K-ROCK CENTRE (REGIONAL SPORTS & ENTERTAINMENT CENTRE) ARCHIVE
Market Study
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The original business plan and the subsequent market study found on the page was written at a time when the Kingston Regional Sport and Entertainment Centre (then called the LVEC) was expected to be constructed at the Anglin Bay site on the Inner Harbour. In the fall of 2005, Council approved a change in the location of the facility, moving it to the North Block area. Although many aspects of the draft business plan remain unchanged, it should be noted that Council approved an updated financial plan for the facility on May 30, 2006.
REPORT SUMMARY
For the past number of years, the City of Kingston has evaluated and studied the prospects associated with developing a new facility to replace its existing Memorial Centre, and based on the conclusions and recommendations of the Mayor's LVEC Task Force, the City is currently contemplating the construction of a new signature sports and entertainment venue on its Inner Harbour (the "LVEC" or "Facility"). This Facility, intended to comprise some 5,000 seats in its arena bowl and have the ability to expand to 6,800 seats through the use of retractable seating in one end of the building, is intended to serve a strong civic function while delivering both economic and non- economic benefits to the entire City of Kingston.
The market area for potential events anticipated to be staged at the LVEC is concluded to include not only the City of Kingston and the Kingston region, but extend further to encompass an area 50 kilometres to the east of the City of Kingston and 45 kilometres to its west. This area is also envisioned to extend some 60 kilometres to the north and approximately 20 kilometres to the south. The southern limit of Kingston's Trade Area includes its extent into Lake Ontario in order to include Amherst, Wolfe and Howe Islands. Within this area, some 210,000 people (2006 estimate) are projected to reside, a population which includes up to 20,650 full-time students attending Queen's University and St. Lawrence College. The spending impact of these individuals is considerable; moreover the target market for many events which may take place at the proposed LVEC will be geared to the 18 to 24 year old demographic, a demographic which comprises the majority of students attending these institutions. Overall, incomes of individuals located within Kingston's Trade Area are estimated at $28,750 on a per capita level (approximating 91 per cent of the provincial average) and almost $71,600 at the household level (85 per cent of the provincial average).
A review of seven Ontario jurisdictions revealed that these centres have had varying degrees of success attracting and staging events within their sports and entertainment venues/arenas. While newer buildings have generally realized a greater degree of success, the ability of a market to continually stage events would appear to be directly dependent upon a number of factors including market size, the presence, location and distance from competing venues/markets, and the positioning of the city/venue on the "entertainment circuit."
Kingston's positioning between Toronto, Ottawa and Montreal is concluded to be similar to that of London, albeit on a smaller scale. Entertainment industry professionals consulted with as part of this assignment believe the Kingston market may extend, depending on the artist, beyond Belleville to the west, Brockville to the east, Perth/Smiths Falls to the north, and potentially into New York State to the south.
CONCLUSIONS
The market study concludes:
- On an overall basis, the event and attendance assumptions forwarded within the Business Plan are reasonable.
- There would appear to be an over-estimation of events related to Kingston Frontenac playoff games, which if removed from the Business Plan would reduce the Facility's project net operating revenue in Year 1 by $22,200 per playoff date, or $88,900 if all four playoff dates are removed.
- It is also concluded that the event assumptions for "Concerts" and "Other Events" are conservative. Should the LVEC be successful in attracting additional concerts and "Other Events," the net impact to the Facility's project net operating revenue in Year 1 would approximate $212,000 for "Concerts" (if the Facility is as successful as entertainment industry contacts believe) and $5,500 per each additional "Other Event."
- While not competitive with the Market Square development, the LVEC will likely be impacted by the proposed Multiplex. In addition, it is likely that there will be some impact from the LVEC on the Grand Theatre; however this impact is likely to be limited to a relatively small number of events per year (approximately three to five).
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In an effort to mitigate, to the greatest extent possible, these impacts, two
opportunities are identified:
- from the perspective of the potential overlap between the LVEC and the Multiplex, the City may consider standardizing ice rental rates between these two venues; and
- from the perspective of all three venues, the City should consider establishing some form of overall coordinating authority in order that a cooperative working relationship is established and maintained wherein each venue can then trade resources and co- and cross-promote each other's events. Such a coordinating function could sit atop any underlying facility management structure (which may or may not include the use of third party management).
