HomeMy WebLinkAbout4.3b Phased Hunden Proposal - Cottage Grove 5-26-23
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Cottage Grove Arena Market Demand Study
To: Gretchen Larson, Economic Development Director
City of Cottage Grove
12800 Ravine Parkway S.
Cottage Grove, MN 55016
GLarson@cottagegrovemn.gov
From: Rob Hunden, CEO
Hunden Strategic Partners
213 W Institute Place, Suite 707
Chicago, IL 60610
rob@hunden.com
Date: May 26, 2023
Understanding
The City of Cottage Grove (City or Client) is seeking a proposal from Hunden Partners (Hunden) to provide
a market demand and financial feasibility study related to a proposed arena and entertainment district
development (Arena or Project) in Cottage Grove, Minnesota.
The City has identified a 73-acre site available and under contract for a new arena and mixed-use
development district. The vision for the Project is to create a vibrant entertainment district that is anchored
by a multi-use arena. Hunden has experience studying similar sports and event venue-anchored
entertainment districts across the country, including comparable districts in:
§ Middletown, OH
§ Mansfield, TX
§ Lansing, MI
§ Richmond, VA
§ Tempe, AZ
§ Milwaukee, WI
§ Overland Park, KS, and others.
Hunden is prepared to execute a multi-phased feasibility study for the proposed Project as outlined in the
following scope of work.
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Scope of Work
Phase 1: High-Level Arena Market Opportunity Analysis
§ Task 1 – Project Kickoff and Orientation
§ Task 2 – Economic, Demographic and Tourism Analysis
§ Task 3 – Local and Regional Arena Market Evaluation
§ Task 4 – Arena Implications
Phase 2: Deeper-Dive Arena Financial Feasibility and Impact Analysis
§ Task 5 – Project Profile and Site Analysis
§ Task 6 – Deep-Dive Arena/Event Venue Market Analysis
§ Task 7 – Hockey Tenant and Ice Market Analysis
§ Task 8 – Arena Programming Recommendations
§ Task 9 – Arena Demand and Financial Projections
Phase 3: Entertainment District Market and Financial Feasibility Analysis
§ Task 10 – Retail and Restaurant Market Analysis
§ Task 11 – Multifamily Market Analysis
§ Task 12 – Hotel Market Analysis
§ Task 13 – Office Market Analysis
§ Task 14 – Entertainment and Attractions Market Analysis
§ Task 15 – Case Studies
§ Task 16 – District Recommendations
§ Task 17 – Demand and Financial Projections
§ Task 18 – Economic, Fiscal and Employment Impact Analysis
Phase 4: P3 Advisory – Funding and Development Strategy
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Phase 1: High-Level Arena Market Opportunity Analysis
Task 1: Project Kickoff and Orientation
During the project kickoff, Hunden will meet with Client leadership to confirm the goals of the study and
other contextual issues related to the Project. We will perform the following orientation and due diligence-
oriented tasks:
§ Virtually meet with and obtain information/data from City officials, economic development
officials, and other key stakeholders as appropriate.
§ Review any previous plans and documents related to the Project.
§ Review the various projects on which Hunden professionals have worked, discuss their
attributes, implementation, and approach as part of the interview with the Client and others
as previously described.
§ Gather and review relevant economic, demographic, tourism and other data.
Tasks 2: High Level Economic, Demographic and Tourism Analysis
Hunden will evaluate the Project site area and Cottage Grove’s position as a center of economic activity,
related to resident population and growth, business location and growth, accessibility, and as a destination
for visitors. This analysis will provide a realistic SWOT assessment for the local and regional area. Among
the data gathered and analyzed will be:
§ Geographic attributes, accessibility, and transportation links,
§ Trends in population growth and income, and other demographic information,
§ Corporate presence, major employers and any significant recent or likely future changes,
§ Nodes of restaurant, retail, and commercial development growth, and
§ Tourism drivers and assets relevant to the community and potential revitalization of the site.
This analysis includes an ESRI Neighborhood Analysis, Placer.ai Analysis, Census data, and CoStar Insights.
Hunden utilizes the latest market data, visitor origin data, demographic data, psychographic data, and
other resources to determine a comprehensive view of your marketplace.
