Laserfiche WebLink
For the survey approach,we called a number of existing horse parks in order to <br />estimate operating costs for a facility of the size proposed for the WSHP.For 400 stall <br />parks,we found a wide range of operating costs,with lows very close to our estimate <br />and highs around $1.2 million dollars per year (see below).This estimate is very <br />imprecise,for surveyed facilities varied the length of their operating season (with some <br />operating year round),as well as the range of equine and non-equine eventshosted. <br />In our scenarios we increase operating costs by 7%per year until the facility reaches <br />full capacity,and then decrease its growth rate to expected inflation (2.5%). <br />This model of cost over time assumesthat many of the operatingcosts will exist <br />regardless of the numberof horse days -for examplethe managerwill have to be paid <br />even in the first year of operation when the number of events is small.To these "fixed" <br />costs we add costs that will increase with the number of horse days,such as bedding <br />and manual labor costs.Because only pad of the total operatingcosts will increase, <br />the rate of total costs will increase more slowly (7%)than the number of horse days (20 <br />or 25%). <br />One operating cost that is not included is property tax.Based on an expenditure of <br />twenty million dollars and a land value of five million dollars,property taxes will be <br />approximatelytwo hundred and twentyfive thousanddollars.We have assumed that <br />the taxing jurisdictionswaive these taxes -the facility will experience substantial <br />operating losses if these are included. <br />Scenarios: <br />We use the parameters of demand and cost to develop four scenarios regarding <br />profitability.All assume an absence of capital costs and property taxes.Tables Two <br />30