9/18/2019

Dear Potential Investor,

The Mt. Carmel Municipal Airport completed its economic analysis for a proposed sports complex at the Airport. The report presented herein includes the summary of findings and conclusions from our research.

This report was prepared for any interested party or investor for consideration of referenced project. The information contained in the report reflects analysis of data obtained from sources from Wabash County, Lawrence County, State of Illinois, and similar sport complexes in the Midwest. I have utilized sources that are reliable but cannot guarantee accuracy. All information provided to me by others was not audited or verified and was assumed to be correct.

This report was generated to reflect the economic impact on the Airport and surroundings community. The information contained herein are averages and were generated conservatively. The figures in no way should be used as a source for final financing but as an overview of general revenues and expenditures.

I generated this report to show the potential benefits for the Airport, the City of Mt. Carmel, and the region.

Sincerely,

Chad HillAirport ManagerMt. Carmel Municipal Airport

Mt. Carmel Municipal Airport

Sport Complex Analysis

Prepared by Chad Hill Airport Manager

TABLE OF CONTENTS

1. Executive Summary.2. Comparable Sports Complex Facilities.3. Conclusion of Findings.

EXECUTIVE SUMMARY

Project Background

In 2018 the Mt. Carmel Municipal Airport was chosen to be in an investment area called an Opportunity Zone along with Sumner, Illinois. This zone gives investors the chance to invest Capital Gains profits into these areas without being taxed on those funds. Several ideas came to mind to bring new revenue into the Airport, but with the tax structure of Illinois, Aviation Investors go to our surrounding States, like Indiana and Kentucky. The Airport started looking at Non-Aeronautical investments that would not have a negative impact on the environment but would bring revenue and exposure to the Airport and surrounding communities. Sports is a huge part of the lives of residents in our area. In the last ten years travel team sports have taken off and can be very profitable for the right sport complex. The idea of a Multi Sports Complex was born. The complex will consist of a 125,000 square foot dome with a multi-function facility attached. The multi-function facility would be the main office, locker rooms, weight room, general purpose room, concessions, retail outlet, and restaurant. The dome would house two regulation size fast pitch softball fields/little league fields, batting cages, pitching runs, full football/soccer field, and spectator area. The out side will have a 4 field all weather tournament complex with concessions and warm up area for teams, 1000 seat championship field with locker rooms and concessions, parking lots, 20 site full hook up RV lot, and a two lane walk/run track around the whole facility. The facility would take on venues and programs such as coaching clinics, sport camps, whole team training camps, partnerships with local hospitals for exercise and nutrition, tournaments, and other non-sport related venues such as drone completions, wedding receptions, and exhibits.

Work Plan

The Airport researched the impacts of a sports complex on its grounds and as part of the Economic Analysis related to the proposed sports complex includes, but not limited to the following:

Define the Sport Complex and site parameters. Develop a financial pro forma and related assumptions

regarding potential usage/event activity and facility operations in terms of operating revenues and operating expenses.

Estimated the economic impacts in terms of spending, employment, and earnings associated with on-going facility operations.

Summarize findings.

The remainder of this report summarizes the key findings from the Economic Analysis.

Project Overview

Sports tourism is a growing niche regionally and nationally. As more communities realize the economic value of this visitor segment, new facilities have been developed to accommodate competitive sporting events designed to attract out-of-town visitors while having the additional benefit of hosting recreational and club programs in support of regional residents. Several of the Regional Area market characteristics including its accessibility, supply of overnight accommodations, restaurants, parks, Airport and visitor amenities are compatible with attracting sporting events and other venues that generate economic and fiscal impacts.

In addition, the region has several Softball/Baseball travel teams, Colleges, and Schools that would utilize the facility year-round. The Airport has found an organization that can bring in Division I coaches, Olympic Softball players, and professional players to conduct clinics and camps year-round in softball, baseball, football, and soccer. Having this exposure will bring in national tournaments, showcases, and establish a national reputation in amateur athletics and increase revenue to the region in the form of sales tax, hotels, fuel sales, and general revenue.

The remainder of this section provides a summary of building program as well as the estimated event activity, financial operations, and economic and fiscal impacts associated with on-going operations of the proposed new sports complex at the Mt. Carmel Municipal Airport.

Program

Based on the needs for a successful sport complex the following summarizes the building requirements:

125,000 square foot climate-controlled dome to accommodate 2 softball/baseball fields, football field, soccer field, and exhibit area.

