Visit_Greater_Palm_Springs_Feasibility_Study-2024.pdf

DRAFT COPY

FEASIBILITY STUDY OF A NEW

AMATEUR SPORTS COMPLEX

in the Greater Palm Springs / Coachella Valley Area

April 17, 2024

TABLE OF

CONTENTS

Executive Summary 4

1. Introduction 12

2. Local & Regional Conditions 14

3. Industry Trends 41

4. Comparable Facilities 51

5. Market Demand & Opportunities 76

6. Program, Site & Business Model 89

7. Cost/Benefit Analysis 97

ES

EXECUTIVE

SUMMARY

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 5

EXECUTIVE SUMMARYES

Background & Methods

Conventions, Sports & Leisure International (CSL) was retained by Visit Greater Palm Springs to conduct a feasibility study of a potential new Amateur Sports Complex. The purpose of the study is to assist Visit Greater Palm Springs and other stakeholders in evaluating key market, program, financial, economic and ownership/management aspects of a potential new Amateur Sports Complex in the Greater Palm Springs / Coachella Valley area. The attached report outlines the findings associated with the analysis.

The full report should be reviewed in its entirety to gain an understanding of analysis methods, limitations and implications.

Sports tourism is one of the fastest growing sectors of tourism. An increasing number of communities throughout the country are investing in the development and operation of large, multi-sport amateur sports complexes for the purpose of driving new sports tourism as well as better accommodating local sports and recreation demand. An increase in the number of travel sports programs and participation has been matched by the recognition by many communities of the often high return-on-investment (ROI) modern sports complexes can have in host destinations in terms of driving visitation, hotel room nights, and economic impact through new spending in the community and the creation of new jobs.

A new Amateur Sports Complex would address opportunities and needs related to sports tourism (i.e., tournaments) in the Greater Palm Springs / Coachella Valley area, while also enhancing opportunities for local amateur sports and recreation users. The information developed as part of the study outlined herein is intended to assist Visit Greater Palm Springs, constituent local municipalities, and other stakeholders with the information necessary to make informed decisions regarding the potential development and operation of a new Amateur Sports Complex.

The study process consisted of detailed research and analysis, including a comprehensive set of market-specific information derived from the following:

• PROJECT EXPERIENCE: Experience garnered through more than 1,000 planning and benchmarking projects involving sports, recreation and event facilities throughout the country.

• LOCAL VISIT: Local market visit at the outset of the project, including community and existing sports and recreation facility tours, and discussions with study stakeholders and community leaders.

• BENCHMARKING: Research and analysis of facility data and interviews conducted with more than 40 competitive/regional and/or comparable amateur sports facilities.

• INTERVIEWS & OUTREACH: Telephone interviews and virtual meetings with stakeholders and representatives of potential user groups, including key local, state, regional and national athletic associations, organizations, clubs and leagues that run sports programs, leagues, tournaments, competitions and meets that could have an interest in a new Amateur Sports Complex in the Greater Palm Springs / Coachella Valley area.

Local & Regional Conditions

• STRONG TOURISM BRAND: The Greater Palm Springs / Coachella Valley destination is a high-quality, internationally-known tourist destination. A recent economic impact study completed by Tourism Economics estimated that the destination welcomed approximately 12.8 million visitors in 2021, generating $6.8 billion in total economic impact. In 2019, prior to the COVID-19 pandemic, the estimated total number of visitors was 14.1 million. Area hospitality infrastructure is robust and mature, including a wide diversity of lodging products and event and sports facilities, with a notable exception being limitations in modern facilities appropriate to sufficiently compete within certain sports tourism segments.

• DRIVABLE ACCESS TO REGIONAL MARKETS: Located in southern California, nearly equidistant from San Diego and Los Angeles, each just less than 125 miles away, the Coachella Valley is situated within three-hours’ drive of approximately 22 million people.

When considering the market potential for new and/or improved sports tourism assets within a destination, access to a significant population base is an important factor. Many tournament, meet and competition participants target regional drive markets both to help manage the cost associated with travel and to manage transporting equipment.

• EXTENSIVE LODGING INVENTORY: There are more than 14,600 hotel rooms and a wide array of service levels and price points within the 54 lodging properties offering at least 100 sleeping rooms. In addition to these primary hotels and resorts, a large number of vacation rentals, timeshares, and bed and breakfasts exist throughout the destination to complement the overall lodging capacity. There are clusters of sleeping rooms proximate to much of the existing inventory of youth/amateur sports facilities in the destination, and a variety of hotels within an estimated 20-minutes’ drive of all primary youth/amateur sports facilities. This is important, as most non-local visitors participating in tournaments, meets, competitions or other sports tourism activities are willing to drive up to 20 minutes between their hotel and game/activity location. Additionally, the hotel inventory in the destination is well-distributed among a variety of price points, service levels and loyalty programs/brands.

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 6

• EXISTING LOCAL FIELD SPORTS FACILITIES: The existing inventory of outdoor youth/amateur sports facilities in the Coachella

Valley is largely limited to individual and small clusters of outdoor fields. Empire Polo Club has periodically hosted large field tournaments in the past, but it is not a dedicated field sports tournament, game and training complex. While Hovley Soccer Park, Big League Dreams Cathedral City, and other small field complexes have historically hosted some soccer, baseball and softball tournament activity, the overall destination lacks the type of tournament-quality rectangle and/or diamond field complex seen in many other sports tourism destinations (i.e., complexes that offer 10+ high-quality fields in a single location).

