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Proposed Arena in Tucson City of Tucson

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					  Feasibility Study Findings:



Proposed Arena
         in Tucson


              Presented to:




 City of Tucson

      January 28, 2007
January 28, 2007




Ms. Sarah Vavra
Department of Procurement
City of Tucson
255 West Alameda
Tucson, Arizona 85701


Dear Ms. Vavra:


Conventions, Sports & Leisure International (“CSL”) is pleased to present this report
regarding an analysis of the market, building program, financial, and cost potential for a
new multi-purpose arena in downtown Tucson. The attached report summarizes our
research and analyses and is intended to assist members of the City of Tucson and other
project representatives with their decisions regarding a new arena.

The information contained in this report is based on estimates, assumptions and other
information developed from research of the market, knowledge of the public assembly
facility industry and other factors, including certain information you have provided. All
information provided to us by others was not audited or verified and was assumed to be
correct. Because procedures were limited, we express no opinion or assurances of any
kind on the achievability of any projected information contained herein and this report
should not be relied upon for that purpose. Furthermore, there will be differences
between projected and actual results. This is because events and circumstances
frequently do not occur as expected, and those differences may be material.




                                       Conventions, Sports & Leisure International
      2121 W. Spring Creek Parkway, Suite 108 • Plano, TX 75023 • Telephone 972.491.6900 • Facsimile 972.491.6903
Ms. Sarah Vavra
January 28, 2007
Page 2 of 2



We sincerely appreciate the opportunity to assist you with this project, and would be
pleased to be of further assistance in the interpretation and application of the study’s
findings.


Very truly yours,




CSL International
Table of Contents




EXECUTIVE SUMMARY .......................................................................................................... i



I.       INTRODUCTION .......................................................................................................... 1



II.      OVERVIEW OF THE TUCSON MARKET ........................................................................ 4



III.     TUCSON ARENA HISTORICAL OPERATIONS ............................................................. 31



IV.      COMPARABLE FACILITIES ........................................................................................ 43



V.       COMPETITIVE AND LOCAL FACILITIES ..................................................................... 63



VI.      MARKET SURVEYS .................................................................................................. 71



VII. ESTIMATED EVENT DEMAND................................................................................... 85



VIII. BUILDING PROGRAM ANALYSIS ............................................................................ 107



IX.      ARENA PRO FORMA ANALYSIS ............................................................................. 125
        Executive Summary
I.      Introduction
II.     Overview of the Tucson Market
III.    Tucson Arena Historical Operations
IV.     Comparable Facilities                Executive Summary
V.      Competitive and Local Facilities
VI.     Market Surveys
VII.    Estimated Event Demand
VIII.   Building Program Analysis
IX.     Arena Pro Forma Analysis
Executive Summary


Tucson voters approved approximately $125 million in tax increment financing to fund
various development projects in downtown Tucson. In 2006, the life of the TIF district
was extended an additional twelve years, for a total of 22 years and $800 million dollars.
The entire downtown revitalization project, known as the Rio Nuevo Project, will focus
on development to bring out the history, culture, and tradition of Tucson. As a part of the
development plans, the City is considering the construction of a new arena to provide a
larger facility with modern amenities that can attract more events and patrons, creating a
critical mass to assist in supporting other Rio Nuevo initiatives. The Rio Nuevo Project
will also include development of museums, housing, theater restorations, open space,
additional retail and restaurant opportunities, new convention hotel rooms, improvements
to the existing Tucson Convention Center meeting and exhibition space, new
entertainment facilities, and various infrastructure improvements.

The City of Tucson retained CSL International (“CSL”) to provide a market and financial
analysis of a proposed new arena in downtown Tucson. The new arena would be
constructed near by to the current Tucson Convention Center (“TCC”) and would replace
the existing arena. The current arena was built in 1971 and has a seating capacity of
9,275 seats. It is one of two arenas in the Tucson market, along with University of
Arizona’s McKale Center, but it is the only arena that is marketed for commercial (non-
university) use. The TCC Arena serves as Tucson’s public arena holding various events
such as concerts, hockey games, family shows, circus acts, conventions, consumer and
trade shows, and graduations.

In order to assess the feasibility of
                                                                Study Methodology
the proposed arena, CSL reviewed
the historical operations of the
TCC Arena, reviewed local market                            Comparable
                                                             Comparable                 Competitive
                                                                                         Competitive
                                                              Arena                       Arena
demographic and socioeconomic                                  Arena
                                                              Analysis
                                                               Analysis
                                                                                           Arena
                                                                                         Analysis
                                                                                          Analysis
characteristics,           analyzed
comparable        and   competitive      Local Market                                                    Event
                                                                                                          Event
                                          Local Market                                                 Promoter
facilities, interviewed arena event      Characteristics
                                          Characteristics                                               Promoter
                                                                                                        Surveys
                                                                                                         Surveys
promoters, and surveyed local
corporations.
                                           Historical                Market Demand
                                                                     Market Demand                     Corporate
                                            Historical                                                  Corporate
                                           Analysis                        &&                           Surveys
                                            Analysis                                                     Surveys
                                                                        Building
                                                                         Building
Research results were used to                                           Program
                                                                         Program
estimate potential demand for the
proposed arena, define general
                                                                           Financial
building     program         elements                                       Financial
                                                                          Operations
                                                                           Operations
necessary      to     accommodate
demand, and estimate potential
financial operating results.



                                               i
Executive Summary (cont’d)


The following are key conclusions from a comprehensive, market-based study of the
viability of a new multi-purpose arena in downtown Tucson.

MARKET ANALYSIS

   •   The Tucson metropolitan area has approximately 891,220 people and is the 68th
       largest among the 323 metropolitan areas in the United States. A total of 942,634
       live within 50 miles of the proposed arena, an area comprising a majority of the
       arena’s primary and secondary market area and the area from which a majority of
       attendees are expected to be drawn.

   •   A comparison of the primary market sizes of 31 arenas that have been built since
       1995 with seating capacities of at least 8,000 seats indicates that Tucson’s
       population ranks eighth largest out of 32 markets.

   •   Income characteristics of the market may indicate a lower propensity to allocate
       discretionary income for entertainment as compared to other markets with new
       arenas. Despite these lower than average incomes, entertainment and sporting
       event spending in the market are relatively strong. The Tucson market ranks
       among the top markets with new arenas in terms of sports and entertainment
       spending

   •   The Tucson market has a relatively strong corporate base as compared to markets
       with new arenas, which could positively impact the ability to sell premium seating
       and sponsorships at the proposed arena, support multiple tenants and demand for
       corporate meetings, trade shows, conferences and other events.

   •   The local market is positively impacted by various groups that increase the
       amount of money spent in the local market and induce demand for sporting,
       entertainment and leisure activities. These groups consist of Mexican visitors that
       travel from across the border to visit the Tucson area, university students that
       attend the University of Arizona, and seasonal residents that reside in the Tucson
       area during the winter months.

   •   Currently, there is not another commercially-operated arena in the market.
       However, the proposed arena will face competition from existing sports and
       entertainment facilities in the local market primarily for concerts from local
       casino amphitheatres and Phoenix venues.

   •   A total of 250 random surveys were completed with local corporations to assess
       potential demand for a new arena. The two groups of corporations that were



                                            ii
Executive Summary (cont’d)


    surveyed included large corporate headquarters with annual sales of at least $5
    million and the second group consisted of small corporate headquarters with
    annual sales between $2.4 million to $4.9 million along with corporate branches.
    The following are key survey results:

           A majority of corporate respondents indicated that they do not have season
           tickets or premium seating at other venues in the Tucson and Phoenix
           markets. Specifically, 56 percent of large headquarters and over 70
           percent of small headquarters indicated that they did not currently have
           either seating option.

           Approximately 19 to 31 percent of corporate respondents indicated
           potential interest in leasing a private suite at a new arena, depending on
           the price.

           Approximately 26 to 30 percent of corporate respondents indicated
           potential interest in leasing a loge box at a new arena, depending on the
           price.

           Approximately 42 to 48 percent of corporate respondents indicated
           potential interest in leasing club seats at a new arena, depending on the
           price.

           In terms of potential events that could be hosted at a new arena,
           respondents indicated the most interest in attending concerts, family
           shows, University of Arizona Ice Cats hockey and arena football games.
           The least desired events included other non-sporting events and minor
           league hockey.

           Corporate interest in purchasing season tickets for minor league hockey at
           a new arena at a price of $15 per game ranged from 51 to 54 percent.

           Corporate interest in purchasing season tickets for arena football at a new
           arena at a price of $20 per game ranged from 54 to 60 percent.

           Corporate interest in advertising and sponsorship opportunities at a new
           arena ranged from 48 to 54 percent. The highest interest was in
           purchasing signage, videoboard advertising, or in-game promotions. The
           least desired advertising or sponsorship opportunities included arena
           naming rights and concourse naming rights.




                                        iii
Executive Summary (cont’d)


             Corporate interest in joining the Arena Founding Partners Program, which
             includes a package of arena signage, premium seating, and other
             advertising opportunities, ranged from 8 to 17 percent.

  •   According to minor league sports representatives contacted as a part of this study,
      the Tucson market size and location would likely be most attractive for a minor
      league hockey franchise in the American Hockey League (“AHL”) or in the
      ECHL, which are affiliated with the National Hockey League as an AAA league
      and an AA league, respectively. A Tucson minor league hockey franchise would
      provide an opportunity for affiliation with the NHL Phoenix Coyotes, who
      currently play at Glendale Arena in the Phoenix metropolitan area. However, it
      should be noted that four minor league hockey teams in the market have not lasted
      more than two years, mainly due to low season ticket sales and ownership quality.

  •   In addition to minor league tenant possibilities, it is expected that the UA Ice Cats
      hockey team will play their home games at a new arena. The University of
      Arizona club hockey team plays approximately 18 home games each year.

  •   According to arena event promoters (concerts, family shows, sporting events,
      etc.), the Tucson market area’s close proximity to Phoenix is attractive for the
      majority of touring acts that usually perform in Phoenix, as it provides a
      convenient and natural routing pattern for events. However, this close proximity
      may hinder performances coming to Tucson for those acts that prefer to perform
      at only one venue in the central Arizona region, comprising both the Phoenix and
      Tucson markets.

  •   Promoters indicated that the presence of casino amphitheatres in the market could
      hinder bookings at the new arena because the casinos have the flexibility to
      underwrite events with casino income in order to attract events and patrons to
      their casinos. However, the casinos’ event facilities offer less than 5,000 seats,
      which inhibits their ability to host certain concert acts which draw larger crowds.

  •   The physical, operational, and financial characteristics of 13 comparable facilities
      were analyzed in order to provide a benchmark from which to assess the potential
      operation for a new multi-purpose arena in Tucson. The following are key
      findings from comparable facilities:

             Comparable facilities have an average capacity of approximately 13,515
             seats, an average opening year of 2000 and an approximate average
             market population of 643,100 people.




                                            iv
Executive Summary (cont’d)


            Comparable arenas hosted an average of 115 events, ranging from a low
            of 64 events to a high of 164 events.

            In terms of non-tenant events, comparable facilities hosted an average of
            67 events, ranging from a low of 35 events to a high of 98 events. Non-
            tenant events typically included concerts, family shows, motor sports, high
            school sporting events, graduations, religious events, trade/consumer
            shows, and other sporting and non-sporting events.

            The average operating revenue and operating expenses generated by
            comparable facilities was $4.3 million and $3.2 million, respectively. The
            operating revenue ranged from a low of $1.9 million to a high of $8.5
            million, while the operating expenses ranged from a low of $1.9 million to
            a high of $6.1 million. The average net income was $1.1 million ranging
            from a low of a net loss of $291,000 to a high net income of $3.2 million.
            The average profit margin among the comparable facilities was 20
            percent.

            All of the comparable facilities have private suites. The average number
            of private suites is 28, ranging from a low of 11 to a high of 48. The
            average annual suite price is $39,123.

            Out of the 13 comparable facilities, ten have club seats. The average
            number of club seats was 1,038 at facilities with club seats, ranging from a
            low of 186 to a high of 3,300. The average annual club seat price was
            $1,185.

  •   The following table presents a summary of the estimated annual events and
      attendance that could be attracted to a new multi-purpose arena operating in
      downtown Tucson in a stabilized year of operations.




                                          v
Executive Summary (cont’d)


                                                            Estimated Events and Attendance
                                                   Proposed Multi-Purpose Arena in Downtown Tucson



                                                                   Average           Average
                                           Events                     Paid          Turnstile    Total Paid Attendance       Total Turnstile Attendance
Event Type                         Base Case      Best Case     Attendance        Attendance    Base Case        Best Case    Base Case         Best Case

Tenant Events:
   Minor League Hockey Franchise         40             40           4,500             6,500      180,000         180,000       260,000          260,000
   af2                                    8              8           5,500             6,500       44,000          44,000        52,000           52,000
   U of A Ice Cats                       18             18           2,000             2,300       36,000          36,000        41,400           41,400
     Subtotal                            66             66                                        260,000         260,000       353,400          353,400

Non-Tenant Events:
  Concerts                               12             16           6,563             6,825       78,750         105,000        81,900          109,200
  Rodeo/Equestrian/Other                  6              8           3,500             3,500       21,000          28,000        21,000           28,000
  Latino Shows                            5              8           6,000             6,200       30,000          48,000        31,000           49,600
  Ice Shows                               6              8           6,500             6,500       39,000          52,000        39,000           52,000
  Family Shows                           12             15           3,750             4,000       45,000          56,250        48,000           60,000
  Motor Sports                            3              4           5,750             5,750       17,250          23,000        17,250           23,000
  Other Sports                            6              8           5,000             5,000       30,000          40,000        30,000           40,000
  Graduations                             2              3           3,500             3,500        7,000          10,500         7,000           10,500
  Religious Events                        2              2           9,500             9,500       19,000          19,000        19,000           19,000
  TCC Shows                               8             10           5,000             5,000       40,000          50,000        40,000           50,000
    Subtotal                             62             82                                        327,000         431,750       334,150          441,300

Total                                   128            148                                        587,000         691,750       687,550          794,700




        •    As depicted above, it is estimated that a new multi-purpose arena operating in
             Tucson with minor league hockey, arena football, and Ice Cats hockey as the
             main tenants could host 128 to 148 events, drawing 587,000 to 691,750 paid
             attendees annually and 687,550 to 794,700 turnstile attendees annually.

        •    It is estimated that there will be 66 tenant events and 62 to 82 non-tenant events
             annually. Tenant events could attract an estimated 260,000 paid attendees
             annually and 353,400 turnstile attendees annually. In addition, it is estimated that
             non-tenant events could attract 327,000 to 431,500 paid attendees annually and
             334,150 to 441,300 turnstile attendees annually.



BUILDING PROGRAM

        •    The recommended physical characteristics of the proposed arena are based on the
             needs of possible tenants of the facility, physical characteristics of arenas located
             in similar markets and the requirements of other potential events that would likely
             use the proposed arena.

        •    A building program consisting of the following general elements is suggested
             based on market demand:




                                                                             vi
Executive Summary (cont’d)


             11,000 fixed seats for ice hockey with the capability of expanding to
             12,500 total seats for concerts and other events through use of portable
             seating;

             25,000 square foot arena floor capable of accommodating an ice sheet
             compatible for minor league hockey;

             3,000 to 3,500 square feet of sub-dividable meeting space (8 to 10 rooms);

             3,700 to 4,200 parking spaces within walking distance, including the
             existing parking that is available at the TCC complex;

             20 private suites;

             25 loge boxes;

             500 club seats; and,

             total arena square footage of approximately 300,000 square feet.


FINANCIAL OPERATIONS

  •   Potential financial operating results of the proposed arena were estimated based
      on the results of market analysis, industry trends, knowledge of the marketplace
      and historical financial results from comparable facilities.

  •   Several key assumptions were made in estimating potential revenues and
      expenses associated with the proposed arena including:

         •   The facility will contain 11,000 seats, expandable to 12,500 seats with
             temporary floor seating.

         •   The facility will be developed as a quality, state-of-the-art venue and
             would accommodate the needs of various user types.

         •   The facility will be owned by a public sector entity (i.e. City, Authority,
             etc.) and will be exempt from property taxes.

         •   There will not be a city-levied ticket tax on tickets sold at the new arena.




                                            vii
Executive Summary (cont’d)


         •   A minor league hockey team, an indoor football team, and the University
             of Arizona Ice Cats will serve as primary tenants and will be competitive
             within their respective leagues.

         •   A professional, competent and experienced facility management company
             will manage the facility.

         •   There will be no assumed operating synergies created with the Tucson
             Convention Center.

         •   The facility is aggressively marketed, providing competitive guarantees
             and, where applicable, rental rates.

         •   Ample parking and related infrastructure will be provided to accommodate
             demand, including 3,000 on-site spaces controlled by arena management.

         •   The Tucson Convention Center Arena no longer exists and the McKale
             Center is not marketed for outside events. Additionally, there are no
             significant or material changes in the supply, quality or marketing focus of
             other sports and entertainment venues in the marketplace.

  •   As shown in the following table, the proposed arena is estimated to generate
      operating revenues of approximately $5.2 million to $6.6 million and operating
      expenses of $3.6 million to $3.8 million, resulting in a net operating income of
      $1.7 million to $2.8 million, before capital reserve and debt allocations.




                                           viii
Executive Summary (cont’d)

                                                  Estimated Revenues and Expenses
                                                    Stablized Year of Operations


                                                                 Base Case                     Best Case
                                                                          Percentage                    Percentage
                                                         2008 Dollars    of Revenues   2008 Dollars    of Revenues
       OPERATING REVENUES
         Rent                                               $763,000          14.5%      $914,000           13.9%
         Premium Seating, net                                 988,000         18.8%      1,235,000          18.8%
         Suite Ticket Revenue                                 160,000          3.1%        211,000           3.2%
         Food and Beverage, net                               724,000         13.8%        884,000          13.4%
         Advertising and Sponsorships                         350,000           6.7%       400,000           6.1%
         Naming Rights                                        200,000           3.8%       250,000           3.8%
         Merchandise, net                                      78,000          1.5%        105,000           1.6%
         Parking, net                                         798,000         15.2%        988,000          15.0%
         Ticket rebates/facility fees                       1,184,000         22.6%      1,587,000          24.1%
            TOTAL REVENUES                                  5,245,000          100%      6,574,000         100.0%

       OPERATING EXPENSES
          Salaries & wages                                  1,425,000         27.2%      1,500,000          22.8%
          Utilities                                           850,000         16.2%        900,000          13.7%
          General & administrative                            400,000          7.6%        425,000           6.5%
          Insurance                                           125,000          2.4%        150,000           2.3%
          Repairs & maintenance                               150,000          2.9%        180,000           2.7%
          Contract Services                                   150,000          2.9%        165,000           2.5%
          Advertising                                          50,000          1.0%         75,000           1.1%
          Materials & supplies                                100,000          1.9%        125,000           1.9%
        * Base management fee                                 300,000          5.7%        300,000           4.6%

               TOTAL EXPENSES                               3,550,000         67.7%      3,820,000          58.1%

       INCOME FROM OPERATIONS BEFORE
         CAPITAL RESERVE AND DEBT                         $1,695,000          32.3%     $2,754,000          41.9%

       * Does not reflect upfront contribution.



   •     It should be noted that the income from operations presented herein is before any
         debt service payments related to facility construction and before any allocations to
         a capital reserve fund to pay for future capital projects as the arena continues to
         age.


This study is designed to assist project representatives in making informed decisions
regarding the development of the proposed arena. This report should be read in its
entirety to obtain the background, methods and assumptions underlying the findings.




                                                               ix
        Executive Summary
I.      Introduction
II.     Overview of the Tucson Market
III.    Tucson Arena Historical Operations
IV.     Comparable Facilities                I. Introduction
V.      Competitive and Local Facilities
VI.     Market Surveys
VII.    Estimated Event Demand
VIII.   Building Program Analysis
IX.     Arena Pro Forma Analysis
I. Introduction


Tucson voters approved approximately $800 million in tax increment financing to fund
various development projects in downtown Tucson. The entire downtown revitalization
project, known as the Rio Nuevo Project, will focus on development to bring out the
history, culture, and tradition of Tucson. As a part of the development plans, the City is
considering the construction of a new arena to provide a larger facility with modern
amenities that can attract more events and patrons, creating a critical mass to assist in
supporting other Rio Nuevo initiatives. The Rio Nuevo Project will also include
development of museums, theatre restorations, additional retail and restaurant
opportunities, a new convention hotel, expansion of the existing Tucson Convention
Center meeting and exhibition space, new entertainment facilities, and various
infrastructure improvements.

The City of Tucson retained CSL International (“CSL”) to provide a market and financial
analysis of a proposed new arena in downtown Tucson. The new arena would be
constructed adjacent to the current Tucson Convention Center (“TCC”) and would
replace the existing arena. The current arena was built in 1971 and has a seating capacity
of 9,275 seats. It is one of two arenas in the Tucson market, along with University of
Arizona’s McKale Center, but it is the only arena that is marketed for commercial (non-
university) use. The TCC Arena serves as Tucson’s public arena holding various events
such as concerts, hockey games, family shows, circus acts, conventions, consumer and
trade shows, and graduations.




                                            1
I. Introduction (cont’d)


In order to assess the market and financial analysis of a new arena in Tucson, CSL
performed the following tasks:

   •   Provided an overview of the historical operations of the current arena including
       utilization and financial operating results;

   •   Reviewed local market demographic and socioeconomic information within the
       Tucson MSA and 50-mile radius surrounding the proposed arena site, as well as a
       review of the impact that visitors from Mexico and seasonal resident population
       has on the Tucson market;

   •   Assembled and analyzed various physical, operating, and financial characteristics
       of comparable and competitive arenas;

   •   Conducted market surveys with corporations in the Tucson market to understand
       corporate interest in premium seating and sponsorship opportunities;

   •   Assessed potential event demand for a new arena including minor league sports
       tenant possibilities; and,

   •   Developed a financial and construction cost analysis of a new arena.


                                        Study Methodology


                                    Comparable
                                     Comparable                 Competitive
                                      Arena                      Competitive
                                       Arena                       Arena
                                                                    Arena
                                      Analysis
                                       Analysis                   Analysis
                                                                   Analysis


                 Local Market                                                    Event
                                                                                  Event
                  Local Market                                                 Promoter
                 Characteristics
                  Characteristics                                               Promoter
                                                                                Surveys
                                                                                 Surveys



                   Historical                Market Demand
                                             Market Demand                     Corporate
                    Historical                                                  Corporate
                   Analysis                        &&                           Surveys
                    Analysis                                                     Surveys
                                                Building
                                                 Building
                                                Program
                                                 Program




                                                  Financial
                                                   Financial
                                                  Operations
                                                   Operations




                                                       2
I. Introduction (cont’d)


The results of this analysis are designed to assess the viability of a new arena in
downtown Tucson including potential utilization, the appropriate building program, and
projected financial operating results. Accordingly, the report is divided into the
following sections:

   Executive Summary;
   I.     Introduction;
   II.    Overview of the Tucson Market;
   III.   Tucson Arena Historical Operations;
   IV.    Comparable Facilities;
   V.     Competitive and Local Facilities;
   VI.    Market Surveys;
   VII. Estimated Event Demand;
   VIII. Building Program Analysis; and,
   IX.    Arena Pro Forma.

This report outlines the key findings of the feasibility study for a proposed multi-purpose
arena to be located adjacent to the Tucson Convention Center. This study is designed to
assist project representatives in making informed decisions regarding the development of
the proposed multi-purpose arena. The full report should be read in its entirety to obtain
the background, methods and assumptions underlying the findings.




                                             3
        Executive Summary
I.      Introduction
II.     Overview of the Tucson Market
III.    Tucson Arena Historical Operations
                                             II. Overview of the Tucson
IV.     Comparable Facilities
                                                                 Market
V.      Competitive and Local Facilities
VI.     Market Surveys
VII.    Estimated Event Demand
VIII.   Building Program Analysis
IX.     Arena Pro Forma Analysis
II. Overview of the Tucson Market


An important component in assessing the potential success of a new multi-purpose arena
in Tucson is the demographic and socioeconomic profile of the local market. The
strength of a market in terms of its ability to attract events, attract patrons and generate
revenues is measured, to some extent, by the size of the regional market area population
and its income characteristics. Specific demographic and socioeconomic information that
can provide an indication of the ability of a market to support a new arena includes
population, households, median age and age distribution, household income,
entertainment and sports-related spending, education attainment, and corporate base.
Event promoters and minor league sports owners typically consider these factors when
selecting the appropriate markets for their events or teams.

The demographic and socioeconomic data presented in this report is based on the
anticipated primary and secondary markets of the proposed arena. The primary market is
the geographic area in which it is anticipated that the majority of attendees and corporate
partners are expected to originate. The size of the primary market can be influenced by
factors such as transportation systems, site accessibility, media coverage and competing
entertainment venues in the surrounding region. For purposes of this analysis, the
primary market is assumed to comprise the Tucson Metropolitan Statistical Area
(“MSA”). An MSA defines a county or group of counties having a large population
center and economic ties to adjacent communities. The Tucson MSA is comprised of all
of Pima County and includes cities such as Tucson, South Tucson, Marana and Oro
Valley, among others.

In addition to the assessment of
the primary market area, the
analysis presented herein also
includes an assessment of the
combined primary and secondary
market for the arena, which is
                                                                             50 Miles
anticipated to be within a 50-mile
radius from the proposed arena.
This represents a market within
an approximate one-hour drive
time and includes the market area
from which most attendees will
be drawn. Also, beyond the
traditional primary and secondary markets, the proposed arena will likely draw attendees
from across the Mexican border. As a result, the impact that Mexican visitors to the
region may have on the proposed arena has also been considered. Additional information
regarding the impact of the Mexican marketplace was obtained from a study entitled




                                             4
II. Overview of the Tucson Market (cont’d)


“The Economic Impacts of Mexican Visitors to Arizona: 2001” and written by Drs.
Alberta Charney and Vera Pavlakovich.

To provide a context in which to understand the impact that various demographic and
socioeconomic characteristics may have on the operations of the proposed arena, the
demographic and socioeconomic characteristics of Tucson have been compared to other
markets hosting new multi-purpose, minor league arenas with at least 8,000 seats.


Population

The level of population from which to draw can impact the ability of the proposed arena
to draw events and patrons. With more than five million people residing in Arizona, the
state is the twentieth most populous state in the nation. With approximately 890,000
residents, the Tucson metropolitan area is second only to the Phoenix-Mesa metropolitan
area in terms of population within the state and ranks as the nation’s 68th largest among
323 MSAs in the United States. The following table presents the historical and projected
population of the primary and secondary markets for the proposed multi-purpose arena.
                                                                              (1)
                                              Tucson Area Population

                                                                                    Tucson                 50-Mile
             Year                                                                    MSA                    Radius
             2009 Projection                                                        978,903               1,032,386
             2004 Estimate                                                          891,220                 942,634
             2000 Census                                                            821,119                 871,238
             1990 Census                                                            645,432                 683,687
             Projected annual growth rate (2004 to 2009)                               1.9%                   1.8%
             Historical annual growth rate (2000 to 2004)                              2.1%                   2.0%
             Historical annual growth rate (1990 to 2000)                              2.4%                   2.5%
           (1) In addition to the Tucson market and surrounding populations, the Tucson market attracts
               approximately 3.6 million Mexican visitors each year.
           Source: Claritas




                                                            5
II. Overview of the Tucson Market (cont’d)


Within the proposed arena’s primary market, there is a total population of 891,220. This
population is expected to grow at an average annual growth rate of 1.9 percent over the
next five years, resulting in a primary market population of 978,903 by 2009. The
growth rate of the primary market over the next five years is expected to be more than
double the national average.

In terms of the proposed arena’s primary and secondary markets (50-mile radius), there
are 942,634 residents within a 50-mile radius of central Tucson. The 50-mile radius area
has an expected annual growth rate of 1.8 percent over the next five years, growing to
over 1.0 million by 2009. It is important to note that this population level does not
account for the students at the University of Arizona, seasonal residents who reside in the
area during the winter, or the considerable number of Mexican visitors. Within 60 miles
of Tucson is the Mexican border city of Nogales, which has about 350,000 residents in
the city and the surrounding areas.

The exhibit shown on the left below illustrates the population density, or residents per
square mile, for the Tucson area. As illustrated, the darkest areas indicate the highest
density levels with at least 4,500 residents per square mile, while the lightest areas have
the lowest population density with less than 100 residents per square mile.

                    Tucson                                        Tucson
               Population Density                            Population Growth




                                             6
II. Overview of the Tucson Market (cont’d)


The illustration on the right on the previous page highlights the expected population
growth for the Tucson market. As illustrated in the exhibit, the darker shades depict
areas that have grown at higher growth rates from 1990 to 2000 with the lighter areas
showing sections of Tucson with little or no growth in population.

Tucson is one of the larger MSAs in the United States that does not have an NBA or
NHL franchise. The following exhibit lists the top 100 markets by population without a
NBA or NHL franchise. The exhibit provides the status of the largest arena in markets
that do not have a professional franchise (NBA or NHL tenant). The exhibit does not
include MSAs that are part of larger markets with professional teams such as Riverside,
California (part of the Los Angeles market).
                                                                      Arenas in Non-NBA/NHL Markets
                                                                    Total Seating Capacity of 8,000 or More


                                                                                                                   Seating
      MSA                          Facility                                          Market Size     Year Built   Capacity Status

      San Diego, CA                San Diego Sports Arena                                2,960,100        1966     15,000   Evaluating New Arena
      Baltimore, MD                1st Mariner Arena                                     2,635,600        1962     14,000   Evaluating New Arena
      Kansas City, MO              Sprint Center                                         1,821,200        2007     20,000   Building New Arena
      Las Vegas, NV                Thomas & Mack Center                                  1,774,900        1983     18,540   Multiple Venues
      Cincinnati, OH               US Bank Arena                                         1,675,500        1975     17,849   --
      Norfolk, VA                  Scope Arena                                           1,609,100        1971     13,300   Evaluating New Arena
      Austin, TX                   Frank Erwin Center                                    1,398,100        1977     16,042   Recently Renovated
      Greensboro, NC               Greensboro Coliseum                                   1,299,000        1959     23,830   Recently Renovated
      Hartford, CT                 Hartford Civic Center                                 1,173,300        1978     16,450   --
      Jacksonville, FL             Jacksonville Arena                                    1,170,500        2003     16,301   New Arena
      Grand Rapids, MI             Van Andel Arena                                       1,124,200        1996     12,864   New Arena
      Oklahoma City, OK            Ford Center                                           1,109,400        2002     20,817   New Arena
      Rochester, NY                Blue Cross Arena                                      1,105,200        1955     14,000   Recently Renovated
      Louisville, KY               Freedom Hall Coliseum                                 1,043,200        1956     19,169   Evaluating New Arena
      Richmond, VA                 Richmond Coliseum                                     1,032,300        1968     13,540   Recently Renovated
      Greenville, SC               Bi-Lo Center                                            991,900        1998     16,000   New Arena
      Providence, RI               Dunkin' Donuts Center                                   989,700        1972     14,572   Evaluating Renovation
      Fresno, CA                   Save Mart Center                                        971,800        2003     16,204   New Arena
      Birmingham, AL               B-J Convention Arena                                    933,200        1974     18,977   --
      Tucson, AZ                   Existing TCC Arena                                      891,220        1971      9,275   Evaluating New Arena
      Honolulu, HI                 Blaisdell Center                                        890,900        1964      8,733   --
      Albany, NY                   Pepsi Arena                                             881,500        1990     17,500   Announced Renovation Plans
      Tulsa, OK                    New Tulsa Arena                                         823,900        2005     19,000   Building New Arena
      Worcester, MA                Centrum Centre                                          770,900        1982     15,000   --
      Albuquerque, NM              Tingley Coliseum                                        734,000        1953     11,571   Evaluating New Arena
      Omaha, NE                    Qwest Center                                            733,000        2003     17,000   New Arena
      Syracuse, NY                 Oncenter Arena                                          732,400        1951      8,000   Receently Renovated
      El Paso, TX                  El Paso Convention Center Arena                         707,600        1945      8,000   Evaluating New Arena
      Gary, IN                     Genesis Convention Center Arena                         633,300        1979      8,200   --
      Baton Rouge, LA              Riverside Centroplex                                    616,000        1977     11,040   --
      Little Rock, AR              Alltel Arena                                            596,200        1999     19,000   New Arena
      Mobile, AL                   Mobile Civic Center                                     551,100        1965     10,676   --

      Average (not including Tucson)                                                     1,144,806        1978     15,199

      Note: Only lists markets with an arena with a seating capacity of 8,000 or more.



As shown, the Tucson MSA is the 20th largest in the country without a professional sports
tenant (NBA or NHL). Most of the top United States markets have either built a new
arena or significantly renovated their older venue. Only three MSAs that are larger than
Tucson have not renovated or developed new arenas. The increased focus on new or
renovated arenas exemplifies the importance of providing state-of-the-art amenities in
order to compete with other communities to attract various touring acts.


                                                                                             7
II. Overview of the Tucson Market (cont’d)


In assessing the population of the proposed arena’s market, it is also important to
understand the local market population in the context of markets with comparable arenas.
The following exhibit presents a list of new multi-purpose, minor league arenas that have
opened since 1995 with seating capacities of at least 8,000 seats.
                                                     New Arenas Opened Since 1995 1
                                                 Concert Seating Capacities of 8,000 or More


                                                                          MSA         Year        Seating Capacity
Venue                                     Location                   Population     Opened      Fixed      Hockey    Concert

Ford Center                               Oklahoma City, OK           1,140,319        2002    11,100      18,178    20,817
Alltel Arena                              North Little Rock, AR         632,290        1999    14,000      16,000    19,000
Wells Fargo Arena                         Des Moines, IA                483,083        2005    13,581      15,585    17,170
Qwest Center                              Omaha, NE                     748,102        2003    15,500      14,700    17,000
Save Mart Center                          Fresno, CA                    853,658        2003    12,363      14,224    16,182
Jacksonville Veterans Memorial Arena      Jacksonville, FL            1,221,806        2003    13,201      13,141    16,000
Bi-Lo Center                              Greenville, SC                585,298        1998    13,000      14,000    15,000
Atlantic City Boardwalk Hall              Atlantic City, NJ             365,536        2001     9,643      10,900    13,800
Crown Coliseum                            Fayetteville, NC              303,782        1997    10,000      10,100    13,500
CenturyTel Center                         Bossier City, LA              380,015        2000    12,440      12,440    13,200
Gwinnett Center                           Duluth, GA                  4,556,413        2003    11,600      13,000    13,000
Spokane Arena                             Spokane, WA                   433,726        1995    11,114      11,000    12,500
Van Andel Arena                           Grand Rapids, MI              768,280        1996    10,706      10,835    12,500
Verizon Wireless Arena                    Manchester, NH                398,500        2001     8,800      10,000    11,000
Wachovia Center at Casey Plaza            Wilkes-Barre, PA            1,693,000        1999     8,300       8,500    10,500
Sovereign Bank Arena                      Trenton, NJ                   364,545        1999     8,100       8,100    10,500
American Bank Center                      Corpus Christi, TX            409,361        2004     8,156       8,156    10,500
Tyson Events Center                       Sioux City, IA                123,579        2003        n/a      6,735    10,110
Resch Center                              Green Bay, WI                 236,147        2002        n/a      8,500    10,000
Giant Center                              Hershey, PA                   641,592        2002    10,500      10,500    10,000
Arena at Harbor Yard                      Bridgeport, CT                905,906        2001        n/a      8,500    10,000
Rabobank Arena                            Bakersfield, CA               713,645        1998     8,000       8,641    10,000
Everett Events Center                     Everett, WA                 2,510,743        2003        n/a      8,200    10,000
DeSoto County Civic Center                Southaven, MS               1,179,117        2000     6,500       8,300    10,000
Laredo Entertainment Center               Laredo, TX                    217,923        2002     8,100       8,065     9,622
Ford Arena                                Beaumont, TX                  384,714        2003        n/a      8,200     9,100
Sovereign Center                          Reading, PA                   388,557        2001     7,200       7,000     9,000
World Arena                               Colorado Springs, CO          552,789        1995     4,500       7,400     9,000
Mid-America Center                        Council Bluff, IA             748,102        2002        n/a      6,700     9,000
Germain Arena                             Estero, FL                    503,053        1998        n/a      7,181     8,000
Orleans Arena                             Las Vegas, NV               1,833,439        2003     9,000          n/a       n/a
Average                                                                847,646         2001    10,225      10,426    12,200
Tucson Convention Center Arena            Tucson, AZ                      891,220
1 Excludes university-only and professional (NBA or NHL) arenas.



A total of 31 arenas have been identified that have opened since 1995 and have a seating
capacity for concerts of at least 8,000 seats. The venue capacities range from 8,000 to a
high of 20,817. The venue’s capacity is primarily impacted by a number of variables
including the needs of the facility’s tenant(s).




                                                                      8
II. Overview of the Tucson Market (cont’d)


The following exhibit summarizes the MSA population for markets with arenas built
since 1995.
                                                                             Population
                                                                     New Arenas Opened Since 1995
                                                                     Metropolitan Statistical Areas




                               Gwinnett Center, (Duluth, GA)                                                                                                        4,556
                         Everett Events Center, (Everett, WA)                                                                  2,511
                             Orleans Arena, (Las Vegas, NV)                                                    1,833
     Jacksonville Veterans Memorial Arena, (Jacksonville, FL)                                      1,222
               DeSoto County Civic Center, (Southaven, MS)                                        1,179
                                 Ford Arena, (Beaumont, TX)                                       1,140
                      Arena at Harbor Yard, (Bridgeport, CT)                                906
                       Proposed Tuscon Arena, (Tuscon, AZ)                                  891
                              Save Mart Center, (Fresno, CA)                                854
                        Van Andel Arena, (Grand Rapids, MI)                           768
                     Mid-America Center, (Council Bluff, IA)                          748
                                 Qwest Center, (Omaha, NE)                            748
                                                                                                           Tucson Market Population:            891,220
                          Rabobank Arena, (Bakersfield, CA)                           714
                                                                                                           Tucson Market Rank:                8 out of 32
                                 Giant Center, (Hershey, PA)                        642
                                                                                                           Average Market Size:                  815,000
                        Alltel Arena, (North Little Rock, AR)                       632
                                                                                                           Median Market Size:                  519,000
         Wachovia Center at Casey Plaza, (Wilkes-Barre, PA)                         613
                               Bi-Lo Center, (Greenville, SC)                   585
                        World Arena, (Colorado Springs, CO)                     553
                                 Germain Arena, (Estero, FL)                    503
                         Wells Fargo Arena, (Des Moines, IA)                   483
                              Spokane Arena, (Spokane, WA)                    434
                 American Bank Center, (Corpus Christi, TX)
                                                                              409

                   Verizon Wireless Arena, (Manchester, NH)                   399
                             Sovereign Center, (Reading, PA)                  389
                           Ford Center, (Oklahoma City, OK)                385
                        CenturyTel Center, (Bossier City, LA)                 380
             Atlantic City Boardwalk Hall, (Atlantic City, NJ)            366
                         Sovereign Bank Arena, (Trenton, NJ)              365
                          Crown Coliseum, (Fayetteville, NC)             304
                              Resch Center, (Green Bay, WI)             236
                   Laredo Entertainment Center, (Laredo, TX)            218
                                                                       124
                        Tyson Events Center, (Sioux City, IA)


                                                                 0      500          1,000        1,500      2,000     2,500      3,000   3,500   4,000     4,500     5,000

                                                                                                           Population (in thousands)

                                                      Tucson, AZ Market
                                                      Venues discussed in more detail in Comparable Facilities Section
                                                      Other new venue markets


                             Source: Claritas, Inc.



As illustrated, Tucson’s population of 891,220 would rank as the eighth largest out of 32
markets that have recently built new arenas. Markets with comparable arenas ranged in
population from a low of 124,000 for Sioux City, Iowa (Tyson Events Center) to a high
of 4.6 million in Duluth, Georgia (Gwinnett Center), a suburb of Atlanta, Georgia. The
average market size for comparable new arenas is 815,000 and the median market
population is 519,000.




                                                                                             9
II. Overview of the Tucson Market (cont’d)


Households

The number of households in an area is also an important factor in assessing the market
potential for the proposed multi-purpose arena. The number of households in a market
provides an indication of the number of buying units in a specific area. The table below
presents the estimated number of households for the Tucson market area.

                                            Tucson Area Households

                                                                     Tucson    50-Mile
               Year                                                   MSA       Radius

               2009 Projection                                       385,968   408,167
               2004 Estimate                                         351,220   372,119
               2000 Census                                           323,528   343,560
               1990 Census                                           253,733   268,175

               Projected annual growth rate (2004 to 2009)             1.9%      1.9%
               Historical annual growth rate (2000 to 2004)            2.1%      2.0%
               Historical annual growth rate (1990 to 2000)            2.5%      2.5%

              Source: Claritas



As shown, the number of households within the MSA and a 50-mile radius of the
proposed arena are each expected to grow at an annual average growth rate of 1.9 percent
over the next five years. By 2009, it is projected that there will be 385,968 households
within the Tucson MSA and 408,167 within a 50-mile radius of the proposed arena.

The exhibit on the following page illustrates the number of households in markets with
new comparable arenas.