Support facility for offices, weight room, all purpose room, locker rooms, restrooms, retail outlet, restaurant, and concessions.

4 tournament fields with concessions and restrooms. 1000 seat Championship style stadium with concessions and

locker rooms.- Attract professional softball teams for exhibition games.- Host World Series tournaments is softball/baseball.- Host College games.

Field surfaces are artificial turf to maximize tournament opportunities:- Allow play during inclement weather.- Extend the season for the use of outdoor facility.- Low Maintenance cost.

All fields are lighted. Two-lane all-weather walking track. 20 Space RV full hook up area. Sufficient on-site parking and traffic management that

identifies appropriate ingress/egress to and from the site that can accommodate tournament traffic and flow.

WI-FI access throughout the facility. Open space for future development for a dormitory

and coach’s quarters. Storage facility for equipment and sponsor items.

Supporting infrastructure for electrical, water, sewer, and drainage.

The above program would require approximately 40 acres to accommodate the fields, dome, support facility, storage facility, and supporting infrastructure (e.g., drainage areas, maintenance buildings, playground, walking track, parking lots, etc.).

Event Activity

The following table summarizes the estimated total event activity associated with operations of the proposed sport complex for a stabilized year of operations. The estimate of event activity only includes tournament activity, no clinics or camps is programed into the financial pro forma.

Proposed Sport Complex at the Mt. Carmel Municipal Airport Estimate of Annual Event Activity

Category Range

Tournament Activity January 1st throughDecember 31st

Total Events 24Total Event Days 60Number of Participants 10,080Number of Spectators 30,240Average Length of Stay (Days) 2.5Total Attendee Days 75,600

Based on market research, it is estimated that approximately 90% of this event would be new to the area. This incremental activity reflects new events as well as increased attendance at events taking place in other locations throughout our region. The estimate of the economic and fiscal impacts associated with the on-going operations of the proposed sport complex is based on the incremental new activity (not the total activity shown above).

Financial Operations

Based on the assumptions outlined in this report and summarized in the following tables that the proposed sport complex will show a profit in a stabilized year of operations. The below tables do not consider clinics, camps, and other related revenues. The tables do not consider the payment to investors for the construction of the sport complex.

Operating RevenueSport Complex at the Mt. Carmel

Municipal Airport

Category RevenueTournament Fees $315,000.00Tournament Admission $453,600.00Concessions $112,000.00Retail $96,768.00Advertising/Sponsorships $15,000.00Family Memberships $120,000.00Individual Memberships $84,000.00Team Memberships $45,000.00Facility Fees $35,000.00Restaurant Rent $12,000.00RV Fees $84,000.00

Total Operating Revenue $1,372,368.00

Tournament Fees. These fees are based on 24, 35 team tournaments at$375.00 per team. This amount could increase if some tournaments are Elite teams. These teams pay up to $1000.00 per team to compete in Elite team tournaments.

Tournament Admission. This fee is based on an average family of four paying $15.00 for a weekend pass for a 35-team tournament.

Concessions & Retail. Concessions is based on 20% of profit of the average $7.00 sale on tournament attendance. Retail is based on 20% of profit of the average $12.00 sale on tournament attendance. This is the rent of space within the facility by a third-party vendor.

Advertising & Sponsorships. Advertising and sponsorships opportunities are diverse and can rang from temporary signage at a signal tournament or to permanent signage on scoreboards or billboards located throughout one or more fields to advertising in a program to sponsoring events/tournaments. Typically, events sponsored by outside organizations do not share revenues with the facility. However, advertising and sponsorship revenue generated from events organized by the facility is usually retained by the facility and is a function of the number/type of tournaments held, total attendees, and the aggressiveness of the approach taken by management in terms of the amount and type of advertising and sponsorships sold.

Family, Individual, & Team Memberships. The fees are based on 200 families at $50.00 per month, individual fees are based on 200 at$35.00 per month, and team fees are based on 25 teams at $150.00 per month.

Facility Fees. These fees are based on non-member usage of the batting cages, weight room, all purpose room, and other amenities the facility has to offer.Restaurant Rental. Rent is $1000.00 per month for restaurant space.

RV Fees. These fees are based on the rate of $35.00 per night for 20 sites, for 120 days a year.

