HomeMy WebLinkAboutFeas An of Lewis&Clark Exp CtrFinal 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
May 1, 2000
HUNTER INTERESTS
I N C O R P O R A T E D
May 1, 2000
Mr. Satyendra Huja
City of Charlottesville
and The Lewis and Clark Exploratory Committee
P. O. Box 911
Charlottesville, Virginia 22902
Dear Committee Member:
This letter transmits the final report on the feasibility analysis of a Lewis and Clark Exploratory
Center in Charlottesville. We are pleased to have arrived at this point, and encourage you to use
the information, concepts, and projections contained in the study to educate the community and
prepare the way for a new stage of development planning. We are confident the Lewis and Clark
Exploratory Center can be successful as a self-supporting cukural museum, which will contribute
Significant social and economic benefits as it takes its place among top-tier heritage tourism
attractions.
The feasibility analysis does not constitute the end of your work. Rather it marks the beginning of
a new work phase that is now possible. Forming the entity that will develop and operate the Lewis
and Clark Exploratory Center, organ/zing a capkal campaign, engaging a director, and a host of
other exciting and challenging actions await you. Like the expedition, you have a long way to go,
but will get there with good leadership, sustained effort, and a little luck. We encourage you to
think big, and to seize the opportunity .to create a first class facility that Charlottesville, and y. ou
personally, will be proud of.
Hunter Interests Inc. and Jones & Jones share the firm belief that the Lewis and Clark Exploratory
Center can, and shOuld, be something special. We hope that our work will lead to groundbreaking
and construction, and stand ready to assist the Committee, the Cky of Charlottesville, and others
in any way to help achieve that goal. Thank you for the opportunity to assist you on this project,
into which you have invested so much personal time and effort. Thanks also to the City of
Charlottesville and its officials for investing its funds in the project, and to the strategic planning
and economic development officials who were so helpful and supportive during the study process.
Sincerely,
HUNTER INTERESTS INC.
Ernest E. Bleinberger //'
Vice President
URBAN ECONOMICS · FINANCE · REAL ESTATE DEVELOPMENT
121 MAIN STREET · ANNAPOLIS. MARYLAND 21401 · (410) 269-0033 · FAX (410) 280-9163
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II.
III.
IV.
VI.
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
1. Orientation Space
2. Central Exhibit Area
3. Focus Pods
4. Multi-Sensory, Audience Participation Theater
5. Educational/Classroom Space
6. Retail Center
7. Restaurant
8. Snack Bar
Meeting and Seminar Space
· Back of the House/Office/Restrooms
Storage
Natural Exhibit/Activity Area
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IX, Capital Cost Estimate and Development Budget summary 29
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XII.
XlII.
Financial Analysis
A. Projected Revenue
B. Projected Costs and Expenses
C. Cash Flow Summary
Funding Evaluation and Recommendations
Site Discussion
A. Site Discussion 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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Tables and Figures
Table
Table
Table
Table
Table
Table
Table
1: Comparative Annual Visitation at Selected Charlottesville
and Virginia Attractions
2: LCEC Population Based Markets
3: City of Charlottesville and Albemarle Co. Travel Impacts
4: State of Virginia. Travel Impacts
5: Charlottesville and Albemarle Co. Hotel Data
6: LCEC Population Based Demand Capture Analysis
7: LCEC Comparative Tourism Capture Analysis
Table 8: LCEC Projected Visitation Range
Table-9: LCEC Conceptual Building Program Summary
Figure 1: LCEC Proportional Spatial Diagram
Figure 2: LCEC Organizational Diagram
Table 10: LCEC Capital Cost and Development Budget Summary
Table 11: LCEC Stabilized Revenues from. Admissions
Table 12: LCEC permanent StaffCost Summary
Table 13: LCEC Plant Operations Cost Summary
Table 14: LCEC 10-Year Cash Flow Projections
Figure 3: Lewis and Clark Exploratory Center, Urban Setting
Figure 4: Lewis and Clark Exploratory Center, Park Setting
Table 15: LCEC Economic Impact Summary
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I. Executive Summary.
