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• FINANCIAL ANALYSIS The breakdown revenue streams is as follows: Rental Income Rental income may come in the form of an annual payment from the anchor tenant, a per - event amount, or any other negotiated amount set forth in the lease agreement. In many cases, however, the anchor tenants rent will be considered to be derived through the landlord's sharing in other revenue streams such as concessions and parking. In these cases, there is no direct rental payments made by the team owner although revenues may be derived through the rental of the arena for other uses, such as college or amateur sports, concerts, and family shows. Again, this analysis does not assume any lease terms for the anchor tenant. Concessions/Novelty Income Concession and novelty income continues to increase with the advent of larger concourses, a more diverse menu, more points of sale, and waiter/waitress service. In many cases, a third party concessionaire will be contracted to manage the food service for a large venue. Typically concessionaire contracts dictate that 35% to 40% of the gross sales is provided in a ' commission" to the facility owner, although this "commission" may be less where the concessionaire is required to invest in food service equipment. This commission may be divided between the team and the building owner per their lease agreement. The remaining commissions go to the private food contractor. This analysis assumes that the average attendee will spend $4.78 per visit (in 2003 dollars) in the first year of arena operations with an estimated 25% commission from the revenues accruing to • the Arena. The estimated average per capita spending related to concessions is projected to increase at roughly 4% per annum Naming Rights The practice of selling naming rights that occurs in major league arenas and stadia is now beginning to appear as a revenue opportunity among minor league facilities. Due to Seattle-Bellevue-Everett's strong corporate market, as detailed in the Market Analysis phase of the feasibility study, the Everett facility should have substantial opportunity to transacra multi -million dollar sale of the arena's naming rights. The pricing of these rights at the minor league level are very much in flux and are often complicated by the inclusion of a broader ' sponsorship' relationship extending far beyond the stadium s name itself. Recent corporate sponsors include the Ryder Corporation, which reportedly signed a long-term, multi -million doll deal to name the University of Miami Arena (Home of Big East Conference's Miami Hurricanes), PepsiCo which paid $3.0 million over 10 years to name the Albany River Rats' arena, and TECO Energy which paid a reported $7.0 million over 20 years to name the Florida Everblades' arena. Naming rights are estimated to be $500,000 per year in the cashflow analysis. Pouring Rights Pouring rights have become a significant source of additional income for arenas and stadia Typically, pouring rights contracts dictate that a fee be paid directly to the building owner by a beverage supply company. City of Everett — Arena Feasibility Analysis Page 38