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• • FINANCIAL ANALYSIS Parking Revenue The level of parking income may vary depending on the design of parking lots, the u ltimate availability of nearby street parking, and the proximity and control over the large amount o f free parking which may be available for retail u ses adjacent to the site. The construction of structured parking is not included within the project budget. This analysis utilizes the basic rule of thumb of providing one parking space for every three seats of stadium capacity. It is assumed that the parking charge will be $2 per automobile with an average of three individuals per vehicle. Revenue Inflation Revenue streams are inflated at 4% per year, with the exception of the luxury suite income, which is generally flat over the first few years due to long-term lease agreements. Findings: Operating Assumptions The operating expenses assumed for this analysis are based on several relatively new minor league arenas with similar tenant mixes, as well as, on operating expense figures provided by a leading national facility management company. The expenses are inflated three years at a rate of 4% to reflect the change in time until the proposed arena opens. Personnel costs for a n ew arena are estimated at $803,000. Staff salaries and staff benefits are estimated at $659,000 and $122,000, respectively. This includes the cost of contract labor for specific e vents, which may vary significantly depending o n the number of events and structure of the lease. It is assumed that the management of the food service is outsourced. The non -personnel operating costs of the arena will vary heavily on the lease negotiations. In some cases, the team itself o perates the arena and thus, the team is responsible for most of the expenses incurred. In other cases, the arena is operated by the City/public entity and the team is a tenant at the arena. In this scenario, it is assumed that public e ntity is responsible for to pay the operating costs. It should be noted that B&D has based several of its assumptions related to facility o perations on actual information as provided by a leading national management company in order to project the most accurate facility operating paradigm possible under normal conditions. This analysis assumes that the facility management contract would be competitively advertised and procured. Findings: Financing Structure The strategic objectives identified by the City of Everett at the outset of this study included maximizing the aforementioned ` Sales Tax Rebate" available to the City of Everett from the State of Washington offered to the City and its partners in this project (Snohomish County and the City of Marysville). Further, the City identified as an objective minimizing the requirement for public support of the proposed arena if it were to be developed, all or in part, by the City. Based on this instruction, several sources of equity have been considered during this analysis. City of Everett — Arena Feasibility Analysis Page 40