Task 3: Local and Regional Arena Market Evaluation
Hunden will complete a high-level analysis of the local and regional market opportunity for a multi-use
arena in Cottage Grove. This analysis will identify and profile the local and regional arena and events
facilities that may compete with the proposed arena project, including, but not limited to entertainment,
sports, event, family shows, and concert uses. For these facilities, Hunden will profile:
§ Type of facility,
§ Size,
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§ Location,
§ Tenants/Teams,
§ Uses/programming, and
§ Other details as relevant.
Hunden will assess the event market for the facilities competing for entertainment, sports and events in
the regional marketplace and will use this information to assess current supply and demand, size and
quality.
Task 4: Arena Implications
Hunden will provide the Client will the local and regional arena market evaluation results, which will identify
if the demand is there for a new arena in Cottage Grove.
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Phase 2: Deeper-Dive Arena Financial Feasibility and Impact Analysis
Task 5: Project Profile and Site Analysis
This task will provide an overview of the proposed Project, including the proposed mix of uses and arena
venue, as well as any other desired surrounding mix of uses. Details will include, as available:
§ Current site conditions,
§ Location,
§ Development plan,
§ Development program by use,
§ Proposed financing and budgets (sources and uses),
§ Public investment (if any), and
§ Any estimated infrastructure costs, drawings and plans.
Hunden will review all of the proposed Project site details with the Client. Hunden will tour the identified
site and surrounding areas, as well as projects currently underway in the area to better understand the site
and surrounding land uses. Hunden will also profile any surrounding demand generators and
developments, as they pertain to the Project.
Task 6: Deep-Dive Arena/Event Venue Market Analysis
Hunden will provide a comprehensive deep-dive market analysis of the local and regional market
opportunity for a multi-use arena, including, but not limited to entertainment, sports, event, family shows,
and concert uses. Hunden will provide the Client with a strong grasp on the current forces shaping this
type of arena facility development, including trends for various types of event growth.
Industry Trends. Hunden will provide an overview of industry trends impacting the development of multi-
use arenas and event centers. This includes an understanding of many event types within the event industry
itself. Hunden will profile:
§ Demand and facility needs for entertainment, concerts and family shows and other common
event center uses, as well as industry trends impacting layout and usage,
§ Opportunity for sports events, tenants (including any potential minor league sports) and
related,
§ Demand and facility needs for educational events, graduations, flat floor shows, public events,
trade shows and the trends impacting the layout and usage,
§ Trends in the design of small- to mid-sized event centers and what has changed over the past
several years, what is demanded by users (attendees and events), and the current state of the
art.
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Competitive Market Analysis. Hunden will assess the event market for the facilities competing for
entertainment, sports and events in the regional marketplace and will use this information to assess current
supply and demand, size and quality. This analysis will include:
§ Entertainment facilities and the types of historical events that have played each, resident users,
and other data, as well as location, size, capacity, age, condition, ownership, management,
and critical issues,
§ Event center/arena facilities and their tenants, usage, market focus and historical performance,
as well as location, size, capacity, age, condition, ownership, management, critical issues, and
§ Theaters, amphitheaters, university facilities and other relevant facilities.
This task will provide an understanding of the competitive market that the Project finds itself in and the
opportunities and challenges associated with the current marketplace. Are there gaps in quality, supply of
certain facility types, and overabundance of certain types of facilities? The goal of this task is to determine
the appropriate size, as well as what features or physical programmatic elements the Project will need in
order to capture live events, concerts, sports, meetings, and others.
Demand Interviews. A new arena can have many types of users and tenants. Hunden will conduct
interviews with show promoters, event producers, and the companies who route events in the area and
will determine what shows and events are likely to come to a new facility and under what conditions. What
are the pros and cons of the market? What are the needs of concerts, family shows, leagues, schools,
meetings, and others?
Competitive Facility Case Studies. Case studies will be profiled for the arena and event center market.
Task 7: Hockey and other Tenant and Ice Market Analysis
In this task, Hunden will assess the primary proposed tenant for the event center/arena, a United Hockey
League franchise or other hockey tenant, as well as the market for ice usage in the metro area. Hunden
will also scan the market for other potential tenants, such as basketball leagues/teams and others.