• EXISTING LOCAL INDOOR COURT FACILITIES: There is a limited number of indoor amateur sports facilities in the Coachella Valley, especially in terms of indoor court space with no facilities offering multiple courts within a single facility. The majority of indoor courts are located in high schools, middle schools, YMCAs, Boys & Girls Clubs, and community centers. As is typical throughout the country, schools tend to give priority to school and student functions, limiting access to outside rentals. While it is recognized that a higher than typical amount of demand exists for outdoor courts in the Coachella Valley due to warm climate conditions throughout the year, the lack of a single indoor complex with a critical mass of courts presents challenges in attracting and hosting traditional court-based tournaments, competitions, camps and clinics that are regional or national in scope.

• OTHER LOCAL SPORTS & RECREATION FACILITIES: There are a variety of other sports, recreation and leisure facilities and infrastructure addressing single sports and niche sports throughout the Coachella Valley. One of the most prominent of which is Indian Wells Tennis Garden, which is an internationally-known tennis destination and hosts a large number of tournaments, training and activities in the tennis segment. Additionally, the Coachella Valley offers extensive product serving outdoor sports and recreation, including swimming and watersports, golf, tennis, pickleball, ice hockey, field hockey, biking, hiking, running, extreme sports, and others.

• COMPETITIVE PRODUCTS IN THE REGIONAL AREA: While there are a number of tournament-quality outdoor rectangle and diamond field complexes in the greater regional area (especially in and around the greater Los Angeles metropolitan area), there are relatively few tournament-quality indoor court complexes in the greater region (i.e., Southern California, Nevada and Arizona), particularly given the very large population base.

Industry Trends

• CONTINUED GROWTH OF THE SPORTS TOURISM SECTOR: An increasing number of communities throughout the country are investing in the development and operation of large, multi-sport amateur sports complexes for the purpose of driving new sports tourism, as well as better accommodating local sports and recreation demand. An increase in the number of travel sports programs and participation has been matched by the recognition by many communities of the oftentimes high ROI modern sports complexes can have in host destinations in terms of driving visitation, hotel room nights, and economic impact.

• IMPORTANT CONSIDERATIONS FOR LOCAL DEMAND: The ability to activate sports tourism within a destination can oftentimes be directly tied to the strength of sports and activities within the local market. Most sports tourism occurs on weekends, leaving four or five days of programming that must be filled by demand from area residents participating in youth and amateur sports activities. There are an estimated 90,000 frequent sports participants within a 60-minute drive of Palm Desert. Importantly, it is estimated that there are more 20 million people that reside within a three-hour drive of Coachella Valley. These data suggest both the strong residential population and the significant opportunity to attract non-local participants for sports tourism events held in Coachella Valley.

• FACILITY DESIGN TRENDS: Synthetic turf is increasingly utilized for both outdoor and indoor sports facility projects, delivering significant advantages over other surfaces, particularly for sports tourism activity. Organizers for youth and amateur sports activities increasingly prefer, and oftentimes demand, modern facility complexes with state-of-the-industry playing surfaces, equipment, and amenities. However, synthetic turf temperatures at field level during high heat periods is often measured as much as 10 degrees warmer than ambient off-field air temperature. This can be particularly problematic for hot weather markets (like Coachella Valley) when deploying synthetic turf fields involving summertime sports. Beyond ensuring a critical mass of courts, fields or other playing surfaces at one location, an increasingly important focus of tournament, meet or other competition participants is the strength of a destination in terms of hotel, restaurant, entertainment and other factors. This can help in terms of a destination’s ability to maximize economic impact capture, minimizing spending leakage to area communities and increasing the likelihood of participants returning for future years.

• HIGHLY UTILIZED, HIGH-IMPACT FACILTY MODELS: Four primary sports tourism-oriented facility types (indoor hardwood complex, indoor turf complex, diamond field complex, and rectangle field complex represent the most common and highly-utilized sports tourism facility products throughout the country that can be most impactful and deliver the highest return-on-investment, in terms of driving tourism and economic impact relative to costs (development and operating costs). As such, based on the analysis of local market conditions in the Coachella Valley area (including consideration competitive/regional facility supply), evaluation of industry trends in terms of participation and tourism volume, and industry experience, the four aforementioned primary facility models represent the primary product models appropriate for further analysis as logical, high-impact sports tourism facility product development candidates that would be key concepts of focus for consideration in the Coachella Valley.

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 7

Market Demand & Opportunities

• MARKET FEASIBILITY: Based on the results of the research and analyses conducted under this feasibility study, overall findings suggest that a distinct market opportunity exists for a new Amateur Sports Complex in the Coachella Valley for the primary purpose of attracting new sports tourism activity and a secondary purpose of better serving local area user groups.

