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HomeMy WebLinkAboutCSD-07-05 , , . . 1 Cl~mglOn REPORT COMMUNITY SERVICES DEPARTMENT Meeting: General Purpose and Administration Committee Date: May 24, 2005 Resolution #: Report #: CSD.07-05 File#: By-law #: Subject: Clarington's Brian McFarlane Hockey Museum - Business and Marketing Plan Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1, THAT Report CSD-07-05 be received; 2. THAT Clarington's Brian McFarlane Hockey Museum: Business and Marketing Plan as prepared by Deloitte & Touche LLP, be endorsed in principle; 3. THAT Council authorize an expenditure of approximately $150,000.00 for Marketing Services including consulting, creative design and production costs for a marketing program as outlined in the Deloitte & Touche's Business and Marketing Plan; 4. THAT the expenditure for the Marketing Services be funded from the Impact Escrow Reserve Fund included in the funding previously approved for Clarington's Brian McFarlane Hockey Museum Account #110-42-421-84242-7401 ; 5. THAT Staff be directed to issue a Request for Proposal to engage a marketing firm as required for the pre-launch phase of the project; and, 6. THAT Staff be authorized to initiate the design process for Clarington's Brian McFarlane Hockey Museum. REPORT NO.: CSD-07-05 PAGE 2 Reviewed bYO~ -"'~ Franklin Wu Chief Administrative Officer ReVieWe~y:ff~ ~ ()\.. Nancy Taylor, B,BA, CA Director of Finance JPC/BRT/ta CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T (905)623-3379 F (905)623-5506 REPORT NO.: CSD-07-05 PAGE 3 1.0 BACKGROUND 1.1 In the fall of 2004, the Clarington's Brian McFarlane Hockey Museum Committee, consisting of municipal staff and supported by Brian and Joan McFarlane, Michael McFarlane, Bill Humber (local historian, author and sports enthusiast), Barry Bryan Associates (Consultant) and GSM Design (Sub Consultants - Museum and Display Specialists) suggested a museum business and marketing plan would be beneficial to the success of the museum, This was predicated on the complexity of the display, potential market attraction, existing tourism nodes within the municipality, as well as, regional, provincial, national and international partnerships and marketing opportunities, 1,2 Accordingly, the Community Services Department, in conjunction with the Corporate Services Department, prepared and issued a Business and Marketing Plan - Request for Proposal. The successful bidder was Deloitte & Touche LLP, 1.3 The Marketing and Business Plan has also reviewed the characteristics and attributes of a museum of this nature and, in conjunction with staff, has provided recommendations determining the necessary physical size requirements for display, administration and retail sales areas of the museum in order to undertake a successful project of this nature, 1.4 Since December 2004, Deloitte & Touche LLP have worked with the committee and have researched, explored opportunities, commented and made recommendations on all facets of the Request for Proposal. The Museum Committee supports the Business and Marketing Plan and is recommending approval in principle of the recommendations provided by Deloitte & Touche LLP, 2.0 BUSINESS AND MARKETING PLAN 2,1 Highlights of the study and comments are provided for Council's consideration as follows: 2.2 BUSNESS CLIMATE - The demographics provided by Deloitte & Touche LLP (as confirmed by the Development Charges Study) indicate that Clarington, as well as the Region of Durham, is expected to continue to enjoy progressive population growth over the next number of years, In terms of tourism, the area already draws 3,3 million visits per year, of which 94% are day trips typically from GTA area and local residents. The study identifies three (3) main areas of potential target market resources. 2.3 The municipality also enjoys several existing tourism attractions (for example, Mosport, Bowmanville Zoo and Jungle Cat World) in which to share promotional partnerships. In addition, there exists a strong minor hockey league program REPORT NO.: CSD-07-05 PAGE 4 consisting of approximately 15,000 youth, The final market area is the educational component in which there are over 100,000 elementary aged children. These areas provide an advantage to the success of Clarington's Brian McFarlane Hockey Museum as there is a large resident population, a large existing tourism base and a large resident hockey base, compared to similar operations throughout North America. Our market area has a population in excess of 3,0 million, of which nearly 1,0 