HomeMy WebLinkAboutLewis&Clark Explora Ctr-draftDraft
Final Report
Feasibility Analysis
of the
Lewis and Clark Exploratory Center
Prepared For:
City of Charlottesville, Virginia
and
The Lewis and Clark Exploratory Committee
Prepared By:
Hunter Interests Inc.
Annapolis, MD · New York City · Clearwater, FL
in association with:
Jones & Jones
Seattle, WA
January 31, 2000
HUNTER INTERESTS
I N C O R P O R A T E D
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VII.
VIII.
Table of Contents
Executive Summary
Introduction and Methodology
Community Context Analysis
Competitive Supply Analysis
A. Other Lewis and Clark Centers
B. Charlottesville Attractions
Demand Analysis
A. Primary Market
B. Secondary Market
C. Tertiary Market (Day-Trip Tourism)
D. Tourism Market
Lewis and Clark Exploratory Center Development Assumptions
Capture Analysis and Visitation Projections
A. Capture Analysis
B. Total Projected Visitation
Lewis and Clark Exploratory Center Concept Building Program
2.
3.
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5.
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11.
Orientation Space
Central Exhibit Area
Focus Pods
Multi-Sensory, Audience Participation Theater
Educational/Classroom Space
Retail Center
Themed Restaurant
Popular Snack Bar
Themed Conference Center Space--Leadership
Seminar Focus
Back of the House/Office/Restrooms '
Outdoor Exhibit/Activity Area
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IX. Capital Cost Estimate and Development Budget Summary 29
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XIII.
Financial Analysis,:,~, ...~,
A. Projected RevenUe
B. Projected Costs and Expenses
C. Cash Flow Summary
Funding Evaluation and Recommendations
Site Analysis
A. Site Analysis Methodology
B. Recommended Sites for Consideration
Economic Impact Analysis
A. Direct Economic Impact Summary
B. Indirect Economic Impact Summary
C. Tourism Impacts
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'" I. Executive Summary
The' cOn. stilting team'of Hunter Interests Inc'. and jOnes & JOnes architects was
retained by,'the" City of Charlottesville to Conduct a market and financial
feasibility analysis for a Lewis and Clark Exploratory Center, based on the
vision of the Lewis and Clark Exploratory Committee to .create a facility that
successfully combines economic development goals with cultural and
educational enrichment objectives.
A wealth of data and other information for use in the feasibility analysis was
collected inclui:ling material from the City of Charlottesville, Charlottesville
Convention and Visitors Bureau, the University of Virginia, the Albemarle
County Historical Society, 'the Virginia Tourism Corporation, the Federal
Executive Institute, and others.
Research in conjunction with the analysis has also included discussions with
many individuals associated with operation of other Lewis and Clark
museums, interpretive centers, and parks throughout, the country. We have
also interviewed members of the Lewis and Clark Historic Trail Commission
and the National Lewis and Clark Bicentennial Council.
At this time there are no regionally competing Lewis and Clark centers in the
Charlottesville marketplace, although the artifact collection and historical
connection at Monticello currently attracts visitors who are interested in the
expedition. The lack of a major museum in the area that features this
important historical event is noticeable by its absence.
A 25-mile band around Charlottesville represents the primary, or local market.
This market for the Lewis and Clark Exploratory Center is an area within a
half-hour drive of downtown and has a population of approximately 223,000.
This represents a premier target market for repeat visitation and alternative use
of the facility for a variety of activities.
An 85-mile band, which includes the cities of Richmond and Lynchburg,
identifies a secondary market that can be characterized as a short trip tourist
market. This market area includes a population of approximately 2.9 million.
A 170-mile band identifies a tertiary market that includes the Baltimore-
Washington area, the population clusters of Northern Virginia, and the
population centers of the Norfolk and Roanoke areas. This band effectively
represents a day-trip tourism market and has a net population of
approximately 14.9 million.
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Based on the projected., total number of room nights sold in 1998, we e~mate
that there are approximately 1.1 million overnight visitor-days in
Charlottesville and Albemarle County. Adjusting for multiple night stays and
. ~ pass-through tourists, ..we estimate, that actual overnight tourist visitation to the
Charlottesville area is between 900,000 and 1 milli0nperSons per year.
· Hunter Interests Inc. and ~the Lewis and Clark Exploratory~.Committee
developed a preliminary concept that focuses on the Center's ability to occupy .
a role as the "hub of the wheel" for nationwide Lewis and Clark facilities,
programs, activities, research, etc.
The Lewis and Clark National Historic Trail Interpretive Center in Great Fails,
Montana, is the headquarters for the Lewis and Clark Heritage Trail
Foundation, and it will presumably remain so. However, we envision a
Charlottesville center that will become the de facto headquarters for the nation
through its breadth and scope of presentation, high-tech and interactive
exhibits and audience participation experiences, electronic archives, and other
features.
Given the historical profile of Lewis and Clark in the Charlottesville area,
their significance in educational programs, the Lewis and Clark Exploratory
Center's unique characteristics, and its potential ability to offer itself as a
venue for receptions, meetings, and other support uses, we expect that the
Center could capture approximately 10% to 12% of the local market
population. This equates with approximately 22,000 to 27.000 visitors from
the primary market annually.
Based on the characteristics of the facility as conceptualized at this time, and
other factors relative to leisure habits and travel patterns, we expect the LCEC
will capture between 3% and 4% of the population in the secondary market
annually. This equates with approximately 88,000 to 117,000 visitors from
this market area annually.
The tertiary market encompasses a day-trip tourism market that contains nearly
15 million people. The ability of this dense population to reach Charlottesville
in one-and-a-half to four hours makes the City and the LCEC a viable
destination for an enormous market. We project that the LCEC could capture
at least 1% of the tertiary market, generating visitation of approximately
150,000 persons annually.
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[ N C O R P O R A T E D
Assuming that the LCEC is one of the premier culturaI.'am'actions in the City,
we expect that it could capture between 25%. and 30% of.tourists who are
already Visiting major attractions. Viewed differently; ' this equates with a 16%
to 18% capture of all overnight tourists to Charlottesville, or between
approximately 143,000 and 171,000 visitors annually..
Based on its attractiveness as a family destination,, likely destination for locals
to take out-of-town visitors, and its position as a national center, we can
reasonably expect multiple visits from a portion of the population. We have
factored into the visitation calculations a projection that 5% of visitors would
attend twice a year. This adds between approximately 20,000 and 23,000
visitor-days to the total visitation range.
Hunter Interests Inc. projects that total annual visitation to the Lewis and
Clark Exploratory Center will range from approximately 421,000 to 487,000,
with a midpoint of approximately 450,000 representing the most likely
stabilized annual attendance.
The Conceptual Building Program is summarized below.
Orientation Space
Central Exhibit Area
Focus Pods
Multi-Sensory, Audience Participation Theater
Educational/Classroom Space
Retail Center
Themed Restaurant
Popular Snack Bar
Themed Conference Center Space--Leadership Seminar Focus
Back of the House/Office/Restrooms.
Outdoor Exhibit/Activity Area
The Conceptual Building Plan provides nearly 70,000 net' square feet of
useable space (80,000 including outdoor exhibit and activity areas). This space
can accommodate a world class center by maximizing utilization of the
interior, and using outdoor plazas and other spaces accordingly. Gross
Building Area is approximately 82,000 square feet.
The total development budget for the Lewis and Clark Exploratory Center not
counting any land or financing costs, is estimated to be approximately $24
million in year 2000 dollars.
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· · Based '~on ::the: facility:: program, performance .~projections, :and pricing
· aSSumptionS;'We estimate that total annual operating revenues for. the LCEC
· will be approximately~$$. I4 miIlion at stabilization in year three.
· Based on the facility program, cost projections, andoperating assumptions, we
estimate that total annual operating expenses for the LCEC will be
approximately $4.8 million at stabilization in year three.
The resultS of the 10-year analysis performed for the LCEC indicate that the
facility can generate revenues in excess of costs to PrOduce a positive Net
Operating Income (NOI), a portion of which could be available for debt
service, although it would be a minimal dollar amount.
Based on results of the cash flow analysis, we believe the LCEC can be self-
supporting. However, it is unlikely that it can support any significant
conventional debt financing to cover capital costs associated with construction
and development. Preliminary assessment of funding availability from the
private sector, including contributions, grants, and sponsorship by
corporations is encouraging.
To acquire the estimated $24 million in capital costs required to construct,
outfit, and open the Lewis and Clark Exploratory Center, we recommend a
funding/development model that includes the following components:
>.
The LCEC should tease property, identified in'the site analysis from the
City, County or institutional partner at a minimal cost based, on
performance thresholds, or seek a gifted parcel as part of a public/private
development partnership.
The LCEC should seek to raise $15 million from private contributions,
grants, membership sales, and corporate sponsorship agreements to this
portion of the capital campaign. Private monies may be especially suited
to funding of exhibits, technological components, and interactive video
programs.
The LCEC should seek Public funding in the form of grants and
contributions from state and federal programs and agencies of $5 million.
The LCEC should seek to acquire additional funding of $5 million through
conventional debt financing and tax exempt financing in the form of
Virginia Industrial Revenue Bonds.
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i N C O R P O R A T E D
· With a view toward maximizing potential visitation and economic impact, two
primary sites that work best for the Center and the City of Charlottesville have
been identified. They can generally be described as: 1) Downtown Location,
and 2) Park Location. .. ~.:.:. ~ ,,, ...:.. ~
· Total direct economic impacts from Lewis and Clark Explor~tory Center
development include one-time capital expenditure of $24 million and annual
direct spending of approximately $4 million.
We estimate that capital expenditures will create approximately $74.5 million
in indirect impacts, and ongoing expenditures by the Center will generate
approximately $12.4 million in annual indirect economic impacts.
Based on the conservative assumption that approximately 10% of all visitors
will be making their first trip to Charlottesville, spin-off spending can be
expected from an estimated 40,000 to 50,000 "net new" day-visitors. We
estimate that attendance at other attractions, spending in local restaurants,
consumer purchases, and the like may contribute an additional $200,000 to
$500,000 to the local economy.
