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CITY OF HILLSBORO – ECONOMIC, FISCAL, & COST‐BENEFIT ANALYSIS OF A MINOR LEAGUE BASEBALL STADIUM PAGE 1

MEMORANDUM DATE: April 27, 2012 TO: Ken Pipher Parks & Recreation Program and Support Manager CITY OF HILLSBORO FROM: Bill Reid, Principal

JOHNSON REID, LLC SUBJECT: Economic and Cost‐Benefit Analysis of a Potential Minor League Baseball Stadium The City of Hillsboro retained Johnson Reid to provide an economic and fiscal impact analysis and a standard cost‐benefit analysis of a proposed minor league baseball stadium that would be constructed at the Gordon Faber Recreation Complex. This report is a continuation and expansion of a preliminary analysis completed in March of 2012. The City is interested in a more detailed understanding of the following issues:

▪ Assessment of the extent to which baseball stadium construction activities on Softball Field #4 at the GFRC would negatively affect the existing, busy seasonal schedule of events at the softball complex.

▪ Assessment of the extent to which summer baseball games, particularly on weekends, would result in risk of losing existing, committed, and high value events historically committed to the Gordon Faber Recreation Complex.

▪ Identification of any baseball stadium‐related municipal revenue streams at other such parks elsewhere that the City of Hillsboro might consider.

▪ Identification of the potential interest by Hillsboro‐area businesses to sponsor various aspects of baseball promotion.

▪ A standard cost‐benefit analysis of the public investment and return on the baseball stadium and recruitment of a Class A minor league baseball team based on all other findings.

This memorandum is a summary of our findings for this expanded assignment, but where appropriate includes findings from the previous report. Accordingly, the document is separated into the following analytical sections.

1. Project Description & Analytical Approach 2. Professional Sports: Net, New Impacts? 3. Assessment of Project Impacts 4. Baseball Stadium Revenue Streams Identified 5. New or Additional Event Potential 6. Baseball Promotions Market Factors 7. Cost‐Benefit Analysis of the Proposed Baseball Stadium


EXECUTIVE SUMMARY The following is a summary of the main findings of this assignment.

▪ The proposed project is a 4,000 to 5,000‐seat baseball stadium capable of hosting professional, Class A minor league baseball games during the summer month “short season” at the Gordon Faber Recreation Complex in Hillsboro, Oregon. The stadium would replace the existing softball field #4 immediately west of the Hillsboro Stadium facility.

▪ The project would cost an assumed $14 million, including expansion of 400 additional parking spaces to the west of the existing Gordon Faber Recreation Complex.

▪ While under construction, the project would not likely have significant impacts to other events or event scheduling during the construction period. Project construction can largely occur during the late fall, winter, and early spring off‐season for the key uses of the Gordon Faber Recreation Complex: field sports such as softball and baseball. Comparable facilities facing construction closures elsewhere in the U.S. could not be identified for informative comparison.

▪ The Gordon Faber Recreation Complex is currently a very successful sporting and entertainment event complex for the City of Hillsboro and the region. The introduction of a professional baseball home game schedule to the GFRC could potentially conflict with 20 to 25 weekend summer events that typically utilize the softball complex, Hillsboro Stadium, and combined parking.

▪ It is estimated that the economic value of existing weekend, summer events at the GFRC are worth a total of $8.7 million annually to the Hillsboro economy. Several events, particularly multi‐state fastpitch softball tournaments, baseball tournaments, and other events pull significant lodging, dining, and other retail spending into Hillsboro from the Western U.S. and the Pacific Northwest that would not occur otherwise.

▪ The total economic impact of baseball operations and spectator spending, both at the stadium and off‐site while visiting Hillsboro, is estimated at $7.1 million annually. This includes economic ripple effects such as additional business revenues for local vendors to baseball/event operations, as well as local spending by people employed through baseball operations and visitor spending.

▪ Economic analysis indicates that scheduling flexibility for summer weekends is crucial for the City as it considers baseball team attraction to the Gordon Faber Recreation Complex. Although it cannot be determined what existing, weekend events would for certain be lost to baseball scheduling, should the City lose all weekend events, the impact of baseball would be a $1.6 million net loss annually for the Hillsboro economy. Losses for the local lodging and dining sectors would be disproportionately significant, as they see greater benefit from multi‐state and regional sports tournaments at the GFRC due to the multi‐night lodging and dining spending of those participants.

▪ Although 400 additional parking spaces are planned as part of baseball park construction, we find that the addition is significantly insufficient based both on past parking need planning by the City (2.5 passengers per vehicle for GFRC complex visitors) or by national


parking standards recently utilized by other minor league baseball park planning efforts (3.4 passengers per vehicle).

▪ We find the continued under‐provision of parking to be on the order of 941 to 2,000 spaces for instances where the GFRC operates at full capacity between a baseball stadium and the Hillsboro Stadium, specifically 10,000‐visitor joint event attendance.

▪ Assuming temporary, overflow parking need cannot be satisfied off‐site, the cost of surface parking for identified additional need ranges from $2.8 million to $6.0 million excluding land cost.

▪ We find that temporary closure of softball field #4 due to project construction will not have a sizeable impact upon softball complex or Hillsboro Stadium operations. Planned construction phases during sports off‐season months (late fall through early spring) and the loss of only one field of a total of seven, plus all other City fields elsewhere and fields owned and operated by community partners, indicated little likely measurable impact to events.

▪ In general, new baseball team attraction to a community and its annual operations generally do not create new economic activity and, therefore, grow a regional economy. Baseball games, concessions, and merchandise among other things generally represent a shift of existing spending by households from other entertainment and retail offerings that they would have purchased otherwise. A new baseball team as a business and its management is generally the only guaranteed, net new economic impact generated.

▪ However, at the local level, new economic impacts are created by a baseball team and its operations if spectators from outside of the community spend money at the game and elsewhere in that city that they would not otherwise if not, but for the baseball team and trips to visit for games. In the case of Hillsboro, with no professional sports teams drawing such spending from elsewhere in the region, new economic activity for the City itself is generated by a professional baseball team.

▪ Review of ten to fifteen recent, minor league baseball park developments as well as the two other minor league parks in Oregon indicate that City‐owned facilities generate three general categories of revenues for the municipality: fixed lease payments, annual corporate naming rights payments, and minority shares of team operations revenues such as ticket sales, concessions, parking, and merchandise. In general, parks either receive lease payments or minority shares of operations revenues. Naming rights for minor league parks are not extremely common, usually in instances where a Fortune 500 corporation is headquartered locally, and payments typically average between $150,000 to $200,000 annually.

▪ In all instances but Eugene (Emeralds) and Keizer (Volcanoes), cities that own ball parks enjoy sizeable, citywide sales tax revenue and hotel/motel tax revenue that are significantly greater than ballpark‐generated revenue and are significantly leveraged for both project financing and on‐going maintenance funding.

▪ Minor league baseball teams, as with all sports, significantly depend upon corporate sponsorships and promotion. Short seasons and need for concentrated, dedicated revenues during the season with the opportunity to market brands to a captive audience at a 2‐3 hour game make for substantial business market opportunity. However, we also find that 2012


will likely be a difficult year for business promotions/marketing spending consistent with national trends. Though sports are the safest and largest category of business promotion spending, election year uncertainties, continued economic uncertainties, and locally continued stagnant economic growth have fixed the size of the market spending “pie” and business support for a new baseball team is at best uncertain over the short term.

▪ As a 20‐year investment by the City, we calculate that the net present value of that investment in 2012 is estimated at roughly $55.342 million under reasonably conservative assumptions.

▪ Results, however, are sensitive to still‐highly uncertain outcomes from negotiating a home game schedule that minimizes existing event conflicts. We assume only 25% of existing events will be lost to scheduling conflict with summer weekend home games, though this assumption is arbitrary. Loss of 81% of existing weekend, summer event economic activity will result in zero net economic benefit to the City from professional baseball coming to Hillsboro.

FIGURE A: 2012 NET PRESENT VALUE OF BASEBALL STADIUM CONSTRUCTION & OPERATIONS, HILLSBORO ECONOMY

▪ Analysis also indicates that existing Gordon Faber Recreation Complex events that rely on overnight participants and multi‐night stays in particular, such as multistate fastpitch softball and baseball tournaments, disproportionately contribute the majority of annual economic impact to the City of Hillsboro. Loss of only two to three of these events would be the rough equivalent of 75% or more of summer weekend events that would greatly negate any positive impact of professional baseball team operations and visitor spending.

Total Total NetYear Costs Benefits Benefit

2012 $0 854,000$ 854,000$ 2013 ($3,066,000) 8,217,000$ 5,151,000$ 2014 ($2,923,000) 6,350,000$ 3,427,000$ 2015 ($2,787,000) 6,113,000$ 3,326,000$ 2016 ($2,658,000) 5,885,000$ 3,227,000$ 2017 ($2,536,000) 5,664,000$ 3,128,000$ 2018 ($2,420,000) 5,453,000$ 3,033,000$ 2019 ($2,309,000) 5,249,000$ 2,940,000$ 2020 ($2,204,000) 5,053,000$ 2,849,000$ 2021 ($2,104,000) 4,864,000$ 2,760,000$ 2022 ($2,009,000) 4,682,000$ 2,673,000$ 2023 ($1,918,000) 4,507,000$ 2,589,000$ 2024 ($1,832,000) 4,338,000$ 2,506,000$ 2025 ($1,750,000) 4,176,000$ 2,426,000$ 2026 ($1,672,000) 4,020,000$ 2,348,000$ 2027 ($1,598,000) 3,870,000$ 2,272,000$ 2028 ($1,527,000) 3,725,000$ 2,198,000$ 2029 ($1,460,000) 3,586,000$ 2,126,000$ 2030 ($1,396,000) 3,452,000$ 2,056,000$ 2031 ($1,335,000) 3,322,000$ 1,987,000$ 2032 ($974,000) 2,440,000$ 1,466,000$

TOTALS (40,478,000)$ 95,820,000$ 55,342,000$ NET PRESENT VALUE


PROJECT DESCRIPTION & ANALYTICAL APPROACH The City of Hillsboro is exploring due diligence for the potential construction of a baseball stadium suitable for hosting a minor‐league professional baseball team. If constructed, the stadium would play host to at least 38 home games for a Single A, Northwest League professional baseball team over the course of the summer months, roughly June through early September. Additional home games extending into September would be possible should the team compete for the league championship. Facility Description Based on known home game attendance figures at other Northwest League teams, including Salem‐Keizer, Tri‐Cities, Washington, Everett, Washington, and Vancouver, BC, it is expected that daily game attendance in Hillsboro would regularly exceed 4,000 people. To accommodate such demand, the City of Hillsboro is considering an expanded baseball stadium suitable to host between 4,000 and 5, 000 spectators as well as expansion of surface parking to accommodate some measure of overflow parking related to a baseball game and any other activities that might be occurring simultaneously at the Gordon Faber Recreation Complex. Development assumptions are summarized in Figure 1, including preliminary estimates of project costs. At present, we assume that the City of Hillsboro would be the stadium developer and owner. FIGURE 1: 4,000‐5,000‐SEAT PROFESSIONAL BASEBALL STADIUM CONSTRUCTION ASSUMPTIONS

The stadium as considered would replace Gordon Faber Recreation Complex (“GFRC”) Softball Complex Field 4, which is situated immediately to the west of Hillsboro Stadium. The potential new facility could continue to be used as a regulation softball field when the new stadium is not being used for a baseball team home game. Because the new facility would replace an existing field, the conversion poses impacts to the event schedule during a construction period that may likely include a portion or portions of softball and baseball season, the driver of significant activity and event scheduling during the year. The issue of impacts to existing operations of the GFRC during construction and due to baseball team operations is treated in greater detail later in this document. Figure 2 provides a map displaying the subject site in context to the existing Gordon Faber Recreation Complex facilities, U.S. Highway 26, and NW Cornelius Pass Road.

