HomeMy WebLinkAboutResolution - 3574 - Contract-Price Waterhouse-Market_Financial Analysis, All Purpose Event Facility - 03_14_1991Resolutioi
March 14,
Item #4
1 No. 3574
1991
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RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby auth rized and
directed to execute for and on behalf of the City of Lubbock a Co tract by
and between the City of Lubbock and Price Waterhouse for professi nal
services, attached herewith, which shall be spread upon the minut s of the
Council and as spread upon the minutes of this Council shall cons itute and
be a part of this Resolution as if fully copied herein in detail.
Passed by the City Council this 14th day of March 1, 1991.
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Kangtte boya, uity becrezary
APPROVED AS TO CONTENT:
Rita Harmon, Assistant City Manager
APPROVED AS TO FORM:
u&ffaia u. vanaiver, rust Hssis
City Attorney
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City of Lubbock
P.O. Box 2000
Lubbock. Texas 7S457
806-762-641 1
The City 1�
March 15, 1991
Mr. David Petersen
Price Waterhouse
Sports & Convention Facilities Group
P. 0. Box 2640
Tampa, FL 33602
Dear David:
The City Council of the City of Lubbock approved the contract with P ice
Waterhouse on Thursday, March 14. Attached is a copy of the exec ted
contract.
This letter serves as a notice to proceed with professional services
regarding the feasibility of constructing an all purpose events facility
for the city. As specified in the request for proposals, a check for
$20,000 is enclosed.. All future payments will need to be invoic d,
itemizing the work performed. We prefer that you reference, on he
invoice, the tasks that have either been completed or partia ly
completed for which payment is being rendered.
Referenced in the proposal was an orientation and work session to
initiate this project. If you will call me at your earli st
convenience, (806).767-2016, I will work with the Chamber of Commerce to
schedule that meeting. We look forward to working with you on t is
project.and are anxious to see the results.
Sincerely,
Rita P. Harmon
Assistant City Manager
for Public Safety and Services
RPH:ytb
Enclosure
of
Resolution No. 3574
- March 1 1991
Item #4
CFN
Commerce has solicited professional services with regard to
of
ock,
of
s;
with
and
WHEREAS, City deems said proposal of Consultant to be the
best proposal received in response to its solicitation;
NOW THEREFORE, City and Consultant hereby agree 'as follows.
WITNESSETH:
- SCOPE OF SERVICES. The Consultant shall determine the need
for an all purpose event facility which can be supported by the
Lubbock community; shall determine what unique features need to
be included in a new facility or in an expansion of the existing
Civic Center to make the facility feasible in the Lubbock market;
and shall assess the financial feasibility of the proposed
facility. The information to be provided by the Consultant shall
include the requirements set forth in Exhibit A and Exhibit B
hereto, but shall not be limited to only such named duties.
2.
TIME AND BUDGET REQUIREMENTS. The work, as described in
Exhibit A and Exhibit B hereto, shall be performed for a fixed
fee, including all expenses, of $58,500.00. The work will be
completed within a time period of 16 weeks from the date of
execution of this Contract by all parties. All payments shall be
made in accordance with the payment schedule contained in Ex ibit
B.
Boyd, City
D AS TO CONTENT:
Rita Harmon, Assistant C
Manager
AS TO
Donald G. Vandiver, First
Assistant City Attorney
the
01
- 2 -
EXHIBIT A
7v,
REQUEST FOR PROPOSALS
FOR PROFESSIONAL SERVICES
FOR.THE.LUBBOCK CHAMBER OF COMMERCE
`LUBBOCK, TEXAS
I. General:
The Lubbock Chamber of Commerce is seeking professional servi es
for a consultant, architect, or engineer experienced in
determining the feasibility of an all purpose event facility or
the Lubbock community.
II. Scope of Services:
The consultant shall determine what size of an all purpose ev nt
facility the Lubbock community can support and what unique fe -
tures must be included to make the facility feasible in the
Lubbock market. The information provided by the consultants all
include but not be limited to the following:
1.- - Market Analysis
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a. Review historical event statistics of the C vic
Center and Auditorium/Coliseum for the past
three years (FY 1987-88, 1988-89, 1989-90).
b. Define market area (primary and secondary g o-
graphic area)
-c. Project usage by type of event (i.e., enter-
tainment, sports, conventions, etc.), quantity
of events, -attendance, and timing.
d. Demographics by population trends and spendi g
profiles.
e. Review competitive facilities by location an
projected attendance to determine market imp ct.
