New Findings Publicly Released During “Valley Arena Project” Informational
Webinar Series with The Desert Sun Newspaper
PALM SPRINGS, CALIF. – March 8, 2021 – Oak View Group(OVG), the global venue development, advisory, and investment company for the sports and live entertainment industries, and CAA ICON, the project management and strategic advisory division of athlete representation giant Creative Artists Agency (CAA), today announced the results of a recently OVG commissioned in-depth report on the economic and fiscal impact for the Coachella Valley Arena, a new state-of-the-art, privately financed sports and entertainment arena near the City of Palm Desert. The findings, covering its impact during the initial construction phase and ongoing annual operations, were highlighted during the “Valley Arena Project” informational webinar series aimed at furthering the discussions around the Coachella Valley Arena in partnership with Gannett’s Desert Sunnewspaper located in Palm Springs.
“The results of the analysis are astounding on so many levels and confirm what we have suspected since the inception of the project,” said Tim Leiweke, CEO of Oak View Group. “Our privately-funded $277 million project investment, which comes at no cost to taxpayers, will generate nearly $3 billion in economic output to the community over the course of the next 49-years. We’re pleased the arena will have such a positive, life-changing impact for the entire Valley and its area businesses.”
John Bolton, senior vice president, and geneal manager of the new Coachella Valley Arena continued, “One of the main thingss I think is great is the fact that the entire Coachella Valley won’t have to wait until the arena opens at the end of 2022 to feel the financial boost it will bring to the local economy. With the start of construction, the impact will be felt almost immediately.”
“During the construction period alone, the project is estimated to support approximately 1,400 jobs and will generate over $200 million of economic output to Riverside County, which is quite significant,” said Josh Cohen, vice president of CAA ICON.
“Not only will the arena support 420 full-time equivalent year-round jobs once it opens, it will also benefit so many other local businesses and create a high demand for their goods and services, said Gina Nestande, former Palm Desert mayor and current city councilor. “Everyone – hotels, restaurants, gas stations, retail, and grocery stores – will all reap the benefits of increased economic activity and foot traffic. The arena’s close proximity to the Cal State Satellite Palm Desert Campus will also help support the efforts of Palm Desert being the next four-year standalone University.”
“We’ve always seen the enormous potential in this property and are delighted by the progress,” said Stone James, economic development director. “The development of the new arena will have an enormous impact on stimulating, supporting, and sustaining the local economy – from increasing tourism, to benefiting locally-owned small businesses, to providing real jobs and future economic
development. This will be a tremendous asset for the entire Coachella Valley as it will provide year-round entertainment and events for not only visitors, but full-time residents.”
The third event in the ongoing expert-led series, moderated by sports reporter Andrew John of the Desert Sun, was headlined by Cohen and Dan Barrett, executive vice president of CAA ICON, as theyshared insights into the overall economic impact of the project. The analysis covered the impact of the arena during its construction period and ongoing annual operations. The methodology used in the study measured economic impacts, employment impacts, labor income impacts, and fiscal impacts (public tax revenues).
Coachella Valley Arena / Riverside County
Economic and Fiscal Impact Analysis: Summary of Findings
To calculate the the construction period, CAA ICON utilized the $277.8 million project cost and adjusted gross labor expenditures in the market area according to the likelihood that laborers would be sourced from outside Riverside County. Similar adjustments were also made to account for procurement of materials and soft cost services from outside Riverside County. The proposed project will support the following construction period economic impacts in Riverside County. Figures reflect gross impacts (2022 dollars).
Construction Period Impact Summary for Riverside County
|Direct Economic Output (Adjusted) – (1)||$136.3M|
|Indirect Economic Output||$30.6M|
|Induced Economic Output||$36.4M|
|Total Economic Output||$203.3M|
|Labor Income – (2)||$79.9M|
|Total Direct Fiscal Impacts||$2.6M|
- – Direct economic output is adjusted for spending patterns/timing.
- – Includes all forms of employment income, including employee compensation (wages/benefits) and proprietor income.
Ongoing operations of the arena and team will generate annual economic and fiscal impacts such as in-arena/team generated spending (personnel, utilities, general and administrative, etc.), and out-of-arena visitor spending (restaurants, hotels, gasoline stations, grocery, etc.). The proposed project will generate the following economic impacts on an annual basis (2022 dollars).
Recurring Impact Summary for Riverside County
|Direct Economic Output (Adjusted) – (1)||$20.0M|
|Indirect Economic Output||$6.1M|
|Induced Economic Output||$5.7M|
|Total Economic Output||$31.8M|
|10/28/21, 10:05 AM||Oak View Group & CAA Icon Unveil Economic Impact Findings for Coachella Valley Arena|
|Labor Income – (2)||$11.9M|
|Local Sales and Use Tax||$0.1M|
|Local Property Tax||$0.5M|
|Total Direct Fiscal Impacts||$0.7M|
- – Direct economic output is lower than net new direct spending because retail margins are not considered a direct impact.