For the hockey tenant, Hunden will profile the league(s) under consideration and profile their existing
locations, performance (attendance per game, etc.), home location of attendees, distance between
existing locations, and likely implications if a new team sets up as a primary tenant in a new event
center/arena in Cottage Grove. Where will fans likely originate? Will there be a pull from other existing
facilities? What are keys to success for such teams in the proposed league?
Hunden will profile and interview other venues and teams where such teams are tenants and determine
implication for the Project. The likely market to penetrate and its propensity to support hockey will be
estimated.
In addition, the ice market will be analyzed to understand how busy the facility would be during non-team
hockey practices and games. Hunden will analyze:
§ Local/Regional/Travel Youth Hockey
§ Adult Amateur Hockey
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§ Figure Skating
§ Public Skate
§ Learn-to-Skate/Clinics
§ Curling, and others as appropriate.
Competitive venues, some of which will have been already profiled in the prior task, will be profiled to
determine their level of demand for the above items, rental rates for ice time, additional sheets of ice,
amenities (retail, restaurants, etc.) and other key factors.
The findings will determine how utilized the facility will be during certain times of the year and supportable
rental rates.
Task 8: Arena Programming Recommendations
Hunden will make recommendations for the optimal arena. This will not only be based on the existing
market, but also on the market that the Client is looking to attract with development of a new arena.
Recommendations may include:
§ Quality/function of the facility,
§ Sizing,
§ Location parameters,
§ Possible tenants,
§ Programming,
§ Amenities,
§ And other key factors, for the arena.
Task 9: Arena Demand and Financial Projections
Hunden will make projections for the demand of the recommended Project. These will be projected for a
period of ten years. Projections will include demand by type of event, average attendance for each type
and total attendance by type. Based on the projection of demand and a number of assumptions regarding
rental rates, fees, concession per-capita revenues and others, we will prepare a financial projection for the
venue. This financial analysis will include the following:
§ Estimated line-item revenues for five years of operations. Expenses directly related to the venue
will also be projected for the period. The demand profile and data from existing venues will be
used to model the operating revenues and costs of the Project. The model will generate a pro
forma operating statement that will include revenue and expense items, including the following:
o Revenues: ticket sales, rental rates, food and beverage, parking and other income,
o Direct operating expenses: wages and salaries, contract services, utilities,
maintenance and repair, supplies and other expenses, and
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o Unallocated expenses: employee benefits, advertising and promotion, general and
administrative, professional services, insurance and other expenses.
As stated above, the financials will be presented in a line-item by line-item basis, which will lead to
estimates of net operating income or loss. Based on the operating loss or profit, there will be either funds
remaining for debt service or there will be a requirement for ongoing operating support by the public.
Phase 3: Entertainment District Market and Financial Feasibility Analysis
Task 10: Retail and Restaurant Market Analysis
The retail and restaurant analysis will include an overview of the market in Cottage Grove, as well as the
industry trends that drive shifts in restaurant and retail development and survival in urban and suburban
areas. The analysis will include the following:
Industry Trends. Hunden will cover the trends that influence how and where people want to shop, eat/drink
and be entertained as part of those experiences, and how recent macro events have shifted these trends.
In addition, Hunden will cover key drivers of demand, financial realities, including typical metrics and cap
rates, and others, as relevant.
Market Performance. Supply, Demand, Rates, Absorption, and other key metrics of the Cottage Grove
market, in time-series charts and data tables, using CoStar and other analytical tools. Hunden will include
a map of area submarkets and key nodes of asset clusters.
Submarket Performance. Supply, Demand, Rates, Absorption, and other key metrics of the Project site
submarket, in time-series charts and data tables, using CoStar and other analytical tools.
Competitive Set Identification & Performance. Profiles of leasable spaces or developments (location, size,
quality, age rates, vacancy), absorption and time-series of performance. A competitive set supply map will
profile location and consider nearby supportive uses, such as residential, hotels, event facilities, office
clusters, attractions, and other support/demand generators.
Proposed and Under Construction Projects. Hunden will profile the relevant projects underway or
imminent and consider those as part of the future competitive set absorption dynamic.
Geofencing research technology. Hunden will study customer origin and traffic analytics for retailers and
other relevant businesses. This information will be used to understand the possible impacts of new
restaurant, retail, hospitality, and entertainment space in Cottage Grove and project how the development
will perform.