The consulting 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 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 the Association of Science and Technology Centers,
Inc. (ASTC).
Research in conjunction with the analysis has also included discussions with
many individuals associated with the 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 markelplace, 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
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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.
Based on the projected total number of room nights sold in 1998, 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 overnight tourist visitation to the
Charlottesville area is between 900,000 and 1 million persons 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 Falls,
Montana, is the headquarters for the Lewis and Clark Heritage Trail
Foundation, and it will presumably remain so. However, we envision a
Charlottesvill. e 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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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 15%
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
vi sitor-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 briefly summarized below.
Orientation Space
Central Exhibit Area
Five Focus Pods
Multi-Sensory, Audience Participation Theater
Educational/Classroom Space
Retail Center '
Restaurant
Snack Bar
Meeting/Seminar Space
Back of the House/Office/Restrooms
Storage
Outdoor Exhibit/Activity Area
The Conceptual Building Plan provides nearly 70,000 net square feet of
useable space (80,000 including outdoor exhibit and act. ivity 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
including $10.25 million for the building itself, $3.8 million for design,
outfitting, and pre-opening budget, and $10 million for exhibits, but not
counting any land or financing costs, is estimated to be approximately $24
million.
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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 $5.14 million at stabilization in year three.
Based on the facility program, cost projections, and operating 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 1 O-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).
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 Lewis and Clark Exploratory Center could seek to raise $15 million
from private contributions, grants, membership sales, and corporate
sponsorship agreements to this portion of the capital campaign. Corporate
monies may be especially suited to funding of exhibits, technological
components, and interactive video programs.
The Lewis and Clark Exploratory Center could seek public funding in the
form of grants and contributions from state and federal programs and
agencies of $5 million.
The Lewis and Clark Exploratory Center should seek to acquire additional
funding of $5 million through conventional debt financing or tax exempt
financing in the form of Virginia Industrial Revenue Bonds.
The Lewis and Clark Exploratory Center could lease property 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.
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l
With a view toward maximizing potential visitation and economic impact, two
primary site types that work best for the Lewis and Clark Exploratory Center
have been discussed. They can generally be described as: 1) an urban setting
and 2) a park setting.
Total direct economic impacts from Lewis and Clark Exploratory Center
development include a one-time capital expenditure of $24 million and
annual direct spending by the facility of approximately $4.2 million.
We estimate that capital expenditures will create approximately $74.5 million
in one-time indirect impacts, and ongoing expenditures by the Center will
generate approximately $13 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 annually 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 annually.
When the multiplier 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.
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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 regularly 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/culturai attractions in the area, and
private citizens with an interest in Lewis and Clark. We have also interviewed a
number of people in the greater Charlottesville area, including hotel operators,
tourism officials, business people, and public officials, as part 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 the Association of Science and Technology Centers
(ASTC). 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 of the facility.
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III. Community Context Analysis
The purpose of conducting the Community Context Analysis was to assess the
potential 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 essentially 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 improving
the 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 Discox~ery 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 inutually 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 expenditur, es that are associated with it.
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Benefits associated with education, cultural enrichment, and image enhancement,
have also been idemified 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
A. Other Lewis and Clark Centers'
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 Falls, 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 Alderman 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 fairly 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 ro 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.
Other important attractions such as Ash Lawn, the University 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 to 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 Selected Charlottesville and Virginia Attractions
1998 1997 % Change
Ash Lawn 81,199 81,090 0.13%
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 1,048,399 1,036,385 1.16%
2olonial Williamsburg 983,100 972,433 1.10%
/'irginia Discovery Museum 47,135 42,314 11.39%
University of Virginia 608,000* 595,000' 2.18%
Charlottesville Visitors Center 201,016 185,429 8.41%
Estimated.
Source: Virginia Tourism Corp.; Hunter Interests Inc.
