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HomeMy WebLinkAboutResolutiontoApproveAgmt2019PFHorseParkKITTITAS COUNTY DEPARTMENT OF PUBLIC WORKS AGENDA DATE: ACTION REQUESTED: AGENDA STAFF REPORT December 4, 2018 Request to Approve a Resolution for the 2019 Distressed County Sales and Use Tax Infrastructure Improvement Program Agreement with Washington State Horse Park Authority BACKGROUND: Kittitas County Conference of Governments (COG) met on September 19, 2018 to review the 2019 submitted applications. COG recommended awarding $350,000 to Washington State Horse Park Authority. This Agreement is the final step in the award process. INTERACTION: Public Works; Washington State Horse Park Authority RECOMMENDATION: Approve & Sign the Resolution and the 2019 Distressed County Sales and Use Tax Infrastructure Improvement Program Agreement. HANDLING: Return one (1) original to Public Works ATTACHMENTS: Resolution, 2019 Distressed County Sales and Use Tax Infrastructure Improvement Program Agreement LEAD STAFF: Mark Cook Director of Public Works BOARD OF COUNTY COMMISSIONERS COUNTY OF KITTITAS STATE OF WASHINGTON RESOLUTION NO: 2018 - RESOLUTION TO APPROVE THE 2019 DISTRESSED COUNTY SALES AND USE TAX INFRASTRUCTURE IMPROVEMENT PROGRAM AGREEMENT WITH WASHINGTON STATE HORSE PARK AUTHORITY WHEREAS: The 1999 Legislature did pass RCW 82.14.370 Sales and Use Tax for Public Facilities in rural counties; and WHEREAS: These funds are for the purpose of financing Public Facilities which are defined as bridges, roads, domestic and industrial water facilities, sanitary sewer facilities, earth stabilization, storm sewer facilities, railroad, electricity, natural gas, buildings, structures, telecommunications infrastructure, transportation infrastructure or commercial infrastructure and port facilities in the State of Washington; and WHEREAS: The 2019 Distressed County Sales and Use Tax Intrastructure Improvement Program Agreement with Washington State Horse Park Authority has been executed by said entity with funding available January 1, 2019; and NOW, THEREFORE BE IT RESOLVED: The Kittitas County Board of County Commissioners hereby approves the attached 2019 Distressed County Sales and Use Tax Infrastructure Improvement Program Agreement with Washington State Horse Park Authority. ADOPTED this 4th day of December, 2018. Attest: ❑ Clerk of the Board- Julie Kjorsvik BOARD OF COUNTY COMMISSIONERS KITTITAS COUNTY, WASHINGTON Laura Osiadacz, Chairman Obie O'Brien, Vice -Chairman ❑ Deputy Clerk of the Board- Mandy Buchholz Cory Wright, Commissioner 2019 DISTRESSED COUNTY SALES AND USE TAX INFRASTRUCTURE IMPROVEMENT PROGRAM AGREEMENT BETWEEN KITTITAS COUNTY AND WASHINGTON STATE HORSE PARK AUTHORITY This Contract, dated , 2018 is made and entered into by and between KITTITAS COUNTY ("County"), a subdivision of the State of Washington, and WASHINGTON STATE HORSE PARK AUTHORITY ("Funding Recipient"). WHEREAS, the purpose of this Agreement is to provide for public facility construction and foster economic development opportunities within Kittitas County; NOW THEREFORE, in consideration of the terms and conditions contained herein, or attached and incorporated and made a part hereof, the County and the Funding. Recipient mutually agree as follows: Section 1. Scope of Work. a. Funding Recipient shall provide the services and staff described in its Application for Funds submitted to the Council of Governments, attached hereto as Exhibit "A" which is attached hereto and incorporated herein by this reference. b. Except as otherwise specifically provided in this Agreement, Funding Recipient shall furnish the following as required to perform the services, described in Paragraph (a) above, in accordance with this Agreement: Personnel, labor and supervision; technical, professional and other services. All such services, property and other items furnished or required to be furnished, together with all other obligations performed, or required to be performed, by Funding Recipient under this Agreement are collectively referred to herein as "Services." Section 2. Payment. a. As full compensation for satisfactory performance of the Funding Recipient Services, the County agrees to pay Funding Recipient the sum of three hundred fifty thousand dollars ($350,000). b. Additional payment terms: The County will make payment to the Funding Recipient only on a reimbursement basis, as receipts for any items including marketing and/or advertising are submitted to the County. c. Requests for reimbursements must be submitted to: Kittitas County Public Works Attn: Joyce White 411 North Ruby, — Suite 1 Ellensburg, WA 98926 'o ce.white co.kittitas.wa.us Distressed County Sales and Use Tax Infrastructure Improvement Program Funding Agreement Page 1 d. Reporting requirements of your events will be required on prescribed forms from the Kittitas County Public Works Department. Section 3. Performance by Funding Recipient. a. Funding Recipient shall not (by contract, operation of law or otherwise) delegate or subcontract performance of any Services to any other person or entity without the prior written consent of the County. Any such delegation or subcontracting without the County's prior written consent shall be voidable at the County's option. b. Funding Recipient shall at all times be an independent Funding Recipient and not an agent or representative of the County with regard to performing the Services. Funding Recipient shall not represent that it is, or hold itself out as, an agent or representative of the County. In no event shall Funding Recipient be authorized to enter into any Agreement or undertaking for or on behalf of the County. It is understood that the Funding Recipient and the Funding Recipient's staff and employees are not employees of the County and are not, therefore, entitled to any benefits provided employees of the County. c. Funding Recipient shall comply with all applicable laws, ordinances, rules, regulations, orders, licenses, permits, and other requirements, now or hereafter in effect, of any governmental authority (including, but not limited to, such requirements as may be imposed upon the County and applicable to Services). Funding Recipient shall furnish such documents as may be required to effect or evidence such compliance. All laws, ordinances, rules, and orders required to be incorporated into agreements of this character are incorporated into this Agreement by this reference. Funding Recipient agrees to obtain all required licenses and permits, and further agrees to keep them in full force and effect during the term of this Agreement. d. The County and the Funding Recipient agree that in fulfilling the terms and conditions of this Agreement neither shall discriminate on the basis of race, creed, color, national origin, age, sex, marital status, or the presence of a physical, sensory, or mental handicap. e. The Services shall at all times be subject to inspection by and approval of the County, but the County's making (or failure or delay in making) such inspection or approval shall not relieve Funding Recipient of its responsibility to perform the Services in accord with this Agreement, notwithstanding the County's knowledge of defective or non -complying performance, or the substantiality or ease of discovering the same. Funding Recipient shall provide the County with sufficient, safe, and proper facilities and equipment for such inspection and free access to such facilities. This contract is subject to review by any Federal or State auditor. Funding Recipient shall promptly furnish the County or its designee, or such Federal or State auditor with such information related to the Services as may be requested by the applicable governmental entity. Funding Recipient shall preserve and maintain all financial records and records relating to performance of Services under this Agreement for six (6) years after contract termination. For such duration after the County makes final payment of compensation due hereunder, Funding Recipient shall provide the County access to (and the County shall have the right to examine, audit and copy, Distressed County Sales and Use Tax Infrastructure, Improvement Program Funding Agreement Page 2 with or without notice) all of Funding Recipient's books, documents, papers and records related to the Services or this Agreement. g. Funding Recipient understands and acknowledges that Funding Recipient is solely responsible for its own reporting and accounting of all state, federal, social security, and local taxes, of every nature, arising from Funding Recipient's performance of this Agreement. All compensation received by the Funding Recipient will be reported to the Internal Revenue Service at the end of the calendar year in accord with the applicable IRS regulations. Section 4. Release, Indemnity, and Hold Harmless. The County assumes no liability for the Funding Recipient's actions under this Agreement. Funding Recipient releases and shall defend, indemnify, and hold harmless the County, its officers and employees, agents, representatives, attorneys and/or volunteers, from and against all claims, costs, liabilities, damages, and expenses, (including, but not limited to, reasonable attorney fees) which arise or may arise or be alleged to arise out of or by reason of this Agreement including: Any fault, negligence, strict liability or product liability of Funding Recipient in connection with the Services for this Agreement; • Any lien asserted upon any property of the County in connection with the Services for this Agreement; • Any failure of Funding Recipient, or of the Services, to comply with any applicable law, ordinance, rule, regulation, order, license, permit and other requirement, now or hereafter in effect, of any governmental authority; or • Any breach of or default under this Agreement by Funding Recipient. Section 5. Compliance with Public Records Law. a. In compliance with Washington's public records law, the County will retain copies of any documents associated with this Agreement, which may be required by law unless legally exempt from such retention, for any applicable legally required retention period. b. In the event a public records request is made to the County for documents created in relation to this Agreement, should legal uncertainty arise regarding the disclosability of any documents under federal or state public records laws, the County shall provide notice to Funding Recipient pursuant to Washington's public records act, chapter 42.56 RCW, to allow Funding Recipient to seek a court injunction. c. The County specifically shall not be liable to Funding Recipient for the County's release under public records laws of any documents not protected by trademark, copyright or other law. Distressed County Sales and Use Tax Infrastructure Improvement Program Funding Agreement Page 3 Section 6. Industrial Insurance Waiver. With respect to performance of this Agreement and as to any claims against the County, its Additional Insureds, officers, agents and employees, the Funding Recipient expressly waives its immunity under Title 51 of the Revised Code of Washington, the Industrial Insurance Act, for injuries to Funding Recipient's employees and agrees that the obligations to indemnify, defend and hold harmless provided in this Agreement extend to any claim brought by or on behalf of any employee of the Funding Recipient. This waiver is mutually negotiated by the parties to this Agreement. Section 7. Insurance and Endorsements. a. The County may require through a request in writing that the Funding Recipient provide the County with a certificate, binder, or policy of liability insurance, acceptable to the County in an amount specified by the County. b. Such liability insurance shall be such as will protect Funding Recipient, its employees, agents and representatives, from all claims, losses, harm, costs, liabilities, damages and expenses arising out of personal injury (including death) or property damage that may result from performance of the Services or this Agreement, whether such performance is by Funding Recipient or any of its employees, agents or representatives. c. Should the County require such liability insurance, the Funding Recipient agrees to provide proof of insurance prior to commencing performance of this Agreement. d. Copies of the County's written request and the insurance documents provided by Funding Recipient shall be attached to this Agreement and by this reference will be made part hereof. e. Where insurance is requested by the County, all liability insurance policies shall be endorsed to include the County as an Additional Insured and shall stipulate that the insurance afforded by the policies shall be primary insurance, and that any insurance, self-insured retention, deductibles, or risk retention trusts maintained or participated in by the Parties shall be excess and not contributory to any other insurance maintained by the County. Funding Recipient shall furnish the County a certificate of insurance with Endorsement as evidence that the required policies are in full force and effect. Section B. Termination. The County may, by written notice thereof to Funding Recipient, terminate this Agreement as to all or any portion of the Services not yet performed, whether or not Funding Recipient is in breach or default. Upon receiving such notice of termination, Funding Recipient shall, except as otherwise directed by the County, immediately stop performing the Services to the extent specified in the notice. In the event the County terminates the Funding Recipient's Services, the Funding Recipient is obligated and hereby agrees to refund to the County all monies paid for Services not yet rendered by the Funding Recipient, if any, as of the date of the notice of termination. Distressed County Sales and Use.Tax Infrastructure Improvement Program Funding Agreement Page 4 Section 9. Miscellaneous. a. Funding Recipient shall not (by contract, operation of law or otherwise) assign this Agreement or any right or interest in this Agreement without the County's prior written consent. b. This Agreement embodies the entire Agreement between the County and Funding Recipient, and supersedes any and all prior oral or written communications, proposals, conditions, promises, representations, or understandings regarding the Services. No change, amendment or modification of any provision of this Agreement shall be valid unless set forth in a written amendment to the Agreement signed by both parties. c. Notice for any purpose under this Agreement, except service of process, shall be given by the Funding Recipient to the Kittitas County Commissioners and the Kittitas County Public Works Director, 411 North Ruby, Suite 1, Ellensburg, WA 98926. For all purposes under this Agreement, any notice by the County to the Funding Recipient shall be given to the Funding Recipient's address provided on the signature page. Notice may be given by delivery or by depositing in the U.S. Mail, first class, postage prepaid, certified mail, return receipt requested. d. The section and paragraph headings of this Agreement are for reference convenience only and are not intended to restrict, affect or be of any weight in interpreting or construing the provisions of such sections or paragraphs. e. This Agreement may be executed in one or more counterparts and by facsimile, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Funding Recipient warrants to the County that the individual signing on Funding Recipient's behalf has the requisite power and authority to enter into and to perform Funding Recipient's obligations under this Agreement. Funding Recipient further warrants to the County that Funding Recipient has made no misrepresentation or misleading statement in connection with this Agreement, and is not in violation of any applicable law, ordinance, or regulation the consequence of which will or may materially affect Funding Recipient's ability to perform its obligations under this Agreement. g. If any term or condition of this Agreement or the application thereof to any person(s) or circumstances is held invalid, such invalidity shall not affect the other terms, conditions or applications which can be given effect without the invalid term, condition or application. To this end, the terms and conditions of this Agreement are declared severable. h. The exclusive venue for any action brought to enforce this Agreement or any of its terms shall be in Kittitas County, State of Washington. Distressed County Sales and Use Tax Infrastructure Improvement Program Funding Agreement ; Page 5 KITTITAS COUNTY BOARD OF COUNTY COMMISSIONERS Laura Osiadacz, Chair Obie O'Brien, Vice- Chair Cory Wright, Commissioner Dated: ATTEST: Clerk of the Board APPROVED AS TO FORM: Deputy Prosecuting Attorney WASHINGTON STATE HORSE PARK AUTHORITY Representative t4Stw 12 Q 13 6XI Address Lf- fW(h, g1 2�2- Y-77- Telephone Dated: Distressed County Sales and Use Tax Infrastructure Improvement Program Funding Agreement Page 6 Kittitas County Department of Public Works Di8T1 mszo COUNTY SALES AND IJSE TAX INFRASTRUCTURE IMPROVEMENT PROGRAM APPLICATION The Distressed County Sales and Use Tax Infrastructure Improvement Program supports improvements to infrastructure systems that foster ewnomic development in Kittitas County. The goal is to create economic opportunity through infrastructure investment APPLICANT INFORMATION: Applicant: Contact Name: Address: City: Telephone: Email Address: Project Location: Washington State Horse Park Authority Leslie Thurston, Executive Director PO Box 278 Cle Elum 877-635-4111 WA Zip: 98922 FAX: NIA director@wahorseparL org 1202 Douglas Munro Blvd. RECEfVED JUL 13 'tpid KWWAS CUtlNW DEPTOP Pt18LiC WORM Cle Elum, WA 98922 Jurisdiction Population: 1,890 Project Title: Washington State Horse Park Covered Arena and Associated Band -Qat APPLICATION THRESHOLDS: Applieant Check- Off Requirement ✓ L The project is improvement to an infrastructiue system(s) linked to economic development ✓ 2. A detailed 8 112 X 11" vicinity map that clearly slows the project is included in the application package ✓ 3. Distressed County Funds are not being substituted for other funds that are already secured. ✓ 4. The Project involves traditional impravements instead of "nont iditional" improvements eligible for "Enhancement" funding ✓ 5. Applicant has submitted only one application this round. f 6. The local/regional economic development organization has been informed of the project Washington State Horse Park Distressed County Sales and Lee Tax Cmmt Application pglM PROJECT BUDGET FUNDING SOURCES Prelhnlnery Engineering Right of way Phase Construcdon Phase Project Total Is Fund rg Secured? Distressed County Funds Requested $ 400,000 $ - $ - $ 400,000 $ 400,000 N Other Federal: State Biennial Capital Budget $ 2,000,000 $ - $ - $ 2,000,000 rs 2,ODOA00 i Y State RCO Grant I I— $ 350,000 $ Mao r $ 350.0001 N Local Government Coun in Tax $ 1,500,000 $ - $ - i $ 1,500,000 rs 1,500,000 1 N LocaI Gavernment (M Lad i Tax $ 30,000 1 $ 30,000 rS 30,000 I N Private Private Fundraisi $ 200,000 1 $ 315,000 $ 315,000 Y 50% *Other (Corporate S nsorshi $ 125,000 1 $ US,= rs 125,000 Y 40% *Other (In -Kind $ 160,000 $ I $ 160 000 rs 160 000 I Y *Other Distressed County Funds 2015 $ 60,000 1 $ 60,000 1 rs m000l Y Project Todd 1 $ 60,000 1$ -1 $ 4,M0,000 1 $ 4,940,000 Distressed Cowly Fund Mafthlqg Ratio 1 01 01 4396 44% Please Explain Other Type of Funding: Local Funding includes: Distressed County Funds grant 2015, In Kind, Corporate Sponsorships, Private Fundralsing, City and County Lodging Tax Capital Grants Washington State Horse Park Distwoed County Sales and Use Tax Cmmt Application pg2125 PROJECT NARRATIVE ■ Prajed Description: Describe the scope of work. Indleate the major work involved, including a brief eomparhon of existing and proposed conditions. The Washington State Horse Park Authority ("the Authority") is a 501(c)3 nonprofit corporation whose mission is to develop, promote, operate, manage and maintain a first-class horse park facility in accordance with RCW 79A.30, which passed 1995. Subsequently the Authority obtained land and funding to develop the initial revenue -generating facilities for the Washington State Horse Park in Cle Elven, Kittitas County, Washington. The Park held its first event in 2010 and has been self sustaining since that time. However, its ability to satisfy current customer needs, serve a broader range of horse sport disciplines and host larger events is limited because all of its existing riding facilities are outdoors while many event organizers require protection $bm the weather. This project seeks $400,000 from the Kittitas County Distressed County Sales and Use Tag Infrastructure Improvement Program to construct a $4.9 million Covered Arena and Associated Build -Out (covered arena, not an enclosed arena) at the Washington State Horse Park for the purpose of public equine competitions and training cvents, recreational riding and other uses. Background: In 1995, the Stat legislature passed RCW 79A.30 (recedified 67.18 ) to create the Washington State Horse Park Andwrity. The legislation directed the Authority to establish "3) a first- class rstclass horse park facility in Washington to meet the important needs of the state's horse industry, attract investment, enhance recreational opportunities, and bring new exhibitors and tourists to the state from throughout the region and beyond; and 4) A unique opportunity exists to form a partnership between state, county and private interest to create a major horse park facility that will provide public recreational opportunities and statewide economic and employment benefits." Upper Kittitas County was selected as the location for the Horse Park when suitable wooded acreage was donated by Suncadia LLC for tho purpose of developing a horse park. The 112 -acre site is conveniently located off I-90 at 1202 Douglas Munro Blvd in the city of Cle Elum. This location met requirements determined by earlier studies for a horse park facility, including good highway access and a dry climate. The City took ownership of the donated property and entered into a 99 -year lease with the Authority. Legislative support continued with appropriation of $3.5 million in the 2007-2009 capital budget for Phase I construction of the Horse Park. That work included design, development, pe sitting and engineering components, as well as site clearing, road grading, utility improvements and initial arenas and stabling to begin hosting activities and generating revenues. Ground was broken in March 2010 and the first event took place in August of that year. In an Oct 12, 2009 posting on houserepublicans.wa.gov, then Rep. Judy Warnick (now Sen. Judy Warrick, 13' Legislative District) included in the list of reasons for her support: `Most of all, these facilities will help the local economy and provide much-needed jobs." This view by the legislators was reinforced in 2018 when the State Biennial Capital Budget was approved with $2.0 million in support of the WA State Horse Park Covered Arena and Associated Build -Out project. The bill passed both the House and Senate unanimously. Construction of the Horse Park has been divided into three phases. Phase I was completed when the park opened for business. Its cost of $3.5 million to develop the initial infrastructure and competition facilities was funded by the state legislature in the 2007-2009 capital budget. Phase II, which expands upon those basic amenities, has been ongoing since that time and includes acquisition of equipment, horse stalls, bleacher seating, electricity extensions, cattle pew, jumps and fencing, etc. as well as development of Wadangton State Horne Park Distrraaed County Sales and Use Tax Grant Application pg 25 fourth arena, cross country courses, competitive trail obstacle course, etc. The Park is now ready to initiate Phase III which includes this project (a covered arena) plus associated items and buildout of amenities to attract and host major regional, national and international competitions. The Covered Arena itself will comprise the following features: The competition arena is 150 feet x 300 feet. k A 25 -foot wide `porch" wraps around the arena, resulting in abuilding that is 200 feet in width and 350 feet in length. Features of the porch: — Floor level of the porch is the same as the competition arena, so gates can be placed to enter the arena at any location. — Portable seating can be placed at any location in the porch, depending on the needs of the event. Judges stands can be placed at any location in the porch, depending on the needs of the event. The porch can be used for competition warn up and to protect the horse and rider from adverse weather while waiting to compete. The porch protects the competition space from direct sunlight and from rain. — Roll -down mesh screens can be installed at select locations at the outer wall of the porch (portions at north and west) to protect from wind. These can be motorized and controlled from a single location. Eave height of the porch is 16 feet, so horses can enter at any location. The porch can be used for storage of event equipment. Vendors, concessionaries and hospitality areas can be conveniently staged within the porch area,. ■ Lighting the Arena — The eave height around the entire structure is 16 feet so light arrives evenly from all sides. — A translucent panel skylight at the ridge balances die lighting for the arena. — Lighting would be provided for night events. • Gable Ends — The gable ends above the wraparound porch are solid, providing space on the outside for the wena logo and name and on the inside for scoreboards and advertising. — Air vents and/or mechanical circulation may be placed in the end gables if needed. IN Structure and Materials The entire structure is prefabricated steel, including the porch. Building footings are concrete with ties under the arena floor. Roofing and siding materials are metal. Providing shade and weather protection for both participants and spectators will not only enhance the user experience, it will also expand the Horse Park's calendar by affording more months of operation and attracting more diversified equine activities, especially "A" rated equestrian competitions, thereby increasing revenues and visitor volumes. Currently these activities are hosted at fairgrounds and private venues across the Stats with covered or indoor arenas. Many equestrian event organizers have expressed their strong interest in holding large shows at more modern and conducive facilities as the Park represents. Below is an artist's rendering of the planned covered arena without the screens down. The arena is untended to be a bright and airy structure that will be inviting for horses and riders, and preserve the sense of place of the Park's woodland setting. Washington State Horse Park Distressed County Sales and Use Tax Grant Application pg4W The land where the covered arena will be built is currently lightly wooded, sunuunded by graveled parking and roadways, and has utilities (water, electric and sewer) adjacent to it. There are no impediznMts to moving forward with the project once funding is secured. 