                                                          10
II. Overview of the Tucson Market (cont’d)
                                                                             Households
                                                                     New Arenas Opened Since 1995
                                                                      Metropolitan Statistical Area



                           Gwinnett Center, (Duluth, GA)                                                                                                       1,657
                    Everett Events Center, (Everett, WA)                                                                    1,002
                         Orleans Arena, (Las Vegas, NV)                                                      686
 Jacksonville Veterans Memorial Arena, (Jacksonville, FL)                                          473
                             Ford Arena, (Beaumont, TX)                                          449
           DeSoto County Civic Center, (Southaven, MS)                                           437
                   Proposed Tuscon Arena, (Tuscon, AZ)                                     351
                  Arena at Harbor Yard, (Bridgeport, CT)                               332
                             Qwest Center, (Omaha, NE)                               289
                 Mid-America Center, (Council Bluff, IA)                          284
                   Van Andel Arena, (Grand Rapids, MI)                               284
                          Save Mart Center, (Fresno, CA)                           268
     Wachovia Center at Casey Plaza, (Wilkes-Barre, PA)                           255
                             Giant Center, (Hershey, PA)                          255
                    Alltel Arena, (North Little Rock, AR)                        251
                           Bi-Lo Center, (Greenville, SC)                       229                                Tucson Market Households:           351,220
                      Rabobank Arena, (Bakersfield, CA)                         219                                Tucson Market Rank:              7 out of 32
                             Germain Arena, (Estero, FL)                        216                                Average Market Size:                306,000
                    World Arena, (Colorado Springs, CO)                        205                                 Median Market Size:                 224,000
                    Wells Fargo Arena, (Des Moines, IA)                       190
                         Spokane Arena, (Spokane, WA)                     170
               Verizon Wireless Arena, (Manchester, NH)
                                                                          152
                    CenturyTel Center, (Bossier City, LA)                147
                         Sovereign Center, (Reading, PA)                  145
             American Bank Center, (Corpus Christi, TX)                  144
         Atlantic City Boardwalk Hall, (Atlantic City, NJ)               141
                       Ford Center, (Oklahoma City, OK)                  141
                    Sovereign Bank Arena, (Trenton, NJ)                131
                      Crown Coliseum, (Fayetteville, NC)              109
                          Resch Center, (Green Bay, WI)               91
               Laredo Entertainment Center, (Laredo, TX)           57
                    Tyson Events Center, (Sioux City, IA)
                                                                   46


                                                             0          200            400             600    800       1,000       1,200   1,400      1,600      1,800

                                                                                                       Households (in thousands)
                                                         Tucson, AZ Market
                                                         Venues discussed in more detail in Comparable Facilities Section
                                                         Other new venue markets
                                                         Source: Claritas, Inc.



The number of households in the Tucson ranks seventh out of 32 markets with new
comparable arenas. The average number of households in markets with new arenas is
306,000 and the median number of households is 224,000.




                                                                                                 11
II. Overview of the Tucson Market (cont’d)


Age

Another demographic characteristic that can be important to the overall viability of the
proposed multi-purpose arena is the age of the local populace. Generally, sports and
entertainment events attract patrons of various ages with the core group of patrons
clustered from the ages of 15 to 44. The following exhibit presents the percentage of
total population by age for the Tucson market area.

                                   Tucson Area Age Distribution

                                                       Tucson         50-Mile
                Age Distribution                        MSA            Radius

                0 to 14 years                           20.6%           20.5%
                15 to 44 years                          42.0%           41.3%
                45 to 64 years                          23.5%           23.6%
                65 and over                             14.0%           14.6%

                Median Age                                36.0            36.4
                Average Age                               37.3            37.7

                Source: Claritas
                                                                      Tucson
                                                                  Age Distribution
As depicted in the table above,
approximately 42 percent of the Tucson
MSA population is between the ages of 15
and 44. The median age of residents ranges
from 36.0 to 36.4 for the MSA and 50-mile
radius, respectively. In comparison, the
median age of residents in the United States
is 35.8.

The exhibit to the right illustrates the age
distribution of residents within the
immediate market area of the proposed
arena. The darker areas are characterized by
an older population with the darkest areas
having median ages of 40 years or greater.
The lighter areas are characterized by
younger populations with the lightest area
having a median age population under 25
years.




                                                12
II. Overview of the Tucson Market (cont’d)


The exhibit below illustrates the median age of markets with comparable arenas.
                                                                                       Median Age
                                                                               New Arenas Opened Since 1995
                                                                               Metropolitan Statistical Areas



               Laredo Entertainment Center, (Laredo, TX)                                                                            26.9
                          Save Mart Center, (Fresno, CA)                                                                                   30.1
                      Crown Coliseum, (Fayetteville, NC)                                                                                    30.5
                   Centennial Gardens, (Bakersville, CA)                                                                                    30.7
                          Gwinnett Center, (Duluth, GA)                                                                                             33.6
                    World Arena, (Colorado Springs, CO)                                                                                                 33.8
                   Van Andel Arena, (Grand Rapids, MI)                                                                                                  33.9
           DeSoto County Civic Center, (Southaven, MS)                                                                                                   34.0
                 Mid-America Center, (Council Bluff, IA)                                                                                              34.4
                             Qwest Center, (Omaha, NE)                                                                                              34.4
                    Tyson Events Center, (Sioux City, IA)                                                                                               34.7
             American Bank Center, (Corpus Christi, TX)                                                                                                 34.7
                       Ford Center, (Oklahoma City, OK)                                                                                                  34.9
                          Resch Center, (Green Bay, WI)                                                                                               35.2
                                                                                                                                      Tucson Market Median Age:          36.0 years
                         Orleans Arena, (Las Vegas, NV)                                                                               Tucson Market Rank:
                                                                                                                                                      35.4     12th oldest out of 32
                                                                                                                                      Average Market Age:
                                                                                                                                                      35.4               35.5 years
                    Wells Fargo Arena, (Des Moines, IA)
                                                                                                                                      Median Market Age:                 35.4 years
                    CenturyTel Center, (Bossier City, LA)                                                                                                 35.4
                    Alltel Arena, (North Little Rock, AR)                                                                                                 35.5
 Jacksonville Veterans Memorial Arena, (Jacksonville, FL)                                                                                                  35.9
                   Proposed Tuscon Arena, (Tuscon, AZ)                                                                                                     36.0
                         Spokane Arena, (Spokane, WA)                                                                                                          36.0
                           Bi-Lo Center, (Greenville, SC)                                                                                                       36.2
                    Everett Events Center, (Everett, WA)                                                                                                       36.5
                             Ford Arena, (Beaumont, TX)                                                                                                        36.5
                    Sovereign Bank Arena, (Trenton, NJ)                                                                                                         36.8
               Verizon Wireless Arena, (Manchester, NH)                                                                                                         36.9
                  Arena at Harbor Yard, (Bridgeport, CT)                                                                                                          38.0
                         Sovereign Center, (Reading, PA)                                                                                                           38.1
                             Giant Center, (Hershey, PA)                                                                                                            39.1
         Atlantic City Boardwalk Hall, (Atlantic City, NJ)                                                                                                             39.2
     Wachovia Center at Casey Plaza, (Wilkes-Barre, PA)                                                                                                                    41.1
                                                                                                                                                                                       44.9
                             Germain Arena, (Estero, FL)


                                                             0             5              10      15          20          25          30           35             40              45          50

                                                                                                           Median Age (in years)
                                                                 Tucson, AZ Market
                                                                 Venues discussed in more detail in Comparable Facilities Section
                                                                 Other new venue markets


                                                                 Source: Claritas, Inc.




As illustrated above, Tucson’s median age of 36.0 years ranks as the 12th oldest of the 32
markets. Markets with new arenas ranged in median age from a low of 26.9 years in
Laredo, Texas (Laredo Entertainment Center) to a high of 44.9 years in Estero, Florida
(Germain Arena). The average median age for comparable new arenas is 35.5 years.




                                                                                                 13
II. Overview of the Tucson Market (cont’d)


Income

An important socioeconomic variable that can be indicative of the market potential for
the proposed arena is household income. Household income can be used to measure a
market’s ability to purchase tickets, concessions, novelties, parking and other such items.

The exhibit below indicates the percentage of households by income level as well as
median, average and per capita household incomes of the local market area.

                                 Tucson Area Income Distribution

                                                               Tucson           50-Mile
           Household Income Distribution                        MSA              Radius

           Less than $15,000                                   16.0%              16.0%
           $15,000 to $24,999                                  13.3%              13.3%
           $25,000 to $34,999                                  14.2%              14.2%
           $35,000 to $49,999                                  16.7%              16.7%
           $50,000 to $74,999                                  18.2%              18.2%
           $75,000 to $99,999                                   9.8%               9.8%
           More than $100,000                                  11.8%              11.7%

           Median Household Income                           $40,817           $40,813
           Average Household Income                          $55,450           $55,447
           Per Capita Income                                 $22,162           $22,197

           Source: Claritas



As shown, median household income is                                    Tucson
                                                                   Income Distribution
$40,817 in the MSA and $40,813 within a 50-
mile radius, respectively. In comparison, the
median household income in the United States
is $42,280. It should be noted that any
comparison of household incomes among
different geographic regions should consider
the cost of living characteristics of an area.
Tucson’s cost of living index is 98.1, which is
slightly lower than the U.S. index average of
100.

The illustration on the right shows the income
distribution of the immediate Tucson market
area. The darker shades denote areas of higher
income while the lighter shades denote areas
with lower incomes. The relatively high


                                                14
II. Overview of the Tucson Market (cont’d)


incomes in the areas to the west, north, and northwest of the proposed arena indicate that
the market may have a higher propensity to allocate discretionary dollars towards
sporting and entertainment events. However, the immediate area surrounding the
proposed arena and most of central Tucson have lower income areas.

The following exhibit presents a comparison of the median household income of markets
hosting multi-purpose, minor league arenas that have opened since 1995. The median
incomes for each market listed have been adjusted for cost of living considerations.
                                                                                                                           1
                                                                                       Median Household Income
                                                                                      New Arenas Opened Since 1995
                                                                                      Metropolitan Statistical Areas




                 Arena at Harbor Yard, (Bridgeport, CT)                                                                                                                             $65,538
                   Sovereign Bank Arena, (Trenton, NJ)                                                                                                                 $57,657
              Verizon Wireless Arena, (Manchester, NH)                                                                                                             $54,673
                         Gwinnett Center, (Duluth, GA)                                                                                                           $53,483
                   World Arena, (Colorado Springs, CO)                                                                                                         $52,293
                         Resch Center, (Green Bay, WI)                                                                                                         $52,027
                   Wells Fargo Arena, (Des Moines, IA)                                                                                                        $51,387
                Mid-America Center, (Council Bluff, IA)                                                                                                      $50,136
                            Qwest Center, (Omaha, NE)                                                                                                        $50,136
                        Sovereign Center, (Reading, PA)                                                                                                  $48,199
                            Giant Center, (Hershey, PA)                                                                                                  $48,100
                  Van Andel Arena, (Grand Rapids, MI)                                                                                                    $47,893
Jacksonville Veterans Memorial Arena, (Jacksonville, FL)                                                                                                 $47,628
                   Everett Events Center, (Everett, WA)                                                                                                  $47,592
                            Germain Arena, (Estero, FL)                                                                                        $45,438
          DeSoto County Civic Center, (Southaven, MS)                                                                                          $45,270
                   Tyson Events Center, (Sioux City, IA)                                                                                      $44,415
                                                                                                                               Tucson Market Median Income:
                                                                                                                                              $44,414                        $40,817
                   Alltel Arena, (North Little Rock, AR)
                                                                                                                               Tucson Market Rank:
                                                                                                                                              $44,334                  25th out of 32
            American Bank Center, (Corpus Christi, TX)
                                                                                                                                              Income:
                                                                                                                               Average Median$43,821                         $46,515
                      Ford Center, (Oklahoma City, OK)
                                                                                                                               Median Median Income:                         $45,354
                        Orleans Arena, (Las Vegas, NV)                                                                                      $43,149
                          Bi-Lo Center, (Greenville, SC)                                                                                  $41,737
                     Crown Coliseum, (Fayetteville, NC)                                                                                        $41,625
        Atlantic City Boardwalk Hall, (Atlantic City, NJ)                                                                                   $41,427
                  Proposed Tuscon Arena, (Tuscon, AZ)                                                                                      $40,817
                            Ford Arena, (Beaumont, TX)                                                                                    $40,332
                        Spokane Arena, (Spokane, WA)                                                                                    $38,915
    Wachovia Center at Casey Plaza, (Wilkes-Barre, PA)                                                                                $37,830
                   CenturyTel Center, (Bossier City, LA)                                                                              $37,791
                         Save Mart Center, (Fresno, CA)                                                                               $37,384
                     Rabobank Arena, (Bakersville, CA)                                                                            $35,047
              Laredo Entertainment Center, (Laredo, TX)                                                                          $34,360


                                                            $0                $10,000          $20,000          $30,000           $40,000          $50,000         $60,000         $70,000

                                                                 Tucson, AZ Market                        Median Income (in dollars)
                                                                 Venues discussed in more detail in Comparable Facilities Section
                                                                 Other new venue markets

                                                                 1
                                                                     Median incomes have been adjusted for cost of living to the Tucson MSA.
                                                                 Source: Claritas, Inc.




As illustrated above, Tucson’s median household income of $40,817 ranks 25th out of 32
markets. Markets with new arenas ranged in median household income, which was
adjusted by the cost of living index to Tucson dollars, from a low of $34,360 for the
Laredo Entertainment Center in Laredo, Texas, to a high of $65,538 for the Arena at



                                                                                                          15
II. Overview of the Tucson Market (cont’d)


Harbor Yard in Bridgeport, Connecticut. The average and median household median
incomes for comparable new arenas are $46,515 and $45,354, respectively.

Entertainment and Sporting Event Spending

Along with the total amount of income that each household generates, it is important to
understand the amount of money being spent by patrons in the market on entertainment
and sporting events or attractions.

The chart on the following page presents a comparison of the per capita entertainment
dollars spent in the Tucson market and comparable markets hosting arenas that have
opened since 1995 with seating capacities of at least 8,000 seats.

                                                                         Per Capita Entertainment Spending
                                                                     Markets With New Arenas Opened Since 1995
                                                                            Metropolitan Statistical Areas



                   Arena at Harbor Yard (Bridgeport, CT)                                                                                                                    $41.16
                     Sovereign Bank Arena (Trenton, NJ)                                                                                                           $37.26
               Verizon Wireless Arena, (Manchester, NH)                                                                                                    $34.98
                         Sovereign Center, (Reading, PA)                                                                                                   $34.96
                           Gwinnett Center, (Duluth, GA)                                                                                                 $33.44
                    Everett Events Center, (Everett, WA)                                                                                              $31.93
         Atlantic City Boardwalk Hall, (Atlantic City, NJ)                                                                                        $30.37
 Jacksonville Veterans Memorial Arena, (Jacksonville, FL)                                                                                $26.92
            DeSoto County Civic Center (Southaven, MS)                                                                                 $26.30
                         Orleans Arena, (Las Vegas, NV)                                                                              $25.76
                       Ford Center, (Oklahoma City, OK)                                                                             $24.88
                   Van Andel Arena, (Grand Rapids, MI)                                                                            $24.47
                    World Arena (Colorado Springs, CO)                                                               $21.55
                                                                                                           Tucson Market Entertainment Spending:
                                                                                                                     $21.24                                              $18.09
               Mid-American Center (Council Bluffs, IA)                                                    Tucson Market Rank:                                    22nd out of 32
                    Wells Fargo Arena, (Des Moines, IA)                                                               $21.18
                                                                                                           Average Entertainment Spending:
                                                                                                                     $21.07                                              $22.49
                             Germain Arena, (Estero, FL)                                                   Median Entertainment Spending:
                                                                                                                        $20.18                                           $21.07
                          Resch Center, (Green Bay, WI)
                             Qwest Center, (Omaha, NE)                                                                $20.14
                             Giant Center, (Hershey, PA)                                                             $19.65
                           Bi-Lo Center, (Greenville, SC)                                                          $18.81
                    Alltel Arena, (North Little Rock, AR)                                                        $18.19
                   Proposed Tuscon Arena, (Tuscon, AZ)                                                           $18.09
                         Spokane Arena, (Spokane, WA)                                                         $17.20
                    Tyson Events Center, (Sioux City, IA)                                                  $16.00
                      Crown Coliseum, (Fayetteville, NC)                                                 $15.32
                    CenturyTel Center, (Bossier City, LA)                                                $15.18
                             Ford Arena, (Beaumont, TX)                                                 $14.85
             American Bank Center, (Corpus Christi, TX)                                               $14.68
      Wachovia Center at Casey Plaza (Wilkes-Barre, PA)                                              $14.35
                          Save Mart Center, (Fresno, CA)                                           $13.15
                      Rabobank Arena (Bakersfield, CA)                                              $12.94
               Laredo Entertainment Center, (Laredo, TX)
                                                                                         $9.13


                                                             $0.0        $5.0        $10.0         $15.0        $20.0         $25.0      $30.0         $35.0        $40.0      $45.0

                                                                                                 Per Capita Entertainment Spending
                                                               Tucson, AZ Market
                                                               Venues discussed in more detail in Comparable Facilities Section
                                                               Other new venue markets

                                                   Source: Claritas, Inc.




                                                                                                   16
II. Overview of the Tucson Market (cont’d)


As illustrated above, the Tucson market’s per capita entertainment spending of $18.09
ranks 22nd out of 32 markets. Markets with comparable arenas ranged in spending from
a high of $41.14 at in Bridgeport, Connecticut (Arena at Harbor Yard) to a low of $9.13
in Laredo, Texas (Laredo Event Center). The average market spending for entertainment
is $22.49 and the median amount is $21.07. Four of the top six markets in terms of
spending are markets that host professional sports, which in turn directly impacts the
level of entertainment spending in the marketplace.

The chart on the following page presents a comparison of the annual spending for
admissions to sporting events in markets with comparable arenas.
                                                                                                   Sports Spending
                                                                                      Markets With New Arenas Opened Since 1995
                                                                                             Metropolitan Statistical Areas


                    Everett Events Center, (Everett, WA)                                                                                                                                         $68.3
                  Arena at Harbor Yards (Bridgeport, CT)                                                                                                                             $62.7
 Jacksonville Veterans Memorial Arena, (Jacksonville, FL)                                                                                                                 $56.8
            DeSoto County Civic Center (Southaven, MS)                                                                                                                  $55.5
                         Orleans Arena, (Las Vegas, NV)                                                                                                                $54.3
                    Sovereign Bank Arena, (Trenton, NJ)                                                                                                           $51.9
                       Ford Center, (Oklahoma City, OK)                                                                                                          $51.1
                   Van Andel Arena, (Grand Rapids, MI)                                                                                                         $50.2
               Verizon Wireless Arena, (Manchester, NH)                                                                                                $45.8
                           Gwinnett Center, (Duluth, GA)                                                                                            $44.0
                    World Arena (Colorado Springs, CO)                                                                                        $40.3
                    Wells Fargo Arena, (Des Moines, IA)                                                                                     $38.9
                 Mid-America Center (Council Bluffs, IA)                                                                                   $38.8
                                                                                                                                   Tucson Market Sporting Events Spending:           $31.56
                             Germain Arena, (Estero, FL)                                                                                   $38.2
                                                                                                                                   Tucson Market Rank:                            21st of 32
                             Qwest Center, (Omaha, NE)                                                                                   $36.8
                                                                                                                                   Average Sporting Events Spending:                 $38.19
                          Resch Center, (Green Bay, WI)                                                                                 $36.4
                                                                                                                                   Median Sporting Events Spending:
                                                                                                                                      $35.1                                          $36.41
                             Giant Center, (Hershey, PA)
         Atlantic City Boardwalk Hall, (Atlantic City, NJ)                                                                             $34.6
                           Bi-Lo Center, (Greenville, SC)                                                                            $33.3
                    Alltel Arena, (North Little Rock, AR)                                                                          $32.4
                   Proposed Tuscon Arena, (Tuscon, AZ)                                                                           $31.6
                         Spokane Arena, (Spokane, WA)                                                                          $29.8
                         Sovereign Center (Reading, PA)                                                                       $29.8
                    Tyson Events Center, (Sioux City, IA)                                                                $27.5
                      Crown Coliseum, (Fayetteville, NC)                                                                $26.6
                    CenturyTel Center, (Bossier City, LA)                                                               $26.4
                             Ford Arena, (Beaumont, TX)                                                               $26.1
             American Bank Center, (Corpus Christi, TX)                                                               $25.9
      Wachovia Center at Casey Plaza (Wilkes-Barre, PA)                                                            $24.5
                          Save Mart Center, (Fresno, CA)                                                          $23.3
                      Rabobank Arena (Bakersfield, CA)                                                           $23.0
               Laredo Entertainment Center, (Laredo, TX)                                        $16.0

                                                         $0.0                  $10.0               $20.0                 $30.0           $40.0          $50.0            $60.0                 $70.0

                                                                                                                   Per Capita Sports Spending
                                                             Tucson, AZ Market
                                                             Venues discussed in more detail in Comparable Facilities Section
                                                             Other new venue markets


                                                             Source: Claritas, Inc.




                                                                                                                 17
II. Overview of the Tucson Market (cont’d)


On a per capita basis, sporting event spending for the Tucson market is approximately
$31.60, lower than average of the comparable markets at $38.15 and is also lower than
the median of the comparable markets at $36.41. The market of the Everett Events
Center (Seattle, Washington) has the highest per capita spending at $68.30, which is due
to the presence of professional sports teams in Seattle, and the lowest is the market of the
Laredo Entertainment Center at $16.00.


Education

Education level is one of the most important drivers of economic welfare in metropolitan
areas. Metropolitan regions with highly educated workforces tend to fare significantly
better in income growth than do regions with fewer educated workers, and the gap
between the two is growing wider in various regions of the United States.

Tucson Unified School District is a pre-kindergarten through 12th grade district with an
enrollment of approximately 60,000 students. The district operates over 100 regular
public schools with several of those schools having classes to meet specialized student
needs. In addition, the immediate area offers a public four-year college, the University of
Arizona (UA), which is located just blocks to the east of the proposed arena site. UA
offers over 150 undergraduate degrees and over 200 masters, doctoral and specialist
degrees. The area also offers other institutions of higher education such as Pima
Community College, Chaparral College, University of Phoenix, and ITT Technical
Institute, among others.

The following table illustrates the educational attainment of local residents that are 25
years of age or older.
                                                                              (1)
                                     Tucson Area Educational Attainment

                                                                             Tucson   50-Mile
        Educational Attainment                                                MSA      Radius

        Less than 9th grade                                                   6.0%      6.2%
        Some High School, no diploma                                          9.9%     10.0%
        High School Graduate, or GED                                         22.9%     23.1%
        Some College, no degree                                              26.9%     26.9%
        Associate Degree                                                      6.9%      6.8%
        Bachelor's Degree                                                    16.3%     16.1%
        Master's Degree                                                       7.4%      7.3%
        Professional School Degree                                            2.1%      2.0%
        Doctorate Degree                                                      1.6%      1.6%
        (1)
              2004 Estimated population age 25+ by educational attainment.
        Source: Claritas



                                                               18
II. Overview of the Tucson Market (cont’d)


As depicted in the table on the previous page, 27.4 percent of the market has attained a 4-
year bachelor’s degree or higher. In comparison, 24.6 percent of the U.S. population age
25 and above attained a 4-year bachelor’s degree or higher.
                                                                                                Tucson
                                                                                         Education Attainment
The illustration to the right shows the
dispersion of adults over 25 and the average
number of years they attended school. The
average assumes it takes a total of 12 years
to complete elementary, middle and high
school, and 4 years to complete college.

The illustration reveals that the lesser
educated population lives in central and
southeast Tucson while the more educated
population lives to the northwest of the
proposed arena site.




Corporate Inventory

Local corporations could play a significant role in the overall success of the proposed
multi-purpose arena by purchasing tickets, premium seating and/or advertising or
sponsorship opportunities. The exhibit below presents the number of corporate
headquarters and corporate branches with at least 25 employees by annual sales within
the local market.

                                            Tucson Area Corporate Base (1)

                                                                                            Tucson
                         Annual Sales                                                        MSA

                         Headquarters:
                          Unknown                                                                14
                          Under $1,000,000                                                      165
                          $1,000,000 to $4,999,999                                              583
                          $5,000,000 to $9,999,999                                              166
                          $10,000,000 to $49,999,999                                            139
                          $50,000,000 to $99,999,999                                             20
                          $100,000,000 to $499,999,999                                           20
                          Over $500,000,000                                                       3

                         Headquarters - Subtotal                                              1,110
                         Branches                                                               800
                         Total                                                                1,910

                        (1)
                              Includes corporate headquarters and branches with at least 25 employees
                        Note: Certain SIC codes like government entities, school districts, retail
                              stores, and non-profit organizations have been eliminated.
                        Source: Dun & Bradstreet



                                                                19
II. Overview of the Tucson Market (cont’d)


As shown in the exhibit on the previous page, there are 1,110 corporate headquarters
within the Tucson MSA meeting certain criteria. Approximately 31 percent of the
corporate headquarters have annual sales of $5.0 million or more. Additionally, there are
800 corporate branches with at least 25 employees within the immediate Tucson market
area.

In addition to the number of corporate headquarters and branches in the local market, the
depth and breadth of the local market’s major employers provides an indication of the
ability of the local area to withstand economic downturns. The table below lists the
area’s top 12 major employers by industry and the number of employees.

                                          Tucson Area Major Employers

                                                                                        Number of
  Company / Entity Name                                         Industry                Employees
  Raytheon Missile Systems                                      Manufacturing              10,171
  University of Arizona                                         Education                  10,078
  Davis-Monthan Air Force Base                                  Defense                     7,692
  Tucson Unified School District No. 1                          Education                   7,690
  Pima County                                                   Public Administration       6,987
  City of Tucson                                                Public Administration       5,495
  University Medical Center Corporation                         Health Services             2,700
  Carondelet Health Network                                     Health Services             2,689
  TMC HealthCare                                                Health Services             2,562
  Pascua Yaqui Tribe                                            Public Administration       2,427
  Amphitheater Public Schools                                   Education                   2,255
  Pima Community College                                        Education                   2,204
  Source: Arizona Daily Star's Star 200: Major Employers of Southern Arizona, 2004


As shown above, major employers in the Tucson area includes Raytheon Missile Systems
with 10,171 employees, the University of Arizona with 10,078 employees and Davis-
Monthan Air Force Base with 7,692 employees.

The chart on the following page presents a comparison of the corporate base of markets
hosting new multi-purpose, minor league arenas with at least 8,000 seats.




                                                              20
II. Overview of the Tucson Market (cont’d)

                                                                                                            (1)
                                                                            Corporate Base
                                                                       New Arenas Opened Since 1995
                                                                       Metropolitan Statistical Areas




                           Gwinnett Center, (Duluth, GA)                                                                                                        8,978
                    Everett Events Center, (Everett, WA)                                                               4,536
                         Orleans Arena, (Las Vegas, NV)                                        2,241
 Jacksonville Veterans Memorial Arena, (Jacksonville, FL)                                    2,132
                   Van Andel Arena, (Grand Rapids, MI)                                       2,107
                   Proposed Tuscon Arena, (Tuscon, AZ)                                     1,910
                           Bi-Lo Center, (Greenville, SC)                                 1,796
                       Ford Center, (Oklahoma City, OK)                                   1,765
                             Qwest Center, (Omaha, NE)                               1,475
                             Giant Center, (Hershey, PA)                          1,207
                          Save Mart Center, (Fresno, CA)                          1,199
                    Alltel Arena, (North Little Rock, AR)                      1,057
                    Wells Fargo Arena, (Des Moines, IA)                        1,053
     Wachovia Center at Casey Plaza, (Wilkes-Barre, PA)                        984
                             Germain Arena, (Estero, FL)                    777
                      Rabobank Arena, (Bakersville, CA)                     756
                    Sovereign Bank Arena, (Trenton, NJ)                     733
                         Spokane Arena, (Spokane, WA)                       695
                                                                            667
                                                                                                          Tucson Market Corporate Base:       1,910
                  Arena at Harbor Yard, (Bridgeport, CT)
                                                                                                          Tucson Market Rank:          6th out of 32
                             Ford Arena, (Beaumont, TX)                    629
                                                                                                          Average Corporate Base Size:        1,310
                         Sovereign Center, (Reading, PA)                 607
                                                                         568                              Median Corporate Base Size:           745
                    CenturyTel Center, (Bossier City, LA)
             American Bank Center, (Corpus Christi, TX)                 551
                          Resch Center, (Green Bay, WI)                 503
                 Mid-America Center, (Council Bluff, IA)                501
         Atlantic City Boardwalk Hall, (Atlantic City, NJ)             475
               Verizon Wireless Arena, (Manchester, NH)                458
           DeSoto County Civic Center, (Southaven, MS)                 442
                      Crown Coliseum, (Fayetteville, NC)              365
                    World Arena, (Colorado Springs, CO)               280
                    Tyson Events Center, (Sioux City, IA)            250
               Laredo Entertainment Center, (Laredo, TX)             238


                                                             0      1,000          2,000          3,000      4,000   5,000     6,000    7,000   8,000   9,000     10,000

                                                                                       Total Corporate Base: Headquarters          and Branches
                                                         Tucson, AZ Market
                                                         Venues discussed in more detail in Comparable Facilities Section
                                                         Other new venue markets

                                                         (1) Includes corporate headquarters and branches with at least 25 employees.
                                                         Source: Claritas, Inc.



As shown above, Tucson’s corporate base of 1,910 corporate headquarters and branches
ranks sixth out of 32 markets. Markets with new arenas ranged in size from a low of 238
in Laredo, Texas (Laredo Entertainment Center) to a high of 8,978 in Duluth, Georgia
(Gwinnett Center). The average corporate base for comparable new arena markets is
1,310 companies, and the median is 745 companies.




                                                                                                  21
II. Overview of the Tucson Market (cont’d)


Transportation

For cities to remain competitive, a modern and efficient transportation system that has the
capability to provide connections and physical infrastructure for all modes of
transportation is vital. Various modes of transportation include airport and cargo
facilities, roads and railroad connections, public transit, and bicycle and pedestrian
facilities.

Currently, Tucson residents and visitors have access to Sun Tran Transit system with bus
lines and stops running through most areas of Tucson and stretching outside of the city
limits. The City of Tucson has designated areas for cyclists and pedestrians throughout
the City with more than 400 miles of bikeways and multi-use paths running downtown to
beyond the City limits.

The major airport in Tucson is the Tucson International Airport. This airport provides
flights from 13 airlines with 69 total daily flights. It has 17 non-stop destinations and
with connections can reach 121 destinations. The airport is located in south Tucson.
                                                     Regional Roadway Access

The City of Tucson has access to
major highways that allow for
travel to California, the eastern
United States, Mexico, and up
north through Phoenix. The
map to the right displays the
major interstate and state
highways that connect Tucson to
the regional area.

As detailed, the major interstate
highways with direct access to
Tucson are Interstate Highways
10 and 19. IH-10 travels east
through Las Cruces, NM, El
Paso,     TX,       ending     in
Jacksonville, FL. In addition,
IH-10 travels north through
Phoenix and then west to Los
Angeles, California. IH-19 travels south from Tucson to Nogales and the Mexican
border. Northwest of Tucson, IH-10 connects with IH-8, which travels west through
Yuma towards San Diego, CA. In addition to the interstate highways, State Highways 79
and 77 intersect with Tucson from the north.



                                             22
II. Overview of the Tucson Market (cont’d)


The following table depicts major metropolitan areas with an approximate four-hour
drive of Tucson.

                             Distance from Major Regional Metropolitan Areas

                                                     Miles from           Drive Time               Market
           Metropolitan Area                            Tucson              in Hours            Population

           Nogales, AZ                                        70                     1.1           350,000 *
           Phoenix, AZ                                       115                     2.0         3,552,700
           Yuma, AZ                                          241                     3.7           172,900
           Flagstaff, AZ                                     260                     4.2           131,300
           Las Cruces, NM                                    274                     4.2           181,400
           * Also includes population of Nogales, Mexico, and surrounding areas.




Impacts of Mexican Visitors to Tucson

Each year millions of visitors from Mexico enter the United States for various reasons.
In 2001, approximately 22.9 million non-United States residents entered the United
States through ports of entry in six border cities at the Arizona-Mexico border. Over the
past 25 years, annual alien border crossings have ranged from approximately 13.3 million
in 1977 to approximately 25.7 million in 2000.

The purpose behind visiting the United States varies among Mexican citizens. The chart
below specifies the reasons Mexicans have visited the City of Tucson.
                                              Purpose of Mexican Visitors




                                       Shopping
                                        76.8%




                                                                                           Visit Family
                                                                          Vacation           14.2%
                                                     Other     Work        4.7%
                                                     1.5%      2.8%




                                                             23
II. Overview of the Tucson Market (cont’d)


As depicted in the chart on the previous page, 76.8 percent of Mexican visitors came to
Tucson for the purpose of shopping. An additional 14.2 percent mentioned their reason
for coming to Tucson was to visit family, 4.7 percent came for vacations, 2.8 percent
because of work, and 1.5 percent stated other reasons.

The number of Mexican visitors visiting the Tucson area is an important factor in
realizing an opportunity that may exist in attracting Mexican visitors to various events
that could be held at the proposed arena. According to the 2001 study, approximately 1.4
million Mexican parties came to the United States with Tucson as their destination city
for travel. The average party size was estimated to be about 2.7 individuals, resulting in a
total of approximately 3.6 million visitors. Results revealed that parties entering the
United States to visit border cities had party sizes of about 1.8 to 2.2, but the party size
seems to increase the further the party travels inland. The average length of stay for
Mexican visitors in Tucson is about 0.44 nights. The overall percentage of visitors that
stay one or more nights in Tucson is 16.1 percent.

An important impact that visitors from Mexico have is the amount of money they spend
in the local Tucson area during their stay. According to the 2001 study, it is estimated
that Mexican visitors spend over $300 million in Pima County, a substantial increase over
the estimated $109 million spent in the same area in 1991.

Major benefactors of the spending of Mexican visitors are the city, county, and state
government bodies. In 2001, the City of Tucson received about $5.9 million from
Mexican visitor spending, along with $3.8 million generated by Pima County, and $19.5
million generated by the State of Arizona.

A vast number of Mexican citizens that travel each year to visit Tucson attend various
attractions while in the area. The chart on the following page reveals the top attractions
that Mexican visitors attended in 2001.




                                             24
II. Overview of the Tucson Market (cont’d)

                                    Attractions Attended by Mexican Visitors




                                                                          Casino of the Sun
                         Other                                                 25.5%
                         38.8%




                                                                                    Desert Diamond
                             Reid Park Zoo                                              Casino
                                 2.5%                                                   20.9%
                                                                    University of
                        Old Tucson Studios       Arizona-Sonora       Arizona
                              3.5%               Desert Museum         5.2%
                                                      3.5%


              Other includes: Mt. Lemmon, A Mountain, Sabino Canyon, Pima Air & Space Musem, among others.

              Source: "The Economic Impacts of Mexican Visitors to Arizona: 2001" by Charney and Pavlakovich.



As depicted above, the two main attractions visited by Mexican visitors are the Casino of
the Sun (25.5 percent) and Desert Diamond Casino (20.9 percent). Interviews with
representatives from the casinos revealed that the percentage of Mexicans attending their
spectator events can range from 20 to 80 percent depending on the type of event, with an
overall average of approximately 25 percent. Other main attractions visited consisted of
the University of Arizona (5.2 percent), Arizona-Sonora Desert Museum (3.5 percent),
Old Tucson Studios (3.5 percent), Reid Park Zoo (2.5 percent), and other attractions
(38.8).

The amount of impact that Mexican visitors can have on a new arena is evident in the
markets of Hidalgo, Texas, and Laredo, Texas. Hidalgo and the surrounding areas have a
population of 619,800, excluding the Mexican population south of the border, which
includes Reynosa, Mexico, with a population of over 320,000, and Monterrey, Mexico,
which is located within 150 miles and has a population of approximately 1.1 million.
Dodge Arena, which opened in 2003, averages 5,114 spectators per hockey game, over
600 more than the Central Hockey League (“CHL”) average. The facility also hosts
numerous concerts, family shows, and other entertainment. In its first year of operations,
the arena hosted over 100 events and drew over 400,000 attendees.

Laredo has a market population of only 211,000, yet its location near the Mexican border
and over one million Mexican residents, including Nuevo Laredo with over 270,000
residents, has allowed its new arena, the Laredo Entertainment Center, to be successful
since its recent opening. The arena is home to a minor hockey league tenant, which
averages 6,519 attendees per game, over 2,000 more than the average attendance for


                                                               25
II. Overview of the Tucson Market (cont’d)


teams in the CHL. This venue is also host to numerous concerts, family shows, sporting
events, circus acts, and motor sports. The arena hosts over 100 events and about 500,000
patrons annually.


Impacts of the University of Arizona to Tucson

The City of Tucson contains the second largest university in the State of Arizona, the
University of Arizona. The campus first opened in 1891 and now has a student
population of over 34,000 students. The University of Arizona campus is located less
than one mile from the site of the proposed arena.

The large student population in the Tucson market may affect the type and genre of
events that are held at facilities in the city. For example, certain event promoters, such as
concert promoters, prefer markets with large student populations.


Impacts of Seasonal Visitors to Tucson

With a climate that is hot in the summer and mild during the winters, there are numerous
people who own a home or lease a property in the Tucson area to escape the cold winters
of the northern areas of the United States between the months of November and March.
The characteristics of people, known as “snow birds”, who stay in Tucson during the
winter months tend to be retired couples who usually enjoy entertainment events while
away from their permanent homes in the north. This group of people tend to be in the
higher age groups and have more discretionary income to spend on entertainment and
leisure.

The migration of older individuals to the Tucson market during the winter months has a
market impact on the City of Tucson’s economy. It is estimated that during the 2002/03
fall and winter seasons, seasonal residents occupied about 7,200 mobile home spaces and
RV spaces, accounting for a total of approximately 15,800 people. The results of a 1995
Arizona Republic survey of winter residents indicated that a winter resident’s household
stayed about four months and spent about $1,600 per month in Arizona during the
duration of their stay.




                                              26
II. Overview of the Tucson Market (cont’d)


Entertainment and Sports Attractions

Tucson hosts various sports teams and events, including the University of Arizona
athletic teams, minor league baseball, and Major League Baseball spring training. As
illustrated in the following exhibit, various entertainment and sporting events are held at
various facilities within the Tucson metropolitan area.

                                                                      Entertainment and Sports Venues
                                                                             Local Tucson Area

Facility                                        Location                Capacity             Tenants / Events

Pima County Fairgrounds                         Tucson, AZ                   64,000 (1) Outdoor Concerts, Trade shows, Car Show, County Fair Events
Arizona Stadium                                 Tucson, AZ                   56,197     Collegiate Football
McKale Center                                   Tucson, AZ                   14,545     Collegiate Basketball and Volleyball
Tucson Electric Park                            Tucson, AZ                   11,000     AAA Baseball, MLB Spring Training
Hi Corbett Field                                Tucson, AZ                   10,000     Women's National Prof. Fastpitch League, MLB Spring Training
TCC Arena                                       Tucson, AZ                    9,275     Hockey, Concerts, Family Shows, Trade Shows, Other
AVA Amphitheater                                Tucson, AZ                    5,000     Concerts
Diamond Entertainment Center                    Sahuarita, AZ                 2,400     Concerts, Boxing
TCC Music Hall                                  Tucson, AZ                    2,289     Concerts, Theatre, Opera, Other
TCC Theatre                                     Tucson, AZ                      511     Theatrer, Comedy, Other

(1) Pima County Fairgrounds' Super Stage is an outdoor concert stage with a grass section that can hold 64,000 with no fixed seating.
Source: CSL research and facility interviews.




              Pima County Fairgrounds

              The Pima County Fairgrounds contains several buildings that house horse shows,
              Pima County Fair exhibits, and trade shows. The Southern Arizona Super Stage,
              a covered stage facing a grass field that can hold up to 64,000 spectators, is
              located at the fairgrounds. A second stage on the premises, the Main Stage, has
              grass areas that hold up to 5,000 people, and with the addition of bleachers,
              another 2,000 people can view the stage. Adjacent to the fairgrounds is the
              Southwestern International Raceway, a drag strip that has seating for up to 6,000
              people.


              Arizona Stadium

              Located on the campus of the University of Arizona, Arizona Stadium has a
              seating capacity of 56,197 seats. The facility hosts UA’s Wildcats football games
              as well as a limited number of other events. The University of Arizona campus is
              located about one mile from the Tucson Convention Center. The stadium
              contains 21 suites containing 18 seats each and leasing for an average annual fee
              of $22,000.




                                                                                            27
II. Overview of the Tucson Market (cont’d)



     McKale Center

     The McKale Center is also located on the University of Arizona campus and has a
     seating capacity of 14,545 seats. The arena is used as the home court of the men
     and women’s Wildcat basketball teams and the women’s volleyball team. The
     arena holds various university events, but is not commercially marketed to host
     non-university events.


     Tucson Electric Park

     Tucson Electric Park is the main ballpark on the Kino Sports Complex grounds.
     TEP is home to the Tucson Sidewinders, a AAA baseball team. In addition to the
     minor league baseball season, TEP hosts the Chicago White Sox and the Arizona
     Diamondbacks during spring training.


     Hi Corbett Field

     Hi Corbett Field is a ballpark that has a seating capacity of 10,000 seats. The
     Colorado Rockies of Major League Baseball use Hi Corbett Field as their spring
     training facility. With the recent addition of the Arizona Heat, a franchise of the
     National Professional Fastpitch softball league, the field is also used as a softball
     facility.


     AVA Amphitheater

     The AVA Amphitheater is a part of the Casino del Sol and has a seating capacity
     of 5,000 seats. It hosts various concerts throughout the year and has the
     convenient nearby access of the gaming opportunities and to numerous
     restaurants.


     Diamond Entertainment Center

     The Diamond Entertainment Center is located at the Desert Diamond Casino I-19
     and has a seating capacity of 2,400 seats. The facility hosts various concerts,
     boxing matches, and comedy performances throughout the year. The facility also
     allows patrons convenient access to gaming opportunities and restaurants.



                                           28
II. Overview of the Tucson Market (cont’d)




       TCC Music Hall

       The Tucson Convention Center has a Music Hall located on its premises that seats
       up to 2,289 patrons. The Hall is host to various symphonies, small concerts,
       theatre shows, operas, and is used in conjunction with several convention center
       events.