Estimated Operating Expenses Proposed Sport Complex

Category ExpensePersonnel Cost $128,200.00Repairs & Maintenance $50,000.00Utilities $20,000.00General Administration & Other $70,000.00Lease Payment $15,000.00Real Estate Tax (Buildings Only) $25,000.00

Total Estimated Net Operating Expense $308,200.00

Estimated Financial Operations Proposed Sport Complex

Mt. Carmel Municipal Airport

Category ValueNet Operating Revenue $1,372,368.00Net Operating Expense $308,200.00

Net Earnings $1,064,168.00

Personnel. It is assumed that the proposed new sport complex will be owned by private investors and operated by them. It is further assumed the private investors will hire staff to operate the proposed sport complex, which will be augmented by other marketing assets such as area coaches, sponsors, and Airport staff.

Repairs and Maintenance. This line item includes labor, equipment and materials associated with maintaining the facility and the general grounds. Most repairs and maintenance will be done internally while others will be done by a third party. Some expenses related to maintaining synthetic turfs are irrigation to keep temperatures of

playing surface manageable and safe, chemical disinfectants, sprays to reduce static, and removal of organic matter accumulation.

Utilities. This line item, which includes water and electric will be kept manageable. All lighting will be led fixtures and h-vac equipment will be high efficiency. Some areas will have Solar Energy to offset cost. Non- Sport Complex events renting fields will pay for electric used.

General Administration & Other. This line item includes various general expenses used in the day-to-day management of the proposed Sport Complex that may include office supplies, travel, communications, technology, postage, membership dues, etc. Insurance could be included in this line item; cost of insurance is unknown at this time.

Lease Payment & Real-estate Taxes. These two-line items are what is paid to the Mt. Carmel Municipal Airport for the use of the land. The lease payment is fixed, but the real-estate tax varies from year to year based upon the counties tax rate.

Potential Non-Operating Revenues

As the project evolves, other potential revenue sources need to be considered, but not limited to, the following:

Parking – Comparable facilities in the region do not generally charge for parking and as such, no parking is estimated in this study. However certain type events the facility could charge for parking to offset cost.

Naming Rights – Through a combination of naming rights, preferential advertising treatment and event sponsorship inducements, one or more private parties may be solicited for up-

front or recurring annual commitments. However, as with advertising and sponsorships, the revenue generated from naming rights is generally based on several factors, including but not limited to , the amount of event activity (sports tenants, regional/national/international tournaments), the local corporate base and on the amount and type of naming rights sold (selling the facility as a hole, naming the dome, or selling individual fields).

Camps & Clinics – During the week and off weekend times camps and clinics by professional athletes, coaches, and trainers can be made available. Camps and clinics are a good revenue generating mechanism especially when a well-known individual conducts them.

Private Athletic Lessons & Trainers – Charge recurring instructors a monthly fee for conducting one on one training for groups and instructors.

Comparable Sport Complex Facilities

Louisville Slugger Sports Complex, Peoria, Illinois• 125,000 Square Foot Dome• 8 Tournament Field Complex• 2 Championship Stadiums• All Artificial Turf• Family Center with café/restaurant• Distance 175 miles.

The Dome Crown Point, IN• 33,000 Square Foot Dome• Family Fun Center• Distance 194 miles.

Go For It Sports Yorkville, IL• 40,000 Square Foot Structure• Inside Track• Party Room• Distance 213 miles.

The following pages have visual descriptions of each of the before mentioned facilities.

(800) 325-130311880 Dorsett Road, St. Louis, MO 63043

ArizonBuildingSystems.com

Louisville Sluggercentral illinois

Application:................................Baseball, Softball & Soccer DomeSize:..............................................240’ x 520’ x 72’ (124,800sf)Features:....................................Attaches to conventional structure

Gray Exterior Fabric Translucent Skylight Curtain divider walls

Arizon Building Systems was selected to design, manufacture and construct a 124,800 square foot sports dome at the Louisville Slugger Sports Complex in Peoria, IL. This extensive facility allows complex management to schedule winter tournaments and events and provides an indoor alternative for youth baseball and softball throughout the year. The dome can accommodate two regulation softball fields simultaneously, while removable outfield fencing permitsa larger field for baseball, soccer and other sporting events. The dome directly connects to a conventional structure which houses a lobby, changing facilities, and retail. Energy efficient features include Arizon’s custom designed and manufactured heating and cooling system, a translucent skylight, and LED lighting.

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Application................................Softball/Baseball/Multisport DomeSize:..............................................140’ W x 240’ L (33,600 sq. ft.)Features:..................................Translucent fabric facilitates natural daytime light

Accommodates a variety of sports applications Large, open-span space

Challenge• Create a comfortable indoor space that

can accommodate a variety of sports. as part of a community-orientedactivity center in Crown Point, IN.