2. Explain the specffiic mfrastructou a issues the project addresses and how they are linked to economic development improvements. The project is cited as a high priority strategic objective of the Kittitas County Tourism Infrastructure Plan (Action 5: Recreational Tourism) and the Kittyitas County Parks and Recreation Capital Improvement Plan (CIP) 201 "ee attachment. A Covered Arena was identified as a key facility as early as 1991 in the fust Washington State Horse Park feasibility study, which was funded by the Washington State Department of Community Development. Recreation and Showing/Competition comprise 71% of US horse wage (source: AHCF 2005). This segment is different from the SCORP segment of equine activity, which is limited to trail riding. The project addresses the economic vitality that results from building infrastructure for recreational tourism. Upper Nattitas County was ultimately selected as the site for the Horse Park when suitable land, valued at $5 million, was donated by Suncadia. It also met the requirements detenmined by earlier studies that the site have good highway access and a drier climate. With funding from the state legislature in 1986, the Washington State Department of Agriculture completed a study recommending the creation of an eque stim center to "promote and serve the recreational hone industry in the state and provide economic benefits through equine activities. (*FFEI--WSHP p.3 App ITS In 1995, the state legislature passed RCW 67.18 (recodified 79A.30), to create the framework for the facility, authorizing the Horse Park Authority to establish "3) a first class horse park facility in Washington to meet the important needs of the state's horse industry, attract investment, enhance recreational opportunities, and bring new exhibitors and tourists to the state from throughout the region and beyond; and 4) A unique opportunity exists to form a partnership between state, county and private interest to create a major horse park %cility that will provide public recreational opportunities and statewide economic and employment benefits." Washington StM Horse Park Mskwsed County Sales and Use Tax Grant Application pg5/25 The covered arena has always been part of the Horse Park's development master plan, and the City of Cle Hlum Master Plan. The Washington State Horse Park Covered Arena promotes the following goals and priorities of the Kittitas Comity Tourism Infrastructure Plan (see Exhibit 1): Goal 1: Develop integrity of place—This project will enhance Kittitas County's character by developing and improving the venue in distinctive ways to differentiate Kittitas County from other areas and to engender local community pride. In addition to bringing international caliber competitions to the area, many equestrian event organizers have expressed their strong interest in holding some of their large shows at a different, more modem and conducive venue. This market opportunity represents approximately 40 new and expanded medium -to -large size competitions that potentially could be hosted at the Horse Park. Local economic impact is estimated at $4.5 to S5.5 million. • Goal 11: Interpret interactively—The WA State Horse Park Covered Arena and Associated Build -out will attract and engage a unique segment of visitors, representing some 25-34,000 overnight stays. These visitors will learn about other recreational assets of Kittitas County, thereby gaining a richer experience and helping residents develop pride in their locale. The Park's beautiful woodland setting, system of trails, competition facilities and horse -specific operations make it a unique facility in the county and the state. ■ Preliminary Engineering Phase: Estimated Start Date: Site Preparation/Engineering 2016 Estimated End Date: 2019 Please explain phase status (work already completed, in progress, awaiting funding, ete. and factors that may slow phase progress). In 2016, funded by a Distressed County Sales and Use Tax Infrastructure Xmprovement Program grant of $60,000, project design and engineering began and this preliminary phase is now completed. Working with affected horse community leaders and a professional design consultant, Park management invested significant time and attention to defining the right location and overall specifications for the covered arena. Preliminary engineering and cost estimates of the steel structure were developed by a nationally known manufacturer. The arena location is depicted as `Arena 1" on the attached Master Plan. 4. Right of Way Phase: Is It Required? Yes: X No: Please explain phase status (work already Completed, in progress, awaiting finding, etc., and factors that may slow phase progress). The WA State Horse Park has engaged in talks with New Suncadia LLC to obtain an 8 -acre parcel for the purpose of additional parking at the site. The estimated cost of the land is $150,000 included in the project cost. This parcel is not a "go/no-go" requirement of the project, but is considered in its scope. Wadhirom Stale Hasse Perk Distressed County Sales and Use Tax [rant Application pg6125 5. Construction Phase: Estimated Start Date: Fall 2018 Estimated End Date: 7019 Please explain phase status (work already completed, in progress, swatting funding, etc., and factors that may slow phase progress). The project is phased to meet funding requirements of the State, to speed the erection of the facility itself with minimal amenities to start events. Additional amenities, relocation of maintenance facilities, additional seal ft, and other aspects of the project await confirmation of additional funding. Below are details of the costs associated with Phases I and II of the project: Covered Arena Pro ect Expenses Real Propertyor ` -aILW Acquisition Cost es ItW Aaset Coat Acquisitionoft-acreparrel from NsvSuncad!&LLCfbrparldng $150.000 Capital Asset Cost: Covered Arens Construction Cost or "Hard" Costs TUML Phase I Phase 11 Site Pre aratlon and d rainM $65,000 $65,000 Metal building ($28.50/5fx60,000 sq $1,710,000 $1,710,000 Porch at pbleends 24/six 9,600 $230,400 $730,400 Foundations $185,000 $185 D00 Mechanical $35,000 $35,000 Electrical and en 'nearing $250,000 $250,000 Fencing $50,000 $50,000 Arenafooting $200,000 $200,000 Translucent pands s 1 ht) $450,000 $450,000 Land9caElng $40,000 $25,000 $15,000 Portable bleachers $60,000 $60,000 Weather screens $55,000 $55,000 Restrooms $200,000 $200,000 Additional parking land-c[earin and construction $75,000 75 00 Relocation ofmaintenancearea (utilities,landclearing,site development) Lump- S156.2m Subtotal $3,761,400 $3,356,400 $405,000 Contingency596 $188,070 $167,820 $20,250 WSST 8% $315,958 $281,938 $34,020 Total Construction $4,265,428 $3,806,150 $459,270 Soft costs 3% AdministrativeCost on$2.OMMstate fundln $60,000 $60,000 -Project Ma ent $100,000 $60,000 $40,000 Permit Fees $15,000 $15,000 Architectural and Structural Design Fees $20,000 Total"costs $225,0001 $165,0001 $60,000 Total Project casts $4,640,428 1 $3,971,156 1 $66%270- A combination of private and corporate donations and public funding sources will fiord the project. These, too, are phased to (a) fast trunk the building of the arena itself and (b) accommodate gant application and funding timing ents. Washington State Horse Park Distressed County Saks and Use Tax Ceram Application p97/25 6. Indicate Kthe project is consistent with the following applicable state, regional and local plans and prioritization processes: X Overall Economic Development Plan — Officially ,adopted; June 2013 Yakima and Kittitas (&-Yak) Counties Regional Comprehensive Economic Development Plan is dated June 1, 2013. The Washington State Horse Park is one of 11 ventures noted on page 42 under Strategic Projects — Key Investments and Projects Supporting a Strong Regional Economy as having "helped boost the region's economic fortunes." X Comprehensive Land Use Plan — Officially Adopted: 2006 The City of Cle Elum Comprehensive Land Use Plan was adopted in 2006. The Horse Park is noted within the City's Urban Growth Area ((JGA) and is listed specifically on page 10 of Chapter 2, Table -4 "Proposed Land Use" in the inventory of active parks. (Exhibit Ill, attached) O Capital Facility Plan -- Oifiicially Adopted Not a livable 13 Community Action Plan (or other community-based plan — Officially Adopted Not avnlicable 13 Six Year Transportation Improvement Plan — Officially Adopted Not Wheable 0 Site-specific development plans; e.g. Community Master Plan — Officially Adopted Not Uph X Other: Economic Development Strategic Plan—Of ieially adopted July 2009 The Economic Development Strategic Plan 1.0 sponsored by the Kittitas County Economic Development Group was published by TIP Strategies and dated July 2009. The complete report is available from the Kittitas County Chamber of Commerce office in Ellensburg. The report lists Rec reahonal Tourism as the third strategy for economic growth. Working closely with. EDG, the resulting "Strength -Weakness -Opportunities -Threats (SWOT) Report lists "Build on recreational tourism opportunities in the county and surrounding region„ as Goal 3 (of 6). `Tourism should be an essential component of any economic development plan for a region with Kittitas County's transportation access and natural features." The long-standing annual Ellensburg Rodeo and Kittitas County Fair are listed as examples because each meets the standard of being a "mechanism for capturing retail sales dollars " X Other: Kittitas County Parks and Recreation Open Space/Capital Improvement Plan (CEn OfllciaRy Adopted 2016 The WA State Horse Park Covered Arena and Associated Buildout is listed as a High Priority strategic objective of the plan, approved by the Kittitas County Board of Commissioners in 2016. (Exhibit Il, attached) X Other: Kittitas County Tourism Infrastructure Plan—Officlally Adopted March 2016 Authored by the Consolidated Lodging Tax Advisory Committee, which represents all four Lodging Tax Advisory Committees m the County (Council Member Spears served, representing the City of Cle Elam Lodging Tax Committee) this planning process included multiple public workshops and forums in Cle Blum and Ellensburg, on-line and hand -back surveys of over a thousand tourists, and meetings with local recreational groups. Adopted in March 2016 by the Board of County Washington State Horse Park Distressed County Sales and Use Tax Grant Application pg8/25 Commissioners, the plan lists the WA State Horse Park Covered Arena as a high priority strategic objective. K Other: 2018 State Biennial Capital Budget -Offlcbft Adopted May 7018 A $2.0 million appropriation for the WA Mate Horse Park Cowered Arena and Associated Build -Out project was included in the budget, passed by both the Senate and the House, and approved unanimously. 7. Explain how this infrastructure project has been coordinated, or will be coordinated with other jurisdictions, such as counties, cities, state/federsl agencies, and with economic development organizations during planning, design, thmehig, construction and/or operation phases. Coordination has been the bedrock of Horse Park since 1986 when the Washington State Legislatum appropriated funds to the Washington State Department of Agriculture for investigation of the economic impact of Washington's horse industry. The study recommended such a facility to promote and serve the recreational horse industry in the state and "provide economic benefits through equine activities." (See FFEI-WMP App N, pg3), Co-ordination continued in 1991 with $200 thousand of state funding for an equestrian planning study. It was codified in 1995 with the passage of RCW 67.18 (rwxHfied 79A.30) to "establish a first-class horse park facility in Washington to meet the important needs of the state's horse industry, attract investment, enhance rational opportunities, and bring new exhibitors and tourists to the state from throughout the region and beyond." The RCW even spears to the importance of continued interaction noting "a unique opportunity adats to farm a Partnership between state, county, and private interests to create a major horse park facility that will provide public recreation opportunities and statewide economic and employment benefits. The RCW also established the Washington Horse Park Authority, a nonprofit corporation directed by volunteer board members who are appointed by the governor and must be from across the state, and experienced in the business side of horse shows and events. One member must represent the Washington State Parks and Recreation Commission and another the local interest of the community where the Horse Park is located (based on recommendations from County Commissioners). The Board cuncntly comprises eleven members who represent a over 300 years of combined experience in a range of horse disciplines: four members are full-time trainer seven members currently ride horse themselves. The Horse Park Authority actively seeks to fill Board positions with individuals who can help the Horse Park continue to expand its user base and facilities. More information is available under Governance at wahorsepark.org. At its May 27, 2014 City Council Meeting, City of Cle Elum Council members voted unanimoudy for a resolution "Supporting the Application for Distressed County Sales Tax Funding for the Design, Fngincaring, and Permitting of a Covered Arena for the Washington State Horse Park, located in Cle Elum" (Rrhfbst Id). The Washington State Horse Park has been awarded a total of over $200 thousand in eight consecutive -year grants by the Mthtas County Lodging Tax Advisory Committee (and, most recently, the Consolidated Kittitas County Lodging Tax Advisory Committee), approved by the Board of Commissioners, in recognition of the Horse Park's value as an economic driver for tourism efforts in Kittitas County. The Kittitas County Chamber of Commerce Economic Development Committee (EDC) recognizes the Horse Park plays to the strengths and opportunities of Kittitas County that were defined in the TIP Strategies report (noted in Item 6) and the facility will be a valuable aid in developing Recreational Wubngtm State Hoare Park Diseessed County Sales and Use Tax Grant Application pg925 Tourism, one of 6 goals cited. EDC is willing and able to assist whenever and however it is called on to do so. Last but not least, members of the Park's Authority Board serve in a variety of important roles at the State and County levels: Senator Judy Warnick and Representative Tom Dent ensure the Park's projects and operations are connected as needed with State agencies and resources; Steve Brand serves on the Board as the representative from the State Parks and Recreation Commission; Victor Woodward is the Park's Advisory Board representative on the Consolidated Kittitas County Lodging tax Advisory Committee; and Mitch Williams serves on the Technical Review Team for the new Lodge Tax Large Capital Pmjects program. In addition, the Horse Park's Executive Director participates in the County Chamber's Tourism Committee, and coordinates with local businesses and community leaders to expand tourism opportunities in the County. S. Explain how the infrastructure project will help meet the economic development goads of your community and/or region. If this project is not done, will the anticipated private development still take place? Attracting new visitors to the Horse Park will create opportunities for a positive first impression of the local community that can build tourism loyalty and word-of-mouth interest in the area as the rightful gateway to recreational pursuits. The full realization of the Horse Park's potential economic impact will rely heavily on the ability of the City of Cie Elum, the Town of South Cle Elurn, and City of Roslyn to continue to develop acceptable, attractive lodging and tourism experiences for visitors of the Horse Park. The chart below summarizes the user metrics and economic impact of the Horse Park from 2014 to date and projected forward to 2022. From 2014-17 the measurement process includes gathering zip codes from all Park users, on-site surveys, the Dean Runyan Report provided by Washington Tourism Alliance, and discussion with event organizers. (This exhiffi t only includes event visitors and not recreational riders who are far less numerous and largely local.) For events, the number and zip codes for all participants are supplied by each event organizer; this base data is then multiplied by 1.5 to 3 depending on the type of group to project total attendees [Central Washington University conducted an economic study in 2006 of over 40 horse parks across the country. The CVM findings estimate 3 people (including trainers, grooms, firmly, spectators, staff, volunteers, vendors, etc.) attend an event for each horselparticapant, and that assumption seems reasonable for many groups based on our experience managing the Park to -date.] This chart reflects strong but slowing growth because our largest shows have reached the capacity of the Park until we add more arena space, our limited ability to attract more events without a covered competition arena, and a short operating season from May -September due to the risks of bad weather. However, we've been gratified to find that just the anticipation of a covered arena coming soon has sparked renewed interest in the Park and brought in a few new events. The chart also projects the measurable objectives and economic impact of the Park, with significant increases expected to occur in 2020 and beyond due almost exclusively to completion and impacts of the Covered Arena and Associated Build Out. Washington State Horse Park Disftssed County Sales and Use Tax Grant Application pglo/25 Event Visitor Traffic and Economic Contribution Dent Meths 2014 2015 2016 2017 2022 PkeJected with Covered Arena . herenEwd Econenk Benefit of Covered Arena Total mmober of dfixat eve 39 38 39 45 65 20 NO. Viers 17,246 24,827 30163 29,519 52,047 22 28 Vatots mdit ouWde K4Was County 33% $89/0 95% 96% 70% NIA Da Vs- lars-noslocal 5,201 6,877 7,277 5,474 13,407 7,933 Total visors ovem a--non-bcal 10,294 13,351 22,467 22,864 41,549 18,685 Vim o --Bat in Pau bd 1,544 2,003 3,370 3,430 6,222 2,792 V hors ovcni&--m paid lodging 8,750 11,348 19,097 19,434 35,327 15,893 No. Lodimg Rooms Booked 5,833 7,566 12,731 12,956 23.552 10 595 av=1EeonamieImpact ofvisi = $1,189,986 $1,543,376 $2,597,185 $2,643,078 $4,804,526 $2,161,448 Number oflobsC=ted 19 25 42 42 77 35 Hot yMoldS $464,095 1 $601916 1$1,012,902 $1,030,801 $1873,765 $842,965 Lad'Lodg4g Tax Revs 4% 1 $18,564 1 $24,077J $40,516 $41,232 $74951 $33,719 Recreational tourism is a significant economic opportunity for this area, and clearly the Horse park can be the engine. 9. Describe any feasibility or predevelopment studies that demonstrate the bnkage between the proposed Distressed County Infrastructure improvements and the anticipated economic outcomes. The most recent study is the November 2006 `Financial Feasibility and Economic Impact of the Washington State Horse Park" ( Mw- WSHP), written by Timothy Dittmer, Ph.D. and Richard Mack, Ph.D. professors in the Economics Department at Central Washington University in Ellensburg, WA. The study is included in this application in its entirely, as required. `-he primary objectives of this study were to determine the financial feasibility and potential economic impact of the Washin&n State Horse Park (WSHP) in its proposed location in Kittitas County..."(p.3) Using information fiam 17 other facilities across the country, the authors "developed a relatively sopbisticated financial model to determine economic feasibility."