million will have an expressed interest in a museum facility of this nature, 2.4 MARKETING STRATEGY - The Business and Marketing Plan has indicated there are already a number of local area attractions that exist to compliment the museum, In addition, the interest of local minor and senior hockey teams will be a draw to the museum, The educational component will be of interest to the various local and surrounding school boards as part of our Canadian heritage - important to the school curriculum, The objective will be to develop the museum into a destination location through the number of family day-trips and activities already taking place within the municipality and particularly at the Garnet B. Rickard Recreation Complex, In order to accomplish these objectives, the Business and Marketing Plan has recommended the Municipality engage a marketing firm to undertake these requirements as they pertain to our marketing strategy. 2,5 IMPLEMENTATION PLAN - Key to the success of the Business and Marketing Plan is the implementation plan for pre-launch and first year start up, The success of the museum will largely depend on the pre-launch groundwork undertaken by staff prior to the actual opening, Several components are to be in place prior to the fall of 2006, . Development of all staffing positions including position descriptions, staff recruitment and training plus volunteers, . Marketing Strategies - retention of marketing consultant to develop media strategies, clientele targets, cross-promotion marketing campaigns, educational component, sponsorship packages and special events and promotion. . Exhibit set-up and display components complimented by interactive displays, 2.6 As recommended, funding of $150,000,00 is required to engage a marketing firm capable of undertaking a marketing program of this magnitude, The program will include consulting fees, creative design and production costs. This expenditure is for the initial development of the program. 2.7 LOCATION AND OPERATING STRATEGY - The Business and Marketing Plan has indicated the Garnet B. Rickard Recreation Complex is ideal for the museum location, There is a built-in clientele attracting 300,000 visitors per year, in a complimentary service to the museum. By locating the museum at the Garnet B, Rickard Recreation Complex, there is expected savings in both capital REPORT NO.: CSD-07-05 PAGE 5 and operating expenses. The projected visitation target is 20,000 to 25,000 visitors per year. Actual operating hours are to be confirmed, however, staff would indicate consideration will be given to prime winter season, offering slightly reduced summer hours. 2.8 STAFFING STRUCTURE - The Business and Marketing Plan recommended staffing requirements conducive to operating hours and business expectations. The lead position will be the Community Service Coordinator (existing position) assisted by a full-time Museum Programmer/Curator fulfilling programming and curatorial requirements (previously approved as a part-time position in the 2004 budget, however has not been activated pending the results of the Business and Marketing Plan) and a Facility Clerk (existing position). Additional staffing will be comprised of part-time clerical administrative support and a compliment of volunteer tour guides. All new positions related to the museum will be implemented as part of the 2006 annual budget process, Assuming an April 2006 budget approval, staff may require pre-budget approval for certain staff associated with the museum, If required, staff will prepare a report to Council later in 2005, 2,9 OPERATING PLAN - The Business and Marketing Plan identified several revenue streams including general admissions, special events (exclusive use) rentals, sponsorships and gift shop sales. In order to attract the required revenues, the Museum Committee supports the Marketing and Business Plan that will lay the foundation of the project as referred to in the business plan. 2.10 The Business and Marketing Plan developed a five (5) year operating budget to demonstrate a proforma cash flow model. The model indicates a first-year surplus operation and break-even operations in the subsequent years. It should be noted that utilities, cleaning and insurance have been identified as Museum operational costs, however, will be reflected as an overall increase to the Garnet B. Rickard Recreation Complex once the Museum facility is fully operational. 