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V. Demand Analysis
A series of concentric demographic/population bands has been used to define and
quantify primary, secondary, and tertiary Charlottesville markets. The population
figures used in the concentric-band analysis are net to that particular market area,
and projected 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 alternativ, e 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 characterized 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 !70-mi!e b~d t° 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 Clark Exploratory Center
Population Based Markets
(2004 Projected)
Primary Market
25-Mile Band 223,711
;econdary Market
25- to 85-Mile Band
2,923,934
['ertiary Market (Day-Trip Tourism)
85- to 170-Mile Band 14,911,402
Total Market Population*
18,059,047
* Net population in concentric bands.
Sources: Claritas; Hunter Interests Inc.
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 about 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. Adjustifig 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 overnight visitation which daytrippers represent are
important elements of the larger tourism market. The existing overnight tourism
segment represents a key potential demand segment for the LCEC and a
foundation for public sector 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
Change from Previous ?ear
Travel Payroll
Travel Employment
Local Travel Taxes
Travel-Related Establishments
Travel-Related Employment
State TraVel Taxes
$110,970,000 $163,690,000 $274,660,000
10.0% 13.4%
$31,600,000 $39,760,000 $71,360,000
2,040 2,980 5,020
$2,780,000 $4,140,000 $6,920,000
561 376 937
9,356 6,689 16,045
$5,280.000 $7,640,000 $12,920,000
Source: Virginia Tourism Corp. FY 1998; Hunter Interests Inc.
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Table 4
State of Virginia Travel Impacts
Traveler Spending
Change from Previous year
Travel Payroll
Travel Employment
State Travel Taxes
Local Travel Taxes
Travel-Related Establishments
Travel-Related Employment
;ource: Virginia Tourism Corp FY1998.;
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
Projected
2000
Hotel Rooms 2,540 2,770 2,891 3,028
Available per year 927,100 1,011,050 1,104,855 1,105,220
Estimated ADR $65 $68 $72 $75
68% 66% 65% 67%
Estimated Hotel Occupancy
630,428 667,293 687,472
$43,666,897 $48,804,022 $53,532,360
Estimated Hotel Room Nights (consumed)
Estimated Room Revenue
Estimated Room Tax Revenue $1,206,123 $2,015,541 $2,676,618
Source: Charlottesville Albemarle Visitors Bureau; Hunter Interests Inc.
740,497
*55,537,305I
$2,776,8651
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VL Lewis and Clark Exploratory Center
Development Assumptions
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. The Lewis and Clark Exploratory Center's final 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 foduses on the Center's abilit~y 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 wilt 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 that feature genealogical and
historical research opportunities, and other features.
The LCEC will have the ability to transmit and translate the Lewis and Clark
expedition into a vivid mv. lti-sensory experience. It will also provide 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 exhibits with a
central theme, and capitalize on its role as a national center.
The Lewis and Clark Exploratory Center will feature high tech, visual,
interactive exhibits with significant marketing potential.
The Lewis and Clark Exploratory Center will have adequate 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 Projections
A. Capture 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 addition 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.
We 'have also used data from the Association of Science-Technology Centers
Incorporated (ASTC) to compare the performance of cultural attractions
nationwide. The average on-site attendance at medium size facilities, including
museums, in the United States was 497,725 in 1998. 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. The comparative information is used in conjunction with 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 appro:~imately 10% to 12% of the local
market population. This equates with approximately 22,371 to 26,845 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
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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 87,718 to 116,957 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
Charlottesville in one-and-a-half to four hours, makes the City and the LCEC a
viable destination for an enormous market. However, competition from
hundreds of other cultural attractions, historical venues, parks, recreational
amenities, entertainment, and tourist destinations greatly diminish the ability of
any attraction in Charlottesville to capture market share. Nonetheless, we
project that the LCEC could capture at least 1% of the tertiary market,
generating visitation of approximately 149,114 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 attractions 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 15% to 18% capture of all overnight
tourists to Charlottesville, or between approximately 142,500 and 171,000
visitors annually.
It is logical 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 20,085 and 23,196 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
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from approximately 421,788 to 487,113, with a midpoint of approximately
454,450 representing the most likely stabilized annual attendance. For purposes
of additional financial projections we use 450,000 as a rounded number that
reflects a conservative approach.