Solution• Arizon designed, manufactured and

installed a climate-controlled air supported building that provides unobstructed, open- span space for baseball, softball, football, golf and soccer.

• The dome features translucent fabric totake advantage of natural daytime light, a vehicle airlock to allow large equipment and bleachers into the facility and an energy- efficient HVAC system.

Result• Crown Point Family Fun Center now has an

indoor venue available to athletic organizations, local schools, community groups, families, birthday parties, recreational organizations, etc.

• This cost-effective facility solution adds tremendous value to the overall business, which also offers a number of outdoor activities like mini golf and go-karting.

• The energy-efficient design keeps operational costs low, while serving as an exciting all-seasons attraction at

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Conclusion of Findings

Economic and Fiscal Impacts

As discussed in the Executive Summary, the primary objective of the proposed Sports Complex is to draw out-of-town visitors and produce economic impact from tourism. As such, this section of the report outlines the potential benefits that could be generated by activity at the proposed Sport Complex.

The Mt. Carmel Municipal Airport, the City of Mt. Carmel, and the surrounding Region would benefit from operations of the proposed Sport Complex in many ways including such tangible and intangible benefits as:

Enhancing the quality of life to area residents Fostering the development of sport participants in the area Enhancing the Airport’s image as a destination by increasing its

amenities Broadening market reach to new visitors Attracting visitors during non-peak months Receiving media exposure through hosting regional and national

event activity Increasing economic and fiscal impacts for Local and County

governments Serving as a catalyst for future development in the area

Each of these benefits is important in assessing the impacts that the new Sport Complex may have on the area. While the value of these benefits is difficult to measure, the economic activity generated can be quantified.

General Overview

An assessment of the economic benefits that could occur at the Airport, City of Mt. Carmel, and the surrounding region, because of the proposed new Sport Complex can be approached in several ways. The approach used in this analysis considered expenditures generated from on-going operations at the complex from items such as personnel costs, utilities, repairs and maintenance, general administrative and other expenses as well as spending by participants and spectators outside the complex. The number of events and attendance, event mix, origin of attendees (e.g., local versus out-of-town), facility financial operations, industry trends, economic conditions, direct spending categories used, per person spending amounts, distribution of spending, multipliers, and specific taxes quantified are all variables that influence the economic and fiscal impact estimates.

Direct Spending

Estimating direct spending is the first step in calculating economic impact. Direct spending represents the initial change in spending that occurs as a direct result of operations of the proposed new Sport Complex. As graphically depicted, direct spending occurs both inside and outside of the complex.

Facility Operations

Personnel Costs Repairs & Maintenance UtilitiesGeneral Administrative &

Attendee Spending Outside the Facility

Hotels/Lodging Restaurants RetailEntertainment/Recreation

Indirect/Induced Impacts

The economic activity generated by operations of the proposed new Sport Complex affects more than just the facility. In preparation for new spending in the economy, several other economic sectors are impacted, and jobs are created. Indirect effects reflect the re-spending of the initial or direct expenditures, or the business-to-business transactions required to satisfy the direct effect. Induced effects reflect changes in local spending on goods and services that result from income changes in the directly and indirectly affected industry sectors.

Total Economic Impact

• Spending (output) represents the total direct and indirect/induced spending effects generated by on-going operations of the proposed new Sport Complex.

• Employment (jobs) represents the number of full and part-time jobs supported by on-going operations of the proposed new Sport Complex.

Personal EarningsEmployment (Jobs)Spending (Output)

Total Economic Impact

Other Economic SectorsGovernment SpendingBusiness ServicesHousehold Spending

Induced Spending – changes in local spending on goods/services resulting from income changes

dustriOtherInesRetailersWholesalersManufacturersDistributorsTransporters

Indirect Spending – re-spending of the initial or direct expenditures

Facility Operations & Spending Outside of the Facility

Direct Spending – initial change in

• Personal Earnings represent the wages and salaries earned by employees of businesses associated with or impacted by on-going operations of the proposed new Sport Complex.

The following graphic illustrates the effects of total economic impact.

Final Remarks.

The proposed new Sport Complex as proven in this study has the potential setting our area up for Economic Success by raising revenues for local and regional business’, increasing sales at the local Airport, increasing tourism for the area, and increasing tax revenue for the region. Though the Sport Complex won’t bring in many full-time jobs, but it does give young adults in the area for job opportunity. In closing the new proposed Sport Complex will serve this area well and be a much-needed positive change.