Implications: Based on all of the market data and interview insights, as well as Hunden’s experience in
other markets with similar situations, implications will be provided for the Project.
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Task 11: Multifamily Market Analysis
The multifamily market analysis will include an analysis of the rental apartment market in Cottage Grove,
as well as the industry and demographic trends that drive shifts in apartment occupancy in urban and
suburban areas. The analysis will include the following:
Industry Trends. Hunden will cover demographic and migration trends that influence how and where
people want to live, and how recent macro events have shifted these trends. In addition, Hunden will cover
key drivers of demand, financial realities, including typical profit ratios and cap rates, and major players in
the industry, nationally and locally.
Market Performance: Supply, Demand, Rates, Absorption, and other key metrics of the Cottage Grove
market, in time-series charts and data tables, using CoStar and other analytical tools. Hunden will include
a map of area submarkets and key nodes of asset clusters.
Submarket Performance: Supply, Demand, Rates, Absorption, and other key metrics of the Project site
submarket, in time-series charts and data tables, using CoStar and other analytical tools.
Proposed and Under Construction Projects. Hunden will profile the relevant projects underway or
imminent and consider those as part of the future competitive set absorption dynamic.
Competitive Set Identification & Performance: Profiles of competitive developments (location, size,
quality, age, rates, vacancy), absorption and time-series of performance. A competitive set supply map
will profile location and consider nearby supportive uses.
Interviews: Hunden will interview local brokers, facility management and others in the marketplace to
understand the nuances moving the market. Hunden will work to determine what product could thread
the needle to improve the market’s offerings and achieve rates that will support development costs. Often,
new, unique product can significantly outperform existing stock if there is a gap in quality, age, location,
etc. that could induce new demand and higher rates to the submarket.
Implications: Based on all of the market data and interview insights, as well as Hunden’s experience in
other markets with similar situations, implications will be provided for the Project.
Task 12: Hotel Market Analysis
Industry Trends. Hunden will cover the trends that influence hotel development and performance and how
recent macro events have impacted hotels. In addition, Hunden will cover key drivers of demand, financial
realities, including typical metrics and cap rates, and others as relevant.
Local Market. In this task, Hunden will profile the area supply of hotels, as well as the key nodes or clusters
of hotels in the marketplace. Hunden will interview local hotel and tourism management representatives
to determine the sources of demand for the market generally and for individual hotels in and around the
Cottage Grove area. Hunden will gather local and regional tourism data from specific hotel, event, sports
and meeting facilities and organizations. Hunden will consider such annual events and seasonal tourism
waves to examine how the existing hotels are or are not accommodating the type of demand that would
like to visit the area.
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Competitive Set. Hunden will analyze the submarket to determine the competitive set of hotels near the
Project site. Hunden will consider location, size, quality, age, brand, concept, amenities and other factors.
Hunden will obtain data through interviews and STR (Smith Travel Research) statistical database and
reports, and a variety of industry resources.
Proposed and Under Construction Projects. Hunden will profile the relevant projects underway or
imminent and consider those as part of the future competitive set.
Comp Set Performance. The analysis will include tracking of occupancy, monthly room night demand,
average daily rate (“ADR”), and Revenue per Available Room (“RevPAR”), and performance by year,
month, day of week, unaccommodated demand and demand type/market mix.
Interviews. Hunden will interview competitive set hotel management to understand what business they
are accommodating and the type of business that they believe may be going to other hotels outside of
Cottage Grove due to quality, space availability and other issues. These interviews are critical to a true
understanding of the market beyond what historical statistics show and portend. This is a step that Hunden
always includes that many firms do not.
Hunden will discuss how new hotels have been absorbed into the market. Hunden will provide conclusions
on the ability of these improvements to induce more demand from each major market segment. Market
segmentation within the set will also be shown in three primary categories:
§ Commercial transient,
§ Group (corporate group, association, and other), and
§ Leisure.
Implications: Based on all of the market data and interview insights, as well as Hunden’s experience in
other markets with similar situations, implications will be provided for the Project.