(p.48) The Study supports the expectations of legislators (noted in Item 2) oonf rms the positive findings of previous studies and updates the economic benefits. Summarizing from page 51 of the study: Using the `most likely' scenario at year six (considered maturity in operations assuming steady bmid-out to Muster Plan completion), the following impacts are projected: W1athington Stabs Horse Perls Dmft sand County Sales and Use Tax Graft Appli"don pg11/25 A. Direct spending by exhibitors and spectators estimated at $7.3 million B. Total money flows, both direct and indirect estimated at $8.4 million C. 143 jobs cleated D. Direct, indirect and induced spending by out of state residents estimated at $1,460,000 E. `°The recreational services sectors" will be the sectors most affected by the Horse Park operations The viability of the Horse Park is evident in the way it plays to the strengths of the County as listed in the report: A. Outdoor recreation E. Development of Suncadia resort B. Climate F. History (including western) C. Premier sports facilities and even location G. Small townhural character) D. interstate highway accessibility H. Natural beauty, open space It is anticipated that at maturity, the Horse Park will be an economic engine that will facilitate and drive private sector enterprise, especially retail, which is intrinsic to the value of recreational tourism to an area. There is currently nothing else planned in Upper County that could have such a positive impact. At this stage of development, the addition of a covered arena is expected to be the single most important impetus in reaching the area's potential. 10, indicate if other needed infrastructure (e -g4 sewer, water, power) is in place or if there is a plan for getting it in place, Utility infrastructure is in place at the Horse Park. Design and engineering of the covered arena includes access to utilities on the grounds. 11. Indicate the Estimated Number of Businesses Created/Retained by the Projea With the additional months of shoulder season activity allowed by the covered arena, the Horse Park estimates an additional 22,528 visitors annually, nearly 15,823 incremental overnight stays of paid lodging, and $2,882,000 of incrennental economic impact (CWLI study estimates the average visitor spends $136/day for lodging and related expenditures). Direct economic impacts of the WA State Horse Park will increase significantly with the buildout, but examples of current spending include (2017): R Annual payroll: $203,000 (2 fulltime year rotund, plus 12 seasonal) ■ Fort -a johns: $21,000 ■ Equipment rentals: $16,000 ■ Shavings: $27,000 ■ Manure removal: $4,000 ■ Temporary stall rentals: $16,000 Importantly, since over 95% of visitors to the Park come from more than 54 miles away, indirect economic impacts include local area restaurants, grocers, hotels and home rentals, fuel, supplies, etc.. Park visitors typically stay more than one night and travel in larger groups. 12. Indicate the Estimated Number of Jobs Created/Retained by the Project. As reflected on the chart in section 8 above, the Horse Park has experienced strong growth in visitor traffic and resulting overnight stays. Projecting forward, essentially all of the visitor and revenue growth expected during 2018-22 is attributable directly or indirectly to development of the covered arena. The Washington Stale Horse Park Disuessed County Sales and Use Tax Grant Application pg12/25 number of total annual event visitors increases by 22,528 with an increase in overnighters increases by 18,685, generating $2.2m in additional economic benefits and $33,719 of added Lodging Tax revenues. The methodology used to develop these metrics and projections is as follows: ❑ impact of Covered Arena: Assumes season extended by 50% plus expansion of current shows and ability to attract new users groups including some non-equme events. 13 Vtshors: Based on actual count of each horse(nder) using the Horne Park for a visit (regardless of number of days of visit) multiplied by 3. Central Washington university (CWU) conducted an economic study of over 40 US ham parks in 2006. The study concluded that 3 people (including trainers, grooms, family, spectators, stag volunteers, etc.) attend an event per horse. This is reasonable based on Horse park experience. ❑ Visitors residing outside Kittitas County: actual zip code information collected from users and projected ❑ Overnights during multi -day events: based on each event's schedule. ❑ Bay -Use Visitors—non-local: based on user registration forms. Q Total visitors overnights—non-local: calculated for each event the number of nan-local visitors times the number of nights, then applied the overall % of non -local visitors to the total. 13 Visitors overnight—not in paid lodging: An estimated 15% of Horse Park use= ether use RV hookups or dry camp. A negligible number stay with friends/family close by. We multiplied 15% to the total number. 13 Visitors overnight—in paid lodghW. This is the remaining 85% of visitors overnight. ❑ No. Lodging Rooms Booked: Based on umma demographics, we estimate that 1.5 users occupy a single room. This is conservative. l] Overall Economic bnpad of Vidtors: CWU study estimates that an individual spends $136/day for tourist swvicem; this metric was multiplied by the total number of non -local visitor nights. We applied an even more conmarvat ve assumption of $120/day. ❑ Number of Jobs Created: CWU estimates that for every $1 million of economic impact, 16 jobs are created. ❑ HotdIMotei Spending: approximately 39% of overnight spending is for lodging per Dean Runyan Washington State Travel Impacts & Visitor Volume 2001-2011 ❑ Lodging Tax Revenues: Total Hotel/Motel spending times 4% lodging talc rate (2% plus 2%) Submit the original application to: Kittitaa County Department of Public Works 411 N. Ruby, Suite #1 Ellensburg, WA 9892 Wasbmg on Sb to Horse Park Dutmsmd County Sales and. Use Tax Grant AMh a don pgl3/25 App eWion CextM%adon Cettificaflon is hereby given that the information provided es accurate and the awhcaMe. attwitmen s are complete and included as part of the Whcatton padaige. X certify that the apphcwon tlnesholds are met at the tune of application /e4c ?_ -��.� Signature of thew Rgmwnta&e Leshe Thmston, Executive Dmector Signature of Agency Representative Typed or Printed Name Sponsoring Agency (If Applicable) Dxte Date Associate Economic Developer Organizatian NoW=tion The organization listed below has received notification of this project as demonstrated by the signature of the organization's representative Kfttfts: County Chamber of Commerce Economic DeveloDmeatt [3l .Name of Orgaeizadon (See ,loathed Letter) Signature of Reprexentn&e e Amwhed Letter) Date Kites County Department of Public Warks Coaauat mal Approval of the project feasibly, scope, mad Per Cwt& Leader, ft jibe requiremem w~ -*V 1d 1;51* ftu tore of Kftdtax County DPW Representa5alry Typed or Prf W Nome Washington State Horse Park DiAmsed County Sates and Use Tax Grant Application pg14/25 pCHAMBER ., U }� ME C July 10, 203 MOD Couqly Deepartmeet of Public %arks 411 NWb Wbv Stvftt SSme 01 tilltnsburg,'wOW "S" 'to Whore it tv" marn: In ft%0*nWnh of the sim and Mora! m m kmam to the 1Washirq ars Stele Hama Park, 44 %Ve rr a dr+xv PAF Mrnt►r111 4tftWPffM t [or the aTelf, a nd ht ttrasesk pbmaot; in kwal ■od mjbmA etwjanr . dere *m"t pldm, I hie barn MMM and hemkw rwrm tpp ort of the 2D1&4rW pmomed apwkstlon ftr bMre6 d Wunty Ism and fin Tax fwndhg for "wi4arMbWanSlt w Norse Pwik Co+ ra0 kfacr trWAnadowd feiid'•lvt Dtted and siped thcs 10 ' Day of July. 70.14 N81TTff AS COUNTY CHiIAMilI:R W CDi MERCIE tCQMwtDf�+1IC M:LE}P t4T FftCf t $ jv 4awa ftbovskL Director or tgbnanlle Adm=mpnt iCit IUS COUntr Chant mr of Cam m ae Lwromk Dmiapment. Ston v:i V m—,4;! Ap rr- I r ►E±,15}.1306, IIIA 9NJ 4..6 1 0F.°; :!_'tip; x n,+'Ai ' 1 t'ILt h Rtr 143 W", .'Fv: 1 rAs<: Nl" III !' V Ir18f.7.k 4.pi ti lxt73ri r;n� r;• .yv.F ti [lv:::.•., M' ha+i�l.o t.:sf Washington State Horse Park Du*cssed County Sales and Use Tax Grant Application pgl5/25 64tt" 118 West I:Irrat SJreel INe •Flurn, WA U922 vw< my 12, 2018 KittitH� Ct}l&y D" maent of Public Wtalts 41 L N i #h RubyStrcct $tuft: #1 Ej,'ensburp, Wasltitlakm 98g';6 J)mr Review 7 cam, Telfiphtlrl>?t; () 674-2262 Fax (Mg) 074-091 wwww.ckyafd9ek rrt.com The City of r1t: Plumb= beca noti{icd ofthc 201 V -dared pwpasad apla?itwLon for Nol, eased County Uft and Use Too Ftmtdin_q fir tho 11' iVon Stagr Horse ,Park Cowrad Areca and e we1awdBtd1d-Ch& W vlity 201 tai etc City aclmowleW is support fisc a Cavereatl rt rt a at th r W hingtm State 1•lttm Park tsar The p -qpm -ad Kittittas County I't rkB and l mullion Plan Capita# 1vpmvcmcrtt Plan (Cin. The Kittrtu County Pak, Rem tion. and oPCM Speoc Plea (PROS), %W W*ft by IM county's Coat olitlated Ladft Tat. Advikry O rwrove including Council Ma beer Ren spmrs, n7wom ixtsrsg the C;4 of Cie Sian ! odop Tux ComthWw. In January 2017, the City of Or Elam supported the WA State Home Park applicaUm for the sting hietsn[al capital hudg--el. The City is die rttunicrality appfi, t 1br dib pnzjwt for April 2017 Kittilm County Lodg*- 7'm targe i'+jwal 1'rq*L-st and the [ ovvred Arena rroiect Ja OM im tho third phiLsp of the fYsndirg pnjomi. Vie C dy'N �iuwwlodlgonuxit or lbi: WA *1tr Harm Pane's vale as a driver of cco cam its der dapniont ilia lite Mra, and 6 stmtejie pmAlun its ltirul aW rrr6itknal awoonlic develo rtniertt phm� A e611 -e' oemiatt .hod clic 0(y Onowil Te a4itrt d u projftt alidi tt• as rrWntly ttt, My 21111!. 1114: Vily ul"t'!a l%]liyit aitiritirI av al, u+ninivally %'Atw jaul iouppctrl, mid fwwiop ttVtulkthllity. A1t11tsuo tliu ilism 11x16 pniim t im not at pritstillrO Oty l+:job i. It dorq IntivIde a vakibk wrvitv In 11it.- faFimini lity 1lattrtl land Mt.imw dais 120' Dtty orjuly, 21119 cri-YOF Ur atim ►�iwt;a�t Y Washington State Horse Park Distressed County Sales and Use Tax (kaint Application pg16M5 e4fly 4 C%. Swo 110 WOM F!fV- S(M-C tX. Ejun-. WA A8621 or4 kitt'.0i - k fv%(*k ( . :11111f' ".IIFI:a Ann I i� [ so;.;I 2tA �% it. ,, Sfic, S.Jox: Is A 1,46"n-bitiv AA WWZ� DL Ll t 41U` t, hNIML-1 %, 'd- 509! 67441.i- -'I iv I h" l 1 I )II, 1 14 1 1 I-Wj^ rev 4 k i 1 9T.4 gor 4,mifl. 4.". . Bal'i -.*, tv-Tlk.1- N.'! - i A: IIL.t:bL Us.. i lk dt % rLop'..'. I ". J 1-0. rA w�; .t- 64L I lit— v w"i.vd, soijw. Mmm.�r,k! -vk.m] CFP .-.O i,4 r. I.,' I m 7%"ol VILA all Washmpm State Hme. Park Disovesed CcRmty Sales and Use Tax Grant Application pgI7/25 PROJECT VICINITY MAPS: 1 of 2 Location of Park Washington State Horse Park Diswassed County Sales and Use Tax Gm nt Application Pgl W5 ___.. _ 7. PRO t R -7 ua 'VICINITY MAPS: 2 of 2 tion of Covered Arena Site � M w M Q ri am xstill i Mdd 10*644* Washington Stabs Horse Park Distressed County Sales and Use Tax Gant Application pg19/25 Exhibit I: Kittitas County Tourism Infrastructlue Plan Feb 2016 P64 meetings and presarkadons, parties, and weddings Yakama rola] Yoke* - upimsina to melude covered performance and exhibition specs, 47+ tepee sites, and reatreom and shower fatuities + RYlark - for 93 full-service pull-through campsites with power, water, orifi, and clubhouse with IsundromwK and meeting morn on the mite of the existing mobile borne parr( CumaLdatad trerydmlf l`t - with integrated RV naps for exhibitors mad up to 922 can for fall, rodeo, and spacial event attendees - a portion of Which could be used for the relocation of the caraw far better visibility from Untvarally Way Lead egeat Potential par"cipsus Rittit" Cuuaty EReneburg Roden, Ellensburg Rodeo Hall of Fame, Ri dtas County Fair Board, Kittitae Cotmty 4-3`1 Clubs, Yakema lodian Nation, KLttit-m County Chamber of Commerce, CWU. City of Ellensburg, user groups Project-apedffc performaact measures ® date master plan adopted H date rodeo arena stadiums, 4-H barns, parking lot and temporary RV sites, Alder Streetmcape and Promenade completed ® date mobile home part acqutred and redeveloped for RV Park and Yakeraa Ube gathering site • date Frontier Village moat dmd and cammons and stags completed �eixplaafil bo>�:�a -A000U 51 WrtabnVm Slate BMW Perls (n City Of Cie Em praNWON Plans Saito abi-thra Priority Complete key master plan improvemerlts iaehtding: High mus3fla foot covered arena with bk-cbers permanest resttuoms trail linkages on and off -da with regional trail network 84 Lead agent Potential PMPOC% ■ata Cie VI— Washington State Hotsc Park. Wasbington State Legislature, Wasburgton Stile Parra & Rtereetion Coanrmasion. Kittit-s county ('+-mbar of Commerce, Swundia, and In conjunction with Equestrian user groups Project-gwdite performance motivates ® date ftmding approved and key Improvetnenta completed :Atttioa i. UVEIRI y ailsleUL temprtjtlol 6KOU-9 Strategk objective Priority hnpmn re&n l athletic field bleachers, conceuk as, Low ou-alte water and restroom services, RV praldng and comping at competitive athietic facilities tw Roslyn Cie Uum Ellensburg Lead agent Petential par'delpiatu CIE &um. Roslyn, Cie 91mN Maashurg Parks and Ro Public Works Depertments, Ktttitas County Chamber of Commerce, In coApmetlen,ith athktic leagues and sponsors Project-specNic peeformanee immu s S enhancement projects Completed 111CMULag tournament potentials 8 twunaments scheduled per year as result of improvmncnts MUM 7, �1111 ad arChNY ICIE Strategic objective Priatity Develop facaltiee and programs to teach and practice Waw Elm and archery safety fa, borrtmg, racresnow tratnmg, competition, and lair enforcement agency urtlftcanon purposes Le -d agent Potan al participants Kildt"county Klttitas County Shedi'f. Roslyn, CIE Slum. and Ellensburg Police Departments, Klttitas Connty Held A Washington Siad: Horse Park Dlstri sed County Stilet! and Use Tax Grant Application pg24/25 Exhibit II. Kittitas County Parks Recreation mid Open Space Plan Ae Kiri a i '��°; f c tilt, ' 'Pi'�i ` �,� c-I;I:RILfnr'J sit, ' i i nl�lii Irl} a r ��, Via'€1u f3i h priority (not listed in any pudcular pr%dw order) 71011M Do 4 -- wall_" Design and construct a second wallow an the hwevem ant to upstream ode of the South Cie Sum Bridge to South CA Bh= provide a add pedestrian ever crossing BridEe hetween die Coal ]tines Nall System and the conservation andrastmstion practices for The John Wayne Tag The lttrtebt brld3e is a bottleneck and eaten vueltors and residents. W411ndiB Design, nimushcntre, and lootsU sigemic to Sigmge 'clod' reccxton m krttitas County Waldo t with Pettus. Cemtr, WSDUTd and public land parmers Ting wC: be a cooedl>mted. Community Fmeat. Improve Wye Pari traEhrnd comprehmsrve, and detailed apprarch to wayhr ding for reaeadonal assets already in existence In tha Cotmty 7tawwray Thane prolamin win nmpeave recrastlen Co®ninety FOMIR opporttmttlas and publt amal to eacreatlon In BountmA the Teanatray Community Forest me adlag a) papravamenta campgwm4 iap&vvemenia6 b) day-oaa atter. Skills Park tmprovemects, and C) signage. Highway 10 Cons nvct a low maintenance, gravel Yakima liver recreauniod pat" lot adjacent to alghway 10 Recreation Access between C,le Elms, and Ellensburg tit the month of the r1anne ov River to nimproova sones for Improvamenu. rec,estua tuem wklle also banefittmg the travehng public and mcreasmg pcbltc safety. Tatra to Aceoft 160 acres of pllvaWy owned land that Teantway sepaatn the CRY of Roslyc e Urban Forest "a Regional Trails system f+ml regional network's beteg developed System on adjacent properties mdudisg the Home Conservaaey's Central Cascades Forest and the Teaasway Commudty Forest as wall as adw existmg regeond Lad networks. PrOort Urban Forest DasR4013 Develop a bull connector from 15 acres dented Connector by aSuncadla for cunptng, perking. and resElng area on ftMh g Road net Suncadu to 11 Fish F4ttcherv, South CIS LUZ16 and the MIM Wayne Trail, and 2) ileum the Lad seines 7ratl to Cls Eno and Rodin Eidga ties to the Tamaway Community Foram. Easements. rights-of-way, and memw'mdnms of understandms OWM may be rego]led. Bridge will be eequnred for the Yakima Bluer and Crystal Creek. Washington State Co smset a covsred structure (covered arena, Horse Park not an enclosed arent) to attract now reponrl, Covered Areas mational. and murnahonel competlbotis as put of a master plan involving S ancien at build -out Location Spo— Coat Year midge scrap City of C1e Slum 1979,920 YaiOma Elver between Cls Mean and South Cis Bias Lotmtywlde Forkma, mauntains to $735.000 6acnd Greenway. Karat { I)m C:oasewascy. Trnet for S 100 000) Public Land. Wilderness Sooety, Washmgtsn Trails Asan Ton way nXii. Tunway Community COmOmnsty Forest poem Coordinator TGAROWay River Eittltas Couoty BeAge an Com issioner& Highway 10 Town to City of Easlya Tacna ay LOatleu SP— Roslyn. Cle 1W, Writes County Parks t South CTO El® Recreation Dletdct 1 Washington ante Wad"gmn State Horsa Horse Park, Cle Park Authority Ehtm Upper County Develop malt and connections. trall and Upper Kittltu Coni Mmes Trarl Coal lltuas Iran u maws imp—eats, wavllnding signage, County Commission Mrrtsr Met interpreCve ethnblu and history, and conservation andrastmstion practices for The )ran Hosie Trail end the Yakima Ewan. Cle Elmet Rim Roslyn thban Forest. Suncadia. Sapphire Stiles, Hansen Ponds, and the Teanarrav Community Fmeat. Improve Wye Pari traEhrnd facilities mdadiog public resunoms, and wetland flood basin. Cea17Yas Dev lop a destination mountain bike park an Be Cle Elum Tnililde Homes and Mountain Eike & acres of land for all skill levels and sD age Evergreen Mounta!n Elbe Skills Park groups completing the already imuated by Alliance volunteer efforts. Complete park impaarments Including parking. argnaga, and troll Improvamenu. Appmdts 6 - C RWW toaAnbw Fseiwnw tC,4PI 1a tenons Parke. EaesrWsn 4, open apace tunas) Plan 3660.000 OUR 395,000) 51,730.000 (Paths. & Tfalls Fend $50.0001 32,182,250 0Reslyn $500.000, Private funds ($198,538) Cast Yee 12.268,000 (Cie Elmo 310,000. Rouyn 35,000, South CJs MUM 52,000) $9,609,204 M" Conches 380,000, LIELdat- 51,400.000, Pnaatt $260,000, In4dud 1160,00$ $133,000 3140.000 Washington ste Horse Park Duff ssed Cts Sales imd Use Tax Grant Application pg21/2� s Exhibit III City of Cle Elum Comprehensive Land Use Plan 2006 & Ac&e Parks is a proposed 106 arc equesitrian facility located in the bullfrog Flats. lyre park is designed to be the promme equestrian fhdlity in Washi Stave drawing competitors, altowman and tourists from the Greater Pacific Northwest and the Canadian province of British Columbia. As it regional show and competition facility, the horse pmk will accommodate large scale regional events such as the Arabian and Quarter Hom Shcwvs, The North Amm- can Young Riders program, Dressage and World Cup C ompetiti ma The facility is proposed to have a 200 by 300 foot covered at an 113 by 300 foot open arena, suing for over 1.000 spec tors, a polo field, suss county compeWon course, 400 stalls (located in 8 -separate bassi and the required appurtanant mal support fac'rlitlea to mvice the horse Park. is a community park located between the Cie Elum "wye" and the Coal Mines Trallind. The park derives its ane from the large American flag that has been traditionally flown here to welenme visitors to Cie Elm and as a reminder to its resident; of Cie Mum's treMon of duty and smiee to Arnerka. The park is an -open lawn with room for a0vo and passive activities. Centenalal Pork is a aantrnu* park located north of Third ShW and nestled against a wooded hillside. This park has facilities for active bion inehrding;; a maftd and goal posted football field, a baseballi%ftball di ad and unple open lawn. Mrnmiaa Ford Park is perhaps Cle Elm's most dimmer community Park which Is located an the site of the old [tow non-existentl community svwirmn ft pool. It iocludes a -of-the at Aaft bard facility, play ground equi mt; himshoe pnvw, a WV wrered plc nic shelter Ath tables and in ground bwboques, a large open lawn and is the mom "trail head" fir the Cie Elum Roslyn School community Progress P$th. Fireman's Park/ Memorial ball Field we actually two adjourns community poft located In Ck Blum on ft South Side of the Yakima River. Fireatan's Park is home to a large coved shelter, picric tables, a wide open lawn and riverfio►nt access. M mdal Ball old IS a compctition youth baseball field comply with oomMons, bleachers and high quality baseball fiel& fagebro k C omMUghl is a neighborhood park dasigned to serve as a conunw ity meeting place and guild's play area. ilo pork is a mull grassy area with,a community gazebo and bque amaL F r� „Aquaizc Cater The Pour Seasons Recreational board is examining the passibility of ming a eommunity focreation tar behind the Cle Elum4oslyn School District campus, The conkr, expend to cast upward of S1.5 million, relay have Washington State Horse Park Disitzssed County Sales and Use Tax Great Application pg22/25 Exhibit IV: 1 of 2 City of Cle Blum Resolution dated 5,27.2014 C:1TY OF CIE ZLjjM CITY COUNTIL RESOIA1' 101 FORTEM SUPPORT OF THE wASTi(G'i'UN STATE HORSE PARK A"LICATION FOR OLTIMEMED CI,lIXTY KALU ANIS USE TAX pC MN9 FflR 7'1EiI+. l)11;fi C.K, ENGMMNG AND PERMIMNC, OF A +COVMMD,A1C.F.lMlk AT A .W..i'TIN( OF THE CITY COUNCIL OF CLI.; Fj.UM, WAS INCITONtK niTffAS COUNT' Y, I IELD Kr 7 P.M. ON MAY 27.2014: RF.SOI.UTJ0N: SUPPORTING THEAPPLICA.TiON Pot Dl TRESSED COiiN"iY SAL AND USE TAX F UNDINTj poR THE DEMON. ENGINEMWG AND PERMl'tMNO Ql' A ' LCOVERED ARENA I OR TIM WAST DNWMN STATE MORSE PARK, LOC:ATISD !N CLL I EEI.tM h L?tv11CIPALLY-OVVhET) F'ACIUTY) The Cit} C.oarMl arcle Lium, wasi}ington, does hereby as Eialioars: WI'lF.REAS, in 1 M thy: Washington State Dgw==t of A,griculturo eompiewd a stady r+. rnmetaiiapt t1ale weatim ofan eq=tdal ceirtar to `-pod's to asad sastvtt the t+tdaraai hone indusW 9a tba state and pmvide acaran nic benefits thmuglt equine activitar, and WI1 AU,AS, Ip 199s, the state ick deture pansed IkCA d7.t B {rocadified 79A3t1}, to create the fmmcwutfk fb'e the rc0ity, ra 0wrazing the Hmme Park Aulltasrit„v to estaMM "o treat -loss lam part fgtdlij+ in WmWngtt?n ua meet the important needs of *e suit's horse indway, attract itavergmcnt►+ate reoreational oppaanaaitzes, and bdug new exhibitors and tMaists to the wme from th muoayayt the mgtou and ba ysarttl, and WHEiCl S. IxZLdwivs support continue with approparlall• n, of .S million in the 2007- 2009 capital budget for Phatse 1 of oongmetiM of the WashfiWon Swe Horse Pwk in Gia Blum, WAA*gtan, and WHEREAS, the Yakima and Muhm (Ki Yak) Counties Ronal [ orgrehewive manic Dent laptaY nj Am adod June 2ol3 ci%-o the Waashingbn State 11me Park as cede of eiwen Stttawelo Fr tt ey 1M"tm=% prod ft*0111 S uppwtb* a NIMN Regional E ommy as lam%* "helped boost the region's ownwdo des." and W11EKE/ % The City sof Gine Mum Comprehensive Land Use Plans, adoptod in 2%C aim the 't!°nslsiagetan State 14mm park as a part of die City's Urbau Cn+ra iLh Area (UGA) [the Horse Park is in the City itselfand is nranicipally-ntvrraij and Hsts the firmity in the invcmwy oradive peeks, and indicates wThc fwility is pCa x%Wed to have a 200 by 300 foot cov avd amiaa. , : ' and VVI IM. A% Ito Hcoaurnic DevelopamW Straftgic Man 1.0. epansomd by the Kinitaua County I anorAv De oprmmt Group. published by Tip Stratugirs sad darted July 2009 !mppnrLjt reaxeatiowil Wurism as Ow third acre strategy for+a;ur mik de►relopmeM and Washington State Horse Park Disk essW County Sales and Use Tax Grant Application pg23/25 Exhibit N: 2 of 2 City of Cle Elum Resolution dated 5,27.2014 %%;H iRF.AS. rbo now Pak basexpeAmeed WOR9 9m in v!Nh r Uatf c and resulting a,r anlglat stityr, inere"4 by WA in 2013 avow 2012. and A14ME AS, thr WasbiVon StMe Narse Puk will flit applic`nion for 'be fDesignr Fngincering. MW Parrdidng Or N caved areae.. whish WD' extend the SCaanfl for tuttivitiea in tl>4 park by S4 perms And estima w that The a d iiional utuaft of older sewn AW** allowed by the courted arena will results siguffiicant imeraa in visitors per year. incrowntal arve�n!