2. Projected Size
a. Determine what size facility can be supporte by
kthe Lubbock community (number of seats in ar na,
total square footage).
b. Determine unique features (arena, exhibit ar a,
dining, meeting rooms, skating arena, etc.) hat
need to be included to make facility economi
cally feasible.
d. Determine number of acres of land needed f r
projected facility. -
3. financial Feasibility
A. Prepare estimates of projected revenue by i come
source (rent, concessions, etc.) for first en
years of operation of facility.
b. Prepare estimate of projected operating and
maintenance expenses for first ten years of
operation of facility.
c. Project total cost of construction to inclu e
architectural fees, engineering fees, const uc-
tion costs, furnishings, etc. (excluding th
cost of land acquisition).
d.- Provide estimated unit cost per square foot ge,
per arena seat, etc.
e. Determine economic impact on community (addi-
tional revenue generated in hotel/motel tax,
sales tax, estimated dollars spent by incre sed
attendance.
III. Experience and References
Professional consultants will be selected on the basis of a co bi-
nation of proven experience, ability to complete the project i a
IV.
timely manner, and recommendations from recent clients with si i-
lar projects. Submit the following information:
I.. A`listing of similar projects completed or in
progress, including a list of the references by na e,
address and telephone number for each project list d.
2. A listing of the individuals, with professional qu li-
fications, who will be assigned to this project.
Schedule and Methodology
The consultant should be capable of performing the services in the
shortest time possible without sacrificing the quality.
I. Include.a projected timetable for the work to be per-
formed in the scope of services outlined in Section
II.
2. Describe the methodology to be used to complete the
project.
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V. Estimated Cost for Services and Basis of Payment
The Chamber of Commerce desires to obtain the services.in Section
II at*its actual cost not to exceed a maximum fee.
1. List cost for services to be provided to includepro-
: services and expenses.
2. Provide anticipated payment schedule.
VI. Contract Negotiations
Upon selection and approval of a consultant, negotiations wiII be
scheduled to determine final project fees and contract terms.!
VII. Submission of Proposal
To be considered, ten copies of the -proposal should be submitted
to:
All Purposp Facility Planning Committee
c/o Chamber of Commerce
P.O. Box 561
Lubbock, Texas 79408
• 14th and Avenue. K
Lubbock, Texas 79401
Phone 806 763-4666
-3-
No Text
1700 Pacific Avenue, Suite 1400 Telephone 214 922 8040
Dallas, Texas 75201-4698
Price Waterhouse
�., January 10, 1991
All Purpose Facility Planning Committee
c/o Chamber of Commerce
P.O. Box 561
Lubbock, TX 73408 ,
Dear Committee Members:
The Price Waterhouse Sports and Convention Facilities Group
is pleased to respond to' -your request for this proposal.
This letter agreement will describe our understanding of the
background and objectives of the study, proposed scope of
services, qualifications and references, time and budget
requirements, terms of the engagement and authorization to
proceed.
Background and Objective of Study
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The City of Lubbock serves west Texas as a center for
entertainment and sports activities. Lubbock Coliseum also
serves as the home court for the Texas Tech basketball
program. The coliseum was built in the mid 1950's and does
not have air conditioning. Consequently, its limited
seating capacity and physical condition does not enable it
to capture many types of events and major shows.
=The Lubbock Civic Center serves the convention and trade
show needs of the area. Its_exhibition space and meeting
room capacity however, may require expansion to accommodate
the growing needs of its clients and retain its market
share. Accordingly, the Multi Purpose Facility Planning
Committee has requested the services of an independent firm,
specializing in arena and convention center planning, to
evaluate the needs for new facilities, recommend the scope
of new or expanded building space, and estimate prospective
financial operations.
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January 10 1991
All Purpose Facility Planning Committee
Page 2
Scope of Services`
The facility needs and prospective operations analysis for
he proposed center will be conducted in two segments or
phases of work... This approach will permit the committee to
approve or modify the consultants' suggested building
program before the financial analysis is conducted.
The work plan includes three work sessions to provide for
committee involvement before the field work begins (Work
Session I), at the completion of the market study/
recommended building program (Work Session II), and
following the committee's review of the draft report (Work
Session III).