       TCC Theatre

       The Tucson Convention Center also has a theatre on its premises, the Leo Rich
       Theatre, which seats up to 511 spectators. The facility is used mainly for theatre
       productions and comedy performances, but is also used for speakers of
       conferences and conventions.


Summary

As previously mentioned, the demographic and socioeconomic characteristics of a market
are important components in assessing the potential success of the proposed arena. The
strength of a market in terms of its ability to attract events and spectators and generate
revenues is predicated, somewhat, on the size of the regional market area population and
its spending characteristics in the context of competition within the market.

The following are key conclusions of the proposed arena’s market:

   •   The Tucson metropolitan area has approximately 891,000 people and is the 68th
       largest among the 323 metropolitan areas in the United States.

   •   Tucson is the 20th largest market in the United States without a professional tenant
       (NBA or NHL franchise) in an arena.

   •   There are only three markets larger than Tucson without a professional tenant that
       have not developed new arenas or significantly renovated existing arenas in the
       past 15 years.

   •   A total of 942,634 residents live within 50 miles of the proposed arena, an area
       comprising the proposed arena’s primary and secondary market area and the area
       from which most arena attendees will be drawn. In addition, there are about



                                             29
II. Overview of the Tucson Market (cont’d)


       350,000 Mexican residents that live in the area surrounding the border city of
       Nogales.

   •   Due to its proximity to a larger market, approximately 120 miles from Phoenix,
       and the existing venues in Tucson, a new arena could face strong competition
       when competing for concerts and family shows, but will have limited competition
       in the immediate market in regards to sporting events. There is also the potential
       to create synergies for hockey with Glendale Arena and other events.

   •   The median age and age distribution of the local market is older than the national
       average, but does have a large portion of residents within the prime ages for
       sports and entertainment event attendance. The larger percentage of older
       individuals is balanced with the presence of a large university in the market.

   •   The household income in the market of the proposed arena ranks below the
       national average, which may indicate that the primary market has a lower
       propensity to allocate discretionary dollars to entertainment activities associated
       with a new arena. There is, however, additional discretionary dollars being spent
       in the market on activities by tourists from Mexico and seasonal residents.

   •   The corporate base of the Tucson market contains nearly 2,000 corporate
       headquarters and corporate branches, providing a strong base of which to market
       premium seating, tickets, and advertising and sponsorship opportunities

   •   Compared to 31 other markets with comparable facilities, the Tucson market
       ranks high in regards to population, corporate base and entertainment and sporting
       event spending, but ranks low in median household income and age distribution.

   •   Three factors that will be important to the Tucson market in attracting events to
       the proposed arena are the university students in the market, visitors from Mexico,
       and seasonal residents.

The demographic and socioeconomic characteristics of the proposed arena’s market are
considered together with an assessment of the competitive facilities in the marketplace,
the historical operations of comparable facilities, and interviews with event promoters to
estimate demand.




                                            30
        Executive Summary
I.      Introduction
II.     Overview of the Tucson Market
III.    Tucson Arena Historical Operations
                                             III. Tucson Arena Historical
IV.     Comparable Facilities
                                                             Operations
V.      Competitive and Local Facilities
VI.     Market Surveys
VII.    Estimated Event Demand
VIII.   Building Program Analysis
IX.     Arena Pro Forma Analysis
III. Tucson Arena Historical Operations


The primary purpose of this section is to provide an overview of the current facilities of
the Tucson Convention Center along with existing conditions and historical operations of
Tucson Arena. An analysis of the historical operations of the existing arena serves as a
basis for quantifying the existing market and estimating any incremental benefits that
may likely occur with a new arena. Specific items analyzed included trends related to
event levels, attendance, and revenues and expenses.

Tucson Convention Center Complex

The Tucson Convention Center (“TCC”) consists of different buildings that host various
events. TCC facilities TCC include a convention center, an arena, a music hall, and a
theatre.

                                                      Tucson Convention Center
The convention center contains four
large exhibit halls that comprise
approximately 114,000 square feet of
space. In addition to exhibit hall space,
there is approximately 20,000 square
feet of banquet space available. The
convention center holds events such as
conventions, trade shows, consumer
shows, wedding receptions, large
seminars, keynote speakers, and
various meal functions.

The existing arena has a seating
capacity of 8,750 fixed seats. The
facility can seat upwards of 9,275
patrons with the use of additional
portable seating.     The facility is
configured in a U-shape, with a
majority of the seating on two sides
and at one end. The facility is capable
of holding ice events, motor sport
events, concerts and most other typical arena events. The arena also has two large locker
rooms and three rooms for performers.

The Music Hall has a seating capacity of 2,289 seats and contains five small dressing
rooms, two large chorus dressing rooms, and has a meeting room that is 1,500 square
feet. This facility hosts events by the Tucson Symphony Orchestra, the Arizona Opera,
and Broadway in Tucson, among other events.



                                            31
III. Tucson Arena Historical Operations (cont’d)


The Leo Rich Theatre has a seating capacity of 511 seats. The stage is over 130 feet
wide and there are two large chorus dressing rooms in the building. This facility hosts
theatre productions and recitals, especially by the Arizona Friends of Chamber Music and
Borderlands Theater.


Event Levels

TCC Arena has historically hosted a variety of events. The venue’s only current tenant is
the University of Arizona’s club hockey team, the Ice Cats. The table below illustrates
the distribution of performances by event type for the TCC Arena from 1999 to 2003.

                                                         TCC Arena
                                                   Event Levels 1999 - 2003

                                                                                            Average    % of
Type of Event                             2003        2002         2001       2000   1999    Events    Total

Ice Cats Hockey                               18         18          18         18    16         18    21.9%
Concerts                                       5          6           6          8      9         7     8.5%
Circus                                         4         12           7          0    12          7     8.7%
Family Ice Shows                               8          9           9          7      2         7     8.7%
Family Shows                                  15         10           7          8      5         9    11.2%
Motorsports                                    4          4           5          2      2         3     4.2%
Wrestling                                      1          3           1          1      2         2     2.0%
Boxing                                         0          0           0          1      1         0     0.5%
Graduations                                    2          4           4          0      0         2     2.5%
Other Events                                   1          1           0          0      0         0     0.5%
Other Sporting Events                          0          0           2          5      0         1     1.7%
Flat Floor Events                             19         21          27         28    n/a        24    29.6%

Total                                         77         88         86         78      49        80   100.0%
Source: Facility management.


Arena Ice Rental                               0          0          50         21    n/a        18    22.1%
Note: Excludes event move in/move out days.


As shown, in 2003 the TCC Arena hosted 77 performances or conventions, including 18
hockey games, 15 family shows, and eight family ice shows, among other events. Ice
Cats hockey is the University of Arizona’s club hockey program.

Over the past four years, event activity at the TCC Arena has ranged from 77 to 88
events, averaging 80 events per year over this time period. In addition, the TCC Arena is
used for more than 70 days for move-in and move-out days for performances,
graduations, and convention events. As a result, the TCC Arena is utilized upwards of
140 to 160 days each year.




                                                              32
III. Tucson Arena Historical Operations (cont’d)


Ice Cats hockey games have accounted for an average of 18 games each year comprising
approximately 22 percent of the total event activity annually. Circus events, such as
Ringling Brothers Barnum & Bailey and Circus Gatti accounts for seven events annually,
and family shows, such as Rugrats, Mariachi Christmas and Sesame Street Live, account
for about nine annual performances. Other events that are held on an annual basis at the
arena include such events as concerts, family ice shows, motor sports, wrestling, and
boxing, among others.

Overall, event activity at the TCC Arena is relatively low compared to arenas operating
in other comparable-sized markets. The absence of a full-time minor league tenant, the
lack of modern amenities at the arena and utilization of the arena by numerous flat floor
shows (including move-in/move-out days) contribute to the lower utilization levels.

There are many events that rent one or more of the exhibit halls, the ballroom, or meeting
rooms in addition to the arena. Below is a sampling of events that have been held at the
convention center over the past four years that have used both the arena and another
portion of the convention center.

                                      Tucson Convention Center Events
                        Events Utilizing Arena and Convention Center Exhibit Halls

        Event                                                              Arena Use Days (1)
        Calvary Chapel Religious Conference                                          2
        Christian Congregation of Jehovah's Witnesses Convention                     4
        Door Christian Fellowship                                                    1
        Gem & Mineral Society Show                                                   4
        Mariachi Conference                                                          7
        NSA Conference                                                               6
        Pima Community College Graduation                                            3
        Rolling Thunder Down Home Democracy Tour                                     1
        Salpointe High School Graduation                                             2
        SECME Conference                                                             1
        Social Behavioral Science Graduation                                         1
        University of Phoenix Graduation                                             2
        Waste Management Symposium Convention                                        3
        Watch Tower Bible & Tract Society Convention                                 20
        Women of Virtue Conference                                                   2

        (1) Events have occurred at least once in the past five years.
        Source: Facility management.


As shown above, there are varying types of events that utilize both the arena and portions
of the convention center including graduations, conventions, conferences, and public
shows. All of the above listed events used at least one of the exhibit halls in addition to



                                                                 33
III. Tucson Arena Historical Operations (cont’d)


the arena. Also listed is the number of days each convention event also used the arena
space for their respective functions.
Attendance

The level of attendance attracted to events hosted at the TCC Arena directly impacts
revenues generated from the sale of tickets, concessions, merchandise and parking. The
table below depicts total paid attendance at the TCC Arena from 1999 to 2003.

                                               TCC Arena
                                    Paid Attendance Levels 1999 - 2003

                                                                                        Average    % of
Type of Event                    2003       2002        2001        2000     1999    Attendance    Total

Ice Cats Hockey                 28,319     37,532     34,146      33,902    33,473       33,474    23.3%
Concerts                        27,259     26,563     21,934      35,282    28,552       27,918    19.5%
Circus                           3,074     31,316     35,273           0    55,513       25,035    17.5%
Family Ice Shows                25,473     27,390     21,879      20,405     8,301       20,690    14.4%
Family Shows                    12,748      9,156      6,382      16,897    16,977       12,432     8.7%
Motorsports                     15,940     14,809     17,540       1,274     7,541       11,421     8.0%
Wrestling                        3,510     18,089      6,907       2,411    14,360        9,055     6.3%
Boxing                               0          0          0         228     2,231          492     0.3%
Other Events                     5,954      4,824          0           0         0        2,156     1.5%
Other Sporting Events                0          0      1,207       2,482         0          738     0.5%
Total                          122,277    169,679    145,268     112,881   166,948      143,411   100.0%
Source: Facility management.



As shown, the total paid attendance in 2003 was 122,277, which was a 28 percent
decrease in the total attendance from 2002. The decrease was in large part because the
Ringling Brothers Barnum & Bailey Circus (“RBBBC”) did not perform during 2003.
Historically, RBBBC has performed in Tucson every other year. RBBC has indicated
that they did not think the market would attend their events as much if the show was in
Tucson every year. However, in 2001 RBBBC decided to attempt hosting performances
in consecutive years. As shown, the event attracted a total of 35,000 patrons for seven
performances, but the following year it decreased to 31,000 although they performed 12
times. It is possible that RBBBC may modify their touring pattern with the development
of a new arena.

The average attendance from 1999 to 2003 was 143,411 patrons. The highest year of
attendance during this period was 2002 with a total attendance of 169,679. The lowest
annual attendance during this period was 2000 with a total attendance of 112,881.

Ice events, including Ice Cats’ games and family ice shows, comprised about 44 percent
of total attendance during 2003 with attendance levels of 28,319 and 25,473, respectively.
Concerts comprised about 22 percent of total attendance in 2003, attracting a total of
27,259 patrons. The remaining events that attracted the most in attendance during 2003
were family shows and motor sports, attracting 12,748 and 15,940, respectively.


                                                     34
III. Tucson Arena Historical Operations (cont’d)


The table below shows the average attendance per event, by type of event, from 1999 to
2003 in the TCC Arena.

                                             TCC Arena
                                 Average Paid Attendance 1999 - 2003

                                                              Average       Average
                                             Average       Attendance         Total
        Type of Event                    Perfomances        Per Event    Attendance

        Wrestling                                  2             5,660        9,055
        Concerts                                   7             4,106       27,918
        Motorsports                                3             3,359       11,421
        Family Ice Shows                           7             2,956       20,690
        Circus                                     7             3,576       25,035
        Ice Cats Hockey                           18             1,902       33,474
        Family Shows                               9             1,381       12,432
        Other Sporting Events                      1               527          738
        Total                                     56             2,561      143,411
        Source: Facility management.




As shown, the overall average paid attendance for events hosted at the TCC Arena over a
five-year period was 2,561 per event. Wresting events, mainly WWE, experienced the
highest average paid attendance of any event type hosted at the TCC Arena, averaging
5,660 total attendees per event. Concerts averaged 4,106 patrons per event followed by
motor sports with 3,359 patrons per event. Ice Cats hockey, with the highest number of
events, averaged 1,902 spectators per game.


Seat Occupancy

The TCC Arena has a permanent seating capacity of 8,750 seats. The facility can seat
upwards of 9,275 for end stage concerts, which includes 525 portable floor seats. In
general, very few events hosted at the TCC Arena require the facility’s full capacity of
9,275 seats. The chart on the following page illustrates paid attendance for each event
hosted in the arena during 2003. Paid attendance was used as a proxy for turnstile
attendance in this analysis as turnstile attendance was unavailable.




                                                    35
III. Tucson Arena Historical Operations (cont’d)

                                                            TCC Arena
                                                2003 - Event Paid Attendance Levels

    Attendance
    10,000
     9,000
     8,000               Seating Capacity:
     7,000                     9,275

     6,000
     5,000
     4,000
     3,000
     2,000
     1,000
          0
                 1   3   5   7   9   11   13   15    17     19   21   23   25    27    29   31   33   35   37   39   41   43   45   47   49    51   53   55



                                                    Note:             Yellow = hockey game
                                                                      Green = concert
                                                                      Purple = family show, including ice shows
                                                                      Blue       = other events
                 Source: Facility management.



As is evident above, concerts generally experience the highest attendance of any type of
event hosted at the TCC Arena. Hockey games tend to range from 1,000 to 2,000 paid
attendees per game. Family shows have various paid attendance levels that range from
below 1,000 to above 4,000 per performance. The table below summarizes seat
occupancy trends for events hosted at the arena from 1999 to 2003.

                                                                    TCC Arena
                                                            Paid Attendance Distribution

                                                       2003                     2002                  2001                2000                 1999
                 Paid Attendance
                 Less than 1,500                     53.6%                 32.8%                  38.2%               42.0%                   18.4%
                 1,501 to 4,000                      30.4%                 46.9%                  30.9%               46.0%                   42.9%
                 4,001 to 6,000                      10.7%                 12.5%                  25.5%                6.0%                   22.4%
                 Over 6,000                           5.4%                  7.8%                   5.5%                6.0%                   16.3%
                 Total                              100.0%                 100.0%                100.0%              100.0%              100.0%

                 Source: Facility management.



Circuses, concerts, and WWE wrestling events had the highest seat occupancy per event.
Approximately 84 percent of event activity at the TCC Arena during 2003 drew 4,000 or
less paid attendees. Only 16 percent of events drew 4,000 or more paid attendees.




                                                                                36
III. Tucson Arena Historical Operations (cont’d)


Financial Operations

The Tucson Convention Center, which includes multiple facilities, is operated by the City
of Tucson. Based on current accounting practices of facility management, the financial
operations of the arena cannot be separated from the convention center operations.
Therefore, the table below presents a summary of the total revenues, expenses and
resulting net income generated by the Tucson Convention Center, including the TCC
Arena, during FY03, FY04 and budgeted FY05.

                                       Tucson Convention Center & Arena
                              Revenues & Expenses - FY03, FY04 and Budgeted FY05

                                                               Budgeted FY05                       FY 2004      FY 2003
Operating Revenues:
    TCC Rent                                                         $1,500,000               $988,000       $1,046,000
    Parking                                                             650,000                 738,000         736,000
    Concessions                                                         440,000                 445,000         381,000
    Facility Fee                                                        750,000                 278,000         374,000
    Box Office                                                          200,000                 200,000         198,000
    Commission Revenue                                                  100,000                 116,000          99,000
    Novelties                                                            80,000                  50,000          39,000
    Other (1)                                                           100,000                 121,030          88,000
    Total Operating Revenues                                          3,820,000               2,936,030       2,961,000

Expenses:
    Salaries & Wages                                                  1,638,000               1,618,000       1,134,000
    Maintenance                                                         987,000                 886,000         884,000
    Electricity                                                         683,000                 707,000         678,000
    Administration                                                      591,000                 582,000         522,000
    Other Operation Costs                                               559,000                 539,000         538,000
    Event Support                                                       287,000                 364,000         290,000
    Box Office                                                          392,000                 358,000         356,000
    Sales and Marketing                                                 332,000                 307,000         234,000
    Stage                                                               292,000                 251,000         368,000
    Parking                                                             168,000                 175,000         174,000
    Gas                                                                 151,000                 133,000         135,000
    Other Utilities                                                      82,000                  97,000          90,681
    Water                                                                70,000                  83,000          72,000
    Other Expenses                                                            0                 (29,000)         34,000
    Total Operating Expenses                                          6,232,000               6,071,000       5,509,681

Capital Reserve Account Contributions                                    750,000                   238,929      386,725

Net Income/(Loss) from Operations                                   ($3,162,000)           ($3,373,899)      ($2,935,406)

(1)
      Other includes non-tax lease, rental/lease, charge services, credit card NSF, and refunds.
Source: Facility management.




                                                                       37
III. Tucson Arena Historical Operations (cont’d)



As shown in the chart on the previous page, total operating revenues generated during
FY04 were $2.9 million and consisted of rent, box office, parking, concessions, novelty
sales, and facility fees, among other revenues. The facility fee revenue is income that is
generated from a ticket surcharge that is applied to all tickets sold at the TCC Arena,
Music Hall and ticketed events at the Tucson Convention Center building. The fee is
$0.75 for any ticket with a value of $17.00 or less and $1.00 for any ticket in excess of
$17.00. The revenue generated from the ticket tax is dedicated to a capital repairs and
replacement account. In addition, 25 percent of any parking revenue generated in excess
of $500,000 also is earmarked for the capital repairs and replacement account.

Total operating expenses in FY04 were about $6.1 million, consisting of expenditures for
salaries, maintenance, utilities, administration, sales and marketing, operations, and box
office, among others. The net loss from operations for FY04 amounted to $3.4 million
and is budgeted at approximately $3.2 million for FY05. Overall, the revenues, expenses
and net loss from operations were consistent from FY03 to FY05.


Summary of Lease Agreements

The Tucson Arena hosts several events that recur on an annual basis and are important to
the overall utilization and financial operating results of the TCC Arena. Large, recurring
events include Ice Cats hockey, Mariachi conferences, and Jehovah’s Witnesses. The
following is an overview of the major lease terms associated with these events.


       Ice Cats Hockey

       The Ice Cats lease TC Arena at a rental fee of $2,225 per game day. As a part of
       this agreement, the Ice Cats retain all commissions for game day advertising on
       dasher boards and game programs. The Ice Cats are allowed two advertising
       spots in the ice and non-permanent advertising on the zamboni during their
       games. The day of game advertising must be removed after each game.

       The Ice Cats pay three percent of the gross receipts after deduction of taxes if it
       amounts to higher than the per day rental fee of $2,225. The team must also pay
       $200 for each practice session on the arena ice outside of game days. The Ice
       Cats must have insurance for their events covering a minimum combined single
       limit of $1 million, for public liability and property damage, and including fire
       damage liability of $50,000.




                                            38
III. Tucson Arena Historical Operations (cont’d)


     In addition to rental fees and/or a percentage of gross receipts, the Ice Cats are
     responsible for paying arena charges of $0.15 for printing each ticket and three
     percent of all credit card transactions occurring at the convention center ticket
     office.


     Mariachi Conferences

     The Mariachi Conference uses all Tucson Convention Center facilities for its
     events including the exhibit halls, arena, ballrooms, meeting rooms, music hall,
     Leo Rich Theater, and the Grand Lobby. The event is required to pay a rental fee
     of $19,000, of which half is due at the acceptance of the lease permit and the
     second half before the event occurs. The event is not required to pay any
     percentage of gross receipts to the facility.

     The event is required to have a certificate of commercial, general, and excess
     liability insurance with a minimum combined single limit of $1 million including
     fire damage legal liability of $50,000.


     Jehovah’s Witnesses

     The Christian Congregation of Jehovah’s Witnesses Convention uses the arena,
     the north exhibit hall, meeting rooms, and parking lots for their event. The
     convention usually occurs over a three day period running Friday through
     Saturday, with Thursday used as a move-in day. The convention meets on these
     days for four weekends during the summer.

     This convention is required to pay a rental fee of $18,000 for a total of 16 days of
     use over the four weekends. Included in the sixteen days are four days when the
     arena and the north exhibit hall are used and the meeting rooms are used for the
     remaining twelve days. A rental fee of $1,800 is due upon signing of the permit
     as a deposit and the remaining $16,200 is due on the first day of use. The
     convention is also required to have an insurance policy for the event.




                                           39
III. Tucson Arena Historical Operations (cont’d)


Past Tenants

The TCC Arena currently does not have a full-time minor league sports tenant in the
arena. In the past, the TCC Arena has been host to franchises in various hockey leagues,
but none of which have played in the facility for longer than two seasons. Below is a
summary of the minor league hockey teams that have played in the TCC Arena.

       Tucson Mavericks

       The Tucson Mavericks were a member of the Central Hockey League (“CHL”).
       The team played in the TCC Arena for one season, 1975-76, and folded at the end
       of the season. The team had a record of 14 wins, 53 losses, and nine ties during
       that single season. The previous owners of the Tucson Toros baseball team
       started the franchise.


       Tucson Icemen

       The Tucson Icemen were a member of the Southwest Hockey League (“SWHL”).
       The team played in the TCC Arena for a single season, 1976-77.


       Tucson Rustlers

       The Tucson Rustlers team was a member of the Professional Hockey League
       (“PHL”). The team played in the TCC Arena for a single season, 1978-79.


       Tucson Gila Monsters

       The Tucson Gila Monsters were a member of the West Coast Hockey League
       (“WCHL”). The team played in the TCC Arena for two seasons, 1997-98 and for
       1998-99 until they folded during their second season. The team folded because of
       low attendance levels and financial problems, and team management was unable
       to renegotiate a lease with the City of Tucson for continued use of the TCC
       Arena. When team management realized that they could not renegotiate the lease,
       the team folded to prevent further financial losses. During the 1997-98 season,
       the team had an average game attendance of 1,136 spectators, well below the
       WCHL league average of 3,663. At the same time, the University of Arizona’s
       club team, Ice Cats, averaged 2,325 people per game at the TCC Arena.




                                           40
III. Tucson Arena Historical Operations (cont’d)


       Tucson Scorch

       The Tucson Scorch team was scheduled to be a part of the Western Professional
       Hockey League (“WPHL”). The team was scheduled to begin play in the TCC
       Arena for the 1999-2000 season, but the league cancelled the team only hours
       before the season began because the team did not meet the WPHL’s licensing
       agreement in regards to selling sufficient season tickets and corporate
       sponsorships, as well as not having the financial stability to support the
       obligations of team payroll. The team also failed to provide insurance and other
       guarantees to the City of Tucson. The team was owned by Joe Milano, who had
       also experienced a failed franchise the previous season with the Waco Wizards of
       the WPHL. Since the Scorch folded, Mr. Milano has started and closed a UHL
       team in Columbus, Ohio, the Columbus Stars, within its first season of operations.


Summary

The historical operations for the existing TCC Arena were analyzed to provide a
contextual for which to measure the market potential and incremental benefits that could
be generated by a new arena. Key findings detailed in this section included:

   •   The TCC Arena has averaged approximately 80 performances over the past five
       years, with a high of 88 performances in 2002. The most frequently hosted events
       included Ice Cats hockey games, family shows, concerts, ice shows, circus acts,
       and rental of the arena for youth hockey games. In addition, there are about 70
       move-in/move-out days for events held at the arena each year, resulting in a total
       of approximately 140 to 160 annual use days over the past five years.

   •   There are numerous convention events that utilize the arena for use during their
       events. Some of these events have included the Christian Congregation of
       Jehovah’s Witnesses Convention, the Gem & Mineral Society Show, and the
       Watch Tower Bible & Tract Society Convention, among others.

   •   The annual paid attendance at the TCC Arena has averaged about 143,000 patrons
       over the past five years, with a high of 169,679 in 2002 and a low of 112,881 in
       2000. The type of events that have attracted the largest number of paid attendees
       on an annual basis have been Ice Cats hockey games, concerts and circus acts.

   •   The events that attract the largest number of paid attendees per performance have
       been wrestling, mainly performances by the WWE, with an average paid
       attendance of 5,660 patrons per event. Concerts have an average attendance of



                                            41
III. Tucson Arena Historical Operations (cont’d)


      4,106 patrons per event, followed by motor sport events with an average paid
      attendance of 3,359 patrons per event.

  •   Over 60 percent of events hosted at the TCC Arena have paid attendance levels of
      4,000 and below. The TCC Arena rarely hosts an event that utilizes the full
      capacity of the arena.

  •   For each of the past two fiscal years, the Tucson Convention Center and Arena
      has generated over $2.9 million annually in total operating revenues, while
      incurring operating expenses of over $5.5 million annually, resulting in an annual
      net loss from operations of over $2.5 million, including contributions to a capital
      reserve account. The main sources of revenues have been rent for use of the TCC
      facilities, parking, and concessions. The most costly expenses have been salaries
      and wages of employees of the TCC, maintenance costs, electricity, and
      administration.

  •   The TCC Arena has hosted four minor league hockey teams in the past, with three
      occurring for only a single season during the 1970s and one lasting for nearly two
      years from 1997-99. In addition, the venue was scheduled to host a minor league
      hockey team beginning in 1999, but the franchise withdrew before the beginning
      of the 1999-2000 season.

  •   Major factors for the failure of the two most recent minor league hockey
      franchises in Tucson have included low ticket sales, financial problems, and
      issues with team management, including not being able to renegotiate a lease with
      the City of Tucson and not meeting league requirements. It is unlikely that the
      failures are a direct reflection of the market’s ability to support a team, but rather
      the team’s ownership experience and capabilities.

  •   A key component for the establishment of a minor league sports franchise and its
      success is a strong ownership team that is committed to the team, willing to exert
      a strong effort in marketing the team to the local market, is able to establish
      advertising and sponsorships from local corporations and individuals, and is able
      to work well with the league directors on meeting the requirements for
      maintaining a minor league franchise.




                                             42
        Executive Summary
I.      Introduction
II.     Overview of the Tucson Market
III.    Tucson Arena Historical Operations
                                             IV. Comparable Facilities
IV.     Comparable Facilities
V.      Competitive and Local Facilities
VI.     Market Surveys
VII.    Estimated Event Demand
VIII.   Building Program Analysis
IX.     Arena Pro Forma Analysis
IV. Comparable Facilities


The purpose of this section is to present an overview of selected comparable facilities to
provide a benchmark from which to assess the current and potential operations of a new
multi-purpose arena in Tucson. The arenas reviewed in this section were selected based
on one or more of the following factors: market size, geographic location, seating
capacity, year opened, and /or event focus.

The table below presents a summary of the 13 facilities that were identified to provide a
benchmark for potential operations of a new arena in Tucson.
                                                                                     Comparable Facilities

                                                                                                       Market                             Year    Seating
Facility                                                        Location                            Population   Tenant(s)1             Opened   Capacity

Ford Center                                                     Oklahoma City, OK                    1,140,300   CHL                      2002     20,800
Jacksonville Veterans Memorial Arena                            Jacksonville, FL                     1,121,800   WHA2                     2003     16,000
Save Mart Center                                                Fresno, CA                             853,700   ECHL, University         2003     16,500
Pepsi Arena                                                     Albany, NY                             841,500   af2, AHL, University     1990     17,500
Van Andel Arena                                                 Grand Rapids, MI                       768,300   AHL, AFL                 1996     12,500
Alltel Arena                                                    North Little Rock, AR                  632,300   af2, University          1999     18,000
Dodge Arena                                                     Hidalgo, TX                            624,100   ECHL                     2003      6,800
Bi-Lo Center                                                    Greenville, SC                         585,300   ECHL, NIFL               1998     16,000
American Bank Center                                            Corpus Christi, TX                     409,400   CHL, University          2004     10,500
Verizon Wireless Arena                                          Manchester, NH                         398,500   af2, AHL                 2001     11,770
CenturyTel Center                                               Shreveport, LA                         380,000   af2, CHL                 2000     12,500
Budweiser Events Center                                         Loveland, CO                           269,200   CHL                      2003      7,200
Laredo Entertainment Center                                     Laredo, TX                             217,900   af2, CHL                 2002      9,622

Average                                                                                                634,100                            2000     13,515

1
    The following are sports league tenants at the above facilities, where listed:
af2:      Arena Football 2
AFL:      Arena Football League
AHL: American Hockey League
CHL:       Central Hockey League
ECHL: 'AA' Hockey League
NIFL: National Indoor Football League
University: University teams (I.e. basketball, volleyball, hockey)
WHA2: World Hockey Association 2

Source: CSL Research




As shown, several markets with populations ranging from approximately 217,900 in
Laredo, Texas to approximately 1.1 million in of Jacksonville, Florida host comparable
venues with one or two minor league tenants and, in some cases, a university tenant. The
average maximum capacity of the comparable facilities is approximately 13,500, with the
majority of the venues built within the past five years. Through research of CSL’s
database, information received from various publications, and discussions with facility
management, information was gathered on the comparable arenas including physical
characteristics, tenant and non-tenant event levels, ownership and management, premium
seating, and other operational characteristics.




                                                                                               43
IV. Comparable Facilities (cont’d)


Jacksonville Veterans Memorial Arena

Jacksonville Veterans Memorial Arena is
located in Jacksonville, Florida and
opened in November 2003. The $130
million arena replaced the former
Jacksonville     Veterans    Memorial
Coliseum. The facility seats up to
16,000, which is nearly twice the
capacity of the former Coliseum. The
World Hockey Association 2 (WHA2)
Jacksonville Barracudas serves as the
arena’s only tenant. The arena is owned by the City of Jacksonville and operated by
SMG, a private management company.

The old Veterans Memorial Coliseum was built in 1959 and lacked many of the features
and amenities found in modern arenas. In 2000, Jacksonville voters approved the Better
Jacksonville Plan, which utilized a half-cent sales tax increase to support approximately
$2.2 billion in total spending, including the $130 million arena as part of a downtown
initiative similar to the Rio Nuevo Project.

According to facility management, the arena hosted less than 100 events in its first year
of operations, which included hockey games, concerts, family shows, graduations, and
religious events, among others.

The arena’s premium seating amenities include 28 annually-leased suites, eight suites
leased on an event-by-event basis, 94 terrace seats and 1,100 club seats. The following
table outlines the premium seating inventory, average annual fee, percentage of premium
seating that is leased, ticket costs for premium seating and potential annual revenues.

                                                   Jacksonville Veterans Memorial Arena
                                                              Premium Seating

                                                                                                              Tenant
                                                                   Average                 Percent             Ticket                Potential
                                             Inventory           Annual Fee                Leased            Revenue          Annual Revenue

                                                                                                                        (1)
Private Suites                                      28              $50,000                 100%            $201,600               $1,198,400
Private Suites - event by event                      8        $500 to $1,000                  n/a                 n/a                      n/a
Terrace Seats                                       94               $3,000                   n/a                 n/a                $282,000
Club Seats                                       1,100                 $300                 100%                  $0                 $330,000

Total Premium Seating Revenue                                                                                                     $1,810,400
(1)
      Suites include all tickets and non-tenant tickets are not listed in seating manifest with concert promoters




                                                                         44
IV. Comparable Facilities (cont’d)


The arena incorporates 28 single suites, plus eight flexible corner suites which can open-
up into four party suites, one large "party deck" known as the St. John’s Suite Level that
offers 94 barstool seats positioned at a drink rail as well as 1,100 club seats. The private
suites include 12 seats plus four barstools averaging $50,000 annually, which are offered
on one-, three-, and five-year lease term, including tickets to all arena events. The
executive suites are located 24 rows above the event floor. Direct access to the suite
level is available through a private entrance. The suites are fully furnished with
comfortable seating, a color television, refrigerator, storage cabinets and more. Other
amenities include VIP parking, personal concierge service, in-suite catering and access to
private bar and dining. The event day suites, which are not sold with an annual
agreement, are sold as event day suites for $500 for hockey and family shows and $1,000
for concerts plus the price of the event tickets.

The St. John’s Suite Level barstool seats average $3,000 per seat, which includes one
ticket per seat to all events. The arena also has 1,100 club seats, which are sold on one-,
three-, and five-year lease terms for a seat license fee of $300 per seat. Club seat holders
are required to buy hockey event tickets and are given the first right to purchase tickets to
all events.

Van Andel Arena

Located in downtown Grand Rapids,
Michigan, Van Andel Arena opened in
1996. The arena has a U-shape seating
configuration that features flexible
seating capacities of 10,834 permanent
seats for hockey and upwards of 12,500
for center stage concerts. The 285,000
square foot multi-purpose arena is home
of the AHL's Grand Rapids Griffins and
the AFL's Grand Rapids Rampage. A
third tenant, the CBA Grand Rapids Hoops, played in the arena until the league went
defunct in 2000. Van Andel Arena is owned by the Kent County-Grand Rapids
Convention-Arena Authority and managed by SMG.

According to facility management, the arena held over 100 events in the past year and
had an annual total attendance of over 750,000 spectators. The venue held numerous
events in addition to tenant events, including concerts, family shows, ice show
performances, motor sport events, wrestling, rodeos, trade shows and other events such as
the NCAA Hockey Regional Finals and the AFL Arena Bowl XV game. The venue




                                              45
IV. Comparable Facilities (cont’d)


operates at a profit and consistently ranks as one of the best performing mid-sized arenas
in the country.

Premium seating amenities incorporated into Van Andel Arena include 42 suites and
1,800 club seats. The following table outlines the premium seating inventory, average
annual fee, percentage of premium seating that is leased, ticket costs for premium seating
and potential annual revenues.

                                            Van Andel Arena
                                            Premium Seating

                                                                         Tenant
                                                Average       Percent     Ticket                Potential
                                Inventory     Annual Fee      Leased    Revenue          Annual Revenue

                                                                                   (1)
Private Suites                        42        $30,000        100%          $0               $1,260,000
                                                                                   (1)
Club Seats                         1,800          $550          98%          $0                $970,200

Total Premium Seating Revenue                                                                $2,230,200
(1)
      No tickets included


The arena incorporates 42 annual private suites with seating capacities ranging from 16 to
20 seats. The suites can be leased on a three-, five- or seven-year basis at an annual
average price of $30,000, which does not include event tickets. Suite amenities include
parking passes, a private entrance and occasional suite holder parties and events. The
arena also includes 1,800 club seats, of which 900 are operated by the building
management and leased through a personal seat license system for $600 per year on a
three-, five- or seven-year basis plus the cost of event tickets. Approximately 200 club
seats are controlled by the Rampage and leased through a personal seat license for $500
per year plus a required season ticket purchase averaging $300. The remaining 700 club
seats are controlled by the Griffins and leased through a personal seat license for $500
per year plus a required season ticket purchase averaging $860.

According to local representatives, Van Andel Arena has been instrumental in facilitating
the revitalization of downtown Grand Rapids, particularly in the area of the Cherry Street
entertainment district.




                                                   46
IV. Comparable Facilities (cont’d)


Ford Center

The Ford Center opened in
June 2002 and is located in
downtown Oklahoma City
adjacent to the Cox Business
Services Convention Center.
The arena features flexible
seating capacities of 18,178 for
hockey, 19,675 for basketball and approximately 20,800 for center stage concerts. The
586,000 square foot facility features four seating levels and a press level. While the
Center was designed, particularly the seating capacity, with the ability to accommodate
an NBA or NHL team in the future, its two current tenant franchises are the Central
Hockey League (CHL) Oklahoma City Blazers and Arena Football 2 (AF2) Oklahoma
City Yard Dawgz. The city-owned facility is operated by SMG.

Oklahoma City voters approved the MAPS Program in 1993. The MAPS Program
imposed a citywide, one-cent sales tax over a 66-month period to finance convention,
cultural and sporting facilities, including the new Ford Center. The sales tax portion of
the MAPS program generated approximately $88.7 million, funding the arena’s
development cost. The Ford Center generates $8.1 million over 15 years through a
naming rights deal with the Oklahoma Ford Dealers which goes directly back to the City
of Oklahoma reserve fund, which funds the MAPS Program.

The facility has hosted fewer than 100 events in a recent year with an annual attendance
level of approximately 550,000 patrons. Events hosted included tenant events, concerts,
family shows, rodeo events, and professional exhibition games. The facility generated an
operating surplus in its most recent year of operation.

Premium seating amenities incorporated into the Ford Center include 56 private suites of
which 8 are party suites and 3,300 club seats. The following table outlines the premium
seating inventory, average annual fee, percentage of premium seating that is leased, ticket
costs for premium seating and potential annual revenues.
                                                             Ford Center
                                                           Premium Seating

                                                                                          Tenant
                                                              Average        Percent       Ticket              Potential
                                               Inventory    Annual Fee       Leased      Revenue        Annual Revenue

Private Suites                                       48        $28,000         90%       $345,600 (1)         $864,000
Party Suites                                          8             n/a         n/a            n/a                  n/a
Club Seats                                        3,300          $800         100%     $1,980,000 (1)         $660,000

Total Premium Seating Revenue                                                                                $1,524,000
(1)
      Includes tickets to hockey tenant only


                                                                  47
IV. Comparable Facilities (cont’d)


The Ford Center incorporates a total of 56 suites, which consist of eight party suites,
leased on an event-by-event basis, and 48 private suites leased on one-, three- and five-
year contract terms. The private suites have seating for eight-, 12- or 14-seats and range
in price from $21,000 to $35,000, depending on the location of the suite, the suite’s
capacity and the lease term agreement. Suite prices include tickets to all Blazers hockey
games and the first right to purchase tickets for other events. In addition, the Center
incorporates approximately 3,300 club seats, priced between $760 and $825 per year,
depending on the lease term. Club seat prices include tickets to all Blazers games, with
the first right to purchase tickets to other events.

The Ford Center, along with the development of the 13,066-seat SBC Bricktown
Ballpark, has contributed significantly to the revitalization of the southern portion of
downtown Oklahoma City.


Bi-Lo Center

Located in downtown Greenville, South
Carolina, the Bi-Lo Center opened in
1998 and has a maximum capacity of
16,000 seats. The facility has two sports
tenants, the ‘AA’ Hockey League
(ECHL) Greenville Grrrowl and the
National Indoor Football League (NIFL)
Greenville RiverHawks. In the past, the
facility hosted the af2 Carolina Rhinos
and the NBDL Greenville Groove. The
arena is owned by the Greenville Memorial Auditorium Tax District and is privately
managed by Centerplate.

The Bi-Lo Center was built for a total cost of $63 million. Approximately 55 percent of
the total project costs were funded through a five percent hotel tax ($20 million), local
property tax revenues ($12 million) and a state grant ($2.5 million). The remaining 45
percent was supported through $24 million in Certificates of Participation issued by the
Greenville Memorial Auditorium District Public Facilities Corporation, as well as rental
payments and other private contributions, which totaled approximately $4.5 million of
the development cost.

The Bi-Lo Center hosts well over 100 events annually. Non-tenant events include
concerts, family shows, motor sport events, graduations, religious events, and other
sporting events.



                                            48
IV. Comparable Facilities (cont’d)



Premium seating amenities incorporated into the Bi-Lo Center include 30 private suites
and 1,000 club seats. The following table outlines the premium seating inventory,
average annual fee, percentage of premium seating that is leased, ticket costs for
premium seating and potential annual revenues.
                                                            Bi-Lo Center
                                                          Premium Seating

                                                                                       Tenant
                                                             Average        Percent     Ticket              Potential
                                             Inventory     Annual Fee       Leased    Revenue        Annual Revenue

Private Suites                                       30      $47,000         100%     $216,000 (1)        $1,194,000
Club Seats                                        1,000       $1,650          75%     $600,000 (2)         $637,500

Total Premium Seating Revenue                                                                            $1,831,500
(1)
      Tickets to all events are included
(2)
      Tickets to all tenant events are included


Bi-Lo Center incorporates 30 private suites located on the concourse level, of which 24
suites seat up to 12 people and lease for a price of approximately $45,000 per year. The
remaining six suites have a capacity of 16 seats, and lease for approximately $55,000
annually. Suites can be leased for five- or seven-year terms. The lease price includes
tickets to all tenant sporting events held at the Center as well as first option to purchase
tickets to public events. The suites are appointed with the following amenities: two
televisions, wet bar, refrigerator, private bathrooms, telephones, closets, balcony viewing
areas and up to five VIP parking passes.

In addition to suites, the Center also offers over 1,000 cushioned club seats in sections
112 to 115. The cost is $1,650 annually per seat, which includes season tickets to all
Grrrowl and RiverHawks events, with the first option to purchase tickets to other arena
events. The seats are leased for three- or five-years. Amenities include membership to
the VIP Club Lounge, VIP parking passes and in-seat service for hockey games.

Pepsi Arena

Located in Albany, New York, Pepsi Arena
opened in 1990 and has an adaptable seating
capacity of between 6,000 and 17,500 seats. The
multi-purpose arena recently became the full-
time home of Siena College Saints’ men’s
basketball team. The Saints have played portions
of their home schedule at the arena since the
1990-91 season when it was called Knickerbocker



                                                                 49
IV. Comparable Facilities (cont’d)


Arena. The Siena College women’s basketball team also plays several home games at
the arena each year. The arena is also home to the AHL River Rats and the af2 Albany
Conquest. The arena is owned by Albany County and operated by SMG.

