venue would spur additional development in the areas adjacent to the ultimate site. Assuming such development occurs as envisioned by project representatives, spending at the ancillary development could generate billions of additional dollars in total output, personal earnings, sales tax, property tax and TDT over the next 30 years. A detailed estimate of the fiscal impact of the additional development dollars would be included in our Phase 2 EIS and would be based upon the venue's flnal location. It is important to note that the impacts presented herein represent the gross impacts generated by the venue and related

• development. A portion of this spending and the related impacts currently occurs fn the current market due to the presence of

the existing venue and events, The development of this new venue will enhance the existing level of economic activity and ensure the impacts continue to occur for the foreseeable future. It is also important to consider the long-term future viablllty of the events that currently take place at the existing facilities . In addition to the quantifiable impacts related to the Venue discussed above, such a facility also generates significant intangible benefits to the overall community. Such benefits include civic pride, quality of life for citizens, attractiveness of the rna rl<et for companies relocating to Central Florida, increased international media coverage, increased awareness in key markets such as Brazil and the UK, potential to host U.S. National Team games, potential to host MLS All-Star games, NCAA Soccer Final Four games, and increased OC Foundation community involvement and programs. WhHe these benefits cannot be directly quantified, they must also be considered in a comprehensive review of the benefits derived from the proposed Venue development . ., :.,;.f

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