See Tables 6,7,8
We have purposely not factored in the potential impact of the National Lewis and
Clark Bicentennial celebration on visitation, al. though the LCEC (either the
facility and/or the effort to create it) could certainly benefit from the national
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 and Clark Exploratory Center.
Table 6
Lewis and Clark Exploratory Center
Population Based Demand Capture Analysis
Low High
Market Population Capture Rate Visitation
Primary 223,711 10-12%
Secondary 2,923,934 3-4%
Tertiary 14,911,402 1%
Tourism* 950,000 15-18%
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
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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
900,000 -- 1,000,000
950,000
60%
570,000
25%-- 30%
142,500 -- 171,000
Source: Charlottesville Albemarle Visitors Bureau; Hunter Interests Inc.
Table 8
Lewis and Clark Exploratory Center
Projected Visitation Range
Low High
Primary Market 22,371 26,845
Secondary Market 87.718 116,957
Tertiary Market 149,114 149,114
Tourism (Overnight Visitors) 142,500 171,000
Sub-Total 401,703 463,917
5% @ 2x Annually 20,085 23,196
Total Visitation Range 421,788 487,113
Total Estimated Visitation (Midpoint)
Source: Hunter Interests Inc.
454,450
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VIII. Lewis and Clark Exploratory Center
ConcePtual Building Program
The Conceptual 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. An organizational diagram 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 will 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 be 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 founder and force behind the expedition--also roles of Monroe
and Madison
· Leadership, decision making, responsibility, and discovery
· Individual members of the expedition--Lewis, Clark, Sacajawea, York, etc.
· The Native American role in the expedition and subsequent cultural impacts
· Science and technology of the expedition--impacts on future development
· Daily life on the expedition
· Trip planning center--interactive 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.
· Regionalism--focus on Charlottesville area
4. Multi-Sensory, 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
encountered during and after the journey.
Theater' cOuld incorporate a wide 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. 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. 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 1,500 square feet.
9. Meeting and Seminar Space
The Community Context Analysis and market analysis work demonstrated
significant demand for meeting and seminar space that uses the Lewis and Clark
experience as a facilitator. Such 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 sf per
room, two large seminar rooms ~ 1,250 sfper room, five breakout rooms ~ 325
sfper room, one large conference room ~ 1,000 sf, and one board room ~1,000
sr. Additional dedicated administration office space would orequire approximately
2,000 sr. The Leadership Center could ostensibly share public space areas and
dining rooms with other components of the facility. Total Net Usable Area
11,875 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. Storage
The building program includes storage space for exhibits, supplies, educational
materials, retail inventory, etc. Net Usable Area 5,000 square feet.
12. Natural Exhibit/Activity Area
A desire for natural areas of the Lewis and Clark Exploratory Center, which may
be mostly outdoor if a park setting is selected or recreated indoors if an urban site
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[ N C O R P O R A T E D
is selected, has been expressed by the Committee. This area includes 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 if possible.
Because this component is not conceptualized as part of the building structure
itself, net Usable area has not been included in hard construction costs, but rather
in site development and improvement calculations.
See Table 9.
Table 9
Lewis and Clark Exploratory Center
Conceptual Building Program Summary
Net Usable Gross Building
Usage Area SF Area SF
Main Visitor Area
Orientation Space
Central Exhibit Area
5ve Focus Pods
Multi-sensory Participation Theater
Education/Classroom Space
Retail Center
Restaurant
Snack Bar
Vleeting/Seminar Space
Back of House/Offices/Restrooms
Storage
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
11,875 14,250
10,D00 12,000
5,000 6,000
Total Net Usable Area and Gross Building Area 67,875
81,450
Gross Building Area Used in Capital Cost
Estimate and Development Budget 82,000 Square Feet*
Does not include I0,000 square foot outdoor Natural Exhibit/Activity Area.