Other than tenant games, the venue hosts numerous other events such as concerts, family
shows and other sporting events. Additional events hosted include motor cross and
monster truck events with the venue averaging over 100 events and over 700,000
attendees annually. In the past few years, the venue hosted the NCAA National
Championship in hockey (Frozen Four), wrestling, the Eastern Regional in basketball
(Sweet Sixteen) and hockey, as well as the MAAC basketball championship and the
ECAC hockey championships. The arena was also the former home of the NLL Albany
Attack which was sold in 2003 and moved to the HP Pavilion in San Jose. The arena also
lost its AFL team, the Firebirds, when the franchise moved to Indianapolis prior to the
2001 season. Soon thereafter, the team was replaced with an af2 expansion team, the
Albany Conquest, in 2002.

Premium seating amenities incorporated into the Pepsi Arena include 25 private suites.
The following table outlines the premium seating inventory, average annual fee,
percentage of premium seating that is leased, ticket costs for premium seating and
potential annual revenues.
                                                         Pepsi Arena
                                                       Premium Seating

                                                                                    Tenant
                                                          Average        Percent     Ticket              Potential
                                           Inventory    Annual Fee       Leased    Revenue        Annual Revenue

Private Suites                                   25       $48,000         100%     $384,000 (1)         $816,000
Club Seats                                        0            $0           n/a          $0                   n/a

Total Premium Seating Revenue                                                                           $816,000
(1)
      Tickets to all events are included


There are 25 luxury suites inside the arena, each consisting of 16 seats, cable television,
private bathroom, and private refrigerator. Suites are located at the top of the lower bowl
of the arena and are rented on three-year leases. The average annual price of a luxury
suite is $48,000. The venue does not offer club seating. In the past, the River Rats
offered 140 premium club seats; however, club seat sales struggled due to a lack of public
interest in premium seats because there were available general admission seats with the
same sight lines as well as relationship issues with the venue’s concessionaire. The Pepsi
Company purchased naming rights for the arena for $3 million over 10 years, which
expires in 2007. Albany County has recently approved a sports bar and club
development, which will seat approximately 200 people with a required membership




                                                              50
IV. Comparable Facilities (cont’d)


allowing them access to upscale food and beverage services similar to what is offered to
suite holders, among other amenities.


Save Mart Center

Located in Fresno, California, the Save Mart
Center opened in 2003 and has a seating capacity
of 16,500 seats. The multi-purpose arena is located
on the California State University – Fresno campus
(Fresno State University) and is home to the Fresno
State men’s and women’s basketball teams, as well
as a minor league hockey team from the ECHL, the
Fresno Falcons. The $87 million arena, is owned by Fresno State University and
operated by SMG.

In addition to tenant games, the arena hosts other events throughout the year such as
concerts, family shows, other university events including graduations, and other sporting
events. In the past year, the Save Mart Center also hosted the 2004 Western Athletic
Conference men’s and women’s basketball tournament. The venue held over 100 events
and experienced an operating loss in its first full year of operations.

The premium seating amenities incorporated into the Save Mart Center include 32 private
suites and 1,080 club seats. The following table outlines the premium seating inventory,
average annual fee, percentage of premium seating that is leased, ticket costs for
premium seating and potential annual revenues.
                                                           Save Mart Center
                                                           Premium Seating


                                                                                                          Tenant
                                                                Average                Percent             Ticket                Potential
                                          Inventory           Annual Fee               Leased            Revenue          Annual Revenue

Private Suites                                   32              $55,000                 100%            $409,600 (2)          $1,350,400
Arena Builders' Seats (1)                     1,080              $1,500 (3)              100%                  $0                      n/a

Total Premium Seating Revenue                                                                                                  $1,350,400

(1)
    Seats are purchased with a one-time premium seat license fee; is not an annual fee.
(2)
    Suites include all tenant hockey tickets and non-tenant tickets are not listed in seating manifest
(3)
    Builder's Seats leased for $15,000 for a 10 year term, paid upfront. Tickets are not included and if the seat owner
    does not purchase season tickets for men's basketball for two years in a row the seat license is revoked.


There are 32 private suites inside the arena, each consisting of 14 seats, cable television
and a private refrigerator. Suites are rented on 10-year terms. The average annual price


                                                                     51
IV. Comparable Facilities (cont’d)


of a private suite is $55,000. The arena also includes 1,080 arena builders’ seats. The
arena builders’ seats are located courtside and the sections on the sidelines. The arena
builders’ seats are purchased with premium seat licenses at $25,000 each. The purchaser
of each arena builders’ seat has first right of refusal for all events and contains the license
for that seat on a long-term basis. The arena also includes two club restaurants, a 350-
seat lecture hall, and an annex for athletic department offices. Save Mart Supermarkets
purchased the naming rights of the arena for $40 million over 20 years.


Alltel Arena

Located in North Little Rock, Arkansas, Alltel Arena
opened in 1999 and has a seating capacity of 18,000
seats. The multi-purpose arena is home to the
University of Arkansas – Little Rock men’s
basketball team. However, UALR men’s basketball
team will move to a new campus arena at the
beginning of the 2005/06 season. The venue also serves as the home venue to the af2
Arkansas Twisters. The arena was home to the ECHL’s Arkansas Riverblades through
the 2002/03 season. Alltel Arena is owned by Pulaski County and is operated by SMG.

A large number of the events held at Alltel Arena are tenant games, but numerous other
events are held at the venue throughout the year. Some of these events include concerts,
family shows, and other sporting events. The facility held less than 100 events during the
past year and drew over 350,000 patrons. In the recent fiscal year, the arena operated at a
profit.

The premium seating amenities incorporated into Alltel Arena include 32 private suites.
The following table outlines the premium seating inventory, average annual fee,
percentage of premium seating that is leased, ticket costs for premium seating and
potential annual revenues.

                                                              Alltel Arena
                                                            Premium Seating


                                                                                                    Tenant
                                                                Average                  Percent     Ticket                Potential
                                           Inventory          Annual Fee                 Leased    Revenue          Annual Revenue

                                                                                                              (2)
Private Suites                                    32             $27,400 (1)              100%          $0                $876,800
Club Seats                                         0                  $0                  100%          $0                      $0

Total Premium Seating Revenue                                                                                             $876,800

(1)
      Estimated. Suites monies were received upfront and applied to project financing.
(2)
      No tickets are included



                                                                     52
IV. Comparable Facilities (cont’d)


There are 32 luxury suites inside the arena, with seating ranging from 14 to 18 seats. To
assist in paying for the construction cost of the facility when it was built, the arena sold
the suites at a large up-front cost with a long-term lease. The leasing price of the suites
sold at $1 million for four suites with a 20-year term, $500,000 for four suites with a 20-
year term, $375,000 for four suites with a 10-year term, and $175,000 for twenty suites
with an 8-year term. Though the entire amount was received at the beginning of the lease
term during the first year of operations, the estimated amount received on an annual basis
is $27,400. All of the suites were leased when the venue began operating. Alltel
Corporation purchased naming rights for the venue at a cost of $7 million.

The facility has 2,000 premium seats, considered the “Save Your” seating, that do not
have an annual fee, but require an up-front premium seat license of $2,000 over a term of
ten years. In addition, seat purchasers are required to donate $150 annually to the
University of Arkansas – Little Rock’s Athletic Foundation. Seat purchasers have the
first right of refusal to purchase tickets to events in the premium seating sections, which
are the sections in the lower bowl at center court on both sides of the court.


CenturyTel Center

Located in Bossier City, Louisiana, the
CenturyTel Center opened in 2000 and has a
seating capacity of 12,500 seats. The venue is
home to the Bossier-Shreveport Mudbugs of
the CHL and the Bossier City Battle Wings of
af2. The arena is owned by the City of
Bossier and is managed by SMG.
CenturyTel, Inc. purchased naming rights for
the arena at a cost of $5 million over 10 years.

Throughout the past year, the arena has hosted numerous tenant events, concerts, and
family shows. The tenant events consisted of the home games of the Mudbugs hockey
and Battle Wings arena football teams. Concerts consisted of groups in the genre of rock
as well as country & western, among others. Family shows consisted of performances by
Sesame Street Live, Lippizaner Stallions, and rodeos, among others. In a recent year, the
facility hosted slightly less than 100 events and drew nearly 290,000 attendees. The
facility operated at a profit.

The premium seating amenities incorporated into the CenturyTel Center include 16
private suites and 186 club seats. The table below outlines the premium seating




                                              53
IV. Comparable Facilities (cont’d)


inventory, average annual fee, percentage of premium seating that is leased, ticket costs
for premium seating and potential annual revenues.
                                                              CenturyTel Center
                                                               Premium Seating

                                                                    Average                Percent     Ticket                Potential
                                              Inventory           Annual Fee               Leased       Fees          Annual Revenue

                                                                                                                (2)
Private Suites                                       16             $45,000                  100%    $138,240               $581,760
                                                                                                                (2)
Club Seats                                          186              $1,875    (1)           100%    $133,920               $214,830
Total Premium Seating Revenue                                                                                               $796,590
(1)
      Club seats sell at an average game price of $25; annual revenues are estimated.
(2)
      Tickets to all events are included, but are listed in the seating manifest with promoters.


There are 16 private suites inside the arena, each consisting of 12 seats and lease for a
three-year period. The average annual price of a suite is $45,000. Each of the club seats
are sold on a game-by-game basis at an average of $25 per event. With the premium
seating combination of private suites and club seats, the CenturyTel Center has an
opportunity to generate approximately $797,000 in annual premium seating revenue.


Verizon Wireless Arena

Located in Manchester, New Hampshire, the
$70 million Verizon Wireless Arena opened
in 2001 and has a maximum seating capacity
of 11,770 seats. The facility hosts two
tenant sports franchises, the Manchester
Monarchs of the American Hockey League
and the Manchester Wolves of af2. The
arena is owned by the City of Manchester and is managed by SMG. Verizon Wireless
Company purchased naming rights for the venue at a cost of $11.4 million over 15 years.

This venue not only hosts two minor league sports tenants, but it also holds numerous
other sporting events, concerts, and family shows. Some of the events that have been
held in the past include games by the University of New Hampshire hockey team, circus
performances, and concerts such as Elton John and Bon Jovi. In its most recent fiscal
year, the venue operated at a profit and hosted over 100 events and drew over 700,000
patrons.

Premium seating amenities incorporated into the Verizon Wireless Arena include 34
private suites and 600 club seats. The table on the following page outlines the premium




                                                                         54
IV. Comparable Facilities (cont’d)


seating inventory, average annual fee, percentage of premium seating that is leased, ticket
costs for premium seating and potential annual revenues.
                                                           Verizon Wireless Arena
                                                              Premium Seating

                                                                   Average                 Percent        Ticket                Potential
                                             Inventory           Annual Fee                Leased          Fees          Annual Revenue

                                                                                                                   (1)
Private Suites                                      34              $37,500                 100%      $1,060,800               $214,200
                                                                                                                   (2)
Club Seats                                         600               $1,600                 100%       $480,000                $480,000

Total Premium Seating Revenue                                                                                                  $694,200
(1)
      Tickets to all events are included and are not listed in the seating manifest with promoters.
(2)
      Tickets to tenant events are included


The suites available at Verizon Wireless Arena seat up to 12 people and lease for an
approximate annual price of $37,500. The lease terms can be any length between five
and ten years. The suites are located on the two long sides of the arena and are at the top
of the lower bowl. Included in the price of the suites are tickets to all Manchester
Monarchs home games, tickets to all qualified concerts and other events, and three VIP
parking passes. The club seats at the arena lease for $1,600 on an annual basis and are
located in the lower bowl in the center of the two main sides. Club seat ticket holders
receive tickets to all hockey games, in-seat food and beverage service, and access to the
Sam Adams Lounge.


American Bank Center

Located in Corpus Christi, Texas, the $49.6
million American Bank Center opened in the
fall of 2004. The venue has a seating capacity
of 10,500 seats of which about 8,200 are fixed
seats. The facility hosts the Corpus Christi
Rayz of the CHL and is also home court for
the men’s and women’s basketball teams from
Texas A&M University – Corpus Christi. The
arena is owned by the City of Corpus Christi and is privately managed by SMG.

The venue was built adjacent to the current Corpus Christi Convention Center, which also
recently added two large ballrooms to bring its total available space to about 180,000
square feet.

In addition to hockey and basketball games, the American Bank Center will host various
concerts, family shows, motor sport events, other events, and will also be used as a part



                                                                        55
IV. Comparable Facilities (cont’d)


of large conventions and trade shows. Events currently scheduled include concerts by
Cher, Clint Black, and Amy Grant, as well as Grease theatrical performances, symphony
concerts, Harlem Globetrotters, and ice shows.

Premium seating amenities incorporated into American Bank Center include 11 private
suites and 302 club seats. The table below outlines the premium seating inventory,
average annual fee, percentage of premium seating that is leased, ticket costs for
premium seating and potential annual revenues.
                                                          American Bank Center
                                                            Premium Seating

                                                                Average          Percent     Ticket                Potential
                                              Inventory       Annual Fee         Leased       Fees          Annual Revenue

                                                                                                      (1)
Private Suites                                      11          $24,000            93%      $79,200               $166,320
                                                                                                      (1)
Club Seats                                         302           $2,000            90%     $181,200               $362,400

Total Premium Seating Revenue                                                                                     $528,720
(1)
      Tickets to tenant events are included


The 11 private suites in the venue lease for an annual fee of approximately $24,000. The
suites have 10 to 14 over-sized, theater-style cushioned seats. The suite holders have
access to a VIP lounge and restaurant, a buffet area in the suite, an upscale menu of food
and beverage catering, private suite concourse restrooms, and tickets to all events. The
club seats sell for an annual fee of $2,000 and include season tickets to the Corpus Christi
Rayz and the men/women Islanders basketball games.


Laredo Entertainment Center

Located in Laredo, Texas, the $36.5 million Laredo
Entertainment Center (“LEC”) opened in 2002 and has a
capacity of 9,622 seats, which about 8,600 seats are fixed
seats. The LEC has two tenants, including the Laredo
Bucks of the CHL and the Laredo Law of af2. The arena is
owned by the City of Laredo and is managed by SMG.

Besides hockey and arena football games, the LEC is host to numerous other events
including ice shows, concerts, family shows, and other events. For the upcoming year,
the venue is planned to have events such as WWE wrestling, Sesame Street Live, the
Broadway show “Cats”, performances by Yanni, Harlem Globetrotters, Taste of Laredo,
and the 2005 CHL All-Star Game. Located near the Mexico border, the arena draws
attendance from both the United States and Mexico. In a recent year, the venue operated
at a profit and hosted well over 100 events, drawing over 500,000 patrons.


                                                                   56
IV. Comparable Facilities (cont’d)



Premium seating incorporated into the LEC includes 14 private suites that have seating
for approximately 14 people. The suites lease at an annual rate ranging from $45,000 to
$55,000. The table below outlines the premium seating inventory, average annual fee,
percentage of premium seating that is leased, ticket costs for premium seating and
potential annual revenues.
                                                          Laredo Entertainment Center
                                                               Premium Seating

                                                                                                              Tenant
                                                                   Average                 Percent             Ticket             Potential
                                             Inventory           Annual Fee                Leased            Revenue       Annual Revenue

Private Suites                                       14             $50,700                   80%           $134,400 (1)         $433,440
Club Seats                                            0                  n/a                   n/a                n/a                  n/a

Total Premium Seating Revenue                                                                                                    $433,440
(1)
      Suites include all tickets and non-tenant tickets are not listed in seating manifest with concert promoters




Budweiser Events Center

Located in Loveland, Colorado, the Budweiser
Events Center opened in 2003 and has a seating
capacity of 7,200 seats. The venue is a part of
“The Ranch”, which is the name of the entire
Larimer County Fairgrounds and Events
Complex.      Besides the Budweiser Events
Center, The Ranch contains other facilities
including an exhibition hall, an indoor rodeo arena, and two livestock pavilions. The
arena has two tenants including the Colorado Eagles of the CHL and the Colorado Chill
of the National Women’s Basketball League. The arena is owned by Larimer County and
is managed by Global Spectrum.

In addition to tenant events, the Budweiser Events Center hosts various other events
throughout the year including concerts, Harlem Globetrotters, a preseason Colorado
Mammoth game of the Indoor Lacrosse League, and World Championship Ice Racing
events, among other events.

Premium seating incorporated into the Budweiser Events Center includes 24 private
suites and 500 club seats. The table below outlines the premium seating inventory,
average annual fee, percentage of premium seating that is leased, ticket costs for
premium seating and potential annual revenues.




                                                                         57
IV. Comparable Facilities (cont’d)


                                                          Budweiser Events Center
                                                             Premium Seating

                                                                                                             Tenant
                                                                   Average                Percent             Ticket                Potential
                                             Inventory           Annual Fee               Leased            Revenue          Annual Revenue

                                                                                                                       (1)
Private Suites                                      24              $41,000                 100%           $253,440                $730,560
                                                                                                                       (2)
Club Seats                                         500                $990                  100%           $440,000                 $55,000

Total Premium Seating Revenue                                                                                                      $785,560
(1)
      Suites include all events and non-tenant tickets are not listed in seating manifest with concert promoters
(2)
      Tickets to tenant events are included


The 24 luxury suites lease at an average annual fee of $41,000 with lease terms ranging
from three to seven years. The suites contain between 10 to 12 seats and include tickets
to all regular season home games of tenant teams as well as to all other events. Suites
include amenities such as in-suite catering service, sink, refrigerator, theater seating, and
access to private telephone service. The 500 club seats lease at an average annual fee of
$990 and include regular season tickets to the Colorado Eagles hockey games. Club seat
holders have padded seats, access to a club lounge, in-seat wait service, and the first right
of refusal of tickets to other events.


Dodge Arena

Located in Hidalgo, Texas, Dodge Arena opened
in 2003 and has a seating capacity of 6,800 seats.
The arena has two tenants, including the Rio
Grande Valley Killer Bees of the Central Hockey
League and the Rio Grande Valley Dorados of
af2. The arena is owned by the City of Hidalgo
and is managed by Global Spectrum.

In addition to tenant events, the $20 million venue is host to numerous other events
throughout the year including, but not limited to boxing, WWE wrestling, Harlem
Globetrotters, International Fighting Championships, the Al Amin Shrine Circus,
concerts such as Cher and Alan Jackson, Sesame Street Live, and monster truck racing.
In addition to attracting patrons from Hidalgo, the arena is located in an area where it
attracts patrons from the entire Rio Grande Valley, as well as patrons from Mexico,
including from large cities like Reynosa and Monterrey.




                                                                        58
IV. Comparable Facilities (cont’d)


Premium seating available at the Dodge Arena includes 25 private suites and 508 club
seats. The table below outlines the premium seating inventory, average annual fee,
percentage of premium seating that is leased, ticket costs for premium seating and
potential annual revenues.
                                                            Dodge Arena
                                                          Premium Seating

                                                             Average        Percent     Ticket                Potential
                                              Inventory    Annual Fee       Leased       Fees          Annual Revenue

                                                                                                 (1)
Private Suites                                      25       $25,000         100%     $210,000               $415,000
                                                                                                 (1)
Club Seats                                         508         $900          100%     $355,600               $101,600

Total Premium Seating Revenue                                                                                $516,600
(1)
      Tickets to tenant events are included


Private suites lease at an average annual price of $25,000 and include seating between 10
and 18 seats. Included with the price of the suites are tickets to all arena events. The
suites have a catering service and private restrooms outside of the suite. The club seats
lease at an average annual fee of $900 and include tickets to hockey games. The club
seat holders have the first right of refusal to buy tickets to all other events. The club seats
are located in lower sections at midfield/court.


Summary

In total, 13 areas that have recently been built were analyzed to provide a benchmark
from which to assess potential operations for a new, multi-purpose arena in downtown
Tucson. The following table summarizes key characteristics of the comparable arenas.




                                                                 59
IV. Comparable Facilities (cont’d)


                                                                             Summary of Comparable Arenas and Market Characteristics

                                                   Jacksonville
                                                 Veterans Mem.                      Van Andel                            Ford                Bi-Lo           Save Mart                Pepsi                   Dodge
                                                          Arena                         Arena                           Center               Center             Center                Arena                   Arena

Location                                       Jacksonville, FL            Grand Rapids, MI              Oklahoma City, OK            Greenville, SC        Fresno, CA           Albany, NY              Hidalgo, TX

Year Opened                                                   2003                         1996                           2002                 1998               2003                 1990                    2003

Seating Capacity                                            16,000                       12,500                         20,800               16,000             16,500               17,500                    6,800

Tenant(s)                                                  WHA2                     AHL, AFL                          af2, CHL         ECHL, NIFL          ECHL, Univ.       AHL, af2, Univ.              af2, ECHL

Market Characteristics - MSA
 Population                                             1,221,806                      768,280                       1,140,319              585,298            853,658              841,528                 642,074
 Median Age                                                  35.9                         33.9                            34.9                 36.2               30.1                 37.9                    27.5
 Median Household Income                                  $46,509                      $48,800                         $40,276              $42,357            $37,601              $48,733                 $27,483
 Corporate Base                                             2,132                        2,107                           1,765                1,796              1,199                1,360                     528

Premium Seats
  Number of Suites                                             28                          42                               48                   30                 32                   25                      25
  Avg. Annual Suite Price                                 $50,000 (1)                 $30,000 (3)                      $28,000 (2)          $47,000 (2)        $55,000 (2)          $48,000 (2)             $25,000 (1)
  Number of Club Seats                                      1,100                       1,800                            3,300                1,000              1,080                    0                     508
  Avg. Annual Club Seat Price                                $300 (3)                   $550 (3)                          $800 (2)           $1,650 (2)             n/a                  $0                    $900 (2)
  Annual Ticket Charges                                  $201,600                          $0                       $2,325,600             $816,000           $409,600             $384,000                $565,600
  Net Annual Revenue                                   $1,810,400                  $2,230,200                       $1,524,000           $1,831,500         $1,350,400             $816,000                $516,600
  Game day / Party suites                                       8                                                            8

Facility Management
  Owner                                                       City                       County                           City             GMATD             University              County                    City
  Operator                                                   SMG                          SMG                            SMG             Centerplate             SMG                  SMG          Global Spectrum
  Facility Fee                                               $1.50                        $1.50                          $0.00                $1.00              $1.75                $1.00 (4)              $1.50
                                                       Laredo
                                                Entertainment                    Budweiser                     American Bank              CenturyTel               Verizon                      Alltel
                                                       Center                 Events Center                           Center                  Center        Wireless Arena                      Arena       AVERAGE

Location                                           Laredo, TX                Loveland, CO              Corpus Christi, TX            Bossier City, LA      Manchester, NH        N. Little Rock, AR

Year Opened                                                 2002                         2003                           2004                    2000                  2001                      1999               2000

Seating Capacity                                           9,622                        7,200                         10,500                  12,500                11,770                     18,000            13,515

Tenant(s)                                              CHL, af2                          CHL              CHL, University                   CHL, af2              AHL, af2           af2, University

Market Characteristics - MSA
 Population                                             217,923                      269,231                         409,361                 380,015               398,500                 632,290              643,100
 Median Age                                                26.9                           34                            34.7                    35.4                  36.9                    35.5                 33.8
 Median Household Income                                $31,274                      $55,419                         $38,627                 $35,562               $59,557                 $42,564              $42,674
 Corporate Base                                             238                          395                             551                     568                   458                   1,057                1,089

Premium Seats
  Number of Suites                                           14                          24                               11                      16                    34                      32                   28
  Avg. Annual Suite Price                               $50,700 (2)                 $41,000 (1)                      $24,000 (2)             $45,000 (2)           $37,500 (2)             $27,400 (2)          $39,123
  Number of Club Seats                                        0                         500                              302                     186                   600                       0                1,038
  Avg. Annual Club Seat Price                                $0                        $990 (2)                       $2,000 (2)              $1,875 (3)            $1,600 (2)                  $0               $1,185
  Annual Ticket Charges                                $134,400                    $693,440                         $260,400                $272,160            $1,540,800
  Net Annual Revenue                                   $433,440                    $785,560                         $528,720                $796,590              $694,200                $876,800           $1,091,878
  Game day / Party suites

Facility Management
  Owner                                                     City                   County                               City                    City                  City                     County
  Operator                                                 SMG            Global Spectrum                              SMG                     SMG                   SMG                        SMG
  Facility Fee                                             $1.50                    $1.00                              $1.50 (5)               $1.50 (6)             $1.00                      $1.50             $1.25

(1) Includes tickets to all events
(2) Includes tickets to tenant events only.
(3) Does not include price of tickets to any events.
(4) Facility fee is $1.00 for tickets with a value of over $7.50.
(5) Facility fee is $1.50 for tickets with a value of over $10.00 and $1.00 for tickets with a lesser value.
(6) Facility fee is $1.50 for tickets with a value of over $20.00 and $1.00 for tickets with a lesser value.




As shown in the table above, each of the comparable arenas has a minor league sports
tenant and an average seating capacity of 13,515 seats. The average population of the
comparable markets is 643,100, with a median age of 33.8 years and a median household
income of $42,674. The average corporate base is about 1,089 corporations.




                                                                                                                        60
IV. Comparable Facilities (cont’d)


The average number of suites in comparable markets was 28 with an average annual fee
of $39,123. The average number of club seats was 1,038 with an average annual fee of
$1,185. The average overall premium seating revenue is about $1.1 million.

An important factor in evaluating the operational success of the proposed arena is the
historical event utilization and the financial operating results of comparable arenas. The
chart on the following page contains a list of events and a financial summary from
several of the comparable venues.
                                                                      Comparable Venues
                                                              Annual Events and Financial Summary

 Event Type                                        Venue 1       Venue 2       Venue 3        Venue 4        Venue 5      Venue 6       Venue 7

 Tenant Hockey                                          44            43             42             35            23           32            35
 Tenant Football                                         8             0              0              8             9            6             8
 Collegiate Tenant                                       0             0             29              0            15            0             0
 Other Tenant                                            0             0              0              0             0            0             0
        Subtotal - Tenant Events                        52            43             71             43            47           38            43

 Concerts                                               23            19             26             13            18           17            12
 Family Shows                                           20            36             15             16            13           23            28
 Motorsports                                             7             4              0              0             0            2             3
 Other Sporting Events                                  11             8             23              2            16            5             9
 High School Sporting Events                             1             0              0              0             0            1             0
 Graduations                                             3             6             13              1             0            0             6
 Religious Events                                        0             0              1              2             0            2             0
 Trade / Consumer Shows                                  0             8              3              2             0            1            29
 Other                                                   5             6             12              3             0            0             0
   Subtotal - Non-Tenant Events                         70            87             93             39            47           51            87

 Total Events                                          122           130            164             82            94           89           130


 Total Operating Revenue                        $4,943,000    $5,006,000    $2,905,000     $2,818,000     $5,368,000   $4,981,000    $2,785,000
 Total Expenses                                 $2,986,000    $2,695,000    $3,196,000     $2,776,000     $5,243,000   $3,332,000    $2,513,000
 Net Operating Income (Loss)                    $1,957,000    $2,311,000     ($291,000)      $42,000       $125,000    $1,649,000     $272,000

 Profit Margin                                       39.6%         46.2%        -10.0%           1.5%           2.3%        33.1%          9.8%




 Event Type                                     Venue 8 (1)   Venue 9 (1)   Venue 10 (1)    Venue 11       Venue 12     Venue 13       Average

 Tenant Hockey                                          30            34             35             36            43           29            35
 Tenant Football                                         0             0              0              8             9            0             4
 Collegiate Tenant                                      32             0              0              0            20            0             7
 Other Tenant                                            0             0              0             12             0            0             1
        Subtotal - Tenant Events                        62            34             35             56            72           29            48

 Concerts                                               12             9             12             18            25           15            17
 Family Shows                                           16            19             18             14            21            8            19
 Motorsports                                             1             8              6              4             5            0             3
 Other Sporting Events                                   7            11              5             14            13            3            10
 High School Sporting Events                             0             8              2              0             0            0             1
 Graduations                                             0             2              2              1             0            0             3
 Religious Events                                        0             3              4              2             0            1             1
 Trade / Consumer Shows                                 10            15             15              0             0            8             7
 Other                                                   5            23             14              6            17            0             7
   Subtotal - Non-Tenant Events                         51            98             78             59            81           35            67

 Total Events                                          113           132            113             115          153           64           115


 Total Operating Revenue                        $1,882,000    $2,733,000    $3,364,000     $6,074,000     $8,512,000           n/a   $4,280,917
 Total Expenses                                 $1,874,000    $2,143,000    $2,909,000     $2,862,000     $6,148,000           n/a   $3,223,083
 Net Operating Income (Loss)                       $8,000      $590,000       $455,000     $3,212,000     $2,364,000           n/a   $1,057,833

 Profit Margin                                        0.4%         21.6%         13.5%          52.9%          27.8%           n/a         20%
 (1)
       Projected events.
 Source: Facility management representatives.




                                                                                     61
IV. Comparable Facilities (cont’d)


Historical event levels vary among comparable venues and are directly impacted, in part,
by the number of tenants as well as the level of competition in the marketplace. Events
ranged from a low of 64 to a high of 164, with an average of 115 events. Every venue
has a hockey tenant and nearly 70 percent of the facilities have more than one tenant.
Non-tenant events that are held most frequently at comparable facilities include concerts
and family shows with an average of 17 annual events and 19 events, respectively. Other
events held include motor sports, high school sporting events, graduations, religious
events, trade/consumer shows, and other sporting and non-sporting events.

An arena’s financial performance is influenced by the event schedule as well as the level
of premium seating contained in the venue, among other factors. However, the financial
performance is not necessarily a direct correlation to the number of events but rather the
quality of events. While a minor league sports tenant is important to the viability of a
venue, the financial contribution from hosting those events is generally not as great as
hosting concerts.

The chart on the previous page also depicts that the average total operating revenue and
expenses for comparable facilities to be $4.3 million and $3.2 million respectively.
Operating revenues range from a high of $8.5 million to a low of a $1.9 million.
Operating expenses range from a high of $6.1 million to a low of $1.9 million. Average
annual net operating income was approximately $1.1 million, with a high of $3.2 million
and a low of a deficit of $291,000. For purposes of this analysis, management fees and
debt were not included in total expenses. The average profit margin of comparable
facilities is about 20 percent of revenues.

The level of event activity is impacted by a number of variables including demographics,
competition and facility conditions. The table below depicts the number of each event
hosted annually per capita in comparable market MSAs. For example, comparable
markets host one concert for every 50,423 people. Applying the average events per
capita in comparable markets to the population in Tucson indicates the market could host
18 concerts, 18 family shows, and four motor sport events annually.
                                         Population per Event in the Marketplace


                         Venue 1    Venue 2    Venue 3      Venue 4      Venue 5    Venue 6   Venue 7        Venue 8

  Concerts                48,878     20,842      37,377       30,215      33,122     65,259    41,667         32,283
  Family Shows            56,210     11,000      64,787       24,550      45,862     48,235    17,857         24,213
  Motorsports            160,600     99,000          n/a          n/a         n/a   554,700   166,667        387,400

                                                                                               Tucson Estimate
                         Venue 9   Venue 10   Venue 11     Venue 12     Venue 13    Average   Population: 891,220

  Concerts                29,967    166,667      32,500      35,260       81,467     50,423             18
  Family Shows            14,195    111,111      41,786      41,976      152,750     50,349             18
  Motorsports             33,713    333,333     146,250     176,300           n/a   228,663              4

  Source: CSL Research



                                                            62
        Executive Summary
I.      Introduction
II.     Overview of the Tucson Market
III.    Tucson Arena Historical Operations
                                             V. Competitive and Local
IV.     Comparable Facilities
                                                             Facilities
V.      Competitive and Local Facilities
VI.     Market Surveys
VII.    Estimated Event Demand
VIII.   Building Program Analysis
IX.     Arena Pro Forma Analysis
V. Competitive and Local Facilities


The number and type of facilities potentially competing for the limited supply of events,
spectators, attendees and participants within the Tucson marketplace will impact the
market potential of the proposed multi-purpose arena. The current arena at the Tucson
Convention Center currently competes, to some degree, with a variety of regional sports,
entertainment, meeting and exhibition facilities including local arenas, performing arts
centers, conference facilities and other such similar facilities.

The following exhibit lists the venues in the marketplace, their location and distance from
the proposed arena, as well as their primary tenants, year opened and total seating
capacity.
                                                            Competitive and Local Facilities

                                                                Distance                                                     Year     Seating
                                                                                          (1)
Facility                                  Location                  (mi.)     Tenant(s)                                    Opened    Capacity

McKale Center                             Tucson, AZ                    1     Collegiate                                     1973     14,545
Arizona Stadium                           Tucson, AZ                    1     Collegiate                                     1928     56,197
Hi-Corbett Field                          Tucson, AZ                    4     NPFP, MLB spring training                      1937      9,600
Tucson Electric Park                      Tucson, AZ                    5     MLB spring training, minor league baseball     1998     11,000
AVA Amphitheater                          Tucson, AZ                   12     none                                           2001      5,000
Diamond Entertainment Center              Sahuarita, AZ                16     none                                             n/a     2,400
America West Arena                        Phoenix, AZ                 113     NBA, WNBA, AFL                                 1992     19,023
Dodge Theatre                             Phoenix, AZ                 114     none                                           2003      5,500
Glendale Arena                            Glendale, AZ                125     NHL, NLL                                       2003     17,653
Average                                                                 43                                                   1979     15,658
(1) The following are sports league tenants at the above facilities, where listed:
AFL: Arena Football League
MLB: Major League Baseball
NBA: National Basketball Association
NFL: National Football League
NHL: National Hockey League
NLL: National Lacrosse League
NPFP: National Professional Fast Pitch (Women's)
WNBA: Women's National Basketball Association



As shown, there are several sporting and entertainment facilities located in Tucson and
the surrounding regional area. Local and regional facilities that would likely represent
the highest competition to a proposed arena in downtown Tucson include the McKale
Center, America West Arena, and Glendale Arena. Other facilities including ballparks,
amphitheaters and stadiums may not compete directly to host the same events, but often
compete to attract patrons and corporate sponsors and their discretionary entertainment
dollars.

The remainder of this section presents a brief overview of potentially competitive
facilities.




                                                                                63
V. Competitive and Local Facilities (cont’d)


Anselmo Tori Valencia Amphitheater

The Anselmo Tori Valencia Amphitheater (“AVA”) is
a part of the Casino del Sol, located in Tucson,
Arizona. The casino and the AVA Amphitheater
opened in 2001 and offers 22,500 square feet of
gaming space. The AVA Amphitheater is an outdoor
amphitheater located on the grounds of the casino.
The amphitheater has a seating capacity of 5,000 seats, including both fixed seats and
lawn seating. The amphitheater is privately owned and managed by the Casino del Sol.
The entire casino complex is operated by the Pascua Yaqui tribe.

The AVA Amphitheater hosts numerous concerts throughout the year, which comprise
top musical artists. In the past year, the amphitheater hosted acts such as Toby Keith,
Van Halen, Christian Castro, and Megadeth. A representative from the casino indicated
that the amphitheater hosts between 20 and 30 events annually.

The amphitheater has a covered pavilion over the fixed seating sections, which allows for
concerts to be held under various weather conditions. There are six corporate boxes,
which are located at the rear of the fixed seating in the center section.

According to facility management, there is a direct impact from nearby Mexico, with
anywhere from 20 to 80 percent of attendees coming from Mexico, depending on the act.
The AVA amphitheater would represent competition to a new arena in Tucson in that it is
able to attract various music artists throughout the year. The casino is able to offer strong
financial incentives to the promoters due to its subsidized artist fees with gambling
revenues. In addition to the entertainment of a concert, the Casino del Sol is able to
entertain the patrons with gaming space and seven restaurants and three bars located on
the premises, offering various types of food and beverages.


Diamond Entertainment Center

The Diamond Entertainment Center (“DEC”) is a performing
arts auditorium that is located south of Tucson. DEC is part
of the Desert Diamond Casino I-19, one of the three casinos
that make up the Desert Diamond Casinos in Tucson. The
casino offers over 500 slot machines and the DEC has a
seating capacity of 2,400 fixed seats. The casino and DEC are owned and operated by
the Tohono O’odham Nation tribe.




                                              64
V. Competitive and Local Facilities (cont’d)


The DEC hosts various events throughout the year such as boxing, comedy, and music
concerts. Some events that have been held or that are planned for future dates, include
Julio Cesar Chavez boxing, comedians Jay Leno and Vicki Lawrence, and musical
performances by Se Salen, Pat Benatar, Trick Pony, and Engelbert Humperdinck. The
DEC also holds numerous karaoke salsa dance performances.

The DEC would likely be a minor competitor to a new arena in Tucson because it is able
to attract some sporting events, comedians, and musical performances. However, many
of the groups that perform at the DEC may not be able to attract a large enough audience
to justify performing at a larger venue. These events, which would use a half-house or
similarly reduced seating configuration for the proposed arena, represent the events for
which the proposed arena and the DEC would be most likely to compete. Additionally,
the discretionary income that patrons spend at the casino and at the concert may impact
potential spending at a new arena. The DEC has the advantage of providing nearby
casino entertainment and various restaurants.


Arizona Stadium

Arizona Stadium is located in Tucson and is a part of
the University of Arizona campus. The stadium was
originally constructed in 1928 and has been renovated
and expanded several times to reach its current
seating capacity of 56,197 seats. Arizona Stadium is
owned and operated by the University of Arizona.

Arizona Stadium is home to the University of Arizona Wildcats Division I-A football
team. The facility primarily hosts five to six UA football team home games. The stadium
has 24 private suites that lease at an average annual fee of $25,000 and 395 loge seats,
which require an annual fee ranging from $1,200 to $1,800 in addition to the cost of
season tickets. Eighteen of the 24 suites are leased for revenue purposes with the
remaining six suites used by the school and athletic department. Local corporations lease
three of the suites with the balance being leased by individual donors.

Arizona Stadium will likely be a secondary competitor of the new arena because each
facility would cater to different event types, but will compete for the discretionary
spending dollars that patrons and corporations may spend on entertainment and
sponsorships in the local market.




                                            65
V. Competitive and Local Facilities (cont’d)


McKale Center

The McKale Center is located in Tucson on the
University of Arizona campus. The arena was built in
1973 and has a seating capacity of 14,545 seats.
Owned and operated by the University of Arizona,
the facility is home to the men’s and women’s UA
Wildcats basketball teams. The teams each play
about 15 home games annually. The average men’s
basketball attendance has been about 14,500 per game over the past four seasons. The
facility has priority seating areas that require contributions to the university athletic
program. The contribution levels range from $50 for priority seats in the upper bowl to
$30,000 annually for courtside seats. Contribution levels do not include the cost of
season tickets.

The McKale Center does not currently host non-university events. As such, the McKale
Center will not likely be a direct competitor of the new arena for hosting events.
However, with the success and popularity of UA basketball it may attract potential
spectators that would otherwise attend events at a new arena.


Tucson Electric Park

The Tucson Electric Park (“TEP”) is located in
Tucson and is the major facility of the Kino Sports
Complex, containing the TEP and numerous baseball
practice fields. The TEP opened in 1998 and has a
seating capacity of 12,500 seats. The facility is home
to the Tucson Sidewinders AAA Pacific Coast
League baseball team and serves as the spring
training facility for the Chicago White Sox and the Arizona Diamondbacks of Major
League Baseball. The facility is owned by Pima County and is operated by the
Sidewinders ballclub.

The TEP hosts approximately 30 spring training games and 71 Sidewinders games each
year. Of the 11,000 seats available for patrons, about 8,000 are fixed seating and 3,000
are lawn seats. The facility also has eight suites with 12 seats in each suite. The suites
lease at an average of $18,000 per year and include tickets to the spring training and
Sidewinders games.




                                            66
V. Competitive and Local Facilities (cont’d)


The TEP would likely be a secondary competitor to a new arena because of the numerous
sporting events held there that may attract patrons away from spending their discretionary
income at the arena. In addition, the venues will likely compete for corporate spending in
terms of sponsorships and advertising. The TEP would not likely compete with events
that might be held at a new arena.

The following table displays the annual attendance of the Tucson Sidewinders compared
to other class AAA minor league baseball teams.

