GO Indoor

Financing Your Indoor Soccer/Sports Center by Norm Gill, Partner, Pinnacle Indoor Sports Y Universal Fabric Structures is proud to sup port the United States Indoor Soccer Associ ation. Sporthall A building represents the the state-of-the-art in bringing all of the advantages of outdoor soccer indoors. For more information and to design the exact facility of your dreams, call us at: (800) 634-8368. An affordable, immediate solution to your structure needs. www.usindoor.com ou have just spent the last three months preparing a detailed market study for you proposed new indoor soccer/sports facility. You have identified all of the possible revenue streams. You have analyzed the demographics of each market component. You have acquired detailed information on existing competition (not just other indoor centers but all relevant participants for the recreational sports dollar), and you have prepared a detailed, realistic business plan to make your case for investing a significant amount of money in an indoor soccer/sports facility. Now what? How do you move your dream project after all this preparation to construction? Financing is the next stage, and it is the area in which most people, even seasoned business managers, may have trouble knowing how to get started. The first step is to identify the total amount of money that will be necessary to: acquire land in the target area; build a structure suitable for your purpose; finish the "sports package" necessary for occupancy as a soccer/sports center; purchase office furniture, phone system, computers, and equipment for a café/snack bar; and fund the start-up, which will include pre-opening expenses for marketing and publicity. So how much money will you need? That will all depend on the type of facility and the location you have chosen. To give you an idea of the order of magnitude, here are some "average" numbers for a typical 2-field complex in a 50,000 square foot building. The price of commercial land is highly variable, and you will need a minimum of 3 acres appropriately zoned. How much you can spend on property will ultimately be determined by your ability to generate an acceptable return on the capital outlay. Chances are you will not want to spend more than an average of $500,000 for land. The base building, depending on materials and code requirements, will likely cost anywhere from $1.2 to $1.8 million (average $30 per square foot). The sports package, which includes turf, dasher boards, goals and netting, will be approximately $250,000. Other equipment and supplies will require at least another $50,000. Pre-opening start-up expenses including personnel, temporary offices, marketing and publicity will be approximately $150,000. What legal structure should you choose? The land and the basic structure represent most of the needed investment. As the majority of the asset it also provides needed collateral in the event the project is not a success—an option that any lender must take into account. Thus, a favored approach is to structure the project in such a way as to set up a real estate entity holding the real assets, against which lenders can be attracted to commit funds at market rates. Equipment and start-up expenses will typically have to be funded separately, although often a fit out allowance can be included in the building cost to cover much of the sports package requirements. Where does the money come from? As lead on the project you have already invested the seed money necessary to perform the market study and prepare the business plan. Now that significant funds are required there are two main approaches, both of which should be explored. First of all you can gather together a real estate investor group willing to invest cash in the amount of at least 25% of the project, (continued on page 22) G O A L In d o o r • Oct.-Nov. 2002 • 21

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