Based on current overnight tourist visitation to Charlottesville of 900,000 to 1
million and our own capture analysis, we project that the Center might
increase that level by 1% to 2%, or 10,000 to 20,000 persons. This translates
into "net new" overnight tourism spending of between $2.1 million and $4.2
million in the local economy.
When the mu~ltiplier effect is applied to net new spending by daytrippers and
overnight visitors, an annual indirect economic impact of between $7.1
million and $14.5 million is generated.
Total direct and indirect one-time economic impact from development of the
Lewis and Clark Exploratory, Center will be approximately $98 million.
Total direct and indirect annual economic impact from operations and
visitation to the Lewis and Clark Exploratory Center will be approximately
$36 million.
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! N C O R P O R ^ T E D
II. Introduction and Methodology
Hunter Interests Inc. was retained by the City of Charlottesville to conduct a
market and financial feasibility analysis for a Lewis and Clark Exploratory
Center, based on the vision of the Lewis and Clark Exploratory Committee to
create a facility which successfully combines economic development goals with
cultural and educational enrichment objectives. During the course of our work,
we have met with the full Exploratory Committee and many of its individual
members who represent a diverse group of interested parties including City,
officials, representatives of key historic/cultural attractions in the area, and private
citizens with an interest in Lewis and Clark. We have algo interviewed a number
of people in the greater Charlottesville area, including hotel operators, tourism
officials, business people, and public officials, as pan of our Community Context
Analysis.
We collected a wealth of data and other information for use in the feasibility
analysis, including material from the City of Charlottesville, Charlottesville
Convention and Visitors Bureau, the University of Virginia, the Albemarle
County Historical Society, the Virginia Tourism Corporation, the Federal
Executive Institute, and others. Research in conjunction with our market analysis
has also included discussions with many individuals associated with operation of
other Lewis and Clark museums, interpretive centers, and parks throughout the
country. We have also interviewed members of the Lewis and Clark Historic
Trail Commission and the National Lewis and Clark Bicentennial Council. Our
research into the facilities and programs that currently exist, and which are in
development across the country, has been facilitated by a well developed Internet
connection between Lewis and Clark facilities and programs, reports, technical
papers, newspaper articles, books, and other material.
We conducted the feasibility, analysis in association with Jones & Jones
Architects, an internationally prominent design firm. They have provided input
throughout the work process, and have played an integral role in the Site Analysis
and development of the Lewis and Clark Exploratory Center Conceptual Plan.
This report includes a capital cost estimate, revenue projections, operating'
expense projections, cash flow analysis, and an economic impact analysis. The
report concludes with a series of development recommendations, a funding
strategy, and several illustrations that depict diagrammatic space programs and a
conceptual sketch the facility.
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I N C O R P O R .~ T E D
III, Community Context Analysis
The pUrPos~i 'Of 66nducting the Community Context AnalYsis was to asSess the
p°t~ntial role that a major heritage tourism attractiOn in' the form Of the. Lewis and
Clark ExploratorY Center would play in the context of the synergy between other
attractions, its impact on overall tourism visitation to Charlottesville, and the
potential for economic development that such a facility could' produce. The
methodology for this analysis consists of assimilation of interviews and
discussions with stakeholders in the community, and our experience in observing
and working in other tourism markets on similar projects. The Community
Context Analysis ~ssentially continued throughout our work process, with new
information, ideas, issues, and opportunities incorporated into the development of
a building concept, site recommendations, and the financing strategy.
It is clear that the Lewis and Clark Exploratory Center can function very well as a
key addition to the mix of historic and other attractions in Charlottesville. Indeed,
the development of a Lewis. and Clark Exploratory. Center that is a destination for
tourists, and also a venue for repeat local use may be a critical factor in continuing
the trend of an improving rate of tourism growth and market share in
Charlottesville. Cities such as Lexington, Fredericksburg, and Staunton have
experienced double-digit growth in travel spending over the last several years.
Charlottesville has experienced approximately 6% growth annually, although in
the last two years there has been a slight increase in traveler spending. Moderate
declines in attendance at-Monticello and Michie Tavern over the last two years
have been partially balanced by slight gains at Ash Lawn, the Virginia Discovery
Museum. and other attractions, but local tourism activity remains fairly static.
Without exception, the interviews conducted in our Community Context Analysis
have supported the notion that a new attraction, particularly a Lewis and Clark
Exploratory Center, is not only desirable for Charlottesville, but will provide
much needed support for the City's efforts to regain a competitive edge in
regional tourism. The ability of the LCEC to act as a support attraction for
Monticello and other museums, as well as an overflow capture mechanism, is an
important dynamic. Similarly, the historic, cultural, and physical ties between
existing Charlottesville attractions and a facility that will embody the Lewis and
Clark expedition and its multifaceted role in our society, represents a market
dynamic which can create a mutually beneficial environment for growth.
This enhanced tourism environment can have a long-term beneficial impact on the
local hotel industry, conference and convention business, restaurants, retail, and
other market sectors that benefit from increased visitation to the area, and the
travel expenditures that are 'associated with it.
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I N C O R P O R A T E D
More esoteric benefits associated with education, cultural enrichment, and image
enhancement, have also been identified as positives in LCEC development during
our Community Context Analysis. The ability of the LCEC to provide a venue
for seminars and:.workshops for leadership, decision making, personal growth, and
other areas of learning associated with the Lewis and Clark. experience has also
been supported. Its potential leadership role in the "national community" of
tourists, historians, educators, and other Lewis and Clark organizations has also
been supported by the Community Context Analysis.
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IV. Competitive Supply, Analysis
-AY~ ~':":: Other LeWis'and Clark Centers " :::..-.- :t :: "' :
New LeWis and-Clark museums and interpretive centers of various types are being
featured, and in some-cases developed, throughout the country as the bicentennial
of the expedition approaches and the large base of enthusiasts continues to grow
through educational and marketing programs. In addition to existing Lewis and
Clark museums and interpretive centers such as the Fort Clatsop .National
Memorial in Oregon and the Lewis and Clark National Historic Trail Interpretive
Center in Great Fails, Montana, there are new centers planned. These include the
National LeWis and Clark Bicentennial Exhibition in St. Louis, the Sacajawea
Interpretive Center in Salmon, Idaho, and the Lewis and Clark State Memorial
Interpretive Center in Woods River, Illinois.
At this time there are no regionally competing Lewis and Clark centers in the
Charlottesville marketplace, although the artifact collection and historical
connection at Monticello currently attracts visitors who are interested in the
expedition. The Aldermm~ Library at the University of Virginia, the Albemarle
County Historical Society, ancestral homesites of the Meriwethers and Clarks,
statues, and markers constitute other bases for Lewis and Clark-oriented
visitation. However, the lack of a major museum in the area that features this
important historical event is noticeable by its absence.
We view the formative role of Thomas Jefferson. and the geographic/civic role of
Charlottesville as the. location for the beginning of the expedition, as the two
keystones of visitor demand, for which there is no current designated supply.
This gap. in what is otherwise a fairlv well developed chain of sites, facilities, and
parks across the country, represents an important market opportunity which a well
planned Lewis and Clark Exploratory. Center in Charlottesville can effectively
exploit.
The impact on visitation that the over arching national and international
fascination with the Lewis and Clark expedition could provide to the LCEC over
time is difficult to quantify. However. given its widespread following and place
in history, we believe a Center which becomes a "must see" destination for
aficionados, as well as Virginia heritage tourists and visitors to Charlottesville,
could effectively capture a significant amount of this potential visitation.
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B. CharlotteSVille AttraCtionS
Charlottesville has a modest supply of other attractions, which serve to bring in
tourists, educate and entertain the local ,population,, and otherwise Contribute to the
mix of places to go and things to do. Charlottesville's main location-based
attraction of course is Monticello, which has~ attracted approximately 550,000
visitors annually over the last several years. There has been a decline in visitation
from 561,304 in 1997 to 551,975 in 1998, and visitation is expected to drop
slightly again in 1999 to 548,828. Repeat visitation to Monticello is high, with
approximately 40% visiting once every year or two:
Other important attractions such as Ash Lawn, the Universiv of Virginia,
Virginia Discovery Museum, the Virginia Museum of Natural History, and
several art museums comprise the base of cultural attractions in Charlottesville.
More regional attractions such as Montpelier, Luray Caverns, and the Shenandoah
National Park combine with outdoor recreational activities such as golf and
collegiate athletics to provide additional tourism market support. However,
Charlottesville clearly needs more destination attractions to achieve the critical
mass of visitation and travel spending activity necessary for tourism growth.
The addition of the Lewis and Clark Exploratory, Center to the existing mix of
attractions will be a very complementary., indeed potentially critical one. Again,
its uniqueness allows it to fill a niche that will generally provide support for
overall visitation t° Charlottesville. While some capture of visitation from other
attractions can be expected, the additional tourists and daytrippers who are
induced to visit the area because of the Lewis and Clark Exploratory Center
would likely offset any decrease. Indeed, it is more likely that certain attractions
will experience a net gain in visitation due to the development of the Lewis and
Clark Exploratory Center. The range of visitation experienced at Charlottesville
attractions and other heritage tourism sites in Virginia gives a sense of overall
market potential. See Table 1.
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Table 1
Comparative Annual Visitation
At S~l:ected Cl~arlotte~Villeand Virginia. ~;~tra'cti°ns
'..: " -.. ' '- .:_. L_ ;"' ' -~' . -,~'.~,~: ·
1998 1997 · % Change
Ash Lawn 81,199 81,090 0A3%
Michie Tavern Museum
33,172 37,189 -10.80%
Monticello 551,975 561,304 - 1.66%
MVC Exhibition 107,258 91,773 16.87%
Mt. Vernon
Colonial Williamsburg
1,048,399 1,036,385 1.16%
983,100 972,433 1.10%
Virginia Discovery Museum
University of Virginia
Charlottesville Visitors Center
* Estimaled.
47,135 42,314 11.39%
608,000* 595,000* 2.18%
201,016 185,429 8.41%
Source: Virginia Tourism Corp.; Hunter Interests Inc.