* stays of paid Iodgb*, and mvr $1 miliian of inaerr c al economic ItrmPUL NOW, TREAE 3RE.131 1T H1 RPSY PROC LAIMED by 41te City C'mnaii Of C10 hlwn, WwWngtmr, [batt &D City council as,umcimte mriomic dev+eiopment orpnimiad" for'Ole City of C"le Elim has been n4X[Iled of this pmj ort and hure6y expmmcs its suppprt of the 309 4- daned proposed appl mthm for Dixtremed Ommty Sales and Use 'Fax Funding ibr t1w l)t-Asn. Enginagring, alxi permloing of Covered Arena at Washington State 11orm Park. Bated and signed this 28" Uay of %*,, 2014 CITY OF ULF FLU1M H t,. jtw es I~.idarratller. Ma}vr PF0 Tempore tiny c;oundl, Cite of`Cle Ftum. WaWlwon Washington State Horse Park Distressed County Sales and Use Tax Grant Application pg24J25 Exhibit V Economic Impact of Horse Industry in Washington State By Rack Cam Hms melw gtIWaabingwn (BCF[ fur the Big Tent irtaa lition in Oly 2013 Number ofpt Ic in Waslun" SWe anppd in equestrian atctivides; 4% or 250,01111` am►ciMtyriting in number ofp&66pnn% ofag owdoor activitia int Wu hinS ao Sate: 101 Nwtillre of horses in Wmbh*n State. 249,90 Avera9t cwt afkaVing a horse ft a yeah &%U6'(249,964 x 3.676 - $961118600"Iyear) Wage„ fiam lF qu=zrian and kdated industries in Xing County alone: 561,559,408` Factors for contlnuingto hm # Oucmsfultendproperausequetufmhwdustry(Kb*Cotatity): a) lac c Of an AgrioatittRW $nfau+sMw%we allot }xwid a the toerials, savice s, mnd feeititiae for ceding, raisitl, training, atabling, fes, and carr farhat. b) A healthy peridnubwl rasing induoy- c) amity fitkow and cbaapgititm ihcilkies and va?ium d) An Mite calendar o raha.m opmpeftcacaa, nd alter equestrion events end sc"tieal , such u4. K tlattniy firs, lata. s k =wly complow d study in Kentucky (2012) wWob fres 242,400 beems and conipwable xetzudonal &W racing "lid" pals chair egWM-Witted assets as S?3.4NI,l n and SU Men in cqukw related expmhtureO With saconduy basivess effects, we (11 HW) esttinatc that: aaittestrian ernnemk kbpacts in W&W ft ost Siete at SS Mae per yaw, which is *ansistent with tw t dmd study by dw American finrsc C it anal ntaeking it one *f alae lbV Mmtie" a mtributore to ars stole's eaonmW. Mdse 7ralk state Park 2012 ° 2M OuWoar reatim 5urwny by the Washtatgten State Mcreatten end Censervatloa office ' Arnerlcsart Mort#*~ puhffcsom by the AO edcan Home Council +205 3 tr ION Cooperative Wension Pubsiartlons Bulletin #12W4 ill! 11,1111WW"ag mum bt slag QWQJX EnA ant 2007 ' SuraftutryofE 6nooks of E4*68 rie0 Industry Use in King County 2011 a 2012 tcmucky Equine 5vrveyr r Motional Economic impact of the U.S. Horse industry by doe American Horse Council 2W5 Washington State Horse Perk Distressed county Sales and use Tax Grant Application pg25/25 Financial Feasibility and Economic Impact Of the Washington State Horse Park Contractor Report for The Washington State Horse Park Authority By Timothy Dittmer, Ph.D. And Richard Mack, Ph.D. Central Washington University Ellansburg, Washington November 29, 2006 TABLE OF CONTENTS EXECUTIVE SUMMARY I INTRODUCTION II PREVIOUS FEASIBILITY AND IMEACTSTUDIES III EXISTING FACILITIES 1V FINANCIAL FEASIBILITY ASSESSMENT: METHODOLOGY, APPLICATION AND FINDINGS V NPACT ANALYSIS: METHODOLOGY, APPLICATION, AND FINDINGS 3 4' 23 ,a- 303 VI RECOMMENDATIONS FOR ORGANIZATIONAL STRUCTURE .,% w(, VII CONCLUSIONS AND RECOMMENDATIONS '64- W Bibliography 0 Appendix I , Questions for Equestrian Organizations Appendix II: Survey Questions for Horse Parks Appendix III Development of the Washington State Horse Park Authority 6�9 Appendix 1V Washington State Horse Park Request For Funds 2 EXECUTIVE SUMMARY The primary objectives of this study were to determine the financial feasibility and potential economic impact of the Washington State Horse Park (WSHP) in Its proposed location In Kittitas County, and to make recommendations as to the organizational structure far management of the facility. We cannot recommend unequivocally that the plans to raise funds for a Phase 1 facility proceed. As explained below, our analysis shows that like practically all public equestrian facilities, the Washington State Horse Park will most likely require annual operating cost subsidies in addition to waivers of property tax and capital repayment. Economic impacts of this facility and broad unquantifiable benefits may justify its subsidization, as with other.public facilities. Relative to the capital commitment to the venture, the projected losses are minor. This study includes both financial feasibility and economic impact analysis. Key findings and recommendations in terms of financial feasibility, economic impact and organizational structure are summarized below: FINANCIAL FEASIBILITY We developed a relatively sophisticated financial model to determine economic feasibility. To gather inputs into this model we: Surveyed horse facility using organizations in Washington State Validated our survey with the work of professional marketers Surveyed the developmental and financial experiences of horse parks around the country Gathered anecdotal recommendations of potential users of the facility. 3 Worked with professional equestrian management consultants to set parameters for the models Four scenarios of the model were developed, they differed as to assumptions of growth rates of: numbers and types of shows, entries, revenues, and costs. In Scenario 3, which we believe will be the most likely scenario, the park operates at an eighty thousand dollar per year loss, despite assuming augmented revenues of $100,000 per year from non -equestrian events. Scenario 2, which assumes a much higher and likely unrealistic rate of facility use, results in net revenues of approximately one hundred fifty thousand dollars per year. The key financial findings of these two scenarios are: 4 Maximum use of the facility is reached in the sixth year. Scenario 2. breaks even in the sixth year. Accumulation of 1.4 million dollars in losses by the end of the tenth year in Scenario 3. Scenario 2 accumulates one million dollars in losses prior to break-even. 0 Net revenues losses of $74,726 when the facility reaches maturity in year six for Scenario 3. Scenario 2 projects net revenues at maturity in year seven of $140,802. 0 For Scenario 3, annual revenues at maturity well be $548.316 and annual expenses will be $724,042. For Scenario 2 these values are respectively: $915,527 and $774,725. 0 69,357 exhibitors and spectators will use the facility annually when the facility is at maturity. 4 For either Scenario, it will be necessary to waive property taxes on the facility and to create a capital funding approach which requires no direct repayment from operating revenues. In one version of the model, we adjusted revenue per horse In order to avoid losses. Under the most likely assumptions, the facility rental fees required were too far above competing levels. Survey results indicate that horse show organizers are very price sensitive, and the required rental fees would likely result in the facility being unused. Our findings are reflected in the national equestrian park picture, where large and medium sized facilities are typically subsidized around 20% of operating revenues. Only two of twenty-five horse parks break even. The primary reasons for the lack of positive cash flows in our projections of the Washington State Horse Park are that The climate and location limits the number of open weeks per year. Recent local surveys showed that equestrian groups are very sensifyve to price. The equestrian -dedicated design limits the size and nature of nonequestrian events. For full utilization a facility needs to serve large horse events, and there is a lack of growth in the number of large horse organizations in the region. Under these circumstances there are several major provisos that mud be met before we can recommend that the plans to raise funds forthe facility proceed. The first two have already been stated, that capital repayment not be required and that property taxes be waived. Third is the requirement that in order to assure successful operation, 5 the Horse Park Authority must recruit a facility manager from the upper 90 percentile of managers and support that manager with top-notch review and assistance by professional equestrian management professionals. Without an entrepreneurial manager, it is unlikely that the, facility will generate the alternative revenue built into the model, Finally, the facility will require subsidization from either private foundations or' public coffers of approximately $80,000 per year. ONOMIC IMPACTS One means by which other facilities justify operating grants is through their impacts upon local and regional economies. Therefore, an impact model based upon expenditures of the horse park participants and expenditures for horse park operations was developed to estlmate f9nanc4al flows to both the local and state economies and to local and state finances. Using the `most likely" Scenario 3 at year six maturity, the following impacts are projected: 0 The direct spending by exhibitors and spectators are estimated to be $7,334,038 when the -facility reaches maturity in the sixth year of operations_ The total money flows attributable to the horse park In the sixth year, including Indirect and induced effects, are $8,412,982 annually. Using the employment multiplier of 17 jobs per million dollars of direct expenditures projects, 143 jobs will be created by the horse park after the direct, indirect and induced effects are factored In. D Starting at the sixth year, annual state impacts from out of state residents were found to be $51,164,360 of direct, indirect and induced spending. r� Operations of the facility would, at maturity, generate $1,199,279 in sales taxes, of which $98,668 would be apportioned to local government coffers, and the remainder would go to the State. O The recreational services sectors will be the sectors (hotels, restaurants, etc.) most affected by Horse Park operations. For qualifications on the magnitude of these impacts, see section V ORGANIZATIONAL STRUCTURE We'recommend that: O The Washington State Horse Park Authority Board of Directors set up the organization to be run as a commercial operation by an experienced and successful professional manager. The organization of the institution be that of a non-profit corporation, avoiding designation as a State governmental entity and thus avoiding the labor and procurement procedures required of State governmental units, The Board focus Its activities on obtaining funding commitments required for the construction of improvements and the tirst.five years of operation. That the Board actively work with existing equestrian organizations to promote the Horse Park project. 7 I INTRODUCTION OVERVIEW The horse industry is highly diverse, supporting a wide range of activities In each region of the country. A recent report prepared by the American Horse Council, "The Economic Impact of the U.S. Horse Industry in the United States" estimated that the horse industry contributes $40 billion annually to the gross domestic product and provides 460,000 full time equivalent jobs. In Washington State, horse ownership is woven into the fabric of the state's history and essence. In terms of horse ownership, Washington, with over 250,000 horses. ranks eleventh among the states in the nation In total number of horses and ranks among the top states In the number of horses per capita. Annually Washington facilities host hundreds of Small, medium and large scale events. The equestrian community finds that no satisfactory facilities exist to handle the highest quality or multi --state events. Most existing facilities offer limited rapacity, older buildings and poor access (WSPRC Memo.) Horse shows and western events are basic parts of the horse industry. Shows vary by breed and type of event, eaeh,requidng specific facilities In which to conduct the activity. The shows range from small, one -day local shows to large, multi -day national and International exhibitions and activities. In the past decade, new facillities have been developed in many locations around the country. Virginia, Kentucky, North Carolina, Colorado, Arizona, Oklahoma, and New Jersey. National Trends We have three sources for Nation Trends in horse shows; the number of horses and horses involved in .shows for 1996 and 2005 (American Horse Council Foundation), 2000-2005 United States Equestrian Federation (USEF) data (http:llwww.usef.org), and 8 2001-2005 American Quarter Horse Association data (http://www.agha.com/association/wholstOfl$tics.htmi). Data from these organizations is useful in analyzing underlying trends in the horse industry, and is presented in Table One. From 1996-2005 the number of horses and the number of horses used primarily for competition have increased 33% and 37% respectively. The number of approved shows, as shown in the USEF and AQHA data, has increased at a much smaller rate. Over similar five year periods (half of the longer period), the rate of increase for approved shows was 2.57% and 11.56% for USEF and AQHA. While the number of approved shows has increased relatively slowly, the number of total entries has Increased at a high rate for USEF (39%), and a slow rate for AQHA (7%). Given USEF`s slow increase In the number of shows, and rapid increase in the number of entries, the number of entries per show has increased more rapidly (35%) than for AQHA, which actually experienced a decline in the entries per show (4%). These data support the idea that at the national level there is an increase in demand for horse shows. This increase has resulted in either a larger number of entries per show (USEF) or a larger number of shows (AQHA). Both increases are important in the economic feasibility of the WSHP, however as will be argued in Section 4, the number of small shows is not lacking; instead it is the number of large shows (400 horses) that is important for the facility's financial success. Both public and private facilities have been developed across the nation as the numbers of Horses and horse owners have increased. The largest of these facilities tend to be publicly owned by state, county and municipal entities. The public ownership has come about through either the initial establishment of the facility by the public sector, or by the purchase of a private sector facility by the public sector. Typically, 9 profitability of these faciiities is Inversely proportional to size. In our conversations with public sector horse facility managers, the generally agreed upon estimate of profitability is that costs exceed -revenues in all but 8-10% of facifties. This Is despite the fact that many of these facilities are not required to make capital payments, as the capital is held by the public entity. How are these losses justified? The construction of multi-million dollar horse parks and their continued operation is commonly justified on grounds of their generating economic impacts and unquantifiable benefits which extend beyond the accounting balances between revenues and costs. These total impacts are of two types: direct impacts that reflect expenditures generated by horse park activities; and indirect impacts, which reflect the regenerative impacts of the initial spending. For this reason this feasibility study will be coupled with an impact analysis that will factor in the total effect of direct plus indirect impeicts. This report.is an evaluation of feasibility and potential impact Qf a proposed state horse park that was authorized by the Washington State Legislature in 1997. The horse park is intended to be a first-class equestrian facility serving a broad range of the recreational, competitive and educational needs of Washington State horse owners. it will support community, youth and disabled riding programs and will faster physical fitness, responsibility, and achievement. Although the general concept for the proposed horse park Is for a facility that Is custom designed for equine events, it will also be attractive for some secondary types of uses such as company picnics, dog shows, motor vehicle shows, and trail bicycle events. To modify the design to accommodate other non -equestrian events will require additional capital. This report Is comprised of six sections. The remainder of this first section details the purpose of the study, states study parameters, summarizes the history of the Washington State Horse Park, and provides a summary of the master plats. Section li reviews previous studies of horse park feasibility and impact. Section III examines existing facilities that were surveyed in the study. Section- IV presents the methodology, 10 applications and findings of the financial model, and Section V does the same for the impact model. Conclusions and recommendations are presented in Section VI. PURPOSE OF THE STUDY The overall purpose of this study is to evaluate the feasibility and economic impact of the proposed state horse park. More specifically, this study meets the'following objectives: 1. Evaluate the demand for and economic viability of a high quality, multi -use complex designed to meet the needs of the diverse sectors of the State's substantial horse industry. 2. Determine the feasibility of establishing a successful facility in Kittitas County which will meet the needs of national, regional and local shows, western events, and related equestrian activities. 3. Make specific recommendations as to the appropriate organizational structure needed to acquire control of the site, solicit funds to construct improvements and successfully operate the fecility over the long term. 4. Summarize the economic impact to the State of Washington, generally, and Kittitas County, specifically, of the operation of the proposed Washington State Horse Park in Kittitas County. PAl3AMETERS: Objectivity - It should be noted that the authors have been completely objective and 11 unbiased in reaching their conclusions about the feasibility and impact of a major horse park in Washington State. The study team was not directed to justify the creation of such a facility. Quality of the Facility - It is the Intent of the Horse Park Authority that the facility be of high quality as to both functions and aesthetics. The consensus of the Horse Park Authority is that if such quality could not be provided, a facility should not be bulk. Purpose and__Use of the Facilifir - The design and intended primary use of the facility should be for horse related activities; other complementary activities are also possible, but as a secondary priority. The facility should be designed and operated In such a fashion as to: encourage use by all facets of the Washington State equestrian industry; -attract competitions of a major regional, national or international level, and -promote tourism. - provide an educational function - serve the needs of equestrian activities of youth groups Cost of Operations- Land for the facility in upper Klttitas County has already been donated by a private entity, Suncadia Resorts, of the Suncadle Real Estate Company. Capital costs will be raised primarily from the public sector, they may be augmented by a concerted fund-raising program by the Washington State Horse Park Authority and the Washington State Horse Park Foundation. Public/Private Coor)eration The horse parte will encon1pass elements of both public 12 and private sector organization, extending to both the development and managernentloperation of the facility. Recommendations will be made as to how best to combine these elements in order for the horse park to best accomplish its objectives. Impact on Fxdstina Equestrian Facilities - The Authority plans to create a complex which will complement existing equestrian operations, seeking out -and satisfying unmet market needs. It is expected that over the long run the operations of the horse park will Increase interest in equestrian events and activities throughout the state and accordingly create additional business for existing operators. Facilfty_ Summary: The vision of the horse park Is that of a primarily equestrian facility to be located on property donated by Suncadia Resorts, located Immediately off of 1-90, near Cie Elum. For this public-private partnership, Suncadia Resorts has donated a 106 acre parcel of land, -currently valued at approximately fivee-million dollars. It is proposed that this land be developed in two phases. The first is a planning. preparation, and Initial site development phase that. entails final planning, design, permitting approvals, and initial land Improvements. A request of $3,900,000 will be made in 2007 to fund Phase I. Phase Il entails the construction of the remainder of the facility. Estirriated costs for Phase It is $15,434,600 in current dollars. The WSHP Authority intends to request these funds from the State legislature so that full project build -out will be completed in 2010. A detailed description of the facility and the funding -request is included as Appendix 111. 13 Il PREVIOUS FEASIBILITY AND IMPACT STUDIES Two categories of previous studies are relevant to this analysis: previous studies of the need for and economic feasibility of a horse park in Washington State, and studies of feasibility and impact of similar facilities in other states. The first category is particularly Impoitant, because considerable effort has already been invested in data gathering as to the need for such a facility In Washington State. Initially an impact study of locating a state equestrian center in Lewis County was developed in 1991 by Kay Crawford and Sue Roden. The study was funded by the Washington State Department of Community Development. When the Lewis County site was deemed non -feasible on grounds of the physical location, the horse park group looked to the east side of the State to take advantage of the drier weather. When the Trendwest/Suncadia property negotiation with the Authority was completed in 1997; a second feasibility study was commissioned and completed in 1998 by Richard Mack and Cary Richardson, both of the Central Washington University College of Business. Each study is briefly summarized below. Lewis County Stud The Lewis County study was comprised of four areas of primary research: surveying 37 existing Morse parks, surveying 59 equestrian groups, surveying 100 Individual equestrians, and holding public meetings to solicit local community input, From calculations based upon this primary data, conclusions were reached as to: the demand for a state equestrian center, economic feasibility, the economic, employment and congestion impacts upon the local community, the design and management of the facility, and funding options. Briefly, findings of the study were that: (1) There is significant demand for a first class, fully enclosed facility; (2) In the first year 61 events would take place, a number that would increase to 99 by the fifth year; (3) Attendees would range from 48,900 in the first year to 80,000 Jn the fifth year, (4) The horse park would be economically feasible on grounds of demand; even were the number of 14 projected events to be halved, the horse park would break even by the third year; (5) no negative community impacts were identified; (6) Recommendafions were gathered as to horse park design; (7) A combination of government, private, corporate, foundation, and debt funding was recommended; (8) Annual expenditures and jobs were projected to be $3,655,146 and 116 In the first year and $5,939,714 and 990 jobs in the fifth year; (9) The study recommended that focal communities begiri planning efforts in order to capitalize on horse park benefits. Three surveys were developed for the Lewis County analysis. The first was used to poll a cross section of equestrian sports disciplines to determine the number size and potential mobility of their functions; 59 equestrian groups were surveyed. The second survey was used to poll individual members of the groups as to travel and spending plans. The goal of the third survey was to solicit specific opinions of existing facilities. Of the three surveys 162 were returned from the initial 200 sent out. Although the study was methodologlos0y sound, significant demographic, climatological and economic differences between Western and Eastem Washington required that many elements of the feasibility and impact segments of the study be redone for the 1998 feasibility study. The 1998 Fegsibilily Stud For this study, representatives of thirteen public and private horse paries were queried as to: background, facilities, events, marketing, funding, staling, and community involvement. in addition, Information was solicited from several horse paries that were under consideration at the time. Representatives of 59 equestrian groups were also contacted to update the Lewis County marketing survey. Input was also solicited In depth from the Langer Equestrian Group, an equestrian consultlnl firm from Los Angeles. 