Hard Costs/Construction Services $10,464,000

Soft Costs $3,535,000Construction (Contingency, misc., etc.) $2,197,000Financial Activities (Insurance, management, etc.) $235,000Professional Services (A/E, etc.) $628,000Government (Permits, Inspection, etc.) $475,000

TOTAL DEVELOPMENT COSTS $14,000,0001/ Expressed in constant 2012 dollars. Excludes land cost.SOURCE: City of Hillsboro and Johnson Reid, LLC

Development Cost Estimate: 4‐5,000 Seat Facility/400 Parking


FIGURE 2: POTENTIAL BASEBALL STADIUM SITE LOCATION AT THE GFRC

As stated, expanded parking suitable for likely visitor count peaks will be required. The City is currently exploring alternative parking strategies that would minimize impact to other, existing facilities at the GFRC. The City has specifically identified the addition of 400 surface parking spaces at the immediate east of the GFRC and immediately north of the Cornelius Pass Fred Meyer store indicated by an irregular rectangular parcel that would extend existing GFRC parking to the east. Of the $14 million total project cost estimate, it is anticipated that the surface parking lot would represent roughly $1.2 million. IMPLAN Economic Impact Methodology To model the economic impacts of such a new facility and the operation of a minor league baseball team in Hillsboro, Johnson Reid utilized IMPLAN (IMPact for PLANning) 1 input/output multiplier model methodology. Developed by the Forest Service to assist in land and resource management planning, IMPLAN is an economic impact model designed for analyzing the effects of industry activity (employment, income or business revenues) upon all other industries in an economic area. Economic impact analysis generally seeks to assess changes in overall economic activity within a specific geographic area as a result of a change in one or many specific activities. The ripple effect of a gain or loss in economic activity is identified in three stages: Direct Impacts, Indirect Impacts and Induced Impacts.

Direct Impacts: The actual change in activity affecting a local economy. For example, if a new office building is constructed, direct economic impacts comprise the construction contract revenues for businesses involved in the project, as well as the jobs required by those businesses and the labor income they pay.

1 Minnesota IMPLAN Group (MIG), Inc., Stillwater, Minnesota.


Indirect Impacts: The response of all other local businesses within the geographic area to the direct impact. Continuing the previous example, indirect impacts of office building construction comprise revenues for project venders, i.e. building materials wholesalers, subcontractors, etc., and the jobs and labor income thereby generated.

Induced Impacts: The response of households within the geographic area affected by direct and indirect impacts. In the given example, induced impacts would be the increase in all categories of spending by households in the geography directly or indirectly employed by office building construction activities.

PROFESSIONAL SPORTS: NET NEW IMPACTS? There exists a remarkable disparity in the findings of economic impact studies that consider the benefits of a professional sports team moving to a new jurisdiction. Stadium development consultants and others in the consulting industry typically study the construction of a facility and the specific, new commercial streams that correspond to sports team‐related activities that would not or did not previously happen with no team. This typically includes the business spending patterns of the team itself within the jurisdiction and certainly spectator spending on tickets, merchandise, and concessions on a daily and seasonal basis. In strong contrast, more academic economic analyses of sport team economic impacts find little evidence of new economic activity created by the location of a sports team somewhere that it previously did not exist. The following succinct expression of this analytical disparity is attributed to Dennis Coates, Ph.D. and Brad Humphreys, Ph.D. in their review2 of numerous studies of sports team economic impacts for the North American Association of Sports Economists:

“There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results in this literature are strikingly consistent. No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.”

Why the stark difference of findings between consultants and economists? Johnson Reid’s review of the issue indicates that the answer hinges upon geography. In other words, the nature of economic impacts of a new sports team depends upon how one geographically defines the economy that is impacted by the new economic activity. In many studies of new sports team economic impacts, a region, metropolitan area, or highly populated county is typically the economy of interest. Consultant studies typically describe with reasonable accuracy the commerce related to a previously non‐existent sports team that will occur in the economy of interest. Impact studies then typically call this commerce “created” or “generated” by the sports team that currently or previously did not exist in the economy. While it is true that the economic activity related to the sports team did not previously happen as described, it is also true that the commerce related to the sports team is usually little more than a shift in existing spending by regional residents, businesses, and governments. That is, professional

2 “Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega‐Events?” Dennis Coates and Brad Humphries, North American Association of Sports Economists, Working Paper Series, Paper No. 08‐18, August 2008.


baseball games represent a new choice for regional resident disposable income expenditure. Households may spend less money on movies and instead on game tickets and merchandise. Businesses may pay for box seats for a company summer function rather than rent a facility with catering elsewhere, etc. Accordingly, sports team operation revenues and employment may be newly attributable to the new presence of a team, but those revenues and the employment they support represent substitution or shifting of existing spending patterns that would have largely happened in the economy without the sports team. The primary exception to this no‐net‐effect phenomenon has to do with geography: Does the sports team attract spending to an economy that indeed would not have otherwise occurred, namely from visitors outside of the economy in question coming to the sporting event and spending absolutely new dollars in the local economy? To the extent that the answer is yes, net new economic impact is truly created for the economy of interest; in this case, the City of Hillsboro. The extent to which households and businesses – including from elsewhere within the Portland metro region – attend baseball games and spend on merchandise and other businesses that they would not have otherwise without the baseball team, net new economic activity is generated by the stadium and the baseball team. To answer this question, it must first be understood the extent to which sporting event spending is done by Hillsboro residents and how much sporting event business revenue already is generated in the City of Hillsboro by households and businesses in Hillsboro and elsewhere. Figure 3 presents entertainment spending by all Hillsboro resident households in 2011 with comparisons to national averages. Admission to Sporting Events spending is highlighted. Last year, it is estimated that Hillsboro households earned over $1.678 billion of income. Compared to the national average, Hillsboro households earned 8% more than the typical US household. Of that, Hillsboro households spent a combined $6.2 million on professional sporting events, or roughly $203 per household each year. Compared to the national average, the typical Hillsboro household spends 27% more on professional sporting events, indicating significant local interest in such entertainment offerings.


FIGURE 3: HILLSBORO RESIDENT ENTERTAINMENT SPENDING PATTERNS, 2011

For comparison purposes, Figure 4 provides estimates of entertainment services businesses within the City of Hillsboro. Unsurprisingly, in 2011, no business revenues existed for commercial sports within Hillsboro due to absence of the for‐profit sector entirely. In fact, Hillsboro residents are making the great majority of their entertainment spending decisions outside of the city as Hillsboro entertainment service businesses earned $371.3 million in 2011, merely 22% of total, annual Hillsboro resident entertainment spending.

2011 2011 2016 2011Aggregate Annual Annual IndexAnnual Average Average Average Hillsboro

Household Income Income Income Income Annual to(in 1000s) per HH per HH Growth USA

Total Household Income ‐ USA $5,952,277,279 $50,934 $53,700 1.9%Total Household Income ‐ Hillsboro $1,678,480 $55,034 $58,140 3.5% 108

2011 2011 2016 2011Aggregate Annual Annual IndexSpending Average Average Average Hillsboro

Product Category Estimate Spending Spending Annual to(in 1000s) per HH per HH Growth USA

TV, Radio, and Sound Equipment $26,656 $874 $1,205 10.7% 125

Computers, Software, and Accessories $20,041 $657 $945 12.0% 110

Reading Materials $15,282 $501 $539 3.9% 115

Travel $81,380 $2,668 $2,748 2.9% 127

Sports & Recreation Total $57,333 $1,880 $2,228 6.4% 123Sports Eqiupment $32,573 $1,068 $1,324 7.6% 125Social/Recreation/Civic Club Membership $4,919 $161 $176 4.2% 111Fees for Participant Sports $4,899 $161 $175 4.2% 123Admission fees for Entertainment $1,801 $59 $64 4.3% 112Admission to Sporting Events $6,206 $203 $221 4.2% 127Fees for Recreational Lessons $5,222 $171 $187 4.3% 115Music Instruments/Accessories $1,638 $54 $78 12.4% 167Rent/Repair Musical Instruments $75 $2 $4 12.6% 148

Photographic Equipment & Supplies $3,660 $120 $147 7.2% 115

SOURCE: Nielsen Claritas and Johnson Reid, LLC


FIGURE 4: HILLSBORO ENTERTAINMENT SERVICES BUSINESS REVENUES, 2011

Based on the above Hillsboro resident and economic data, it can be concluded that for the City of Hillsboro specifically, professional baseball game attendance and spending by Hillsboro residents and visitors from outside of Hillsboro would indeed be net, new activity for the City. At the regional level, however, the no‐net‐impact conclusion expressed above would likely hold. Baseball game attendance and spending would greatly be a shift in existing population spending patterns, only a different geographic location for that spending.

City of Hillsboro Total SalesBusiness Description Establishment (in Millions)

Hotels and Other Lodging Places 14 $7.9

Personal Services 162 $25.2

Business Services 147 $250.5

Automobile Repair Services and Parking 116 $35.1

Miscellaneous Repair Services 45 $10.0

Motion Pictures 15 $8.0

Amusement and Recreation Services (Excluding Movies) 59 $34.9Commercial Sports 0 $0.0Miscellaneous Amusement and Recreational Services 45 $30.7Physical Fitness Facilities 9 $13.0Amusement Parks 0 $0.0

SOURCE: Nielsen Claritas and Johnson Reid, LLC


PROJECT IMPACTS ASSESSED This section of the analysis first considers the impact of baseball team recruitment to Hillsboro upon existing Gordon Faber Recreation Facility operations. Unlike many jurisdictions who have considered a new professional baseball stadium and team, the site of a potential new baseball team in Hillsboro is already a very successful sporting event facility that draws sport tournaments and events from across the region, state, and the western U.S. with significant related economic activity. New economic impacts specific to a new baseball stadium and the operations of the team are considered thereafter. Baseball Impacts to Existing GFRC Operations The above estimates of economic impacts from baseball team operations represent commercial activity due to the new sports entertainment type as proposed. However, cost‐benefit analysis of the proposed stadium must take into account the effect of baseball operations during the summer months upon the existing operations schedule of the Gordon Faber Recreation Complex. Existing Event Schedule Conflict & Visitor Counts Interviews with Hillsboro P&R staff, as well as subsequent GFRC schedule and estimated attendance data, indicate that the softball fields and Hillsboro Stadium are already tightly scheduled and successful as local and regional sports and entertainment venues, particularly during summer weekends when multi‐day events are hosted at the GFRC. Exhibit 1 in the Appendix is a detailed schedule of GFRC events scheduled for 2012 during the summer months, as well as estimated attendance. Exhibit 1 also provides results of an analysis by P&R staff of potential summer weekend scheduling conflicts between existing, scheduled events for the summer of 2012 and likely weekend home games based on the known 2011 home schedule for the Yakima Bears. Results of the analysis indicate:

▪ The home game schedule for the Yakima Bears if they relocated to Hillsboro would likely conflict with weekend events at the GFRC for all but two weekends from June to September.

▪ The majority of scheduled events likely in conflict with a typical summer home game schedule are softball and baseball tournaments that attract visitors to Hillsboro from across the region, state, and in some cases, the western U.S. These include 2‐3 day tournaments by the American Softball Association and the National Fastpitch Coaches Association.

