Aloha Stadium Conceptual Redevelopment Report. April 5, 2017

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1 Aloha Stadium Conceptual Redevelopment Report April 5, 2017

2 THE HISTORY OF ALOHA STADIUM A Hawaii landmark since 1975 Aloha Stadium has stood for over 40 years and effectively achieved its mission as a gathering place and as a first-class facility. Aloha Stadium is an iconic structure for the citizens of Hawaii, as it has hosted hundreds of major events during its life. Aloha Stadium is a community asset currently hosting over 300 events per year. Aloha Stadium is where the spirit of achievement was nourished by the thrill of healthy competition. Aloha Stadium is where families gathered to share their cultural diversity with pride and a feeling of Aloha.

3 EXISTING vs. NEW STADIUM Life cycle costs Aloha Stadium requires approximately $423M in critical health and safety repairs, ADA and code compliance (2017 dollars). Or, $30M/year for 25 years. $107M spent in health and safety repairs for Aloha Stadium since 2005 but significant deferred maintenance remains. A new stadium will be an improvement over the existing stadium, and at a lower cost ($324.5M vs. $423M to maintain the existing stadium). A new stadium will facilitate up to 2.6 million square feet of ancillary development over a 25-year period. Ancillary development potential is severely limited with the existing stadium, even if renovated. A new stadium and property development will generate significant revenue and up to $1.5B in economic activity.

4 NEW STADIUM - POTENTIAL Aloha Stadium s failure to attract major events The current stadium cannot attract new events it is too big (with limited seating adjustment capabilities), it lacks premium amenities and the field is too narrow for major international soccer and rugby clubs. A new stadium with a properly dimensioned natural playing field could attract 3-4 soccer exhibition games and 1-2 rugby exhibition games each year. A new 30,000 seat stadium that can facilitate variable sized events with proper staging equipment, seating bowl and lighting and sound designed for concerts could attract 4 major annual concert events each year.

5 ALOHA STADIUM 2.0 New State of the Art Stadium Approximately 30,000-35,000 permanent seats; expandable to 40,000 with temporary seating More seating options, increased concessions, improved facility circulation Premium areas, including 22 private suites (18 private 16-seat suites and 2 30-seat party suites leased annually, 2 16-seat suites reserved for State/University use), 50 loge boxes (4 seats per box; leased annually by box), 1200 club seats (leased annually by seat), and at least one upscale lounge area (which can be rented on non-event nights) Natural grass field with dimensions for international soccer, rugby and baseball (120 yards by 80 yards) ADA compliant Decrease operational expenses (efficient building systems) Designed to increase revenues Facilitate ancillary development, leading to a robust return on investment unavailable by investing in renovations to the existing stadium

6 ALOHA STADIUM 2.0 Transit-Oriented Development Rail transit station is being built at the Aloha Stadium site. The station is only one stop from JPHHF Base and two stops from HNL. Both will generate foot traffic to the station. Unique opportunity to leverage increased transit options for stadium operations and transit oriented development. If new stadium is opened, the existing stadium would be demolished, opening up land for ancillary TOD development located in an optimal location next to the new HART station.

7 ALOHA STADIUM 2.0 Development Revenue Generating Opportunities Based on JLL s development market study, the State s $324.5 million investment in a new stadium could generate private sector mixed-use development surrounding the stadium, potentially including: 350,000 SF Retail 150,000 SF Office (50% professional, 50% medical) 200 Room Limited or Select Service Hotel 500 Multifamily units (to include allocation of affordable housing) The above represents the initial phase of the conceptual development program, totaling approximately 1.2 million square feet. Subsequent phases could add an additional 1.4 square feet of development. Overall, based on an economic & fiscal impact analysis of a new stadium and ancillary development, Victus Advisors estimates the $324.5 million investment in a new stadium could generate net new economic output over the next 25 years with a net present value of nearly $1.5 billion.

8 CONCEPTUAL SITE PLAN 1. New Halawa HART station 2. Commercial buildings above parking deck & retail podium 3. Residential buildings above parking deck & retail podium 4. Retail-entertainment oriented Main Street & plazas 5. Aloha stadium gateway (with historic volcano monument) 6. Grand entrance to stadium plaza (extended roof canopy) 7. Aloha stadium plaza 8. Entertainment district (structured parking below) 9. Residential neighborhood 10. Existing surface parking (swap meet zone 1) 11. Warriors Way (or other name): Signature promenade designed to accommodate various events, including swap meet (zone 2) 12. Hotel & conference center, with parking deck 13. Pedestrian bridges over creek, with local road access on both sides 14. District gateway: Elongated traffic roundabout with access to/from H3 and H201 via expanded Kahuapaani Street; direct access to Stadium Loop Road. 15. Expanded Salt Lake Blvd ( complete street ) with linear park and dedicated pedestrian/bike pathways 16. Garden forecourt (and limited VIP parking) for Aloha Stadium 17. Service access on south side of Stadium (lower elevation, below concourse level) 18. RR/concession blocks on east and west side concourses 19. Surface parking lot and event space 20. North end zone berm, able to accommodate temporary seating, with double-sided video board to both Stadium and plaza 21. Parking garage and two residential buildings 22. Multi-use recreational field and neighborhood park