• PRIMARY DEMAND & FACILITY FOCUS: In general, interest in a potential new Amateur Sports Complex in the Coachella Valley, measured through interviews with stakeholders and potential nonlocal and local user groups, is considered moderately-strong to strong for an Indoor Hardcourt Facility. Market research and analysis suggest that a state-of-the-industry Indoor Hardcourt Facility, suitable to accommodate basketball, volleyball, wrestling, pickleball, dance/cheer, martial arts, table tennis, futsal, gymnastics and other sports/uses could address key areas of unmet market demand from local and non-local user groups, including weekend tournaments, meets, and competitions. Hardcourt indoor sports facilities typically have broad-based usage and tend to be highly-utilized year-round, delivering some of the highest returns-on-investment in terms of utilization, revenue and economic impact per square foot. This year-round usage can be particularly helpful in generating off-season and shoulder-season hotel room demand.

Additionally, should an indoor turf component be included with this type of facility development, certain operating, marketing, and branding synergy and efficiencies could be realized and serve to accommodate some unmet demand for indoor turf training and recreation (particularly in periods of high heat weather conditions).

• SECONDARY DEMAND & FACILITY FOCUS: Additionally, market research and analysis suggest that moderate interest exists for a multisport rectangle field complex (to accommodate soccer, lacrosse, football, flag football, rugby and other such uses), with slightly less demand for a diamond field complex (to accommodate baseball and softball). While synthetic playing surfaces are now industry standard for new field complex developments throughout the country and tend to offer a distinct competitive advantage for sports tourism activity through minimizing the possibility that tournaments, games or practices are cancelled due to inclement weather or the need to rest natural grass fields from wear and tear due to overuse, temperatures at field level on synthetic turf fields during high heat periods is often measured as much as 10 degrees warmer than ambient off-field air temperature. This can be particularly problematic for hot weather markets (like the Coachella Valley) when deploying synthetic turf fields involving summertime sports. Furthermore, unlike indoor sports facilities, the impact period of outdoor facilities in any destination tends to be concentrated during half or less of a calendar year (therefore, often resulting in lower annual financial and economic performance.

• DEMOGRAPHICS: The goal of any new investment in new youth/amateur sports facilities in the Coachella Valley would be envisioned to not only meet the needs of Coachella Valley area residents, but also the needs of tournaments, meets and competitions that draw out-of-town visitors to the area and generate economic and fiscal impacts to the Greater Palm Springs / Coachella Valley area. As a result, the viability of any potential investment in a new Amateur Sports Complex is dependent, in large part, on local market demographic and socioeconomic characteristics of both the local and regional area, and the marketability of the community to potential visiting participants and spectators. A substantial population base exists within both the primary and secondary markets serving the Coachella Valley (more than one million within an hour’s drive and over 20 million within a three-hour’s drive).

• VISITOR INDUSTRY INFRASTRUCTURE: The breadth, quality, mix and location of key visitor industry amenities in a local area significantly contributes to the appeal of a destination and its competitiveness in attracting tournament and other non-local activity.

It is particularly important that an appropriate and appealing hotel supply exists within a 20-minute drive of the sports complex.

There are more than 14,600 hotel rooms and a wide array of service levels and price points within the 54 lodging properties offering at least 100 sleeping rooms. In addition to these primary hotels and resorts, a large number of vacation rentals, timeshares, and bed and breakfasts exist throughout the destination to complement the overall lodging capacity.

• LACK OF TOURNAMENT-QUALITY FACILITIES: Research suggests that unmet demand exists in the Coachella Valley for a state-of-the-industry Amateur Sports Complex that is optimized for sports tourism attraction. The Coachella Valley and the surrounding region are very limited in terms of facilities offering a critical mass of indoor courts in a single facility/location. While there are a number of rectangle and diamond fields in the Coachella Valley, existing facilities lack certain elements incorporated in current state-of-the-industry facilities, such as a critical mass of fields in one location, synthetic turf or tournament-quality grass, lighted fields, modern food & beverage facilities/offerings, locker rooms, play areas and shade structures.

• OPPORTUNITY TO BETTER SERVE LOCAL USERS: While optimized to attract sports tourism (i.e., tournaments, meets, and competitions), state-of-the-industry amateur sports facilities, such as a new state-of-the-industry Indoor Hardcourt Facility and/or a Rectangle and Diamond Field Complexes, would be expected to deliver substantial benefits to local community members through enhancing the rental, practice, programming, and alternatives available for sports, recreation, leisure and wellness activities. Local usage and attendance (as opposed to non-local usage and attendance) normally contribute the majority of utilization at comparable youth/amateur sports facilities—positively contributing to the quality of life for local citizens.

• SUPPLY & DEMAND ISSUES: While it is estimated that local demand for outdoor rectangle and diamond facilities is currently relatively well-accommodated by existing facility products in the Coachella Valley area, some demand exists from sports tourism markets for these products. In terms of an indoor court facility complex, estimated local and nonlocal demand is estimated to be greater than what existing Coachella Valley area facility product can accommodate—therefore, representing a core development opportunity. From a nonlocal (sports tourism) standpoint, indoor court facility demand is estimated to represent a primary development opportunity, as Coachella Valley area facilities currently have important limitations in competing for this activity.