Source: Hunter Interests Inc.; Jones & Jones
26
Z
LU "~-
o rY o
I
0
LLI
(.3 0
= 0
1.1.1
0
~0
Z
0
0
,~oo
d~
HUNTER INTERESTS
I N C O R P O R A T E D
IX. Capital Cost Estimate
and Development Budget Summary
The Conceptual Building Plan outlined in the previous section provides 67,875
net square feet of useable space (77,875 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 (furniture, fixtures, and equipment), 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 or quality reproductions. 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 financing costs, is estimated to be approximately $24
million.
See Table 10.
Table 10
Lewis and Clark Exploratory Center
Capital Cost and Development Budget Summary
Construction Budget
82,000 GSF ~ $125 sf
Added 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%
i%
$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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X. Financial Analysis
A. Projected Revenue
Projected operational characteristics are subject to certain unknowns at this time.
However, every effort has been made to substantiate and support the most precise
calculations possible. This has been accomplished primarily through a
comparative analysis of other museum operations, and current financial
performance at selected facilities nationwide. Hunter Interests has used this basic
methodology in conjunction with analysis of local market data and information to
forecast revenues.
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, 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.
Categorical revenues and their percentage makeup of total revenues as stated in
this section refer to third or fourth year activity unless otherwise stated.
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 employed the admission pricing program shown in
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Table 11 in our financial projections. This establishes price points of $8 for
aduks, $5 for youths (age 12 to 18), and $2 for children under 12. By
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.
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%)
450,000
180,000 $8.00 $1,440,000
157,500 $5.00 $787,500
112,500 $2.00 $225,000
Total Revenue $2,452,500
Source: Hunter Interests Inc.
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
attendance revenue of $2.6 million. Revenues decline through the third year, then
increase at a rate of 3% annually based on stabilized attendance with small ticket
price increases and/or added admission features.
See Table 14.
2, 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 LCEC could
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potentially 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 in the long run. Similarly, a 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 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.
3. Grants, Contributions, and Sponsorship
Potential revenue from corporate sponsorship, grants, and other contributions are
expected to comprise approximately 15%-20% of total revenues, based on
experiences elsewhere and taking into consideration 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 above will comprise 15.2% of total revenue annually, or about
$780,300 annually.
4. 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 show's,
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
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from programs noted above, as well as lectures, seminars, movies, etc., will
comprise approximately 6% to 7% of total revenues annually, or $338,130 at
stabilization.
5. Memberships
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,
which equates with $245,250 at stabilization.
6. Seminar/Auxiliary Programs
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 space that 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 turned down each year. The Director of the Rotunda at
the University of Virginia reported that as many as 100 requests for use of the
facility are also turned away each year. Based on a conservative estimate of
10,000 conference and seminar attendees paying $20 each, we project this source
would generate approximately $200,000 in revenue. Additional auxiliary uses are
projected to add another $40,000 to $80,000 .each year. Total revenues from these
sources amount to $238,703 in year three.
7. Catered/Special Events
The LCEC could implement an aggressive special events program that Would
likely include facility usage such as business and government receptions, possibly
in conjunction with the University of Virginia, the Federal Executive Institute, the
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Sorenson Institute for Political Leadership, and other Charlottesville
organizations. Social functions such as 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
$208,080 in year three.
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 two, 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. 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 including insurance.
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Based on permanent staffing assumptions including 53 FTE employees shown in
Table 12, 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.
lan
Table 12
Lewis and Clark Exploratory Center
Permanent Staff Cost Summary
Annual Cost
Annual Cost
Management Staff
Executive Director
Finance Director
Development Director
Seminar Manager
Operations Manager
Education Director
Subtotal
Leadership Programs/Research
Artifact/Research Curator
Program Director
Shift Staff Weekends 26 30K
Administrative Staff 26 14/hr.
Research Assistants 26 10/hr.
Subtotal
Development Department
Marketing
Public Relations
Communications Asst.
Subtotal
Educational Department
Graphics
Program Development
Subtotal
$80,000
$66,000
$60,000
$55,000
$50,000
$45,000
$356,000
$40,000
$35,000
$60,000
$56,000
$40,000
$231,000
$30,000
$30,000
$25,000
$85,000
$28,000
$25,000
$53,000
Gift Shop/Admissions
Manager
Ass't. Manager
Cash Register
Clerks
Subtotal
26 12/hr.