Task 13: Office Market Analysis
The office analysis will include an overview of the office market in Cottage Grove, as well as the industry
and trends that drive shifts in office demand in urban and suburban areas. The analysis will include the
following:
Industry Trends. Hunden will cover cultural and macroeconomic trends that influence how and where
people want to work, and how recent macro events and Covid-19 have shifted these trends to work from
home (WFH) or a hybrid model. In addition, Hunden will cover key drivers of demand, financial realities,
including typical cap rates.
Market Performance. Supply, Demand, Rates, Absorption, and other key metrics of the Cottage Grove
market, in time-series charts and data tables, using CoStar and other analytical tools. Hunden will include
a map of area submarkets and key nodes of asset clusters.
Submarket Performance. Supply, Demand, Rates, Absorption, and other key metrics of the submarket, in
time-series charts and data tables, using CoStar and other analytical tools.
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Proposed and Under Construction Projects. Hunden will profile the relevant projects underway or
imminent and consider those as part of the future competitive set absorption dynamic.
Competitive Set Identification & Performance: Profiles of competitive facilities (location, size, quality, age,
rates, vacancy), absorption and time-series of performance. A competitive set supply map will profile
location and consider nearby supportive uses, such as restaurants, retail, office clusters, attractions, and
other support/demand generators.
Interviews: Hunden will interview local brokers, building management and others in the marketplace to
understand the nuances moving the market. Hunden will work to determine what product could improve
the market’s offerings and achieve rates that will support development costs. Often, new, unique product
can significantly outperform existing stock if there is a gap in quality, age, location, etc. that could induce
new demand and higher rates to the submarket.
Task 14: Entertainment and Attractions Market Analysis
Relevant entertainment/eatertainment and attractions in the local/regional area will be reviewed to
provide a context for any proposed entertainment components to the Project. Hunden will assess
competitive venues in terms of the following characteristics, as available:
§ General characteristics, such as location, year built, owner/operator, and adjacent/nearby
developments/activities,
§ Type of attraction (movie theatre, recreation/family friendly, unique group sports
entertainment, etc.),
§ Size (total, visitor areas, non-visitor areas),
§ Content/offerings,
§ Experience,
§ Target market,
§ Pricing and length of stay,
§ Attendance,
§ Visitor characteristics,
§ Visitor origin, and others.
Task 15: Case Studies
Hunden will review relevant arena-anchored districts and similar mixed-use projects developed for similar-
sized areas and markets to understand what has worked in other places. Hunden will focus on those in
markets with comparable characteristics to those of the Project site.
Hunden will consider the following data points as available:
§ Location,
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§ Size,
§ Arena facility details,
§ Anchor and other tenants, deal points/schedules
§ District components,
§ Performance (as available),
§ Events and programming,
§ Critical factors to success or failure, and
§ Others, as appropriate.
These will be profiled, and implications discussed. The results will provide the Client with lessons learned
and critical elements to success or failure.
Using geofencing research technology, Hunden can assess how busy similar/comparable or competitive
districts are, compare them to the Project, and determine primary trade areas, visitor origin, demographics
and other datapoints. We can gather data on both the overall district and on each sub-category of uses.
Below we have included a small sampling of the type of data we collect and assess. These images were
assembled as an example of our data capabilities.
Visitor Origins by Distance from Site
Colors correspond to charts & maps
Est. Number
of Visits
Percent of
Total Visits
Est. Number
of Customers
Percent of
Total Customers
Avg. Visits
per Customer
Locals - Within 50 miles 236,200 58.4%137,100 65.3%1.72
Regional & Long Distance - 50-100 miles 26,700 6.6%15,700 7.5%1.70
Long Distance only - Over 100+ miles 141,300 35.0%57,000 27.2%2.48
Total Visits 404,200 100.0%209,800 100.0%1.93
Source: Placer.ai
St. Charles Convention Center
January 1, 2019 - December 31, 2019 (365 Days)
Total Visits Total Unique Customers
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Task 16: District Recommendations
Considering the analysis, Hunden will make recommendations for the optimal mix of use types, including
quality, sizing and other key factors, for the mixed-use district. This will not only be based on the existing
market, but also on the market that the Client is looking to attract with the development of the site. Hunden
will provide development scenarios by type of use which may include hotel, multifamily, restaurants,
shopping/retail, office, and entertainment, and/or others uses as appropriate.