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 8

Summary of Estimated Coachella Valley Amateur Sports Supply & Demand by Facility & Demand Type Ex is tin g Lo ca l F ac ili ty S up pl y

Local Demand

Ex is tin g

Re gi on al

F ac ili ty

S up pl y

Non-Local (Sports Tourism) Demand

Oversupply of Facilities

Development Opportunity

Demand Well Accommodated

Demand Well Accommodated

Oversupply of Facilities

Development Opportunity

Demand Well Accommodated

Demand Well Accommodated

Outdoor Rectangle Field Complexes Indoor Court Facilities

Low

High

High Low

High

High

Outdoor Diamond Field Complexes

Facility Concept & Program

The following product concept and associated elements represents an estimated supportable program and key attributes for a potential new Amateur Sports Complex in the Coachella Valley. This type of product would be expected to deliver the highest return-on-investment (ROI) to the sports tourism industry among the various product types considered under this analysis, while also serving to fill important local needs.

• CORE CONCEPT: Indoor Sports Facility, comprising a tournament-quality indoor amateur sports and recreation facility product offering permanent hardwood courts, indoor turf, and various associated amenities.

• FACILITY SIZE: Approximately 140,000 gross square feet.

• PARKING: Approximately 900 spaces.

• SITE SIZE: Minimum of 10 acres.

• PRIMARY INDOOR ATHLETIC SURFACES:

• Hardwood courts: 8 full-sized basketball courts (95’ x 50’ alleys) or 16 full-sized volleyball courts (60’ x 30’ alleys).

• Synthetic turf: 1 regulation-size indoor field (200’ x 85’).

• CHARACTERISTICS / AMENITIES:

• Minimum 35-foot ceiling height.

• Dropdown nets to separate court and turf spaces (including ability to net individual batting/training cages/spaces).

• Bleachers, athletic equipment, scoreboard, and other such equipment.

• Locker/team rooms and party rooms consistent with industry standards.

• Fitness/wellness spaces and equipment.

• Walking track.

• Play areas.

• Food court / café.

• Performance and esports spaces (optional).

• FUTURE PHASE OPPORTUNITY: The addition of high-quality Rectangle Fields at or proximate to the Indoor Facility site could be considered as a second phase to better accommodate nonlocal and local needs, while leveraging infrastructure and the sports destination/brand established by the Indoor Facility. A state-of-the-industry Rectangle Field Complex in a destination like the Coachella Valley would involve 12 or more fields in a single location with tournament-quality natural grass plus lights, concessions, shaded areas, field operations buildings, child play areas, and other amenities.

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 9

Site, Development Opportunities & Business Model

In general, the location and site of an amateur sports facility/complex can have a significant impact on the asset’s ability to generate attendance (local and nonlocal), as well as its financial and economic success. Optimized modern amateur sports complexes tend to be located in areas with existing sports and recreation facility products or in areas with a well-established economic base of hotels, restaurants, retail and other visitor industry infrastructure. (i.e., typically, within a 15- to 20-minute drive time).

When co-located with other amateur sports facilities, expanded or new sports and sports tourism assets have an opportunity to create a “sports destination” through a campus of facilities that leverage operating, marketing and branding synergies for the purpose of attracting sports tourism as well as accommodating local demand. Overall, there are a number of characteristics and factors are typically important when evaluating the attractiveness of a site location. These include, but are not limited to:

• Size, cost, and ownership complexity of site.

• Nearby accessibility to major interstates/roadways.

• Centralized location within a target geographic region.

• Driving proximity to primary population concentrations.

• Ability to leverage existing infrastructure/prior investment.

• Requirements/preferences of a private partner.

• Proximity to quality hotel inventory.

• Proximity to restaurants, retail, nightlife, and entertainment.

• Parking availability.

• Ingress/egress.

• Site visibility.

• Synergy with public sector initiatives/master plans.

• Compatibility with surroundings.

Based on the analysis conducted, the following represents recommendations concerning ownership and operation of a potential new Amateur Sports Complex in the Coachella Valley.

FACILITY OWNER & MODEL

Given the expected sports tourism mission of a potential new Amateur Sports Complex, along with the project’s expected physical and operational characteristics, it is believed that the appropriate governance and oversight model for a new Sports Complex in the Coachella Valley would be a hybrid public/private model. This would involve public ownership via some governmental entity or sports authority (such as the Desert Recreational District or a newly-created sports authority focusing on sports tourism), contracted private management, and an Oversight Board. Through coordination and collaboration with the facility owner, management team, tenant groups, and other local area facilities, the Oversight Board would be responsible for the Sports Complex’s schedule and use calendar, as well as its rates and discounting policies. This type of structure could work to ensure equitable scheduling and rates, as well as mitigating cannibalization of local user group activity at existing local sports facilities. This would allow for appropriate scaling should the new Indoor Sports Facility represent one of several phases of development of a larger amateur sports complex destination. The facility owner outlines facility policies informed by aims and goals for the facility. To refine these policies and ensure that they are being implemented by the private management firm, the facility owner would establish an Oversight Board populated by appointed facility and community stakeholders.

OVERSIGHT BOARD

The Oversight Board, a handful of appointed individuals with facility and community ties, has de facto control of the schedule and use calendar for the Indoor Sports Facility (or greater campus), as well as rates and discounting. The Oversight Board would initially work the County/City and the selected Private Management Firm to establish a formal booking and scheduling policies, as well as policies related to rates and discounting. The Oversight Board would be best served if it included a mix of public sector and private sector members, including representatives of the County/City, the contracted private management firm, key tenants/user groups, other existing local area athletic facilities, schools, tourism organizations, and/or other local business leaders. The Board would have an established set of bylaws and would meet monthly.