Estimated attendance for each of these events was provided by Hillsboro P&R staff. Exact attendance counts from past events are not available as event promotion and management have not historically attempted to keep precise attendance counts. Given the events identified as potentially in conflict with minor league baseball home games between June and September, Johnson Reid conducted an analysis of likely event attendance by local/City residents, day visitors from outside of Hillsboro, and overnight visitors from outside of Hillsboro. Individual events were reviewed for their expected and planned attendance as documented by event promotion online by the responsible organizations. Detailed estimates of


event attendants by type are provided in Exhibit 1 in the Appendix. The following figure provides summary estimates of event attendance by attendee type. FIGURE 5: ANNUAL VISITOR COUNTS BY TYPE, GFRC EVENTS POTENTIALLY IN CONFLICT WITH MINOR LEAGUE BASEBALL

Results indicate that summer events most in risk of conflict with a typical home game schedule bring over 60,000 visitors to the GFRC annually. Reflecting the regional role of the existing sports facilities, the largest share of visitors are “day visitors” likely from elsewhere in the region or the state. Local (resident) attendants at events at risk of scheduling conflict are the second‐largest group at 21,075 visitors. Overnight visitors for events potentially in conflict with professional baseball are the third largest group at nearly 15,000. It is important to note that estimates are not unique individuals, but rather “person‐days” for each event. That is, one individual who attends a two‐day fastpitch softball tournament would count as two “person‐day” visitors. Such counting is crucial to estimating total visitor spending for each event, most of which last at least two days. Potential Event Conflict Economic Loss To calculate the potential economic loss as a result of scheduling conflicts between typical summer, weekend events at the GFRC and the introduction of professional baseball home games, per diem visitor spending was estimated for GFRC event visitors by accommodation type. Results are expressed in the following figure. FIGURE 6: AVERAGE DAILY SPENDING BY VISITORS TO HILLSBORO FOR GFRC EVENTS (2012 DOLLARS)

Daily spending by visitors to the Gordon Faber Recreation Complex for existing, weekend events during the summer varies greatly by accommodation type. Visitors for multi‐day, multi‐state tournaments, most notably fast pitch softball, spend the highest daily amount at $336 per person. Lodging, prepared food/dining, and rental vehicles and fuel comprise the great majority of daily spending. Alternatively, day visitors typically from elsewhere in the Portland metro area unsurprisingly spend the least amount daily per person, estimated at $56. Estimates for average daily spending were achieved utilizing the most recent annual Washington County tourism study by Dean Runyan Associates (2012), but modified to reflect sporting event visitor spending patterns as

Per Capita DayDaily Spending Hotel/Motel Private Home Other VisitorLodging $111 $30 $31 $0Restaurant $84 $63 $63 $21Vehicle/Fuel $71 $35 $35 $12Souvenir/Gifts $34 $34 $34 $11Misc. Retail $20 $20 $20 $7Entertainment $17 $17 $17 $6Total $336 $199 $200 $56SOURCE: USA Balls & Strikes Magazine, 2001 Season Preview and Dean Runyan Associates, 2011

Accommodation

City/Local Day VisitorsOvernight Visitors Total Visitors

21,075 24,550 14,825 60,450SOURCE: Johnson Reid, LLC based on Hillsboro Department of Parks & Recreation GFRC Schedule Conflict Analysis


documented by the American Softball Association as published in USA Balls & Strikes Magazine (2001). Given average daily spending figures and estimated visitors to the GFRC for summer weekend events potentially in conflict with professional baseball, estimates of total visitor spending impacts attributable to the GFRC on summer weekends are possible. The following figure provides estimates of Hillsboro area visitor‐driven spending commerce that could potentially be displaced by scheduling conflicts during the summer with the introduction of minor league baseball home games. FIGURE 7: GFRC SUMMER WEEKEND EVENT VISITOR SPENDING POTENTIALLY DISPLACED (2012 DOLLARS)

Analysis indicates that events on summer weekends generate nearly $5.3 million in commerce for the Hillsboro economy from visitor spending by spectators and participants from outside of the Hillsboro area. The average event at the GFRC pulls an estimated $241,000 in weekend commerce for Hillsboro businesses. Again, events that draw participants and spectators from a multi‐state geography such as youth fast pitch softball and baseball tournaments contribute the greatest amount of visitor spending activity at nearly $2.4 million over the course of summer weekends. Estimating Potential Event Loss Risk With an obviously successful and highly economically valuable event schedule at the GFRC, the City of Hillsboro is mindful of what is at stake for the local economy should high‐value events come in conflict with weekend professional baseball home games. As part of the proposal and negotiation process, minimization of valuable event conflicts will undoubtedly be front and center for the City. However, some measure of conflict will occur as a successful home game schedule will undoubtedly need to plan games on weekends to maximize summer attendance. A range of probability for potential event conflict and loss was estimated to provide some measure of economic loss risk due to the trade‐off of professional baseball games and typical weekend events that are already hosted by the GFRC during the summer. The following table provides a range of estimates of total economic activity loss in terms of basic percentages of event attendance loss with baseball schedule conflict. Total economic activity here is defined as visitor spending already described, as well as indirect and induced economic (ripple) effects in the Hillsboro economy not unlike those described for stadium construction and baseball team operations impacts previously in this analysis. Results indicate that a total of $8.677 million in total summer weekend commerce due to existing GFRC events is at stake for the local economy depending upon how weekend professional baseball home games can be scheduled and managed with other events. Because of the importance and

Per Capita Day Total Per EventDaily Spending Hotel/Motel Private Home Other Visitor Spending SpendingLodging $790,000 $222,000 $9,000 $0 $1,021,000 $46,000Restaurant $598,000 $467,000 $19,000 $511,000 $1,595,000 $73,000Vehicle/Fuel $503,000 $262,000 $10,000 $286,000 $1,061,000 $48,000Souvenir/Gifts $239,000 $249,000 $10,000 $273,000 $771,000 $35,000Misc. Retail $144,000 $150,000 $6,000 $164,000 $464,000 $21,000Entertainment $120,000 $125,000 $5,000 $136,000 $386,000 $18,000Total $2,394,000 $1,475,000 $59,000 $1,370,000 $5,298,000 $241,000SOURCE: Johnson Reid, LLC utilizing HP&R event data, USA Balls & Strikes Magazine, & Dean Runyon Associates

Spending by Visitor Accommodation


magnitude of these events, 100% loss of estimated economic activity is extremely unlikely due to existing City policies and priorities for the GFRC to serve the recreation and entertainment needs of the local community and the region. Supposing schedule conflicts could reduce GFRC event‐generated commercial activity by as much as 25% and 50% each year, estimates in Figure 11 provide a confidence interval for potential event commerce loss. We find that loss of 25% to 50% of total event activity during summer weekends would translate into economic losses for Hillsboro in the range of $2.17 million to $4.34 million. FIGURE 8: GFRC SUMMER WEEKEND EVENT VISITOR ECONOMIC LOSS RISK ASSESSMENT (2012 DOLLARS)

We would again underscore that realized event loss is certainly possible, but with uncertain and likely limited probability given City Parks & Recreation priorities. But for cost‐benefit modeling purposes, we utilize the 25% Event Loss scenario to document potential trade‐offs during the summer event season with the introduction of professional baseball as proposed. During the course of this analysis, P&R staff identified that there are potential opportunities and constraints related to the risk of existing event loss during the summer. These include:

▪ 4pm PreGame Event Closure: Staff indicated that it is possible that certain larger events can be scheduled and managed to be completed by 4pm on game days, thus giving the minimum amount of time for stadium clean‐up and conversion for baseball game needs. This was, however, cited as an uncertain solution given the varying nature of larger weekend events.

▪ Extending MultiDay Event Hours on the Day Before a Baseball Game: There is potential for ‘frontloading’ tournament games and event activities to the first full day of a multi‐day event to provide professional baseball game day with more time to convert/clean the stadium from the previous event activities. There is some limitation on this potential, however, as some youth baseball and softball event regulations restrict the duration of daily play schedule.

▪ Factoring Displaced Capacity Need into Citywide Capital Facilities Planning: Recognizing it is a growing jurisdiction with inevitably larger parks and recreation services demand with growing population, P&R staff indicated that events can be accommodated at expanded facilities elsewhere in the City depending upon facility/venue type. This would, however, require capital improvement planning amendments and a likely longer‐term solution to potentially short‐term need.

Baseball Stadium Operations Several assumptions about the operation of a Class A Minor League baseball team in a new stadium in Hillsboro were required for economic modeling. To this end, Johnson Reid utilized the following data sources to inform description of economic activities related to a baseball stadium in Hillsboro:

Annual Spending Total Indirect Inducted Total 25% 50%by Category Spending Impacts Impacts Impacts Event Loss Event LossLodging $1,021,000 $231,000 $420,000 $1,672,000 $418,000 $836,000Restaurant $1,595,000 $361,000 $656,000 $2,612,000 $653,000 $1,306,000Vehicle/Fuel $1,061,000 $240,000 $437,000 $1,738,000 $434,500 $869,000Souvenir/Gifts $771,000 $175,000 $317,000 $1,263,000 $315,750 $631,500Misc. Retail $464,000 $105,000 $191,000 $760,000 $190,000 $380,000Entertainment $386,000 $87,000 $159,000 $632,000 $158,000 $316,000Total $5,298,000 $1,199,000 $2,180,000 $8,677,000 $2,169,250 $4,338,500SOURCE: Johnson Reid, LLC utilizing IMPLAN


▪ Columbia River Economic Development council (CREDC) study entitled “Economic & Fiscal Benefits Analysis of Multi‐Use Facility to Attract Yakima Bears,” July 27, 2011. The study, conducted only nine months ago to inform Clark County, Washington policy discussions for a not‐dissimilar proposal, provides detailed descriptions of Class A Minor League baseball team operations, attendance patterns, ticket pricing, and other market and operations information that we find to still be accurate.

▪ City of Hillsboro Parks & Recreation data and input;

▪ “Salem‐Keizer Volcanoes attendance surges in wake of Portland Beavers' departure,” The Oregonian, July 4, 2011.

▪ Minor League Baseball organization and team websites (http://www.milb.com) In the Clark County, Washington study commissioned by the CREDC, the following operations information was determined and also utilized in this study:

▪ Pacific Northwest, larger metro area minor league baseball average daily attendance: 3,000 to 5,000.

▪ Average stadium attendance as percentage of capacity: 70%.

▪ Typical ticket prices: $7 to $20 per person.

▪ Operations Employment: 12 full‐time front office jobs with up to 140 temporary, seasonal jobs for game day operations. Full‐time jobs are expected to pay an average of $80,000 annually and temporary jobs are expected to pay an average of $11 per hour.

Figure 9 provides estimates of daily economic activity resulting from baseball stadium operations and on‐site visitor spending as well as total annual activity with a minimum of 38 home games annually. In addition to an average ticket price of $12.50 per person, research indicates an average of $12 per person, per game spent on concessions, merchandise, and beverages. Accordingly, we estimate annual, average commerce related to a baseball team in a new stadium of roughly $3.2 million. Additional merchandise sales via ecommerce and other economic activity is also likely, however this estimate is specifically what would occur within the City of Hillsboro. We are careful not to guarantee that the above economic activities are “created” or “generated” by a baseball stadium and related minor league baseball team. As was discussed in this document, commerce related to a baseball team may be new to Hillsboro, but could also be a shift in disposable income spending decisions by existing Hillsboro and regional residents. In the following pages we will discuss what net, new impacts to the City of Hillsboro can indeed be expected by such a development. FIGURE 9: POTENTIAL BASEBALL STADIUM SITE LOCATION AT THE GFRC

SOURCE: Johnson Reid, LLC utilizing IMPLAN

Low High AverageSeating Capacity 4,000 6,000 5,000Attendance Rate 69% 69% 69%Average Attendance 2,760 4,140 3,450Spending per Capita $24.50 $24.50 $24.50

Revenue per Game $67,620 $101,430 $84,525Games per Season 38 38 38

Total Revenue $2,570,000 $3,854,000 $3,212,000


Assuming 20‐year debt service at 4.25% similar to assumptions found in the beginning of this report, depending upon how overflow parking is handled, the City could be looking at between $217,000 and $462,000 of additional, annual debt service for parking. Construction Impacts Results of the economic impact assessment of stadium construction are found in Figure 10. During a likely 15‐month construction period, total commercial activity related to stadium construction is estimated at $18.86 million for the region. This includes total stadium construction cost (Direct impacts of $11.368 million), construction vendor and support services and commerce (Indirect impacts of $3.38 million), and household spending by those employed by direct and indirect construction activities (Induced impacts of $4.112 million). Regional estimates are for the Portland metro area, as it represents the primary business and labor force trade area that will benefit from the construction of a sizeable new baseball stadium. However, when considering potential impacts to City of Hillsboro businesses and labor force, they are less certain. Ultimately, the procurement choice of construction contractor and service providers by the City of Hillsboro for stadium construction will determine the extent to which the City economy will benefit. FIGURE 10: REGIONAL & CITY IMPACTS FROM BASEBALL STADIUM CONSTRUCTION ACTIVITY

Because that cannot be known at this time, the best we can assume is that Hillsboro businesses will capture their typical share of construction commerce relative to the broader metro area economy. Utilizing Oregon Employment Data and US Census Bureau data for Hillsboro’s share of regional non‐residential construction firms, employment, and construction trade residential choices, estimated impacts to City of Hillsboro businesses and labor force are also expressed in Figure 10. Conservatively assuming existing construction industry and labor force presence in Hillsboro relative to the metro area, we find a minimum of $1.363 million in total construction impact to remain within the City representing new but temporary local commerce from construction. This includes a daily, per‐diem of $20 spent by every non‐resident construction worker while in Hillsboro ranging from meals to fuel or any other typical daily spending. In general, the Hillsboro construction trades and labor force presently accounts for roughly 4% to 7% of the regional industry. These percentages correspond to share of total activity that would be retained by Hillsboro businesses and workers in the nonresidential construction industry and its support sectors.