3.0 MUSEUM DESIGN 3,1 The consulting firm of Barry Bryan Associates has been retained to design the physical building components. Through their sub-consultants, the firm of GSM Design will develop the museum exhibits, display space and interactive components within the museum structure. Our consultants have reviewed the Municipality's artifacts acquired from Brian McFarlane and have made comparisons to similar facilities in Canada, United States and Europe to determine the recommended size (5,000 square feet) for Clarington's Brian McFarlane Hockey Museum, As a result of the recommended increase in the size of the building, staff is now required to provide updated project financing as follows: REPORT NO.: CSD-07-05 PAGE 6 Category Construction Consulting Contingency Furnishings and Equipment Disbursements Total Cost Projection 1,350,000 280,000 150,000 20,000 15,000 1,815,000 3,2 It is anticipated the project will be tendered in the fall of 2005, with construction commencing later in 2005. Actual construction is anticipated for completion in summer/fall of 2006, 4.0 FINANCING 4.1 An amount of $875,000.00 was set aside for this project in report CSD-20-03. (Attachment #2), After marketing services are deducted, $725,000.00 currently remains earmarked for this project. This results in the anticipated need for financing of $1,090,000.00 to cover projected costs. It will be recommended that this balance be debentured, The approximate annual repayment is estimated at $130,000.00 annually, The required resolutions will be included in a future report to Council as part of the tender awarded when exact costs are determined. 5.0 COMMENTS 5.1 Staff submitted a supplementary memorandum to Council on May 2, 2005 (Attachment #1) which introduced several of the Business and Marketing Plan recommendations, including the requirement for post-budget approval of $150,000.00 to engage a marketing consultant, creative design, printing and production costs. 5.2 The Director of Finance has recommended the expenses for the marketing firm be funded from the Escrow Reserve Fund Account as already approved for the Museum Capital Project as identified in Report CSD-20-03 Account # 110-42-421-84242-7401. Attachments: Attachment #1 - Memorandum - May 2, 2005 Attachment #2 - Community Services Department Report # CSD-20-03 Attachment under separate cover - Clarington's Brian McFarlane Hockey Museum - Business and Marketing Plan ~!~mglOn Attachment #1 to Report C5D-07-05 MEMO TO: Mayor John Mutton and Members of Council FROM: Joseph p, Caruana, Director Community Services Department DATE: May 2, 2005 RE: Clarington's Brian McFarlane Hockey Museum The Business Plan and Marketing Strategy that was commissioned to Deloitte is currently in its final stages. Recently, staff have been provided with an overview of that process and I would like to take this opportunity to provide Members of Council with preliminary project cost estimates. As Council is preparing to consider the 2005 budget this Friday, it is prudent to be aware of these anticipated increases that will impact the 2006 budget. The size of the museum is being recommended to be approximately 6,000 sq, ft. This is an increase over the initial estimate of 3,500 sq. ft. and the $875,000 approved preliminary budget. The increase in the square footage requirement suggests that an estimated capital construction budget of $1 ,500,000 to build the museum and additional consulting (architectural) fees of approximately $150,000 will be required. This is a total increase of $866,500 to the earlier project estimate. It should be noted these are still estimates and will be refined when the building has been designed and tenders received, scheduled for October 2005. Also identified is the pre-launch program for the museum operation. The consultant is recommending approximately $150,000 will be required leading up to the opening of the museum in the Fall of 2006. This $150,000 consists of hiring a marketing consultant, creative design, printing and reproduction costs associated with the operation of the museum. This will be required in 2005; finances to be addressed in a subsequent staff report. CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T(905)623-3379 F (905)623-5506 The ongoing operational budget and associated staffing requirements will be addressed through the 2006 budget process. Assuming an April 2006 budget approval, staff may require pre-budget approval for certain staff associated with the museum, If required, staff will prepare a formal report to Council later in 2005. Staff will be scheduling a detailed presentation by the project consultant within the next 3-4 weeks. In the meantime, if you