CLEARWATER, Fla., Jan. 21, 2014 /PRNewswire-iReach/ -- Faced with increasing public demand coupled with budgetary constraints, youth sports facilities are being confronted with a growing amount of pressure to deliver new and improved amenities designed to cater to competitive athletes. However, insufficient resources are limiting the ability of the public sector to provide the much-needed developments. Private developers are also experiencing increased scrutiny from Wall Street, making it difficult to raise money for new sports complexes. The Sports Facilities Advisory (SFA), the leading expert consultancy for new and existing amateur sports complexes, says that public-private partnerships are on the rise throughout the sport and recreation sector. These endeavors benefit the economy by combining private sector capital and expertise with publicly-owned land and resources to bring sport and recreation centers to life.
Public-private partnerships, also known as P3s, are 20‑ to 50-year partnerships in which the public sector contributes assets (often land or tax abatement) and the private sector contributes investment capital to upgrade or enhance these assets—the benefits come in the form of new investment, jobs and tax revenue for the state (1). SFA's CEO and founder, Dev Pathik, says that sport facilities are one P3 that benefit the economy by driving sport tourism and attracting competitive athletes to host cities, the end result being increased jobs, hotel sales, and spending on area recreation and dining. Pathik says the sport industry is also seeing a rise in P3's as the strategy for community sport and recreation centers that provide community users with new facilities while allowing a private operator to bring world class sports training and well-run league programs.
Case in Point:
In Gatlinburg, Tennessee, SFA's Management Arm became the private operator for Rocky Top Sports World. The $20 million project is a joint venture between the city and Sevier County, and will be managed by SFA, which is responsible for booking tournaments and events that attract athletic teams and visitors from outside the region for multiple day visits.
Prior to Rocky Top's summer 2014 grand opening, SFA has currently booked events totaling more than 30,000 visitors in year one and more than 15,000 room nights in the first year. The facility is also hiring a variety of positions for Rocky Top Sports World.
Pathik maintains that the benefits of P3s are plentiful, but the biggest advantage is that they create a foundation through which a municipality's long-term tax revenue is reinforced through hotel stays and spending by visiting athletic teams, in addition to providing a positive outlet for amateur athletes. However, per Pathik, caution is necessary—not all communities are well suited to offering tournaments. It's critical to create a strategy and to complete a feasibility study to assess risks and potential rewards.
"Public-private partnerships can ultimately provide a solution to those facilities struggling with financing, management and the like," said Pathik. "What's key is that public-private partnerships are built with realistic expectations and that the private side operator is a proven and experienced program."
Pathik offers several tips for burgeoning facilities initiating the process of securing funding:
- Don't try to go it alone. Obtain an independently developed and research-based cash flow forecast that includes facility utilization projections, pricing, a sensitivity analysis, construction and startup costs, five-year cash flows and operating expenses.
- Be prepared to respond to questions regarding facility management. Funding sources will want to know who has been put in place as the management company or operator; address these questions prior to contacting funding sources and seek experienced operators with experience in multiple markets.
- Review and verify cash flow projections. This can be done in‑house, but it is best to have the actual projections presented by the firm hired to produce them. Funding sources will ask about the research that lies behind the numbers, and consultants will be needed in those presentations.
- Public entities must serve the needs of local/regional taxpayers, so it's critical to develop a plan that can provide community benefits and programming that would not be possible without the private partner.
As a private consulting firm and management service, SFA is responsible for booking tournaments and events, as well as managing facilities to support its government client's objectives. SFA also assists public sector clients in identifying and negotiating private sector investment and/or private sector use of facilities.
SFA officials encourage P3s as an effective collaboration between private sector assets and government functions that benefit all users of public services.
SFA assists clients throughout the nation in planning, funding and managing sports and community recreation centers. SFA's portfolio includes more than $3.5 billion in planned and operational facilities, as well as being the industry leader in the managing of such complexes. The company will assist in opening more than 1.5 million acres of additional indoor facilities, as well as 600 acres of outdoor facilities, within the next year.
For more information about the Sports Facilities Advisory and its suite of planning-funding-opening-management services, visit www.sportadvisory.com/home.html.
About Sports Facilities Advisory:
The Sports Facilities Advisory (SFA) is the leading resource in sports facility planning and management. The Sports Facilities Advisory has helped to plan, fund, open and manage dozens of multimillion-dollar sports complexes in communities throughout the USA and internationally since its founding in 2003. The company serves public and private clients. Its services fall into four main categories: plan, fund, open and manage, which encompass every phase from early stage feasibility studies to preparing financing documents, overseeing development and opening and full-time management services. SFA's success depends upon its mission to dramatically improve communities through the opening or optimization of sport and recreation centers. For more information, visit www.sportadvisory.com/home.html.
1. "Public-Private Partnerships Benefit the American Economy." Privateequityatwork.com. N.p., 27 Nov. 2013. Web. 11 Dec. 2013. privateequityatwork.com/newsroom/blog/2013/11/public-private-partnerships-benefit-the-american-economy/.
Karla Jo Helms
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SOURCE Sports Facilities Advisory