Task 17: Demand and Financial Projections
Hunden will comprehensively research and explain the market area’s demand for each of the uses over
the next ten years using the best available data and employing appropriate research from the prior tasks
to provide a robust understanding of the demand for each use. Our approach and data presentation will
align with industry-standard reporting for private sector real estate (hotel, commercial, residential) demand
modeling.
Hunden will conduct a demand model, including a penetration analysis. This will then lead to assumptions
that will be used to determine the detailed financial projections for each use. These will include major line-
item detail of revenue and expense for each component, which will then result in net operating income
(NOI) that will support debt service. Hunden will present projections from each component and then
combine these results into a mixed-use financial projection.
In order to determine financial feasibility, the net operating income must be shown against a development
cost. Hunden will show the supportable equity and debt that the net cash flows support. We will also run
a discounted cash flow analysis to show the perspective an appraiser for a bank would utilize to determine
DCF valuation. From these financial analytics, the feasibility will be determined. If there is a feasibility gap,
the modeling from Hunden will determine the amount and what key items led to the gap (costs,
absorption, rents, etc.).
Task 18: Economic, Fiscal, and Employment Impact Analysis
Hunden will conduct an economic, fiscal and employment impact analysis to determine the direct, indirect,
and induced impacts, including the tax revenues that are generated by the Project elements – the district
and the arena.
Based on the above analysis, a projection of net new direct spending will be tabulated. New spending is
spending that is new to the community due to new residents, visitors to retail/restaurant, new employees
in offices and other spending impacts associated with the development. The model will consider net new
recaptured and induced spending only (versus gross spending) to ensure that substitution spending is
netted out of the impacts. Spending categories primarily include food/beverage, retail, transportation,
lodging and entertainment/other. The net new and recaptured spending is considered to be the Direct
Impact.
From the direct spending figures, further impact analyses will be completed.
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§ Indirect Impacts are the supply of goods and services resulting from the initial direct spending.
For example, a new resident’s direct expenditure on retail causes the store to purchase goods
and other items from suppliers. The portion of these purchases that are within the local
economy is considered an indirect economic impact.
§ Induced Impacts embody the change in local spending due to the personal expenditures by
employees whose incomes are affected by direct and indirect spending. For example, a
waitress at a restaurant may have more personal income because of the new spending. The
amount of the increased income that the employee spends in the area is considered an
induced impact.
§ Fiscal Impacts represent the incremental tax revenue collected by the City due to the net new
economic activity related to a development. The fiscal impact represents the government’s
share of total economic benefit. There will be distinct tax impacts for each governmental
entity. Fiscal impacts provide an offset to the potential public expenditures required to induce
the development of the Project. Hunden will identify the taxes affected and conduct an
analysis of the impact on these accounts and governmental units.
§ Employment Impacts include the incremental employment provided not only onsite, but due
to the spending associated with the Project. For example, the direct, indirect, and induced
impacts generate spending, support new and ongoing businesses, and ultimately result in
ongoing employment for citizens. Hunden will show the number of ongoing jobs supported
by the project and provide the resulting income and income taxes generated.
Hunden uses one of the industry’s most relied upon multiplier models, IMPLAN. This input-output model
estimates the indirect and induced impacts, as well as employment impacts, based on the local economy.
An input-output model generally describes the commodities and income that normally flow through the
various sectors of the economy. The indirect and induced expenditure, payroll and employment result
from the estimated changes in the flow of income and goods caused by the projected direct impacts. The
model data are available by various jurisdictional levels, including counties.
Phase 4: P3 Advisory – Funding and Development Strategy
After the study phases are complete, Hunden can provide continued advisory services related to project
implementation, deal negotiations and business planning for the development. This may include
collaborating with the City’s financial advisor to determine funding options and best practices for project
implementation, revised financial projections and updates to budgets, recommendations on optimal
phasing of the Project elements, and other services as identified with the Client.
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Milestones and Touchpoints
1) Kickoff Organizing Call – Once the administrative engagement paperwork process is
complete, Hunden will schedule an initial kickoff organizing call/Zoom with the Client team
for introductions and to schedule the in-person site visit, tours, and meetings. Hunden will
send a kickoff memo outlining requests for data, scheduling arrangements, and key contact
information.