15 Four scenarios of the model were developed and "run." They differed as to assumptions of the following initial values and growth rates: numbers and types of shows, entries, revenues, and costs. Scenario 3, the "most likely" scenario, proved to be financially feasible, as did the "optimistic" Scenario 4. Scenario 3 projected: ,0 Attainment of break-even at the and of the fifth year of operations. 4 Accumulation of $715,372 in losses by the end of the fifth year. 0 Net revenues of $189,732 when the facility reached maturity in year six. 0 At maturity annual revenues to be $858,307 and annual expenses to be $658,575. C A total of 25,600 horses to be entered In shows annually when the facility is at maturity. 4 89,600 exhibitors and spectators to use the facility annually when the facility is at maturity. 0 It would be necessary to create a capital funding approach which does not require direct repayment from operating revenues, because the facility will not be able to afford delft service. An impact model based upon expenditures of the -horse park parWpants and expenditures for horse park operations was developed to estimate financial flows to both the local and state economies and to local and state finances. Using the "most likely" scenario at year six maturity, the following impacts were projected: 16 0, The direct spending by exhibitors and spectators were estimated to be $9,866,000 when the facility reached maturity In the sixth year of operations. ♦ The total money flows attributable to the horse park in the sixth year, including indirect and induced effects, were $11,476,765 annually. 0 Using the employment multiplier of 16 jobs per million dollars of direct expenditures projects,160 jobs would be created by the horse park after the direct, indirect and induced effects are factored in. 0 Starting at the sixth year, annual state impacts from out of state residents were found to be $7,685,884 of direct, indirect and Induced spending. Operations of the facility would, at maturity, generate $758,912 in sales taxes, of which $204,429 would be apportioned to local government coffers, and the remainder would go to the State. As for organizational structure, the 1998 study recommended that: ^ The Washington State Horse Park Authority Board of Directors set up the organization to be run by an experienced professional manager as a commercial operation. The organization of the institution be that of a non-profit corporation, avoiding designation as a State governmental entity and thus avoiding the labor and procurement procedures required of State govemmental units. 17 Other Feasibility Studies Of studies done of feasibility and/or Impact of other horse parks, six are of particular analytic merit: the feasibility and impact studies for the New Jersey, the Connecticut, the Texas, and the Maryland horse paries, and the impact studies done on the Virginia and the Califomia horse park. Although the planned and actualized facilities for the New Jersey horse park are considerably smaller that those planned for Washington State, the general model of the study was considered substantive, as was the model for the Connecticut study. Both are "bottom-up" studies; that is, they begin with estimates of demand for the facirdy and estimates of charges that can be made for horse park services and proceed to project revenues, costs, and profits. Both studies entailed surveys of regibnal facilities as a basis for estimating demand. It should be. noted that the Intent of the Connecticut group was to build a facility suitable for national events, whereas the New Jersey facility was intended primarily as a state and regional faclilty. As for the Impact components of existing studies, all are based upon a tallying of direct Impacts based upon counts of horse/days from which a number of measures are derived: number of persons attending (grooms, exhibitors, and spectators.) Direct impacts are then calculated based upon the expenditures per day of participants. Some of the studies conducted surveys to determine attendance per horse and spending patterns, whereas others, given the dose approximation of the survey results, chose to use existing estimates. A similar differentiation among impact studies can be found in the use of multipliers to estimate indirect impacts from direct impacts; indiredt impacts result from secondary spending by the recipients of horse park payrolls, expenditures, expenditures by visitors, as well as from local linkages that provide inputs into the purchases by the horse park and its visitors. The Virginia, Texas, Maryland, and Califomla studies used input-output analysis to derive these multipliers, wn►heiaas the other studies Used existing estimates of multipliers, or did not -estimate, Indirect impacts. 18 III EXISTING FACILITIES In the preparation of this study and its two precursors the administrators of 45 horse parks were contacted and surveyed as to elements of their operational, organizational and financial histories. The Lewis County horse park study was used as a basis of information on regional facilities, as the study concentrated upon deriving information from regional equestrian individuals, groups and facilities. The interviews conducted for this study concentrated upon facilities of comparable scale and purpose to the planned Washington State horse park. The purpose for this emphasis was multifold: first, financial and event data and growth rates from these facilities are a primary input into modeling the feasibility of a Washington State facility. Many of the findings of this survey process were corroborated in conversations with and information shared by the Langer Equestrian Group of Los Angeles. In addition to a number of horse park directors who were contacted for specific information, ten horse park directors/managers were interviewed systematically and In depth. These horse parks were selected because of their nature - they were primarily state levet facilities that hosted local, regional and national events. Facilities contacted for the systematic interview were: Georgia International Horse Park Horse Park of New Jersey Hoosier Horse Park Kentucky Horse Park Los Angeles Equestrian Center Reno Livestock Events Center The State Fair of Oklahoma Virginia Horse Center WestWorid 19 Will Rogers Memorial Center Senator Bob Martin Eastern Agricultural Center Horse Facility, WiMamston, N.C. DelMer, San Diego CA. The Colorado Horse Park The Carolina Horse Park WestWorld, Scotsdale AZ. Gov. James B. Hunt, Jr. Horse Facility, Raleigh, NC. Salt Lake County Equestrian Center In addition to that which is obvious from the survey form In the appendices, .the following data were requested from all horse parks: total events, equestrian events, nonequestrian events, permanent stalls, temporary stalls, paved parking, unpaved parking, total acreage, orgenization chart, rental policies, and equestrian event priority. Of particular Importance Were financial data. Generally, the following data were available: capitalization, operating revenues, operating expenses, number and size of events at startup, growth rates of revenues, ousts, events, average number of horses. Several. horse parks provided data for a number of years. When this feasibility study was underway, we loomed of two other horse parks under consideration in Washington State. The first Involves the ceding of the Enumclaw Fairgrounds facility by King County to the City of Enumclaw. One of the recommended uses for the facility is an equestrian focused refurbishing of the fairgrounds, so that the facility would become primarily an equestrian facility. A feasibility study is curreritly underway; recommendations will be forwarded to the city in late December. The second equestrian facility under consideration Is the Southwest Washington Regional Equestrian Center in Centralia. It is envisioned as a larger ($80 million) multipurpose facility, of which horse -related activities -will constitute about 259 of total revenues. The center has funded a feasibility study with a focus on equestrian activities. 20 Anecdotal Findings Although none of the facilities provide an ideal model of the Intended Washington State facility, there appear to be a number of "truths" about horse park finances and management that were derived from our interview process: The quality of management is apical to financial success of the facility. Management must be entrepreneurtally, rather than bureaucratically spirited. The critical managerial goal is to capture show dates. d The major sources -of revenue are: stall rentals, facility or ring rents, bedding sales, parking, concessions, and RV faculties. ♦ It is important that procurement be done through private sector processes, rather than through state or municipal processes. t, The vast -majority of facilities are public/private partnerships. 0 Estimates of profitability are consistently about one in twelve facilities. Hence, the vast majority of facilities are subsidized. Public seetor subsidies are typically in the range of 15%-25% of costs, although some range as high as 46%. They are justified on a basis of economic impact andlor "spillover benefits," secondafy economic benefits that accrue to the location or region: A facility cannot make capital and interest payments and even dream of breaking even. The vast majority of facilities have associated foundations to raise private sector funding for capital or to subsidize operations. Private sector fund raising is far more difficult and far less successful than one would imagine. 0 It is better to concentrate fund raising on individuals rather than on foundations. Launches usually run 5-8 years behind initially expected schedules. 0 Profitable facilities have typically had the some managing director for more than eight years. 21 The largest facilities generally run the largest deficits. The fatal flaw of large facility failures usually involves overly ambitious ancillary activities such as administration facilities; restaurants, meeting rooms, etc. Converting to a year-round operation sometimes increases costs without substantially increasing revenues. It is necessary to book multiple events. Multi -day events should be targeted. Equestrian events should be marketed in conjunction with other community attractions and activities. Mon -equestrian events pay higher fees and are critically important generators of revenue. i� Non -equestrian events are far less labor intensive. ♦ Horse groups are highly supportive in the formation process, but often balk at fees later on. Most facilities make exclusive food concession contracts. Mail concessions are generally left up to event promoters. 0 Management wai tell event promoters security requirements, but do not require the use of the facility's security personnel. 0 Eight of the twelve facilities contacted use primate contractors for disposal of manure and shavings. The more successful facilities minimize full time staff and rely on part -timers -for events. ♦ Eight of the ten facilities were multiple use. ♦ Most facilities require a certificate of insurance with one million -dollars bodily injury and 50 thousand to one million dollar damage minimums. Public hoarding often conflicts with show management. Motels and restaurants are primary among local business beneficiaries. Minimum stabling size is 400 horses. There is a burgeoning of horse parks across the country. Most managers felt 22 that the new competition would outstrip demand. Several were concerned with the effects of a future recession. Maintenance costs creep up over 5-9 years and are significant. 0 Clearly there is a leaming curve that applies to operating expenditures. 0 Many costs were not incorporated in the initial plans. 0 Operating deficits drive significant cost -shaving efficiencies in the third or fourth year of operation. IV FINANCIAL FEASIBILITY ASSESSMENT; METHODOLOGY, APPLICATION AND FINDINGS Here we analyze the feasibility of the Washington State Horse Park by malting projections as to its -likely operating profits. We assume that the capital expenditure will be provided by other sources from the public and private sectors. In our projectionss-we also assume a waiver of property taxes. Revenues Although there are many categories of revenues, there are four categories that, from the experience of other horse parks, comprise 85-91 % of all revenues. Stall rentals are the most significant source of revenues at an average of 51%. Bedding is the next highest source at 18%. Together, stalls and bedding account for over 2l3rds of revenues and these are critical areas in the success of any equestrian park. In addition to these principal sources, arenas contribute 10%, camping facilities 9%, miscellaneous utilities and equipment 4% and other sources 2%. The revenue flow from these functions is remarkably consistent across horse parks. (dote that these revenue sources are proportional to the number of horses using the 23 facility. When modeling changing revenue over time, we focus on the number of horse days (one horse using the facility one day) and the average revenue per horse. This ignores non -equestrian sources of revenue, which we will address below. The number of horse days, and therefore revenue, depends on the number of events hosted by the Horse Park, and the number of horses per event. While examining the experience of other horse parks may be informative, demand for a facility may vary dramatically from location to location, depending on such factors as the horse population density of the area surrounding the perk, the number and quality of competing parks, and the length of the season. Obviously the factors that make demand large in such a location as Los Angeles may or may not apply in Washington. Given this, we estimated demand several ways, using differing methods and assumptions. The demand estimate from the 1998 version of this study simply multiplied the number of stalls (400) times the number of weekend days the facility would be open (64 days or 32 weekends), for a total number of horse days of 25,600. This .underestimated demand because it Ignored the fad that most events will run from three to five days. But It significantly overestimated demand, for in assumed that most events will include the maximum number of horses (400). It also assumes full capacity for 32 weekends. A 26 weekend season runs from April through the end of September, 32 weekends requires 6 weekends divided between March and October, which we view as Infeasible on grounds of the length of the horse show season and weatherAravel conditions. However, in one scenario described below we do assume 25,600 horse days, but this -number is excessively optimistic. in order to develop a more fact based demand model, we asked a local horse enthusiast, Steve Busick, to perform a market survey. Mr. Busick called the officials of most Washington equestrian organizations, and recorded the number of events conducted by each organization per year, and the number of horses in each event. He 24 also asked questions related to the how many of these events are likely to be moved to the Washington Horse Park, as well as the likelihood of organizing new events. Most organizations have two types of events. The first category is small events, involving a single day and a small portion of the organization's membership. These tend to be more frequent, but involve much smaller numbers of horses per event (averaging 65 in our sample). These events are usually spread out among multiple facilities, often local fairgrounds. We estimated that very few of these events would be held at the WSHP — we assumed one per organization. This resulted in 260 horse days from four events. The other category of event involves a larger number of horses (averaging 150 in our sample) and multiple days. In assessing potential demand, we included one major event for each organization, unless the organization official indicated that all events were held atone other location and a new venue was desired (e.g. WSH.IA, with five events at Monroe which could all switch). In the case of one organization using Oregon fairgrounds (AMHA Region 8), we concluded if was unlikely the WSHP will acquire any business. In calculating horse days for multiple day events, we added one day to each event. It is our understanding that most competitors arrive the day before major events, resulting in another day of stall rentals. This overstates demand, for while stall, feed and shavings will be purchased, other revenue sources such as arena rentals or food concessions will not occur. Based on these assumptions, surveyed demand was 10,630 horse days from 11 multiple day events. The survey included 24 multiple day events at all locations, so our assumptions result in approximately half of surveyed multiple day events switching to the WSHP. We will consider this number, 10,630, as our conservative estimate of demand. Our survey did not contact all Washington equestrian organizations, although it is likely that we contacted the majority of the larger organization. There may also be 25 organizations from other states that are willing to switch to the WSHP, although our survey does include organizations using Oregon facilities. If we assume that we only contacted 60% of potential client organizations, and that the remaining organizations are similar in character to the surveyed organizations, they we may scale up our surveyed demand as follows: 10,630 x 60% =17,717 This results in a true total number of 17,717 horse days from 18 large events and 7 small events. While the previous feasibility study estimated a 32 weekend season, a six month or 26 weekend season seems more likely given Northwest weather conditions and the length of the show season. While some of the small events may be double booked for the same day or same weekend, there are few weekends remaining for larger organizations. This is our optimistic forecast of horse day demand. As another measure -of potential demand, we note that in our sample -the average number of horses at multiple day events Is exactly 150. The average number of days in multiple day events is 3.45. Multiplying these, we have 518 horse days per multiple day event. If we assume a 29 week season — every weekend April through September and three weekends divided between March and October -• this results in 29 times 518 or 15,027 horse days. For the total number of horse days to be larger than this, horse orgahizations outside of our survey must hold substantially larger shows. Given that we contacted the larger organizations, this seems unlikely. Our assumption of 29 events per season is also somewhat heroic. In discussing this point with an industry consultant, we were told that it is possible that entrepreneurs do pet together horse shows Independently of local organizations. A 400 horse show could be drawn from the membership of many local organizations. We do not have any method of assessing likelihood that this will occur. Nothing in our survey gave support to the idea that there Is an underlying demand for horseshows untapped by existing organizations. 26 We then work with the following estimates of horse days per year: 10,630 (conservative), 17,717 (optimistic), and 25,600 (unrealistic). Given a number of horse days per year, we translate this into revenue per year by mu19plying by dollars per horse day. As mentioned above, survey results indicate that stall fees are approximately one. half of revenue per horse. We confirmed this by examining an event analysis for a Dressage Horse .Show conducted in Los Angeles in 2003. Horse stall revenue was 54% of total show rental. Based on this, we assume total revenue per horse is twice stall rental, even though some revenue Is indirectly linked to the number of stalls rented (e.g. the facility rental). We must distinguish between stall fees charged to the participant from stall fees paid to the facility. Show organizers pay facility stall fees and charge participant stall fees. For the purposes of our study., we are only concerned with facility stall fees. In our survey of WA equine organizations, Steve Busick asked the organization officers what stall rentals were at their current locations. Seven respondents said $25, while the other three -listed $35, $40 and $65 per day. For the Los Angeles show we examined, stall fees to the facility were $13.86 per horse day. Given this disparity in rental fees, we were unsure if our survey respondents we providingstall fees charged to participants or charge fees paid to facilities. In orderto resolve this we conducted a brief Internet search of current facilities. The Kentucky Horse Park fists $20/night for the first night, and $15 per night thereafter. This Horse Park of New Jersey fists $30 for one day shows, $45 (total) for 2 or 3 day shows, and $10 per day thereafter. The North Carolina Eastern Agriculture Center charges between $10 and $15 per day depending on the number of days. Examining the entry forms of the Reining Horse Association NW, the per day stall fee to the competitor at'varlous Northwest locations is unifonniy $25 per night This information suggests that revenue to the facility is between $10 and $15, while stall fees charged to 27 participants by the promoting organization are usually $25 per night Based on this, and assuming total revenue per horse is twice stall rentals, we use revenue per horse figures of $20 and $30. We believe higher figures then those are unrealistic. Our primary evidence is a survey performed for another proposed facility in Washington. When asked the primary reason for changing facilities, rising facility charges was the most frequent answer. Organizers of horse shows seem to be quite price sensitive. While equine shows will be the primary source of WSHP revenue, it is also possible that the facility will be used ,for other types of events. An essential component of profitability will be booking'events for otherwise unused times, and In our discussions with industry consultants several possibilities were proposed. One is housing a "livery stable" — an organization that rents horses for trail riding. Given the proximity to the Sunc adia resort, it is possible that the WSHP may lease space to a contrac m who in turn rents horses for trail rides. Riding lessons may be another potential market. The resort may also wish to lease the faculty for very large events - trade shows, etc. — that require more meeting space than is available at the resort. Entrepreneurial talent on the part of the WSHP management, as well as flexible facility design will maximize the potential of non -equine revenues. As. a rough approximation, k may be possible to generate $100,000 per year in non -equestrian revenue, and we include this amount in one of our scenarios, This revenue stream is highly uncertain for several reasons. First, the design of the proposed facility