Table Of ContentMULTI-USE ARENA MARKET FEASIBILITY STUDY
INTERSTATE 70 & LITTLE BLUE PARKWAY
INDEPENDENCE, MISSOURI
January 2007
CANYON RESEARCH SOUTHWEST, INC.
COMMERCIAL REAL ESTATE RESEARCH AND ANALYSIS
MULTI-USE ARENA MARKET FEASIBILITY STUDY
INTERSTATE 70 & LITTLE BLUE PARKWAY
INDEPENDENCE, MISSOURI
January 2007
Prepared for:
City of Independence, Missouri
111 East Maple
Independence, MO 64051-0519
Prepared by:
Canyon Research Southwest, Inc.
651 Delaware Avenue, Suite 139
Buffalo, NY 14202
PR# 06-11-09
651 DELAWARE AVENUE, SUITE 139 / BUFFALO, NY 14202 / (716) 362-1203
CANYON RESEARCH SOUTHWEST, INC.
COMMERCIAL REAL ESTATE RESEARCH AND ANALYSIS
January 19, 2007
Jim Harlow
City of Independence, Missouri
111 East Maple
Independence, MO 64051-0519
RE: Multi-Use Arena Market Feasibility Study
Interstate 70 & Little Blue Parkway; Independence, Missouri
Dear Mr. Harlow;
Attached are the findings from the Multi-Use Arena Market Feasibility Study conducted on a
parcel of land located at the northeast corner of Interstate 70 and Little Blue Parkway. The
preliminary development plan calls for a 6,000-seat multi-use arena accompanied by an
entertainment/retail district. The Multi-Use Arena Market Feasibility Study evaluated the short-
term development potential of both the multi-use arena and entertainment/retail district.
Upon review of the report, should any questions arise or additional information requested,
contact me directly at (716) 362-1203.
Respectfully submitted,
CANYON RESEARCH SOUTHWEST, INC.
Eric S. Lander, Principal
ESL:dld
651 DELAWARE AVENUE, SUITE 139 / BUFFALO, NY 14202 / (716) 362-1203
T A B L E O F C O N T E N T S
Page # Tab #
SUMMARY OF MAJOR FINDINGS ............................................... ii
INTRODUCTION .................................................................................... 1 1
Study Objective and Organization .......................................................... 1
ARENA MARKET FEASIBILITY ANALYSIS ........................... 2 2
Sports Facilities Development ................................................................ 2
Kansas City Area Sports Facilities .......................................................... 4
• Existing Sports Facilities ................................................................ 4
• Active Sports Facility Development ............................................... 7
Arena Demand Evaluation ...................................................................... 10
Conclusions ............................................................................................ 18
RETAIL MARKET FEASIBILITY ANALYSIS ......................... 19 3
Entertainment District Concept ............................................................... 19
Metropolitan Kansas City Retail Market................................................. 20
(cid:131) Historical Market Trends ......................................................... 20
(cid:131) Retail Sub-markets.................................................................... 23
(cid:131) Conclusions .............................................................................. 26
Competitive Retail Market Conditions ................................................... 27
(cid:131) Independence Center Retail Hub ............................................. 27
(cid:131) Kansas City Entertainment Retail Districts.............................. 31
(cid:131) Forecast Retail Space Demand ................................................ 39
Entertainment District Site Evaluation .................................................... 40
Conclusions ............................................................................................. 43
STUDY CONCLUSIONS ...................................................................... 45 4
Development Plan ................................................................................... 45
Forecast Arena Demand .......................................................................... 46
Forecast Retail Sales ............................................................................... 47
ADDENDA .................................................................................................. 48 5
Exhibit A: Canyon Research Southwest, Inc., Client Roster............ 49
Exhibit B: Resume of Eric S. Lander, Principal............................... 52
Canyon Research Southwest, Inc. i
SUMMARY OF MAJOR FINDINGS
The City of Independence, Missouri is evaluating the viability of constructing a 6,000-seat multi-
use arena and entertainment/retail district on a vacant site located at the northeast corner of
Interstate 70 and Little Blue Parkway. Canyon Research Southwest, Inc. has prepared a Sports
Arena Market Feasibility Study that evaluates the short-term development potential of a 6,000-
seat multi-use arena and accompanied entertainment and retail district. The report’s major
findings are summarized in the text below.
Feasibility of Multi-Use Arena Development
The Kansas City area has a number of event facilities that serve the sports and entertainment
markets. A major market like Kansas City is generally able to support at least one major arena
facility and one minor venue. Growing markets are developing modern mid-size facilities in
addition to large, primary facilities. Kansas City’s convention and baseball markets have supported
recent new development with the opening of the Overland Park Convention Center in 2002, the
Community America Ballpark during 2003 in Kansas City, Kansas and the scheduled opening of
the Sprint Center in November 2007. However, Kansas City’s sports market doesn’t offer a modern
mid-size arena.