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V..Demand Analysis
A series of concen~c.~demo~aphid/populati°'n bands has been used to define and
quantify primary, secondary, and tertiary charlottesvill~ markets. The population
fig~. es used in the cOncentric-band analysis are net to that particular market area,
and i~r0jected at 2004 levels. The tourism visitation estimates are approximate as
no precise data with regard to the number of people visiting the area exists. We
have extrapolated our projections regarding this market segment from available
hotel occupancy and spending data and other tourism indicators.
A. Primary Market
A 25-mile band around Charlottesville represents the primary, or local market.
This market for the Lewis and Clark Exploratory Center is an area within a half-
hour drive of downtown and has a population of approximately 223,000. This
represents a premier target market for repeat visitation, and alternative use of the
facility for a variety of activities.
B. Secondary Market
An 85-mile band, which includes the cities of Richmond and Lynchburg,
identifies a secondary market that can be character/zed as a short trip tourist
market. This market area includes a population of approximately 2.9 million.
C. Tertiary Market (Day-Trip Tourism)
We have utilized a 170-mile band to identify a tertiary market that includes the
Baltimore-Washington area, the population clusters of Northern Virginia, and the
population centers of the Norfolk and Roanoke areas. This band effectively
represents a day-trip tourism market and has a net population of approximately
14.9 million.
See Table 2.
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-- Table 2
Lewis and, Cia~k Exploratory Center
,.~:: Population Based Markets
(2004 Projected)
Primary Market
25-Mile Band 223,711
Secondary Market
25- to 85-Mile Band
2,923,934
Tertiary Market (Day-Trip Tourism)
85- to 170-Mile Band 14,911,402
total Market Population*
Net population in concentric bands.
Sources: Claritas; Hunter Interests Inc.
18,059,047
D. Tourism Market
According to the Virginia Tourism Corporation there is approximately $275
million in annual traveler spending associated with visitation to Charlottesville
and Albemarle County,. As a point of reference, traveler spending in the State of
Virginia totaled nearly $11.2 billion, revealing a 3% market share for the
Charlottesville-Albemarle County area. The market share of traveler spending in
Charlottesville alone is abour 1% of statewide spending at $110 million.
Hotels and motels in Charlottesville and Albemarle County registered a total of
667,293 room nights consumed in 1998, creating an overall occupancy rate of
about 66%. Based on the projected total number of room nights sold in 1998 of
approximately 687,000, an occupancy ratio of 1.2 for business travelers (60% of
room nights), and 2.2 for leisure travelers (40%), we estimate that there are
approximately 1.1 million overnight visitor-days in Charlottesville and Albemarle
County. Adjusting for multiple night stays and pass-through tourists, we estimate
that actual tourist visitation to the Charlottesville area is between 900,000 and 1
million persons per year.
This projected number of tourists does not include daytrippers who may come
from within the secondary or tertiary markets, as covered above. Therefore, we
view the baseline for tourism projections as conservative. The spending
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attributes, impacts on local entertainment and eating and drinking establishments,
and the pOtential 'fOr overnighti:gisitation which daytrippers represent are
important elements of the larger tourism market. The exiSting overnight tourism
segment represents a key":Poter~ti~l:~iemand,.segment for the LCEC and a
foundation .for public seeior 'SUpport: ':.~:An :incremental increase in tourism
generated by the development of the: Lewis and Clark Exploratory Center can
have a dramatic effect on other segments of the local economy.
See Tables 3, 4, and 5
Table 3
City of Charlottesville and
Albemarle Co. Travel Impacts
City of Albemarle
Charlottesville County
Total
Traveler Spending $110,970,000 $163,690,000
Change from Previous year ! 0.0% 13.4%
Travel Payroll $31,600,000 $39,760,000
Travel Employment 2,040 2,980
Local Travel Taxes $2,780,000 $4,140,000
Travel-Related Establishments 561 376
Travel-Related Employment 9,356 6,689
State Travel Taxes $5.280.000 $7,640,000
Source: Virginia Tourism Corp. FY 1998; Hunter Interests Inc.
$274,660,0012
$71,360,000
5,020
$6,920,000
937
16,045
$12,920,000
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State of Virginia Travel Impacts
Traveler Spending
. Change from Previous year
Travel Payroll
travel Employment
~tate Travel Taxes
Local Travel Taxes
Travel-Related Establishments
Travel-Related Employment
Source: Virginia Tourism Corp FY 1998.;
Hunter Interests Inc.
$11,189,270,000
6.3%
$2,917,000,000
176,210
$487,940,000
$300,740,000
40,438
697,801
Table 5
Charlottesville and Albemarle County Hotel Data
Projected
1997 1998 1999
Hotel Rooms
Available per year
Estimated ADR
Estimated Hotel Occupancy
Estimated Hotel Room Nights
(consumed)
Estimated Room Revenue
Estimated Room Tax Revenue
Projected
2000
2.540 2,770 2,891 .~,0,8
927,100 1.011,050 1,104,855 1,105,220
$65 $68 $72 $75
68% 66% 65% 67%
630,428 667,293. 687,472
$43,666,897 $48.804,022 $53,532,360
$l.206,123 $2.015,541 $2,676,618
Source: Charlottesville Albemarle Visitors Bureau; Hunter Interests Inc.
740,497
$55,537,305
$2,776,865
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VI. Lewis and Clark Exploratory Center
Developm'~nt AsghiiapfiOns
'!'.~'i~ ':'~'.!'~ :i~ff . ii .:~,'~ -
In formulating .. the visitation projections .for the .LCEC, certain preliminary
assumptions about the ultimate size, function, location, design, and operational
characteristics of the facility must be made. The nature of supply can have a
dramatic effect On demand for museums and other cultural arts and entertainment
attractions. What exactly the Lewis and Clark Exploratory Center becomes, its
form and function, will have a significant impact on its ability to penetrate local,
regional, and national tourism markets, and to generate repeat visitation.
Hunter Interests Inc. and the LCEC committee developed a preliminary concept
that focuses on the Center's ability to occupy a role as the "hub of the wheel" for
nationwide Lewis and Clark facilities, programs, activities, research, etc. The
Lewis and Clark National Historic Trail Interpretive Center in Great Falls,
Montana, is the headquarters for the Lewis and Clark Heritage Trail Foundation,
and it will presumably remain so. However, we envision a Charlottesville center
that will become the de facto headquarters for the nation through its breadth and
scope of presentation, high-tech and interactive exhibits and audience
participation experiences, electronic archives, and other features.
The LCEC will have the ability to transmit and translate the Lewis and Clark
expedition into vivid multi-sensory experience. It will also function as a vehicle
for transcending the journey itself by providing a location and atmosphere for
exploring the less tangible concepts associated with the expedition such as
leadership, decision-making, democracy, manifest destiny, racial, ethnic, and
cultural diversity and interaction, science, horticulture, cartography, geography,
and many other areas ripe for application to. and/or learning from, the Lewis and
Clark expedition.
A detailed Conceptual Development Plan is presented in Section VIII that
.describes the building size, spatial relationships, possible exhibits and alternative
use mix, and other specifics, whose ultimate incorporation, and/or refinement will
have an impact on visitation. In proceeding with visitation projections, we assume
the following baseline characteristics of Lewis and Clark Exploratory Center
development.
The Lewis and Clark Exploratory Center will be located in greater
Charlottesville, Virginia, presumably (although not necessarily) within the
City limits.
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The Lewis and Clark Exploratory Center will have a mix of extfibits with a
central theme, and capitalize on its role as a national center.
* The Lewis and Clark Exploratory Center wil!~., feamre~...high tech, visual,
interactive exhibits with significant marketing p°'tential.
· The Lewis and Clark Exploratory Center will have a~iequate parking and good
vehicular and pedestrian access.
The Lewis and Clark Exploratory Center will be effectively managed,
aggressively marketed, and maintained at a high level of professionalism.
The Lewis and Clark Exploratory Center will be of sufficient size and design
to accommodate visitation as determined by market demand potential.
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VII. Capture Analysis and Visitation Projeetiofis
A.~ : c:~Pture Analysis ' '
Capture analysis is a technique for projecting market penetration that is based on
comparative market performance of operations under varying sets of development
criteria, assessment of economic and market characteristics, and professional
experience. In this case we have examined the historical capture rates of other
Charlottesville area attractions and their overall visitation numbers and
characteristics. In a~ddition to the pertinent data shown in Table 1, we established
that nearly 300,000 persons attend a total of six football games at the University.
The Rotunda at the University of Virginia attracts 110,000'visitors each year
under a limited attendance format, and more than 10,000 people each year for
meetings, dinners, receptions, and the like. These statistics are presented as an
additional comparative tool, and we believe they support our assessment of the
market as one with significant potential for the Lewis and Clark Exploratory
Center. We have further applied our knowledge of the performance of cultural
attractions nationwide, and used our market data and associated analysis to
establish a range of capture rates which is then applied to market areas to calculate
projected visitation.
Given the historical profile of Lewis and Clark in the Charlottesville area, their
significance in educational programs, the Lewis and Clark Exploratory
Center's unique characteristics as summarized earlier, and its potential ability
to offer itself as a venue for receptions, meetings, and other support uses, we
expect that the Center could capture approximately 10% to 12% of the local
market population. This equates with approximately 22,000 to 27,000 Visitors
from the primary market annually.
The secondary market encompasses a broader geographic area. but
Charlottesville is readily accessible, and the Lewis and Clark Exploratory
Center will provide a destination attraction for school field trips, family
outings, and personal trips that are within a 90-minute drive. Based on the
characteristics of the facility as conceptualized at this time, and other factors
relative to leisure habits and travel patterns, we expect the LCEC will capture
between 3% and 4°/8 of the population in the secondary market annually. This
equates with approximately 88,000 to 117,000 visitors from this market area
annually.