Is for a relatively small number of spectators. A non -equestrian event will normally generate revenue from spectators (e.g. music events), so the WSHP facility with seating, restrooms ,etc. designed for an audience of 1000 will have little appeal. Given its location a mountain pass away from population centers, we view it as unlikely that it wAl be used for the host of events normally housed in county fairgrounds, such as car and gun shows. The 28 facility is also not designed for horse boarding, leaving a conflict .between stall rentals for horse shows and stall rentals for a "livery stable". In one of our scenarios we include $100,000 per year in alternative revenue, but the generation of this revenue will require considerable entrepreneurial ingenuity. Costs. We used two methods of calculating operating costs. f=irst, we estimated the cost of each component of operations (e.g. labor costs, utility costs, etc.) and add them together (the component approach). Alternatively, we informally surveyed existing horse parks to discover their operating costs (the survey approach). Each method has disadvantages. The component approach has the disadvantage that we must estimate the quantities of all inputs — we must know how many workers will be hired, how much fuel will be used, etc. Such estimates generally assume efficient operations, Which is unlikely in any new business. The survey approach has the advantage that it reflects the costs of actual operations, but the disadvantage that other facilities may have very different operations — for example the number of non -equestrian events may be substantially larger or smaller. Both of our approaches yielded similar results, giving us substantial confidence in the approximate cost of operations. The 1998 feasibility study conducted a component cost estimate, based on estimates by the Langer Equestrian Group and confirmed by a survey of 13 equestrian facilities. That estimate was $445,500 as a first year operating cost, and we scaled that estimate up by the amount of inflation from 1996-2005, resulting in an estimate of $546,232 for the first year of operation.. Another component based cost estimate was performed independently by Ed Lepsley as part of his re -estimation of construction costs. His result was within $12,000 of ours. 29 For the survey approach, we called a number of existing horse parks in order to estimate operating costs for a facility of the size proposed for the WSHP. For 400 stall Parks, we found a wide range of operating costs, with lows very close to our estimate and highs around $1.2 million dollars per year (see below). This estimate is very imprecise, for surveyed facilities varied the length of their operating season (with some operating year round), as well as the range of equine and non -equine events hosted. In our scenarios we increase operating costs by 7% per year until the facility reaches full capacity, and then decrease its growth rate to expected inflation (2.5%). This model of cost over time assumes that many of the operating costs will exist regardless of the number of horse days — for example the manager will have tb be paid even in the first year of operation when the number of events is small. To these "fixed" costs we add costs that will increase with the number of horse days, such as bedding and manual labor costs. Because only part of the total operating costs will Increase, the rate of total costs will increase more slowly (7%) than the number of horse days (20 or 25%). One operating cost that is not Included Is property bm Based on an expenditure of twenty million dollars and a land value of five million dollars, property taxes will be approximately two hundred and twenty five thousand doilars. We have assumed that the taxing jurisdictions waive these taxes -- the facility will experience substantial operating losses if these are included. Scenarios: We use the parameters of demand and cost to develop four scenarios regarding profitability. All assume an absence of capital costs and property taxes. Tables Two 30 through Five show the assumptions and output of each of the modeled scenarios. Scenario 1: This has our pessimistic estimate of the maximum number of horses, plateauing at 10,630 horse days per year. We begin.with more than one third of this — 4000 horse days per year. We assume a low rate of growth; the park takes 8 years to achieve its maximum number of horse days. Revenue starts at $20 per horse. All scenarios start with the some assumption about costs, but since this model has few horses the initial cost per horse is quite high. With this scenario, the park never experiences profitability, and loses approximately half a million dollars per year. Scenario 2: This has the very most optimistic demand forecast; all 400 stalls rented for every weekend for 32 weekends, or 25,600. horse days per year, and a rapid rate of growth to this number. Revenue starts at $30 per horse. Profitability is achieved by year six, and following this the facility has net revenues of around $150,000 per year. Scenario 3: This scenario assumes a maximum of 17,717 horse days per year, $30 per horse.revenue, and $100,000 per year of non -equestrian revenue. At its maximum number of horse days, the facility loses approximately $80 thousand per year. Scenario 4: This duplicates scenario 3, but Instead of adding non -equestrian revenue, we raise the revenue per horse sufficiently to break even. At $42 per horse, the facility will net approximately $15 thousand per year. This corresponds to stall receipts of $21 per horse, and corresponding fees for all other avenue sources (shavings, feed, etc.). We view Scenario 3 as the most likely outcome, with the reservation that the $100,000 in alternative revenue is far from certain. This scenario is consistent with the experience of the vast majority of horse parks around the country -- it is very difficult to find any examples of horse paries that do not require continuing subsidies. 31 0 CLL4)B Iwo M r Ewa W Fm-�W "dE co cmt 0� -00 �w lc 0 IL vWp mW age 12 � r G C N C4 C d o $3 O N Q 06 �3 fI} v3 L m 110, �cq � a 8 rCY N 3 GO EA fofi f/3 .000 Lo � � m m to CD q P (y co fJ9 M ti V 40 m Lo o 0 V. o to m � iv44 N N Lo CY two 00 N UJ Q6 m 0 to m fR fA a � vq t1 !li 09 0 CD CV to co a M O pp Q C a A O (�+NCS Lo LO C 4uj W 0 cc G o a 01 m O w M ] CY to C S co a FL FL Q t �x X 40 w W m �o CL o t3 110, M a 1- w 0 C4 o rs Lq oo N 69 r y��j too 0_D to � N co C4 It O cq w CO N F{} w Imo+ 'tit [hH 4~9 � 619 w 9c O N N O pOp 06 cr to 64 to cc ODcm co too fo vi. 6 N r f0 .- co cm M 4? 4 iv�c cc in g � vs r�r yrs O 0 fl N fA N �LVf to N d3 w Y 6 Q O m [m7 p d `+ y Cr U 0: Ix c� g� 91b y LO y y 46 12 C a Q Q H=_ a ui _cao W iu W F— W F— LU i m C E co C tm m C C E C AC3 AN z$ _ OO 44 cif9L� to ift N 00 �cC7 N ds OWto y M a 1- w 0 C4 o rs Lq oo N 69 r y��j too 0_D to � N co C4 It O cq w CO N F{} w Imo+ 'tit [hH 4~9 � 619 w 9c O N N O pOp 06 cr to 64 to cc ODcm co too fo vi. 6 N r f0 .- co cm M 4? 4 iv�c cc in g � vs r�r yrs O 0 fl N fA N �LVf to N d3 w Y 6 Q O m [m7 p d `+ y Cr U 0: Ix c� g� 91b C4 _ CD C t1 a p a CV .S cm CL z Lo v c V- r X i w .AL o AS o a as t9 0uaz as CO L9 z� m oa R � c $ W Go r c ccc wip in m ass co aw4 4% Nr qyr• T- m O o a_ CL E Y r I,- f• GO C1 Im m C%I qt V- 40 w �p iM di f!3 � r r. 6+l c Cb cri CD tri �1 Ni In coC co � to � h M us N co a pu�� G 32 `7 e�rs r4 aD to r O A 01 m 49 4w t N � Q O � h Cfh. CD t9 Y7 N � h � ass co aw4 4% 2i o a_ CL E 2i L w= CL m ul '� E a too man 9.096 z� � v $� S H o co N N d3 f H 914, Mti Les W C3 w T Of ro0 ww G? V) A O W T ti co mm Go Rlf Y9 �Nppp d4 C� 6)1 1 CY M r +Cr C7V3 r � pp co eC 3 �pcc d Its m pp�� tF O OI R r r cocm O u�yyyi � Wryry h e� ER N r r OD co �y !� C w N co 4m CD �j 53 W aid ri� Il - Cg e�7C%D N i+} � 04 epi � N m A n 117 w w 4% ' f E� $c oQ a CL IM � F } Q U 914, Table Six lists revenue and cost data for eleven horse parks, ranked by the number of permanent stalls- The dollar figures are in thousands. As may be observed from the table, most horse parks experience operating losses, averaging 19% of operating costs. This report's Scenario 3 is consistent with this, with losses of around I I% of total costs. Table Suc: Comparable Facilities' Revenues and Costs Scenario 3 predicts operating losses of around $80,000 per year. This should be put in Perspective. Whether there are losses or gains of this amount, these re suits are only a very small percentages of'the opportunity cost of the 20 million dollar capital expenditure. At a five percent interest rate, the annual interest on 20 million dollars is one million dollars. The facility also requires two hundred and twenty five thousand dollars forgone property tax. The opportunity cost of the facility, on an annual basis, is therefore $1.225 million. If this facility provides this much value to the citizens of the state, it probably also justifies another eighty thousand per year in operating subsidies. 32 Operating Pennane Revenue Costs Profit Prat as a % of Facility # nt Stalls ($1,000) ($1000) ($1000) Cam 1 217 $4955 $597 -$102 -17% 2 300 $850 $1,500 -$650 -43% 3 400 $490 496 -16% 4 440 $600 $11100 4500 45% 5 460 $1,178 $1,717 $61 5% 6 480 $6,171 $7,447 X1,276 -17% 7 484 $580 $680 4100 -15% 8 550 $578 $560 -$282 -33% 9 672 $2,400' $2,400 $0 0% 10 750 $3,205 $3,658 4353 -10% 11 1,100 $6,190 $7,239 ,$1,049 -14% Average -19% Scenario 3 predicts operating losses of around $80,000 per year. This should be put in Perspective. Whether there are losses or gains of this amount, these re suits are only a very small percentages of'the opportunity cost of the 20 million dollar capital expenditure. At a five percent interest rate, the annual interest on 20 million dollars is one million dollars. The facility also requires two hundred and twenty five thousand dollars forgone property tax. The opportunity cost of the facility, on an annual basis, is therefore $1.225 million. If this facility provides this much value to the citizens of the state, it probably also justifies another eighty thousand per year in operating subsidies. 32 V IMPACT ANALYSIS: METHODOLOGY, APPLICATION AND FINDINGS impact analysis 'is commonly used in regional policy maldng to predict the economic changes that result from a project. These changes, or impacts, are experienced as increases or decreases in the magnitude of selected economic variables. Employment, output, income, value added, and taxable sales are the most often used impact variables. Project -impacts may be estimated for a local, regional, state, or national economy. one purpose of this study is to estimate the impacts of the horse park operations upon the state, and more importantly, upon the immediate regional economy. This chapter explains the methods that we used to estimate total regional impacts that result from the initial direct effects of the project. First we describe the general typep of economic Impacts. Then we briefly explain the specific modeling techniques. Types of Econofl3ic lmoact There are three types of economic impacts; direct, indirect, and induced-- each of which captures one facet of change in regional economic activities. Direct lmpa tc s Direct impacts refer to the initial purchases within an economy that result from project activities. Direct impacts of the horse park include expenditures stemming from construction, operations and maintenance, and from spending by event participants and spectators. Examples include purchases of concrete for construction, purchases of bedding by the horse park, and expenditures for lodging by out -of -area participants. Indirect Impacts 33 The term indirect impacts' refers to the production and sales of goods and services that result from the fact that direct impacts require inputs from other business sectors. For example, in order to sell hay at the retail level (a direct impact), materials will be purchased from local wholesalers and growers. This second levet of activity is the source of indirect impacts. Induced Imo -Ws The changes in employment in those industries that experience both direct and indirect impacts result in changes in income that are spent in the region to purchase consumer goods and services. This income effect Is the source of induced impacts. For example, if hay is produced locally, local incomes increase. Local spending of this additional income is the basis of an induced impact. Totpl_ Economic lm.oact The total economic impact is found by adding all three levels of impact for each sector of the local economy. The larger the magnitude of local purchases, the larger will be the total local impact; conversely, the larger the portion of expenditures which are made outside the local economy, the smaller.wili be the total local impact. The amount spent outside the region does not effect the local economy, but the amount spent locally on such things as food, services, and supplies is considered a local impact. Similarly, purchases resulting from increased wages which stem from both direct and indirect impacts are the basis for the Induced+ impact, a further round of rocal'spending. Induced impacts lead to additional rounds of indirect'and induced impacts. This is referred to as a Omultiplier effect.". To the extent that expenditures occur outside the local economy, they are considered to 34 be leakages. With each round of spending a portion usually leaks outside the local economy. Leakages from successive rounds of spending eventually taper further rounds of responding to zero. The larger the region, the more intricate the economic linkages and, accordingly, the greater the total local impact from.a given direct expenditure. There is, -therefore, a multiplicative effect of a given direct impact, which results in greater total impacts. This so-calted multiplier reflects the extent to which the initial expenditures recirculate through a local economy. The multiplier shows the relationship of direct impact to total impact and depends upon both the degree of linkages among the local industries and the extent of leakages. In a general sense, the multiplier can be estimated by dividing the total impact by the direct impact. For example, if a total impact of $1000 is comprised of $500 of direct impacts, $275 of indirect Impacts, and $225 of Induced impacts, the multiplier is $1000!$500 or 2. In this example, each dollar of direct impact creates a total impact of $2. Note that the total impact includes the original dollar of direct impact To most accurately assess the multiplicative effect, estimates of the multiplier are ofte?n derived for each sector of the economy. To accomplish this task a computer model of the local economy can simulate local economic interactions. A number of economic impact analyses have been conducted for horse -related activities. The primary element of impact analysis for horse parks,is the measurement of direct benefits. These are based upon a set of measurements regarding the number of people for every horse on the grounds, the expenditures per person, and the percentage of expenditures that originate outside of the region of analysis. This last component is included because, by the precepts of regional econorhics, it is assumed that only-extemal dollars advance the local or regional economy, since expenditures from locals would have occurred anyway, whether on horses or on other items that would cycle through the local economy. It is, accordingly, appropriate to review the values of these spending patterns used in other impact analyses of horse parks. A 35 second major element of impact analysis is the multiplier. Each analysis develops a multiplier to convert direct expenditures to total impact upon the target economy. The multipliers will vary depending upon location and type of activity. Fortunately, the measurements of both direct and Indirect impacts that have been developed or assumed in other horse park studies converge into a somewhat tight band. A brief review of the relevant variables in these studies follows; all dollar values have been converted to year 2006 dollars. The feasibility study of the national scale Maryland Horse Park assumed the extremely low values of 1.27 participants including spectators per horse. Spending per person in the local area was $100 per day for lodging and meals plus $160 of horse related expenditures. The study for the California Horse Park assumed spending of $126.22 per person, with 95% of participants and spectators coming from outside the county. Total 'indfviduals per horse was 2.5. The often -cited Oklahoma City Chamber of commerce study measured and used the following values: $.5 persons per horse, $174.57 expanded per person per show day, 85% of spending is from'out of town. A survey of Northwest horse owners was the basis for the estimates used in the Lewis County study. This primary research projected the following values: 2.4 persons per horse, $116.52 expenditure per day per person, and 28% out-of-state attendance. These values were given particular weight in our analysis because of their regional derivation. The very complete analysis of the Virginia Horse Center by Kaplan and Knapp (1995) 36 derived the following values from their survey: an average of 1.5 persons per horse, a weighted average of $268 expended per person per show day, 53% of spending from out of town. It .should be noted that although the persons per horse measure is quite low at 1.5, the expenditures per person is quite high, resulting in a product of the two factors that falls tightly into line -with the other studies. The Governor Hunt Horse Park Complex in Raleigh uses the following values: 4 persons per horse, $125 expended per person per show day, 67% of spending is from out of town. The Hoosier Horse Park uses the following values: 3 persons per horse, $123 expended per person per show day. The Connecticut Horse Park and Exhibition Center feasibility study measured and used the following values: 6 persons per horee (including exhibitors and spectators,) $169.68 expended per person per show day, 85% of spending from out of town. Although the measures of participants from outside the area ranged from 28% to 86% across the studies, these numbers reflect several factors - the size of the area and the size and nature of the shows. Clearly the density of population in -the East tends to increase this measure, and a higher proportion of large shows tends to increase this measure. The Virginia study group conducted a survey to find that 32% of small show participants were from out of state, along with 69% at medium sized shows and 52% at large shows. Thus this percentage will change as the mix of shows shifts with maturity of the facility. Because of the large sizes of western states and their relatively low population densities, we select the bottom end of the range for out of state participation, 25%. Remember that this Is the number to be entered into the calculations for impacts at the state level; at the county level a• figure as high as 95% of participants coming from outside the county can be used and deemed conservative, given the very small 37 popul3don of Kittitas County (at 38,000) relative to the region. Again* to be on the conservative side, we use 3 persons per horse (both participants and spectators), and $736 expenditures per person. Although our estimates of spending tend to be low, we find these appropriate in view of the relatively limited options for eXpenditures in a rural county, coupled with the -lower cost of tourism expendbires for motels, restaurants, and entertainment in a rural area. In impact studies the magnitude of the impact multipliers Is wide ranging and far more dependant upon scope of the region under analysis. As for impact of hose parks, the Virginla Horse Center study employed the highly rigorous input-output technique to derive two sets of multipliers, one for the state and one for the immediate horse center area. Table 7 shows output, eamings, and employment multipliers for both Virginia and the Immediate area. The output multiplier converts direct expenditures Into output (or value of product), the earnings multiplier converts expenditures into incomes, and the employment multipliers convert spending into a•measure of new jobs created. Far the state impacts of our study, we compare the'most recent input-output analysis multipliers for Washington State to those for the State of Virginia and adopted the multipliers shown in Table 8; note that they do not differ -markedly from those used for the State of Virginia. However, the multipliers for Kittitas County differ significantly from those for the Lexington -Rockbridge location of the Virginia facility. This Is because the Kittitas area is far smaller (population of 36,600 versus 360,000), and accordingly has far fewer economic linkages; many of the types of establishments -in the Lexington -Rockbridge location do not exist in Kittitas county, and will not eAst within the time -scope of this analysis. 38 Table Seven The Impact MuMpliers for the Virginia Horse Center Output Multiplier Earnings Multiplier Employment Multiplier State of Virginia 2.48 0.95 43.54 Lexington -R -bridge 1.88 0.72 145.79 _ In the mid -1990's an input-output model forthe,combined Kittitas and Yakima Counties was developed by one of the authors of this present study in order'to estimate the. impacts of the operation of a fish hatchery, also located next to the City of Cie Eium. The direct to indirect impact multipliers for this hatchery study (1.6 for jobs and 1.8 for earnings) were very close to the 1.88 multipliers of the Virginia study: This is not surprising in view of the facts that the two county area has approximately the same population as the Lexington -Rockbridge area, and that most of the spending associated with the hatchery - expenditures by recreational fishers - impacted the hotel, restaurant, camping and retail foods sectors, as did most of the expenditures by horse park visitors. In both cases about 90% of expenditures impact these tourism sectors. Accordingly, the sectorial multipliers for the state of Virginia study are deemed appropriate for direct application as to the impact of the horse park upon the State of Washington. Table Eight Impact Multipliers for Washington State acrd Kittitas County 39 Direct Expenditures to Total Employment Muifiplier Spending Multiplier Jobs/Million $ of Direct Expenditures Washington State 2.48 20 KM!tas County 1.15 16 39 Because Kittitas County is far smaller and less economically interlinked than is the combined Kft itas-Yakima area (about 10% of the combined county population or income), a yet smaller multiplier is appropriate. Accordingly, based upon a number of studies that correlate multipliers to -size of place, an earnings multiplier of 1.15 was used for Mites County impacts in this horse park analysis. A multiplier of 2.48 was used for the State measures. Another means of stating the jobs multiplier is in terms of the number of jobs created per million dollars of direct expenditures. This jobs multiplier takes Into account both indirect and Induced effects. In other horse park studies these jobs multipliers range from 16 to 45 jobs created per million dollars of direct expenditures. We have used 17 for the county component and 20 for the state component both conservative figures. Although the magnitude of these multipliers may eppear to be very conservative, it must be remembered that K'rttitas County Is a very small and unlinked economy. Direct Impacts: Two categories of d1n3d expenditures were Input into the model: Direct expenditures incurred in the operation of the horse park and the direct expenditures of show participants and spectators. As for direct expenditures arising from operations of the horse park, only a small percentage of these expenses will impact the local area, due to the lack of local sourcing of many of these expenditures. As many of these goods and services will be purphased within the State, however, a higher proportion of expend"Rures shown -on Line 1 of Table 8 are "margined" into direct expenditures for the state-wide component of the model. After considering availability of sources, 48% of total operating expenditures were considered to be local and 90% were used in thq state-wide component As the 48% local expenditures are included in the state's 90%, this means that 10% of direct expenditures went outside the state. Direct expenditures of show participants and spectators was calculated from the number of horses, based upon the fallowing assumptions. 