Phase I1- Market Analysis and Building Program
This phase='of work consists of several analytical techniques
which, taken together, will provide a reliable basis to
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estimate the prospective utilization of the all purpose
center and define the building space requirements for the
center.
Task 1. (irientation and Work Session I _
A meeting with the committee will be scheduled prior to the
initiation of field work. This will provide an opportunity
for the consulting team and committee to review and refine
the proposed work program, identify specific individuals or
enterprises to be interviewed and schedule dates for draft
report reviews and future work sessions. The agenda for
this meeting will also include the designation of consultant
and committee contact persons and identification of existing
reports and plans, and other documents which may be relevant
to this study. At the conclusion of Task 1, the committee
and consultant should have a clear understanding of the work
schedule, report format, dates. for report delivery and
future work sessions.
January 10,.1991
All Purpose Facility Planning Committee
Page 3
Task 2. Existing Data, :Local Interviews and Collection
Analysis
Prior studies,.financial reports and other documents will be
collected and reviewed. Historical utilization and
financial operations of the Civic Center and Auditorium/
Coliseum for the past three years (FY 1987-88, 1988-89 and
1989-90) will also.be"assembled and evaluated. Other
important operational characteristics of the existing
facilities which,_will be evaluated include:
event
• Rental rates - service charges
• Staffing - organizational structure
•. Food and beverage operations
• Building facilities and equipment
• Other relevant operational characteristics
This task will also include interviews with committee
members, Civic Center and staff members,
hospitality industry leaders, civic and governmental leaders
and others.
Task 3. Interviews with Past and Prospective Users
..This will include interviews and surveys of event promoters,
association executives, meeting planners, show producers and
sports event sponsors. These interviews and surveys will
include past users as well as prospective users of the
proposed center. Information to be gathered will include
their perceptions of Lubbock's comparative advantages/
disadvantages,.facility needs and estimated utilization and
attendance.
Task 4. Identify and Evaluate Competitive Facilities
Competitive facilities for spectator sports and
entertainment events and consumer shows would include
existing and proposed local and regional facilities.
Facilities competing with Lubbock for convention and trade
show events would include other convention centers and
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exhibition halls in Texas and the southwestern region of the
U.S. These two groups or types of facilities will be
identified and described in terms of their building and
locational characteristics, utilization and event mix, and
financial operations.
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January 10,::1991
All Purpose ' .Facility Planning Committee
.Page 4
Task 5. Community Economics and Demographic Analysis
Relevant characteristics of Lubbock which support the
proposed center include:,population (metro area and ADI),
comparative age, income and employment characteristics of
the population,comparative composition of employment
(economic base characteristics), air service, attractions
and hotel rooms supply. Thesestatistics will be assembled
and evaluated to determine Lubbock's present and future
resident and economic ,support ,for. the proposed center.
Task 6., Comparable.Communities Facility Analysis
Convention center and.arena type facilities in communities
with comparable convention/trade show resources and
demographic characteristics will be identified. These
facilities will be evaluated in terms of their building
programs, utilization,:development costs, financial
operations and other features.
.
Task 7. Estimate Prospective Utilization
The information gathered and analyzed in Tasks 1-6 will
provide the basis for estimating prospective utilization.
Industry trends, changes in the competitive supply of
facilities and market shares will also be considered in this
task.
Prospective utilization will be described and shown in a
tabular format and will -be expressed in terms of:
0 Type of event 0 Parking requirements
a Number of performance. or 0 Seasonality of event
,event days 0 Food and beverage
0 Space requirements or requirements
average attendance 0 Attendance per event
This information will be expressed in ranges.
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January 10, 1991
All Purpose Facility Planning Committee
Page 5
Task 8. Evaluate Building Program and Site Requirements:
Progress Report
The estimated usage provided in task 7 will indicate the
building requirements, parking needs and site area
requirements. Building size and site area recommendations
will consider future expansion requirements as well 'as
current needs. The building program will be expressed in
terms of:
• Spectator seating V Selected performance
• Exhibition space specifications'
• Meeting rooms • Parking space needs
• Assembly space • Banquet -ballroom needs
• Support space (kitchen, locker • Premium seat require -
rooms, office, etc.) ments
These will be shown as building area requirements which, in
turn, will determine building foot print, plan layout
options, location criteria and site requirements.
A progress report will be delivered at the conclusion of
Task 8.