The tertiary market is represented by a band 85 to 170 miles from
Charlottesville, effectively encompassing a day-trip tourism market that
contains nearly 15 million people. The ability of this dense population to reach
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Charlottesville in one-and-a-half to four hours, makes theCity and the. LCEC a
viable destination for an enormous-market..Howe, veri:~,:competition from
hundreds of other cultural attractions~:historical venues,zparks~<-:,re~cr_eational
amenities, entertainment,, and _tourist destinations greatly diminish the ability of
any attraction in Charlottesville to.capture market/shar.,e.7):-:~onetheless, we
project that the LCEC could capture at least 1% of the tertiary market,
generating visitation of approximately 150,000 persons annually.
We' have estimated that there are approximately 950,000 tourists visiting the
Charlottesville area each year. Based on data received from various
attractions, we estimate that approximately 60% of these, or 570,000 persons,
are visiting key kttractions during their stay. Assuming that the LCEC is one
of the premier cultural attractions in the City, we expect that it could capture
between 25% and 30% of tourists who are already visiting major attractions.
Viewed differently, this equates with a 16% to 18% capture of all overnight
tourists to Charlottesville. or between approximately 143,000 and 171,000
visitors annually.
It is logi.cal to assume that a certain percentage of visitors to the Lewis and
Clark Expedition Center will attend more than once per year. Particularly if
the LCEC is aggressively utilized as a venue for receptions and other
alternative uses, frequent visitation can be expected. Based on its
attractiveness as a family destination, likely destination for locals to take out-
of-town visitors, and its position as a national center, we can reasonably expect
multiple visits from a. portion of the population. We have factored into the
visitation calculations a projection that 5% of visitors would attend twice a
year. This adds between approximately 20.000 and 23.000 visitor-days to the
total visitation range.
B. Total Projected Visitation
Hunter Interests Inc. projects that total annual visitation to the Lewis and Clark
Exploratory Center, under the development assumptions described earlier, and
based upon the market and capture analysis which we have conducted, will range
from approximately 421,000 to 487,000, with a midpoint of approximately
450,000 representing the most likely stabilized annual attendance.
See Tables 6,7,8
We have purposely 'not factored in the potential impact of the National Lewis and
Clark Bicentennial celebration on visitation, although the LCEC (either the
facility and/or the effort to create it) could certainly benefit from the national
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focus on Lewis and Clark. Also, the bicentennial will likely contribute to a
bubble of increased visitation in the early years of operation,-but this is a typical
performance characteristic of any'new attraction.' we have focUSed instead on
what we believe to be reasonable projections for long~term performance of the
Lewis add Clark Exploratory Center. ~
Table 6
Lewis and Clark Exploratory Center ·
Population Based Demand Capture Analysis
LoW Fligh
Market Population Capture Rate Visitation
Primary 223,711 10-12%
Secondary 2,923,934 3-4%
Tertiary 14,911,402 1%
Tourism* 950,000 16-18%
TOtal Estimated Base Visitation
* Current Overnight Visitors To Charlottesville.
Source: Hunter Interests Inc.
22,371 26,845
87,718 - 116,957
149,114 - 149,114
142,500 -171,000
401,703 - 463,917
Table 7
Lewis and Clark Exploratory. Center
Comparative Tourism Capture Analysis
Low
High
Estimated .Overnight Visitors
Midpoint
Percentage Visiting Key Attractions
Est. Overnight Visitors to Attractions
Projected LCEC Capture Rate
Overnight Visitor Attendance
600,000 -- 1,000,000
950.000
60%
570,000
25%-- 30%
142,500-- 171,000
;ource: Charlottesville Albemarle Visitors Bureau; Hunter Interests Inc.
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Table 8
Lewis and Clark Exploratory Center
Projected Visitation Range
Secondary Market
Tourism (Overnight Visitors)
Sub-Total
5% ~ 2x Annually
Total Visitation Range
22,371
87,718
149,114
142,500
401,703
20.085
421,788
26,845
116,957
149,114
171,000
463,917
23.196
'487,113
Total Estimated Visitation (MidPoint)
Source: Hunter Interests Inc.
454,450
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...VIII. Lewis and Clark Exploratory Center
Concep/h~'i ~uiiding Program
The Cc~nceptual Building Program is summarized below in a series of brief
descriptions'of potential components of the. facility. We have estimated an
appropriate amount of Net Usable Space for each component, and we have added
an additional 20% to each component space to allow for circulation, tare, etc.
This results in Gross Building Area square footage, all of which is delineated in
Table 9. Total Net Usable Area is 67,875 square feet, and the Total Gross
Building Area is 81,,450 square feet.
A diagrammatic layout of the Lewis and Clark Exploratory Center that represents
spatial relationships is shown in Figure 1. A conceptual sketch of the Center is
provided in Figure 2. The Conceptual Building Program is designed to
accommodate annual visitation of 450,000, an average daily attendance of
between 1,000-1,400, and peak loading of 3.000 persons.
1. Orientation Space
Entry/public area that invites and directs visitors to various areas/activities in the
Center. This area should also provide an attractive environment and location for
receptions and other social gatherings. This space may convey the "big picture"
of the expedition through multimedia, and provide the gateway to exploring the
Center. The space wilt accommodate 300-400 people in a reception mode, and
100--200 in a school field trip mode. Net Useable Area -- 5,000 square feet.
2. Central Exhibit Area
We envision this area being the main location for display of artifacts, large visual
images, some interactive exhibits, and reproductions of key Lewis and Clark
objects such as boats, wagons, clothing, weapons, tools, maps. etc. This area
should capture the imagination of visitors and further induce them to "explore" all
areas of the Center, while at the same time providing a good value for those
tourists or other visitors who may only have a short time to spend. This area will
serve as a further directional space which provides choices to.visitors--multiple
forks in the road if you will. Given the need for some sizable exhibits, while
retaining space for other nodes in the Center, it will be one of the largest single
spaces. Net Useable Area -- 8,000 square feet.
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3. ~ Focus Pods
We recommend a series of rooms or spaces that focus on:specific elements of the
Lewis and Clark experience. After establishing a core group of focus pods,
others could-be added in the phasing program, over a period of years: Although
each pod would not have to lie the same size,, we. are presuming that each area
might require approximately 2,500 square feet. We have. programmed five focus
pods with an aggregate Net Usable Area of 12,500 square feet.
Focus pods could feature subjects that include:
· Jefferson as fodnder and force behind the expedition
· Individual' members of the expedition--their stories
· Minority roles and background histories
· The Native American connection---cultural impacts
· Science and technology of the expedition--impacts on future development
· Trip planning centerminteractive links to other Lewis and Clark Centers
· Impact on western migration and development of the United States
· Cultural lessons in democracy, equality., voting rights, etc.
· Leadership, decision making, responsibility, and discovery
· Regionalism--focus on Charlottesville area
4. Multi-Sensou, Audience Participation Theater
This program component potentially represents the main attraction of the Center,
and can contribute significantly to its marketability. The theater is where the
Center can edge into the entertainment zone, and provide a level of excitement
that will separate, it from the Monticello experience and other typical museums.
We envision a mix of presentation/interactive capabilities that would enable
multiple uses to generate the most value from it and ensure that it was constantly
in use. Some of the envisioned functions are:
Multi-sensory experience of the entire (edited) Lewis and Clark journey,
possibly utilizing the Florentine Films production, "Lewis and Clark: Journey
of the Corps of Discovery," which was done for the PBS broadcast.
Audience participation experience, which allows for group decisions on travel
routes, provisions, contact with Native Americans, food choices, etc., similar to
the "Oregon Trail" interactive computer game. We envision different versions
of this that could be geared toward different age groups, special interest groups,
etc.
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· Venue for special films on a variety of Lewis and Clark material ranging from
individual histories of expedition members to modem interpretations of issues
~;~':~ encountere~during and after the journey.... ~;
· 'e Theater could, incorporate aWide screen or other technologically, advanced
projectiOn system along with motion and other sensory stimuli to enhance the
. total Lewis and Clark experience. ·
The program incorporates a seating capacity of just 100 to provide the most
intimate and engaging experience posSible. Net Usable Area -- 2,000 square
feet.
5. Educational/Classroom 'Space
This has been frequently cited as a desirable attribute of the Center by the
Committee. The program includes space for small breakout rooms, or small
lecture hall type of space that would be appropriate for after-tour discussions or
other educational uses. Net Useable Area -- 2,000 square feet.
6. Retail Center
Retail sales at the LCEC can cover a variety of goods ranging from books and
videos to souvenir items. As a profit center, it is an important development
component. The program provides enough space for either one fairly large retail
area, or for two different retail areas--one for more serious high-end items, and
one for lower-end souvenirs. Net Usable Area -- 5,000 square feet.
7. Themed Restaurant
The consultant team believes the LCEC restaurant should be high-end, full
service, and large enough to accommodate at least 250 people. In addition, we
recommend a Small banquet room for special events. Both food and beverage
components could be utilized by the .seminar/conference delegates, and be a
frequent visitation driver for the local market. The food and beverage service
Could feature menu items of regional or historical salience as an added theme
element. Net useable area including kitchen -- 8,000 square feet.
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8. Popular. Snack Bar--. -' : .
A cafeteria or snack bar that serves a variety of fast food items is~ necessary for
visitor satisfaction, and can provide another source of revenue. The program
includes space that can accommodate 50-75 persons at one time. Net Usable
Area M 1,500 square feet.
9. Themed Conference Center Space--Leadership Seminar Focus
The Community Context Analysis and market analysis work demonstrated
significant demand~ for conference and seminar space that uses the Lewis and
Clark experience as a facilitator. Themed conference/seminar space can provide
the LCEC with access to a potentially lucrative market, while at the same time
providing depth and dimension to the range of experience, thought, and
philosophy that Lewis and Clark represent. The program allows for five small
seminar rooms ~ 750 sfper room, two large seminar rooms ~ 1,250 sfper room,
five breakout rooms ~ 325 sf per room, one large conference room ~ 1,000 sf,
one amphitheater ~ 5,000 sf, and one board room 61,000 sr. Additional
dedicated administration office space would require approximately 2,000 sf. The
Leadership Center could ostensibly share public space areas and dining rooms
with other components of ~:he facility. Total Net Usable Area M 16,875 square
feet
10. Back of the House/Office/Restrooms.
In addition to the 20% space added to Net Usable Area that allows for pedestrian
flow, tare, etc., we have included a space allocation for back of the house
operations, administrative office space, and restrooms. The aggregate Net Usable
Area for these functions is programmed at 10,000 square feet.
