Aloha Stadium Conceptual Redevelopment Report

April 5, 2017

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.

THE HISTORY OF ALOHA STADIUMA Hawaii landmark since 1975

EXISTING vs. NEW STADIUMLife cycle costs

● Aloha Stadium requires approximately $423M in criticalhealth and safety repairs, ADA and code compliance(2017 dollars). Or, $30M/year for 25 years.

● $107M spent in health and safety repairs for AlohaStadium since 2005 but significant deferredmaintenance remains.

● A new stadium will be an improvement over the existingstadium, and at a lower cost ($324.5M vs. $423M tomaintain the existing stadium).

● A new stadium will facilitate up to 2.6 million square feetof ancillary development over a 25-year period. Ancillarydevelopment potential is severely limited with theexisting stadium, even if renovated.

● A new stadium and property development willgenerate significant revenue and up to $1.5B ineconomic activity.

NEW STADIUM - POTENTIALAloha Stadium’s failure to attract major events

• The current stadium cannot attract new events – it is toobig (with limited seating adjustment capabilities), it lackspremium amenities and the field is too narrow for majorinternational soccer and rugby clubs.

• A new stadium with a properly dimensioned naturalplaying field could attract 3-4 soccer exhibition gamesand 1-2 rugby exhibition games each year.

• A new 30,000 seat stadium that can facilitate variablesized events with proper staging equipment, seating bowland lighting and sound designed for concerts couldattract 4 major annual concert events each year.

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 logeboxes (4 seats per box; leased annually by box), 1200club seats (leased annually by seat), and at least oneupscale lounge area (which can be rented on non-eventnights)

• Natural grass field with dimensions for internationalsoccer, 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 inrenovations to the existing stadium

ALOHA STADIUM 2.0

ALOHA STADIUM 2.0Transit-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 fromHNL. Both will generate foot traffic to the station.

• Unique opportunity to leverage increased transit options forstadium operations and transit oriented development.

• If new stadium is opened, the existing stadium would bedemolished, opening up land for ancillary TOD developmentlocated in an optimal location next to the new HART station.

ALOHA STADIUM 2.0Development Revenue Generating Opportunities

• Based on JLL’s development market study, the State’s $324.5 million investment in a new stadium couldgenerate 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 1.2million 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, VictusAdvisors estimates the $324.5 million investment in a new stadium could generate net new economic outputover the next 25 years with a net present value of nearly $1.5 billion.

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CONCEPTUAL SITE PLAN1. New Halawa HART station2. Commercial buildings above parking deck & retail podium3. Residential buildings above parking deck & retail podium4. Retail-entertainment oriented “Main Street” & plazas5. Aloha stadium gateway (with historic volcano monument)6. Grand entrance to stadium plaza (extended roof canopy)7. Aloha stadium plaza8. 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 deck13. Pedestrian bridges over creek, with local road access on both sides14. 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 Stadium17. Service access on south side of Stadium (lower elevation, below

concourse level)18. RR/concession blocks on east and west side concourses19. Surface parking lot and event space

20. North end zone berm, able to accommodate temporary seating, withdouble-sided video board to both Stadium and plaza

21. Parking garage and two residential buildings22. Multi-use recreational field and neighborhood park

ALOHA STADIUM 2.0Projected 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.

Notes:- Represents a stabilized year of operations.- Estimates are intended to represent a conservative, base-case scenario.

Event TypeEvent

Days

Average Attendees per Event

Total Attendees

Existing Events      Runs 4 7,743 30,972Football Games 53 6,249 331,197Swap Meet 155 5,771 894,505Other Events & Shows (Graduations, Parties, etc.) 101 484 48,884Annual Total 313 20,247 1,305,558       New Events      Concerts & Entertainment Acts 3 20,000 60,000International Soccer & Rugby Exhibitions 5 15,000 75,000Annual Total 8 35,000 135,000

ALOHA STADIUM 2.0Projected 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

OperationsRevenues:      Swap Meet1 $4,175,578 ($835,116) $3,340,462Parking (net)2 $874,689 ($874,689) $0Food & Beverage (net) $989,980 $389,311 $1,379,291Rent $250,669 $200,000 $450,669Stadium Naming Rights (net)34 $0 $1,088,000 $1,088,000Advertising & Sponsorships (net)3 $305,032 $2,958,968 $3,264,000Interest $25,951 $0 $25,951Luxury Seating Premiums (net)3 $0 $2,249,984 $2,249,984Stadium Tours $2779 $0 $2779Miscellaneous $274,896 $0 $274,896Total – Net Revenue: $6,899,574 $5,176,458 $12,076,032       Expenses:      Personal Services $4,115,021 ($700,506) $3,414,515Supplies $216,677 ($65,003) $151,674Utilities $962,090 ($288,627) $673,463Repairs & Maintenance $216,446 ($64,934) $151,512Services on a Fee Basis $508,311 ($152,493) $355,818Central Services Assessment $441,249 ($132,375) $308,874Miscellaneous $218,502 ($65,551) $152,951Total – Expenses: $6,678,296 ($1,469,489) $5,208,807

Net Operating Income8: $221,278 $6,645,947 $6,867,225Less: 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 Authority3 Conservatively discounted at 15% to account for sales commissions4 Represents new naming rights for the entire stadium, not just the field

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

NEXT STEPS

Stadium● $423M - Aloha Stadium (repair and

renovation)● $324.5M - New StadiumDevelopment● 2.6 million sq ft of mixed-use development● Up to $1.5B in economic activityRevenue Generation● $5.2M annual revenue increase from new

stadium alone● Significant revenue potential from

developmentLegislative Action Needed● State-funded master plan, development

financial analysis, environmental review and design for stadium

● This investment to yield detailed data forlawmakers and attractive conditions forinvestors

SUMMARY

CONCEPTUAL RENDERING

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