36 8~.
Food Service* Chefs
Food Beverage Manager
Cooks
Cash Register
Kitchen Staff
Subtotal
2@ 25K
26 12/hr.
4@ 8/hr.
Security
Manager
Shift Managers 26 25K
Permanent Staff 46 12K
Subtotal
Grounds & Building Maintenance
Manager
'Electrician 26 35K
Permanent Staff 4~20K
Motor Pool
Houskeeping 26 8/hr.
Total Staff Costs
Additional Payroll Costs & Benefits
Total Staff Costs
$35,000
$20,000
$48,000
$48,000
$151,001]
$50,000
$40,000
$50,000
$48,000
$64,OOO
$252,001]
$40,000
$5O,OOO
$48,000
$138,001]
$35,000
$70,000
$80,000
$20,000
$32,000
$237,000
·$1,503,000
20% $300,600
$1,803,600
Food Service staffing costs would be significantly reduced or eliminated if the Lewis and Clark Center utilized an outside operator.
Source: Hunter Interests Inc.
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3. RetailfRestaurant Sales
The cost of retail/restaurant sales are projected at approximately 75% of revenues
based on a mid range of potential costs including staff salaries, which are
dependent on future management decisions. The profit margin on retail sales
could be higher if the Museum Store is operated in house, although out-sourcing
restaurant operations would be preferable. Estimated expenses are approximately
$656,250 in year three.
4. 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. 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 LCEC 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.
b. Repairs/Maintenance/Supplies
Costs for ongoing repairs and maintenance to the exhibits and facility will
be a significant component of total plant operational costs. Upkeep of
high-tech audiovisual equipment, computers, and other mainstays of the
LCEC will be important to customer satisfaction, as well as purely
functional issues. Much of this work could be handled by staff technicians
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l
and various in-house experts, however, we have allocated an additional
$150,000 annually for repairs and maintenance. Miscellaneous supplies,
including those needed for cleaning and care of the exhibits and the public
areas of the facility are estimated to cost apprOximately $25,000, based on
expenditures at other museums, bringing the total estimated annual
expense for this component of operations to around $175,000.
See Table 13.
Table 13
Lewis and Clark Exploratory Center
Plant Operations
Cost Summary
Cost Component
Rate/Amount
Annual
Expense
Changing Exhibits
Repairs/Maintenance/Supplies
Contract Services
Utilities
Plant Operations--Annual Cost Total
'.ource: Hunter Interests Inc.
$200,000
$175,000
$125,000
$120,000
$620,000
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 LCEC-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
LCEC 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. Utilities: Water, Electricity
Based on the building plan assumptions covered in previous sections and
water and electrical use predicated on an average of 1,200 visitors daily,
we proj eot the cost of utilities to be approximately $120,000 per year.
5. 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 opening
could be allocated from the $500,000 start up costs, and $1 million pre-opening
budget. The Center could also expect to receive "good will" value nearly equal to
its cash expenditures in the form of press coverage, 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 promotion and marketing is projected to rise to about
$775,000 by the tenth year of operation.
6. Groups/Education
The cost of educational 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 $254,898 at stabilization.
7. Cost of Seminar/Auxiliary Programs
These costs will include staff time, printed seminar materials, audiovisual
products, and miscellaneous supplies. We estimate the cost of the seminar and
auxiliary programs at 80% of revenues, amounting to $200,000 in year three.
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Cost of Catered Events and Retail/Restaurant Sales
The cost of catered events may include food and beverage supplies, personnel,
equipment rental or other specific items depending on the final catering services
offered. Catering may be done in house, which might increase the cost, or outside
caterers may be used, which would redUce the cost. We estimate the cost of
catered events at between 70% and 80% of revenues, which represents a midpoint
of likely cost levels. Total expenses for catered events are estimated at
approximately $168,750 in year three.
9. 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.
10.
Contingency/Replacement Reserve
A contingency budget equal to 5% of Total Operating Expenses has been added
prior to estimating Net Operating Income.
