ECONOMIC ANALYSIS OF A DEVELOPMENT

Economic Analysis of a Development

Economic Analysis of a Development

Introduction

Major League Soccer's Kansas City Wizards have been a part of the Kansas City community since the league's inception in 1995. The team currently plays its home games at the 79,451-seat Arrowhead Stadium, which is also home to the National Football League's Kansas City Chiefs. The Wizards have achieved success at Arrowhead Stadium, despite being limited by playing in a venue that is too large and does not provide sufficient revenue opportunities. Over the past several years the franchise has been seeking to partner with a local community in the Kansas City area to build a soccer-specific stadium.

A soccer specific stadium would likely improve the on-going viability of the franchise in the Kansas City market. In December 2004, Lamar Hunt announced his intentions to sell the Wizards soccer franchise with the condition that the buyer has formal plans to build a soccer-specific stadium for the team. Mr. Hunt also conveyed his intentions to keep the Wizards in Kansas City by offering local buyers the first right of refusal. Mr. Hunt also owns the investor-operator rights to two other MLS teams, the Columbus Crew and FC Dallas, which both play in new soccer-specific stadiums Based on the potential sale of the Wizards franchise and the need to develop a soccer specific stadium to keep the franchise in the Kansas City market, the “Commission” is leading an effort to study the viability of a new stadium, sports complex and retail development to be located in Johnson County, Kansas. The proposed development is envisioned to include a 22,000-seat soccer-specific stadium (expandable to 40,000 seats) and 30 tournament quality soccer fields and considerable retail space. In addition to hosting the Wizards, the stadium and sports complex is expected to host international and collegiate soccer games, national team soccer games, concerts, the National Soccer Coaches Association of America and other sports and entertainment uses. The sports complex would primarily be used to attract national, regional and local youth and adult soccer tournaments, camps, and meet the needs of local youth and adult sports leagues and teams for practices and games.

Soccer Participation Trends

The purpose of this section is to provide an overview of soccer participation trends in the United States. An understanding of these trends at a national, regional and local level provides a framework from which to assess potential demand for a soccer stadium and complex in Johnson County, Kansas. Soccer participation trends analyzed include:

soccer participation

soccer participation by age

soccer participation by household income

soccer participation by state

soccer participation by metro area

historical KSYSA and MYSA registrations

youth sports team rankings

The historical level of soccer participation in the United States provides a general indication of the broad-based market for professional and amateur soccer. Exhibit II-1 illustrates U.S. soccer participation trends from 1996 to 2004, the most recent data available from the Sports Business Research Network.

Market Analysis Characteristics

An important component in assessing the potential success of the proposed soccer stadium and complex is the ...