Regional Direct Indirect Induced TotalBusiness Revenues $11,368,000 $3,380,000 $4,112,000 $18,860,000Construction Employment 90.8 25.1 30.9 146.8Construction Payroll $5,659,000 $1,246,000 $1,282,000 $8,187,000Average Wage $62,300 $49,600 $41,500 $55,800

City of Hillsboro Direct Indirect Induced TotalBusiness Revenues $491,000 $237,000 $635,000 $1,363,000Construction Employment 3.9 1.8 4.8 10.4Construction Payroll $244,000 $87,000 $198,000 $529,000


Construction Impacts to Existing Facility Schedule It is important to underscore that the Gordon Faber Recreation Complex is already a successful sporting event complex drawing regional and national events, particularly during summer months.

▪ Construction activity, staging, and other impacts of construction activities can possibly have a negative impact upon events that plan to book the GFRC from a noise, traffic, dust, and nuisance standpoint.

▪ The loss of one of the softball fields, particularly in late summer, fall, and spring, may have a negative impact upon the ability of the city to accommodate larger, important sports tournaments and events.

To quantify a specific dollar cost to the City of Hillsboro from any potential loss of scheduled events due to the temporary impacts of new stadium construction in place of softball field #4, Johnson Reid reviewed softball field #4 usage data, researched comparable facility construction impact documentation elsewhere in the United States, and interviewed Hillsboro Parks & Recreation Department staff. Figure 11 provides detailed usage data in terms of hours for softball field #4 over the past three years, as well as total usage data for all softball fields and facilities at GFRC since 2009. FIGURE 11: GORDON FABER RECREATION COMPLEX SOFTBALL FIELD USAGE DATA, FIELD 4 & TOTAL

Usage records for field #4 indicate fluctuating usage with peak use in 2009‐10 at almost 730 hours. However, hours usage data for the entire softball complex indicates that overall usage of the softball fields and facilities has steadily increased since 2009. The significant decrease in field #4 usage after 2009‐10 had more to do with shifting softball/baseball activities concentrated at field #4 to other fields in more even usage. Unsurprisingly, usage records along with event and organization review also indicate field #4 is most busy in the summer and fall seasons when outdoor field conditions are appropriate for play.

Apr‐09 Apr‐10 Apr‐11Softball Field # 4 Usage Type Mar‐10 Mar‐11 Mar‐12

Coed Fall Softball Leagues 90.0 45.0 40.0Coed Summer Softball Leagues 60.0 55.0 55.0Girls' Fall Young Fastpitch League ‐ 12U 60.0 60.0 56.0Girls' Fall Young Fastpitch League ‐ 14U 60.0 60.0 56.0Girls' Fall Young Fastpitch League ‐ 16U 48.0 60.0 56.0Girls' Fastpitch Tournament ‐ U14 0.0 0.0 8.0Men's Fall Softball Leagues 90.0 45.0 80.0Men's Summer Softball Leagues 170.0 140.0 125.0Softball/Baseball Game 96.8 72.3 57.0Softball/Baseball Practice 34.3 27.0 35.5Special Event 20.5 6.0 17.0

Softball Field #4 Annual Usage (Hrs.) 729.5 570.3 585.5Annual Change ‐21.8% 2.7%

All Softball Complex Annual Usage (Hrs.) 3,498.3 3,802.3 3,913.6Annual Change 8.7% 2.9%

SOURCE: Hillsboro Parks & Recreation Department


In other words, a construction period that begins in late fall and continues to late spring or early summer may not cause a measurable loss of field usage and rental. To the extent that field closure occurs in the fall during part of fall league play, event loss may occur as a result of field #4 closure and construction. Because delivery of a completed stadium would be required before June for league play, we would not anticipate measurable impacts to the softball complex due to construction extending into the crucial early summer and summertime season. With construction close to completion in the spring, return to usage of the facility in some capacity could be possible. When interviewed, Hillsboro Parks & Recreation staff did not anticipate significant impacts to softball complex events with the closure of field #4 and construction activity during the rainy season.

▪ Indeed low season for field usage would be the timing for concentrated, heavy construction activity on the baseball stadium.

▪ Parks & Recreation facilities citywide can be utilized to make up for single field loss for short duration, as well as other facilities potentially such as school district fields already used for youth field events.

During the course of research, Johnson Reid could not identify a comparable, successful field sport complex with documented negative operations impacts during construction of a sizeable stadium such as proposed. Furthermore, during the course of research, it was never identified that massive expansion of Intel Ronler Acre campus and related dust and traffic fairly proximate to the GFRC had created negative operating impacts or concern for the complex. Accordingly, we conclude negative impacts to existing softball complex or Hillsboro Stadium operations would be negligible or minimal. However, during Parks & Recreation staff interviews, it was identified that future study would be of value regarding the physical/engineering impacts of baseball stadium construction upon the existing, adjacent Hillsboro Stadium facility due to vibration and other issues. Stadium Operations Impacts Given all of the above, estimates of economic impacts of minor league baseball operations in Hillsboro for the regional economy and the City economy are provided in Figure 12. The potential $3.2 million operation would correspond to a total of $5.261 million in total commerce having to do with operation of the baseball team. This includes on‐site baseball operations‐related commerce (Direct impacts of $3.2 million annually), vendor business revenues resulting from baseball operations (Indirect impacts of $727,000 annually), and household spending by those employed by direct and indirect commercial activities (Induced impacts of $1.322 million annually). At the City level, we conservatively estimate total economic impacts corresponding to a professional baseball operation equal to $3.458 million annually. The great majority of that is the $3.212 million baseball operation itself and its certain location in Hillsboro. Indirect (vendor business revenues) and induced (baseball‐employed household spending activities) are far less certain. The choice of vendors by the baseball team, as well as where baseball activity‐employed households choose to spend their income cannot be predicted at this time. However, for purposes of analysis, we assume Hillsboro captures its current/fair share of indirect and induced commercial activity relative to businesses elsewhere in the metro area. According to recent economic and population data, Hillsboro accounts for 2.6% of regional entertainment and related services. Furthermore, Hillsboro population represents 17.2% of the Washington County


total, a likely reflection of the residential and commercial spending choices of baseball‐employed households. FIGURE 12: ECONOMIC IMPACTS OF MINOR LEAGUE BASEBALL OPERATIONS IN HILLSBORO

Baseball Visitor Off‐Site Spending Analysis in Figure 12 provides detailed economic impacts of baseball operations for the Hillsboro economy. But it is also true that attraction of spectators from outside of Hillsboro means spending by those spectators at dining, services, and other amenities in Hillsboro if not but for a trip to Hillsboro. Analysis in Figure 13 utilizes similar assumptions to previous analysis of the impact of event scheduling conflict found previously in this document. Given anticipated per‐game attendance of up to 5,000 people, results in Figure 13 are expressed as follows:

▪ Local Residents: As of 2011, Portland State University places Hillsboro’s share of region‐wide population as roughly 6% of Washington, Multnomah, and Clackamas county residents. For the purposes of this study, we assume the share of baseball team spectators will exceed 6% due to the location of the team in Hillsboro. We assume 10% of baseball game draw will be Hillsboro residents. We do not focus on Hillsboro resident spectator spending off‐site because spending by residents, if not at the baseball game, would greatly occur elsewhere in the Hillsboro vicinity. Accordingly, with or without baseball, similar spending patterns would be exhibited for residents and thus do not reflect a new impact or change in behavior.

▪ Non‐Resident Day Visitors: Alternatively , we assume that 90% of baseball spectators will come from outside of Hillsboro, most predominantly from elsewhere in Washington County and Multnomah County. We focus on the spending of non‐residents because the attraction of spectator spending largely occurs if not but for a baseball team drawing those visitors to Hillsboro when they otherwise would not visit.

Low High AverageSeating Capacity 4,000 6,000 5,000Attendance Rate 69% 69% 69%Average Attendance 2,760 4,140 3,450Spending per Capita $24.50 $24.50 $24.50

Revenue per Game $67,620 $101,430 $84,525Games per Season 38 38 38

Total Revenue $2,570,000 $3,854,000 $3,212,000

Regional Direct Indirect Induced TotalBusiness Revenues $3,212,000 $727,000 $1,322,000 $5,261,000On‐Going Employment 40.3 9.7 9.9 60.0On‐Going Payroll $1,862,000 $323,000 $412,000 $2,597,000Average Wage $46,200 $33,200 $41,500 $43,300

City of Hillsboro Direct Indirect Induced TotalBusiness Revenues $3,212,000 $19,000 $227,000 $3,458,000On‐Going Employment 40.3 0.3 1.7 42.3On‐Going Payroll $1,862,000 $9,000 $71,000 $1,942,000


FIGURE 13: MINOR LEAGUE BASEBALL DAY VISITOR SPECTATOR SPENDING OFF‐SITE IN HILLSBORO

Results indicate that baseball game attendance per‐game would be 90% non‐resident day visitors and as 4,500 individuals per game. Because many day visitors to Hillsboro would include residents of Beaverton and elsewhere nearby in Washington County, a downward adjustment of previous per‐diem spending estimates by non‐resident visitors is appropriate. Based on spending patterns, we adjust day visitor spending data from previous analysis down by 33% and find that across 38 home games, new spending in Hillsboro by visitors due to baseball games totals an estimated $6.39 million. However, once on‐site/stadium ticket, concessions, and other spending is accounted ($4.19 million annually), net new off‐site baseball spectator visitor spending is estimated at as high as $2.2 million per baseball season. Recalling that for every dollar in spectator spending, an additional $0.23 is created due to indirect economic impacts and $0.41 is created due to induced economic impacts, we estimate a total economic impact of $8.77 million for Hillsboro area businesses off‐site resulting from the $3.6 million in direct visitor, off‐site spending. Parking Cost Considerations As stated in the project assumptions section of this report, the City of Hillsboro is planning for 400 additional surface parking spaces along with the construction of the baseball stadium as proposed. During staff interviews, the issue of sufficient parking for the facility was raised and staff expressed uncertainty about the ability of overflow parking burden should both Hillsboro Stadium and the proposed baseball stadium host sizeable events simultaneously. P&R staff cited maximum, combined event attendance at 10,000 people. To provide further detail regarding the issue, Johnson Reid conducted an analysis of potential overflow parking should the need arise. Findings are summarized in Figure 14. Two sets of estimates of potential, total parking need are provided in Figure 14 for comparison purposes. Hillsboro Parks & Recreation staff during project discussion utilized a rule‐of‐thumb parking ration of 2.5 persons per vehicle. For recent minor league baseball stadium construction projects including in Sugar Land, Texas,3 the Institute of Traffic Engineers standard of 3.4 persons

3 http://www.sugarlandtx.gov/sugarland/cultural_district/documents/BASEBALL_traffic.pdf

City/Local Day VisitorsTotal

Attendance

500 4,500 5,000Per Capita Day Home Visitor Less: On‐Site Visitor Off‐Daily Spending Visitor Games Spending Spending Site SpendingLodging $0 38 $0Restaurant $62,700 38 $2,382,600Vehicle/Fuel $35,100 38 $1,333,800Souvenir/Gifts $33,500 38 $1,273,000Misc. Retail $20,100 38 $763,800Entertainment $16,700 38 $634,600Total $168,100 38 $6,387,800 $4,189,500 $2,198,300SOURCE: Johnson Reid, LLC


per vehicle is frequently utilized for stadium planning.4 A comparison of parking need under both assumptions is recorded in Figure 14. FIGURE 14: POTENTIAL OVERFLOW PARKING NEED FOR 10,000 MAXIMUM COMBINED GFRC VISITORS

Findings indicate that after accounting for the 400‐space surface parking lot expansion as planned, the City of Hillsboro faces an overflow parking shortage between 941 spaces to 2,000 parking spaces. The higher figure results from utilizing the lower passengers per vehicle figure of 2.5, while the higher assumption of 3.4 yields just under 1,000 spaces needed. At a rough estimate of $3,000 per surface parking space – excluding the cost of land assuming land already owned by the City would be available – total cost of overflow parking could reach $6 million or as low as $2.824 million. BASEBALL STADIUM REVENUE STREAMS IDENTIFIED The City of Hillsboro is further interested in understanding various revenue streams that, as the owner of a new baseball stadium capable of hosting minor league games, would be appropriate to explore based on precedent elsewhere. To this end, Johnson Reid researched comparable, publicly‐owned baseball stadiums that have generally been constructed over the last ten years. The various types of revenues that City owners of such facilities receive were explored. Figure 15 provides a summary of five City‐owned parks fitting this description that best exemplify typical public revenue streams. The figure also displays revenue stream type that the City of Hillsboro is presently exploring with the candidate minor league baseball team for comparison purposes.