11. Outdoor Exhibit/Activity Area
A desire for outdoor components to the Lewis and Clark Exploratory Center has
been expressed by the Committee, to include such features as public spaces,
exhibit areas, activity nodes (walk the rope bridge, balance the boat, climb the
rock face, etc.), garden areas, or some combination of these. We recommend that
approximately 10,000 square feet of outdoor space be programmed to
accommodate these attributes of the LCEC concept. Because this component is
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not part of the building structure itself, net usable area has not been included in
hard construction costs, but rather in site development and improvement
alCulafi .
?.!'~"' :. ::'. · :.:.. ~.:.. · ,.::;.,~!~.;.. :,,~.::
See-Table 9. ' -'- - . ,..::.~. :..:
Gross Building
Usage Area SF
Table 9
Lewis and Clark Exploratory Center
Conceptual Building Program Summary
Net Usable
Area SF
Main Visitor Area
Orientation Space
Central Exhibit Area
Five Focus Pods
Multi-sensory Participation Theater
EducatiOn/Classroom Space
Retail Center
Restaurant
Snack Bar
Leadership/Conference Center
Back of House/Offices/Restrooms
5 Sm. Seminar Rms.
2 Lg. Seminar Rms.
5 Breakout Rms.
1 lg. Conference Rm.
1 Amphitheater
I Board Rm.
Administrative Space
Total Net Usable Area and Gross Building Area
Gross Building Area Used in Capital Cost Estimate
and Development Budget
Source: Hunter Interests Inc.; Jones and Jones
5,000 6,000
8,000 9,600
12,500 15,000
2,000 2,400
2,000 2,400
5,000 6,000
5,000 6,000
1,500 1,800
3,750 4,500
2.500 3,000
1,625 1,950
1.000 1,200
5,000 6,000
1,000 1,200
2.000 2,400
10,000 12,000
67.875 81.450
82,000 Square Feet
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Figure 1
Lewis and Clark Exploratory Center
Diagrammatic Layout
(proportional spaces to be adjusted)
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Figure 2
Lewis and Clark Exploratory Center
HUNTER INTERESTS
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IX. Capital Cost.Estimate
and DeVeloPment Budget Summary
The Conceptual Building Plan outlined in the previous section prOvides nearly
70,000 net square feet of useable space (80,000 including outdoor exhibit and
activity areas). We believe this space can accommodate a world class center by
maximizing utilization of the interior, and using outdoor plazas and other spaces
accordingly. With a 20% factor added to allow for circulation, tare, etc., a Gross
Building Area of approximately 82,000 square feet is derived.
Based on unit costs for hard construction in central Virginia of $125 per square
foot, assumptions regarding the use of advanced materials, and a comparative
analysis of development costs experienced by other museums around the country,
we estimate a construction budget of approximately $10.25 million will be
required for the building itself. In addition to the construction costs associated
with the building plan, additional costs will be incurred in the development of the
LCEC. We have established categories and estimates of these costs based on
experiences at other museums and science centers and/or under accepted real
estate development procedures. Calculated as percentages of the construction
budget, design, FF&E, taxes and insurance, professional fees, a pre-opening
budget, soils survey, and development contingency add approximately $3.8
million to the total development costs.
Outfitting the new LCEC with exhibits will be a significant component of total
development cost. However, it is difficult to project final cost of exhibits given
the range of technology that the Center may ultimately choose to feature (in the
multi-sensory theater for example), and the unknown cost of acquiring actual
Lewis and Clark artifacts. The aggregate cost of exhibits will also be impacted by
the number which can be acquired on loan or for free, the level of "wow appeal"
that is incorporated into the mix. and a host of other issues. For purposes of this
analysis, we have assumed a fairly aggressive one-time exhibit development cost
of $10 million. To this we have added annual costs for upgrading, leasing, and
other exhibit development, which appear in the cash flow analysis.
At this time we are assuming no direct land cost associated with LCEC
development given available sites and current information. This cost will be
factored in should it become necessary, based on changing site requirements or
other contingencies. At this time we are making no assumptions as to financing
costs which may be incurred during the short or long term, based on the
assumption of funding as much of the capital cost as possible through private and
corporate sources, grants, contributions, and other non-debt financing.
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The total development budget for the Lewis and Clark Exploratory Center not
counting any land or financi_n_ g costs, is estimated to be approximately $24 million
in year 2000 dollars.
See Table. 10
Table 10
Lewis and Clark Exploratory Center
Capital Cost and Development Budget Summary
Construction Budget
82,000 GSF ~ $125 sf
~_dded Costs
Design
Development Contingency
FF&E
Soils Survey, Civil
Professional Fees
Pre-Opening Budget
Taxes and Insurance
Financing Costs
Land Cost
Sub-Total, Added Costs
Exhibits
Total Development Cost
Source: hunter Interests Inc.
12%
5%
4%
3%
2%
10%
1%
$10,250,000
$1,230,000
$512,500
$410,000
$307,500
$205,000
$1,025,000
$102,500
$0
$0
$3,792,500
$10,000,000
$24,042,500
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Ae
'X. Financial Analysis
'Projected Revenue
We .have prepared a 10-year revenue projection based on visitation/pricing
projections, the ability of the Center to obtain ongoing sponsorship and grants,
and other assumptions. Potential revenues used in the. cash flow analysis will be
impacted by the final development program, site selection, linkage to other profit
centers (IMAX, etc.), emphasis on retail, and alternative public uses of the LCEC
such as leadership seminars and conferences. However, we feel the revenue
projections contained herein are very close to likely performance, representing a
midline of potential revenue based on the market and development scenarios
described thus far.
1. Admissions Revenue
Revenue from admissions to the LCEC will be the primary source of operating
funds, and its level will be a function of pricing and attendance. Museums and
science centers around the country have a wide range of admission programs
including full price charges of up to ($20), senior and child discounts, group sales,
memberships, and no-charge categories. To enhance feasibility, while
maintaining the educational and cultural vision of the LCEC, we suggest a price
schedule which reflects market support and comparable rates at other premier
historic attractions in Virginia. while at the same time encouraging family and
school visitation.
After analyzing the admissions programs of more than 50 museums and science
centers from throughout North America. and considering other Charlottesville
attraction pricing, we have established price points of $8 for adults. $5 for youths
(age 12 to 18), and $2 for children. As a comparison, Monticello charges $11 for
adults, children 6-12 are $6. and children under 12 are free. Based on a
demographic distribution of 40% adults, 35% youths, and 25% children, we
project admission revenues will stabilize at approximately $2.45 million annually.
In the first year, we project attendance to be above the projected stabilized level of
450,000, reaching to about 500,000 as the initial excitement and novelty of the
LCEC is maximized. Therefore. our revenue projections include first year
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attendance revenue of $2~6 million. Revenues decline through the third year, then
increase at a rate of 3% annually after the fourth year of operation based on
stabilized attendance with small ticket price increases and/or added admission
features. .., .:~:~,. ~
See Table 11.
Table 11
Lewis and Clark Exploratory Center
Stabilized Revenues From Admissions
(Year 3)
Cost Per
Visitors Admission
RevenUe
Total Visitors
Adult 40%
Youth, ages 12-18 (35%)
Child, under age 12 (25%)
Total Revenue
Source: Hunter Interests Inc.
450,000
180,000 $8.00 $1,440,000
157,500 $5.00 $787,500~
112,500 $2.00 $225,000:
$2,452,500
2. Membership
i'.In addition to regular paid admissions, memberships Will also generate revenues
and visitors. Membership programs haVe become something of a double-edged
sword, generally increasing repeat visitatiOn, but detracting from full price
admissions. There is probably a net financial gain from membership programs
nationally which raise overall visitation levels and result in spending on retail
items, special promotions, etc. Based on aggressive promotion of a well balanced
membership program, revenues from this source are projected to reach a level
equal to approximately 10% of admission revenues, or 5% of gross revenue.
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3. Grants, Contributions, and SponsOrship
Potential revenue from corporate sponsorship, grants';and~.other~COntributions are
expected to comprise approximately 15%-20%. of t0tal:~ revenues, based on
experiences: elsewhere and taking into consideration certain nationally integrated
programs which the LCEC could implement. Such programs .may include a
relationship with the University of Virginia and/or other educational and research
institutions, branches of the military; support from private foundations and
individual contributors, and exhibit-specific corporate sponsorship. Increasingly,
corporate sponsorship represents an important funding source for cultural
attractions. For purposes of the cash flow analysis we project revenue from all
sources noted ab6ve will comprise 16% of total revenue, or about $800,000
annually.
4. Gift Shop/Retail/Restaurant
Revenues from gift shop and retail sales will be an important part of LCEC
operating revenues, and this profit center should be carefully developed to create a
year-round shopping destination for locals and visitors alike. The general success
of the Discovery and Museum Stores. and other specialty retailers, shows the
potential an integrated retail operation could have on operations. The LCEC
could attract a top retail operator in a joint venture/leasing agreement, or choose to
operate an in-house retail museum store. The former model would have the effect
of reducing operating and inventory, costs associated with retail sales, while
establishing steady revenue from a lease arrangement. The latter model could
prove more lucrative but would carry, greater risk. Similarly, an expanded
restaurant component managed by an independent operator could prove
economical for the LCEC. Leasing to a restaurant/hospitality operator such as
Marriott COrp. or SMG could prove advantageous, or the LCEC could choose to
develop its own themed restaurant using permanent food & beverage staff. A
third alternative would be leasing to a local restaurant operator. Either way, a
good restaurant and snack bar are important amenities for visitors, and important
sources of revenue. We conservatively estimate that per capita revenue from gift
shop and restaurant sales would be approximately $2.00. This per capita spending
equates with approximately $875.000 in annual revenues, or 17% of total
revenues at stabilization.
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5. Catered/SPecial Events ~ ,. ~-...