PRIVATE MANAGEMENT FIRM

The private management firm hired by the Owner would be responsible for operating the Amateur Sports Complex as guided by defined Owner policies. A firm account executive on the national corporate level would directly report to the Owner’s designee (or the Oversight Board, if it is organized with expanded responsibilities), and is responsible for hiring and overseeing the on-site complex staff. The account executive would also act as an intermediary for support functions provided by the firm’s national corporate office, including human resources, brand and marketing strategy, financial reporting and legal/risk assistance. The firm is typically compensated with a flat annual management fee, plus incentive payments for producing desired results. Incentives could be based on achieving specific revenue goals, attendance, events, room night generation or other targets.

ON-SITE FACILITY STAFF

The facility-specific full-time staff is commonly structured as per the diagram below. The facility general manager serves as the on-site lead and directly reports to the private management firm’s property-specific account executive. The marketing coordinator oversees all facility marketing and sponsorship efforts, the tournament director works with third-party organizations to schedule tournaments, the local program director works with local organizations to schedule practices, league play and camps, the office manager oversees facility bookkeeping and the operations manager runs facility maintenance and food and beverage operations as well as oversees most of the part-time employees that are hired for event-specific operations. This on-site staff is responsible for operating the facility within the budget submitted by the private management firm and in coordination with Oversight Board.

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 10

Construction Costs (order-of-magnitude)

An analysis was conducted associated with order-of-magnitude hard construction costs pursuant to the supportable building program elements previously presented. Site costs (acquisition and preparation) have not been included. Construction costs tend to vary widely among comparable sports facility projects. Based on an assumed hard construction cost of $275 per gross square foot, order-of-magnitude hard construction costs for a new Indoor Sports Facility in the Coachella Valley could approximate $38.5 million. Assuming soft costs (not including site acquisition) of approximately $11.5 million, total order-of-magnitude hard and soft construction costs associated with a new Indoor Sports Facility in the Coachella Valley could approximate $50.0 million.

If pursued under a future phase, it is estimated that order-of-magnitude hard construction costs for added rectangle fields could approximate between $1.0 and $2.7 million per field (depending on whether tournament-quality natural grass or synthetic), which includes a per-field factor for supporting infrastructure such as concession buildings, site/maintenance buildings, parking, lighting, general sitework and other such elements.

Cost / Benefit Analysis

An analysis was completed to produce key cost/benefit estimates associated with a potential new Amateur Sports Complex in the Coachella Valley. At this stage, detailed projections have only been developed with respect to the potential Indoor Sports Facility project (as it represents the core facility concept recommendation). A detailed utilization model was developed to consider a large number of variables and inputs to analyze each sport/use for a potential new Amateur Sports Complex in the Coachella Valley.

For instance, when considering different types of usage (i.e., use from local leagues/clubs versus non-local tournaments/meets versus clinics/camps/lessons versus open recreation, etc.), separate assumptions were used to generate usage and attendance (participants and spectators) estimates. The exhibit below presents a summary of key utilization levels associated with a new Amateur Sports Complex in the Coachella Valley (recommended Indoor Sports Facility only).

Opening Stabilized 20-Year UTILIZATION Year 1 Year 2 Year 3 Year 4 Cumulative

LEAGUE TEAMS

Basketball 44 49 54 59 1,150 Volleyball 33 38 43 48 930 Other Court Users 24 28 32 36 696 Indoor Soccer 18 22 26 30 576 Other Turf Users 13 17 21 25 476

Total 132 154 176 198 3,828

LEAGUE GAMES

Basketball 704 784 864 944 18,400 Volleyball 528 608 688 768 14,880 Other Court Users 336 392 448 504 9,744 Indoor Soccer 252 308 364 420 8,064 Other Turf Users 182 238 294 350 6,664

Total 2,002 2,330 2,658 2,986 57,752

TOURNAMENTS

Basketball 9 11 16 18 342 Volleyball 12 16 21 25 474 Other Court Users 6 7 10 11 210 Indoor Soccer 2 4 7 9 166 Other Turf Users 2 4 7 9 166

Total 31 42 61 72 1,358

TOURNAMENT GAMES

Basketball 1,176 1,392 2,208 2,424 45,984 Volleyball 1,056 1,680 2,496 3,120 58,272 Other Court Users 252 288 432 468 8,928 Indoor Soccer 48 120 288 360 6,576 Other Turf Users 48 120 288 360 6,576

Total 2,580 3,600 5,712 6,732 126,336

CAMPS & OTHER RENTALS

Basketball 54 60 66 72 1,404 Volleyball 60 60 60 60 1,200 Other Court Users 12 12 18 18 348 Indoor Soccer 48 60 72 72 1,404 Other Turf Users 30 36 42 48 924 Private Rentals/Practices/Drop-in 2,900 2,900 2,900 2,900 58,000

Total 3,104 3,128 3,158 3,170 63,280

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 11

Based on analysis results, upon stabilization (assumed fourth full year of operation), a potential new Amateur Sports Complex in the Coachella Valley (recommended Indoor Sports Facility only) is estimated to generate a net operating profit of approximately $385,000, before debt service, capital repair/replacement funding and profit sharing. This projected level of operating profit is consistent with other comparable indoor sports facilities throughout the country.