4 ITE informational report Traffic Operations Planning for Stadia & Arenas (1994).

Parking Calculation Determinant 2.5 1/ 3.4 2/÷ Maximum Combined Venue Attendance 10,000 10,000

= Resulting Automobile Count 4,000 2,941

‐ Less Existing GFRC Parking Capacity 1,600 1,600

= Overflow Parking Space Need 2,400 1,341

‐ New Parking to be Constructed 400 400 = Unmet Parking Need 2,000 941 x Surface Parking Cost per Space $3,000 $3,000

= Potential Surface Parking Cost $6,000,000 $2,824,000

20‐Year Debt Service Potential ($462,057) ($217,475) 3/

SOURCE: Hillsboro Parks & Recreation Department and Johnson Reid, LLC1/ City of Hillsboro Parks & Recreation Department2/ Traffic Operations Planning for Stadia & Arenas (ITE, 1994)3/ Assume 4.25% annual percentage rate on a 20‐year general obligation bond

Persons per Vehicle


FIGURE 15: PUBLICLY‐OWNED MINOR LEAGUE BALLPARK CITY REVENUE EXAMPLES

Year Built/

Stadium

Location

Team

Reno

vated

Owne

rOpe

rator

Mainten

ance

Owne

rTeam

Gordo

n Fabe

rHillsboro

(Propo

sed)

2012

‐13

City of H

illsboro

Season

: Team

Season

: Team

$150

,000

ann

ual lease

100%

of adm

ission

sRe

creation

Com

plex

(Propo

sed)

Prop

osed

$1 per ticket fee

30% nam

ing rights

70% of n

aming rights

30% advertisemen

ts70

% of advertisemen

ts10

0% con

cessions

100%

of p

arking

100%

pou

ring

rights

$1 per ticket capital fee

Gam

e even

t profit poten

tial

PK Park

Eugene

Emeralds

2008

Univ. of O

regon

Season

: Team

Season

: Team

$200

,000

ann

ual lease

Admission

Concession

sPa

rking ($3)

Prom

otions

Volcan

oes Stad

ium

Keizer

Volcan

oes

1996

‐97

Land

: City

Team

Team

5% of ticket sales

95% of ticket sales

Stad

ium: Team

5% of facility rentals

95% of facility rentals

20% of p

arking

fees

80% of p

arking

($3)

Prop

erty ta

xes

100%

of p

romotions

Scotiaba

nk Field @

Vancou

ver, BC

Cana

dian

s20

08City of V

ancouver

Team

Team

Greater of:

96% to

100

% of:

Nat Bailey Stad

ium

$100

,000

ann

ual lease

Admission

sOR Co

mbined:

Concession

s4%

of a

dmission

sPa

rking

4% of con

cessions

Merchan

dise

4% of p

arking

100%

of: no

n‐na

ming

4% of m

erchan

dise

right p

romotions

Citiba

nk Ballpark

Midland

, TX

Rockho

unds

2002

City of M

idland

Team

Team

$50,00

0 an

nual lease

50%:

(Operating)

$4,160

mon

thly lease

Scoreboa

rd Signa

geCity

50% of:

100%

of:

(Cap

ital)

Scoreboa

rd signa

geAd

mission

Concession

sMerchan

dise

Dell D

iamon

dRo

und Ro

ck, TX

Express

2000

City of R

ound

RockTeam

Team

$166

,667

ann

ual

100%

of:

naming rights payment

Admission

$15,00

0 an

nual lease

Concession

s/Merchan

dise

Parking

Prom

otions

Revenu

es

SOURC

E: City of Hillsbo

ro Parks & Recreation Departm

ent,m

Oregonian

new

spap

er, various

reports 200

8‐20

12, Eugene Register‐Gua

rd, various

reports 200

8‐20

11, Keizer

Times, Feb. 25, 201

1, Van

couver BC Pa

rks & Recreation, CSL In

ternationa

l Research, Austin Am

erican

‐Statesm

an various

reports, 199

9‐20

06.


In general, after reviewing multiple ball parks that fit the description above, we find relatively little variation in the revenue streams that city‐owners have maintained as a result of stadium development financing and long‐term lease agreements for such facilities. Revenue streams exemplified by the five cities/parks in Figure 15 and almost universally in the remainder of parks researched but not reported are summarized as follows:

▪ Annual Lease: Public ownership of facilities typically requires annual lease payments, though figures vary greatly depending up on the project financing required. Lease payments varied from as high as $200,000 annually (Eugene, OR) due to minimal involvement by the Emeralds in project financing (U. of Oregon ownership) to $1 annual land lease payment to the City of Keizer for Volcanoes Stadium. The City only owns the land while the facility is privately owned and pays property taxes as well as agrees to a minimum number of community events at the facility for discounted rates. The highest lease rate identified was for the Dell Diamond in Round Rock, Texas, though only for its first five years of operations at $1.5 million. The lease rate dropped to $15,000 annually for 15 years thereafter.

▪ Ticket Sales: Cities sometimes receive a percentage of ticket sales, typically below 10%, though in all examples found, a share of ticket sales was received generally in lieu of a fixed, annual lease payment.

▪ Parking Fees: Cities in many instances received a 5% share or less of parking fees annually, but like ticket sales, this is typically a part of a revenue formula in lieu of a fixed annual lease payment. In some recent projects, the stadium is part of a larger mixed‐use (Sugarland, TX) project or entertainment venue (Round Rock, TX) and thus parking has broader uses only including game day.

▪ Concessions: A 5% or less share of concessions was identified as part of a revenue stream formula in instances where annual lease payments were not a part of project financing.

▪ Merchandise: Less common, but in some instances a less than 5% share of game day merchandise was received by the City owner in those instances where annual lease payments were not received.

▪ Scoreboard Signage: Midland, Texas receives one of the few unique revenue streams as a City field owner, enjoying 50% of annual scoreboard signage promotions revenues. The annual lease payment to the City is roughly $100,000 in addition, which is in the median range for all parks identified as well as those specifically reported here.

▪ Naming Rights: Serving much like a lease agreement for the stadium name itself, naming rights are typically substantial payments to the City owner annually for the right to include the corporate sponsor name in the stadium name. Not all cities pursued corporate sponsors in such a manner, and in various instances, naming rights were granted prior to construction and with substantial up‐front prepayment. In these instances, cash up front was part of project construction finance. In examples cited in Figure 15, annual naming rights payments were typically in the $100,000 to $200,000 range annually. In these instances, annual, fixed lease payments by the team for the ballpark were typically on the more modest side.

Although all of the above revenue streams are important to the operations, maintenance, and debt service on the facility, it is very important to note that in all but two instances, Eugene and Keizer, city sales tax revenue and city hotel/motel tax revenue were all sizeable, earmarked revenue streams available to the cities in question and were significantly utilized for project financing and justification. Except perhaps instances of sizeable naming rights revenue, City sales tax and


hotel/motel tax streams citywide certainly exceed ballpark‐generated revenues expressed above and were leveraged for financial support of the projects. The revenue streams are, of course, unavailable to the City of Hillsboro, though the City does receive a modest split share of Washington County hotel/motel tax revenue. Given these findings, the revenue approach currently being explored by the City of Hillsboro is clearly a hybrid of the other typical stadium revenue arrangements. With no sales tax and no direct City hotel/motel tax, the City is exploring a full combination of stadium lease payments, naming rights, parking, and ticket fees. The combination of revenue streams also diversifies the City’s revenue risk between fixed lease payments and percentages of revenues fully dependent upon game attendance. NEW OR ADDITIONAL EVENT POTENTIAL A baseball stadium with bench seating suitable for up to 5,000 spectators introduces the potential for other, non‐baseball events to be hosted at the GFRC not previously possible with softball field #4 as is – a well‐manicured and open softball field. As a recent survey by Convention, Sports, & Leisure International of various short‐season baseball stadium events reveals in Figure 16, the potential for different non‐baseball uses can vary significantly and depends significantly up on stadium design. FIGURE 16: SURVEY OF SHORT SEASON NON‐BASEBALL GAME EVENT COUNTS, 2010

Five baseball stadiums were surveyed by CS&L International, all located in the New York‐Penn short season Class A league. The survey reveals the following indicators for additional, new events at the GFRC:

Market depth for concerts at baseball stadiums is weak, with stadium layout and concert platform orientation to the audience a significant hurdle. All stadiums averaged just one concert annually.

Youth baseball games also figure as weak demand for facilities, likely because of the ease of local school district and municipal parks and recreation facilities better serving such functions.

High school baseball games have some demand for facilities, but again limited largely due to the major tournament or championship game types that facilities will host.

College baseball games have frequent market demand among short season baseball stadiums, averaging 15 games each year. However, the average is skewed somewhat by the fact that the State College Spikes stadium is owned by Pennsylvania State University and the Staten Island Yankees, though owned by the City of New York, is affiliated with the New

Tenant Youth High School College Non‐Game Tenant TotalTeam Baseball Concerts Baseball Baseball Baseball Other Events Games EventsAberdeen Ironbirds 38 1 0 1 13 190 205 38 243Staten Island Yankees 37 2 0 8 23 10 43 37 80Brooklyn Cyclones 35 2 0 10 7 15 34 35 69State College Spikes 36 1 0 0 21 9 31 36 67Tri‐City Valley Cats 34 1 2 6 13 3 25 34 59

Median 36 1 0 6 13 10 34 36 70Average 36 1 0 5 15 45 68 36 104

SOURCE: Convention, Sports, & Leisure International


York Yankees. With such significant local population base, the stadium is also centrally located amid many colleges and universities for game usage.

Other events hosted at ball parks vary considerably based on the specific design of the stadium itself. The Aberdeen IronBirds stadium in Aberdeen, Maryland is the home of Cal Ripken and part of a multiple field complex, expansive parking lot also used for motocross events and a hotel. Due to the population base, and Cal Ripken affiliation, a college baseball player off‐season league utilizes the facility. Its sizable design includes boxes, suites, and other rooms appropriate for event space, meeting space, and other multi‐purpose uses which the complex markets “aggressively” according to CS&L International.

Weddings, community events, swap meets, and other such uses of stadiums comprise the majority of the “Other” category for other ball parks. University‐related events are also common at the State College, Pennsylvania facility.