2) Site Visit/Local Discovery – Members of the Hunden key personnel team will travel to Cottage
Grove to conduct an in-person kickoff trip with the Client, including stakeholder meetings
and interviews, a site tour, and tours of surrounding demand generators.
3) Circle Back Call – After the kickoff trip, Hunden will schedule a ‘circle-back call’ with the Client
to wrap up data requests and any outstanding discovery phase items.
4) Check-In Calls – Throughout the market research tasks, Hunden can schedule check-in calls
with the Client to ensure timely forward direction through the study process.
5) Phase 1 Arena Market Implications – Hunden will meet virtually with the Client to discuss and
present a summary of preliminary arena market implications for the Cottage Grove market.
6) Phase 2 Arena Findings and Projections – Hunden will meet virtually with the Client to discuss
the optimal programming, financial feasibility and market demand projections of a new arena
in Cottage Grove.
7) Phase 3 Mixed-Use Findings and Combined Draft – Hunden will complete all financial and
impact modeling elements of the scope of work and compile the results of all three phases
into a draft analysis of its financial outputs, which will be presented to the Client electronically
for review and comment. Hunden will present a PowerPoint-style deliverable of findings
electronically to the Client.
8) Final Combined Analysis – After receiving comments from the Client on the draft analysis,
Hunden will issue its final combined analysis.
Timing
Hunden proposes the following timing for each distinct deliverable:
§ Phase 1 Arena Market Implications – approximately four weeks after project initiation
§ Phase 2 Arena Findings and Projections – approximately four to five weeks after initiation of
Phase 2
§ Phase 3 Findings and Combined Draft Analysis – approximately seven weeks after
authorization for Phase 3
§ Final Combined Analysis – approximately two weeks after receiving Client comments on the
Phase 2 draft
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The estimated timing above assumes Client responsiveness, availability, and direct authorization into
Phases 2 and 3.
The timing for Phase 4 is dependent upon a number of factors, but will likely take anywhere from three to
six months.
Fees
This fee/payment milestone schedule is broken out by phase of work as follows:
§ Phase 1 Arena Market Evaluation & Implications: $20,000
o Kickoff to Begin Study: $10,000
o Market Evaluation Summary: $10,000
§ Phase 2 Arena Feasibility: $50,000 (one in-person trip for site visit)
o Initiation: $25,000
o Presentation of Results: $25,000
§ Phase 3 District Feasibility & Combined Draft: $60,000
o Initiation: $20,000
o Presentation of Results: $20,000
o Final Full Study: $20,000
Hunden anticipates a fee range between $25,000 - $75,000 for the Phase 4 advisory services, to be
determined mutually with the Client.
Phased Sign Off
It is not assumed that Hunden will complete all phases of work outlined in this document. The Client has
the right to sign off on phases of work as desired and appropriate.
To authorize Phase 1, initial here: _________________________
To authorize Phase 2, initial here: _________________________
To authorize Phase 3, initial here: _________________________
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Contractual Conditions
The following conditions apply to this engagement with you.
SCOPE LIMITATIONS. Hunden’s services do not include the following: any assistance with a bond
marketing strategy; any assistance with the preparation or distribution of any official statement; or any
advice on the municipal bond market. Hunden does not provide advice with respect to municipal financial
products or the issuance of municipal securities, including services with respect to the structure, timing,
terms and other similar matters concerning such financial products or issues.
Hunden is not a municipal advisor and Hunden is not subject to the fiduciary duty set forth in section
15B(c)(1) of the Registration and Regulation of Brokers and Dealers Act (15 U.S.C. 78o-4(c)(1)) with respect
to the municipal financing product or issuance of municipal securities. Client is advised that any actual
issuance of debt must be done under the advice of its bond counsel and financial advisors. Your financial
advisor should provide any advice concerning the specific structure, timing, expected interest cost, and
risk associated with any government loan or bond issue. Potential advisors should not rely on
representations made in this report with respect to the issuance of municipal debt.
The findings and recommendations of Hunden’s research will reflect analysis of primary and secondary
sources of information. Estimates and analyses presented in our work product will be based on data that
are subject to variation. Hunden will use sources that it deems reliable, but will not guarantee their
accuracy. Recommendations will be made from information provided by the analyses, internal databases,
and from information provided by external sources.