The 30-year old Kemper Arena in downtown Kansas City, Missouri is functionally obsolete when
compared to new, modern arenas. To fill this void, the 18,500-seat Sprint Arena is now under
construction in downtown Kansas City, Missouri. Completion of this major arena is not expected to
have a significant impact on the feasibility of a mid-size suburban arena, as they would cater to
distinctly different sports and entertainment markets. The new downtown arena is too large to
house such sports franchises as minor league hockey, MILS, and ABA teams. Also, smaller family
events and concerts would be more prone to seek a mid-size arena. The proposed Independence
multi-use arena would be designed to support these minor league sports franchises and special
events.
Kansas City’s existing demographics and inventory of sports venues suggests a mid-size arena is
supportable. To support feasible development the proposed Independence arena must capture one
or more primary sports tenants as well as a sufficient number of annual event dates. The Kansas
City sports market appears to be large enough to lure a minor league hockey team franchise. The
potential may also exist to attract MISL and ABA franchises.
Competitive advantages for the Independence arena site include its proximity to the Independence
Center retail hub, favorable primary trade area population and income levels, direct access and
visibility via Interstate 70, and location within growing eastern Jackson County. Similar efforts to
develop mid-size arenas in the Kansas City area communities of Overland Park and Olathe using
public assistance have failed. Public assistance will likely be required to fund both capital and
operating costs. Potential public financing tools include tax increment financing, transportation
development district and STAR bond financing. Several recently constructed mid-sized arenas
throughout the country have incorporated retail and entertainment districts. The construction of
retail space adjacent to the proposed arena would enhance the potential to support feasible public
assistance.
Canyon Research Southwest, Inc. ii
Feasibility of Entertainment District Development
A 6,000-seat sports arena and associated entertainment and retail district is being proposed for
development at the northeast corner of Interstate 70 and Little Blue Parkway in suburban
Independence, Missouri.
Throughout the country destination entertainment and retail districts are being developed in
conjunction with newly constructed multi-purpose arenas, capitalizing on the large event
attendance throughout the year. Arena-based destination entertainment and retail districts are
generally positioned to support a vibrant day and nightlife through the tenancy of theme restaurants,
nightclubs, specialty retailers and entertainment venues. Arenas have the greatest economic
impact upon restaurants, hotels, transportation, tourism, and convention business.
Three multi-use arenas anchored by new Central Hockey League franchises opened for the 2006-
07 season. Each multi-use arena features a suburban location and is integrated into a large-scale,
mixed-use urban center featuring restaurants, nightclubs, shopping and entertainment venues.
These new arenas suggest that retail development is appropriate adjacent to the proposed arena in
Independence, Missouri.
The proposed arena site possesses the necessary property characteristics to support development of
an entertainment and retail district, including sufficient access, visibility, exposure, trade area
demographics, and location within a major retail hub. A growing trade area population and
business community, limited presence of upscale retailers and pent-up upscale retail space demand
provides the opportunity to attract restaurants and specialty retailers. The multi-use arena provides
retailers and restaurants with a large and captive customer base.
Study Conclusions
Development Plan
The multi-use arena proposed for the northeast corner of Interstate 70 and Little Blue Parkway in
Independence, Missouri if tentatively designed for a seat capacity for 6,000 spectators. The mid-
sized multi-use arena is designed to compliment existing sports and entertainment facilities in the
Kansas City area.
Kansas City’s demographics and inventory of sports venues suggests a mid-size arena is
supportable. To support feasible development the proposed Independence arena must capture one
or more primary sports tenants as well as a sufficient number of annual event dates. The Kansas
City sports market appears to be large enough to lure a minor league hockey team franchise. The
potential may also exist to attract MISL and ABA franchises.
CHL franchises operate in arenas ranging in size from the 4,986 to 10,400 seats. The average arena
size seats 6,793 spectators. The three CHL franchises opening play during the 2006-07 season all
serve as the anchor tenant of a new 5,100- to 6,200-seat multi-use facility designed with club seats,
luxury suites, excellent spectator sight lines, concessions and flexibility to host a wide range of
Canyon Research Southwest, Inc. iii
events. Each multi-use facility also features a suburban location and is integrated into a large-scale,
mixed-use urban center. Therefore, the seating capacity for the proposed arena in Independence,
Missouri appears to meet the requirements of minor league hockey and other sports leagues and
special events.
To enhance the spectators overall experience and generate additional revenues mid-sized suburban
arenas now incorporate a retail component. The tenancy of these accompanied retail districts
consists predominantly of restaurants, nightclubs, entertainment venues and some specialty shops.
The market positioning of the retail district is to create a vibrant entertainment and retail
environment that is complimentary to the events hosted by the multi-use arena.
Creating a vibrant destination entertainment and retail district requires building a sufficient critical
mass of space. Most successful projects support a minimum of 200,000 square feet of retail space.