As already established, the GFRC and is very successful with various sporting events, community and regional events, and national tournaments/events related to field sports. If the stadium is constructed to be open/outdoor, the market for non‐baseball game events would generally fall during peak softball complex months with weather generally more conducive to outdoor activities. Concerts, games at various age levels and affiliation, and other events would not likely see significant new demand realized at the stadium and would likely conflict with the already busy schedule of the complex. To the extent that special event games such as alternative home field games for a local or in‐state college or university are feasible, relationships with institutions, leagues, etc, should be explored. But demand apart from and in excess of already‐realized event schedules should not be viewed as significant. BASEBALL PROMOTIONS MARKET FACTORS Sporting events naturally present significant and important opportunity for corporate sponsorship spending. Signs, jerseys, programs, and any other manner of company name and logo visibility is possible and of long duration for spectators of baseball games, a captive audience frequently for two to three hours. This of course comes as no surprise to Washington County, home of the world’s largest sports apparel firm. For minor league baseball, corporate spending frequently takes one of the following forms:

▪ Naming Rights: The highest‐profile corporate sponsorship available, as well as the most expensive usually. Stadium name at time of construction or new sponsorship at the end of a previous sponsor contract is most common. Naming rights for the stadium can cost in the tens of thousands to hundreds of thousands depending upon the size of the sports market.

▪ Signage;

▪ Programs/Print Media;

▪ In‐Stadium Vendors;

▪ Corporate Boxes/Suites; and

▪ Equipment and Merchandise.


Demand for corporate promotion opportunities ultimately depends upon the local industry mix, and in particular the quantity of larger firms with sizeable marketing budgets. Figure 17 displays the most recent distribution of Washington County employers by size and industry as a determinant of potential baseball promotion spending. Comparable data is reported for both Lane County, home of the Eugene Emeralds Class A minor league team, as well as Marion and Polk Counties, home to the Keizer Volcanoes Class A minor league team. As of 2009, the target market for baseball promotional spending – Washington County businesses with at least 20 employees – totaled 2,058 firms. By comparison, the Eugene Emeralds and the Keizer Volcanoes markets for promotion spending are significantly smaller at 1,231 and 1,082 such firms, respectively. In this instance, the Keizer Volcanoes are the most comparable to Hillsboro in terms of city stadium ownership and team lease/management as being explored and Hillsboro/Washington County promotional opportunity compares favorably. PK Park, the new stadium home to the Eugene Emeralds, is actually owned by the University of Oregon and also hosts the university baseball team. Accordingly, the financial structure and role of business promotional spending is somewhat different in terms of necessity for financial feasibility. Although local industry size and mix compares favorably to other, established minor league baseball teams, continued economic uncertainty and changes in business promotional and sponsorship spending will likely weaken demand for promotional opportunities. Nationally, 2012 and its election year and economic uncertainties is anticipated to see a return to conservative promotional spending by businesses. IEG, a nationally recognized leader in corporate sponsorship industry forecasting, projects that business spending on sponsorships nationally will increase by 4.1% in 2012, a drop from the 5.5% recorded in 2011.5 FIGURE 17: WASHINGTON COUNTY BASEBALL SPONSORSHIP MARKET DEPTH BY BUSINESS SIZE AND COMPARISON TO

EUGENE EMERALDS (LANE COUNTY) AND KEIZER VOLCANOES (MARION/POLK COUNTIES), 2009

Although sponsorship spending is expected to weaken in general, sports sponsorships are projected by IEG to be the strongest of sponsorship categories, with spending to grow by 4.6% in 2012 and accounting for 69% of all business promotional spending. Sports are traditionally viewed as the relative “safe harbor” of promotional spending even during significant economic weakness.

5 “Economic Uncertainty To Slow Sponsorship Growth In 2012.” IEG Sponsorship Report, January 3, 2012. < http://www.sponsorship.com/IEGSR/2012/01/03/Economic‐Uncertainty‐To‐Slow‐Sponsorship‐Growth‐In.aspx>

Eugene KeizerWashington County Sector 20‐49 50‐99 100‐249 250‐499 500‐999 1,000+ Totals Lane Co. Marion/PolkConstruction 89 32 9 4 0 0 134 64 73Manufacturing 112 40 44 14 8 1 219 147 106Wholesale Trade 90 43 20 4 2 4 163 73 47Retail Trade 192 70 46 8 0 0 316 190 176Transportation, Warehousing, & Utilitie 24 8 7 2 0 0 41 45 38Information 38 19 20 4 2 0 83 29 17Financial Services 70 18 13 4 4 1 110 64 45Professional & Technical Services 194 75 46 17 5 4 341 125 102Education 31 2 3 3 0 1 40 21 21Health Care 125 57 16 3 2 2 205 180 187Arts, Entertainment, & Recreation 27 10 5 1 0 0 43 28 24Hospitality & Dining 225 53 5 0 0 0 283 225 191Other Non‐Government Services 60 16 4 0 0 0 80 40 55

Total 1,277 443 238 64 23 13 2,058 1,231 1,082SOURCE: Censtats Business Survey Data by County, 2009

Business County by Employment Size Range


Weakness in national promotion demand was confirmed at the local level by an interview with Deanna Palm, President of the Greater Hillsboro Area Chamber of Commerce. The local business climate for sponsorship opportunities was described as follows:

▪ Professional baseball coming to Hillsboro was viewed as a positive development and a likely valuable asset to the image of Hillsboro as a growing city, as well as a diversification of entertainment options and quality of life for residents.

▪ Business sponsorship demand at this time is perceived to be uncertain at best due to continued economic sluggishness for most sectors and employers.

▪ Because growth in the local economy has generally been limited, the total pool for promotional spending has been fixed in size. Accordingly, new events or promotional opportunities have generally represented a redistribution of existing promotional spending. Examples of changing sponsorships over the past few years for larger local events were cited.

▪ As economic growth continues, growth in demand for sponsorship opportunities should return. However, until then, there is some concern in the business community that baseball as a new, high‐profile promotional opportunity may weaken promotional spending on larger, existing summer events in the Hillsboro area.

▪ With promotional budgets tightening, Deanna Palm also cited a growing trend in businesses to more narrowly define their promotional and sponsorship mission. Not only has spending generally decreased, but events with particular emphasis on sustainability, disease research and care, and other social causes have gained greater favor with narrowing business marketing spending.

▪ For some businesses, particularly those who have not previously budgeted for marketing or promotions due to lack of sports/entertainment event options, baseball will likely represent a new opportunity for less familiar businesses to step up name recognition through sponsorship. Depth of such businesses was viewed as uncertain at best currently given local and national economic uncertainties.


COST‐BENEFIT ANALYSIS OF THE PROPOSED BASEBALL STADIUM All analysis in this report is intended to quantify the likely net, new or different impacts of the construction of the proposed minor league baseball stadium and the operation of a professional, Class A minor league baseball team at that home stadium. For economic and financial policy considerations, the City of Hillsboro retained Johnson Reid to utilize economic and fiscal impact findings to conduct a standard cost‐benefit analysis of the publicly‐funded project. This section of the report follows a standard cost/benefit methodology to understand the net present value of a long‐term stream of new costs to an entity relative to the long‐term stream of net benefits accrued to that entity. To achieve the present value of future outlays and other costs to Hillsboro for the construction of the proposed stadium and the operation of a short‐season professional baseball team, as well as net new economic benefits in future years, we utilize an annual discount rate of 6.5%, the currently standard discount rate for federal cost/benefit analysis on infrastructure projects. It should be noted that discount rates for different analyses can vary from 8% to as low as 3.3%. We have chosen to utilize the standard rate. City Cost Estimates Figure 18 provides a traditional, 20‐year cost analysis of baseball stadium construction and baseball team operations for the Hillsboro economy. Each category of economic cost have been estimated annually over a 20‐year period as appropriate. Cost categories in the analysis found in Figure 18 are summarized as follows:

▪ General Obligation Bond Debt Service: It was assumed that the entirety of the $14 million baseball stadium and parking lot construction project would be funded by City of Hillsboro 20‐year general obligation bonds. An annual interest rate of 4.25% was assumed, for a resulting annual debt service obligation of nearly $1.1 million.

▪ Field Closure Loss: Although included as a cost category, a zero cost is documented for the City of Hillsboro. Comparable construction closures elsewhere in the U.S. could not be identified and any scheduling conflict for various league/event play can possibly be accommodated by other City of Hillsboro Parks & Recreation facilities or facilities of P&R community partners such as schools.

▪ Parks & Recreation City Costs of Baseball Operations: It was assumed that Gordon Faber Recreation Complex management costs would increase by 15% as a result of a roughly 15% increase in net economic activity for the complex and the City as a result of baseball operations less 25% existing, weekend event loss. Department costs for the GFRC are from the 2012 City of Hillsboro Budget.

▪ Existing Summer Weekend Event Loss: For purposes of analysis, it was assumed that the City would lose 25% of its typical, traditional summer event schedule as a result of professional baseball operations at the GFRC. This translates into a 2012/2013 economic loss of nearly $2.2 million. The assumption is somewhat arbitrary, as only final team attraction negotiations can determine schedule flexibility and conflict avoidance. Again, analysis in this report indicates that complete loss of existing summer events is valued at between $8 million and $9 million for the City economy.

Except for fixed debt service obligation, annual costs are assumed to increase by 3% over twenty years. Resulting cost estimates are expressed in Figure 18.


Results indicate the following:

▪ Over the 20‐year analysis period, all net, new costs to the City of Hillsboro as a result of baseball park construction and operations are estimated to reach $80.7 million. This includes new debt service for the facility, economic loss due to displacement of some existing/traditional summer weekend events at the GFRC, and additional administrative and management costs to Hillsboro Parks & Recreation.

▪ The lion’s share of total, 20‐year costs to the City would be from loss of existing and likely future weekend, summer events due to scheduling conflicts with baseball home game need. Again, this finding hinges upon a 25% existing event loss assumption, though it is arbitrary. The total estimated value of weekend summer events at risk of conflict is over $8 million for a single year. Over a 20‐year period, loss of all weekend summer events due to scheduling conflict is estimated at over $233 million for the Hillsboro economy.

Per traditional cost‐benefit analysis, 20‐year estimates and costs must be discounted to fixed, current dollars. This is done for two reasons: to eliminate the distortive effects of inflation, as well as to reflect the higher value of money over the near term compared to the lower value of money over a longer, more uncertain time period. In other words, a dollar now is worth more than a dollar tomorrow. Annual costs were discounted by a standard 6.5% annually. Results of cost discounting to 2012 dollars are also expressed in Figure 17. In total, we find that the present value of 20‐year costs to the City as a result of baseball park construction and operations is $40.5 million today based on the assumptions of this analysis.


FIGURE 18: 20‐YEAR COST ANALYSIS OF BASEBALL STADIUM CONSTRUCTION & OPERATIONS

CITY OF HILLSBORO ECONOMY

COSTS

COSTS

Construction

Discoun

ted

G/O

Bon

dField Closure

Construction

Parks & Rec.