have any questions or require clarification, please do not hesitate to contact me. Regards, Joseph P. Caruana Ijm cc: George Acorn Skip Crosby Bruce Taylor Nancy Taylor Frank Wu ATTAeHMENT # 2 TO REPORT CSD-07-05 ClSK-!!Jgton REPORT COMMUNITY SERVICES DEPARTMENT Meeting: General Purpose and Administration Committee Date: December 8, 2003 Resolution #: Report #: CSD.20-03 File#: By-law #: Subject: Brian McFarlane Hockey Museum - Garnet B. Rickard Complex Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report CSD-20-03 be received; 2. THAT Council endorse the proposed Brian McFarlane Hockey Museum project to be constructed at the Garnet B. Rickard Complex; 3. THAT Council approve the proposed budget of $875,000.00; , 4. THAT the project be funded from the Impact Escrow Reserve Fund Account #111 0-196-X: and 5. THAT staff be authorized to issue the Request for Proposal for Professional Services required to develop the concept drawings and construction specific 0 for the Museum Project. Submitted by: " Reviewed by: Franklin Wu Chief Administrative Officer Submitted by: JPC/GAljm CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1 C 3A6 T (905)623-3379 F (905)623-5506 REPORT NO.: CSD-20-03 PAGE 2 . , 1.0 BACKGROUND 1.1 As Members of Council are aware, staff negotiated successfully for the acquisition of the Brian McFarlane Hockey Museum. 1.2 At that time, Council reviewed a number of options that would see the host site for the new hockey museum located in the courtyard at the Garnet B. Rickard Recreation Complex. 1.3 The museum, as operated by the McFarlane's, utilized approximately 3,000 square feet of display area, staff is recommending a structure approximately 3,500 square feet, which will allow for some modest expansion of the museum displays and further provide an area for rotating displays. 1.4 Staff will be reviewing various options for the rotating displays, anticipating they will be supplied in conjunction with the National Hockey League's Hall of Fame in Toronto. Those discussions will take place over the next number of months. 1.5 As this is a specialty structure, the cost to design and construct a facility of this nature is estimated in the $250 per square foot range, which will require a project budget of $875,000.00. 1.6 Of this amount, a significant portion will be allocated to interior treatments and display areas of the facilities. Please refer to Section 2.3 of this report for a detailed breakdown of this project budget. 2.0 PROGRAM 2.1 This project will consist of the construction of approximately 3,500 square feet of space, located in the courtyard area of the Garnet B. Rickard Recreation Complex, immediately adjacent to the lobby linking Pad A and Pad B of the facility. 2.2 The building will be completely selfcontained and will consist of a main entrance, display area, Peter Puck Theatre, souvenir sales area and storage. It is anticipated to be accessible externally as well as from the interior of the existing complex. REPORT NO.: CSD-20-03 PAGE 3 2.3 Project Budget Category Budget Allotment Pro'act Total I 80,000 i 525,000 i 200,000 I 70,000 I 875,000 2.4 Project Schedule December 2003-Janua 2004 Februa 2004 Februa -A ril 2004 Ma 2004 June 2004-November 2004 December 2004 Janua 2005-Februa 2005 RFP- Professional Services Award - Professional Services Contract Detail Desi n Award Construction Contract Construction Commissionin / Substantial Com letion Official 0 en in , 2.5 Financing It is recommended that the Hockey Museum be funded from the Impact/Escrow Reserve Fund. In 1996, Council transferred funds from the Impact/Escrow Reserve Fund to the Older Adults - Operating Reserve Fund. The principal was to be held however, interest earned was to be available through the budget process to assist in the start-up operations of the Older Adults Centre. The principal was to be returned to the Impact/Escrow Reserve Fund December 31, 2000. In 2000, Council extended this date to December 31, 2003. Therefore, there is $754,775.00 that will return to Impact/Escrow Reserve Fund on December 31 of this year. It is proposed that these funds plus the balance of $120,225.00 currently in the Impact/Escrow Reserve Fund be used to finance the Hockey Museum capital construction costs. 3.0 COMMENT 3.1 Staff will be reviewing various options and partnerships available regarding the operation of the Museum and will be the subject of an additional report to Council. Preliminary operating estimates will be provided in the 2004 current operating budget and will reflect the proposed project schedule.