9 ALOHA STADIUM 2.0 Projected Stadium Utilization Victus Advisors conservatively estimates that a new Aloha Stadium could host approximately 321 events per year, with an estimated annual attendance of 1,440,558 people. With a new Aloha Stadium, the Honolulu market could capture at least 8 new major sports and entertainment events each year. Event Days Average Attendees per Event Total Attendees Event Type Existing Events Runs 4 7,743 30,972 Football Games 53 6, ,197 Swap Meet 155 5, ,505 Other Events & Shows (Graduations, Parties, etc.) ,884 Annual Total ,247 1,305,558 New Events Concerts & Entertainment Acts 3 20,000 60,000 International Soccer & Rugby Exhibitions 5 15,000 75,000 Annual Total 8 35, ,000 Notes: - Represents a stabilized year of operations. - Estimates are intended to represent a conservative, base-case scenario.

10 ALOHA STADIUM 2.0 Projected Financials In a stabilized year of operations, Victus conservatively estimates that the operations of a New Aloha Stadium could generate approximately $5.2 million in net income, which represents $5.0 million of incremental revenue, after funding of a capital improvement reserve, but prior to any primary tenant revenue sharing. Note that we have exercised extreme caution in coming to this conclusion, making assumptions which make the net income estimates lower than they otherwise would be. Current Aloha Stadium Increment from New Aloha Stadium New Aloha Stadium Operations Revenues: Swap Meet 1 $4,175,578 ($835,116) $3,340,462 Parking (net) 2 $874,689 ($874,689) $0 Food & Beverage (net) $989,980 $389,311 $1,379,291 Rent $250,669 $200,000 $450,669 Stadium Naming Rights (net) 34 $0 $1,088,000 $1,088,000 Advertising & Sponsorships (net) 3 $305,032 $2,958,968 $3,264,000 Interest $25,951 $0 $25,951 Luxury Seating Premiums (net) 3 $0 $2,249,984 $2,249,984 Stadium Tours $2779 $0 $2779 Miscellaneous $274,896 $0 $274,896 Total Net Revenue: $6,899,574 $5,176,458 $12,076,032 Expenses: Personal Services $4,115,021 ($700,506) $3,414,515 Supplies $216,677 ($65,003) $151,674 Utilities $962,090 ($288,627) $673,463 Repairs & Maintenance $216,446 ($64,934) $151,512 Services on a Fee Basis $508,311 ($152,493) $355,818 Central Services Assessment $441,249 ($132,375) $308,874 Miscellaneous $218,502 ($65,551) $152,951 Total Expenses: $6,678,296 ($1,469,489) $5,208,807 Net Operating Income 8 : $221,278 $6,645,947 $6,867,225 Less: Annual Capital Reserve: ($1,622,500) NOI After Capital Reserve Funds: $5,244,725 Notes: Represents a stabilized year of operations. Shown in 2017 dollars. 1 To reflect the uncertainty at this stage of planning, we have discounted existing Swap Meet revenue by 20% 2 If parking is privatized, it is assumed that there will be no parking revenue for the Stadium Authority 3 Conservatively discounted at 15% to account for sales commissions 4 Represents new naming rights for the entire stadium, not just the field

11 NEXT STEPS Foley & Lardner recommends urgent legislative action to fund the next stage of planning. Immediate Requests: State funding needed to invest in master planning, programmatic environmental study, market study, and stadium design. This investment will: Provide deeper understanding of revenue-generating potential for development activity Minimize the effect of future cost escalation Inspire interest and confidence from private sector partners Reduce financial risks for future development Explore financing options available to the state

12 SUMMARY Stadium $423M - Aloha Stadium (repair and renovation) $324.5M - New Stadium Development 2.6 million sq ft of mixed-use development Up to $1.5B in economic activity Revenue Generation $5.2M annual revenue increase from new stadium alone Significant revenue potential from development Legislative Action Needed State-funded master plan, development financial analysis, environmental review and design for stadium This investment to yield detailed data for lawmakers and attractive conditions for investors

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