Existing

Events

Ope

ration

san

dDiscoun

tProject

Year

Deb

t Service

Revenu

e Loss

Total

City Cost

Conflict Loss (25%

)To

tal

Ope

ration

sFactor

Costs

2012

‐$

‐$

‐$

‐$

1.00

‐$

2013

(1,078

,132

)$

‐$

(1,078,132)

$

(33,000)

$

(2,169,250)

$

(2,202

,250

)$

(3,280

,382

)$

0.93

(3,066,000)

$

2014

(1,078

,132

)$

‐$

(1,078,132)

$

(34,000)

$

(2,234,328)

$

(2,268

,328

)$

(3,346

,460

)$

0.87

(2,923,000)

$

2015

(1,078

,132

)$

‐$

(1,078,132)

$

(35,000)

$

(2,301,357)

$

(2,336

,357

)$

(3,414

,489

)$

0.82

(2,787,000)

$

2016

(1,078

,132

)$

‐$

(1,078,132)

$

(36,100)

$

(2,370,398)

$

(2,406

,498

)$

(3,484

,630

)$

0.76

(2,658,000)

$

2017

(1,078

,132

)$

‐$

(1,078,132)

$

(37,200)

$

(2,441,510)

$

(2,478

,710

)$

(3,556

,842

)$

0.71

(2,536,000)

$

2018

(1,078

,132

)$

‐$

(1,078,132)

$

(38,300)

$

(2,514,755)

$

(2,553

,055

)$

(3,631

,187

)$

0.67

(2,420,000)

$

2019

(1,078

,132

)$

‐$

(1,078,132)

$

(39,400)

$

(2,590,198)

$

(2,629

,598

)$

(3,707

,730

)$

0.62

(2,309,000)

$

2020

(1,078

,132

)$

‐$

(1,078,132)

$

(40,600)

$

(2,667,904)

$

(2,708

,504

)$

(3,786

,636

)$

0.58

(2,204,000)

$

2021

(1,078

,132

)$

‐$

(1,078,132)

$

(41,800)

$

(2,747,941)

$

(2,789

,741

)$

(3,867

,873

)$

0.54

(2,104,000)

$

2022

(1,078

,132

)$

‐$

(1,078,132)

$

(43,100)

$

(2,830,379)

$

(2,873

,479

)$

(3,951

,611

)$

0.51

(2,009,000)

$

2023

(1,078

,132

)$

‐$

(1,078,132)

$

(44,400)

$

(2,915,291)

$

(2,959

,691

)$

(4,037

,823

)$

0.48

(1,918,000)

$

2024

(1,078

,132

)$

‐$

(1,078,132)

$

(45,700)

$

(3,002,749)

$

(3,048

,449

)$

(4,126

,581

)$

0.44

(1,832,000)

$

2025

(1,078

,132

)$

‐$

(1,078,132)

$

(47,100)

$

(3,092,832)

$

(3,139

,932

)$

(4,218

,064

)$

0.41

(1,750,000)

$

2026

(1,078

,132

)$

‐$

(1,078,132)

$

(48,500)

$

(3,185,617)

$

(3,234

,117

)$

(4,312

,249

)$

0.39

(1,672,000)

$

2027

(1,078

,132

)$

‐$

(1,078,132)

$

(50,000)

$

(3,281,185)

$

(3,331

,185

)$

(4,409

,317

)$

0.36

(1,598,000)

$

2028

(1,078

,132

)$

‐$

(1,078,132)

$

(51,500)

$

(3,379,621)

$

(3,431

,121

)$

(4,509

,253

)$

0.34

(1,527,000)

$

2029

(1,078

,132

)$

‐$

(1,078,132)

$

(53,000)

$

(3,481,009)

$

(3,534

,009

)$

(4,612

,141

)$

0.32

(1,460,000)

$

2030

(1,078

,132

)$

‐$

(1,078,132)

$

(54,600)

$

(3,585,440)

$

(3,640

,040

)$

(4,718

,172

)$

0.30

(1,396,000)

$

2031

(1,078

,132

)$

‐$

(1,078,132)

$

(56,200)

$

(3,693,003)

$

(3,749

,203

)$

(4,827

,335

)$

0.28

(1,335,000)

$

2032

(1,078

,132

)$

‐$

(1,078,132)

$

(57,900)

$

(3,803,793)

$

(3,861

,693

)$

(4,939

,825

)$

0.20

(974,000)

$

TOTA

LS(21,562,640)

$

‐$

(21,562,640)

$

(887,400)

$

(58,288,560)

$

(59,175,960)

$

(80,738,600)

$

(40,478,000)

$

Local Costs from

Develop

men

t Activity

COSTS

Local Costs from

Ope

ration

s Activity


City Benefit Estimates Figure 19 provides a traditional, 20‐year benefit analysis of baseball stadium construction and baseball team operations for the Hillsboro economy equivalent to the process for cost analysis. Each category of positive economic impacts, or benefits, has been estimated annually over a 20‐year period. Temporary construction impacts documented in this report are identified as one‐time local benefits and are split between an assumed 2012 construction period start and a 2013 construction completion. Various economic benefits are furthermore assumed to annually increase by 3% roughly consistent with inflation as assumed for cost analysis. Benefit categories in the analysis found in Figure 19 are summarized as follows:

▪ Construction Benefits: Of the $14 million construction value of the stadium and parking lot plus economic ripple effects for the region, the Hillsboro economy is estimated to benefit by a total of $2.6 million over the construction period. Again, economic benefit is defined by location and economic capture occurs by place of business. Thus the lower benefit figure than the $14 million+ total reflects local business capture as opposed to contract awards to construction and other firms located outside of the city of Hillsboro.

▪ Baseball Operations: Baseball games, revenues, and on‐site visitor spending are estimated to start at $3.5 million in 2013 as indicated by analysis previously in this report.

▪ Other Visitor Spending: Off‐site spending by visitors to Hillsboro for baseball games is estimated to start at $3.6 million in 2013.

As with the cost analysis, benefit analysis expressed in Figure 18 assumes that various economic benefits grow by 3% annually, or roughly the pace of inflation each year over the 20‐year period. As with the cost analysis in Figure 18, 20‐year estimates and benefits are discounted to fixed, current dollars by a discount rate of 6.5% annually. Results of benefit discounting to 2012 dollars are also expressed in Figure 19. In total, we find that the present value of 20‐year economic benefits to the City as a result of baseball park construction and operations is $95.0 million today based on the assumptions of this analysis.


FIGURE 19: 20‐YEAR BENEFIT ANALYSIS OF BASEBALL STADIUM CONSTRUCTION & OPERATIONS

CITY OF HILLSBORO ECONOMY

BENEFITS

BENEFITS

Construction

Discoun

ted

Construction

Construction

Construction

Baseba

llOther

Ope

ration

san

dDiscoun

tProject

Year

Contracts

Ripp

le Effects

Total

Ope

ration

sVisitor Spe

nding

Total

Ope

ration

sFactor

Bene

fits

2012

527,00

0$

327,000

$

854,000

$

‐$

085

4,00

0$

1.00

854,000

$

2013

1,06

9,00

0$

665,000

$

1,73

4,000

$

3,458,000

$

3,600,640

$

7,05

8,64

0$

8,79

2,64

0$

0.93

8,217,000

$

2014

‐$

‐$

‐$

3,562,000

$

3,708,659

$

7,27

0,65

9$

7,27

0,65

9$

0.87

6,350,000

$

2015

‐$

‐$

‐$

3,669,000

$

3,819,919

$

7,48

8,91

9$

7,48

8,91

9$

0.82

6,113,000

$

2016

‐$

‐$

‐$

3,779,000

$

3,934,517

$

7,71

3,51

7$

7,71

3,51

7$

0.76

5,885,000

$

2017

‐$

‐$

‐$

3,892,000

$

4,052,552

$

7,94

4,55

2$

7,94

4,55

2$

0.71

5,664,000

$

2018

‐$

‐$

‐$

4,009,000

$

4,174,129

$

8,18

3,12

9$

8,18

3,12

9$

0.67

5,453,000

$

2019

‐$

‐$

‐$

4,129,000

$

4,299,353

$

8,42

8,35

3$

8,42

8,35

3$

0.62

5,249,000

$

2020

‐$

‐$

‐$

4,253,000

$

4,428,333

$

8,68

1,33

3$

8,68

1,33

3$

0.58

5,053,000

$

2021

‐$

‐$

‐$

4,381,000

$

4,561,183

$

8,94

2,18

3$

8,94

2,18

3$

0.54

4,864,000

$

2022

‐$

‐$

‐$

4,512,000

$

4,698,019

$

9,21

0,01

9$

9,21

0,01

9$

0.51

4,682,000

$

2023

‐$

‐$

‐$

4,647,000

$

4,838,959

$

9,48

5,95

9$

9,48

5,95

9$

0.48

4,507,000

$

2024

‐$

‐$

‐$

4,786,000

$

4,984,128

$

9,77

0,12

8$

9,77

0,12

8$

0.44

4,338,000

$

2025

‐$

‐$

‐$

4,930,000

$

5,133,652

$

10,063

,652

$

10,063

,652

$

0.41

4,176,000

$

2026

‐$

‐$

‐$

5,078,000

$

5,287,662

$

10,365

,662

$

10,365

,662

$

0.39

4,020,000

$

2027

‐$

‐$

‐$

5,230,000

$

5,446,291

$

10,676

,291

$

10,676

,291

$

0.36

3,870,000

$

2028

‐$

‐$

‐$

5,387,000

$

5,609,680

$

10,996

,680

$

10,996

,680

$

0.34

3,725,000

$

2029

‐$

‐$

‐$

5,549,000

$

5,777,971

$

11,326

,971

$

11,326

,971

$

0.32

3,586,000

$

2030

‐$

‐$

‐$

5,715,000

$

5,951,310

$

11,666

,310

$

11,666

,310

$

0.30

3,452,000

$

2031

‐$

‐$

‐$

5,886,000

$

6,129,849

$

12,015

,849

$

12,015

,849

$

0.28

3,322,000

$

2032

‐$

‐$

‐$

6,063,000

$

6,313,744

$

12,376

,744

$

12,376

,744

$

0.20

2,440,000

$

TOTA

LS1,596,000

$

992,000

$

2,588,000

$

92,915

,000

$

96,750,550

$

189,665,550

$

191,399,550

$

94,966,000

$

BENEFITS

Local B

enefits from

Develop

men

t Activity

Local B

enefits from

Ope

ration

s Activity


Net Present Value The final calculation in a traditional cost‐benefit analysis is the net present value of all 20‐year discounted costs and benefits. Figure 20 provides a restatement of annual, discounted cost and benefit figures from Figures 18 and 19, as well as an annual net benefit calculation and a 20‐year, net present value calculation. As a 20‐year investment by the City of Hillsboro and based on results of analysis in this report, we find that baseball stadium construction and operations has a current, net value to the City economy of $53.3 million. It is worth reemphasizing, however, that the analysis rests on the assumption that the City will be able to limit summer weekend event conflicts with baseball home games to 25% event loss. Should greater schedule conflict loss occur, net present value of benefits would naturally decrease. An 81% summer weekend event loss rate to baseball home games would translate into zero net benefit from baseball for the City of Hillsboro economy. FIGURE 20: 2012 NET PRESENT VALUE OF BASEBALL STADIUM CONSTRUCTION & OPERATIONS CITY OF HILLSBORO ECONOMY

Total Total NetYear Costs Benefits Benefit

2012 $0 854,000$ 854,000$ 2013 ($3,066,000) 8,217,000$ 5,151,000$ 2014 ($2,923,000) 6,350,000$ 3,427,000$ 2015 ($2,787,000) 6,113,000$ 3,326,000$ 2016 ($2,658,000) 5,885,000$ 3,227,000$ 2017 ($2,536,000) 5,664,000$ 3,128,000$ 2018 ($2,420,000) 5,453,000$ 3,033,000$ 2019 ($2,309,000) 5,249,000$ 2,940,000$ 2020 ($2,204,000) 5,053,000$ 2,849,000$ 2021 ($2,104,000) 4,864,000$ 2,760,000$ 2022 ($2,009,000) 4,682,000$ 2,673,000$ 2023 ($1,918,000) 4,507,000$ 2,589,000$ 2024 ($1,832,000) 4,338,000$ 2,506,000$ 2025 ($1,750,000) 4,176,000$ 2,426,000$ 2026 ($1,672,000) 4,020,000$ 2,348,000$ 2027 ($1,598,000) 3,870,000$ 2,272,000$ 2028 ($1,527,000) 3,725,000$ 2,198,000$ 2029 ($1,460,000) 3,586,000$ 2,126,000$ 2030 ($1,396,000) 3,452,000$ 2,056,000$ 2031 ($1,335,000) 3,322,000$ 1,987,000$ 2032 ($974,000) 2,440,000$ 1,466,000$

TOTALS (40,478,000)$ 95,820,000$ 55,342,000$ NET PRESENT VALUE


APPENDIX


EXHIBIT 1: 2012 GORDON FABER RECREATION COMPLEX SCHEDULE CONFLICT ANALYSIS

Day Date SB ComplexEstimated Attendance Stadium

Estimated Attendance City Day Over‐night

Visitors Per Day

Sat 4‐Jun HP&R Tourney 8a‐8p 1000 HSD Multi‐Cultural Soccer 600 1,000 1,000Sun 5‐Jun HP&R Tourney/Rose City SB 8a ‐11p 1000/850 1,000 850 1,850Mon 6‐Jun HP&R Softball 5p ‐11p 850