An investment in a new Amateur Sports Complex project will be expected to provide substantial quantifiable benefits. These quantifiable benefits often serve as the “return-on-investment” of public dollars that are contributed to develop the facility project and site. Quantifiable measurements of the effects that facility project could have on the local economy are characterized in terms of economic impacts.

Based on analysis results, a summary of key cost/benefit projections for a new Amateur Sports Complex in the Coachella Valley (recommended Indoor Sports Facility only), associated with its construction and annual operations is presented below (upon stabilization of operations, assumed to occur by the fourth full year of operations).

ANNUAL

PERSONAL

INCOME

$19.1M

ANNUAL

EMPLOYMENT

(FULL & PART-TIME JOBS)

ANNUAL

DIRECT

SPENDING

$27.5M

ANNUAL

INDIRECT/INDUCED

SPENDING

$18.8M

ANNUAL

ECONOMIC

OUTPUT

$46.3M+ =

SUMMARY OF ESTIMATED KEY PROJECTIONS ASSOCIATED WITH

A NEW AMATEUR SPORTS COMPLEX IN THE COACHELLA VALLEY

(Operating Impacts Reflect Annual Impacts Upon Stabilization, Assumed Fourth Full Year of Operations)

ANNUAL NON-

LOCAL

ATTENDEE DAYS213,200

ANNUAL

ATTENDEE DAYS

561,500

ANNUAL FINANCIAL

OPERATING PROFIT

$384,600

ANNUAL

HOTEL RM NIGHTS

34,300

CONSTRUCTION

ECONOMIC IMPACT

$42.2M

In addition to the quantifiable projections of utilization, financial operations and economic impacts shown above, there are a number of potential benefits associated with a new Amateur Sports Complex in the Coachella Valley that cannot be quantified.

In fact, these qualitative benefits tend to be a critical factor in the consideration of public and private investment in facilities of this nature. These qualitative impacts/benefits may include:

• Potential transformative and iconic effects.

• Enhanced quality of life for community residents.

• Inducement of follow-up visitation.

• Spin-off development.

• Anchor for revitalization of targeted areas within a community.

• Various other benefits.

CONSTRUCTION

COSTS

$50.0M

INTRODUCTION

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 13

INTRODUCTION1

Introduction & Background

Conventions, Sports & Leisure International (CSL) was retained by Visit Greater Palm Springs to conduct a feasibility study of a potential new Amateur Sports Complex. The purpose of the study is to assist Visit Greater Palm Springs and other stakeholders in evaluating key market, program, financial, economic and ownership/management aspects of a potential new Amateur Sports Complex in the Greater Palm Springs / Coachella Valley area.

Sports tourism is one of the fastest growing sectors of tourism. An increasing number of communities throughout the country are investing in the development and operation of large, multi-sport amateur sports complexes for the purpose of driving new sports tourism as well as better accommodating local sports and recreation demand. An increase in the number of travel sports programs and participation has been matched by the recognition by many communities of the often high return-on-investment (ROI) modern sports complexes can have in host destinations in terms of driving visitation, hotel room nights, and economic impact through new spending in the community and the creation of new jobs.

A new Amateur Sports Complex would address opportunities and needs related to sports tourism (i.e., tournaments) in the Greater Palm Springs / Coachella Valley area, while also enhancing opportunities for local amateur sports and recreation users.

The information developed as part of the study outlined herein is intended to assist Visit Greater Palm Springs, constituent local municipalities, and other stakeholders with the information necessary to make informed decisions regarding the potential development and operation of a new Amateur Sports Complex.

The study process consisted of detailed research and analysis, including a comprehensive set of market-specific information derived from the following:

• PROJECT EXPERIENCE: Experience garnered through more than 1,000 planning and benchmarking projects involving sports, recreation and event facilities throughout the country.

• LOCAL VISIT: Local market visit at the outset of the project, including community and existing sports and recreation facility tours, and discussions with study stakeholders and community leaders.

• BENCHMARKING: Research and analysis of facility data and interviews conducted with more than 40 competitive/regional and/or comparable amateur sports facilities.

• INTERVIEWS & OUTREACH: Telephone interviews and virtual meetings with stakeholders and representatives of potential user groups, including key local, state, regional and national athletic associations, organizations, clubs and leagues that run sports programs, leagues, tournaments, competitions and meets that could have an interest in a new Amateur Sports Complex in the Greater Palm Springs / Coachella Valley area.

An outline of the study’s contracted scope of work is provided below:

1. Kickoff, Project Orientation, and Interviews

2. Local Market Conditions Analysis

3. Industry Characteristics & Trends Analysis

4. Competitive & Comparable Facility Analysis

5. Market Outreach, Interviews & Surveys

6. Program, Site & Preliminary Capital Cost Analysis

7. Financial Operating Analysis

8. Economic Impact Analysis

9. Ownership, Management, Funding & Partnership Options

10. Preparation & Presentation of Final Report

LOCAL & REGIONAL

CONDITIONS

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 15

LOCAL & REGIONAL CONDITIONS2

Introduction

An important component in assessing the potential success of a new Amateur Sports Complex in the Coachella Valley is the profile of the local and regional market. The strength of a market in terms of its ability to support and utilize amateur sports and recreation facilities is measured, to some extent, by the size of the regional market area population, its age, income, and other characteristics. In addition to the demographic profile of the local and regional market area, other local market characteristics have relevance when considering the ability of a community to host youth/amateur sports activities and attract sports tourism tournaments, meets and competitions. Characteristics to be discussed in this chapter include transportation accessibility of the market, inventory of sleeping rooms to accommodate non-local participants and families, the strength of the local economy as presented by a summary of the corporate base, the existing/future inventory of local sports facilities and an analysis of state and regional facilities that may present competition for sports tourism activities.

