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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 events hosted. <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 assumes that many of the operating costs will exist <br />regardless of the number of horse days — for example the manager will have tb 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 part of the total operating costs 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 bm Based on an expenditure of <br />twenty million dollars and a land value of five million dollars, property taxes will be <br />approximately two hundred and twenty five thousand doilars. We have assumed that <br />the taxing jurisdictions waive 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 <br />