Tue 7‐Jun HP&R Softball 5p ‐11p 850 Corporate Event 1p ‐2p 50

Wed 8‐Jun HP&R Softball 5p ‐11p 850

Thu 9‐Jun HP&R Softball 5p ‐11p 850

Fri 10‐Jun Corp Event 11a ‐3:30p/Rain out Make ups 850/400 Corp Event/Helvetia Half Load in 5p ‐11p 50/400 400 400Sat 11‐Jun Helvetia Half Marathon 5a ‐ 4p 7000 Helvetia Half Marathon 5a ‐4p/Shockwave FB 5p ‐9p 7000/1000 8,000 8,000Sun 12‐Jun Rose City Softball 11a ‐10p 850

Mon 13‐Jun HP&R Softball 5p ‐11p 850 100

Tue 14‐Jun HP&R Softball 5p ‐11p 850 Corporate Event 1p ‐2p 50

Wed 15‐Jun HP&R Softball 5p ‐11p 850 Corporate Event 6p ‐8p 50

Thu 16‐Jun HP&R Softball 5p ‐11p 850 Valley NAFC Camp Load in 5p‐10p 1500 150 1,350 1,500Fri 17‐Jun Valley NFCA Camp 8a ‐8p 1500 Valley NFCA Camp 8a‐8p 1500 150 1,350 1,500Sat 18‐Jun Valley Invitational 8a ‐8p 1500 Valley Invitational 1500 150 1,350 1,500Sun 19‐Jun Valley Invitational 8a ‐8p 1500 Valley Invitational 1500 150 1,350 1,500Mon 20‐Jun HP&R Softball 5p ‐11p 850 LAX NW 5:30 p ‐10p 200

Tue 21‐Jun HP&R Softball 5p ‐11p 850 Corporate Event 1p ‐2p/LAX NW 5:30‐10p 50/200

Wed 22‐Jun HP&R Softball 5p ‐11p 850 Corporate Event 6p ‐8p/LAX NW 6p‐9:30p 50/200

Thu 23‐Jun HP&R Softball 5p ‐11p 850 LAX NW 5:30 p ‐10p 200

Fri 24‐Jun ASA 16A National Qualifier SB Tournament 1000 LSB 7v7 Tournament/Les Schwab Bowl Load in/Banquet 500/500

Sat 25‐Jun ASA 16A 8am ‐ 4pm 1000 Les Schwab Bowl 8a ‐10p 7000 3,500 3,500 7,000Sun 26‐Jun ASA 16A 8am ‐ 4pm 1000 Special Olympics 8a ‐ 6p 1000 1,000 1,000Mon 27‐Jun HP&R Softball 5p ‐11p 850 Soccer Camp/LAX NW 9a ‐ 10p 300

Tue 28‐Jun HP&R Softball 5p ‐11p 850 Soccer Camp/LAX NW 9a ‐10p 300

Wed 29‐Jun HP&R Softball 5p ‐11p 850 Soccer Camp/LAX NW/Corporate Event 9a ‐ 8p 50/200/50

Thu 30‐Jun HP&R Softball 5p ‐11p 850 Soccer Camp/LAX NW, 9a ‐ 10p 50/200

Fri 1‐Jul Soccer Camp 9am ‐ 3pm 50 Crusaders Practice/Drum Corp International Show 100/3000 750 2,250 3,000Sat 2‐Jul ASA 14B State Tournament 1000 250 250 500Sun 3‐Jul ASA 14B State Tournament 1000 250 250 500Mon 4‐Jul ASA 14B State Tournament 1000 250 250 500Tue 5‐Jul HP&R Softball 5p ‐11p 850 Corporate eventLAX NW/CHS Passing League 1pm ‐ 11pm 200

Wed 6‐Jul HP&R Softball 5p ‐11p 850 LAX NW 6pm ‐ 10pm 200

Thu 7‐Jul HP& R Softball 5p ‐11p 850 LAX NW 6pm ‐ 10pm 200

Fri 8‐JulSat 9‐JulSun 10‐Jul Rose City SB 8a ‐10p 1000 OR Council of Korean Churches 8am ‐ 6pm 400

Mon 11‐Jul HP&R Softball 5p ‐11p 850 LAX NW 5:30 ‐10p 200

Tue 12‐Jul HP&R Softball 5p ‐11p 850 Corporate eventLAX NW/CHS Passing League 1pm ‐ 11pm 200

Wed 13‐Jul HP& R Softball 5p ‐11p 850 Corporate eventLAX NW 1pm ‐ 11pm 200

Thu 14‐Jul HP& R Softball 5p ‐11p 850 LAX NW 6pm ‐ 10pm 200

Fri 15‐Jul Premier Girls Fastpitch Regional Tournament 1000 500 500 1,000Sat 16‐Jul Premier Girls Fastpitch Regional Tournament 1000 500 500 1,000Sun 17‐Jul Premier Girls Fastpitch Regional Tournament 1000 HMSL 9am ‐ 9pm 500 500 500 1,000Mon 18‐Jul HP&R Softball 5p ‐11p 850 LAX NW 6p ‐10p 200

Tue 19‐Jul HP&R Softball 5p ‐11p 850 Corporate eventLAX NW/CHS Passing League 200

Wed 20‐Jul Corporate SB Tournament 9am ‐ 4pm 850 Corporate event/LAX NW, 1pm ‐ 11pm 200

Thu 21‐Jul HP&R Softball 5p ‐11p 850 LAX NW 6p ‐10p/Video Shoot, 5:30am ‐ 4pm 200/150

Fri 22‐Jul Solid Rock Load‐in 100 75 75Sat 23‐Jul Solid Rock Load in 12p ‐ 12am 100 75 75Sun 24‐Jul Solid Rock Event 8a ‐8p 5000 Solid Rock Event 8a ‐ 10p 5000 3,750 1,250 5,000Mon 25‐Jul HP&R Softball 5p ‐11p 850 Solid Rock Load out/LAX NW 200 200 200Tue 26‐Jul HP&R Softball 5p ‐11p 850 Corporate event/LAX NW, 1pm ‐ 11pm 200

Wed 27‐Jul Corporate SB games/HP&R Softball 5p ‐11p 1000 Corporate event/LAX NW, 1pm ‐ 11pm 200

Thu 28‐Jul HP&R Softball 5p ‐11p 850 Film Shoot 8am ‐ 4pm/LAX NW 6p ‐ 9pm 50/250

Fri 29‐Jul Corporate Event 10am ‐ 4pm 400 Tour de Cure Load in 8a ‐8p 50 200 225 25 450Sat 30‐Jul Tour de Cure 6a ‐10p/Senior Traveling League SB 300 Tour de Cure 6a ‐10p 2500 1,400 1,400 2,800Sun 31‐Jul Senior Traveling League SB Tourney 9a‐2p 300 Church Event 8am ‐ 10pm 400 150 150 300Mon 1‐Aug HP&R Softball 5p ‐11p 850 LAX NW 6 ‐9pm 200

Tue 2‐Aug HP&R Softball 5p ‐11p 850 Corporate event/LAX NW, 1pm ‐ 11pm 200

Wed 3‐Aug HP&R Softball 5p ‐11p 850 Corporate event/LAX NW, 1pm ‐ 11pm 200

Thu 4‐Aug HP&R Softball 5p ‐11p 850 HSC Youth Soccer/LAX NW, 1pm ‐ 11pm 200/100

Fri 5‐Aug Sizzle Summer Day Camp 10am ‐ 3pm 200

Sat 6‐Aug Nations Youth Baseball 8am ‐ 8pm 1000 Cure JM Concert 10am ‐ 12am 1500 750 750 1,500Sun 7‐Aug Nations Youth Baseball 8am ‐ 8pm 1000 FC Portland, 8a ‐ 9:30pm 400

Mon 8‐Aug HP&R Softball 5p ‐11p 850 LAX NW 5:30p ‐10p 200

Tue 9‐Aug HP&R Softball 5p ‐11p 850 LAX NW 5:30p ‐10p 200

Wed 10‐Aug HP&R Softball 5p ‐11p 850 Corporate event/LAX NW, 1pm ‐ 11pm 200

Thu 11‐Aug HP&R Softball 5p ‐11p 850 LAX NW 5:30p ‐10p/Video Shoot, 8pm ‐ 8am 200/50

Fri 12‐AugSat 13‐Aug Farmers Adult Softball Tourney 8a ‐ 10p 1000 U of Miami Soccer Practice 100 750 250 1,000Sun 14‐Aug PSU Soccer vs. Miami 1000

Mon 15‐Aug Corporate event 11:30am ‐ 2pmHP&R Softball 250/850 LAX NW 5:30p ‐10p 200

Tue 16‐Aug HP&R Softball 5p ‐11p 850 Corporate event/LAX NW, 1pm ‐ 11pm 200

Wed 17‐Aug Corporate event 11:30am ‐ 2pmHP&R Softball 250/850 LAX NW 5:30p ‐10p 200

Thu 18‐Aug HP&R Softball 5p ‐11p 850 LAX NW 5:30p ‐10p 200

Fri 19‐Aug Coed Soccer Games 6p ‐ 10pm 500

Sat 20‐AugSun 21‐AugMon 22‐Aug HP&R Softball 5p ‐11p 850

Tue 23‐Aug HP&R Softball 5p ‐11p 850 Corporate event 50

Wed 24‐Aug HP&R Softball 5p ‐11p 850 DEA Training/Soccer/Film Shoot, 8pm ‐ 8am 50/50

Thu 25‐Aug HP&R Softball 5p ‐11p 850 Century HS Band Practice 9am‐5pm/Video Shoot 150/75

Fri 26‐Aug UNLV/PSU Soccer Practice/CHS FB Practice 100/50

Sat 27‐Aug ASA Tourney/Battle of the Badges 2500 1,250 1,250 2,500Sun 28‐Aug ASA Tourney/Battle of the Badges 2500 PSU Soccer vs. Idaho 500 1,250 1,250 2,500Mon 29‐Aug HP&R Softball 5p ‐11p 850 CHS Football 6p ‐9p 100 100 100Tue 30‐Aug Corporate Load‐in/HP&R Softball 5p ‐11p 850 CHS Football 6p ‐9p 100 100 100Wed 31‐Aug Corporate event 2000 CHS Football 6p ‐9p 100 100 100Thu 1‐Sep HP&R Softball 5p ‐11p 850 CHS JV Football Game 6p ‐9p 500 500 500Fri 2‐Sep CHS Varsity/JV FB vs. Liberty, 3pm ‐ 10pm 2,500 2,500 2,500Sat 3‐Sep Kick‐off Classic, 4‐games 8am ‐ 11pm 5,000 5,000 5,000Sun 4‐SepMon 5‐SepTue 6‐Sep HP&R Softball 5p ‐11p 850 Corporate events 100

Wed 7‐Sep HP&R Softball 5p ‐11p 850 Central Catholic Frosh FB game 400

Thu 8‐Sep HP&R Softball 5p ‐11p 850 Seattle U‐Boise St Soccer/CHS FB Practice/JV FB game 100/500

Fri 9‐Sep PSU Womens Soccer Games 12p ‐ 10pm 1,000

Sat 10‐Sep Corporate SB Tournament 9am ‐ 7pm 1500 Youth FB games 8am ‐ 4pm 800

Sun 11‐Sep HP&R Girls Fastpitch 8a ‐ 8p 1500 PSU Womens Soccer Games 10a ‐5p 1,000 1,200 300 1,500Mon 12‐SepTue 13‐SepWed 14‐SepThu 15‐SepFri 16‐SepSat 17‐Sep Farmers Adult Softball Tourney 8a ‐ 10p 1500 1,125 375 1,500Sun 18‐Sep HP&R Girls Fastpitch 8a ‐ 8p 1500

Mon 19‐Sep21,075 24,550 14,825 60,450

from j r llc s - oregonlivemedia.oregonlive.com/hillsboro_news/other/final... · continued stagnant...

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