The preliminary master plan for the once proposed arenas in Overland Park and Olathe included
333,941 to 572,500 square feet of shops and pad space. It is recommended that 200,000 to 300,000
square feet of destination entertainment and retail space accompany the multi-use arena proposed in
Independence, Missouri. This inventory of space is sufficient to generate high retail sales volumes
on non-event nights.
Forecast Arena Demand
The multi-use arena proposed Independence is anticipated to serve as the home for one or more
minor league sports teams with a CHL team the most likely anchor tenant. The proposed 6,000-
seat multi-use arena is conservatively forecast to host 100 events per year and a total attendance
of 387,500 spectators. These demand forecasts assume that the arena houses at least one anchor
tenant, is managed by a national sports facility management company, and hosts such special
events as concerts, family shows, amateur sporting events and conventions/trade shows. These
event and attendance forecasts do not include such community activities as high school
graduations; municipal and public meetings; and state basketball tournaments.
Proposed Multi-Use Arena; Independence, Missouri
Forecast Annual Event Schedule & Attendance
# of Average Annual
Event Type Events Attendance Attendance
Minor League Hockey 32 4,500 144,000
Amateur Sports 8 2,000 16,000
Concerts 15 5,500 62,500
Family Shows 10 4,500 45,000
National Sporting Activity 10 7,500 75,000
City-wide Conventions 5 5,000 25,000
Private Catered Events 10 500 5,000
Consumer/Convention/Trade Shows 10 1,500 15,000
Totals 100 3,826 387,500
Canyon Research Southwest, Inc. iv
The proposed 6,000-seat multi-use arena will have a significant economic impact on the
community. Direct impacts measure the spending and job creation that occurs as a direct result
of the operations and activities that occur within the arena. Indirect impacts consist of re-
spending of the initial or direct expenditures, or the supply of goods or services resulting from
the initial direct spending within the arena. Operation of the proposed multi-use arena is forecast
to generate a first-year direct economic impact in the form of job creation and spending
estimated at approximately $13.7 million. Using a multiplier of 1.75, the direct and indirect
(total) economic impact is estimated at approximately $24.0 million.
Forecast Retail Sales Revenues
The proposed multi-use arena’s entertainment and retail district will be designed to attract
customers on both event and non-event nights. Its location off Interstate 70 within eastern
Jackson County’s largest retail hub will assist in drawing customers on non-event nights. Retail
sales for the entertainment and retail district were estimated based on several sources, including:
• Dollars & Cents of Shopping Centers 2006 published by the Urban Land Institute;
• Retail sales data published by the International Council of Shopping Centers;
• Financial data published in the Annual Reports of national tenants that commonly occupy
destination entertainment and retail district; and
• Consultant’s internal database on actual retail sales of similar destination entertainment and
retail developments operating in the Kansas City area.
Retail sales volumes for the proposed entertainment and retail district were forecast taking into
consideration both competitive retail market forces (i.e., direct competition from similar
destination retail developments operating in the Kansas City) and trade area demographics (i.e.,
population and income levels, age distribution and educational attainment) were considered.
During the first full year of operation the entertainment and retail district accompanying the
proposed multi-use arena in Independence, Missouri is forecast to generate retail sales of $310
per square foot of retail floor area, equating to total sales of approximately $62 million to $93
million.
Canyon Research Southwest, Inc. v
MULTI-USE ARENA MARKET FEASIBILITY STUDY
INTERSTATE 70 & LITTLE BLUE PARKWAY
INDEPENDENCE, MISSOURI
January 2007
Canyon Research Southwest, Inc. vi
INTRODUCTION
Study Objective and Organization
The City of Independence, Missouri has contracted with Canyon Research Southwest, Inc. to
prepare a Multi-Use Arena Market Feasibility Study that evaluates the short-term development
potential of a 6,000-seat sports arena and entertainment/retail district located at the northeast
corner Interstate 70 and Little Blue Parkway. The market study for the arena component
commences with an overview of national sports facilities development trends. Existing and
proposed sports facilities in the Kansas City area will also be identified and the potential to
support additional facilities quantified.
The Multi-Use Arena Market Feasibility Study also evaluates the potential of developing
entertainment/retail uses adjacent to the multi-use arena, commencing with a survey of such
comparable entertainment retail centers and districts as Country Club Plaza, Zona Rosa, The
Legends at Village West, and Kansas City Power & Light District. The competitive market
analysis also includes short-term demand forecasts for upscale retail space designed to quantify
the need for additional space within the metropolitan Kansas City area as well as a site-specific
evaluation designed to determine the ability of the proposed multi-use arena site to accommodate
entertainment/retail development.
Based on the study findings, the Sports Arena Market Feasibility Study addressed supportable
arena size and square footage of entertainment retail space, arena event demand forecasts and
forecast retail sales.
Canyon Research Southwest, Inc. 1
Description:proposed arena’s retail component will be competing against Summit Fair, CityWalk and other retail centers, office complexes, business parks, and hotels.