- ,': The:,LCEC could implement an aggressive special.events:program that would
likely include facility usage such-as business andgovern~, ..ent receptions, possibly
.-. ._.-in' conjunction with the, University of Virginia~ the Federal~Executive Institute, the
Sorenson Institute for Political Leadership, and other Charlottesville
· ~ organiZations.-Social functions such as wedding receptions,-cocktail parties,
birthday parties, sleepovers, etc., also can contribute revenue to the Center. Its
ability to offer special evening parties and other occasions for catered and
separate-cost activities makes this a viable source of revenue potential. The
ultimate size, design, and configuration of the LCEC will have a direct impact on
'this revenue source': We feel planning should include design components which
enhance the Center's ability to maximize its attractiveness as a special event site,
therefore ensuring a support revenue stream and frequent alternative usage by the
community. Based on comparative operational scenarios, we project that
revenues from this source will account for approximately 4% of total revenues, or
$208,000 in year three.
6. Groups/Educational Programs
Educational programs, which are also revenue producers, can assist in deferring
the cost of non-revenue programs and contribute to the cash flow of the operation.
Group sales, which may offer package deals including tours, special shows,
special speakers, food and beverage service, and gift items, may be marketed
directly by the Center and through the Charlottesville Albemarle Visitors Bureau,
travel agents, etc. Based on comparisons with other museums and science centers
and the objective for public education and outreach, we estimate that revenue
from programs noted above, as well as lectures, seminars, movies, etc.. will
comprise approximately 7% of total revenues.
7. Conference Center/Auxiliary
The Lewis and Clark Exploratory Center represents an attraction with significant
drawing power, a unique market position, and potential locational advantages that
may combine to afford it additional revenue-generating opportunities. The
proposal to include a themed conference center, which could offer fee-based
seminars, lectures, courses, and other activities associated with leadership,
personal growth, and other aspects of the Lewis and Clark experience, was well
received. The Director of the Federal Executive Institute reported that many
requests for use of the facility for such events are received and mined down each
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· :.. year..The Director. of the Rotunda at the University of..Virginia reported that as
many as 100 requests for use of the facility for are also. turned away each year.
Based on a conservative estimate Of 10,000 conference and seminar attendees
_. paying;S20 each, we. projeet;.this source would generate approximately $200,000
in:revenue. Additional auxiliary, uses .are projected to: add another $40,000 to
$80,000 each year.
8. Total Projected Operating Revenue
Based on the size and facility program of the LCEC described in Section VIII, and
based on the performance projections and assumptions outlined above, we
estimate that total annual operating revenues for the LCEC will be approximately
$5.14 million at stabilization in year three. See Table 14.
B. Projected Costs and Expenses
1. Start Up Costs
In addition to the pre-opening budget and contingent costs outlined in Section IX,
additional start up costs will be incurred. These may include one-time
extraordinary costs for signage, promotional materials, unforeseen professional
fees, supply inventory, etc. We have allocated $500,000 in start up costs to year
one of the cash flow analysis, $300,000 to year tv'o, and $100,000 in year three.
The facility will be reaching stabilization between years three and four, at which
time additional development funds are triggered and accounted for in the cash
flow analysis.
2. Plant Operations
The following costs and expenses are basic components of LCEC operations.
Actual costs may vary depending on the ultimate size, design, and construction,
although we have used an. aggressive development program as a basis for
estimating costs.
a. Utilities: Water, Electricity
Based on the building plan assumptions covered in previous sections,
water use predicated on an average of 1,500 visitors daily, we project the
cost of water to be approximately $5,000 per year. Large water-based
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exhibits, extensive landscaping which requires irrigati6n, or other
variables, could add significantly to this expense. '~': ..
Based on local-poWer rates, we estimate annual electric' '~6sts'associated
with air conditioning; lighting, heating, computers, and other scientific and
technical equipment to be approximately $115,000. Extensive use of solar
power and other alternative power sources could reduce ongoing electric
costs.
Total Utilities -- $120.000
b. Changing Exhibits
The cost of initial development of exhibits is covered in Section IX of this
report. However, there will be ongoing costs to the Center associated with
replacing exhibits, building or acquiring new exhibits to foster repeat
visitation, and providing for changeable exhibits which are leased or
exchanged with other facilities. These features, along with acquisition of
newer technologies associated with exhibits, are expected to cost
approximately $200,000 annually, assuming that the new Center will
actively seek the most cost-effective means of creating and acquiring new
exhibits. A greater budget allowance for new and changing exhibits may
be desirable. Monies from the development fund, contingency fund,
promotional fund, or special alloCations from grants and sponsorships
could be used to augment expenditures in this area.
c. Outside Professional/Contract Services
These services may include those of accounting and law firms,
maintenance and cleaning services, food service providers, etc. Costs
associated with this expenditure category may vary widely depending on
various management decisions in the future which will determine how
many services will be maintained in house. For example, food and
beverage services may be Center,based, or oUt-sourced. In this analysis
we have programmed a fairly comprehensive food and beverage operation.
Similarly, other professional and technical services may be assumed by
staff, or contracted to independent providers. Based on a moderate use of
contract services, we estimate annual costs to be approximately $125,000.
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d. Repairs ~nd Maintenance
COsts for ongoing repairs and maintenance to the-exhibits and facility will
be-anOther component of total plant operational costs. Upkeep of high-tech
'aufli0¥isual equipment, compUters, and'other mainstays of the. Center will
be important 'to customer satisfaction, as well as purely functional issues.
Much of this work could be handled by staff technicians and various in-
house experts, however we have allocated an additional $175,000 annually
for repairs and maintenance.
Other miscellaneous supplies, including those needed for cleaning and
care of the ~xhibits and the public areas of the facility are estimated to cost
approximately $25,000, based on expenditures at other science centers.
See Table 12.
3. General and Administrative
Included in this cost category are salaries and benefits for management and
administrative employees, all costs associated with full and part-time staff
employees, costs associated with training and administration of volunteers, and
other soft costs in61uding insurance.
Based on permanent staffing assumptions including 53 FTE employees shown in
Table 13, we project that wages and salaries will cost approximately $1.8 million
including payroll expenses and benefits. We project that other general and
administrative costs will add an additional $200,000 to this expense category.
See Table 13.
4. Promotional/Marketing
We have estimated that promotional and marketing expenses will equal
approximately 10%-15% of gross revenues, based on the assumption that the
LCEC will require aggressive marketing, and skilled management maintaining
multimedia advertising and promotional programs to achieve maximum visitation
potential. Promotional and marketing expenses are expected to increase over time
in order for the Center to maintain market share. In the first full year of operation,
$500,000 is budgeted assuming that additional funds for promoting the
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opening could be allocated from the $500,000 start up costs, and $ I million pre-
opening budget. The Center could also expect to receive "good will" value nearly
: equal to its: cash expenditures: in the. forrn ~of press.~ cove~rage, inclusion in
· Charlottesville and Virginia~. state promotional: material, and national exposure
through the Association of Science-Technology Centers Incorporated (ASTC) and
the travel industry. The cost of prom6tion and marketing is projected to rise to
about $775,000 by the tenth year of operation.
5. Groups/Education
The cost of educ&tional programs will be a function of personnel expenses
(covered in General and Administrative) and costs associated with materials and
supplies, printed and audiovisual presentations, travel and subsistence expenses.
We estimate costs for educational programs, outside of payroll expenses, to be
approximately 75% of revenues from this operations category. Some sub-
categories such as the travel group package business may yield a greater net
profit, while public education and outreach programs in the community will likely
operate at a deficit. We project the annual cost of groups and education programs
to be approximately $255,000 at stabilization. .....
6. Development
Monies for new development will be a function of net cash flow from operations,
effectively comprised 'of the Net Operating Income (NOI), minus contingency
fund allotments, and any funds used for debt service. Unforeseen costs or
management decisions regarding allocation of funds could significantly affect
funding for new development, however, we have characterized a development
bubble which is allocated $200,000 annually between years 2 and 7. In the first
year of the cash flow analysis $100,000 is budgeted, and in years 8 through 10,
the development budget is $175,000. This curve assumes a concentration of
development monies, including start-up, focused on reaching and maintaining
stabilized visitation.
7. Contingency / Replacement Reserve
A contingency budget equal to 5% of Total Operating Expenses has been added
prior to estimating Net Operating Income,
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8. Total Projected Operating Expenses
Based on the size and facility program of the LCEC described in Section VIII, and
based on the Cost projeCtionS 'Md assumptioris outlined .above, We estimate that
total annual operating expenses for the LCEC .will be approximately $4.8 million
at stabilization in years three and~ four.
C. Cash Flow Summary
The results of the 10-year analysis performed for the LCEC indicate that the
facility can generate revenues in excess of costs to produce a positive Net
Operating Income (NOI), a portion of which could be available for debt service,
although it would be a minimal dollar amount. At stabilization in the fourth year,
NOI is projected to be approximately $34,000. Based on a debt coverage ratio of
1:4, the facility could afford debt service of approximately $24,000, leaving a
positive annual cash flow after debt service of about $10,000.
We have been conservative in our approach to forecasting revenue streams, while
at the same time recognizing market potential, supportable admission pricing, and
additional sources of revenue that the LCEC could reasonably expect to
incorporate. Reduced pricing, failure of the Center to acquire grants and
contributions, or exclusion of particular revenue sources would obviously
decrease NOI.
We have been less conservative in our estimation of costs, and expenses in order to
establish an overall cash flo~v analysis that ultimately proves close to reality.
Every attempt has been made to accurately calculate the costs associated with
specific components of operations, staffing requirements, maintenance of
equipment, exhibits, and other components of total annual expenses.
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Table 12
· ~,. ~,i. ,.~ :. ,? . ' :~., ~..~
Lewis and Clark ExPlorat°~ Center
· . PlantOperaaons"- -- ":
Cost Summary .
Cost Component
Utilities
Annual
Expense
$120,000
Changing Exhibits
$200,000
Repairsflqiaintenance/S upplies
$175,000
Contract Services
$125,000
Plant Operations-Annual Cost Total
$620,000
Source: Hunter Interests Inc.