3 persons per horse and 40 $136 spent per person per day. Because these expenditures are primarily for tourist services, we assume that 826 of expenditures will impact the local economy. The remaining 18% will go to vendors who travel to the county for these events, and are therefore not considered "local.' Findings of the Impact Model We applied the impact model only to the results of Scenarios 3 and 4, the "most likely" feasibility models; both were based upon the same starting numbers of horses across the years of analysis. As the impact model results are linear functions of the number of horses and therefore visitors, impacts for the other feasibility runs can be easily calculated. Table 9 shows the logic and results of the model. Let us use the Year Six column to show the impact of the horse park in its maturity stage. Direct participant expenditures of $7,334,838 are shown on line 1; these are comprised of the number of horses, times the number of participants per horse, times the spending at $138 per day. Line 'I is next margined at 95% to reflect the fact that 95% of participants are from outside the county. expenditures by in -county participants are netted out as it is assumed that this money would be spent in the county even without the horse park.) This margining yields the $6,9.68,096 in line 2, spending by participants oq the local market Line 3 gives the $347,540 of expenditures made by the horse park administration; if Is calculated by multiplying horse park expenses by 48% to account for expenses that flow into the local economy; the remaining 52% will be spent outside the local area. The sum of these two categories of local expenses (local spending by participants, shown in line 2 plus spending on horse park operations, shown on line 3) appears as $7,315,636 in line 4 as local total direct expenditures. These, In tum are multiplied by the local (county) multiplier of 1.15 to yield local total impacts, shown in line 5. This number, $8,412,982 represents the total money flows, including indirect and induced effects in the local economy that are attributable to the home park. Using the employment multiplier of 17 jobs per million dollars of direct expenditures gives us 41 line 6, the 143 jobs created by the horse park after the direct, indirect end induced effects are factored in. 42 H 030wvljwmIt tcoor-931- m0 C4 RONV Pte. a 9r: N NS c oit N M Co N Cb Ir 3 O Fi (C r- et 4D cD N = CC3 8 7}7+ O O m Cl c�7 � �h two r {i r oll 9co G% E y W � ; 44 �1! CO CO CD I r LO t+3 70 N O Co c r W3 03 M 07 r V m m N h r C6 C] r Cy N r O31�1p7 177 R N N w 'Nr 0(p00 W CV) v 4 $ a Me W.: N rlf�O 7� 49 4 ZCR 69 S : Go EH fl- P70p�NNti� CooNO Ct at 115 �NR tCIO 4D9" 4Dar-N C3O470d to CO 1c7 N N w C7 Of 0 M m d4 O mOI C9 MC W ON - f9 + Z VZ GO Goo � i~R � Ci � 6r4 iR tO 0tO 04 ) ccocoov NCOO 00 0 1q cp cn r v4q[-1nN W10N 47acc0 eej SCD Cfj --it Ccc L si ¢¢ ii W dr4 44 � i9 iris dr9 U)10R0glowIMti 0 Iwo CO CC 't ClCoOCJD r corm ic3N0 �4RE 40 WP N w 40 w E14Cd In 40 4r9 44 �' W �m�Nf ) ti vi G �Gol� cn C aD iQ 1 CO W $ ua ao a3 T- � N r Co Co W m irl a0WiCm N5� t-- t- q 40 tOMNrOrCq 25 r`-. to co a u3 cq ' a; in Lo O N!V GO imp w wSt goo I't in CY CD co Lo ps o 'i c��0yy 0NN3 q } 6y f9 4IS 6!<E &i m 4D C a� C CL ca� ar CL asp �00co u7 9S� • CL 98 1 goW 'S - 'G •E � �$�0o 3 3 0'11. nv�`� State Impacts are also calculated from the sum of participant plus horse park expenditures. This sum of $1,466,968 In Column 6, Line 7 is derived from Line 1; it has been margined at 25%, because only 20°% of participants are from out of state, and therefore this is the source of impacts captured by the state. Those participants who come from within the state would be assumed to be making those expenditures elsewhere in the state If the horse park did not exist. Accordingly, the state participant spending is actually less than the local. To derive other state measures, State Horse Park Expenditures of Line 8 are added to Line 7, summing to the $2,082,403 of State Total Direct Expenditures. This, In turn is multiplied by the State multiplier of 2.48, resulting In a total impact (including indirect and induced effects) of $5,164,360 shown on Line 10. Thus, it can be seen that the proposed park, even on a very conservative estimate of use, generates a significant Impact on -the County and'the State economies. It should be noted that these estimates are based on horse shows only; they include no impacts from use of the center by other events, which are expected .to consistently account for up to 25% of the days the. facility is used. Any additional use by horse shows will also markedly increase these totals. This analysis also only appilea to operating expenditures — it ignores the very large initial construction expenditures.. Fiscal Impacts u on the Public Sector Lines 11, 12, 13, and 14 of Table 8 show tax impacts, based upon the results of the "most likely" scenario. Line 11 represents total sales tax collected from participant expenditures, calculated at a rate of 7.7%. Line 12 shows Cie Elum's local share of the sales tax, $90,448 in Year 6. County share is $8,222. Finally, State shave of sales tax (6.5°%) Is shown in Line 14, $1,100,611 In Year 6, reflecting the sales tax Collected from out of state participants. . Local share of the motel and 'hotel -tax is based on 50°% of participant spending going to lodging and the tax rebate to local govemmert is 44 2%; thus for year 6 this is $73,348. Property Taxes Using the assessment rate for Cie Elum of 8.34390 per thousand dollars of valuation, the $5 million of land plus approximately $20 million of constructed improvements would generate an annual property tax of $225,285. The potential impact of adding this level of taxes to the analysis of horse park economic feasibility is critical. Using the projections of the most likely scenario, the payment of property taxes would add this same amount to losses. Hence, even the most optimistic Scenarios, 2 and 4, would be kept in the red. Essentially, payment of property taxes would render the project infeasible under the most likely scenario. Other Benefits: Economic development is the business of attracting, creating and retaining businesses in the State. An important element for any state in this battle is the ability to offer a desirable quality of life. Any improvement In the quality of life makes a state more attractive to people, and therefore more attractive to the companies which need those people. The addition of a first-class, nationally -known horse park would be an enhancement to the quality of life in Washington as well as an important means for promoting the State's image. This type of facility, which brings thousands of people into the state from all over the country, serves as a marketing tool. It brings people here, exposes them to the benefits of the area and perhaps stimulates their Interest in Washington as a place to do business -- while at the same time pouring millions of dollars into the State's tourist 45 economy. The various State and County development agencies subscribe to a goal of creating additional major tourist attractions. The Washington Horse Park would function in fnuch the same way as a major sports arena or concert center where people come from a wide area in order to watch events. Tourism is an important industry because it brings substantial revenue into the economy without significantly burdening local services, particularly schools. An increased number of equestrian events would also support those businesses in the State serving the horse industry - farriers, feed and hay suppliers, vetednarlans and the like. Increased interest in horses could also be expected to result in increased business for horse dealers, stables and tack shops. Economic models estimate that over 7% of the Overall Economic Impact occurring in the State due to the Horse Park would flow directly to the state in the form of taxes. While.these Impacts were calculated using standard economic methodology, it must be noted that most of the forecasted events at the horse park are transfers of existing shows at other facilitles. Only truly new events will create new spending, employment and tax -revenue. VI RECOMMENDATIONS FOR ORGANIZATIONAL STRUCTURE A major task of this study was to make specific recommendations as to the appropriate organizational structure needed to acquire control of the site, solicit funds to construct improvements and successfully operate the facility over the long term. In this section we recommend an appropriate organization structure for the WSHP Authority Board of Directors based upon our interaction with the management of other horse parks, with 46 State and local government officials, and with groups of potential users. The WSHP Authority is a non-profit corporation that was authorized by the Washington State Legislature in 1995 under the provisions of Title 67 RCW 67.1$. The seven member Authority Board of Directors is appointed by the Governor of the State of Washington and is granted broad authorities to "develop, promote, operate, manage, and maintain" a horse paras facility. We believe the most effective organization structure to accomplish these key functions is., (1) for the Directors to establish a non-profit corporation with IRS Code 501.C.3 tax status so that it can receive tax free donations, (2) for the corporation to contract in the private sector for the services of a professional manager experienced in the establishment and operation of equestrian faicilities, and (3) to assign that professional manager the responsibility and authority, subject to appropriate Board review, for the development, promotion, operation and maintenance of the horse park facility. The professional manager, who would not be an employee of the State of Washington, Would be responsible to monitor the construction of the improvements, to prepare a budget to be approved by the Board for the operation of the facility, and to manage the marketing and operations of the horse park facility. These responsibilities would include hiring and managing employees (who would also not be employees of the State of Washington) and negotiating directly with private sector suppliers of goods and services to conduct the operations of the horse park facility. Based on our contacts with horse park facilities in other states and with other authority -controlled activities within the State of Washington, it has consistently been pointed out that the flexibility, time responsiveness, and cost savings available by not being required to operate with employee regulations of the State of Washington and not being required to go through the State purchasing system are significant and may be essential to the ability of the Horse Park to achieve. financially self-supporting operations In the early years. 47 In summary, we recommend that the WSHP Authority Board of Directors set up the organization to be run by an experienced professional manager as a commercial operation outside of the State governmental institutions and procedures, that the Board focus its activities on obtaining the site and funding commitments required for the construction of improvements and the first five years of operation, and that the Board actively work with existing equestrian organizations to promote the Horse Park project. VII CONCLIJ§IONS AND RECOMMENDATIONS The primary objectives of this study were to determine the financial feasibility and Potential economic impact of the Washington State Horse Park in its proposed location In Kiffitas County, and to make recommendations as to the organizational structure of the institution. We will summarize findings and make recommendations as they pertain to each of these objectives. FINANCIAL FEA I12ILITY Horse parks are not money makers in and of themselves. This is a reality which cannot be overlooked. As shown in our analysis, they have a significant positive impact on the economy, but are not themselves profit sources. This Is particularly true for high quality facilities where typically revenues do not fully cover operating expenses. We developed a relatively sophisticated financial model to determine economic feasibility. The inputs into this model were gathered from the experienoes of operating horse parks around the country, user groups that we surveyed, and the experience of horse park management professionals and consultants. The advantage of using such experiential data is that elements of good and bad luck. managerial learning, and shift - in facility goats and procedures are therefore incorporated into the modeling process. Four scenarios of the model were developed and "run;" they -differed as td assumptions 48 of growth rates of numbers and types of shows, entries, revenues, and costs. In Scenario 3, which we believe will be the most likely scenario, the park operates at an eighty thousand dollar per year loss, despite assuming augmented revenues of $100,000 per year from non -equestrian events. Scenario 2, which assumes a much higher and likely unrealistic rate of facility use, results in net revenues of approximately one hundred fifty thousand dollars per year. The key financial findings of these two scenarios are; o Maximum use of the facility is reached in the sixth year. Scenario 2 breaks even in the sixth year. G Accumulation of 1,4 million dollars in losses by the end of the tenth year in Scenario 3. Scenario 2 accumulates one million dollars in losses prior to break-even. Net revenues losses of $74,726 when the facility reaches maturity in year six for Scenario 3. Scenario 2 projects net revenues at maturity In year seven of $140,802. For Scenario 3, annual revenues at maturity will'be $549,316 and annual expenses will be $724,042. For Scenario 2 these values are respectively. $915,527 and $774,725. 69,357 exhibitors and spectators will use the facility annually when the facility is at maturity. For either Scenario, it will be necessary to waive property taxes on the facility and to create a capital funding approach which requires no direct repayment from operating revenues. 49 The model was also run to solve for revenues per horse (Scenario 4). Under the most likely assumptions, the level of revenues per horse necessary to break even in terms of operating costs were unacceptably high. Our findings are reflected in the national equestrian park picture, where large and medium sized facilities are typically subsidized around 20% of operating revenues. Only two of twenty-five horse parks break even. The primary reasons for the lack of positive cash flows in our projections of the Washington State Horse Paris are that: The climate and location limits the number of open weeks per year. Our survey snowed that equestrian groups are very sensitive to price. The equestrian -dedicated design limits the size and nature of nonequestdan events. For full utilization a facility needs to serve large horse events, and there is a lack of growth in the number of large horse organizations in the region. Under these circumstances there are several major provisos that must be met before we can recommend that the plans to raise funds for the farjliiy proceed., The first two have already been stated, that capital repayment not be required and that property taxes be waived. Third is the requirement that In order to assure successful operation, the Horse Park Authority must recruit a facility manager from the upper 90 percentile of managers and support that manager with top-notch review and assistance by professional equestrian management professionals. Finally, the facility wail require subsidization from either private foundations or public coffers of approximately $90;000• per year. 50 ECONOMIC IMPACTS One means by which other facilities justify operating grants is through their impacts upon local and regional economies. Therefore, an impact model based upon expenditures of the horse park participants and expenditures for horse park operations was developed to estimate financial flows to both the local and state economies and to local and state finances, Using the "most likely" scenario at year six maturity, the following impacts are projected: The direct spending by exhibitors and spectators are estimated to be $7,334,838 when the facility reaches maturity in the slxth-year of operations. 0 The total money flows attributable to the horse park in the sixth year,. including indirect and induced effects, are $8,412,982 annually. 4 Using the employment multiplier of 16 jobs per million dollars of direct expenditures projects, 143 Jobs will be created by the horse park after the direct, Indirect and induced effects are factored in. Starting at the sixth year, annual state impacts from but of state residents were. found to be $1,466,968 of direct, indirect and Induced spending, 0 The recreational services sectors will be the sectors most affected by Horse Park operations. ORGAIdIZAT1ONAL STRUCTURE We recommend that: 51 The Washington State Horse Park Authority Board of Directors set up the organization to be run as a commercial operation by an experienced and successful professional manager. G The brganization of the institution be that of a non-profit corporation, avoiding designation as a State governmental entity and thus avoiding the labor and procurement procedures required of State governmental units, 0 The Board focus its activities on obtaining funding commitments required for the construction of improvements and the first five years of operation. 4 That the Board actively work with existing equestrian organizations to promote the Horse Park projea Our findings are reflected in the national equestrian park picture, where large and medium sized facliitles are typically subsidized around 20% of operating revenues. Only two of twenty-five horse parks break even. Under these circumstances there are several major provisos that must be met before we can recommend that the plans to raise funds for the facility proceed. The first -two are that capital repayment not be required and that property taxes be warned. Third is the requirement that in order to assure successful operation, the Horse Park Authority must recruit a facility manager from the upper 90 percentile of managers and support that manager with top-notch review and assistance by professional equestrian management professionals. Finally, the facility will require subsidization from either private foundations or public coffers, of approximately $80,000 per year. However, the positive economic impacts accruing to Kittitas County and to Washington State add some justification to financially support this endeavor. 52 BIBLIOGRAPHY Abell, John and Marsden, James, "The Economic Impact of the Standardbred Industry.on the State of Kentucky: A Report Prepared for the Kentucky Harness Racing Commission." 1984. Adelaja, Adesoiji., "The Proposed New Jersey Horse Park at Stone Tavern: Economics Impact Analysis and Financial Analysis." Rutgers University, New Brunswick, NJ, March 1987, Allmon, Carolyn I. "Horse'Racing in America: What Impact on the State's Economy?" Minnesota Department of Revenue, 19&7_ American Horse Council, Inc. "Economic Impact of Horse Shows." Washington, DC 1979. American Horse Councl.i. Inc. "1989-1990 Horse Industry Directory." Washington, D.C.: June, 1989. Atelier, ps. "Washington State Horse Park in Kitthas County." Master Pian Report, Draft. Bigler, Alexander 8. Associates. "A Financial Feasibility Assessment of a Proposed Connecticut Equestrian Center." Oakton, VA, February 1982. Carr, James; Atwood, Barbara; Bolin, David; Southard, Larry. "Economic Impact of Kentucky's Tourism and Travel Industry,1987 and 1988." Kentucky Department of Trane! Development. Tourism Research Series No. 44.,1989. Center for Business and Economic Research, College of Business & Economia, University of Kentucky. "Understanding The Impact of the Equine Industry in Kentucky and the Central Bluegrass." Lexington, KY, 1991. City of Dallas. Texas Horse Park at Trinity. 2006. http://www.dallascityhall.opmfcommittee briefings/briefiings0806/20060821_TR CDealPoirrts.pdf Center for Economic Development, Caltfomia State University, Chico-'Caiifomia Horse Paris Analysis of Its Impact on the Economy of Shasta County." 2004. Chico, CA Crawford, Kay. "Lewis and Clark State Equestrian Center, Economics and Employment 53 Impact Study." Auburn, WA, The Merit Co., 1991. Economic Research Associates. "Memorandum Report - An Evaluation of Planning for Kentucky State Horse Park." Kentucky State Department of Parks (March 5, 1975): 30. Economics Research Associates. "Analysis of Development Potentials for The Percy Warner Equestrian Center." McLean, VA, December 1977. Economics Research Associates. "Feasibility analysis for a Virginia Horse Center in Roanoke, Virginia." (Draft) Washington, DC, November 1984. Garnet Consulting Services, inc. "Connecticut Horse Park and Exhibition Center Feasibility Study Update." January 1996. Garnet Development Group, Inc. and R. & L. Associates "Connecticut Horse Park Feasibility Study." December 1987. Holt & Morgan Associates, P.A. "Master Plan for New Jersey Horse Park at Stone Tavern." New Jersey, 1979. Kaplan Samuel R.; Knapp, John L.. "Economic impact of the Virginia Horse Center." September 1995 Kems, Terry. "Economic Impact of the Horse Industry on the State of Kentucky," Show Horse. June, 1987. Kisler, Joseph R. "West World Research Report," Unpublished Report prepared for the West World Business Plan Committee. 1997. Kopp, Karen. "AHC Study Reveals Equine Industry's Economic Clout," _E_QUUS. June, 1986. KPMG Peat Manarick - The Policy Economics Group. "Economic Impact of the Ohio Horse Racing and Breeding industry on the State of Ohio.' Executive Summary, vol. 1. September 1990. KPMG Company -"Economic Impact Analysis for a Proposed New Hoge Park in Anne Arundel Couft Maryland". March 2006 Deloitte Company -"The Economic impact of the Horse Industry on the United _ States." American Horse Foundation, 2006. KPMG Company Policy Economics Practice. "The Economic Impact of the Horse 54 Industry in the United States." National Summary, vol. 1-4, December 1997. Mack, Richard; Richardson, Gary. "Financial Feasibility and Economic Impact of the Washington State Horse Park. Contractor Report, Ellensburg, WA. 1998. Maryland Stadium Authority "Maryland Horse Park and Agricultural Education Center 2006 Feasibility Analysis-' Minnesota IMPLANGroup, Inc. "Micro IMPLAN Users Guide." (July 1993). Pannell Kerr Forster. "Evaluation of a Proposal for the Development and Management of Horseman's Equestrian and Theme Park to be Located in Scottsdale, Arizona." New York, NY, May 1986. Robbins, Mark; Terpsma, Betsy. "Structure and Economic Contribution of the Horse Industry in British Columbia:" 1990 Sharp, Jim. "Virginia Horse Center Financial Estimates." Richmond, VA, October 1982 (updated 8/84). United States Equestrian Federation (USEF) Data Pages 2006 (http:Uwww.usef.org). 