Phase II - Financial Analysis
Task 9. Work Session II and Estimated Prospective Operating
Revenues and Expenses
Work Session II will be.conducted'approximately one week
following your receipt of the progress report. The work
session will.focus on the results of Phase I and a building
program and site location criteria will be adopted.
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January 10, 1991
All Purpose Facility Planning Committee
Page 6
Based on the findings of.Phase I and the building program
and site location criteria selected in Work Session III
prospective operating revenues and expenses will be
estimated by major- account classifications:
Operating Revenues Operating Expenses
• Rentals Salaries and wages
• Event services Utilities
• Catering and.concessions Insurance
• Parking Materials & supplies
• Novelties 'Repairs & Maintenance
• Other Other
These estimates will be provided for the first five years of
operations and inflation rates will be shown for years.
10.
Task 10. Estimated Unit Costs and Development Costs
(Excluding.Land)
Construction and related.costs (design, equipment,
construction management, etc.) will be obtained from
.recently constructed similar facilities. These cost figures
will be adjusted to reflect inflationary (1991 $Is) and
locational (Lubbockarea)differentials. Development costs
will then be expressed in terms of unit costs (per sq. foot
or per seat) as well as the estimated range of total costs.
Task 11. Economic and Fiscal Impacts Analysis
The economic impacts (employment, sales and income) from the
proposed centers development and operations will be
estimated as total and incremental impacts. These estimates
will provide the basis for estimating fiscal or tax impacts.
The.impacts will be shown as direct, or first round impacts,
as well as total impacts on Lubbock and Garza Counties
resulting from all spending rounds.
. The major tax revenue
estimates will include hotel and sales taxes.
The total and incremental economic and fiscal impacts will
be based on.non-resident attendee spending and the U.S.
Governments EIFS model for the Lubbock area economy.'
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January 10, 1991
All Purpose Facility Plarming Committee
Page _7 .
Task 12. Final Report and Work Session III
The findings and conclusions of the market and financial
analysis will be described.in a narrative report which will
contain sufficient.statistical information to document our
major -conclusions. Approximately one week following your
receipt of the draft report, we will conduct Work Session
III to discuss the draft report.
Two weeks following our receipt of your written comments, we
will provide you with the final report.
Qualifications and References
The project team assigned to this engagement will be lead by
David Petersen, Directorof the Price Waterhouse Sports and
Convention Advisory -Group. Assisting David will be Deborah
Rogers, from the Dallas office of Price Waterhouse, Michael -
Bilodeau, Nancy Vegas and John Vincent. The staff members
of the Price Waterhouse Sports. and Convention Facilities
Group have conducted numerous arena and multipurpose public
assembly facility studies throughout the nation. A listing
of our experience and references for our work is enclosed
for your review. Resumes for the staff assigned for this
engagement and related supporting materials (articles, etc.)
are also enclosed.
Each year, the Price Waterhouse Group surveys all primary
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convention facilities in the U.S. to obtain occupancy data,
effective rental rates, attendance and food and beverage
sales.
Time and Budget Requirements
This.work, described in the scope of services, will be
conducted for a fixed fee, including expenses, of $58,600.
The work will be completed within a time period of 16 weeks,
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assuming some Phase II work tasks are conducted concurrent
with Phase I and the scheduled work session and report
reviews are not delayed.
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January 10, '1991
All Purpose Facility Planning Committee
Page 8
The costs for our services vices and expenses will be
invoiced and
..payable according to the.following schedule:
Payable upon Authorization to Proceed
$20,000
Payable 4 weeks following authorization to
10,000
proceed
Payable 8 weeks following authorization to
10,000
proceed
Payable 12 weeks following authorization to
10,000
proceed
Payable upon delivery ofthedraft report
8,500
Total Fixed Cost
$58,500
Terms of the Engagement
The following paragraphs express conditions and limitations
which our Firm necessarily states with any engagement of
this nature.
.Our services will not include ascertaining the legal and
regulatory requirements applicable to this project,
including zoning, other state and local government
regulations, permits and licenses. Further, no effort will
be made to determine the possible effect on this project of
possible energy shortages or present or future federal,
state or.local legislation, including any bond restrictions,
environmental or ecological matters, or interpretations
thereof. Our report will contain a statement to that
effect.