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..................... TaMe ~
Lewis nnd Clark .Explorntory Center .ii .-
Permanent Staff Cost S~':
Annual Cos
Management Staff
Executive Director
Finance Director
Development D/rector
Conferen~ lVhmger
Education Director
Subtotal
Leadership ~h
ArtifactfReseamh Curator
Progrm Director
Shi~ Staff Weekends
Administrative Staff
Research Assistants
Subtotal
Development Department
Marketing
Public Relations
Coaaiamicatiom Asst.
Subtotal
Educational Departrmnt
Program Development
C~cs
Subtotal
l(~40K
SOK
l(~30K
l(~30K
I~25K
~@2sK
I(~2SK
$25.000
$2&000
$231,000
S53,0013
Gift Shop/Admissiom
Manager
Asgt. Manager
Cash Register
Clerks
Subtotal
Food Service*
Food Beverage Mamger
Chefs
Kitchen Staff
Cash Register
Subtotal
1~35K
l~20K
l@40K
@S0K
2~25K
Shift Markers
Pertinent Staff
Subtotal
1~.40K
2~25K
4~12K
Grounds & Building Maintenance
5;35,000
$20,000
$16,000 x3
$40,000
$48,000
$40,000
$50,0OO
$4&000
Mana~r 1~_35K $35,000
Perrmnent Staff 4(~20K $80,000
Electrician ~ 35K $70,000
Motor Pool lQ 20K $20,000
Houskeeping 2(~ 8/hr. $32,000
total Staff Costs
Additional Payroll Costs & Benefits
Total Staff Costs
20%
$151,000
* Food Service staffing costs ~uld be significantly reduced or eliminated if the Lewis and Clark Center utilized an outside operator.
Source: Hunter Interests Inc.
41
Tablel4
Lewis and Clark Exploratory Center Center
10 Year Cash Flow Projections
Revenue Year I Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Admission Revenue
Contributions, Grants, Sponsorships
Memberships
Gronps and Education
Gift Shop/Retail/Rcstanraot
Catered/Special Events
Conference/Auxiliary Programs
Total Operating Revenue
Expenses
Slart Up Costs
Plan! Operalioos
General and Administrative
Promotiou & Marketing
Catered Events
Cost of Retail Sales
Groups and Education
Cost of Confereoce/Auxillary Prgr
Development
Total Operating Expenses
5% Contingency
Net Operating Income (NOi)
$2,600.000 $2,500,000 $2,452,500 $2,501,550 $2,551,581 $2,602,613 $2,654,665. $2,707,758 $2,761,913 $2,817,152
$750,000 $765,000 $780,300 $795,906 $811,g24 $828,061 $844,622 $861,514 $878,745 $896,319
$260,000 $250,00(} $245,250 $250,155 $255,158 $260,261 $265,466 $270,776 $276,191 $281,715
$325,000 $331,500 $338,130 $344,893 $351,790 $358,826 $366,003 $373,323 $380,789 ~388,405
$910,000 $890,000 $875,{)00 $901,250. $928,288 $956,136 $984,820 $1,014,365 $1,044,796 $1,076,140
$200,000 $204,000 $208,080 $212,242 $216,486 $220,816 $225,232 $229,737 $234,332 $239,019
$225,000 $231,750 $238,703 $245,864 $253,239 $260,837 $268,662 $276,722 $285,023 $293~574
$5,270,000 $5,172,250 $5,137,963 $5,251,859 $5,368,367 $5,487,550 $5,609,470 $5,734,195 $5,861,789 $5,992~323
$500 000 $300,000 $100,000
$620
$2,003
$500
$168
$682
$245
$200
$100
$0 $0 $0 $0 $0 $0 $0
000 $632,400 $645,048 $657 949 $671,108 $684,530 $698,221 $712,185 $726,429 $74~1957
600 $2,043,672 $2,084,545 $2,126
000 $525,000 $551,250 $578
750 $168,750 $168,750 $168
500 $667,500 $656,250 $675
000 $249,900 $254,898 $259
000 $200,000 $200,000 $200
000 $200,000 $200,000 $200
236 $2,168,761 $2,212,136 $2,256,379 $2,301,507 $2,347,537 $2,394387
813 $60?,753 $638,141 $67~,048 $703,550 $738,728 $775,664
750 $168,750 $168,750 $168,750 $168,750 $168,750 $168,750
938 $696,216 $717, i02 $738,615 $760,774 $783,597 $807,105
996 $265,196 $270,500 $275,910 $281,428 $287,057 $292,798
000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000
000 $200,000 $200,000 $200,000 $175,000 $175,000 $175,000
$5,019,850 $4,987,222 $4,860,741 $4,867,681 $4,977,784 $5,091,159 $5,207,922 $5,303,194 $5,427,097 $5,554,761
$250,993 $249,361 $243,037 $243,384 $248,889 $254,558 $260,396 $265,160 $271,355 $277,738
-$843 -$64,333 $34,184 $140,793 $141,694 $141,833 $141,152 $165,841 $163,338 $159,824
ource: lluntct Interests Inc.
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XL FUnding Evaluation and Recommendations
Based on results of the cash flow analysis we believe the LCEC can be self-
"supPorti~;]~0wever, 'ii i~ malikely that it can support any' Significant- C0nventional
debt financing to cover capital costs associated with construction and
development. Preliminary assessment of funding availability-from the private
sector, including contributions, grants, and sponsorship by corporations is
encouraging. There are a number of high-technology firms in the Charlottesville
area that could be approached and large corporations such as 'Gulf Petroleum
(which sponsored the Lewis and Clark: Corps of Discovery TV Special) that
could also fred nakne association with the LCEC to be an attractive marketing
investment. Public sector funding from city, state, and federal sources is also
potentially available, as are low interest loans, bonds, and other instruments which
may contribute to the complete funding package.
To acquire the estimated $24 million in capital costs required to consmact, outfit,
and open the Lewis and Clark Exploratory Center, we recommend a funding/
development model that includes the following components:
The LCEC should lease property identified in the site analysis from the City,
County or institutional partner at a minimal cost based on performance'
thresholds, or seek a gifted parcel as part of a public/private development
partnership. The public sector should provide site development funding of $2
million to $3 million, and/or provide utility infrastructure, roads, access and
parking for the Center at no cost. The investment will be returned in the form
of direct and indirect economic impacts associated with construction,
permanent jobs, and spin-off spending in the local economy by visitors to the
Center.
The LCEC should seek to raise $15 million from private contributions, grants,
membership sales, and corporate sponsorship agreements. The strong
technology sector of the Virginia economy, linkages with the University of
Virginia, the range of Lewis and Clark groups and enthusiasts, and national
companies from various sectors all represent viable sources of development
capital. Native American tribes with gaming interests span the Lewis and
Clark trail, and they represent a potentially viable funding source as well. The
role of other minorities in the Lewis and Clark expedition can be featured, and
interest groups and public investment programs that are minority-based could
also be approached for grants and other contributions. Matching funds from
government programs may be available als. o. Pre-lease agreements with
national retail operations and/or food service companies could also contribute
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to this Portion of the capital campaign, iPriVate .monies may be especially
suited to funding of exhibits, technological components, and interactive video
programs.
o d .....
LCEC sh ul seek public funding, inth Of grants and contributions
· from state and .federal programs and agencies of $5 million. Education,
· ~ :historical research, economic development, and other initiatives may provide
infusions of cash, in-kind payments, or other meaningful contributions. Direct
funding from the City of Charlottesville may represent the most direct route to
achieving capital requirements, although no such support has been indicated at
this time. Linkage of LCEC development with other important public
projects Such a3 the Conference Center could be part of a strategic plan to gain
· support from the City.
The LCEC should seek to acquire additional funding of $5 million through
conventional debt financing and tax exempt financing in the form of Virginia
Industrial Revenue Bonds and. There may be other low, or no, interest money
available to the Center if it functions in part as an educational facility or if it
hosts government training programs. Asset-backed financing using
sponsorship or pre-lease agreements represents another avenue for
development funding that might be pursued.
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XII. Site Analysis · ·
~is section of ~e repo~ ~cludes obse~ations ~d preli~n~ reco~endatio~
rcg~ding ~c location of ~e Le~s ~d Clark Explorato~ Cemer.' Ce~
i~o~ation, obse~ations, ~d rcco~cndations were con~ed in ~ interim
repo~ submiRcd to ~e Co~iRee. It sc~ed ~ a platfo~ for ~er &scussion
~d ~ysis ~at h~ been ~similated into ~is final ~epom
To briefly review the site analysis process, Hunter Interests Inc. was supplied with
a report entitled "Possible Sites for the Lewis and Clark Expedition Center,"
which summarized previous committee work, criteria for choosing prospective
sites, base parcel information, and base maps of the possible sites. Criteria for site
selection included good regional access, linkages to downtown, linkages to the
UniverSity, linkages to other area attractions, good public transportation and
parking, proximity to hospitality facilities, proximity to shoPPing, outdoor
capabilities, ability to attract other development, access to natural and pedestrian
areas, and site size. In all. 24 sites located in both the City and County were
identified as possible locations for the Lewis and Clark Exploratory Center.
In addition to a detailed review' of the above referenced report, the consulting
team Physically viewed each of the sites during fieldwork in Charlottesville, and
returned to certain sites on repeat visits. In the interim report we reviewed five
sites which appeared most viable for Center development. Subsequently, we have
narrowed the recommended field to two locations. The ultimate decision with
regard to location of the facility will be made in consideration with other factors,
and pursuant to the appropriate approval process.
Several sites were excluded from the list of possibilities due to a variety of
characteristics, issues, and physical attributes that made them less desirable than
others, or completely infeasible in our judgement. There were three primary
factors in eliminating sites from consideration.