                                           Summary of Class AAA Minor League Baseball Attendance


                                                2004 Total    2004   2004 Average   2003 Average   2002 Average 3-Year Average
 Team                                           Attendance   Games     Attendance     Attendance     Attendance     Attendance

 Sacramento River Cats                             751,156      72         10,433         10,643        11,512          10,863
 Memphis Redbirds                                  730,565      70         10,437         10,409        11,035          10,627
 Louisville Bats                                   648,092      69          9,393          9,307         9,158           9,286
 Pawtucket Red Sox                                 657,067      70          9,387          8,211         9,052           8,883
 Buffalo Bisons                                    574,088      66          8,698          8,761         9,003           8,821
 Albuquerque Isotopes                              575,607      70          8,223          8,125            n/a          8,174
 Indianapolis Indians                              576,067      71          8,114          7,976         8,056           8,049
 Toledo Mud Hens                                   544,778      71          7,673          7,608         7,707           7,663
 Fresno Grizzlies                                  531,040      72          7,376          7,355         8,044           7,592
 Norfolk Tides                                     485,260      69          7,033          7,399         7,249           7,227
 Iowa Cubs                                         540,055      74          7,298          7,104         7,277           7,226
 Columbus Clippers                                 489,177      65          7,526          6,963         7,006           7,165
 Durham Bulls                                      490,615      69          7,110          6,946         7,178           7,078
 Richmond Braves                                   368,436      57          6,464          7,093         6,565           6,707
 Salt Lake Stingers                                448,153      69          6,495          6,980         6,583           6,686
 Scranton/W-B Red Barons                           402,676      65          6,195          6,476         6,580           6,417
 Rochester Red Wings                               437,088      68          6,428          6,334         6,021           6,261
 Oklahoma RedHawks                                 474,206      71          6,679          5,508         6,274           6,154
 Portland Beavers                                  312,678      71          4,404          6,270         6,779           5,818
 Syracuse SkyChiefs                                364,648      70          5,209          5,399         6,082           5,563
 Nashville Sounds                                  405,536      67          6,053          5,781         4,668           5,501
 New Orleans Zephyrs                               324,324      68          4,769          5,426         5,777           5,324
 Edmonton Trappers                                 252,557      60          4,209          5,472         5,673           5,118
 Tacoma Rainiers                                   310,626      64          4,854          4,685         4,702           4,747
 Las Vegas 51s                                     306,628      71          4,319          4,531         4,609           4,486
 Omaha Royals                                      318,537      69          4,616          3,962         4,855           4,478
 Charlotte Knights                                 265,271      65          4,081          4,473         4,396           4,317
 Colorado Springs Sky Sox                          236,022      66          3,576          4,412         3,927           3,972
 Tucson Sidewinders                                285,378      71          4,019          3,981         3,896           3,965
 Ottawa Lynx                                       159,619      68          2,347          2,551         3,037           2,645

 AAA Average                                       442,198      68          6,447          6,538         6,645           6,560

 Sources: Minor League Baseball websites



As shown, the Tucson Sidewinders have averaged 3,965 patrons per game over the past
three years, ranking second to last among 30 AAA minor league baseball teams in the
Pacific Coast League and the International League. The average three-year per game
attendance is 6,560, with a high of 10,863 by the Sacramento River Cats and a low of
2,645 by the Ottawa Lynx. The Tucson market ranks 21st out of 28 U.S.-based teams in



                                                                     67
V. Competitive and Local Facilities (cont’d)


terms of population in AAA minor league baseball markets. The location of Tucson
Electric Park likely has had some impact on the team’s ability to achieve attendance
levels consistent with other AAA markets.


America West Arena

America West Arena is located in Phoenix, Arizona,
and has been open since 1992. The facility has a
seating capacity of 19,023 seats, including 88 private
suites, 16 loge suites and 1,350 club seats. The facility
is home to the Phoenix Suns of the NBA, the Phoenix
Mercury of the WNBA, and the Arizona Rattlers of the
AFL. Until 2004, the NHL Phoenix Coyotes also
played their home games at America West Arena. The
facility is owned by the City of Phoenix and operated by Phoenix Arena Development, a
division of the Suns.

America West Arena held over 180 events during 2003, including numerous tenant
games and non-tenant events. There were a total of 108 tenant games among the Suns,
Coyotes, Mercury, and Rattlers. Non-tenant events included 20 family ice shows, 22
concerts, 18 circus performances, two motor sport events, two WWE wrestling
performances, and 10 other events.

The 88 suites at the venue lease at an average annual lease price of $120,000, the 16 loge
suites lease prices range from $22,500 to $30,000, and the 1,350 club seats lease at an
annual average of $3,500 per seat.

In some cases, it is expected that America West Arena will be a direct competitor of the
proposed arena, particularly when touring shows elect to play only one market in
Arizona. In most other cases, the proposed arena would complement America West
Arena in that it represents a natural routing pattern for events hosted in Phoenix.


Glendale Arena

Glendale Arena is located in Glendale, Arizona, which is
located in the Phoenix metropolitan area. The facility opened
in December 2003 and has a seating capacity of 17,653 seats.
The venue is home to the NHL Phoenix Coyotes and the
Arizona Sting of the National Lacrosse League. The facility is



                                            68
V. Competitive and Local Facilities (cont’d)


owned and operated by the City of Glendale.

During the facility’s first eleven months of operations, the facility held 64 events,
including 33 tenant events and 31 non-tenant events. The non-tenant events include 14
concerts, two family shows, three circus performances, two motor sport events, a WWE
wrestling event, and six other events. Due to the current NHL lockout, the arena has not
held any Coyotes hockey games to date during the 2004/05 season.

Glendale Arena contains 87 suites and numerous other premium seats in the first two
rows around the hockey rink and seats in the club level near the suites. The facility also
contains three club lounges or restaurants, which provide premium seat holders with
access to food, beverages, and a place for socializing and conducting meetings.

Similar to America West Arena, the Glendale Arena is expected to be a direct competitor,
in certain circumstances, to a new arena in Tucson in regards to attracting concert
performances, circus acts, and various other non-tenant sporting events.


Hi Corbett Field

Hi Corbett Field was built in 1937 and was originally
named Randolph Field. The facility is located about
four miles from the site of the proposed arena in
Tucson. The field underwent renovations in 1992,
1997, and 1999. Currently, the facility has fixed
seating capacity of 9,600 seats, with the ability to add
an additional 1,000 portable seats plus standing room space for up to 2,000 spectators.
The field is used as the spring training site of the Colorado Rockies, which play about 16
games during the month of March. The field is also being used for the Arizona Heat of
the Women’s National Professional Fastpitch League. Ticket prices for the Rockies
spring training games range from $2 to $11.

Hi Corbett Field will likely represent a minor competitor to a proposed new Tucson arena
in that it does not attract similar events, but would likely compete for corporate
sponsorships and the discretionary income of local residents.


Dodge Theatre

Dodge Theatre is located in Phoenix and is adjacent to the America
West Arena. The facility opened in 2003 and has a seating



                                              69
V. Competitive and Local Facilities (cont’d)


capacity of 5,500 seats, but can be configured to host smaller events with a capacity as
low as 2,200 seats. The theatre contains 16 luxury suites that lease at an annual price of
$30,000. In 2003, the facility hosted 136 performances including concerts, Broadway
shows, comedy acts, family shows, and boxing.

Dodge Theater will likely provide some competition to a new arena in Tucson to host
concerts, Broadway shows, and comedy acts to the extent that touring acts elect to play
only one market in Arizona.


Pima County Fairgrounds

The Pima County Fairgrounds is located in Tucson and included is the site for the Pima
County Fair with various venues such as a drag racing strip, two stages, livestock barns
and exhibit halls. The two stages at the fairgrounds include the Southern Arizona Super
Stage and the Main Stage. Both stages host concerts such as Scorpions and Yellow Card.
The Super Stage does not have fixed seating, but has a grass area that can accommodate
approximately 64,000 patrons. The Main Stage has grass and standing room for up to
5,000 patrons, and can hold an additional 2,000 patrons when bleachers are set up around
the perimeter.

It is likely that the fairgrounds would represent minor competition to the proposed arena
in that it is able to compete for concerts, but due to it being an outdoor facility with stages
that lack fixed seating it would not likely be competitive for other events such as sporting
events, family shows, or concerts requiring an indoor facility.


Summary

There are a limited number of multi-purpose arenas within the immediate Tucson area
that could offer the same state-of-the-art amenities as the new proposed arena. Local
competition is also expected to come in the form of competing for corporate sponsorship
dollars and the discretionary spending of local residents.

Due to the close proximity to the Phoenix market, there will be some degree of
competition in attracting events due to the numerous multi-purpose venues that currently
exist in that market.




                                               70
        Executive Summary
I.      Introduction
II.     Overview of the Tucson Market
III.    Tucson Arena Historical Operations
IV.     Comparable Facilities                VI. Market Surveys
V.      Competitive and Local Facilities
VI.     Market Surveys
VII.    Estimated Event Demand
VIII.   Building Program Analysis
IX.     Arena Pro Forma Analysis
VI. Market Surveys


As part of the evaluation of the viability of the proposed arena, random surveys were
completed with local corporations. Random surveys were conducted via telephone to
determine interest and opinions related to the potential development of a multi-purpose
arena including:

   •   interest in attending events at the proposed arena;
   •   interest in possible minor league tenants;
   •   interest in premium seating options; and,
   •   likelihood of participating in advertising and sponsorship opportunities.

A total of 250 surveys were completed in October 2004. The exhibit below presents a
breakdown of the population and corresponding number of completed surveys.


                                         Market Survey Overview


                                                                                       Completed
                                                                     Population          Surveys

               Large Corporations (1)                                        350                 125
               Small Corporations and Branches (2)                           829                 125
                                                        Total:             1,179                 250

               (1) Large corporations include corporate headquarters with $5 million or more in sales
               with 25 or more employees located in Tucson MSA.
               (2) Small corporations include corporate headquarters with $2.5 million to $4.9
               million in sales, and corporate branches with 25 or more employees.



Current Season Ticket or Premium Seating Purchases

Survey respondents were asked if their company currently purchased season tickets or
premium seating for university and professional teams in the Tucson and Phoenix
markets. The chart on the following page summarizes their responses.




                                                          71
VI. Market Surveys (con’t)


                           Tucson Corporations with Season Tickets or Premium Seating
                                         Tucson and Phoenix Markets


                 Large Headquarters                                                             Small Headquarters and Branches




                                                                                                             Don't Know                    Yes
                                                  Yes                                                          1.6%                       28.0%
                                                 44.0%

     No
    56.0%
                                                                                               No
                                                                                              70.4%



As illustrated in the exhibit, 44 percent of large headquarters and 28 percent of small
headquarters and branches currently have season tickets or premium seating for collegiate
or professional teams in the Tucson or Phoenix markets. The breakdown of teams for
which corporations have season tickets or premium seating is detailed in the chart below.

                                                Corporations with Season Tickets or Premium Seating
                                                      Teams in Tucson and Phoenix Markets



     60.0%
                52.7%
                      48.6%
     50.0%


     40.0%


     30.0%

                                     20.0%
                           16.4%                                                                                   17.1%
     20.0%                                                                                                 14.5%
                                                                                                   8.6%
                                                                              7.3%
     10.0%
                                             3.6%                   2.9%                                                     1.8% 2.9%      1.8% 0.0%
                                                        0.0% 0.0%                    0.0% 1.8%
     0.0%
             UA football      UA men's       Ice Cats      Othe UA sports     Tucson        Arizona          Arizona       Phoenix Suns     Other
                              basketball                                    Sidewinders     Cardinals     Diamondbacks

                                                    Large Headquarters              Small Headquarters and Branches




As shown above, over 52 percent of large corporate headquarters with season tickets or
premium seating have them for the University of Arizona football games. In addition, 16
percent have them for the University of Arizona basketball team. In regards to small
corporate headquarters and branches, about 49 percent with season tickets or premium
seating have them for UA football, 20 percent have them for UA men’s basketball, and
over 17 percent have them for MLB’s Arizona Diamondbacks.



                                                                              72
VI. Market Surveys (con’t)


Interest in Premium Seating

Corporations that participated in the survey were asked to indicate their interest in
purchasing various premium seating options in the proposed arena. The premium seating
options discussed included:

   •   private suites;
   •   loge boxes; and,
   •   club seats.


Interest in Private Suites

Private suites are exclusive seating areas that typically command the highest ticket price
in an arena. Because private suites are expensive relative to other arena seating,
companies generally comprise the market for private suites. Corporate respondents were
informed the suites would be located in prime areas with excellent sightlines of the event
floor. Respondents were further informed that private suites might accommodate up to
16 persons and might include amenities such as preferred parking, an exclusive entrance,
private restrooms, a television, access to a private club located in the arena, and optional
in-suite catering service. The level of initial interest that local corporations expressed for
leasing premium seats is detailed in the following chart.

                                   Initial Private Suite Interest
                                          Proposed Arena




                             5.6% 4.0%                    28.0%                      37.6%
        Large Headquarters




         Small Headquarters 2.4% 9.6%                       28.8%                       40.8%
           and Branches


                        0.0%      10.0%         20.0%             30.0%    40.0%         50.0%
                                        Definitely          Likely        Possibly



Overall, 37.6 percent of large headquarters and 40.8 percent of small headquarters and
branches indicated positive interest in leasing a suite at the proposed arena. The level of
interest is comparable to recent premium seating surveys that CSL has conducted for




                                                     73
VI. Market Surveys (con’t)


arenas in Burlington, Vermont, Providence, Rhode Island, Norfolk, Virginia, and in
Tulsa, Oklahoma as shown below. The table below presents the positive interest in suites
that corporate respondents from each of these markets had.

                                                     Private Suite Interest
                                  Recently Surveyed Markets Without Major League Franchises


                                                                                                                                                 Tucson
                              Norfolk, VA          Providence, RI             Tulsa, OK             Burlington, VT           Average             Average

  Definitely Lease                     2.3%                     4.2%                  1.4%                        8.6%            4.1%             4.0%
  Likely Lease                         7.0%                     4.5%                  5.3%                       14.7%            7.9%             6.8%
  Possibly Lease                      27.2%                    28.8%                 19.8%                       33.6%           27.4%            28.4%
  Total                              36.5%                     37.5%                 26.5%                      56.9%            39.4%            39.2%

  Source: CSL International.



As shown above, the average total positive interest in private suites among corporate
respondents in recently surveyed markets evaluating the renovation or new construction
of an arena was approximately 39 percent, ranging from 27 percent in Tulsa, Oklahoma,
to 57 percent in Burlington, Vermont. The interest from corporations in the Tucson
market is consistent with other markets.

Those companies that indicated some level of positive response were then asked about
their level of interest at specific price points. The chart below summarizes corporate
respondents interest in leasing a private suite at the proposed arena at annual prices of
$40,000, $30,000, or $20,000 per suite, including tickets and parking for all tenant events
at the proposed arena.
                                                  Interest in Private Suites at Various Prices
                                                                Proposed Arena




                                                      5.6%                          13.6%                       19.2%
      $40,000




                Small Headquarters and Branches

                            Large Headquarters 3.2%           4.0%                          16.0%                        23.2%
      $30,000




                Small Headquarters and Branches 1.6% 3.2%                            16.8%                           21.6%

                            Large Headquarters       4.0%            6.4%                           15.2%                    25.6%
      $20,000




                                                      5.6%                  7.2%                             16.0%                       28.8%
                Small Headquarters and Branches

                            Large Headquarters              8.0%                   7.2%                          16.0%                     31.2%

                                              0.0%           5.0%           10.0%         15.0%        20.0%         25.0%        30.0%      35.0%

                                                                      Definitely                    Likely                Possibly




                                                                               74
VI. Market Surveys (con’t)


As illustrated in the chart on the previous page, positive interest in private suites ranged
from 19.2 percent at $40,000 per private suite for small corporate headquarters and
branches to 31.2 percent at $20,000 per private suite for large corporations. It should be
noted that very few respondents recorded a high degree of interest (“definitely
interested”) in the private suites at the prices tested.

It is not uncommon for companies to share private boxes with one another to defray the
cost and to enhance social interaction. Of those interested in suites, approximately 51
percent of large headquarters and 67 percent of small headquarters and branches
indicated that they would likely share a suite with one or more other parties. The average
number of parties per shared suite was 1.9 each for large headquarters and for small
headquarters and branches.


Interest in Loge Boxes

Loge boxes were described to survey respondents as being similar to private suites, but
are typically smaller and do not offer lounge space behind the seating area. The loge
boxes would likely be located below the private suites and would include tickets to all
tenant events, preferred parking, private restrooms, waiter/waitress service with premium
food and beverage options and access to a private lounge or club area. The chart below
depicts corporate respondents interest in leasing loge boxes at the proposed arena before
prices were introduced.

                                   Initial Interest in Loge Boxes
                                          Proposed Arena




                                                                          40.0%
      Large Headquarters 4.8%    8.8%               26.4%




      Small Headquarters                                                     44.8%
                           3.2% 9.6%                 32.0%
        and Branches


                      0.0%      10.0%      20.0%     30.0%        40.0%   50.0%      60.0%

                                       Definitely        Likely       Possibly




                                                    75
VI. Market Surveys (con’t)


As depicted in the chart on the previous page, the level of positive interest in leasing a
loge box was 40.0 percent for large headquarters and 44.8 percent for small headquarters
and branches.

Those companies that indicated some level of positive response were then asked about
their level of interest at specific price points. The chart below summarizes corporate
respondents interest in leasing a loge box at the proposed arena at annual prices of
$15,000 or $12,000 per loge box, including tickets and parking for all tenant events at the
arena.

                                            Interest in Loge Boxes at Various Prices
                                                         Proposed Arena




             Small Headquarters 1.6% 5.6%                              20.8%                           28.0%
   $15,000




               and Branches

             Large Headquarters     4.0%     5.6%                          16.8%               26.4%
   $12,000




             Small Headquarters 1.6%       7.2%                            19.2%                      28.0%
               and Branches

                                    4.0%          8.8%                             17.6%                 30.4%
             Large Headquarters

                             0.0%                   10.0%                    20.0%             30.0%             40.0%

                                                         Definitely           Likely       Possibly



As shown above, positive interest in loge boxes at an annual lease rate of $15,000 ranged
from 26.4 percent to 28.0 percent, while the interest at the $12,000 annual lease rate
ranged from 28.0 percent to 30.4 percent. Like private suites, it is common for
companies to share loge boxes with one another to defray the cost. Approximately 34
percent of the large headquarters respondents and 46 percent of small headquarters and
branches indicating an interest in leasing a loge box indicated that they would likely share
a box with one or more other parties. The average number of parties per shared box was
1.7 for large headquarters and 2.0 for small headquarters and branches.




                                                                      76
VI. Market Surveys (con’t)


Interest in Club Seats

Club seats were described to survey respondents as being located in prime areas in the
proposed arena, include padded chair backs, wider seats, more legroom than regular
arena seating, and club seat patrons would have the first right of refusal to purchase
tickets to any event in the arena. Club seats were further described as potentially having
amenities such as preferred parking, private restrooms, and in-seat waiter/waitress service
with standard and upscale food and beverage selections. The chart below details survey
respondents’ initial interest in purchasing club seats at the proposed arena.

                                  Intitial Interest in Club Seats
                                         Proposed Arena




      Small Headquarters 4.8%     11.2%                 32.8%                   48.8%
        and Branches



                           4.0% 11.2%                    36.0%                    51.2%
      Large Headquarters


                      0.0%      10.0%     20.0%     30.0%       40.0%   50.0%     60.0%

                                    Definitely         Likely       Possibly



As shown above, the level of initial positive interest in leasing a club seat at a new arena
included 51.2 percent of large headquarters and 48.8 percent of small headquarters and
branches.

The chart on the following page summarizes respondents interest in leasing club seats at a
new arena at annual prices of $1,500 or $500 per seat, not including the price of tickets to
arena events.




                                                  77
   VI. Market Surveys (con’t)
                                                                   Interest in Club Seats at Various Prices
                                                                               Proposed Arena




                         Small Headquarters 3.2%                        15.2%                                    23.2%                                 41.6%
                           and Branches
              $1,500




                         Large Headquarters          5.6%               10.4%                                      29.6%                                            45.6%




                         Small Headquarters
              $500




                                                                 14.4%                              16.8%                             15.2%                         46.4%
                           and Branches

                                                                 14.4%                              17.6%                                  16.0%                      48.0%
                         Large Headquarters

                                         0.0%                      10.0%                 20.0%                  30.0%                 40.0%                   50.0%                    60.0%

                                                                                Definitely                        Likely                     Possibly


   As illustrated in the above chart, positive interest in club seats ranged from 41.6 percent
   at $1,500 per seat for small headquarters and branches to 48.0 percent at $500 per seat for
   large headquarters. Overall, interest in club was much higher (total percentage) and
   stronger (more “definitely” and “likely” leases) than private suites and loge boxes. The
   median number of club seats desired by a large headquarter was 7.1 and by a small
   headquarters and branches was 6.5.


   Interest in Attending Events at New Arena

   Respondents were asked to describe their interest in attending events at a new arena.
   Multi-purpose arenas can host a variety of events including minor league sports,
   collegiate sports, concerts, family shows (such as Disney on Ice, Dragon Tales, Circus),
   other sporting events (such as boxing, wrestling, motor sports), and other entertainment-
   type events (private events, graduations, etc.). The exhibit below summarizes interest in
   potential events that could be hosted at the proposed arena.
                                                                                Interest in Attending Specific Events
                                                                                           Proposed Arena


                                                Large Headquarters                                                                                      Small Headquarters and Branches


            Concerts                                              3.3                                                 Concerts                                                   3.3

       Family Shows                                        3.0                                                   Family Shows                                              2.9

     Arizona Ice Cats                            2.6                                                                                                                 2.7
                                                                                                                Arena Football
      Arena Football                           2.4                                                             Arizona Ice Cats                                      2.7
Other Sporting Events                      2.3                                                            Other Sporting Events                                2.5
Minor League Hockey                      2.3                                                              Minor League Hockey                                 2.4
        Other Events                     2.2                                                                                                            2.2
                                                                                                                  Other Events

                         1           2                 3                 4                  5                                     1                2                  3                 4                 5
                       No Interest                                                Strong Interest                            No Interest                                                       Strong Interest




                                                                                                     78
VI. Market Surveys (con’t)


As illustrated in the charts on the previous page, respondents were asked to rank each
event on a scale of 1 to 5, with 5 being “strong interest” in attending an event and 1 being
“no interest” in attending an event. The events receiving high rankings by large
headquarters respondents included concerts (average ranking: 3.3), family shows
(average ranking: 3.0), and Ice Cats hockey (average ranking: 2.6). The least desired
events for large headquarters was other events (average ranking: 2.2). For small
headquarters and branches, the events receiving high rankings included concerts (average
ranking: 3.3), family shows (average ranking: 2.9), and arena football (average ranking:
2.7). The leased desired events were other events (average ranking: 2.2).

Among the minor league sports mentioned, both arena football and minor league hockey
received average rankings of below 2.5 for large corporations. Minor league hockey also
received low average rankings from small headquarters and branches, but arena football
received a higher ranking, being one of the top three desired events.

In addition, respondents were asked if the absence of a primary tenant would impact their
interest in premium seating. The following chart summarizes the respondents interest in
leasing premium at the proposed arena without a primary tenant.
                                         Impact of Premium Seating Interest
                                      Proposed Arena Without a Primary Tenant


                      Large Headquarters                                Small Headquarters and Branches


             Strong Negative                                        Strong Negative
                 Impact                                                 Impact
                  12.8%                                                  16.8%



    Moderately                                                                                        No Impact
  Negative Impact                             No Impact
                                                                                                       53.6%
      28.8%                                    58.4%
                                                                 Moderately
                                                               Negative Impact
                                                                   29.6%




As shown above, approximately 58 percent of large headquarters respondents and 54
percent of small headquarters and branches respondents indicated that the absence of a
primary tenant would have no impact on their interest in premium seating.




                                                          79
VI. Market Surveys (con’t)


Season Ticket Interest for Minor League Franchises

Corporate respondents were asked to indicate their interest in purchasing season tickets
for two possible minor league franchises: a minor league hockey team or an indoor
football team.

Survey respondents were informed that a new minor league hockey team at the proposed
arena would most likely consist of a franchise from the American Hockey League
(“AHL”) or the ECHL. Respondents were asked to indicate their interest in purchasing
season tickets for a minor league hockey team assuming the team played 45 home games
and the average ticket price was $15. The following chart depicts the interest level in
minor league hockey season tickets.
                                      Interest in Minor League Hockey Season Tickets
                                                      Proposed Arena




                                                                                                            51.2%
                               7.2%            12.8%                             31.2%
       Large Headquarters




                                                                                                              54.4%
    Small Headquarters and     4.8%        12.8%                                 36.8%
           Branches



                        0.0%           10.0%        20.0%             30.0%         40.0%           50.0%    60.0%

                                                    Definitely          Likely           Possibly



As shown above, positive interest in purchasing season tickets for a minor league hockey
franchise was 51.2 percent for large headquarters and 54.4 percent for small headquarters
and branches. The number of corporations revealing a high degree of interest (“definitely
interested”) was relatively low.

The respondents were also asked how a minor league hockey team affiliated with the
NHL Phoenix Coyotes would impact their decision to purchase season tickets for
Tucson’s minor league franchise. Of the large headquarters surveyed, approximately 31
percent indicated that the affiliation would have a positive impact on their interest, while
about 40 percent of small headquarters and branches indicated that it would have a
positive impact on their decision.




                                                                 80
VI. Market Surveys (con’t)


It is also possible that an arena football franchise could also play at the proposed arena,
with the league most likely being af2. Respondents were asked to indicate interest in
purchasing season tickets to an arena football team assuming the team played eight home
games and the average ticket price was $20.
                                           Interest in Arena Football Season Tickets
                                                        Proposed Arena




                                   8.8%             17.6%                          28.0%                        54.4%
          Large Headquarters




       Small Headquarters and       9.6%         13.6%                               36.8%                              60.0%
             Branches


                           0.0%       10.0%         20.0%         30.0%        40.0%          50.0%        60.0%        70.0%

                                                      Definitely            Likely           Possibly



As the chart on the above depicts, positive interest in purchasing season tickets for a
arena football team playing in the proposed arena was 54.4 percent for large headquarters
and 60.0 percent for small headquarters and branches. Less than 27 percent indicated
they would definitely or likely purchase season tickets in both survey groups.


Advertising and Sponsorship Opportunities

The proposed arena will provide area corporations with additional advertising and
sponsorship opportunities. Respondents were asked of their company’s interest in
advertising and sponsorship opportunities that may exist at the proposed arena. The
following chart provides a summary of the Tucson corporate market’s level of interest.

                                   Interest in Advertising and Sponsorship Opportunities
                                                       Proposed Arena




                                    8.8%     6.4%                  32.8%                                48.0%
           Large Headquarters




       Small Headquarters and 2.4%         16.8%                           35.2%                           54.4%
              Branches


                            0.0%       10.0%        20.0%     30.0%          40.0%          50.0%       60.0%      70.0%

                                                     Definitely           Likely           Possibly




                                                                   81
      VI. Market Surveys (con’t)


      The positive interest by corporations of advertising and sponsorships in a new arena
      ranged from 48.0 percent for large headquarters to 54.4 percent of small headquarters and
      branches. There are numerous advertising and sponsorship opportunities available in
      new arenas, including naming rights, signage, videoboard advertising, and promotions.
      Respondents were asked of their interest level for each type of advertising and
      sponsorships that might be available in the proposed arena. The charts below summarize
      the interest in these opportunities.
                                                                      Interest in Advertising and Sponsorship Opportunities
                                                                                          Proposed Arena


                                                     Large Headquarters                                                                        Small Headquarters and Branches



                Signage                             1.9                                                              Signage                                2.1

                                            1.8                                                      Videoboard Advertising                           1.9
 Videoboard Advertising

    In-Game Promotions                     1.7                                                           In-Game Promotions                        1.8

   Broadcast Advertising                  1.6                                                           Broadcast Advertising                    1.7

Concourse Naming Rights             1.4                                                            Concourse Naming Rights               1.4

   Arena Naming Rights             1.3                                                                  Arena Naming Rights             1.3

                           1                    2                    3                       4                                  1                 2                    3                     4

                     No Interest                                                 Strong Interest                          No Interest                                            Strong Interest




      As illustrated in the above exhibit, respondents were asked to rank each advertising and
      sponsorship opportunity on a scale of 1 to 4, with 4 being “very interested” in that
      particular advertising or sponsorship opportunity and 1 being “not interested” in that
      opportunity. The opportunities receiving the high rankings for large headquarters
      included signage (average ranking: 1.9) and videoboard advertising (average ranking:
      1.8). High rankings by small headquarters and branches also included signage (average
      ranking: 2.1) and in-game promotions (average ranking: 1.9). The opportunity with the
      lowest ranking was arena naming rights (average ranking: 1.2 small headquarters and 1.3
      for large headquarters). Based on the market’s relatively low interest for the various
      advertising mediums, it will be important for the operator to develop creative packages to
      leverage the market’s interest in the new venue.

      One advertising option that could be considered and was discussed with respondents is
      membership in the Founding Partners Program. The program was explained to
      respondents as being limited to a small number of corporations and would include
      product exclusivity, arena signage, videoboard advertising, in-game promotions,
      broadcast advertising and premium seating, among other benefits. The chart on the
      following page summarizes corporate respondents interest in membership in the Arena
      Founding Partners Program at annual costs of $250,000 or $100,000.




                                                                                                   82
VI. Market Surveys (con’t)
                                              Interest in Arena Founding Partners Program




                    Small Headquarters and    2.4%           5.6%          8.0%
         $250,000          Branches

                                                                                  9.6%
                       Large Headquarters 0.8%               8.8%
         $100,000




                    Small Headquarters and           5.6%                     10.4%                     16.0%
                           Branches

                       Large Headquarters 0.8%          6.4%                         9.6%                 16.8%


                                       0.0%                 5.0%           10.0%                15.0%           20.0%

                                                            Definitely     Likely           Possibly


As shown above, positive interest in the Arena Founding Partners Program ranged from
8.0 percent at $250,000 for small headquarters and branches to 16.8 percent at $100,000
for large headquarters. It should be noted that no respondents indicated a high degree of
interest (“definitely interested”) in the program at the $250,000 price level.


Summary

A total of 250 random telephone surveys were completed with local corporations to
determine interest and opinions related to the potential development of a multi-purpose
arena. Key findings included:

   •   The majority of respondents indicated that their company currently has season
       tickets or premium seating for an existing team in the Tucson or Phoenix markets.

   •   The entertainment or sporting events that respondents are most interested in
       attending in a new arena consisted of concerts and family shows. The events that
       had the least interest were minor league hockey and other events such as
       graduations. However, in excess of 50 percent of the corporate market indicated
       some level of interest in purchasing season tickets for either an indoor football
       team and/or hockey team.

   •   Interest in private suites at a new arena ranged from 19 to 31 percent of the
       corporate survey respondents, depending on the annual lease price.

   •   Interest in loge boxes at a new arena ranged from 26 to 30 percent of the
       corporate survey respondents, depending on the annual lease price.




                                                                     83
VI. Market Surveys (con’t)


   •   Interest in club seats at a new arena ranged from 42 to 48 percent of the corporate
       survey respondents, depending on the price.

   •   Interest in purchasing season tickets to a minor league hockey franchise ranged
       from 51 to 54 percent of corporate respondents that indicated a willingness to
       purchase season tickets at an average per game price of $15. There is also strong
       interest in season tickets for an arena football franchise, with 54 to 60 percent of
       respondents indicating an interest in purchasing season tickets at $20 per game.

   •   The following chart details the average interest levels of the two corporate sample
       groups for the premium seating options and season ticket opportunities.

                                         Premium Seating and Season Ticket
                                          Corporate Initial Interest Levels


                                                                                        Total
                                                                                      Positive      True
                                             Definitely      Likely      Possibly     Interest   Interest

       Private Suites                             4.0%         6.8%           28.4%    39.2%       9.2%
       Loge Boxes                                 4.0%         9.2%           29.2%    42.4%      13.2%
       Club Seats                                 4.4%        11.2%           34.4%    50.0%      28.4%

       Season Tickets - Hockey                    6.0%        12.8%           34.0%    52.8%         n/a
       Season Tickets - Arena Football            9.2%        15.6%           32.4%    57.2%         n/a



   •   Approximately 48 percent to 54 percent of companies surveyed indicated an
       interest in advertising and sponsorship opportunities that may exist at the
       proposed arena. The opportunities that had the highest interest ranking included
       signage and in-game promotions, while arena naming rights had the lowest
       interest ranking for both corporate sample groups.

   •   Interest in memberships in an Arena Founders Partners Program was limited with
       eight to 17 percent of the corporate respondents in the two sample groups
       indicating an interest in becoming a member, depending on the price.

The results of the market surveys are considered together with assessment of the local
market characteristics, competitive facilities in the marketplace, historical operations of
comparable facilities, and interviews with potential facility users to estimate demand and
develop the appropriate building program.




                                                      84
        Executive Summary
I.      Introduction
II.     Overview of the Tucson Market
III.    Tucson Arena Historical Operations
IV.     Comparable Facilities                VII. Estimated Event Demand
V.      Competitive and Local Facilities
VI.     Market Surveys
VII.    Estimated Event Demand
VIII.   Building Program Analysis
IX.     Arena Pro Forma Analysis
VII. Estimated Event Demand


The purpose of this section is to estimate the potential event mix and attendance levels
that could be attracted to a new multi-purpose arena located in downtown Tucson. A
variety of factors have been analyzed in order to gauge the ability of a new facility to
attract various events, including:

      •      Event levels and physical characteristics of comparable arenas were used as
             benchmarks to gain an understanding of the types and number of events
             typically hosted by similar arenas; and,
      •      Interviews with local, regional and national arena promoters and event
             organizers as well as with officials from various minor leagues were
             conducted to obtain opinions on the potential new facility and gauge interest
             in utilizing the venue.

This information, along with the knowledge of potential event markets, industry trends,
and previous experience was used to estimate the number of events that a new multi-
purpose arena operating in Tucson could potentially attract.

Several event types have been considered for potential facility usage at a new multi-
purpose arena in Tucson. Potential events have been categorized into two types, tenant
events and market-driven events.


Tenant Events

Tenant events typically consist of games played by sports teams that are tenants of the
venue. Tenant events are usually scheduled well in advance and provide a facility with a
predictable level of facility usage. The majority of multi-purpose arenas have at least one
sports tenant. Tenant events evaluated as part of this analysis include:

      • Minor League Sports:
                  o Hockey;
                  o Football;
                  o Basketball;
                  o Lacrosse; and,
                  o Soccer.
       • Arizona Ice Cats.




                                             85
VII. Estimated Event Demand (cont’d)


Minor League Hockey

A minor league hockey team could represent a
potential tenant in the proposed arena.      There are
five minor hockey leagues and one Tier I junior
league based in the U.S., consisting of varying
degrees of skill and geographic locations, including:

   •   American Hockey League;
   •   ECHL;
   •   Central Hockey League;
   •   United Hockey League; and,
   •   United States Hockey League.

Interviews with various minor hockey leagues
indicate that the ECHL or AHL may be the most suitable for the market. Both of these
leagues contain teams that are affiliated with NHL teams, with the AHL team serving as
the AAA affiliate and ECHL serving as the AA affiliate. The AHL has an 80-game
season while the ECHL plays 72 games. A majority of the AHL teams are located in the
eastern and central United States as well as southeastern Canada, while the ECHL teams
are located primarily in the southern, eastern, and western portions of the country. As
with any potential minor league tenant, the ability to attract a minor league team will be
dependent on many factors including, but not limited to providing an appropriate facility,
identifying local and/or existing ownership, providing favorable lease terms to the
franchise and meeting certain season ticket and/or sponsorship sales thresholds, among
other factors.


       American Hockey League (AHL)

       The AHL is the premier AAA minor hockey league and has been in existence
       since 1936. The AHL is comprised of 28 teams and currently has over 400
       players in the league. The teams are located in various cities across the United
       States and Canada stretching north to south from St. John’s, Newfoundland to
       Houston, Texas, and east to west from Hartford, Connecticut to West Valley City,
       Utah. All of the AHL teams are affiliated with an NHL franchise.




                                            86
VII. Estimated Event Demand (cont’d)


    Each AHL team has an 80-game (40 home) regular season schedule, spanning the
    middle of October through the middle of April, culminating in the Calder Cup
    championship in early June. The exhibit below provides an overview of the
    AHL’s current markets, arenas and attendance.
                                                                                                  AHL Markets and Facilities


                                                                                                                                                                     2003-04               Ratio of
                                                                                                                                                                     Average    Average Attendance
                                                                                                             (1)
     Team                                           City                                       Population            Arena                              Capacity   Attendance         to Population

      Chicago Wolves                                Rosemont, IL                                   8,489,500         Allstate Arena                      17,000        8,006                0.09%
      Philadelphia Phantoms                         Philadelphia, PA                               5,150,900         First Union Spectrum                17,380        7,261                0.14%
    * Houston Aeros                                 Houston, TX                                    4,440,200         Compaq Center                       16,279        5,363                0.12%
      Lowell Lock Monsters                          Lowell, MA                                     4,059,600         Paul Tsongas Arena                   7,800        4,029                0.10%
      Toronto Roadrunners                           Toronto, Ontario                               2,481,494         Ricoh Coliseum                       8,300        4,587                0.18%
      Cleveland Barons                              Cleveland, OH                                  2,246,400         Gund Arena                          20,000        4,212                0.19%
    * San Antonio Rampage                           San Antonio, TX                                1,676,100         SBC Center                          18,500        4,948                0.30%
      Cincinnati Mighty Ducks                       Cincinnati, OH                                 1,675,500         Cincinnati Gardens                  10,326        4,536                0.27%
      Norfolk Admirals                              Norfolk, VA                                    1,609,100         Scope Arena                          8,846        3,992                0.25%
      Milwaukee Admirals                            Milwaukee, WI                                  1,512,400         Bradley Center                      17,800        4,575                0.30%
      Utah Grizzlies                                West Valley City, UT                           1,385,500         E Center                            10,500        5,673                0.41%
      Hartford Wolf Pack                            Hartford, CT                                   1,173,300         Hartford Civic Center               14,758        5,514                0.47%
      Grand Rapids Griffins                         Grand Rapids, MI                               1,124,200         Van Andel Arena                     10,835        6,727                0.60%
      Rochester Americans                           Rochester, NY                                  1,105,200         Blue Cross Arena                    12,500        7,426                0.67%
      Providence Bruins                             Providence, RI                                   989,700         Dunkin Donuts Center                11,940        7,489                0.76%
      Bridgeport Sound Tigers                       Bridgeport, CT                                   903,900         The Arena at Harbor Yard            10,000        4,865                0.54%
      Albany River Rats                             Albany, NY                                       881,500         Pepsi Arena                         14,000        3,454                0.39%
      Worcester Ice Cats                            Worcester, MA                                    770,900         Worcester Centrum Centre            12,400        4,832                0.63%
      Syracuse Crunch                               Syracuse, NY                                     732,400         Onondaga County War Memorial         6,200        5,286                0.72%
      Hershey Bears                                 Hershey, PA                                      637,600         Giant Center                        10,500        7,469                1.17%
      Wilkes-Barre/Scranton Penguins                Wilkes-Barre, PA                                 621,400         First Union Arena                    8,600        8,298                1.34%
      Manitoba Moose                                Winnipeg, Manitoba                               619,544         Winnipeg Arena                      10,812        6,914                1.12%
      Springfield Falcons                           Springfield, MA                                  611,400         Springfield Civic Center             7,442        3,705                0.61%
      Hamilton Bulldogs                             Hamilton, Ontario                                490,268         Copps Coliseum                      17,500        5,111                1.04%
      Manchester Monarchs                           Manchester, NH                                   396,000         Verizon Wireless Arena              10,019        9,141                2.31%
      Portland Pirates                              Portland, ME                                     273,400         Cumberland County Civic Center       6,746        4,072                1.49%
      Binghamton Senators                           Binghamton, NY                                   250,100         Broome Co. Vets. Mem. Arena          4,680        4,360                1.74%
      St. John's Maple Leafs                        St. John's, Newfoundland                          99,182         Mile One Stadium                     5,813        4,799                4.84%

     Average of All Markets                                                                        1,657,400                                             11,696        5,594                0.81%
     Average of Similar-Sized Markets                                                                847,587                                             10,832        5,998                0.75%     (2)
     Average of Comparable-Southern Markets                                                        3,058,150                                             17,390        5,156                0.21%


     Tucson Franchise Attendance Projection - Similar                                                891,220 New Multi-Purpose Arena                     10,000        6,687                0.75%
     Tucson Franchise Attendance Projection - Southern                                               891,220 New Multi-Purpose Arena                     10,000        1,854                0.21%

     Sources: Sales & Marketing Management; Official AHL Website
     * Represents franchises located in southern markets.
     (1) Population are MSA population, except for Canadian franchises where only the city population is included.
     (2) The ratio of average attendnance used for is the average of the comparable sized markets market populations within 300,000 people of Tucson.




    As shown, the average AHL market has a population of approximately 1.7 million
    people. Rosemont, Illinois, a suburb of Chicago, is the largest market in the
    league with nearly 8.5 million people, while St. John’s, Newfoundland, is the
    smallest market with a population of about 100,000. The Tucson marketplace
    would rank as the 17th largest market in the league. It should be noted that new
    franchises will be added in Des Moines, Iowa, and Omaha, Nebraska for the
    2005-06 season.

    The average AHL arena seats 11,700 spectators, with a high capacity of 20,000 at
    Gund Arena in Cleveland, Ohio, and a low of 4,680 at the Broome County
    Veterans Memorial Arena in Binghamton, New York. On average, AHL teams
    drew approximately 5,600 fans per game during the 2003-04 season, ranging from
    an average low of 3,454 per game for the Albany River Rats to a high of 9,141
    per game for the Manchester Monarchs.


                                                                                                          87
VII. Estimated Event Demand (cont’d)


    The ratio of average attendance to market population of teams located in markets
    comparable in size to Tucson was 0.75 percent and for teams located in southern
    markets was 0.21 percent. If Tucson were able to achieve a penetration ratio
    consistent with those with populations within 300,000 people of Tucson, the
    average per game attendance would be 6,687 patrons.

    Based on discussions with AHL officials, the AHL does not have specific markets
    sizes that it targets. They currently have teams in large cities like Philadelphia,
    Chicago, and Toronto, as well as smaller markets like Binghamton, Hershey, and
    Lowell. The league is currently not entertaining expansion applications as of the
    beginning of the 2004-05 season, but it was mentioned that a new arena in Tucson
    would be a good opportunity for the purchase and/or relocation of an AHL
    franchise from an existing market to Tucson. AHL officials indicated that there
    would be a strong interest on the part of some of the western-based NHL teams to
    locate their minor league operations in Tucson. The Phoenix Coyotes AHL
    affiliate is currently the Utah Grizzlies, who play at the “E” Center in West Valley
    City, Utah. Agreements resulting from the current NHL lockout could encourage
    the Phoenix Coyotes team to seek a closer venue for their affiliated minor league
    team if the minor system is restructured to be similar to minor league teams
    affiliated to Major League Baseball teams.


    ECHL

    The ECHL, formerly known as the East Coast Hockey League, is a premier AA
    hockey league that has been in existence since 1988. The ECHL is comprised of
    28 teams. Historically, teams were primarily located in the eastern portion of the
    U.S. However, the ECHL recently added several teams from the now defunct
    West Coast Hockey League. As a result, ECHL franchises are now located
    throughout the U.S.