Greater Palm Springs / Coachella Valley Destination

The Coachella Valley is located in southern California, nearly equidistant from San Diego and Los Angeles, each just less than 125 miles away.

The Coachella Valley is accessible via I-10 and several US Highways. The destination is directly served by the Palm Springs International Airport, offering non-stop service to 35 cities via Southwest, American, United, Alaska, Delta, Allegiant, WestJet and Air Canada Airlines.

There are nine cities and several unincorporated communities within the Coachella Valley region, including Palm Springs (population 45,000), Palm Desert (50,000), Coachella (42,000), Indio (89,000), Cathedral City (51,000), among several others for a total population of approximately 390,000. The entire Coachella Valley lies within the borders of Riverside County, which has a total population of approximately 2.5 million and captures a portion of the Los Angeles suburban market.

The Greater Palm Springs / Coachella Valley destination is a high-quality, internationally-known tourist destination. A recent economic impact study completed by Tourism Economics estimated that the destination welcomed approximately 12.8 million visitors in 2021, generating $6.8 billion in total economic impact. In 2019, prior to the COVID-19 pandemic, the estimated total number of visitors was 14.1 million.

One of the notable events/attractions in the Coachella Valley is the Coachella Valley Music and Arts Festival, which is an annual music and arts festival is held in Indio, drawing thousands of visitors from around the world. Additionally, the Coachella Valley offers numerous other attractions, such as golf courses, hiking trails, resorts, spas, museums, galleries and various cultural institutions.

Indian Wells Tennis Garden, Empire Polo Club, Acrisure Arena, and the Palm Springs Convention Center are notable existing sports and event facilities in Coachella Valley. Currently, one of the largest youth lacrosse tournaments on the West Coast, Sand Storm Lacrosse Festival, takes place in January each year with over 400 teams and 22,000 attendees. In past years, the National Field Hockey Festival took place in Greater Palm Springs in November that included approximately 150 teams and 10,500 attendees. Both of the events took place at the Empire Polo Club in Indio.

The Greater Palm Springs / Coachella Valley area is also host to several national sporting events, including the PGA American Express Golf Tournament, the BNP Paribas Open, the PGA Tour Champions Tournament (Galleri Classic), and the Margaritaville USA Pickleball National Championships.

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 16

Location & Accessibility

Transportation access is vital to the success of any amateur sports facility or complex. Ease of access is not only important from the perspective of attracting participants and spectators, but also factors into the site selection process of tournament producers and other sponsoring organizations. The exhibit and map below illustrates the proximity of the Coachella Valley (using downtown Palm Springs as a center point) with other nearby markets and the markets/land area captured within 15, 30, 60 and 180 minutes of drive-time to downtown Palm Springs. These distances will be utilized on the subsequent page and throughout the report for purposes of comparing demographic and socioeconomic variables.

Source: ESRI, 2023.

Distance to Drive

Palm Springs Time Market

City, State (miles) (hrs:min) Population

San Bernardino, CA 54 0:54 4,605,500

Riverside, CA 59 1:01 4,605,500

Irvine, CA 92 1:41 307,700

Anaheim, CA 92 1:46 18,644,700

Los Angeles, CA 118 2:08 18,644,700

Long Beach, CA 115 2:10 18,644,700

San Diego, CA 139 2:13 3,405,900

Tijuana, MEX 156 2:37 2,221,000

Santa Barbara, CA 203 3:24 457,300

Bakersfield, CA 213 3:35 909,200

Las Vegas, NV 232 4:05 2,530,700

Phoenix, AZ 269 4:16 4,899,100

Tuscon, AZ 379 5:47 1,091,100

Air Accessibility

Airlift accessibility to a destination can be an important decision criteria for certain tournament planners and sports tourism participants. As previously mentioned, the Palm Springs International Airport (PSP) offers non-stop service to 35 cities via Southwest, American, United, Alaska, Delta, Allegiant, WestJet and Air Canada Airlines. In conversations with staff at PSP, it was noted that the airport has been experiencing growth in enplanements post-COVID. PSP management has indicated that in the coming years, more airport routes and additional airlines will be added. The exhibit on the following page displays the annual enplaned passengers at the PSP over the past eight years. From 2015 through 2019 enplanements were consistently growing at approximately 7.2 percent annually. Following the pandemic, the PSP was nearly back to normal levels in 2021 and set a new enplanement record in 2022. PSP management indicates that this growth rate is expected to increase in upcoming years and that they do not expect a decrease in the foreseeable future. In addition to expectations for increased passenger throughput, the staff shared that the airport was in the process of developing a master plan for release in 2023. This master plan is expected to include a significant expansion to the PSP to support further increases in its enplanement levels. This should positively impact the destination’s ability to attract non-local fly-in sports tourism activity.

The Coachella Valley is home to the College of the Desert, a two-year community college with an approximate 10,000 student enrollment. Additionally, the University of California Riverside (Coachella Valley), California State University San Bernardino (Palm Desert), Santa Barbara Business College, and the San Bernardino Skidron Business School represent other institutions of higher learning with presence in the Coachella Valley.