First, the size of many sites was too small to effectively meet the requirements for
the physical building, as well as the parking,, access, and other needs anticipated
for a facility which potentially may draw as many as 400,000 to 500,000 people
annually. Indeed, our visitation projections are based, in part, on the ability of the
Center (and the site it is located on) to fully accommodate market demand. We
estimate that the LCEC will require approximately six acres,
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including space to park 1,000 cars. While. a Center could be developed on a small
parcel, limitations on access, visitor capacity, etc. would be passed through as
limitations on total visitation and potential revenues. Secondly, several sites are
located in the County, and, while we have :viewed these sites and evaluated them,
public sector support likely relies on location "of the' Ceniel! 'Within the City of
Charlottesville. Thirdly, several possible sites included significant ·adaptive
building reuse requirements which do not suit the Lewis and Clark Exploratory
Center development concept, and would have a significant, negative impact on
potential visitation.
B. Recommended Sites for Consideration
With a view toward maximizing potential visiiation and economic impact, and
based on the criteria used in the Site Plan Committee Report, as well as our own
experience in cultural attraction development, we have identified two primary
sites which work best for the Center. and the City. of Charlottesville. They can
generally be described as: 1) Downtown Location, and 2) Park Location
Following are discussions of the positive and negative attributes of these sites that
should be given further consideration by the Committee and the City of
Charlottesville as locations for the proposed Lewis and Clark Exploratory Center.
The sites are discussed in the context of their general attributes, location in
relation to transportation access, other attractions, etc. The proposed Center's
exact optimal location within the two sites has not been determined, but should be
the subject of a detailed analysis in the next work phase, if the decision to move
· forward on the project is made.
Downtown Location Convention Center/PubliC Works Sites
The Convention Center site. as identified in City planning documents, is
located downtown between Ridge-Mclntire Road and 4th Street. It is
comprised of approximately 3.5 acres and is privately owned. The Public
Works site is located in a triangular area bordered by 4t~, street on the east.
(across from the Convention Center site), Southern Parkway on the west, the
Southern Parkway Spur on the north, and mixed use development including the
Jefferson School on the south. It is comprised of approximately 6 acres, and is
currently used for storing City equipment, vehicles, and materials. Positive
characteristics of the sites include:
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· .Central location which is part of a larger City plan for development
· Maximum economic impact potential for downtown businesses
· Potential linkage to future convention cegter development.
· Programmatic and visitation synergy with planned convention center
· Proximity to downtown hotels
· City ownership (public works yard) could facilitate redevelopment
· Development.could be combined with enhancement of Jefferson School
· Aggregate site could host critical mass of development
· Aggregate site could accommodate surface and structured parking
Negative characteristics of the sites include:
· Private ownership (convention site) requiring acquisition for development
· Land acquisition, demolition, and site preparation impact on capital costs
· Difficult access from Rt. 29 and Rt. 64
· Existing uses on the site would require relocation
· Parcel size and location would limit on-site parking, possibly requiring
structured parking development
· Planning and strategic complexities associated with construction in concert
with convention center development
2. Park Location m McIntire and Darden Towe Parks
Mclntire Park and Darden Towe Park both represent .areas that could be suitable
for LCEC development. They are essentially next to each other and have
structured amenities including interior access roads, surface parking, recreation
oriented buildings, etc. Other positive attributes associated with the park location
include:
· Approximately 200 total acres (140-Mclntire. 60-Darden Towe) which may
allow for a substantial development project
· Land area for superior parking and access infrastructure
· Direct access to the 250 bypass, and equidistant between Rt. 29 and Rt. 64
· City and County owned, potentially allowing for quick development action
· Exploratory Center could be built under a coordinated plan with the
proposed connector road and included in the updated master planning work
that is now under way
· Open space can allow for outdoor activities and exhibit components
· Potential use of tennis court area nearby
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·
·
Darden T°we Park ~d- Pen Park'
· o" Rel~tiVe proximity tO d6wntown
park environment is in keeping with other Lewis and Clark Centers
Trail` and~:water linkages to the' proposed Rivanna watershed Center in
The negative characteristics of the park locations include:
· Potential resistance from the community to development of open space park
· Increase in traffic along 250 bypass and in proximal neighborhoods
· Less economic impact on the downtown core than a central location
· County jurisdiction over Darden Towe Park could limit City support
· Controversy over connector road could delay development
In summary, we believe each of the locations and sites outlined above represent
basically feasible locations for the Lewis and Clark Exploratory Center. Each has
positive and negative characteristics that must be balanced with funding
requirements, acquisition, and timing issues, as well as long-term goals, for the
Center and its role as a major new cultural, entertainment, and educational
attraction in the City of Charlottesville.
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XIII. Economic Impact Analysis
Development and operation of the LCEC will create significant economic impacts
for the City of Charlottes~ville and surrounding area.. These impacts ean'generally
be categorized as those associated with direct spending, and indirect impacts
associated with respending of initial expenditures throughout the economy in a
multiplier effect. We have employed the U.S. Commerce Department's RIMs II
model for calculating these indirect impacts.
Direct impacts resulting from LCEC development will include: construction jobs;
ongoing full and p~irt time jobs at the Center; capital expenditures for building and
outfitting the facility; ongoing purchases of goods and services by the Center; and,
sales tax paid on retail goods, food and beverage sales, etc. Another direct impact
will be increased tourist visitation and expenditures including a percentage of new
overnight visitors who contribute most to the local economy.
Indirect impacts resulting from development of the LCEC will include: income
taxes paid by construction workers and the full- and part-time employees of the
facility; spending of wages and salaries on other sectors of the economy such as
housing, food, and consumer goods; additional spending by tourists on hotel
rooms, restaurants, entertainment, retail goods, other local attractions, car rentals,
etc.
A. Direct Economic Impact Summary
Based on the market analysis, development assumptions, revenue and operating
cost projections, and other information contained in this report, we estimate the
following direct economic impacts resulting from the development and operation
of the Lewis and Clark Exploratory. Center:
Capital investment of approximately $24 million will be made in the
construction and outfitting of the Center. A significant portion of these
expenditures may be spent in the local economy on building materials,
furnishings, fittings, equipment, and professional services.
Construction costs of approximately $10 million will result in approximately
100 construction jobs being created. Approximately $2.8 million in wages
and salaries will be paid to these workers.
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· ApproximatelY 53 .FTE jobs will 'be created and maintained by Center
operations including well paid administrative, technical, and professional
positions.
'* Wages and~Salaries~.iSaid to these' employees will'~ be approximately $1.5
milliOn annually, payroll expenses including benefits will likely add an
additiOnal $300,000 todirect impacts each year. '
Ongoing purchases of goods :and services by the Lewis and Clark Exploratory
Center Will generate approximately $2.4 million in direct spending each year,
some of which .will occUr in the lOcal economy, and other portiOns which Will
be expended in the national economy.
Total direct economic impacts from Lewis and Clark Exploratory Center
development inclUde one-time capital expenditure of $24 million, and annual
direct spending of approximately $4 million.
B. · Indirect Economic Impact Summary
Using the RIMS II model for economic multipliers, we estimate direct impacts
will generate an additional 3.102 times the spending in a tipple effect through the
economy. Therefore, we estimate that capital expenditures will create
approximately $74.5 million in indirect impacts, and ongoing expenditures by the
Center will generate approximately $I2.4 million in annual indirect economic
impacts. :
C. Tourism Impacts
In addition to the direct and indirect econOmic impacts summarized above, the
LCEC also has the potential to have a significant impact on tourism in the
Charlottesville area. It will have a beneficial impact on the convention business,
hotels, and other sectors of the tourism economy, and bring "net new"' daytrippers
and overnight visitors to the City.
The impact of daytrippers will be mostly directed through the Center in the form
of admissions and spending on retail goods. Therefore, these impacts are
generally covered as direct economic impacts. Based on the conservative
assumption that approximately 10% of all visitors will be making their first trip to
Charlottesville, spin-off spending can be expected from an estimated 40,000 to
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50,000 "net new" ..day-visitors, however, these expenditures are difficult to
quantify. We estimate that attendance at other attractions, spending" in local
restaurants, consumer Pmchases and the like may contribute an additional
$200,000 to $500,000' to the local economy'based on per capita expenditures
outside the Center of $5 t°. $10.'~ '~' ~ -'
Based on current overnight tourist visitation to Charlottesville of 900,000 to 1
million and our own capture analysis, we project that the Center might increase
that level by 1% to 2%, or 10,000 to 20,000 persons. Based on an analysis of the
average mount and distribution of overnight tourism expenditures in the
Charlottesville/Albemarle market, we calculate per capita spending at
approximately $210. This translates into "net new" overnight tourism spending of
between $2.1 million and $4.2 million in the local economy.
When the multiplier effect is applied to net new spending by daytrippers and
overnight visitors, an annual indirect economic impact of between $7.I million
and $14.5 million is generated.
Total direct and indirect one-time economic impact from development of the
Lewis and Clark Exploratory, Center will be approximately $98 million.
Total direct and indirect annual economic impact from operations and visitation to
the Lewis and Clark Exploratory. Center will be approximately $36 million.
See Table 15.
51
HUNTER INTERESTS
I N C O R P O R .~, T E D
.Table 15
Lewis and Clark Exploratory Center
EconOmic Impact Summary
Direct Economic Impacts
Capital Investment
Construction Costs
FTE Construction Jo. bs
Construction Wages and Salaries
FTE Permanenet Jobs
Wages, Salaries, Benefits
Purchase of Goods and Services
Total Direct Impacts
One Time Impact
Annual Direct Impacts
Indirect Economic Impacts
One Time Impact
Annual Indirect Impacts
Tourism Impacts
Projected "Net New" Day Visitors
Spin-Off Expenditures
Projected "Net New" Overnight Visitors
Spin-Off Expenditures
Combined Tourism Impact W/Multiplier
Total Direct - Indirect One Time Economic Impact
Total Direct and Indirect Annual Economic Impact
(including tourism)
;ource: Hunter Interests Inc.
$24,000,000
$10,000,000
100
$2,800,000
53
$1.800,000
$2,400,000
$24,000,000
$4.200,000
$74,448,000
$13,028,400
40,000
$200,000
10,000
$2,100,000
$7,134,600
50,000
$5OO,OOO
20,000
$4,200,000
$14,579,400
$98,448,000
$36,007,800
52