    Each ECHL team has a 72-game (36 home) regular season schedule, spanning
    late October through early May, culminating in the Kelly Cup championship in
    late May. The exhibit on the following page provides an overview of the ECHL’s
    markets, arenas and attendance.




                                          88
VII. Estimated Event Demand (cont’d)

                                                                                       ECHL Markets and Facilities

                                                                                                                                                                       2003-04              Ratio of
                                                                                        Market                                                         Hockey          Average   Average Attendance
 Team                                            City                                Population Arena                                                 Capacity      Attendance         to Population

 Long Beach Ice Dogs                             Long Beach, CA                       9,911,500      Long Beach Arena                                       6,176       2,624                0.03%
 Gwinnett Gladiators                             Duluth, GA                           4,456,700      The Arena at Gwinnett Center                          11,355       5,034                0.11%
 San Diego Gulls                                 San Diego, CA                        2,960,100      San Diego Sports Arena                                12,920       4,772                0.16%
 Las Vegas Wranglers                             Las Vegas, NV                        1,774,900      Orleans Arena                                          7,773       4,981                0.28%
 Cincinnati Cyclones                             Cincinnati, OH                       1,675,500      Firstar Center                                        17,909       2,204                0.13%
 Charlotte Checkers                              Charlotte, NC                        1,599,800      Cricket Arena                                          9,570       4,517                0.28%
 Greensboro Generals                             Greensboro, NC                       1,299,000      Greensboro Coliseum                                   10,388       3,269                0.25%
 Greenville Grrrowl                              Greenville, SC                         991,900      Bi-Lo Center                                          16,000       4,617                0.47%
 Fresno Falcons                                  Fresno, CA                             971,800      Save Mart Center                                      13,800       4,742                0.49%
 Dayton Bombers                                  Dayton, OH                             944,800      Nutter Center                                          9,950       3,461                0.37%
 Bakersfield Condors                             Bakersfield, CA                        698,700      Bakersfield Centennial Garden                          9,000       4,513                0.65%
 Toledo Storm                                    Toledo, OH                             618,200      Toledo Sports Arena                                    5,353       3,799                0.61%
 South Carolina Stingrays                        N. Charleston, SC                      564,000      North Charleston Coliseum                             10,529       5,056                0.90%
 Columbia Inferno                                Columbia, SC                           553,900      Carolina Coliseum                                      6,231       4,087                0.74%
 Augusta Lynx                                    Augusta, GA                            491,700      Richmond County Civic Center                           6,604       2,980                0.61%
 Florida Everblades                              Estero, FL                             477,800      TECO Arena                                             7,209       6,214                1.30%
 Idaho Steelheads                                Boise, ID                              468,700      Bank of America Centre                                 5,006       4,513                0.96%
 Pensacola Ice Pilots                            Pensacola, FL                          429,700      Pensacola Civic Center                                 8,150       3,617                0.84%
 Louisiana Ice Gators                            Lafayette, LA                          390,300      Cajundome                                             11,384       3,398                0.87%
 Texas Wildcatters                               Beaumont, TX                           389,900      Ford Arena                                             7,500       2,884                0.74%
 Reading Royals                                  Reading, PA                            383,100      Sovereign Center                                       7,200       5,371                1.40%
 Mississippi Sea Wolves                          Biloxi, MS                             372,300      Mississippi Coast Coliseum                             9,150       3,329                0.89%
 Atlantic City Boardwalk Bullies                 Atlantic City, NJ                      365,800      Historic Boardwalk Hall                               10,500       3,217                0.88%
 Trenton Titans                                  Trenton, NJ                            361,600      Sovereign Bank Arena                                   7,850       5,059                1.40%
 Peoria Rivermen                                 Peoria, IL                             349,300      Peoria Civic Center (Carver Arena)                     9,894       5,101                1.46%
 Columbus Cottonmouths                           Columbus, GA                           277,900      Columbus Civic Center                                  7,600       2,524                0.91%
 Alaska Aces                                     Anchorage, AK                          270,700      Sullivan Arena                                         6,251       4,340                1.60%
 Roanoke Express                                 Roanoke, VA                            238,400      Roanoke Civic Center                                   8,706       2,918                1.22%
 Johnston Chiefs                                 Johnston, PA                           229,500      Cambria County War Memorial                            4,050       2,551                1.11%
 Wheeling Nailers                                Wheeling, WV                           149,800      Wheeling Civic Center                                  5,406       2,835                1.89%
 Pee Dee Pride                                   Florence, SC                           126,800      Florence Civic Center                                  7,426       2,505                1.98%

 ECHL Average - All Markets                                                           1,122,400                                                             8,930        3,904               0.82%
                                                                                                                                                                                                       (1)
 ECHL Average - Similar Sized Markets                                                   763,329                                                            10,123        3,947               0.60%
 ECHL Average - Southern Markets                                                      1,386,995                                                             9,185        3,909               0.74%


 Tucson Franchise Attendance Projection - Similar                                        891,220 New Multi-Purpose Arena                                   10,000        5,366               0.60%
 Tucson Franchise Attendance Projection - Southern                                       891,220 New Multi-Purpose Arena                                   10,000        6,621               0.74%

 Sources: ECHL and Sales & Marketing Management.
 * Represents franchises located in southern markets.
 (1) The ratio of average attendnance used for Tucson is the average of the comparable sized markets within about 300,000 people of Tucson's population.
 Notes:
   Greensboro Generals and Roanoke Express teams were terminated prior to the 2004/05 season.
   Cincinnati Cyclones have requested a voluntary suspension for the 2004/05 season.
   Columbus Cottonmouths will not play during 2004/05 season but will relocate to Bradenton, FL, and begin play there in 2005/06.
   A new Bloomington, IL, franchise will begin play in 2005/06 season.
   A new Victoria, BC franchise, Victoria Salmon Kings, will begin play in 2004/05.




             As shown, the average ECHL market has a population of approximately 1.1
             million. Long Beach, California with 9,911,500 residents is the largest market in
             the league, while Florence, South Carolina is the smallest market with a
             population of 126,800. The Tucson marketplace would rank as the eleventh
             largest in the league if a new franchise were to be added.

             The average ECHL arena seats 8,930 spectators for hockey, with a high capacity
             of 17,909 at Firstar Center in Cincinnati, Ohio, and a low of 4,050 at the Cambria
             County War Memorial in Johnston, Pennsylvania. On average, ECHL teams
             drew 3,904 fans per game during the 2003-04 season, ranging from an average
             low of 2,204 per game for the Cincinnati Cyclones to a high of 6,214 per game for
             the Florida Everblades. The average ratio of average attendance to population of
             all ECHL markets is 0.82 percent, for all comparable sized markets, with
             populations ranging from 500,000 to 1.0 million, is 0.60 percent, and the ratio for


                                                                                                        89
VII. Estimated Event Demand (cont’d)


    southern markets is 0.74 percent. If Tucson were able to achieve a penetration
    ratio consistent with the average of all ECHL markets, those with similar
    population levels, and with southern markets, the attendance would range from
    5,366 to 6,621 patrons.

    Based on discussions with ECHL officials, ideal markets for an ECHL franchise
    would range in population from 200,000 to 600,000. However, they accept
    markets larger than 600,000 especially if other professional league teams are not
    already present in the immediate market. According to league representatives, an
    ECHL franchise generally needs to attract 3,300 paid admissions and 4,000
    turnstile attendees per game to breakeven, with ticket prices averaging
    approximately $10.50. Further, ECHL officials indicated that sponsorships,
    advertising, promotional and concessions revenue generated to the team needs to
    be in the range of $400,000 to $500,000 in order to breakeven.

    An important factor for the ECHL selecting a city for a new franchise is the
    ownership group involved. It is important for the ownership group to have a
    sound business plan and be willing to brand the team and develop a solid fan base
    to avoid some of the financial shortcomings that previous minor league hockey
    franchises have experienced in Tucson.

    Based on discussions with ECHL officials, the league has commitments to expand
    the league by five franchises over the next few years, including the following
    markets:

       •   Burlington, Vermont;
       •   Bloomington, Illinois;
       •   Bradenton, Florida;
       •   Cincinnati, Ohio; and,
       •   Reno, Nevada.

    ECHL officials mentioned that the Tucson market would be a suitable location for
    a new franchise. ECHL representatives indicated that Tucson’s close proximity to
    Phoenix would not likely have a material impact on the fan base or the number of
    tickets that could be sold in the market. Many ECHL franchises have an
    affiliation with a NHL franchise. Opportunities may exist for an ECHL franchise
    in Tucson to become an affiliate of the NHL Coyotes or another team. The NHL
    Coyotes ECHL affiliate is currently the Idaho Steelheads.




                                        90
VII. Estimated Event Demand (cont’d)


             Central Hockey League (CHL)

             The Central Hockey League (CHL), is a growing minor hockey league. The CHL
             began in the early 1990’s and merged with the Western Professional Hockey
             League in 2001. The current CHL is comprised of 17 teams, which are
             independently owned. Most of the teams are located within the southwestern
             United States, with teams as far west as Loveland, Colorado and as far east as
             Memphis, Tennessee.

             Each CHL team has a 64-game (32 home) regular season schedule, spanning from
             the middle of October through the middle of March, culminating in the Ray Miron
             President’s Cup in April. The following exhibit provides an overview of the
             CHL’s markets, arenas and attendance.
                                                                                      CHL Markets and Facilities


                                                                                                                                            2003-04                    Ratio of
                                                                                                                                            Average         Average Attendance
 Team                                      City                              Population Arena                                 Capacity   Attendance               to Population

 Fort Worth Brahmas                        Fort Worth, TX                    1,820,000      Fort Worth Convention Center       11,200        4,036                      0.22%
 Austin Ice Bats                           Austin, TX                        1,398,100      Travis County Exposition Center     7,000        4,191                      0.30%
 Memphis RiverKings                        Memphis, TN                       1,160,600      DeSoto Civic Center                 8,400        3,975                      0.34%
 Oklahoma City Blazers                     Oklahoma City, OK                 1,109,400      Ford Center                        18,100        8,763                      0.79%
 Tulsa Oilers                              Tulsa, OK                           823,900      Maxwell Convention Center           7,111        4,405                      0.53%
 New Mexico Scorpions                      Albuquerque, NM                     734,000      Tingley Coliseum                   11,571        4,481                      0.61%
 Rio Grande Valley Killer Bees             Hidalgo, TX                         619,800      Dodge Arena                         5,500        5,114                      0.83%
 Wichita Thunder                           Wichita, KS                         519,600      Kansas Coliseum                     9,560        3,850                      0.74%
 Bossier-Shreveport Mudbugs                Bossier City, LA                    392,800      CenturyTel Center                  12,500        4,780                      1.22%
 Corpus Christi Rayz                       Corpus Christi, TX                  387,400      AmericanBank Center                 7,495        2,990                      0.77%
 Colorado Eagles                           Loveland, CO                        269,700      Budweiser Events Center             5,289        5,211                      1.93%
 Lubbock Cottton Kings                     Lubbock, TX                         249,800      Lubbock Municipal Coliseum          6,726        4,626                      1.85%
 Odessa Jackalopes                         Odessa, TX                          239,200      Ector County Coliseum               5,131        3,271                      1.37%
 Amarillo Gorillas                         Amarillo, TX                        225,500      Amarillo Civic Center               4,986        3,302                      1.46%
 Laredo Bucks                              Laredo, TX                          211,700      Laredo Entertainment Center         8,000        6,354                      3.00%
                                                                                                                                                      (1)
 Topeka Tarantulas                         Topeka, KS                          170,800      Kansas ExpoCentre                   7,777           n/a                        n/a
 San Angelo Saints                         San Angelo, TX                      105,400      San Angelo Coliseum                 5,265        2,401                      2.28%

 Average - All Markets                                                          614,000                                         8,330        4,484                      1.14%
                                                                                                                                                                                  (2)
 Average - Similar Sized Markets                                                827,883                                        10,040        5,098                      0.64%

 Tucson Franchise Attendance Projection - Similar                               891,220 New Multi-Purpose Arena                10,000        5,709                      0.64%

 Sources: Sales & Marketing Management; Official CHL Website
 * Represents franchises located in southern markets.
 (1) Topeka is scheduled to begin play in CHL during 2004-05 season.
 (2) Ratio is comprised of comparable sized markets with populations within 300,000 people of Tucson's market population.




             As shown, the average CHL market has a population of approximately 614,000.
             The largest market in the league is Fort Worth, Texas, with a population of over
             1.8 million, while the smallest market is San Angelo, Texas, with a population of
             over 105,000. The Tucson marketplace would rank as the fifth largest in the
             league if a new franchise were to be added.




                                                                                                     91
VII. Estimated Event Demand (cont’d)


    The average CHL arena seats 8,330 spectators, with a high capacity of 18,100 at
    the Ford Center in Oklahoma City, Oklahoma, and a low of 4,986 at the Amarillo
    Civic Center in Amarillo, Texas. On average, CHL teams drew approximately
    4,500 fans per game during the 2003/04 seasons, ranging from an average low of
    2,298 per game for the San Angelo Saints to a high of 8,867 per game for the
    Oklahoma City Blazers.

    The ratio of average game attendance to market population for all of the
    franchises is 1.14 percent, while the ratio of comparable sized markets to Tucson,
    with populations within 300,000 people of Tucson’s market population, is 0.64
    percent. If Tucson were able to achieve a penetration ratio consistent with those
    with comparable populations, the attendance would be approximately 5,700
    patrons.

    Based on discussions with CHL officials, they are interested in expanding to
    markets with new arenas that currently do not have a professional hockey
    franchise of any kind, though having a collegiate hockey tenant was not
    discussed. CHL officials indicated that new franchises beginning in new facilities
    have been successful. For example, teams in Laredo, Texas, Loveland, Colorado,
    and Hidalgo, Texas, have each started their franchise within the past three years in
    new venues and have had strong support from the fans, media, and local
    businesses. Currently, seven of the 17 teams are playing in facilities that have
    been constructed within the past five years.

    Ownership is a key factor in the CHL’s selection for a new market for a franchise.
    According to CHL officials, the construction of a new arena, proximity to western
    state franchises and proximity to the CHL offices in Phoenix, would make the
    Tucson market an attractive location for a CHL franchise.


    United Hockey League (UHL)

    The UHL began play in 1991 as the Colonial Hockey League. The league is
    comprised of 14 teams primarily from the Midwest and northeast United States,
    as well as cities in southern Canada. The farthest west that a team is located is in
    Kansas City, Missouri. The UHL currently has a 74-game regular season (37
    home games). The UHL currently has a partnership with the NHL, but is not
    directly affiliated with the NHL franchises.

    In speaking with representatives with the UHL, it is preferred that new franchises
    are located in close proximity to existing teams to minimize travel costs. With no


                                          92
VII. Estimated Event Demand (cont’d)


       other teams located in the southern or southwestern United States, it is unlikely
       that the UHL would approve a franchise in Tucson.

For purposes of this analysis, a minor league hockey franchise is assumed for a new
Tucson arena.


Indoor Football

There are currently three established indoor football
leagues operating in the U.S., including:

   •   Arena Football League;
   •   af2; and,
   •   National Indoor Football League.

The Arena Football League (“AFL”) is comprised
mostly of teams owned by National Football League
(“NFL”) owners and playing in large arenas in major
U.S. cities, including America West Arena in Phoenix.
The af2 and National Indoor Football League (“NIFL”) are comprised of teams playing
in smaller facilities in secondary and tertiary markets. Based on discussions with each of
the indoor football leagues, it appears that af2 would potentially be the league most
suitable for the Tucson marketplace.

       af2

       The af2 played its first season in 2000 with a total of 15 teams. Aggressive
       expansion has led to 25 teams for the 2004 season. Each af2 franchise plays a 16-
       game schedule (8 home) spanning from early April through late July, culminating
       in the Arena Cup championship in late August. The exhibit on the following page
       summarizes af2 markets, arenas and attendance.




                                            93
VII. Estimated Event Demand (cont’d)


                                                                                                  af2 Markets and Facilities


                                                                                                                                                                 2004              Ratio of
                                                                                              Market                                           Footaball      Average   Average Attendance
Team                                             City                                      Population Arena                                    Capacity    Attendance         to Population

San Diego Riptide                                San Diego, CA                              2,960,100      San Diego Sports Arena                12,000        4,127                0.14%
Memphis Xplorers                                 Southaven, MS                              1,160,600      DeSoto County Civic Center            10,000        3,605                0.31%
Oklahoma City Yard Dawgz                         Oklahoma City, OK                          1,109,400      Ford Center                           18,000       10,089                0.91%
Louisville Fire                                  Louisville, KY                             1,043,200      Freedom Hall                          17,200        8,724                0.84%
Central Valley Coyotes                           Fresno, CA                                   971,800      Selland Arena                          8,912        3,924                0.40%
Birmingham Steeldogs                             Birmingham, AL                               933,200      Birmingham-Jefferson Civic Center     16,850        6,708                0.72%
Hawaiian Islanders                               Honolulu, HI                                 899,900      Neal Blaisdell Arena                   6,600        3,609                0.40%
Albany Conquest                                  Albany, NY                                   881,500      Pepsi Arena                           14,000        5,883                0.67%
Tulsa Talons                                     Tulsa, OK                                    823,900      Tulsa Convention Center                7,096        5,161                0.63%
Bakersfield Blitz                                Bakersfield, CA                              698,700      Centennial Garden                      8,700        5,398                0.77%
Wilkes-Barre/Scranton Pioneers                   Willkes-Barre, PA                            621,400      First Union Arena                      8,300        5,239                0.84%
Rio Grande Valley Dorados                        Hidalgo, TX                                  619,800      Dodge Arena                            5,500        5,458                0.88%
Arkansas Twisters                                N. Little Rock, AR                           596,200      Alltel Arena                          16,058        8,691                1.46%
Wichita Stealth                                  Wichita, KS                                  519,600      Kansas Coliseum                        9,686        3,043                0.59%
Florida Firecats                                 Estero, FL                                   477,800      TECO Arena                             7,082        5,494                1.15%
Manchester Wolves                                Manchester, NH                               396,000      Verizon Wireless Arena                10,019        7,490                1.89%
Bossier City Battlewings                         Bossier City, LA                             392,800      CenturyTel Center                     12,400        3,829                0.97%
Quad City Steamwheelers                          Davenport, IA                                358,100      MARK of the Quad Cities                9,200        6,175                1.72%
Tennessee Valley Vipers                          Huntsville, AL                               350,600      Von Braun Center                       6,624        5,067                1.45%
Peoria Pirates                                   Peoria, IL                                   349,300      Peoria Civic Center                    9,772        4,552                1.30%
Cape Fear Wildcats                               Fayetteville, NC                             333,600      Crown Coliseum                        13,500        4,025                1.21%
Macon Knights                                    Macon, GA                                    331,200      Macon Coliseum                         7,182        3,177                0.96%
Columbus Wardogs                                 Columbus, GA                                 277,900      Columbus Civic Center                  7,600        3,810                1.37%
Green Bay Blizzard                               Green Bay, WI                                233,600      Resch Center                          11,000        3,683                1.58%
Laredo Law                                       Laredo, TX                                   211,700      Laredo Entertainment Center           10,000        4,234                2.00%

af2 Average - All Markets                                                                     702,076                                            10,531        5,248                0.75%
af2 Average - Similar Sized Markets                                                           863,300                                            11,435        6,041                0.74%

                                                                                                                                                                                              (1)
Tucson Franchise Attendance Projection - Similar                                              891,220                                            10,000        6,557                0.74%

(1) Ratio is comprised of comparable sized markets with populations within 300,000 people of Tucson's market population.
Sources: af2 and Sales & Marketing Management.




                   The average af2 market has a population of approximately 702,076, with a high of
                   2,960,100 in San Diego and a low of 211,700 in Laredo. An af2 franchise in
                   Tucson would operate in the eighth largest market in the league.

                   The ratio of average game attendance to market population for all existing
                   franchises is 0.75 percent, while the ratio of the comparable sized markets within
                   300,000 people of the Tucson market population is 0.74 percent. If Tucson were
                   able to achieve a penetration ratio consistent with af2 markets with similar
                   population levels, the attendance would be approximately 6,557 patrons.

                   The league’s arenas range in size from the 18,000-seat Ford Center in Oklahoma
                   City to the 5,500-seat Dodge Arena in Hidalgo, Texas, with a league average
                   capacity of 10,571 seats. On average, af2 teams drew 5,248 fans per game,
                   ranging from an average low of 3,043 per game for the Wichita Stealth to a high
                   of 10,089 per game for the Oklahoma City Yard Dawgz.

                   According to af2 representatives, the priority of the league is to expand in the
                   West, locate another team in Florida, and expand in the Northeast. A league
                   representative indicated that a new arena in the Tucson area could potentially be
                   an attractive option for future expansion or relocation.



                                                                                                                     94
VII. Estimated Event Demand (cont’d)


       Representatives of af2 indicated that a team would need to average 5,000
       attendees (with a season ticket base approximating 3,000) at an average ticket
       price of $14.00 per game in order to breakeven. Also, representatives indicated
       that a franchise needs to generate between $250,000 to $350,000 annually in
       advertising/sponsorships to meet breakeven performance levels. For purposes of
       this analysis, an af2 franchise is assumed for a new Tucson arena.


Minor League Basketball

Minor league basketball has historically been unstable, with a
number of leagues forming, folding, or restructuring from year
to year. Currently there are four established minor league
basketball leagues in the U.S. which include:

   •   National Basketball Development League (NBDL);
   •   United States Basketball League (USBL);
   •   Continental Basketball Association (CBA); and,
   •   American Basketball Association (ABA).

The ABA was formed in 2000 and the NBDL began operating
in 2001. The remaining two leagues have been in existence
for longer periods of time but have historically experienced league and franchise
instability.

Based on discussions with minor league basketball representatives, a review of the
geographic locations of existing teams, and the existence of successful NCAA Division I-
A basketball teams in the market, a minor league basketball franchise has not been
assumed as a tenant for a new multi-purpose arena in Tucson.


Indoor Lacrosse

Currently, there is one major professional indoor
lacrosse league operating in the U.S. The National
Lacrosse League (“NLL”) began operations in 1986
as the Major Indoor Lacrosse League. In 2004,
NLL fielded 10 teams primarily playing in large
markets in National Hockey League (“NHL”)
arenas, as most NLL teams are owned by NHL
owners.


                                            95
VII. Estimated Event Demand (cont’d)


NLL teams play a 16-game regular season schedule (8 home games) that spans from
January through April, culminating in the Champions’ Cup in early May. In 2004,
average league attendance was 10,088 per game.

Based on discussions with NLL officials, the league would not likely approve a team for
the Tucson marketplace due to the league’s tie to NHL markets, which would result in the
league focusing primarily on the Phoenix market if it were to add a franchise in Arizona.
However, league representatives indicated they are planning a new league, NL2, which
could debut in June 2005 and would serve as a developmental league for NLL. The NL2
would serve as the NLL's minor league, with teams playing in small to medium sized
markets across North America. Initially, it is expected that all teams would be
concentrated in the northeast to limit travel expenses.

League officials anticipate that each NL2 franchise would have an operating budget of
approximately $350,000 and would need to average 2,000 paid attendees per game at a
ticket price of $10.00 per game to breakeven. The season is anticipated to span 20 games
(10 home games) primarily played on weekends from June through August of each year.

Given the uncertainty of the NL2 at the time of this report, the lack of any league
operating history and geographic concerns, an NL2 franchise has not been included the
event estimates for a new multi-purpose arena in Tucson.


Indoor Soccer

There is currently one professional indoor soccer league operating the U.S. The Major
Indoor Soccer League (“MISL”) was formed in 2001 following the folding of the
National Professional Soccer League. Currently, MISL has nine franchises operating in
some of the largest markets in the North America with a strong base of soccer
participation including Philadelphia, Chicago, San Diego, Baltimore, Monterrey
(Mexico), Milwaukee, Kansas City, St. Louis and Cleveland. MISL will add an
additional team in Stockton, California for the 2005-06 season.

The chart on the following page depicts the current teams of the MISL, their market
location and population, facility, and average attendance.




                                            96
VII. Estimated Event Demand (cont’d)


                                                                             MISL Markets and Facilities


                                                                                                                                               2003-04                     Ratio of
                                                                                                                                               Average          Average Attendance
Team                             City                          Population Arena                                               Capacity      Attendance                to Population

Chicago Storm                    Chicago, IL                     8,489,500     UIC Pavilion                                      9,000              n/a                         n/a
Philadelphia Kixx                Philadelphia, PA                5,150,900     First Union Spectrum                             14,500           5,226                       0.10%
Dallas Sidekicks                 Dallas, TX                      3,800,900     Reunion Arena                                    16,652           5,756                       0.15%
San Diego Sockers                San Diego, CA                   2,960,100     San Diego Sports Arena                           13,100           4,212                       0.14%
Baltimore Blast                  Baltimore, MD                   2,635,600     Baltimore Arena                                  13,700           6,260                       0.24%
St. Louis Steamers               St. Louis, MO                   2,632,100     Savvis Center                                    16,536           3,483                       0.13%
Cleveland Force                  Cleveland, OH                   2,246,400     CSU Convocation Center                           13,610           4,956                       0.22%
Kansas City Comets               Kansas City, MO                 1,821,200     Kemper Arena                                     18,008           5,373                       0.30%
Milwaukee Wave                   Milwaukee, WI                   1,512,400     Bradley Center                                   17,800           6,012                       0.40%
Monterrey Fury                   Monterrey, MX                   1,200,000     Monterrey Arena                                  17,200           8,937                       0.74%

Average                                                          3,244,910                                                      15,011           5,579                      0.27%

Tucson Franchise Attendance Projection                             891,220 New Multi-Purpose Arena                              10,000           2,399                      0.27%

Sources: Sales & Marketing Management; Official MISL Website
Note: The Dallas franchise went inactive after the 2003-04 season. The Chicago Storm begin MISL play in the 2004-05 season.




As shown above, the average market population for MISL teams is approximately 3.2
million, ranging from 1.2 million in Monterrey, Mexico to 8.5 million in Chicago,
Illinois. An MISL franchise playing in Tucson would operate in the smallest market
among MISL teams. The franchises play in large arenas, averaging 15,011 seats, ranging
from a low of 9,000 at the University of Illinois-Chicago Pavilion to a high of 18,008 at
Kemper Arena in Kansas City. Average league attendance during the 2003-04 season
was 5,579 per game.

The ratio of average attendance per game for all franchises is 0.27 percent. When the
ratio is applied to the Tucson market, it is estimated that a new MISL franchise in Tucson
could expect to attract about 2,399 patrons per game, but this is difficult to compare
evenly to what the average attendance in Tucson might actually be because the markets
listed above all have major professional teams. Based on discussions with MISL
representatives, the primary focus for adding a franchise in Arizona would be in Phoenix
due to the market size. It was noted by MISL representative that the Tucson and Phoenix
regions are good markets for soccer-related events.

University of Arizona Ice Cats

The University of Arizona Ice Cats program was                                                                                           University of Arizona Ice Cats
established in 1979 and is a university club hockey team.
                                                                                                                                                                       Average
The program currently practices and plays its home games                                                                           Season            Games          Attendance
at the existing TCC Arena. The exhibit below presents a
                                                                                                                                   2003-04                 18             1,895
summary of the historical number of home games and                                                                                 2002-03                 18             2,526
attendance for UA men’s hockey over the past two                                                                                   Average                 18             2,211
seasons.                                                                                                                          Source: TCC Management




                                                                                               97
VII. Estimated Event Demand (cont’d)


As shown on the previous page, the hockey program has averaged 18 home games per
season over the last two years, drawing an average turnstile attendance of 2,211 fans per
game. The team plays other Division I-A schools as a member of the American
Collegiate Hockey Association, with its most frequent opponent being Arizona State
University.

For purposes of this analysis, it is estimated that the University of Arizona Ice Cats would
likely represent 18 annual events at a new arena and could draw approximately 2,000
paid admissions per game and 2,300 turnstile attendees per game in a stabilized year of
operations.

It is estimated from discussions with the various minor league organizations and the Ice
Cats that a new Tucson arena could host three tenants, including a minor league hockey
franchise, an indoor football franchise, and the Ice Cats hockey team. The number of
event days and estimated paid and turnstile attendance for each possible tenant is listed
below.

                            Estimated Tenant Events and Attendance

                         Event   Average Paid   Average Turnstile     Total Paid   Total Turnstile
                         Days     Attendance          Attendance     Attendance       Attendance

 Minor League Hockey        40         4,500              6,500        180,000          260,000
 Indoor Football             8         5,500              6,500         44,000           52,000
 Ice Cat Hockey             18         2,000              2,300         36,000           41,400



Market-Driven Events

Market-driven events are defined as those events that are affected by local market forces
and characteristics, and generally represent either national or regional touring events or
locally based events unique to the market. The number of market-driven events in a
given community is typically a function of the size of the marketplace and the number of
available facilities to host these events. The types of market-driven events evaluated in
this section include:

       •      Concerts;
       •      Ice Shows;
       •      Family Shows;
       •      Motor Sports;
       •      Latino Shows;
       •      Other Sports;
       •      Rodeos/Equestrian Events/Other Events; and,


                                                98
VII. Estimated Event Demand (cont’d)


     •       TCC Shows
Concerts

The greatest opportunity to attract concerts to a new arena in
Tucson will likely be derived from the “middle market”
concert category. Middle market concert acts generally draw
between 3,000 and 10,000 spectators to a single performance.

While smaller acts often play in clubs or theaters and larger
acts generally perform in large arenas, the middle market
performers often lack ideal venues for their shows. A mid-
sized arena is often ideal for these performances, offering
enough seats to accommodate fan demand while providing a
more intimate setting than a large arena or stadium venue.
The majority of Tucson residents travel to Phoenix to attend
larger concerts. Having a larger indoor venue would make Tucson attractive for acts that
attract bigger audiences and increase their opportunities in attracting touring shows on
their way to or from Phoenix. A new arena in Tucson could potentially bring a variety of
concert performances including middle market acts and potentially several larger acts.

In order to estimate the number of concerts that could potentially be held at a new arena
in Tucson, conversations were held with a number of promoters familiar with the region’s
event and facility market, including but not limited to:

   •   Bill Silva Productions;
   •   Cal Productions;
   •   Clear Channel Entertainment;
   •   Concerts West/AEG;
   •   Elias Entertainment;
   •   Feld Entertainment;
   •   Nederlander Concerts;
   •   Outback Concerts; and,
   •   Stephens Productions.


A majority of promoters stated that the Tucson market is a relatively strong concert
market. Promoters believed that construction of a new arena would increase the number
of performing acts that would target Tucson due to an increase in the quality of venue.
The following is a summary of comments and opinions obtained through promoter
interviews:



                                            99
VII. Estimated Event Demand (cont’d)


   •   Tucson is an attractive market and attendance at concerts in Tucson is not
       significantly impacted by the nearby Phoenix market.

   •   A positive attribute of the proximity to Phoenix is that touring acts have the
       ability to perform in two markets near each other, but have two different media
       markets.

   •   The relatively low labor rates provide the market with a competitive advantage by
       having a lower cost structure than other markets.

   •   The proximity to Mexico could provide a visitor advantage to Tucson.
                                                               Population Per Event in Marketplace
A breakdown of total MSA population per number                              Concerts
of concerts held at comparable venues can be seen
in the exhibit to the right. A higher population per                                      Population
                                                           Venue                          Per Concert
concert indicates a greater ability to sell tickets to
an event. The average market population has                Venue 1                              48,878
50,423 people per concert. Market populations              Venue 2                              20,842
                                                           Venue 3                              37,377
ranged from as high as 166,667 to as low as 20,842.        Venue 4                              30,215
Applying the average ratio to Tucson’s population          Venue 5                              33,112
of 891,220, it is estimated that the proposed arena        Venue 6                              65,259
could attract 18 concerts per year.                        Venue 7                              41,667
                                                           Venue 8                              32,283
                                                           Venue 9                              29,967
Based on interviews with concert promoters and a           Venue 10                            166,667
review of concert activity at similar venues in            Venue 11                             32,500
comparable markets, it is estimated that a multi-          Venue 12                             35,260
purpose arena in Tucson could host 10 to 15 major          Venue 13                             81,467
concerts per year with an average paid attendance of Average                                     50,423
7,500 and an average turnstile attendance of 7,800. Tucson Population                          891,220
The venue could also host two to five half-house Est. Number of Concerts                            18
concerts with an average paid attendance of 3,750 Source: CSL Research
and an average turnstile attendance of 3,900. The
table below depicts these estimates.

                           Estimated Events and Attendance - Concerts

                   Event   Average Paid    Average Turnstile           Total Paid   Total Turnstile
                   Days     Attendance           Attendance           Attendance       Attendance

Base Case             12          6,875              7,150               82,500           85,800
Best Case             16          6,563              6,825              105,000          109,200




                                               100
VII. Estimated Event Demand (cont’d)


Ice Shows

There are a number of ice events held at various facilities in
Arizona, California, Utah, and New Mexico, among other
bordering states. Promoters and organizers of events such
as Toy Story on Ice, Smuckers Stars on Ice, and Disney on
Ice showed interest in hosting events at a new arena in
Tucson, with the possibility of increasing their frequency of
coming to the market as the result of having a modern and
larger facility. The following is a chart of the estimated ice
shows and attendance that a new arena could expect based
on the results of the promoter surveys and an analysis of
similar event activity at comparable new arenas.

                           Estimated Events and Attendance - Ice Shows

                         Event   Average Paid   Average Turnstile         Total Paid   Total Turnstile
                         Days     Attendance          Attendance         Attendance       Attendance

 Base Case                  6          6,500              6,500             39,000            39,000
 Best Case                  8          6,500              6,500             52,000            52,000


As shown, a new Tucson arena could expect to attract an average of between six and
eight ice shows a year with an attendance of 6,500 patrons per event.


Family Shows

Family shows are events that cater to spectators of all
ages and include a wide variety of events including
Sesame Street Live, Ringling Brothers/Barnum and
Bailey Circus (RBBBC), Barney, and Nickelodeon
shows, among others. A new facility’s ability to
attract events such as family shows will depend
somewhat on the physical characteristics of the
facility.




                                                101
VII. Estimated Event Demand (cont’d)


A breakdown of total MSA population per                        Population Per Event in Marketplace
number of family shows held at comparable                                 Family Shows

venues can be seen in the exhibit to the right. A
                                                       Venue                                   Population
higher population per family show indicates a
greater ability to sell tickets to an event. The       Venue 1                                     56,210
                                                       Venue 2                                     11,000
average population was 50,349 people per               Venue 3                                     64,787
family show. Market populations ranged from            Venue 4                                     24,550
as high as 111,111 to as low as 11,000 per             Venue 5                                     45,862
                                                       Venue 6                                     48,235
family show. Considering Tucson’s population           Venue 7                                     17,857
of 891,220, it is estimated that the proposed          Venue 8                                     24,213
arena could attract 18 family shows each year.         Venue 9                                     14,195
                                                       Venue 10                                   111,111
                                                       Venue 11                                    41,786
Depending on the amenities incorporated, the           Venue 12                                    41,976
proposed arena may be able to attract                  Venue 13                                   152,750
incremental family shows to the market above Average                                 50,349
and beyond current events such as Rugrats, Tucson Population                        891,220
Sesame Street Live, RBBBC, and Dragon Tales. Est. Number of Family Shows                 18
Family show promoters indicated that they Source: CSL Research
would continue to bring family shows to Tucson
that they currently host at the TCC Arena, but may increase the frequency of certain
shows that currently do not come to the market every year. For example, the RBBBC has
performed at the TCC Arena every other year, but recently has attempted to perform in
consecutive years. A new arena could encourage patrons to attend events such as the
RBBC more frequently due to the added amenities and better atmosphere that a new
arena could provide. As shown in the table below, it is estimated that a new arena could
attract 12 to 15 family show performances with an average paid attendance of 3,750
patrons and an average turnstile attendance of 4,000 patrons per performance.

                         Estimated Events and Attendance - Family Shows

                        Event   Average Paid   Average Turnstile           Total Paid   Total Turnstile
                        Days     Attendance          Attendance           Attendance       Attendance

 Base Case                 12         3,750              4,000               45,000            48,000
 Best Case                 15         3,750              4,000               56,250            60,000




                                                102
VII. Estimated Event Demand (cont’d)


Motor sports

Despite the relatively small size of their floors in
comparison with larger stadiums and outdoor venues, mid-
sized venues host motor sport events including motorcross,
monster truck races and tractor pulls. The presence of a
hockey-sized floor and some flexible seating options would
allow a new arena in Tucson to host these events with an
opportunity to attract additional events to the market.


A breakdown of total MSA population per                        Population Per Event in Marketplace
number of motor sports events held at                                      Motorsports
comparable venues can be seen in the exhibit           Venue                                   Population
to the right. A higher population per motor
                                                       Venue 1                                    160,600
sports indicates a greater ability to sell tickets     Venue 2                                     99,000
to an event. The average population was                Venue 3                                         n/a
228,663 people per motor sport event.                  Venue 4                                         n/a
                                                       Venue 5                                         n/a
Population per event ranged from as high as            Venue 6                                    554,700
554,700 to as low as 33,713. Applying the              Venue 7                                    166,667
average ratio to Tucson’s population of                Venue 8                                    387,400
891,220, it is estimated that the proposed             Venue 9                                     33,713
                                                       Venue 10                                   333,333
arena could have up to four motor sporting             Venue 11                                   146,250
events each year.                                      Venue 12                                   176,300
                                                       Venue 13                                        n/a
Motor sports promoters interviewed for this Average                                  228,663
project indicated that they hold two to five Tucson Population                       891,220
shows over several days in some markets. Est. Number of Motor Sports                       4
This helps offset the cost of facility set-up and Source: CSL Research
takedown, making the event more practical
and profitable. Motor sports event promoters indicated that the Tucson market could
potentially be a more attractive market for motor sports events with a new arena. As
shown in the table on the following page, it is estimated that a new arena could attract
three to five motor sports events annually with an attendance of 5,750 patrons per event.

                           Estimated Events and Attendance - Motorsports

                          Event   Average Paid   Average Turnstile          Total Paid   Total Turnstile
                          Days     Attendance         Attendance           Attendance       Attendance

 Base Case                   3          5,750              5,750              17,250            17,250
 Best Case                   4          5,750              5,750              23,000            23,000




                                                 103
VII. Estimated Event Demand (cont’d)


Latino Shows

Latino shows consist of performances that focus on the Latino culture. With the close
proximity of Tucson to the Mexican border numerous visitors travel to Tucson for
various reasons, entertainment being one of them. In addition to tourists, there are a large
number of residents in Tucson with a Latino heritage. As a result, Tucson has been host
to Mariachi festivals in the past and a new arena could be expected to host future events.
The table below depicts an estimate of the number of Latino events and shows, as well as
estimated attendance, which a new arena could attract.

                          Estimated Events and Attendance - Latino Shows

                         Event   Average Paid    Average Turnstile          Total Paid   Total Turnstile
                         Days     Attendance          Attendance           Attendance       Attendance

 Base Case                   5         6,000               6,200                30,000          31,000
 Best Case                   8         6,000               6,200                48,000          49,600




Other Sports

Other sports include a variety of events including, but
not limited to the Harlem Globetrotters, professional
wrestling, rodeos, and amateur sports, among other
events.

The current TCC Arena has been able to attract the
Harlem      Globetrotters,    boxing,     Toughman
competitions, and other sporting events. A new and
larger arena will have the opportunity to attract additional sporting events with more
performances throughout the year. As shown in the table below, it is estimated that the
proposed arena could host six to eight other sporting events at an average attendance of
5,000 patrons per event.

                      Estimated Events and Attendance - Other Sporting Events

                         Event   Average Paid    Average Turnstile          Total Paid   Total Turnstile
                         Days     Attendance          Attendance           Attendance       Attendance

 Base Case                   6         5,000               5,000                30,000          30,000
 Best Case                   8         5,000               5,000                40,000          40,000




                                                 104
VII. Estimated Event Demand (cont’d)


Rodeos/Equestrian/Other Events

Based on the analyses of comparable facilities,
other events that are often held in multi-purpose
arenas include rodeos, equestrian events, high
school and collegiate graduation ceremonies,
religious    services,   festivals,  professional
certification testing, community events, holiday
parties, and private catered functions, among
other events. In discussions with Professional
Bull Riding (“PBR”) officials, they currently
have two tours of rodeo competitions that perform at various venues across the country,
the Built Ford Tough PBR Tour and the Challenger Tour. In the past year, the PBR
teamed up with a local promoter in Tucson to put on the Challenger Tour event, a lesser
competition than the Ford Built Tough Tour.

The number of community-type events held at the multi-purpose venue will depend
somewhat on the operating philosophy of facility management and competition from
other facilities in the marketplace. In general, these events do not represent a significant
income sources to an arena, but rather serve to increase the utilization of the building and
meet the needs of the local community. The following table contains an estimated
number of events and attendance that the proposed arena could attract in regards to rodeo
competitions, equestrian events, and other events.

                   Estimated Events and Attendance - Rodeos, Equestrian & Other

                         Event   Average Paid   Average Turnstile         Total Paid   Total Turnstile
                         Days     Attendance         Attendance          Attendance       Attendance

 Base Case                   6         3,500              3,500             21,000            21,000
 Best Case                   8         3,500              3,500             28,000            28,000




TCC Shows

Several of the convention, expositions, and trade shows that are held annually at the TCC
exhibit halls also use the TCC Arena to host their events. A new arena located adjacent
to the TCC exhibit halls will provide additional floor space, meeting rooms, and the use
of a larger seating capacity for events being held. It is expected that the proposed arena
will also be used in conjunction with some of the events being held in the TCC exhibit
halls, including Tucson’s Gem and Mineral Society and the Jehovah Witnesses
Convention, among others. Below is a table depicting the estimated number of use days
and attendance that the proposed arena could be used for in conjunction with TCC shows.