The conclusions and any prospective financial information
that may be included in our report will be based on
estimates and assumptions from previous studies, information
developed from supplemental research, knowledge of the
industry and other sources, including certain information
that you may provide. These sources of information and
bases of significant estimates and assumptions will be
stated in our report. Some assumptions inevitably will not
materialize and unanticipated events and circumstances may
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January 10 1991
All Purpose Facility Planning Committee
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occur; therefore, actual results achieved will vary from the
estimates, and the variations, may be material. Our r:eport
will contain a,statement,,to that effect.
Further, we will neither evaluate management's effectiveness
nor be responsible for futuremarketing efforts and other ,
management actions upon which actual results will delpend,
and we will so state in our report.
The terms of this engagement will be such that we will have
no obligation to revisethe report to reflect events:or
conditions which occur subsequent to the date of the ',report.
However, we will be available to discuss the necessity for
revision in view of changes in the economic or market
factors affecting this project. Our report will contain a
statement to that effect.
Our report will be intended solely for your information and
use in development planning and should not be relied',upon
for any other purpose. We will so state in our report.
Otherwise, neither our report nor its contents, nor any
reference to our Firm may be included or quoted in any
offering circular.or registration statement, prospectus,
sales brochure, appraisal, loan or other agreement or
document. If you need to refer to our report in any '':loan or
offering document, we will need to perform additional work
as described in Phase III of the scope of services.
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March 14,1991
'Mayor and City Council members
City of Lubbock
P.O. Box 2000
Lubbock, TX 79452
Ladies and Gentlemen:
As Chairman of the.Events facility Task Force, it is my pleasure to
report to you that we have reached a recommendation.
The recommendation is that the City of Lubbock hire Price
Waterhouse to conduct a feasibility study regarding an All Purpose
Events Facility for Lubbock. This study will include evaluating
our existing Civic Center and Municipal Coliseum.
A copy of the. Price Waterhouse Proposal is attached for your
review.
It is our intent that this Task Force monitor the progress of this
study along with city staff and, update you on the findings
periodically.
S sincerel n re
W Wi i m Z,7
l D. P#oteet, III
Chairman
Events Facility Task Force
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EVENTS FACILITY TASK FORCE
1.991
CHAIRMAN
Mr. William Poteet
Methodist Hospital
P.O: Box 1201
Lubbock, TX 19408
792-1.011.
RESOURCE PERSONNEL
Ms. Rita Harmon
Mr. Grey Lewis
Mr. Van McVay
Assistant City Manager
Coordinator,. Events.
Director, Civic
City of Lubbock
Facility Task Force
Center/Auditorium
P.O. Box 2000
Chamber of Commerce
/Coliseum
Lubbock, TX 79457
Lubbock, TX 79457
1501 6th Street
767-2016
763-4666
Lubbock, TX 79401.
767-2241
MEMBERS
Mr. Jim Broome
Mr. Bill Maloy
Mr. Eddie Richardson
Crossed Keys Package
City of Lubbock
LBCE
}ore
P.O..Box 2000
2814-A Weber Dr.
Box 3099
Lubbock, TX 794.57.
Lubbock, TX 79404
"ubbock, TX 79452
767-3001
747-9804
745-2424
Mr. W.R. Collier
Mayor Peck McMinn
Ms. Esther Sepeda
American State Bank
City of Lubbock
COMA
P.O. Box 1401
P.O.. Box 2000.
P.O. Box 886
Lubbock, TX 79408
Lubbock, TX- 79457
Lubbock, TX 79408
763-7061
767-3001
762-5059
Mr. Ty Cooke
Mr. Joe McKay
Mr. Bill Tynan
Investments
Joe McKay Architect
Reese AFB/Public Affairs
1801 Broadway
7008 Salem
64FTWPA-9
Lubbock, TX 79401
Lubbock, TX 79424
Reese AFB, TX 79489-5000
763-9200
795-7146
885-3169
Mr. Don Cosby
Ms. Mavis Miller
TTU Fiscal Affairs
Treasure Island Golf
P.O. Box 4469
Course
Lubbock, TX 79409
501 Frankford
2-2196
Lubbock, TX 79416
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795-9311
Mr. Buddy Forbess
Mr. Jim Ratliff
Benton Oil Co.
Ratliff Investments
P.O. Box 31
2232 Indiana Ave.
Lubbock, TX 79408
Lubbock, TX 79410
763-5301
797-9609