Client is entitled to receive the work product(s) prepared by Hunden pursuant to this Agreement. Client
has no right to access or deliverance of any underlying statistics, models, or any other information
developed by Hunden in preparing the Report to which this Agreement pertains.
REVISIONS. Hunden will complete a maximum of two drafts of the report. The Client is expected to
provide comments and edits on the draft report and those will be addressed by Hunden. Hunden’s results
may not always agree with the desires of the Client. Hunden will use its independent perspective and
research to drive our results. Any revisions, questions, conversations, zooms or travel requested after two
drafts (initial draft report, then final draft), will be billed at Hunden’s hourly rates of: $400 for Rob Hunden
and $300 for the project team. Payment on the final milestone will be required and an advance of $2,500
on the hourly work that would be required by the Client or its designees, such as lenders and others.
UPDATES. Hunden has no responsibility to update its work product(s) for events and circumstances
occurring after the date presented to the Client. Delayed invoice payments will result in delay of
deliverables for the next portion of work. If edits and comments are not received from the Client related
to any prior deliverable within thirty (30) days of the delivery of the deliverable, the work product will be
considered final, and the current billing will be sent and become due.
TIMING OF DELIVERABLES. The timeline for the study begins when the following have occurred: 1)
receipt of first payment, 2) signing of this contract and 3) receipt of any Client materials related to the
Project requested by Hunden.
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BILLING. Any past invoices must be paid prior to the delivery of the next Milestone Deliverable. If an
invoice remains unpaid 30 days after it was emailed to the client, Hunden may without further obligation,
cease the assignment and terminate the Agreement. All previous invoices will remain due. Any invoice
unpaid after 30 days will accrue a 3% per month late fee. Any invoice unpaid after 90 days will result in
legal action by Hunden to collect such invoice(s).
Failure by Hunden to assess late fees does not preclude Hunden from assessing late fees in the future.
TRAVEL. In the event that the Client chooses to alter, adjust or change dates/times of any Client-related
trip after Hunden has booked and purchased travel arrangements, it shall be the responsibility of the Client
to reimburse Hunden for any fees and fare/price differences associated with cancellation/change of travel
arrangements.
USE OF DELIVERABLE. The Work Product is copyrighted and cannot be manipulated in any way beyond
the format that it was provided to the Client.
TERMINATION. Notwithstanding the Billing language above, Hunden reserves the right to terminate this
Agreement on fifteen (15) days written notice to Client should Client fail to satisfactorily perform its
obligations under this Agreement. In the event Hunden terminates this Agreement, Client is obligated to
pay Hunden for all services rendered under this Agreement prior to termination, including work through
the next unbilled milestone. Nothing contained herein shall constitute a waiver of Hunden’s right to bring
suit for damages or to enforce specific performance of this Agreement. In the event of termination of this
Agreement by the Client, Client is obligated to pay Hunden for all services rendered under this Agreement
prior to termination, including work through the next unbilled milestone. Hunden further reserves the right
to take any legal action necessary to enforce its rights under this Agreement. In the event Hunden is
required to commence suit to collect any unpaid amounts due to it from Client, Client agrees to reimburse
Hunden for its costs and attorneys’ fees in bringing such suit.
It is agreed that the liability of Hunden to the Client is limited to the amount of the fees paid by client to
Hunden.
Hunden limits its responsibility to the Client and any use of the study produced pursuant to this Agreement
by third parties shall be at the risk of the Client and/or said third parties. By the execution of this
Agreement, Client acknowledges that he/she/it has read and agrees to the terms and conditions of this
Agreement and agrees to the inclusion of a standard set of General Assumptions and Limiting Conditions
in the report. Additional conditions prompted by the discovery of extraordinary or unusual circumstances
uncovered during the course of investigation may be added to the study assignment, if necessary.
DISPUTES. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof,
other than non-payment of amounts due hereunder, shall be settled by arbitration administered by the
American Arbitration Association in accordance with its Commercial [or other applicable] Arbitration Rules,
and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof.
If this document meets with Client’s approval, Client may accept this letter and authorize Hunden to
proceed by signing below.
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Authorization
Accepted By:
Signature ___________________________________________
Printed Name ___________________________________________
Title ___________________________________________
Company ___________________________________________
Date: ___________________________________________