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 17

2 LOCAL & REGIONAL CONDITIONS

Climate Conditions

A key consideration in both league play and tournament organizers’ decisions to book a facility is the climate of the local area, particularly for outdoor events during times of extreme temperatures or excessive precipitation. The chart to the right summarizes the average monthly maximum and minimum temperatures as well as precipitation for the Coachella Valley.

Overall, the Coachella Valley has a hot desert climate with annual temperatures averaging around 73 degrees, with average monthly temperatures rising to above 90 degrees in July and August. Maximum monthly temperatures during summer months are in excess of 100 degrees. As is typical in warm weather climates with excessive heat patterns, the marketability of outdoor venues for a variety of summertime tournament activity would be expected to possess challenges.

For outdoor complexes, synthetic playing surfaces often offer a distinct competitive advantage for sports tourism activity, through minimizing the possibility that tournaments, games or practices are cancelled due to inclement weather or the need to limit activities in order to protect a natural grass field from wear and tear due to overuse. However, synthetic turf temperatures at field level during high heat periods is often measured as much as 10 degrees warmer than ambient off-field air temperature. This can be particularly problematic for hot weather markets (like the Coachella Valley) when deploying synthetic turf fields involving summertime sports.

Precipitation

Month Maximum Minimum Average Avg (inches)

January 71 42 55 1.1

February 75 46 59 1.4

March 81 52 66 0.8

April 88 58 72 0.2

May 95 65 80 0.1

June 103 72 88 0.0

July 107 78 93 0.2

August 105 77 92 0.3

September 100 70 86 0.2

October 90 60 74 0.3

November 78 48 62 0.5

December 69 41 53 0.9

Average 89 59 73 0.5

Temperature (°F)

Average Temperature & Precipitation by Month – Coachella Valley Area

The exhibit below presents a summary of the number of annual enplanements reported for the Palm Springs International Airport since 2015.

Palm Springs International Airport – Total Enplanements by Year

944,625 1,001,971 1,054,766 1,164,307

1,287,474

632,316

1,047,643

1,340,772

2015 2016 2017 2018 2019 2020 2021 2022

Feasibility Study of a New Amateur Sports Complex in the Greater Palm Springs / Coachella Valley Area ● Page 18

Demographic & Socioeconomic Characteristics

The exhibit below presents a summary of key demographic metrics associated with the nine cities that are situated within Coachella Valley, along with overall Riverside County statistics. As shown, the population base in Indio is the largest concentration among the cities with an estimated 2022 population of approximately 89,500, followed by Cathedral City at approximately 51,900. Over the next five years, the city of Palm Springs is projected to experience the highest population growth at nearly one percent, a rate significantly higher than other municipalities within Coachella Valley and Riverside County.

Source: Esri, 2023.

Household income is an important socioeconomic characteristic of host markets that typically impacts facility performance.

Estimated median household income is over $100,000 in Indian Wells, La Quinta, and Rancho Mirage, with the highest median income estimated in Indian Wells ($121,100) and the lowest in the city of Desert Hot Springs ($42,100). Household income is another important socioeconomic characteristic of host markets that typically impacts amateur sports complex/facility performance. Income levels can serve as an indication of area households’ ability to support sports and recreation in the region by paying league and registration fees and other costs associated with participation. The affluence of area and nearby households can also impact the types of programming that will be most successful at a potential new Amateur Sports Complex.

LOCAL & REGIONAL CONDITIONS

Summary of Key Demographic Statistics Associated with the Coachella Valley Area

City of City of City of City of City of City of Palm City of Indian Palm City of City of Desert Hot Cathedral Rancho Riverside

DEMOGRAPHIC VARIABLE Springs Indio Wells Desert Coachella La Quinta Springs City Mirage County

POPULATION:

2010 Total Population 44,477 79,361 4,923 48,546 40,823 37,427 27,160 51,303 17,123 2,189,641 2022 Total Population 45,935 89,498 4,828 51,638 42,482 38,272 32,539 51,880 17,029 2,451,199 2027 Total Population 47,957 90,702 4,860 52,542 42,932 38,973 32,850 52,589 17,220 2,501,905 Annual Growth Rate (2010-2022) 0.3% 1.1% -0.2% 0.5% 0.3% 0.2% 1.7% 0.1% 0.0% 1.0% Annual Growth Rate (2022-2027) 0.9% 0.3% 0.1% 0.4% 0.2% 0.4% 0.2% 0.3% 0.2% 0.4%

AGE:

Median Age 56.1 33.9 66.4 58.8 26.9 50.2 33.1 38.2 65.7 35.2 Population age 25 to 44 18.3% 28.0% 10.2% 17.9% 30.8% 20.8% 26.9% 25.7% 9.8% 28.2%

AGE DISTRIBUTION:

Under 15 9.9% 22.6% 6.1% 10.4% 29.2% 13.9% 23.3% 18.5% 7.0% 20.9% 15 to 24 7.4% 13.6% 5.5% 7.9% 17.0% 10.0% 14.2% 13.1% 4.9% 13.2% 25 to 34 9.3% 15.4% 5.4% 9.9% 17.6% 11.1% 15.2% 14.9% 5.0%…