- – Includes all forms of employment income, including employee compensation (wages/benefits) and proprietor income.
The proposed project will support the following economic impacts over the 49-year lease term. Net present value (NPV) assumes 2.5% annual growth and 5.0% discount rate.
Impact Summary for Riverside County
|Total Economic Output – Construction Period||$203.3M|
|Total Economic Output – Year 1||$31.8M|
|Total Economic Output – 49 Years (Total)||$2,991.0M|
|Total Economic Output – 49 Years (NPV)||$971.0M|
|Labor Income – Construction Period||$79.9M|
|Labor Income – Year 1||$11.9M|
|Labor Income – 49 Years (Total)||$1,121.5M|
|Labor Income – 49 Years (NPV)||$366.4M|
|Direct Fiscal Impacts – Construction Period||$2.6M|
|Direct Fiscal Impacts – Year||$0.7M|
|Direct Fiscal Impacts – 49 Years (Total)||$60.5M|
|Direct Fiscal Impacts – 49 Years (NPV)||$18.7M|
Additionally, the Coachella Valley Arena will generate other significant impacts and intangible benefits for Riverside County that are less explicit and more difficult to quantify.
Regional and national exposure due to the projected event mix/sporting tournament opportunities
Offers full-time residents, part-time residents, and visitors an entertainment venue not currently offered in the immediate market
Prestige associated with a state-of-the-art Arena and premier sporting and entertainment venue A catalyst for economic development (attract/retain business)
Ancillary development opportunities proximate to the Arena Civic/community pride and identity
Improved quality of life/additional entertainment alternatives
Provides youth hockey opportunities
Provides community gathering space
Provides additional meeting and conference spaces (local, regional, state, etc.)
Provides other event auxiliary space (Coachella Valley Music Festival, Stagecoach Festival, BNP Paribas Open)
Provides potential opportunities for additional high impact events (professional sports training camp, award shows, television productions, music rehearsal/tour launches) Team/facility contributions and donations to local charities/causes
New marketing/advertising opportunities for local and national businesses
Located on 43.35 acres of land at I-10 and Cook Street, in Riverside County on land owned by the Berger Foundation, the arena will be more than 300,000 square feet and feature 11,000-plus seats, and include modern suites and premium hospitality clubs. It will be the home of the Seattle Kraken’s American Hockey League (AHL) team and will include an adjoining facility that will serve as a year-round community gathering space and the training center for the AHL team.
With a focus on the prioritization of technology, sustainability, and green initiatives, the world-class arena will also be built for music and host the best and biggest names in the music industry on an annual basis. In addition to sports and entertainment, the arena will accommodate conventions, large meetings, international events, as well as award shows and exhibitions and will be privately funded at no risk to Riverside County taxpayers. Construction of the new arena is expected to create hundreds of permanent and temporary jobs for the community. The arena is projected to open in the last quarter of 2022.
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About Oak View Group (OVG)
Oak View Group (OVG) is a global sports and entertainment company founded by Tim Leiweke and Irving Azoff in 2015. OVG is focused on being a positive disruption to business as usual in the sports and live entertainment industry and currently has eight divisions across four global offices (Los Angeles, New York, London, and Philadelphia). OVG is leading the redevelopment and operations of Climate Pledge Arena in Seattle, WA, and UBS Arena in Elmont, NY as well as leading arena development projects in Austin, TX, Manchester, UK, and Milan, Italy. OVG Global Partnerships, a division of OVG, is the sales and marketing arm responsible for selling across all OVG Arena Development projects.
About CAA ICON
A division of leading entertainment and sports agency Creative Artists Agency (CAA), CAA ICON is the world’s-leading owners’ representative and strategic management consulting firm for public and private sports and entertainment facility owners/operators, professional franchises and leagues. With more than 50 sports, entertainment and public assembly projects and over 1,500 consulting engagements, CAA ICON has managed the development of many of the most successful venues around the world, including 11 professional sports leagues totaling nearly $20 billion. CAA ICON offers world-class service in the areas of project management, strategic advisory, feasibility and planning and beyond.
About The Desert Sun
The Desert Sun is the leading news organization in the Coachella Valley. Publishing online 24/7 at desertsun.com and in print seven days a week, The Desert Sun content is read millions of times each
month. Now in its 94th year serving the Coachella Valley, the award-winning newsroom is the flagship California newspaper in the USA Today Network, owned by Gannett Co. Inc.
About Gannett Co. Inc.
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