                                                 105
VII. Estimated Event Demand (cont’d)



                                              Estimated Events and Attendance - TCC Shows

                                          Event      Average Paid         Average Turnstile                    Total Paid         Total Turnstile
                                          Days        Attendance               Attendance                     Attendance             Attendance

 Base Case                                      8             5,000                     5,000                      40,000                   40,000
 Best Case                                     10             5,000                     5,000                      50,000                   50,000




Summary

The chart below presents a range of estimated events and attendance for the proposed
arena, including both base case and best case scenarios.

                                                             Estimated Events and Attendance
                                                    Proposed Multi-Purpose Arena in Downtown Tucson



                                                                    Average        Average
                                           Events                      Paid       Turnstile      Total Paid Attendance       Total Turnstile Attendance
Event Type                         Base Case      Best Case      Attendance     Attendance      Base Case        Best Case    Base Case         Best Case

Tenant Events:
   Minor League Hockey Franchise         40              40           4,500           6,500       180,000         180,000       260,000          260,000
   af2                                    8               8           5,500           6,500        44,000          44,000        52,000           52,000
   U of A Ice Cats                       18              18           2,000           2,300        36,000          36,000        41,400           41,400
     Subtotal                            66              66                                       260,000         260,000       353,400          353,400

Non-Tenant Events:
  Concerts                               12              16           6,563           6,825        78,750         105,000        81,900          109,200
  Rodeo/Equestrian/Other                  6               8           3,500           3,500        21,000          28,000        21,000           28,000
  Latino Shows                            5               8           6,000           6,200        30,000          48,000        31,000           49,600
  Ice Shows                               6               8           6,500           6,500        39,000          52,000        39,000           52,000
  Family Shows                           12              15           3,750           4,000        45,000          56,250        48,000           60,000
  Motor Sports                            3               4           5,750           5,750        17,250          23,000        17,250           23,000
  Other Sports                            6               8           5,000           5,000        30,000          40,000        30,000           40,000
  Graduations                             2               3           3,500           3,500         7,000          10,500         7,000           10,500
  Religious Events                        2               2           9,500           9,500        19,000          19,000        19,000           19,000
  TCC Shows                               8              10           5,000           5,000        40,000          50,000        40,000           50,000
    Subtotal                             62              82                                       327,000         431,750       334,150          441,300

Total                                   128             148                                       587,000         691,750       687,550          794,700




As shown in the table above, a new arena is estimated to be able to host between 128 and
148 events annually, including a minor league hockey and arena football tenant, Ice Cats
hockey games, concerts, family shows and other events. It is estimated that a new
Tucson arena could attract a total of 587,000 to 691,750 total paid attendance annually
and 687,550 to 794,700 total turnstile attendees annually.




                                                                              106
        Executive Summary
I.      Introduction
II.     Overview of the Tucson Market
III.    Tucson Arena Historical Operations
                                             VIII. Building Program
IV.     Comparable Facilities
                                                            Analysis
V.      Competitive and Local Facilities
VI.     Market Surveys
VII.    Estimated Event Demand
VIII.   Building Program Analysis
IX.     Arena Pro Forma Analysis
VIII. Building Program Analysis


The purpose of this section is to evaluate the market supportable building program for a
new multi-purpose arena to be located adjacent to the Tucson Convention Center.

To understand the facility needs of the Tucson area, it is important to assess the ability of
local facilities to accommodate indoor public assembly events. The exhibit below
presents a subjective rating of the market’s ability to accommodate Tucson’s measured
event demand.

                                            Present Ability of Local Facilities
                                   To Accommodate Indoor Public Assembly Event Demand


                                                                             Limited                           Strong
                                                                              1    2   3   4   5   6   7   8   9   10

                       University of Arizona Hockey

                       Minor League Hockey
   Spectator Events




                       Other Minor League Sports, excluding baseball

                       Concerts

                       Ice Shows

                       Family Shows / Other Ticketed Events


                       Conventions / Tradeshows
   Flat Floor Events




                       Public / Consumer Shows

                       Non-Local Conferences / Meetings

                       Local Meetings / Banquets / Receptions




As outlined in the matrix, Tucson’s existing local indoor facilities have limitations in
hosting minor league sports with the capacity and amenities that they prefer (i.e., hockey,
indoor football, soccer, etc.). In general, existing facilities effectively accommodate
concerts with the exception of large scale concerts drawing in excess of 13,000 sttendees.
With the TCC arena, there are some limitations to hosting other touring events such as
family shows, motor sport events, and other such ticketed events. Due to these
limitations, touring event promoters have sometimes overlooked the TCC Arena or have
decided to not use the facility as frequently as they would newer facilities in comparable
markets.



                                                                       107
VIII. Building Program Analysis (cont’d)


The community is able to accommodate flat floor events fairly well with the presence of
the Tucson Convention Center and its adjacent venues, including the TCC Arena.
Importantly, with respect to needs between seating and flat floor event space, the matrix
visually illustrates that seating and amenities for spectator events represents the more
deficient area within the Tucson market.

The remainder of this section summarizes the recommended building program
components in the following sections:

      •      Seating capacity;
      •      Flat floor space;
      •      Meeting rooms;
      •      Parking;
      •      Premium seating; and,
      •      Other building components.


Seating Capacity

In evaluating market supportable seating capacity for a new multi-purpose arena, it is
useful to understand the needs of potential primary tenants of the facility, seating
capacities of arenas in similar-sized markets, and the requirements of other potential
events.

       Seating Capacities in Comparable Markets

       As part of this analysis, selected similar markets with MSA populations between
       700,000 and 1,125,000 (Tucson’s MSA approximates 900,000) were reviewed in
       terms of seating capacity at each community’s largest indoor arena venue. The
       purpose of this comparison is to discern whether there is a correlation between
       population and arena seating capacity in order to suggest an appropriate seating
       capacity for a new multi-purpose arena. The exhibit on the following page
       presents a summary of 20 similar-sized markets and the seating capacities (fixed
       and portable) of their respective largest arenas.




                                            108
VIII. Building Program Analysis (cont’d)


                                                                                                                     Seating Capacity Analysis


 Capacity                                                                                                                                                                                                                                                                                                                                                   Population
                                                                                      Average
 30,000                                                                                                                                                                                                                                                                                                                                                      1,400,000
                                                                     Capacity:                        15,116
 25,000                                                              Population:                     897,100                                                                                                                                                                                                                                                 1,200,000
                                                                                                                                                                                                                                                                                                                                                             1,000,000
 20,000
                                                                                                                                                                                                                                                                                                                                                             800,000
 15,000
                                                                                                                                                                                                                                                                                                                                                             600,000
 10,000
                                                                                                                                                                                                                                                                                                                                                             400,000
  5,000                                                                                                                                                                                                                                                                                                                                                      200,000
      0                                                                                                                                                                                                                                                                                                                                                      0



                                                                                                                                  Albany-Troy, NY




                                                                                                                                                                                                                                                                                                       Louisville, KY
                                                                      Worcester, MA




                                                                                                                  New Haven, CT




                                                                                                                                                                                                                                                   Greenville-Spartanburg-
            El Paso, TX




                                                        Tacoma, WA




                                                                                                                                                                                                                                  Providence, RI
                                                                                                                                                    Honolulu, HI




                                                                                                                                                                                                                     Fresno, CA
                                                                                                    Tulsa, OK




                                                                                                                                                                                    Birmingham, AL




                                                                                                                                                                                                                                                                                                                                        Oklahoma City, OK
                                                                                                                                                                                                                                                                             Richmond-Petersburg, VA




                                                                                                                                                                                                                                                                                                                        Rochester, NY
                                                                                                                                                                                                     Dayton, OH
                                                                                      Ventura, CA




                                                                                                                                                                   Bridgeport, CT
                                      Albuquerque, NM
                          Omaha, NE




                                                                                                                                                                                                                                                       Anderson, SC
                                                                                                                Seating Capacity                                                                                  Population




          As presented, the analysis of 20 similar-sized markets and arena facilities does not
          indicate an identifiable correlation between MSA population and seating capacity.
          The seating capacities ranged from a low of 8,500 in Honolulu, Hawaii, to a high
          of 23,000 in Tacoma, Washington. A majority of the facilities have a seating
          capacity between the ranges of 10,000 seats to 20,000 seats, with the average
          seating capacity of the largest arenas in the 20 markets being 15,116 seats.

          The exhibit on the following page presents a penetration analysis of population to
          seating capacity for Tucson using the 20 comparably sized market areas.




                                                                                                                                                                   109
VIII. Building Program Analysis (cont’d)

                                                               Seating Penetration Analysis
                                                               Comparable-Sized Markets


                                                                                                                       Major Arena Population
                                                                                                               MSA         Seating        Per
  Market                                           Facility                                               Population (1)  Capacity (2)   Seat

  Oklahoma City, OK                                Ford Center                             1,109,400                        20,800       53.3
  Rochester, NY                                    Blue Cross Arena                        1,105,200                        14,000       78.9
  Richmond-Petersburg, VA                          Richmond Coliseum                       1,032,300                        13,553       76.2
  Greenville-Spartanburg-Anderson, SC              Bi-Lo Center                              991,900                        15,000       66.1
  Providence, RI                                   Dunkin Donuts' Center                     989,700                        14,572       67.9
  Fresno, CA                                       Save Mart Center                          971,800                        16,500       58.9
  Birmingham, AL                                   Birmingham-Jefferson Convention Complex   933,200                        19,000       49.1
  Bridgeport, CT                                   Arena at Harbor Yard                      903,900                        10,000       90.4
  Honolulu, HI                                     Blaisdell Center                          899,900                         8,733      103.0
  Albany-Troy, NY                                  Pepsi Arena                               881,500                        17,500       50.4
  New Haven, CT                                    Veterans Memorial Coliseum                839,000                        11,171       75.1
  Tulsa, OK                                        Tulsa Convention Center                   823,900                         9,138       90.2
  Ventura, CA                                      Seaside Park Arena                        792,300                        10,500       75.5
  Worcester, MA                                    Centrum Centre                            770,900                        15,000       51.4
  Omaha, NE                                        Qwest Center                              733,000                        17,000       43.1
  El Paso, TX                                      Don Haskins Center                        707,600                        12,601       56.2

  Average                                                                                                      905,344      14,067       67.9
  Median                                                                                                       901,900      14,286       67.0

  New Tucson Arena (Estimated Capacity Using Average Population Per Seat)                                     891,220       13,134       67.9
  New Tucson Arena (Estimated Capacity Using Median Population Per Seat)                                      891,220       13,297       67.0

  (1) Contain populations of markets that have an arena with 5,000 or more seats and are similar-sized markets to Tucson.
  (2) Includes fixed and portable seating.
  Source: AudArena Guide, Sales & Marketing.



        As shown, among facilities located in markets with populations of between
        700,000 and 1.1 million the average facility has a total seating capacity, including
        fixed and portable seating, of approximately 14,067, with 13 out of the 16
        facilities having capacities between 10,000 and 20,000. The median seating
        capacity of the listed facilities is approximately 14,286 seats.

        Based on a market penetration analysis, the average and median penetration ratios
        of population to seating capacity of the largest arena in the selected markets were
        67.9 people per seat and 67.0 people per seat, respectively. Applying the average
        and median population per seat in comparable-sized markets to the population of
        Tucson indicates that the Tucson market could support a venue of approximately
        13,134 to 13,297 seats. It is important to note that this analysis does not account
        for the seat occupancy rates of these venues.


        Seating Capacity Requirements of Potential Minor League Tenants

        The building program developed for a new Tucson arena should consider the
        potential to attract minor league sports tenants to the market. The seating


                                                                                  110
VIII. Building Program Analysis (cont’d)


     capacities and attendance of various minor leagues that represent the strongest
     potential for the Tucson market based on discussions with minor league officials
     are summarized in the following exhibit.
                           Minor League Seating Capacity Summary


                               Seating Capacity               Average Attendance

                                   League                           League
                           High     Average          Low    High     Average        Low

     Minor League Hockey:
        AHL               20,000      11,696      4,680     9,141      5,594       3,454
        ECHL              17,909       8,930      4,050     6,214      3,904       2,204
        CHL               18,100       8,300      4,986     8,763      4,500       2,401

     Indoor Football:
        af2               18,000      10,531      5,500    10,089      5,248       3,043

     As depicted in the exhibit above, the average attendance for various minor
     leagues that represent potential tenants for a new arena in Tucson could be
     accommodated with an arena of 9,000 to 10,000 seats. It should be noted this
     analysis is based on average attendance and does not reflect the variation in
     attendance above and below the average.

     The average seating capacities of the various minor leagues ranged from a low
     average of 8,300 for the CHL to a high average of 11,696 for the AHL.

     Given the population size of the Tucson market area relative to other markets
     hosting minor league sports, it is conceivable for a minor league franchise in
     Tucson to achieve attendance levels consistent with other minor league teams in
     comparable markets. Therefore, if the size of the venue was dictated by the
     primary tenants, it is likely that between 7,000 and 10,000 seats would suffice.
     However, it is important to understand the needs and requirements of touring
     shows as well.


     Non-Tenant Events

     Non-tenant events that occur at venues include concerts, family shows, ice shows,
     motor sport events, graduations, flat floor events, and various other events. The
     exhibit on the following page displays the attendance for all of the non-tenant
     events that were held at comparable facilities in similar sized markets over the



                                               111
VIII. Building Program Analysis (cont’d)


                    past year, as well as the event schedule for a professional sports venue in a larger
                    market.
                                                                                            Comparable Arenas Non-Tenant Events
                                                                                                    Attendance Levels




Attendance                                                                Save Mart Center
  18,000
  16,000
                                                                                                                                                                               Attendance Distribution
  14,000
                                               Capacity:
  12,000                                                                                                                                                    Average                                Percentage    Cumulative
                                                16,182
                                                                                                                                                            Attendance          Performances        of Events    Percentage
  10,000
   8,000                                                                                                                                                    2,500 and under               15             21%           21%
                                                                                                                                                            2,501 to 5,000                18             26%           47%
   6,000
                                                                                                                                                            5,001 to 7,500                15             21%           69%
   4,000                                                                                                                                                    7,501 to 10,000                9             13%           81%
                                                                                                                                                            10,001 to 12,500               5                7%         89%
   2,000
                                                                                                                                                            12,501 to 15,000               7             10%           99%
           -                                                                                                                                                Over 15,000                    1                1%       100%
                    1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69                                     Total                        70              100%        100%
                                                                                Events




Attendance                                                              Centennial Gardens
  12,000

  10,000                                                                                                                                                                       Attendance Distribution


   8,000                                                                                                                                                    Average                                Percentage    Cumulative
                                             Capacity:
                                                                                                                                                            Attendance          Performances    of Events        Percentage
                                              10,000
   6,000
                                                                                                                                                            2,500 and under               23             35%           35%
                                                                                                                                                            2,501 to 5,000                20             31%           66%
   4,000                                                                                                                                                    5,001 to 7,500                16             25%           91%
                                                                                                                                                            7,501 to 10,000                6                9%       100%
   2,000                                                                                                                                                    10,001 to 12,500               0                0%       100%
                                                                                                                                                            12,501 to 15,000               0                0%       100%

        0                                                                                                                                                   Over 15,000                    0                0%       100%
                1     3   5   7   9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65                                     Total                        65              100%        100%

                                                                                Events




Attendance                                                 Professional Arena in Larger Market

 20,000
 18,000
 16,000                                                                                                                                                                        Attendance Distribution
                                           Capacity:
 14,000                                     19,023
                                                                                                                                                            Average                                Percentage    Cumulative
 12,000                                                                                                                                                     Attendance          Performances    of Events        Percentage

 10,000
                                                                                                                                                            2,500 and under                9                9%          9%
  8,000                                                                                                                                                     2,501 to 5,000                26             27%           36%
  6,000                                                                                                                                                     5,001 to 7,500                16             17%           53%
                                                                                                                                                            7,501 to 10,000               21             22%           75%
  4,000
                                                                                                                                                            10,001 to 12,500              11             11%           86%
  2,000                                                                                                                                                     12,501 to 15,000               8                8%         95%
                                                                                                                                                            Over 15,000                    5                5%       100%
       0
               1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95   Total                        96              100%        100%

                                                                               Events




                                                                                                                           112
VIII. Building Program Analysis (cont’d)


        As shown on the previous page, the total number of non-tenant events at the two
        comparable venues was 65 and 70. In one arena, a seating capacity of 10,000
        would have accommodated all of the events, while in the other venue a seating
        capacity of 12,500 would have accommodated approximately 89 percent of its
        events.     In the professional arena, 87 percent of the events could be
        accommodated with 12,500 seats. Based on this analysis, it appears that by
        providing approximately 12,500 seats, a new Tucson arena could accommodate a
        large majority of potential event activity. It is unlikely that any incremental
        events that could be attracted with a large seating capacity would provide enough
        financial justification to add seats beyond 12,500.

        Based on discussions with promoters, it is recommended that a reduced-house
        configuration be available for family shows that could accommodate attendance
        levels of around 5,000. In addition, small concert promoters encourage a
        reduced-house setting in a new arena to allow for a more intimate atmosphere for
        smaller acts that might attract lower attendance levels.

        The most highly attended non-tenant events in arenas are typically concerts. The
        following exhibit summarizes the average attendance of the top 100 concert tours
        in the U. S. in 2003.

                                            2003 Average Paid Attendance per Performance
                                                       Top 100 Concert Tours


   Average
  Attendance

   55,000
   52,500
   50,000                                                                                          Attendance Distribution
   47,500
   45,000                                                                                  Average
   42,500
                                                                                           Attendance          Acts     Percentage
   40,000
   37,500
                                   Average Attendance:                                     2,500 and under        3            3%
   35,000
   32,500                                                                                  2,501 to 5,000        24           24%
                                         7,027
   30,000                                                                                  5,001 to 7,500        19           19%
   27,500                                                                                  7,501 to 10,000       17           17%
   25,000                                                                                  10,001 to 12,500      13           13%
   22,500
                                                                                           12,501 to 15,000       6            6%
   20,000
   17,500                                                                                  15,001 to 17,500       5            5%
   15,000                                                                                  17,501 to 20,000       5            5%
   12,500                                                                                  Over 20,000            8            8%
   10,000                                                                                  Total                100          100%
    7,500
    5,000
    2,500
        0

               Source: Pollstar.




        As illustrated above, the average attendance of the top 100 concert tours was
        7,027 in 2003, ranging from a low of 1,578 for the Willie Nelson tour to a high of
        54,136 for the Bruce Springsteen and the E Street Band tour.



                                                                 113
VIII. Building Program Analysis (cont’d)


       As a result, a new multi-purpose arena in Tucson with a total seating capacity of
       12,500 seats could accommodate the average attendance of nearly 76 percent of
       the top 100 tours and an arena with total seating capacity of 15,000 seats could
       accommodate the average attendance of 82 percent of the top 100 tours.

       Many of the promoters contacted for this study indicated that the Tucson
       marketplace should have the ability to provide upwards of 12,500 seats for major
       concerts. This level of seating would also enable the venue to attract major events
       by allowing them to only conduct one performance rather than two at AVA
       Amphitheater to generate the same revenue.

In conclusion, based on the facility capacities in comparable markets, a review of minor
league capacities and attendance, comparable market historical attendance at non-tenant
events, and historical attendance at concerts, it is recommended that a new multi-purpose
arena provide between 11,000 and 12,500 seats (fixed and portable) for concerts and
other events. In addition, it is recommended that a new arena have the flexibility to
configure into a reduced-house setting that could have a seating capacity of 5,000 seats.


Flat Floor Space

Arena floors can be used to accommodate flat floor events such as conventions,
tradeshows or consumer shows that are traditionally housed in convention centers, civic
centers, hotels or other similar facilities. An advantage to the proposed new arena site is
that it will be adjacent to the Tucson Convention Center, providing opportunities for
events being held at the convention center to use the arena. Currently, convention center
events use the existing arena approximately 20 times annually.

The floor space accommodated in an arena design is a function of the size of the event
floor and the use of moveable or telescopic seating. The exhibit is a summary of the
arena floor square footage of comparable arenas constructed since 1995 with a minimum
of 8,000 seats.
                                Arena Floor Square Footage
                                Comparable New Facilities


                                                    Square
                                                      Feet

                                High                41,756
                                Average             23,737
                                Median              21,000
                                Low                 16,327



                                              114
VIII. Building Program Analysis (cont’d)


Based on the need to accommodate an 85’ by 200’ ice sheet to meet the needs of the
University of Arizona Ice Cats and a possible minor league hockey tenant, as well as
other ice shows that may be hosted at the arena, it is anticipated that the new arena could
offer between 20,000 to 25,000 square feet of column-free arena floor space that could be
used to host flat floor shows, depending on arena design and the number of moveable or
telescopic floor seats in the arena. This amount of space could accommodate 1,330 to
1,670 people for banquet-style events and upwards of 200 to 250 10’ x 10’ booths for
exhibition events. A key marketing advantage for the arena floor space is that it will be
contiguous and column-free, key considerations of meeting planners when selecting a
venue in conjunction with existing space at an adjacent convention center.


Meeting Rooms

Comparable arenas typically provide a nominal number of meeting rooms to meet the
needs of arena business operations, to provide meeting rooms to meet local community
needs, or serve as break-out meeting rooms for other events hosted at the facility. The
existing TCC Arena offers four meeting rooms for individual events or in connection
with events held at the Tucson Convention Center. Due to the combined use, it will be
important for a new arena to also contain meeting rooms. The exhibit below presents a
summary of the meeting rooms at comparable arenas constructed since 1995 with a
seating capacity of at least 8,000 seats.
                                      Meeting Rooms
                                   Comparable New Arenas


                                                         Capacity
                                       Number      Minimum      Maximum

                     High                  21           25        3,000
                     Average                7           39        1,141
                     Median                 4           25          500
                     Low                    2           20          100


Based on a review of comparable arenas and the needs expressed by promoters of
potential events that may be hosted at the proposed arena, it is anticipated that a new
arena could offer between 8 to 10 meeting rooms accommodating 25 to 40 people for
small meetings. A total of approximately 3,000 to 3,500 square feet of sub-dividable
meeting space would be necessary to accommodate the recommended number of rooms
and capacity.




                                             115
VIII. Building Program Analysis (cont’d)


Parking

The availability of sufficient parking will be critical to the success of the proposed arena.
It is a generally accepted industry standard that approximately one parking space should
be provided for every three seats. Given the recommended capacity of the facility of
11,000 to 12,500, it is estimated that approximately 3,700 to 4,200 parking spaces within
walking distance would be needed to meet potential demand. The use of existing parking
spaces in the downtown area may be able to accommodate a significant portion of the
parking requirements. The Tucson Convention Center site currently has 2,346 parking
spaces. Local codes should be reviewed to ensure that the development not only meets
industry standards, but also local codes with respect to parking spaces.


Premium Seating

Premium seating is an important source for generating revenue for a new arena. Below is
a chart depicting the premium seating available in comparable markets along with the
penetration analysis of the corporate base in each market to the available premium
seating inventory.



                                                       Premium Seating Penetration
                                                           Comparable Arenas




                                                                     Corporate     Number of          Suite   Number of     Club Seat
Facility                                 Market                          Base         Suites    Penetration   Club Seats   Penetration

Jacksonville Veterans Memorial Arena     Jacksonville, FL                  2,132         118           18.1      11,600           0.18
Van Andel Arena                          Grand Rapids, MI                  2,107          42           50.2       1,800           1.17
Ford Center                              Oklahoma City, OK                 1,765          74           23.9       3,800           0.46
Bi-Lo Center                             Greenville, SC                    1,796          30           59.9       1,000           1.80
Save Mart Center                         Fresno, CA                        1,199          54           22.2       1,080           1.11
Pepsi Arena                              Albany, NY                        1,360          25           54.4           0            n/a
Dodge Arena                              Hidalgo, TX                         528          25           21.1         508           1.04
Laredo Entertainment Center              Laredo, TX                          238          14           17.0           0            n/a
Budweiser Events Center                  Loveland, CO                        395          24           16.5         500           0.79
American Bank Center                     Corpus Christi, TX                  551          11           50.1         302           1.82
CenturyTel Center                        Bossier City, LA                    568          16           35.5         186           3.05
Verizon Wireless Arena                   Manchester, NH                      458          34           13.5         600           0.76
Alltel Arena                             North Little Rock, AR             1,057          32           33.0           0            n/a

Average                                                                    1,089          38           31.9        1,644          1.22

New Tucson Arena                         Tucson, AZ                        1,910          60           31.9       1,566           1.22


                                                                                       Suites                 Club Seats
                                       Potential based on penetrations                    60                      1,566
                                       Less: Existing Premium Seating in Tucson           32                        800
                                       Net market demand                                  28                        766




                                                                       116
VIII. Building Program Analysis (cont’d)


As displayed in the chart on the previous page, as the average penetration ratio of the
corporate base of arenas in comparable markets is 31.9 corporations per private suite and
1.2 corporations per club seat. If Tucson were to achieve similar ratios as the comparable
markets, Tucson would be able to support a total of 60 suites and 1,566 club seats. This
total includes the existing inventory of suites at Arizona Stadium and Tucson Electric
Park and premium seats at Arizona Stadium and McKale Center. As a result, the
penetration analysis indicates that the market could potentially support an additional 28
suites and 766 club seats.

In addition to the penetration analysis, the results of the corporate surveys were
extrapolated to provide another method to estimate potential demand for premium
seating. The following exhibit presents an overview of the methodology that was used to
extrapolate survey results to estimate demand for premium seating concepts for the
proposed arena.

                                              Overview of Methodology


                                          Survey Respondents - True Interest

                                                     Corporations

                                                   Raw Survey Data




                                                Capture Rate Factors
                                Capture "definite", "likely" and "possibly" responses
                                            Account for survey bias factors




                                                Adjusted Survey Data




                                           Population Adjustment Factors
                                               De-duplicate populations
                                     Geographic and socioeconomic reductions


           Competitive   Demographics                                                       Comparable
                                                                                 Industry
             Facility          and                  Extrapolations                            Facility
                                                                                  Trends
            Analysis     Socioeconomics                                                      Analysis



                                                  Estimated Demand
                                                    Private Suites
                                                      Loge Boxes
                                                       Club Seats



                                                         117
VIII. Building Program Analysis (cont’d)


As shown in the chart on the previous page, the basis for the extrapolation of market
demand, extrapolation factors or “capture percentages” were applied to certain positive
responses (those indicating “definitely”, “likely”, or “possibly”) to questions regarding
interest and pricing levels for private suites, loge boxes and club seats prior to being
extrapolated. These factors represent discount percentages and are based on previous
experience with projects employing a similar methodology. The adjustments reflect that,
in reality, only a portion of those respondents indicating positive interest in any of the
seating concepts will ultimately purchase these concepts when asked to commit actual
dollars. The following table presents the capture percentages applied to positive
responses for each seating alternative.

                         Market Capture Percentages by Seating Concept


                                               Large    Small Headquarters
                                         Headquarters         and Branches

                                          Base Case

                   Suites & Loge Boxes
                     Definite                    66%                     66%
                     Likely                      33%                     33%
                     Possibly                     0%                      0%
                   Club Seats
                      Definite                   66%                     66%
                      Likely                     33%                     33%
                      Possibly                    0%                      0%



                                           Best Case

                   Increment Factor:
                      Definite                   10%                     10%
                      Likely                     10%                     10%
                      Possibly                   10%                     10%

                   Suites & Loge Boxes
                     Definite                    76%                     76%
                     Likely                      43%                     43%
                     Possibly                    10%                     10%
                   Club Seats
                      Definite                   76%                     76%
                      Likely                     43%                     43%
                      Possibly                   10%                     10%




                                                118
VIII. Building Program Analysis (cont’d)


The second adjustment is wider-ranging and encompasses various factors that could alter
the base survey results. This adjustment is made to the population of the group surveyed
and is based on an analysis of the demographic and socioeconomic characteristics of the
market and a review of comparable markets and competitive facilities in the area. As
with the extrapolation factor, the population reduction factor is subjective and based on
experienced judgment. It is important to note that the preliminary quantification provides
an indication of total market demand for these concepts based solely on the telephone
survey conducted with Tucson corporations and corporate branches. The findings
presented herein are based on judgmental sampling, and therefore should be evaluated
accordingly.

After these adjustments were made to the raw survey results, the demand and resulting
revenue was projected. The survey data used to extrapolate to the larger populations of
each group reflect “true interest” data, rather than “initial interest” data as presented
within the previous section of this report.

The remainder of this section presents the estimated demand and revenue potential for
premium seating at the proposed arena based on the results of corporate surveys.

        Private Suites

        Based on an extrapolation of the survey results, the following chart summarizes
        the estimated demand and resulting revenue potential for private suites in a new
        Tucson arena.
                                              Estimated Private Suite Demand
                                                     Proposed Arena



      Private                                                                                       Annual
      Suites                                  Demand              Revenue                           Revenue

      50                                                                                             $1,000,000

                                                                                                     $900,000

      40                                                                                    38       $800,000

                                                                                                     $700,000
                                     29
      30                                                                                             $600,000
                                                                                  25
                                                                                                     $500,000
                                                                        19
      20                                                                                             $400,000
                           16
                 12                                                                                  $300,000

      10                                                                                             $200,000

                                                                                                     $100,000

       0                                                                                             $0
                $40,000   $30,000   $20,000                           $40,000   $30,000   $20,000

                          Low                                                   High




                                                        119
VIII. Building Program Analysis (cont’d)


          As illustrated in the previous exhibit, it is estimated that between 12 and 19
          private suites could be leased at $40,000, between 16 and 25 leased at $30,000, or
          between 29 and 38 leased at $20,000. It is estimated that the low number of suites
          could generate $500,000 annually, while the high number could generate about
          $750,000 annually.

          Based on survey results, it is recommended that the facility offer approximately
          20 private suites. The suites should provide seating for 12 to 16 persons.


          Loge Boxes

          Based on an extrapolation of the loge box survey results, the following chart
          summarizes the demand and resulting revenue potential for loge boxes at a new
          arena.

                                        Estimated Loge Box Demand
                                              Proposed Arena



  Loge                                                                                          Annual
  Boxes                                Demand             Revenue                               Revenue

 60                                                                                            $1,000,000
                                                                                               $900,000
 50
                                                                                       44      $800,000
                                                                                               $700,000
 40                                                                   36
                                                                                               $600,000
                              30
 30                                                                                            $500,000
             23
                                                                                               $400,000
 20
                                                                                               $300,000
                                                                                               $200,000
 10
                                                                                               $100,000
  0                                                                                            $0
            $15,000          $12,000                                $15,000          $12,000

                       Low                                                    High




          As shown in the chart above, it is estimated that there is demand for 23 to 36 loge
          boxes at a $15,000 annual lease price, and a demand for 30 to 44 loge boxes at a
          $12,000 annual lease price. It is estimated that loge boxes could generate
          approximately $345,000 to $528,000, depending on the number of loge boxes and
          the annual lease price.




                                                    120
VIII. Building Program Analysis (cont’d)


          Based on survey results, the facility should offer approximately 25 loge boxes.
          The loge boxes should be located just below the private suites and be designed as
          open-air boxes with seating for between four to eight persons.

          Club Seats

          Based on an extrapolation of the corporate responses related to club seats, the
          following chart summarizes the estimated demand and resulting revenue potential
          for club seats in a new Tucson arena.
                                         Estimated Club Seat Demand
                                               Proposed Arena



  Club                                                                                         Annual
  Seats                                 Demand             Revenue                             Revenue

   700                                                                                    $1,000,000
                                                                                          $900,000
   600
                                                                                          $800,000
                                                                                   480
   500                                                                                    $700,000

   400                         360                                                        $600,000
                                                                                          $500,000
   300                                                                260
                                                                                          $400,000
   200           160                                                                      $300,000
                                                                                          $200,000
   100
                                                                                          $100,000
     0                                                                                    $0
                $1,500         $500                               $1,500           $500

                         Low                                                High




          As shown in the chart above, it is estimated that there is demand for 160 to 260
          club seats at an annual price of $1,500, and demand for 360 to 480 club seats at an
          annual price of $500. As a result, it is estimated that approximately $180,000 to
          $390,000 could be generated by the sale of club seats, depending on the number
          of club seats and the annual price.

          Based on survey results, the facility should offer upwards of 500 club seats
          located in prime locations near the center of the event floor. Club seats should be
          physically differentiated from other arena seating and could include such
          distinguishing features as wider seats, more leg room, cup holders and,
          potentially, a different color or material from other arena seats.




                                                 121
VIII. Building Program Analysis (cont’d)


Other Building Components

Other building components that are integral to the success of the arena include, but are
not limited to:

      •      Minimum of 200’ x 85’ ice surface including 2 players benches, 2 penalty
             boxes and 1 announcer’s box.

      •      Sufficient concession points of sale should be provided to maximize per
             capita spending revenues. Industry standards dictate that there should be
             approximately one concession point of sale for every 250 seats.

      •      Sufficient restrooms should be provided to ensure an enjoyable patron
             experience. Industry standards dictate that there should be one water closet
             per 50 seats and one urinal per 100 seats.

      •      Sufficient number and quality of dressing rooms including a home team
             locker room, visiting team locker room and 2 to 4 smaller dressing rooms
             for other event performers and officials.

      •      Rigging grid capable of holding required poundage of touring acts with
             appropriate stage clearance.

      •      State-of-the-art audio, video and lighting equipment.

      •      Sufficient storage space for equipment, materials, supplies and other needs.

      •      Administrative offices for full-time and season staff for minor league
             tenants and arena personnel.

      •      Ticket or box office for walk-up ticket sales, will call and other ticketing
             needs.

As facility planning progresses, it will be important that project architects experienced in
arena design work closely with team officials and event promoters to create a design that
would maximize the market and revenue potential of the facility.




                                             122
VIII. Building Program Analysis (cont’d)


It should be noted that the general building program presented herein does not include
space requirements for components such as dressing rooms, storage, administrative
offices, box office, food service space and other such spaces as may be determined by
project planners and architects.


Summary

The purpose of this section was to recommend a building program that would be
supportable based on the results of the market analysis. Key recommendations included:

                                     Building Progam - Seating


          Premium Seating:                                                   Total
                                      Number                     Seats       Seats
             Private Suites               20                       12         240
             Loge Boxes                   25                         4        100
             Club Seats                  500                                  500
             Total Premium Seats                                              840

          Other General Admission Seating                                   10,160

          Portable Floor Seating                                             1,500

          Total Seating                                                     12,500


      •       An appropriate seating capacity for a new Tucson arena would be 11,000
              fixed seats with the addition of temporary portable seating increasing the
              total capacity to 12,500 seats. This capacity range would be suitable for the
              minor league hockey and indoor football teams, as well as for a majority of
              non-tenant and events, especially concerts.

      •       It is recommended that the proposed arena have 25,000 square feet of
              column-free arena floor space. This will allow events at the Tucson
              Convention Center to have access to more exhibit space.

      •       A new arena is recommended to have available meeting rooms for groups
              with less than 50 people, as well as for larger groups. It is suggested that a
              new arena have eight to ten meeting rooms capable of holding 25 to 40
              people for small meetings and up to 1,200 for large meetings.




                                                 123
VIII. Building Program Analysis (cont’d)


            •             For an 11,000-to-12,500-seat arena, it is suggested that there be 3,700 to
                          4,200 available parking spots in close proximity to the arena, including the
                          existing parking that may be available near the Tucson Convention Center.

            •             In terms of premium seating, it is suggested that a new arena could have 20
                          private suites, 25 loge boxes and 500 club seats.

            •             In terms of total square footage of a new arena, the following table details
                          an average square footage of several arenas with similar seating capacities.

                                                   Square Footage of Comparable Sized Arenas
                                            Arenas with Seating Capacities Ranging 10,000 to 12,000 Seats


                                                            Year                           Seating                   Total            Club
 Facility                         Market                  Opened     Tenants              Capacity          Square Footage   Suites   Seats

 Liacouras Center                 Philadelphia, PA           2000    University              10,200                340,000      10       0
 Verizon Wireless Arena           Manchester, NH             2001    AHL, af2                10,000                260,000      34     600
 Giant Center                     Hershey, PA                2002    AHL                     10,500                229,000      40     688
 Mark of Quad Cities              Moline, IL                 1993    UHL, af2, NLL           10,000                220,000      15       0
 American Bank Center             Corpus Christi, TX         2004    CHL, University         10,500                180,250      11     302

 Average                                                     2000                            10,240                245,850      22     318

 Notes:
 AHL - American Hockey League
 af2 - Arena Football 2
 CHL - Central Hockey League
 UHL - United Hockey League
 NLL - National Lacrosse League




            •             As shown, the average area of the comparable sized arenas is 245,850 total
                          square feet. It is likely that a new arena in Tucson will be at least 300,000
                          square feet.

            •             The comparable arenas analyzed have an average of 22 suites and 318 club
                          seats.




                                                                          124
        Executive Summary
I.      Introduction
II.     Overview of the Tucson Market
III.    Tucson Arena Historical Operations   IX. Arena Pro Forma Analysis
IV.     Comparable Facilities
V.      Competitive and Local Facilities
VI.     Market Surveys
VII.    Estimated Event Demand
VIII.   Building Program Analysis
IX.     Arena Pro Forma Analysis
IX. Arena Pro Forma Analysis

The purpose of this section is to present estimated operating revenues and expenses for
the proposed multi-purpose arena to be located in downtown Tucson. Since detailed
facility design, configuration, and cost estimates have not yet been completed, the
assumptions used in this analysis are based on the results of the market analysis, industry
trends, knowledge of the marketplace, and financial results from comparable facilities.
Additional physical development planning must be completed before more precise
estimations of the proposed arena’s operating costs can be made. Also, upon completion
of preliminary planning, revenue and expense assumptions should be updated to reflect
changes to the assumptions made herein. These changes could significantly affect the
analysis of future operating results.

This presentation is designed to assist the City and other project representatives in
estimating the financial attributes of the proposed arena and cannot be considered to be a
presentation of expected future results. Accordingly, this analysis may not be useful for
any other purpose. The assumptions disclosed herein are not all inclusive, but are those
deemed to be significant; however, there will be differences between estimated and actual
results may be material.

Key assumptions used to estimate the potential financial operations of the proposed
multi-purpose arena include, but are not limited to the following:

   •   The facility will contain 11,000 fixed seats, expandable to 12,500 with temporary
       floor seating.
   •   The facility will be developed as a quality, state-of-the-art venue and would
       accommodate the needs of various types of users.
   •   The facility will be owned by a public sector entity (i.e. City, Authority, etc.) and
       will be exempt from property taxes.
   •   There will not be a city-levied ticket tax on tickets sold at the new arena.
   •   A minor league hockey team, an indoor football team and the University of
       Arizona Ice Cats will serve as primary tenants in the arena and will remain
       competitive within their respective conferences.
   •   A professional, competent and experienced facility management company will
       manage the facility.
   •   There will be no assumed operating synergies created with the Tucson
       Convention Center.
   •   The facility will be aggressively marketed, providing competitive guarantees and,
       where applicable, rental rates; and,
   •   Ample parking will be provided to accommodate demand including 3,000 on-site
       spaces controlled by arena management.


                                              125
IX. Arena Pro Forma Analysis (cont’ d)

   •   The Tucson Convention Center Arena will no longer exist and the McKale Center
       will not be marketed for outside events. Additionally, there will be no significant
       or material changes in the supply, quality or marketing focus of other sports and
       entertainment venues in the marketplace.


The presentation of financial operating results is divided into the following components:

   •   Operating Revenues;
   •   Operating Expenses; and,
   •   Financial Summary.

For purposes of this analysis, it is assumed that a minor league hockey team, an indoor
football team and the University of Arizona Ice Cats would be the primary tenants in the
multi-purpose arena. Further, the analysis presented herein presents a range of expected
financial operations based on the key assumptions stated in this report.


Operating Revenues

Revenue generated by the operations of a multi-purpose arena typically consists of rent,
premium seating, food and beverage, advertising and sponsorships, merchandise, parking
ticketing fees, and other such sources. A brief description of each revenue sources is
provided below.


       Rent

       Rent generally comprises one of the largest revenue sources for a multi-purpose
       arena. Arena rental agreements typically incorporate a flat rental rate versus a
       percentage of gate receipts generated by the event, whichever is greater.
       Therefore, estimated rent for the multi-purpose arena is a function of several
       assumptions including the number of events, attendance, ticket price and rental
       rates.

       The exhibit on the following page summarizes the assumptions used to estimate
       rent revenue for the proposed multi-purpose arena. As depicted in the exhibit, it
       is estimated that the rental rates could range from 5 to 10 percent of gross ticket
       sales or $3,500 to $4,500 per event depending on the event. Rental rate
       assumptions were developed based on the historical rental rates charged by
       comparable arenas as well as local facilities.