11. Total Projected Operating ExPenses
Based on the size and facility program of the LCEC described in Section VIII, and
based on the cost projections and assumptions outlined above, we estimate that
total annual operating expenses for the LCEC will be approximately $4.86 million
at stabilization in year three.
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C. Cash Flow Summary
The results ~)f 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). At stabilization in the third year, NOI is projected to be
approximately $34,000. The NOI grows to $140,000 in year four as start-up costs
are absorbed, and the NOI remains at or above this level throughout the projected
1 O-year period.
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 flow analysis that ultimately proves close to reality.
Every attempt has been made to accurately calculate the costs associated with
specific compo.nents of operations, staffing requirements, maintenance of
equipment, exhibits, and other components of total annual expenses.
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XI. Funding Evaluation and Recommendations
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. There are a number of high-technology firms in the Charlottesville
area that' could be approached and large corporations that could also find name
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, and bonds, which may contribute to the complete funding
package.
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 Lewis and Clark Exploratory Center could seek to raise $15 million from
private contributions, philanthropic institutions, 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 also. Pre-lease agreements with national retail operations
and/or food service companies could also contribute to this portion of the
capital campaign. Corporate monies may be especially suited to funding of
exhibits, technological components, and interactive video programs.
The Lewis and Clark Exploratory Center could seek public funding in the
form 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
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such support has been indicated at this time. Linkage of Lewis and Clark
Exploratory Center development with other important public projects such as
the Charlottesville Conference Center could be part of a strategic plan to gain
support.
The Lewis and Clark Exploratory Center could seek to acquire additional
funding of $5 million through conventional debt financing or tax exempt
financing in the form of Virginia Industrial Revenue Bonds. There may be
other Iow, or no, interest money available to the Lewis and Clark Exploratory
Center if it functions in part as an educational facility or if it hosts government
training programs. Asset-backed financing using sponsorship and/or pre-lease
agreements represents another avenue for development funding that might be
pursued.
The Lewis and Clark Exploratory Center could lease property 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 could 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
Lewis and Clark Exploratory Center.
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XII..Site Discussion
A. Site Discussion Methodology
This section of the report includes observations and a preliminary discussion of
options regarding the location of the Lewis and Clark Exploratory Center.
Hunter Interests Inc. was supplied with a report entitled "Possible Sites for the
Lewis and Clark Expedition Center," prepared by the Office of Strategic
Planning, which summarized previous committee site work, criteria for choosing
prospective sites, base parcel information, and base maps of the possible sites.
Criteria for site selection in that report included:
·
·
·
·
·
·
·
·
·
·
·
Good regional access
Linkages to downtown
Linkages to the University of Virginia
Linkages to other area attractions (e.g., Monticello, Ash Lawn)
Good public transportation access and parking
Proximity to hospitality facilities (e.g., hotels, restaurants, and conference
· facilities
Proximity to shopping
Outdoor exhibit and activity capabilities
Ability to attract other development
Access to natural trail and pedestrian areas
'Access to pedestrian areas (e.g., Downtown Mall, "the Comer," The
Lawn)
Site size allowing for development
In all, about 25 sites located in both the City of Charlottesville and Albemarle
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. Most 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 otherwise
infeasible in our judgement. There were two primary factors in elimination of
sites from consideration.
First, the size of many sites was simply too small to effectively meet the
requirements for the physical building, as well as the park!ng, access, and
other needs anticipated for the conceptualized facility. Indeed, HII's visitation
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and other projections are based, in part, on the ability of the Center (and the
site where it is located) to fully accommodate market demand. For example,
the Water Street Parking Lot is less than one acre, the Garrett Street Area
(three parcels) less than two acres combined, the Woodard property on 5th
Street is less than ¼ acre, the comer of 5th and Cleveland is less than one acre,
and the Water Street Amphitheater site is about 1/10th of an acre. We estimate
that the LCEC will require approximately six acres, including necessary space
for parking, ingress and egress for optimal performance. ~Vhile a significantly
downsized Center couM be developed on a small parcel, limitations on access,
visitor capacity, etc., would be passed through as limitations on total
visitation and potential revenues.