55 Appendix l Questions for Equestrian Organizations General horse park introduction. General questions about the nature of their organization I. Size of grganization? Change over six years? 2. How many events do you schedule? 3. How many horsedevent? 4. What stall fees do you pay? 5. What do ytju pay for arena facilities? 6. Are past years' calendars available? 7. What is the geographic range of your activities? 8. How satisfied are you with your currant venues? 9. How frequently lura your organization &egged ymues? 10. Why did you stop using dine venues? 11. What new venues have you added? 12. What is your event planning horizon? 13. What has been the trend in fees for stalls? Do you think that your maulers are willing to Pay $5 mora? 14. Do you have past years' .data (going back to 2000) on events/entrimllocatioas? 15. mould you consider using the WA Horse Park? Now events? 16. Will you be wzlling to write a letter of support for the WA State Horse Park? 56 Appendix II: Survey Questions for Horse Parks Name of Facility Contact Name Phone # Operations Manager Name Phone # Operated by: Municipality State County Public-Private Padnmahip Private Other Date opened Operating Months Operating Days of Week Hours of Operation How many acres is your facility? What is the number of on-site horse stalls? 57 Appendix llf DEVELOPMENT OF THE WASHINGTON STATE HORSE PARK A 'I`HORITY The history of the Washington State Horse Park Authority .is succinctly summarized in a January 16, 1998 memo From Cleve Pinnix, Director of the Washington State Parks and Recreation Commission: In 9990 the State Parks and Recreation Commission acquired land adjacent to Lewis and Clark State Park for development of an equestrian facility. Subsequent detailed evaluation determined that the amount of wetlands on the property made it unsuitable for an equestrian facility. The property remains in Parks ownership. The Commission next authorized staff to hire a planning oonsultant to design a schematic master pian sitemattve for an 1,120 acre site near the town of Ethel, on Highway 12 about nine miles east of interstate 5. The Commission approved the consultant's recommended plan in January 1993. Staff was. also authorized to begin aequldng needed land through use of funds previously designated for a horse park facility and through public-private land exchange authority. Staff was also authorized to work with private parties to develop support for a legislave package for equestrian center development through a quasi -governmental entity to be chartered by the legislature. Land acquisition was conditioned upon receiving legislative authorization for the managing and -development entity by September 30,1994, a deadline later extended to September 30, 1995. Because several of the landowners were unwilling to sell their land the project stalled. On May 1, 1995 the Governor signed SSB 5403, creating the Washington Horse Paris Authority. 59 Important components include: 1. terse Park Authority Puraose The best statement of intent in the duties of the Authority is found in section I of the originating statute: RCW67.18.010(4) Ih Is the purpose of this legislation to create the framework for such a partnership to fadrdate development of the Washington state horse pant. !t is further the intent of the legislature that the state horse park shall be developed in stages, based on factors such as the avallabillty of funds, equipment, and other materials donated by private sources,- the availabllity and willingness of volunteers to work on park development,- and the availability of revenues generated by the state horse park as it is developed and utiried. 2. commission Role The statute describes the Commission's role as follows: RCW 1;7.18.020 (1) the Washington state horse park is hereby established, to be located at a site approved by the commission. In selecting a site the commission shall consider areas with large blocks of land suitable for park development, the distance to various population centers in the state, this ease of transportation to the site for Targe vehicles traveling along either a north -south or.an east -west corridor and other factors deemed important by the commission. The statute also encourages the Authority to collaborate with state agencies when it is mutually beneficial. The Commission is referenced as a potential partner in matters pertaining to public recreation. 3. Land Ownership RCW 67.18.020 (2) descflbes three means by which land for the park may be acquired. First, through a grant to State Perks through the WWRP process. In this case the 60 I resort complex. These linkages offer more economical development of needed facilities and have streamlined the permitting process for the horse park facility. On October 22, 1997 the Horse Park Authority voted to endorse the TrendwesilSuncadia site in order to proceed with preliminary planning. On January 2,1998 WSPRC met and approved the site. Facility Master PLAN The contract for the design of the original master plan was awarded to Meller ps, Janis Snoey, the master plan project manager, worked with the Washington State Horse Park Authority, the Washington State Horse Park Foundation, the Public Involvement Task Force, -and the authors of this study to design the Master plan. The design of the Horse Park clearly reflects an iterative process that entailed repeated interaction of all of these parties. It is appropriate to draw directly from the document to succinctly portray the envisioned facility: As a show and competition facility, the Horse Park Master Plan Is designed to accommodate one or more small- to moderate-sized events at a Nme. At full bulld-out, the Horse Park will support large events such as regional Arabian Horse and Quarter horse shows, the North American Young Rldeft Program f=inal Competltkw4 Dressage and Jumping World Cup competitions. The Horse Park w81 meet the needs of breed shows, western competitions, and equestrian sports such as competitive trail riding, jumping, dressage. combined driving and three-day eventing, American Home Show Assoclatlon (ANSA), Federation Equestre Irderrmtionate (FEI)and Profm1b ial Rodeo Cowboys Assccialleon (PIRCA)standards will guide devclopmentof the show and competition facilities. The Horse Park will also serve those interested in less formal equestrian acfivifies such as trail tiding. The Horse Park is proposed to include a trail system interconnected to the Coal Mine Trall east of the site and the Iran Horse Stats Park (the John Wayne trail) south of the site. Trall access Is also proposed through the Mountain Star Resort to back country trails in the -adjacent National Forest in cooperation with Trendwast, a 63 trailhead will be provided at the northwestern limits of the Mountain Star Resort. This facility will be prodded so that users may immediately access more rustic trails without riding through the resort. Trendwest will determine the location of this "outpost." The architecture and landscape development within the proposed Horse Park will conform to a [northwest mountain Style to blend with the natural environment and reflecting Washington State's history. The building style -- characterized by sloped roofs, generous overhangs, and use of wood, stone, and heavy timber -- is consistent with that proposed for Mountain Star resort. To maintain aesthetic quality control, design of specific facilities will be approved by a design review comm[ttee comprised of members of the gorse Park Authority and representatives of Trandwest. The project vwll be built to high-quality standards to stimulate use of the facility and reduce long-term maintenance costs. Substandard facilities may cost less lndlally, but will not serve the goals of the proposed project. The Horse Park will be developed in phases to reduce the initial cost and allow for flexible expansion. The proposed first phase of development would serve the needs of many small7 to moderate-sized events (although probably no more than two small events or one moderate-sized event at a time), Temporary construction is minimized to reduce the cost of future construction, although some temporary features are necessary to consolidate development In the early phases. In 2006 Edward Lapsley, Facil Ries Consultant, reassessed the original master plan and developed a revised construction plan. The design was marginally changed to reflect the last decade's changes in the technology, management and format of hone park design, construction and operations. Cost estimates were also revised, .based upon a bottom-up approach. 64 TAE3Lg oE coNTENTs The following information comprises the formal submission from the Washington State Horse Park Authority for phased capital funding of $19,384,399 "in total" to construct the Waddngton State Horse Park in Cle Slum, Wash. Introduction 3 Historical Background 3-4 The Organisation 4 Events 4 Overview of FlacWties g Site Plan s The Facility a Design Costs 7 Construction Costs 8-10 Phased Build Out Plan ,& Cost Totals I I Detail on Design & Construction isppandix A Updated Economic Feasibility Report Appaldix B * COftm l Washington University will be updating the 10e8 Wuhhgt m Mate Horse Park Economic Feasibility Report to reflect crrreat projeationsfor the Horse park's reve=rie and operating costs, in addition to antiolpoed loco and stat"dde econarnlc benefits. 'This additional document will be made availAble to the Stats Legislature and Office ofFLnsnclal Management as early as possible prior to the session stat date. WASHINGTON STATE HORSE PARK 72M Waditgtan State Horse Park is locafed on 106 acres of land adjacent to 3-90 in Cle Elum, wash. The Park will be the showcase of the Washingtea equestrian iaduslry atnd a World lass inanity, serving the reereatiorW, eMpeadve and wiucationai needs of riders axed horse enthusiasts across tits state and throughout the NOr west. The Proposed facility WM yrovide ample itfcltities to acaam:nodate regional, national and internationa equestrian and recreational pvrs#el°to- Special eenpha8b is included to provide equestrian activities for youth and the disabled. HISTORKCAL BACKGROUND 1980 - W gislatetre appropriates AM& to the Wi Washington State Ls m Staten D*part nwtt OtAgdanhure for lnvedtlgetfaa, of the econon& impact of Waddngton's horse industry. Study "commends the creation of state-owned and operated egnasttfan center to promote and some the recreational horse industryin the state and provide econamic benefits Ow ngh equine activities. 18111- Legislature authorizes nditare of $200,000 for an e n9 study. The PArks Conunkdozz quesh2fttriam Beater adjacent to Lavris and Clark State Pada Lewis C umly Ii to purchase IW Park. qty as a potential sdte Rite 1581-1896 . Afier fto pears of planning, horse cOMMmity input and site analysis, physicat and envfranmentai isme s prove the IMds County location unsuitable for a world-class equestirlan center. 1"6 - State l,egl:eiature, by RCW 87[.18 (ReoadMed: ?QUO), wuthadwg the aahiagton State Horse park Aatlority to "establish a 8rs Man horse parit fa�ity fgft Washiugtare to most the important needs Of the state's horse industry, attract invastrnew, enhance rearea imW Opportunities, and bring new exhlbdtors and tourists to the state &am throtaghaut Rha region and beyond." The leg3slatu+e itu'ther states, "& unique opportunity a*sts to form a that W county, sad private interests to areata a Puership M► state, major horse park�ofllty tthat v►Iil provide publlo recraanneal O PPOrtuatties and statewide seaman& and emphMWIg beneSts." le - fin' Wa IL Resort Corporation oilers to donate land for the horse park in o' Eiee;ee, Wash. adjao M to their planned resort ac Carlow appoints Horse Park AuthorityGovernor. Gary monbera. 188y . A $+15.000 grant is pxavida►d by tw Lqgjsktvra to dsvelap ate e feasibflitl+ study and draft a Master plan for the Washington State Horse Park in ntit" GOuaty. A letter of intent to donate the property im CIO t ' fs sigxned by at8li4tes of]ELD-WEN and Iaws Eaterprises, the nevrlared owners. log selelO - The State p� Comnnission authorizes the Parks Director to approve ctian. of the CIO -Mum location for the Washington State Horse Park, as required in the legislation. 1088 -2004 - Through several years of negotiation, Urban Growth Act (UGA) aPPmval and changing developers; the site in CIO Ehua is selected on 108 acres including tttftastructure improvements and water rights. The value of the donation by JEGa_1ti M and Ise Enterprises (now Suncadia Resort) to the allisens of the State grows to mere than $8,000,000. 8004 - Washington State Morse park Foundation reorganizes to better manage the "Oct. fatdlitate fund-raising activities and expand the involvement by the horse community and equestrian -related businesses. ZOOS - Governor Chrlstfne Gregoire appoints new Washington State Horse park Authority Board members tea tlaaiiae site planning and begun development. ZOOS - The Washington, State KOM ParkA With Ed Ira ( ���y Board VvoriCB, in coo}u�,o,�tiori psley and Robert Mack Central Washino,= Mdverdty—DepsYtmeni of Eoonomics), to update prior reports an capital construction cost estimates and ac`anomic feasibility respectively. These doutun ants wilt support a capita# llutditrg request to be M@40 to the WadUngton State Le912lature during the 8007- 08 ,biennial budget. THE oRGANiZA-noN Women 264e "arse park Authm * is a seven -member board authorised by the Washingtam State Legislature and appointed by the Gavernorto develop, PrOnlOtevd private resources. operate; manage state and and maintain the Horse Par using a combination of ' Waditeon Slate Hea'lae pat* r*u"*t31ea is a non profit ce rporation that acts as a "lfiead of the Horse Paint" by support�g the Washington Sate Horse Par& Authoritp. it is comprised of an alt wdurtaer Hoard of Directors and Foundation anMP that represents a diverse aros"ection of horse disciplines, interests and budnessas. EVENTS Tits Wasiningtcan State Horse Pa* is designed to tweet the needs of local, regional and national competitions. Its charter specilla lly charges the Horse Park A>rthcudty Hoard to Provide 4-K pony clubs, youth groups and local park depatr A"MiEs with youth recreaHcnal activities, The Au&otity Board also is to prov"de Preferential ttse Otaft area of the Horne park for nominal cost. yannth and file disabled at ()V1;R AEW OF FAGILI' iES As a shove and chrnpetttion facility the Washington State Mors a park velli be designed to accommodate serreral simuttaneonts small to moderate sine events cr a single large event. MOMPles of events would Wlede regional Arman and Qustter Horse shows; the North American Young Rider't P"g�, Dreasage events and World Cup competitions. The Horse park wiIl meet the weeds of breed shoves, western ehmpetidws and equestrian sports such as competitive trait riding, J,Mpug, combined driving and three-day eventing. The Washirtgton State Horse Park will also serve those interested in less formal equeatrlan activities such as trail riding and backaoul tr'y packing. Tile Horse Pack wltl include an extensivs trail srittam, hTtero*=eotad with the CW brMes Trail east of the site and the Iron Horse State park south of the sate. It wM also offer facilities for overnight trail rider camping and horse boarding. THE SITE La9atlan of the 100 -acre site is depdcted behest Tho northarit boy a site terminates at Me base of a natm* ridge, sr Mch rites a;W=jtnatel�t nat above the property, The southern border line is shared with the Waslnfngton.State kfighway Departments 1-80 corridor. There is a "no-bultd" 78 That corrWor buffering the property torn the freeway. The tits b moderatelyforested, with pine sand Douglu fir. The aWeemit between the VMV Authority andMmcadl& Resort is for donation of the 108 awes. ww.ewrr..i AMM # M The kAXhMMtLon the site will be a 200 x 300 foot with a 178 x 300 foot Open aroma. A 20 x 300 foot support service area will provide bleacher seating for 1,000 spectators. Bathrooms with showers, a vendor area, judging area, eVertt control area and offices will also be included. The estimate is based an a steel Istria. gable end Mnwture. The covered are na.Is supported with a 200 x 300 foot open arena and a 240 x 140 foot warm-up area. AWWO08tild in eight weatherproof barna wi8 be located to accommodate easy access to parking spaces for buck and trailer combinations. Each 12 x 18 foot stall will include a sliding entry gate and sloped floor to accommodate liquid waste. The barn will have an eft etive waste management system, storage for bedding, electrical power and water. The end of each barn will hava an open.ak horse wash area. The exhibitor parking area will have marked parking stalls with a post -mounted duplex outlet for each space providing power needs far living quarter trailers and vehicles. nds area will Include concrete bumper curbs a" night seeutity lighting. The site will include: a ON x 480 foot Ugh fieldThis Seld Will serve as a multi purpose space for ztan-equerbUz everds, and as a special evw is parking when not being used as a polo field. The design includes a Motorized sprinkler system using 3unc1dia- Provided lrrigatiom taster. Waste stowage Vaidta (20 x 80 foot) Will serve each of the stable barns and the arena. Waste twill baa transported from the barns and clean-up areas to the waste storage vaults. A Qontpnsflag mea 000 x 80 foot paved holding ihoi2ity) will be located away from the Main use area, and will hoose the equipment to process the waste. A IvaS:bo>k >tSaldfng peSa with poriatble control panels, fencing, gates and a to ramp wE be located of the service road. loading A 4,000 aq. A. mabibmwMe and eggfipsaeat storage shop will be located now the selvi inroad, and will house all the support equipment as well as tate tools required far quip ent MaWGnance and miw repair. . 'The north Prnperty isne is planned by Suneadia as the servks ntillty route for Water and waste Water. Thea twill be providing irrigation and domestic water to the site. Power, gas and phone fines will be provided by th a serving utilities, (pM eta.) The Morse Park main, extrauee and exbIbUor pazldug will be located west of the Cie Elurn Cemetery Off bouglas Munroe Ave. Wlth direct proxW*y from the 1_90 west Cls Elum exclumfe, Site acoess U very efficient. An entry sign and fencing On bath sides of the paned 26 foot wide entry road are identified in the construction estimate. A 365 car spectator paved parking k1 with security lfghilrtg is near the covered arena. 6 '*" Z bZ14 6: i�,r a• 400 ]toren stalls to be provided WM build eight SO.stall.post and $8,034,400 beam strndmw 48feet wide by 388 feet long with 10 x 10 foot stalls equipped with alldng gates. Ten A=vrater hydrants located in each structure adllprovide any access for exhnAlmz. Each barn will have two locations for hap storage and retrieval. ROMad power and lighting with central switches will allow sectional Xghtittgr aoz~tsol, Each barn will have a coacrste borne washing ihcility. i Waste Bolding 90 x 30 toot concrete holdingpen with raised concrete 40400t wide19,900 Pen vrails an three nodes to koilitate the depositing artd removal using a hmW end loader. EKY Roads t leariag and brae rock installed under the site developnnetit $45I,000 cOuftct. This project includes the installation of 3" of 3/4 mi;tuu� topping, graded andralted with 8" cfpaviugfar the 3.000 x 84 %ot Ofrmdway. Raised curbs and a Cense oa bath sides of the road A new siga4 ideutiiying the Washington State Tutee Park is included, WE faad the dmlop wmt of trails to connect the 68,mmW of $316,100 Pathwayss and d rveloped land within tlw Hors* park site to th. ex;sting trail ��e Xreas sysk n hEtaution afw.altmys and pathways between the covered arena, barking and exhibit barns are iucittded Ibis trail syOk= WM access agproxittt"'T 80 addib=d acres that tray be. aced for eventing course needs went at&* =Lin campus. CaMOALRg Area An area new Me service road will be clewed end grabbed $28,100 orgastic material and stimWa retnoved to clear for a 100 x 80 ibot Pad for qts waste r tedal- Development at the pad will, con" of 0" of brae rock 4" of 11/4" top rack graders and rolled, and the $nali mialsation of 8" otpaving. rdvestoek The livestock holcUngpen will have a 80 x 80 footpad adwietittg of "$23.000 xaldiaq Aorta G" of base rock, 4" of 11/4" top roalt, and finally 4" of floor P=tatial. Perimeter fencing vdth control gates wM complete this eel. isiund" The save of that eienumt is the go=tructiou ofa 9,100 feet of ditch ir3ti,ToO ti =the praperty tO Power tramdamer locations proVAed by Me serving uWitiss. 4bia warn mcl udea the instsltatioon of security li8htkgdlmg the road my, In addition to 1000Wae1 of Muk and Aft ftm lite sewing t,Htity QAtY onto 5e db Prop" and to ON =wend arta. Also indrinded is a 3,000 mot ditch, nuahole valves avid 5rt hydrants for the ingt&uL& n *= &e Mudie, water, sewer and kilgation syem to the end of the arena. Alow voltage eonunarioation and security system wM be installed. m+ruttenas�ce / Construction of a 40 s 100 foot shop building with a 16-fo of cuing Storage Skop (post and beam etructme) near the service road and close to the arena area. Warkincluder clemiag. SrW*iug andinstalling 0„ of base rock. 4" of l 1/4" top rock and a 4" concrete pad. 14 -bot entry doors, mss doors, lighting andpower will support maintenance oper"QUO and storage of egafgmen# and materisls. PubUc 1"aciiities Funds to pay for adnwdstration duringglanningand con*truction. Admin3sftison 06.00% 7vAatioa Factor Estimated to rease in Con"xrwPrice Index applied to phase 2 and Phase 3. TOTAL Pto tt7t:TC 11M $171,100 $1,014,791 $1,450,519 $18,384.599 to Planning Pl'W&q, design sad construction of the wlmkbgWn St.,. Ron* Park Projact in directly connected the current State Legislature finding recpLest The Planning procedure is bared an amiaing Contiguous phues over a period of three years as shown below. 0 .- C —Vw— _Ls x I's 2MAW - MW ... .. :.,-- 2An AM --l— - - V"fmqWn-ftftHbrae Pak Una ftm R Pie 37= fs is 4 - IM 5 &a= =BE 7QM4 6m W _ 0 .- C —Vw— _Ls x I's 2MAW - MW ... .. :.,-- 2An AM --l— - - Washington State Norse park Funding Assumptions 1 Washington State Funding (WSF) 2 WSF has been to Fund major capital projects in two separate appropriations. a) Design b) Construction 3 WSF or private funds will be used for working capital Project Book Planning Assumptions 1 Event calendar Will be completed by September 30,20M 2 Economic study will be completed by November 30, 2006 3 Economic study will be used to determine recommended design and constructing completion. 4 Approval of Environmental Impact Statement will determine the start of construction. 5 Completion of the project will be when the revenue exams the Observations operating costs. Schedule 1 The maximum hors event days will be over a 30 week period of time Which Is based an weather 2 Earlier economic studies suggest a 5 year Perm before the Projected revenue eroceeds theoperating costs. 1 Revised Project Book Completed by December 15, 2006 2 WSF approved by January 2007 3 Environmental impact Statement Engineering Contract awarded by March 2007. 4 Site Planning Contract awarded by March 2007 5 Design Contracb awarded by August 2007 6 Site Planning compk3ted by June 2007 7 E MronmWVWI Impact Statement computed by Feb 2008 8 •Sita Development 138*608'cOmpleted by March 2008 10 Bid arra Award Construction by April 2008 11 Construction completed by november 2008 Capital Funding Packages Design Amount $1,800,000 Year 2007 Construction $18,300,GW 2008 Constftcapital "00,000 2009 Working Capital $300,000 2010 Wod dng Capital $200,000 2011 Working Capital $100,000 2012 Total $21,200,000 0 C2 C2 Cb da ck LL 40 �a ��q�s�ppir cel11eRV�®y ��ptY�pp �r a M A Yai ury! 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