Several 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. For example
the NGIC Building is a multi-story office building and ill suited to museum
use; the Wachovia Building on the Mall is similarly ill-suited to large-scale
museum activities; and the Jefferson School has historic preservation issues,
as well as structural limitations, limiting thereby restricting its potential as a
site for the Lewis and Clark Exploratory Center. Buildings such as these could
be adaptively reused as a museum, but they would significantly reduce the
opportunity of the Lewis and Clark Exploratory Center to meet its market
potential.
B. Recommended Site Types for Consideration
With a view toward maximizing potential visitation and economic impact, and
based on the criteria used in the Site Plan Committee Report as well as our own
development experience, we suggest that the Lewis and Clark Exploratory
Committee study the site issue further. In this section we have been instructed to
identify two primary site types which work best for the Lewis and Clark
Exploratory Center. They can generally be described as: 1) an Urban Setting, and
2) a Park Setting
Following is an outline of the positive and negative attributes of theSe settings 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 settings 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 settings has not been determined, but should
be the subject of a detailed analysis in the next work phase, if the decision is made
to move forward on the project.
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1. Urban Setting
Positive characteristics of an urban setting include:
· Maximum economic impact potential for downtown businesses
· Central location which may be part of a larger City plan for development
· Potential linkage to future convention center development
· Programmatic and visitation synergy with urban attractions
· Proximity to downtown hotels
· Aggregate urban site could host critical mass of development
· Aggregate urban site could accommodate surface and structured parking
Negative characteristics of the urban setting include:
· Land acquisition, demolition, and site preparation impact on capital costs
· Parcel size and location could limit on-site parking and access.
· Strategic complexities associated with construction in concert with
development
other
2. Park Setting
Positive attributes associated with a park setting include:
· Open space can allow for outdoor activities and exhibit components
· Land area for superior' parking and access infrastructure
· Park environment is in keeping with other Lewis and Clark centers
· Pedestrian trail and water liv4k, ages are possible
· Relative proximity to downtown
The negative characteristics of a park setting include:
· LeSs economic impact on the downtown core than an urban location
· Potential resistance from the community to development of open space park
In summary, we belieVe each of the settings outlined above represents generally
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.
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XIII. Economic Impact Analysis
Development and operation of the LCEC will create significant economic impacts
for the City of Charlottesville and surrounding area. These impacts can 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
economic model for calculating these indirect impacts.
Direct impacts resulting from LCEC development will include: construction jobs;
ongoing full- and part-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 tourigts 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 Lewis and Clark Exploratory 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 Lewis and
Clark Exploratory Center operations including well paid administrative,
technical, and professional positions.
Wages and salaries paid to these employees will be approximately $1.5
million annually. Payroll expenses including benefits will likely add an
additional $300,000 to direct 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 524 million, and annual
direct spending of approximately $4.2 million.
B. Indirect Economic Impact Summary
Using the U.S. Department of Commerce RIMS II model for economic
multipliers, we estimate direct impacts will generate an additional 3.102 times the
spending in a ripple 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 $13 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 purchases 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 to $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 amount 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 $7.1 million
and $14.5 million can be expected.
See Table 15.
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Table 15
Lewis and Clark Exploratory Center
Economic Impact Summary
Direct Economic Impacts
Capital Investment
Construction Costs
FTE Construction Jobs
Construction Wages and Salaries
FTE Permanent Jobs
Wages, Salaries, Benefits
Purchase of Goods and Services
]?otal Direct Impacts
One Time Direct impact
Annual Direct Impact
Total Indirect Economic Impacts
One Time Indirect Impact
Annual Indirect Impact
Tourism Impacts
Projected "Net New" Day Visitors
Spin-Off Expenditures
Projected "Net New" Overnight Visitors
Spin-Off Expenditures
Combined Tourism Impact W/Multiplier
Source: Hunter Interests Inc.
40,000 to
$200,000 to
10,000 to
$2,100,000 to
$7,134,600 to
$24,OOO,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
50,000
$500,000
20,000
$4,200,000
$14,579,400
53