                                             126
IX. Arena Pro Forma Analysis (cont’ d)


                                                                               Estimated Rental Income
                                                                      Stablized Year of Operations - 2008 Dollars


                                                                       Average              Annual        Average              Gross        Arena's Share (2)         Arena
                                                                          Paid                Paid         Ticket              Ticket   Percentage           Flat     Rental
Events                                               Events         Attendance          Attendance          Price   (1)      Revenue     of Tickets           Fee   Revenue

                                                                                              Base Case

Tenants:
  Minor League Hockey Franchise                           40               4,000            160,000        $14.00          $2,240,000          0%         $4,500    $180,000
  af2                                                      8               5,500             44,000        $12.00             528,000          0%         $4,500      36,000
  U of A Ice Cats                                         18               2,000             36,000        $10.00             360,000          0%         $3,500      63,000

  Subtotal                                                66                                240,000                         3,128,000                                279,000

Other Events:
 Concerts                                                 12               6,875              82,500       $40.00           3,300,000          5%         $3,500     165,000
 Rodeos/Equestrian/Other                                   6               3,500              21,000       $15.00             315,000         10%         $3,500      32,000
 Latino Shows                                              5               6,000              30,000       $20.00             600,000          5%         $3,500      30,000
 Ice Shows                                                 6               6,500              39,000       $22.50             877,500         10%         $3,500      88,000
 Family Shows                                             12               3,750              45,000       $17.50             787,500          5%         $3,500      42,000
 Motor Sports                                              3               5,750              17,250       $13.50             232,875         10%         $3,500      23,000
 Other Sports                                              6               5,000              30,000       $16.50             495,000         10%         $3,500      50,000
 Graduations                                               2               3,500               7,000        $0.00                   0          0%         $3,500       7,000
 Religious Events                                          2               9,500              19,000        $0.00                   0          0%         $3,500       7,000
 TCC Shows                                                 8               5,000              40,000        $0.00                   0          0%         $5,000      40,000

  Subtotal                                                62                                330,750                         6,607,875                                484,000

Total                                                    128                                570,750                        $9,735,875                               $763,000


                                                                                              Best Case
Tenants:
  Minor League Hockey Franchise                           40               6,000            240,000        $14.00          $3,360,000          0%         $4,500    $180,000
  af2                                                      8               6,500             52,000        $12.00             624,000          0%         $4,500      36,000
  U of A Ice Cats                                         18               2,000             36,000        $10.00             360,000          0%         $3,500      63,000

  Subtotal                                                66                                328,000                         4,344,000                                279,000

Other Events:
 Concerts                                                 16               6,563            105,000        $40.00           4,200,000          5%         $3,500     210,000
 Rodeos/Equestrian/Other                                   8               3,500             28,000        $15.00             420,000         10%         $3,500      42,000
 Latino Shows                                              8               6,000             48,000        $20.00             960,000          5%         $3,500      48,000
 Ice Shows                                                 8               6,500             52,000        $22.50           1,170,000         10%         $3,500     117,000
 Family Shows                                             15               3,750             56,250        $17.50             984,375          5%         $3,500      53,000
 Motor Sports                                              4               5,750             23,000        $13.50             310,500         10%         $3,500      31,000
 Other Sports                                              8               5,000             40,000        $16.50             660,000         10%         $3,500      66,000
 Graduations                                               3               3,500             10,500         $0.00                   0          0%         $3,500      11,000
 Religious Events                                          2               9,500             19,000         $0.00                   0          0%         $3,500       7,000
 TCC Shows                                                10               5,000             50,000         $0.00                   0          0%         $5,000      50,000

  Subtotal                                                82                                431,750                         8,704,875                                635,000

Total                                                    148                                759,750                       $13,048,875                               $914,000

(1) Net of taxes.
(2) Rental revenue is either a percentage of ticket revenue or a flat fee, whichever is greater.




                Based on the estimated event and attendance levels, average ticket prices and
                rental structures, it is estimated that multi-purpose arena operating in downtown
                Tucson could generate $763,000 to $914,000 in annual rental revenue.




                                                                                                   127
IX. Arena Pro Forma Analysis (cont’ d)

                    Premium Seating

                    Premium seating revenue is typically derived from the sale of luxury suites and
                    club seats. The table below summarizes the estimated premium seating revenue
                    potential for the multi-purpose arena.
                                                                                   Estimated Premium Seating Revenue
                                                                                Stabilized Year of Operations - 2008 Dollars


                                                                                Base Case                                                                        Best Case

                                                       Suites       Loge Boxes                Club Seats                  Total            Suites       Loge Boxes          Club Seats             Total

Inventory                                                 20                     25                     500                                   20                 25                500
Sold                                                      18                     22                     450                                   18                 22                450
Occupancy %                                             90%                    88%                     90%                                  90%                88%                90%
Annual Price:
    Total                                        $40,000                 $12,000                    $500                                 $45,000            $15,000              $750
      Less Ticket Value                        ($10,800)                ($1,200)                     $0                                ($10,800)           ($2,200)               $0
    Net Premium                                  $29,200                 $10,800                    $500                                 $34,200           $12,800               $750
Total Annual Premiums                          $525,600                $237,600                 $225,000                                $615,600          $281,600           $337,500
% Retained by Arena                                100%                    100%                    100%                                    100%               100%              100%
Net Arena Revenue                              $525,600                $237,600                 $225,000              $988,200         $615,600           $281,600           $337,500        $1,234,700



                    The assumptions used to estimate premium-seating revenue potential for the
                    multi-purpose arena were based on the results of the random market surveys
                    completed with corporations in the Tucson metropolitan area as well as premium
                    seating at comparable facilities. The table below displays the premium seating
                    inventory and revenue from some of the comparable facilities.

                                                                                      Premium Seating Inventory and Pricing
                                                                                             Comparable Facilities


                                                         Jacksonville Veterans               Van Andel                     Ford            Bi-Lo            Save Mart           Pepsi           Dodge
                                                              Memorial Arena                     Arena                    Center           Center              Center           Arena           Arena

Premium Seats
  Number of Suites                                                          28                       42                       48               30                  32              25              25
  Average Annual Suite Price                                           $50,000 (1)              $30,000 (3)              $28,000 (2)      $47,000 (2)         $55,000 (2)     $48,000 (2)     $25,000 (1)
  Number of Club Seats                                                   1,100                    1,800                    3,300            1,000               1,080               0             508
  Average Annual Club Seat Price                                          $300 (3)                $550 (3)                  $800 (2)       $1,650 (2)              n/a             $0            $900 (2)
  Annual Ticket Charges                                              $201,600                        $0               $2,325,600       $1,428,000           $409,600         $384,000        $565,600
  Net Annual Revenue                                                $1,810,400               $2,230,200               $1,524,000       $1,219,500          $1,350,400        $816,000        $516,600

                                                         Laredo Entertainment               Budweiser              American Bank       CenturyTel              Verizon          Alltel
                                                                       Center            Events Center                    Center           Center       Wireless Arena          Arena       AVERAGE

Premium Seats
  Number of Suites                                                          14                       24                       11              16                   34              32              28
  Average Annual Suite Price                                           $50,700 (2)              $41,000 (1)              $24,000 (2)     $45,000 (2)          $37,500 (2)     $27,400 (2)     $39,123
  Number of Club Seats                                                       0                      500                      302             186                  600               0            1038
  Average Annual Club Seat Price                                            $0                     $990 (2)               $2,000 (2)      $1,875 (3)           $1,600 (2)          $0          $1,185
  Annual Ticket Charges                                               $134,400                 $693,440                 $260,400        $272,160           $1,540,800
  Net Annual Revenue                                                  $433,440                 $785,560                 $528,720        $796,590             $694,200        $876,800       $1,044,801

Note: Annual revenue is gross amount and does not deduct ticket values, if tickets are included in annual price.
(1) Includes tickets to all events
(2) Includes tickets to tenant events only.
(3) Does not include price of tickets to any events.




                    As depicted in the exhibit at the top of the page, it is estimated that the proposed
                    multi-purpose arena could support 20 to luxury suites, 25 loge boxes and 500 club
                    seats. For purposes of this analysis, it has been assumed that 88 to 90 percent of
                    the premium-seating inventory would be leased and that the arena would retain all


                                                                                                                   128
IX. Arena Pro Forma Analysis (cont’ d)

     premiums associated with premium seating after deducting the value of tickets
     associated with the minor league tenants that were assumed to be included in the
     annual price.

     Based on the aforementioned assumptions, it is estimated that a multi-purpose
     arena operating in downtown Tucson could generate approximately $988,000 to
     $1.2 million in annual premium seating revenue, net of tickets.


     Suite Ticket Revenue

     It is assumed that suite patrons will receive tickets to minor league hockey and
     arena football as part of their base suite price. Each suite holder will have the
     right to purchase additional tickets for other events hosted at the arena,
     representing a sources of additional income to the arena. Revenue assumptions
     are based on the estimated number of events for which suite tickets to non-tenant
     events will be purchased, the ticket price of each respective event, and the share
     of gate receipts that the arena will retain. The exhibit on the following page
     depicts the suite ticket revenue that a new arena could generate.




                                          129
IX. Arena Pro Forma Analysis (cont’ d)

                                                         Estimated Suite Ticket Income
                                                  Stablized Year of Operations - 2008 Dollars

                                                                                       Total Annual         Average    Arena's Share      Suite
                                           Number of           Seats     Percent of    Suite Tickets    Suite Ticket     Percentage      Ticket
Events                            Events   Suites Sold     Per Suite    Suites Used            Sold            Price      of Tickets   Revenue

                                                                  Base Case

Tenants:
  Minor League Hockey Franchise      40            18            12            75%              6,480        $19.00             0%           $0
  af2                                 8            18            12            75%              1,296        $17.00             0%            0
  U of A Ice Cats                    18            18            12            75%              2,916        $15.00            33%       14,434

 Subtotal                            66                                                                                                  14,434

Other Events:
 Concerts                            12            18            12            75%              1,944        $45.00            75%       65,600
 Rodeos/Equestrian/Other              6            18            12            67%                864        $20.00            75%       13,000
 Latino Shows                         5            18            12            75%                810        $25.00            75%       15,200
 Ice Shows                            6            18            12            75%                972        $27.50            50%       13,400
 Family Shows                        12            18            12            75%              1,944        $22.50            50%       21,900
 Motor Sports                         3            18            12            67%                432        $18.50            75%        6,000
 Other Sports                         6            18            12            50%                648        $21.50            75%       10,400
 Graduations                          2            18            12             0%                  0         $0.00             0%            0
 Religious Events                     2            18            12             0%                  0         $0.00             0%            0
 TCC Shows                            8            18            12             0%                  0         $0.00             0%            0

 Subtotal                            62                                                                                                 145,500
Total                               128                                                                                                $159,934


                                                                   Best Case
Tenants:
  Minor League Hockey Franchise      40            18            12            75%              6,480        $19.00             0%           $0
  af2                                 8            18            12            75%              1,296        $17.00             0%            0
  U of A Ice Cats                    18            18            12            75%              2,916        $15.00            33%       14,434

 Subtotal                            66                                                                                                  14,434

Other Events:
 Concerts                            16            18            12            75%              2,592        $45.00            75%       87,500
 Rodeos/Equestrian/Other              8            18            12            67%              1,152        $20.00            75%       17,300
 Latino Shows                         8            18            12            75%              1,296        $25.00            75%       24,300
 Ice Shows                            8            18            12            75%              1,296        $27.50            50%       17,800
 Family Shows                        15            18            12            75%              2,430        $22.50            50%       27,300
 Motor Sports                         4            18            12            67%                576        $18.50            75%        8,000
 Other Sports                         8            18            12            50%                864        $21.50            75%       13,900
 Graduations                          3            18            12             0%                  0         $0.00             0%            0
 Religious Events                     2            18            12             0%                  0         $0.00             0%            0
 TCC Shows                           10            18            12             0%                  0         $0.00             0%            0

 Subtotal                            82                                                                                                 196,100
Total                               148                                                                                                $210,534



            As depicted in the above chart, it is estimated that 18 suites will be purchased and
            that each suite will have 12 seats. Based on certain assumptions regarding suite
            occupancy and suite ticket prices, it is estimated that a new arena could generate
            approximately $160,000 to $210,000 in suite ticket sales on an annual basis for
            events not included in the base suite package price.


            Food and Beverage, net

            Food and beverage revenue consists of sales of various food and beverage items
            at concession stands throughout the arena as well as catering offered in premium
            seating areas within the arena. Revenue assumptions are based on estimated
            event and attendance levels, concession spending at comparable facilities and


                                                                       130
IX. Arena Pro Forma Analysis (cont’ d)

     discussions with event promoters and facility managers. The following exhibit
     summarizes the estimated food and beverage revenue that could be generated at a
     multi-purpose arena in downtown Tucson.



                                                                               Estimated Food and Beverage Revenue
                                                                             Stablized Year of Operations - 2008 Dollars


                                                                                          Average                Annual                Average                      Gross                   Arena
                                                                                         Turnstile             Turnstile                  F&B                        F&B     Arena's         F&B
      Events                                                          Events           Attendance            Attendance                Per Cap (1)                Revenue     Share (2)   Revenue

                                                                                                       Base Case

      Tenants:
        Minor League Hockey Franchise                                       40                 5,500              220,000                  $5.50               $1,210,000     17.5%       $211,800
        af2                                                                  8                 5,500               44,000                  $5.50                  242,000     35.0%         84,700
        U of A Ice Cats                                                     18                 2,300               41,400                  $4.00                  165,600     35.0%         58,000

        Subtotal                                                            66                                    305,400                                        1,617,600                 354,500

      Other Events:
       Concerts                                                             12                 7,150               85,800                  $5.00                   429,000    35.0%        150,200
       Rodeos/Equestrian/Other                                               6                 3,500               21,000                  $2.50                    52,500    35.0%         18,400
       Latino Shows                                                          5                 6,200               31,000                  $2.50                    77,500    35.0%         27,100
       Ice Shows                                                             6                 6,500               39,000                  $2.25                    87,750    35.0%         30,700
       Family Shows                                                         12                 4,000               48,000                  $2.50                   120,000    35.0%         42,000
       Motor Sports                                                          3                 5,750               17,250                  $5.00                    86,250    35.0%         30,200
       Other Sports                                                          6                 5,000               30,000                  $3.50                   105,000    35.0%         36,800
       Graduations                                                           2                 3,500                7,000                  $1.50                    10,500    35.0%          3,700
       Religious Events                                                      2                 9,500               19,000                  $1.00                    19,000    35.0%          6,700
       TCC Shows                                                             8                 5,000               40,000                  $1.75                    70,000    35.0%         24,500


        Subtotal                                                            62                                    338,050                                        1,057,500                 370,300

      Total                                                               128                                     643,450                                      $2,675,100                 $724,800


                                                                                                       Best Case
      Tenants:
        Minor League Hockey Franchise                                       40                 6,500              260,000                  $5.50               $1,430,000     17.5%       $250,300
        af2                                                                  8                 6,500               52,000                  $5.50                  286,000     35.0%        100,100
        U of A Ice Cats                                                     18                 2,300               41,400                  $4.00                  165,600     35.0%         58,000

        Subtotal                                                            66                                    353,400                                        1,881,600                 408,400

      Other Events:
       Concerts                                                             16                 6,825              109,200                  $5.00                   546,000    35.0%        191,100
       Rodeos/Equestrian/Other                                               8                 3,500               28,000                  $1.75                    49,000    35.0%         17,200
       Latino Shows                                                          8                 6,000               48,000                  $2.50                   120,000    35.0%         42,000
       Ice Shows                                                             8                 6,500               52,000                  $2.25                   117,000    35.0%         41,000
       Family Shows                                                         15                 4,000               60,000                  $2.50                   150,000    35.0%         52,500
       Motor Sports                                                          4                 5,750               23,000                  $5.00                   115,000    35.0%         40,300
       Other Sports                                                          8                 5,000               40,000                  $3.50                   140,000    35.0%         49,000
       Graduations                                                           3                 3,500               10,500                  $1.50                    15,750    35.0%          5,500
       Religious Events                                                      2                 9,500               19,000                  $1.00                    19,000    35.0%          6,700
       TCC Shows                                                            10                 5,000               50,000                  $1.75                    87,500    35.0%         30,600

        Subtotal                                                            82                                    439,700                                        1,359,250                 475,900

      Total                                                               148                                     793,100                                      $3,240,850                 $884,300

      (1) Net of taxes.
      (2) Arena's share refers to amount of gross concession revenues retained after paying cost of goods sold, concessionaire profits and event revenue allocations.




                                                                                                        131
IX. Arena Pro Forma Analysis (cont’ d)

     Based on industry trends, the profit margin on food and beverage operations is
     generally in the range of 35 percent (weighted average of general concessions and
     premium seat catering) of gross sales, with the remaining percentage being
     allocated to the vendor to cover the cost of labor and products and to provide a
     profit. In most arenas, the facility retains all, or a very significant portion, of the
     net food and revenue after sharing agreements with the concessionaire/caterer.
     For purposes on this analysis, it was assumed that the arena would retain 50
     percent of the net concessions revenue for minor league tenant hockey events and
     100 percent of the net concessions revenue for all other events.

     As depicted in the exhibit on the previous page, it is estimated that net food and
     beverage revenue generated to the multi-purpose arena could range from
     $725,000 to $884,000 annually.


     Advertising and Sponsorships

     Advertising and sponsorship revenues are derived from the sale of signage related
     to scoreboards, scorer’s table, concourse, interior and exterior fascia, courtside
     (dorna signage), dasher boards, vomitories, outdoor marquee displays and
     promotions. Ultimately, the rates the proposed arena is able to charge for
     advertising will rely on factors such as the total estimated number of events and
     total attendance at the facility, the number of televised events at the arena, and the
     amount of tie-ins such as program advertising and public address announcements
     that are included with advertising packages.

     Based on a review of historical advertising and sponsorship levels at existing
     sports facilities in the marketplace, a review of the breadth and depth of the local
     corporate community, and a review of advertising/sponsorship levels at
     comparable new arenas, it is estimated that $350,000 to $400,000 in advertising
     and sponsorship revenue could be generated to the proposed arena each year. It is
     assumed that this revenue is generated from permanent building signage such as
     the scoreboard signage, fascia signage, and concourse signage. Non-permanent
     advertising is assumed to be allocated to minor league tenants. Examples of non-
     permanent advertising include dasher boards/in-ice signage for hockey and
     courtside/floor signage for basketball.




                                            132
IX. Arena Pro Forma Analysis (cont’ d)

         Naming Rights

         Naming rights revenue is a result of corporations or individuals giving money to
         the arena to have the rights to name the facility or sections of the facility at their
         discretion. Naming rights contracts are usually long-term, at least ten years, and
         can generate a large sum of revenue for a facility. Below is a chart depicting
         naming rights amounts and terms of comparable minor league arenas.

                            Naming Rights Agreements at Selected Minor League Arenas
                                           Sorted by MSA Population


                                                              Seating                            Annual
 Venue                             Location                  Capacity         Price    Term     Average

 Allstate Arena                    Rosemont, IL                18,500   $11,000,000      10   $1,100,000
 Verizon Wireless Arena            Manchester, NH              10,019    11,000,000      15      733,333
 Dunkin Donuts Arena               Providence, RI              11,940     7,000,000      10      700,000
 Ford Center                       Oklahoma City, OK           18,500     8,100,000      15      540,000
 CenturyTel Center                 Bossier City, LA            12,400     5,000,000      10      500,000
 Alltel Arena                      Little Rock, AR             16,400     7,000,000      15      466,667
 TECO Arena                        Estero, FL                   7,082     7,000,000      20      350,000
 US Cellular Arena                 Milwaukee, WI                9,000     2,000,000       6      333,333
 Bi-Lo Center                      Greenville, SC              16,000     3,000,000      10      300,000
 Pepsi Arena                       Albany, NY                  14,000     3,000,000      10      300,000
 Reading Sovereign Center          Reading, PA                  7,200     1,500,000       5      300,000
 Sovereign Bank Arena              Trenton, NJ                  8,100     2,675,000      10      267,500
 BancorpSouth Center               Tupelo, MS                  10,000     2,500,000      12      208,333
 Blue Cross Arena                  Rochester, NY               12,500     2,975,000      15      198,333
 Cricket Arena                     Charlotte, NC                9,500       750,000       5      150,000
 Big Sandy Arena                   Huntington, WV               5,800     1,400,000      10      140,000
 Pepsi Coliseum                    Indianapolis, IN             8,200       650,000       5      130,000
 First Mariner Arena               Baltimore, MD               14,000       750,000      10       75,000
 Budweiser Event Center            Loveland, CO                 7,200     1,500,000      20       75,000
 Wachovia Arena                    Wilkes-Barre, PA            10,500     2,300,000      10      230,000
 Average - All                                                 11,342    $4,055,000      11    $354,900


         Based on the review of historical naming rights for existing facilities, it is
         estimated that $200,000 to $250,000 in naming rights could be generated to the
         proposed arena each year.


         Merchandise, net

         Merchandise sales consist of clothing, souvenirs, programs and other
         miscellaneous items sold during events at the arena. Revenue assumptions are
         based on estimated event and attendance levels, concession spending at
         comparable facilities and discussions with event promoters and facility managers.
         The chart on the following page summarizes the estimated merchandise revenue
         that could be generated at a multi-purpose arena in downtown Tucson.


                                                       133
IX. Arena Pro Forma Analysis (cont’ d)
                                                        Estimated Merchandise Revenue
                                                   Stablized Year of Operations - 2008 Dollars


                                              Average        Annual         Average           Gross                      Net                   Arena
                                             Turnstile     Turnstile     Merchandise     Merchandise     Profit   Merchandise   Arena's   Merchandise
Events                            Events   Attendance    Attendance          Per Cap (1)    Revenue     Margin       Revenue     Share       Revenue

                                                                       Base Case

Tenants:
  Minor League Hockey Franchise      40         5,500       220,000                $1.00    $220,000      20%         $44,000      0%             $0
  af2                                 8         5,500        44,000                $1.00      44,000      20%           8,800      0%              0
  U of A Ice Cats                    18         2,300        41,400                $1.00      41,400      20%           8,300      0%              0

  Subtotal                           66                     305,400                          305,400                   61,100                      0

Other Events:
 Concerts                            12         7,150        85,800                $6.50     557,700      20%         111,500     50%          55,750
 Rodeos/Equestrian/Other              6         3,500        21,000                $1.00      21,000      20%           4,200     50%           2,100
 Latino Shows                         5         6,000        30,000                $2.50      75,000      20%          15,000     50%           7,500
 Ice Shows                            6         6,500        39,000                $1.75      68,250      20%          13,700     50%           6,850
 Family Shows                        12         4,000        48,000                $1.50      72,000      20%          14,400      0%               0
 Motor Sports                         3         5,750        17,250                $3.50      60,375      20%          12,100     50%           6,050
 Other Sports                         6         5,000        30,000                $2.00      60,000      20%          12,000      0%               0
 Graduations                          2         3,500         7,000                $0.25       1,750      20%             400      0%               0
 Religious Events                     2         9,500        19,000                $0.25       4,750      20%           1,000      0%               0
 TCC Shows                            8         5,000        40,000                $0.25      10,000      20%           2,000      0%               0

  Subtotal                           62                     337,050                          930,825                  186,300                  78,250

Total                               128                     642,450                        $1,236,225               $247,400                  $78,250


                                                                       Best Case
Tenants:
  Minor League Hockey Franchise      40         6,500       260,000                $1.00    $260,000      20%         $52,000      0%             $0
  af2                                 8         6,500        52,000                $1.00      52,000      20%          10,400      0%              0
  U of A Ice Cats                    18         2,300        41,400                $1.00      41,400      20%           8,300      0%              0

  Subtotal                           66                     353,400                          353,400                   70,700                      0

Other Events:
 Concerts                            16         6,825       109,200                $6.50     709,800      20%         142,000     50%          71,000
 Rodeos/Equestrian/Other              8         3,500        28,000                $1.00      28,000      20%           5,600     50%           2,800
 Latino Shows                         8         6,000        48,000                $3.00     144,000      20%          28,800     50%          14,400
 Ice Shows                            8         6,500        52,000                $1.75      91,000      20%          18,200     50%           9,100
 Family Shows                        15         4,000        60,000                $1.50      90,000      20%          18,000      0%               0
 Motor Sports                         4         5,750        23,000                $3.50      80,500      20%          16,100     50%           8,050
 Other Sports                         8         5,000        40,000                $2.00      80,000      20%          16,000      0%               0
 Graduations                          3         3,500        10,500                $0.25       2,625      20%             500      0%               0
 Religious Events                     2         9,500        19,000                $0.25       4,750      20%           1,000      0%               0
 TCC Shows                           10         5,000        50,000                $0.25      12,500      20%           2,500      0%               0

  Subtotal                           82                     439,700                         1,243,175                 248,700                 105,350

Total                               148                     793,100                        $1,596,575               $319,400                $105,350

(1) Net of taxes.




                    For purposes of this analysis, a profit margin of 20 percent has been assumed for
                    merchandise sales, which is consistent with industry averages. As with
                    concession revenue, the profit margin for merchandise is sometimes shared
                    between the arena and tenants or event organizers. As shown in the previous
                    exhibit, it is estimated that $78,000 to $105,000 in net merchandise revenue could
                    be generated to the proposed arena.




                                                                           134
IX. Arena Pro Forma Analysis (cont’ d)

     Parking, net

     For purposes of this analysis, it is assumed that 3,000 parking spaces would be
     developed and operated under the control of arena management, with
     approximately 2,500 parking spaces available for general admission parking.
     Complimentary parking is assumed to be provided to luxury suite and club seat
     holders, with three parking passes provided for each suite sold and one pass for
     every three club seats sold. Any necessary additional parking is assumed to be
     provided offsite, but within walking or shuttling distance.

     The exhibit on the following page presents a summary of the estimated parking
     revenue that could be generated to the multi-purpose arena. As depicted in the
     exhibit, assuming an average parking charge of $5.00 per car, 2.8 to 3.5 persons
     per car depending on the event and a profit margin of 80 percent, it is estimated
     the net parking revenue generated to the arena could range from $798,000 to
     $988,000 per year. It should be noted that it was assumed that parking was not
     charged for certain events such as high schools sports and religious events.




                                         135
IX. Arena Pro Forma Analysis (cont’ d)

                                                                                        Estimated Parking Revenue
                                                                                Stablized Year of Operations - 2008 Dollars

                                                                                                                                Non-Premium
                                                                       Average                Persons              Parking           Parking                                  Annual                Arena
                                                                      Turnstile                   Per             Demand           Inventory              Parking             Parking    Profit    Parking
                                                 Events             Attendance        (1)         Car            Per Game           (Spaces)                  Fee            Revenue    Margin    Revenue

                                                                                                           Base Case

 Tenants:
   Minor League Hockey Franchi                         40                   5,500                    3.0               1,833                2,500           $5.00          $366,667       80%     $293,000
   af2                                                  8                   5,500                    3.0               1,833                2,500           $5.00            73,333       80%       59,000
   U of A Ice Cats                                     18                   2,300                    3.0                 767                2,500           $5.00            69,000       80%       55,000

   Subtotal                                            66                                                                                                                                          407,000

 Other Events:
  Concerts                                             12                   7,150                    3.5               2,043                2,500           $5.00            122,571      80%       98,000
  Rodeos/Equestrian/Other                               6                   3,500                    3.0               1,167                2,500           $5.00             35,000      80%       28,000
  Latino Shows                                          5                   6,000                    3.0               2,000                2,500           $5.00             50,000      80%       40,000
  Ice Shows                                             6                   6,500                    3.0               2,167                2,500           $5.00             65,000      80%       52,000
  Family Shows                                         12                   4,000                    3.5               1,143                2,500           $5.00             68,571      80%       55,000
  Motor Sports                                          3                   5,750                    2.8               2,091                2,500           $5.00             31,364      80%       25,000
  Other Sports                                          6                   5,000                    3.0               1,667                2,500           $5.00             50,000      80%       40,000
  Graduations                                           2                   3,500                    3.5               1,000                2,500           $0.00                  0      80%            0
  Religious Events                                      2                   9,500                    3.0               3,167                2,500           $0.00                  0      80%            0
  TCC Shows                                             8                   5,000                    3.0               1,667                2,500           $5.00             66,667      80%       53,000

   Subtotal                                            62                                                                                                                                          391,000
 Total                                               128                                                                                                                                          $798,000


                                                                                                           Best Case
 Tenants:
   Minor League Hockey Franchi                         40                   6,500                    3.0               2,167                2,500           $5.00          $433,333       80%     $347,000
   af2                                                  8                   6,500                    3.0               2,167                2,500           $5.00            86,667       80%       69,000
   U of A Ice Cats                                     18                   2,300                    3.0                 767                2,500           $5.00            69,000       80%       55,000

   Subtotal                                            66                                                                                                                                          471,000

 Other Events:
  Concerts                                             16                   6,825                    3.5               1,950                2,500           $5.00            156,000      80%      125,000
  Rodeos/Equestrian/Other                               8                   3,500                    3.0               1,167                2,500           $5.00             46,667      80%       37,000
  Latino Shows                                          8                   6,000                    3.0               2,000                2,500           $5.00             80,000      80%       64,000
  Ice Shows                                             8                   6,500                    3.0               2,167                2,500           $5.00             86,667      80%       69,000
  Family Shows                                         15                   4,000                    3.5               1,143                2,500           $5.00             85,714      80%       69,000
  Motor Sports                                          4                   5,750                    2.8               2,091                2,500           $5.00             41,818      80%       33,000
  Other Sports                                          8                   5,000                    3.0               1,667                2,500           $5.00             66,667      80%       53,000
  Graduations                                           3                   3,500                    3.5               1,000                2,500           $0.00                  0      80%            0
  Religious Events                                      2                   9,500                    3.0               3,167                2,500           $0.00                  0      80%            0
  TCC Shows                                            10                   5,000                    3.0               1,667                2,500           $5.00             83,333      80%       67,000

   Subtotal                                            82                                                                                                                                          517,000
 Total                                               148                                                                                                                                          $988,000


 (1) Parking is assumed to be included in the premium for suites and club seats. Two parking passes are assumed per suite. A parking pass is assumed for every three club seats sold.
    Complimenary parking for premium seating holders is assumed. All other events would require an additional fee for parking.




              Ticket Rebates / Charges

              Arenas and other such sports and entertainment facilities often assess a facility fee
              on tickets sold for events at the facility as a means of generating additional
              revenue. Additionally, arenas often utilize a third party ticket seller, such as
              Ticketmaster, to handle the majority of ticket sales to events at the venue. The
              ticket seller generally collects a convenience charge on each ticket sold, a portion
              of which is often allocated to the arena.


                                                                                                             136
IX. Arena Pro Forma Analysis (cont’ d)


     The chart below summarizes the estimated ticket rebates / charges that could be
     generated to the arena.
                                                                        Estimated Ticketing Revenue
                                                                 Stablized Year of Operations - 2008 Dollars


                                                                                                    Convenience Charge Rebate      Average
                                                                         Average           Annual    % Sold by        Average      Facility       Arena
                                                                            Paid             Paid    Ticketing        Rebate /         Fee     Ticketing
     Events                                                  Events   Attendance       Attendance      Service          Ticket   Per Ticket     Revenue

                                                                                    Base Case

     Tenants:
       Minor League Hockey Franchise                            40          4,000         160,000          0% (1)       $2.00        $2.00     $320,000
       af2                                                       8          5,500          44,000          0% (1)       $2.00        $2.00      $88,000
       U of A Ice Cats                                          18          2,000          36,000          0% (1)       $2.00        $2.00      $72,000

       Subtotal                                                 66                        240,000                                               480,000

     Other Events:
      Concerts                                                  12          6,875          82,500         51%           $2.00        $2.00     $249,200
      Rodeos/Equestrian/Other                                    6          3,500          21,000         15%           $2.00        $2.00      $48,300
      Latino Shows                                               5          6,000          30,000         10%           $2.00        $2.00      $66,000
      Ice Shows                                                  6          6,500          39,000         41%           $2.00        $2.00     $110,000
      Family Shows                                              12          3,750          45,000         41%           $2.00        $2.00     $126,900
      Motor Sports                                               3          5,750          17,250         10%           $2.00        $2.00      $38,000
      Other Sports                                               6          5,000          30,000         10%           $2.00        $2.00      $66,000
      Graduations                                                2          3,500           7,000          0%           $0.00        $0.00           $0
      Religious Events                                           2          9,500          19,000          0%           $0.00        $0.00           $0
      TCC Shows                                                  8          5,000          40,000          0%           $0.00        $0.00           $0


       Subtotal                                                 62                        330,750                                               704,400

     Total                                                     128                        570,750                                             $1,184,400


                                                                                    Best Case
     Tenants:
       Minor League Hockey Franchise                            40          6,000         240,000          0% (1)       $2.00        $2.00     $480,000
       af2                                                       8          6,500          52,000          0% (1)       $2.00        $2.00     $104,000
       U of A Ice Cats                                          18          2,000          36,000          0% (1)       $2.00        $2.00      $72,000

       Subtotal                                                 66                                                                              656,000

     Other Events:
      Concerts                                                  16          6,563         105,000         51%           $2.00        $2.00     $317,100
      Rodeos/Equestrian/Other                                    8          3,500          28,000         15%           $2.00        $2.00      $64,400
      Latino Shows                                               8          6,000          48,000         10%           $2.00        $2.00     $105,600
      Ice Shows                                                  8          6,500          52,000         41%           $2.00        $2.00     $146,600
      Family Shows                                              15          3,750          56,250         41%           $2.00        $2.00     $158,600
      Motor Sports                                               4          5,750          23,000         10%           $2.00        $2.00      $50,600
      Other Sports                                               8          5,000          40,000         10%           $2.00        $2.00      $88,000
      Graduations                                                3          3,500          10,500          0%           $0.00        $0.00           $0
      Religious Events                                           2          9,500          19,000          0%           $0.00        $0.00           $0
      TCC Shows                                                 10          5,000          50,000          0%           $0.00        $0.00           $0


       Subtotal                                                 82                        431,750                                               930,900

     Total                                                     148                        431,750                                             $1,586,900

     (1) Assumes tenants are responsible for ticket sales.




     For purposes of this analysis, it is assumed that the arena would receive a $2.00
     rebate for each ticket sold by an outside ticketing service and would collect a
     $2.00 facility fee per paid admission for all ticketed events (excludes graduations,
     religious events, and TCC shows). It is estimated that the arena could generate
     $1.2 million to $1.6 million annually from convenience charge rebates and facility
     fees.



                                                                                    137
IX. Arena Pro Forma Analysis (cont’ d)

Operating Expenses

Expenses generated by the operations of a multi-purpose arena typically consist of
salaries and wages, repairs and maintenance, materials and supplies, utilities, advertising,
general and administrative, insurance, facility management fee, capital reserve and other
such expenses. A brief description of each major source of expense is provided below.


       Salaries, Wages and Benefits

       Salary and wage estimates are based on estimated staffing levels, industry average
       salaries and wages and local demographic characteristics. Estimated salaries and
       wages are assumed to account for full- and part-time operating staff for which
       expenses are not directly reimbursed by facility users. The exhibit below presents
       a summary of the estimated staffing levels and associated salaries, wages and
       benefits for the proposed arena.

                                       Estimated Salaries, Wages and Benefits


                                                                        Base Case     Best Case
                                                       Employees          Salaries     Salaries

             General Manager                                   1          $80,000      $80,000
             Receptionist                                      1          $27,500      $27,500
             Admininstrative Assistant                         1          $25,000      $25,000
             Director of Finance                               1          $55,000      $55,000
             Accounting Manager                                1          $40,000      $40,000
             Payroll Clerk                                     1          $27,500      $27,500
             Director of Marketing                             1          $50,000      $50,000
             Marketing Manager                                 1          $35,000      $35,000
             Marketing Coordinator                             1          $27,500      $27,500
             Box Office Manager                                1          $40,000      $40,000
             Assistant Box Office Manager                      1          $32,000      $32,000
             Event Services Manager                            1          $37,500      $37,500
             Director of Operations                            1          $50,000      $50,000
             Operations Coordinator                            1          $32,500      $32,500
             Chief Engineer                                    1          $50,000      $50,000
             Change Over Manager                               1          $30,000      $30,000
             Facility Workers                                  3          $75,000      $75,000
             Chief Electrician                                 1          $40,000      $40,000
             Custodian Supervisor                              1          $32,500      $32,500
             Custodian                                         2          $40,000      $40,000
             Security Manager                                  1          $35,000      $35,000
             Security Guards                                   4          $80,000      $80,000
                    Total Positions and Salaries              28         $942,000     $942,000
             Employee Benefits (30%)                                     $283,000     $283,000
             Additional Compensation                                      $50,000      $75,000
             Part-Time Non-Event Labor                                   $100,000     $125,000
             Part-Time Event Labor                                        $50,000      $75,000

             Total Salaries, Wages and Benefits                        $1,425,000    $1,500,000



                                                       138
IX. Arena Pro Forma Analysis (cont’ d)

     Based on an estimated requirement of 28 full time equivalent employees, total
     salaries, wages and benefits are estimated to be $1.4 million to $1.5 million
     annually.

     It is assumed that functions such as food and beverages, catering, parking,
     custodial and other such services would be outsourced.


     Utilities

     Utilities often represent one of the largest expenses incurred by facility operators.
     Through an analysis of operations at comparable facilities, cost estimates for
     utilities including electricity, gas, water, steam, trash removal and other such costs
     have been prepared. Annual utilities expenses at the proposed arena are estimated
     at $850,000 to $900,000 per year.


     General and Administrative

     General and administrative expenses typically consist of various office and
     administrative expenses incurred as a result of day-to-day facility operations.
     Such expenses typically include travel, telephone, printing, permits and other
     miscellaneous services, and are estimated to total $400,000 to $425,000 per year
     at the proposed arena.


     Insurance

     The insurance expense estimate includes property and liability insurance for the
     proposed facility. While each event is generally required to carry its own liability
     insurance, facilities often carry additional insurance to cover areas such as
     common areas, restrooms and other facility components. Insurance costs will
     vary in proportion to the number of events and total attendance at the facility.
     Annual insurance expenses for the proposed arena are estimated to total $125,000
     to $150,000 per year.


     Repairs and Maintenance

     General maintenance and service of a facility, equipment and surrounding areas
     are primarily the responsibility of facility operations personnel, and are often
     performed by in-house personnel. More specialized needs, such as HVAC system



                                            139
IX. Arena Pro Forma Analysis (cont’ d)

     maintenance, electrical work, and maintenance of other mechanical systems often
     must be contracted out to specialized third parties. Total annual repairs and
     maintenance expenses for the proposed arena are estimated to be approximately
     $150,000 to $180,000 per year.


     Contract Services

     Contract service expenses include both outsourced services as well as professional
     services that may be required in conducting arena operations such as legal,
     accounting, tax, consulting or other advice. Based on a review of contract
     service expenses of other comparable arenas, total contract service expenses for
     the proposed arena are estimated to be approximately $150,000 to $165,000 per
     year.


     Advertising

     Advertising expense for the new facility relates to advertising and promotions
     used to promote the facility and its events. This expense will vary depending on
     the number of events hosted each year, how aggressively the events and facility
     are promoted and whether the facility or the event promoter holds the primary
     advertising responsibility. For purposes of this analysis, it is estimated that the
     proposed arena’s annual marketing budget could total approximately $50,000 to
     $75,000.


     Materials and Supplies

     Materials and supplies include items needed for administrative duties, cleaning
     and general maintenance throughout the facility. While event specific expenses
     are often billed directly to event organizers and promoters, general materials and
     supplies are necessary for day-to-day upkeep and operation of the facility. Based
     on expenses incurred at comparable facilities, materials and supplies expenses are
     estimated to total $100,000 to $125,000 per year at the proposed arena.


     Base Management Fee

     It is assumed that the proposed arena will be privately managed in order to
     maximize event potential and achieve operating efficiencies. In consideration for
     managing the facility, a private management company typically charges a flat fee



                                          140
IX. Arena Pro Forma Analysis (cont’ d)

        plus an incentive fee, provided certain agreed upon operating or financial targets
        are met. Based on a review of management fees at similar arenas in comparable
        markets, it is estimated that the base management for the proposed arena could be
        approximately $300,000 annually, this level of management fee does not account
        for a significant capital investment in the project. It also does not account for any
        fees related to incentives and does not reflect upfront contributions.

Financial Summary

The exhibit below presents the operating revenues and expenses estimated to be
generated by a multi-purpose arena operating in downtown Tucson. All estimates are
presented in 2008 dollars and represent a stabilized year of operations.

                                               Estimated Revenues and Expenses
                                                 Stablized Year of Operations


                                                              Base Case                     Best Case
                                                                       Percentage                    Percentage
                                                      2008 Dollars    of Revenues   2008 Dollars    of Revenues
    OPERATING REVENUES
      Rent                                                $763,000         14.5%       $914,000          13.9%
      Premium Seating, net                                 988,000         18.8%      1,235,000          18.8%
      Suite Ticket Revenue                                 160,000           3.1%       211,000           3.2%
      Food and Beverage, net                               724,000         13.8%        884,000          13.4%
      Advertising and Sponsorships                         350,000           6.7%       400,000           6.1%
      Naming Rights                                        200,000           3.8%       250,000           3.8%
      Merchandise, net                                      78,000           1.5%       105,000           1.6%
      Parking, net                                         798,000         15.2%        988,000          15.0%
      Ticket rebates/facility fees                       1,184,000         22.6%      1,587,000          24.1%
         TOTAL REVENUES                                  5,245,000          100%      6,574,000         100.0%

    OPERATING EXPENSES
       Salaries & wages                                  1,425,000         27.2%      1,500,000          22.8%
       Utilities                                           850,000         16.2%        900,000          13.7%
       General & administrative                            400,000          7.6%        425,000           6.5%
       Insurance                                           125,000          2.4%        150,000           2.3%
       Repairs & maintenance                               150,000          2.9%        180,000           2.7%
       Contract Services                                   150,000          2.9%        165,000           2.5%
       Advertising                                          50,000          1.0%         75,000           1.1%
       Materials & supplies                                100,000          1.9%        125,000           1.9%
     * Base management fee                                 300,000          5.7%        300,000           4.6%

            TOTAL EXPENSES                               3,550,000         67.7%      3,820,000          58.1%

    INCOME FROM OPERATIONS BEFORE
      CAPITAL RESERVE AND DEBT                         $1,695,000          32.3%     $2,754,000          41.9%

    * Does not reflect upfront contribution.



As depicted above, it is estimated that a new multi-purpose arena in downtown Tucson
could generate $5.2 to $6.6 million in annual revenues and incur approximately $3.6 to
$3.8 million in expenses, resulting in operating income before debt service ranging from
a $1.7 million to $2.8 million. This represents an operating margin ranging from 32.3
percent to 41.9 percent.


                                                               141
IX. Arena Pro Forma Analysis (cont’ d)


Capital Expenditure Considerations

In addition to the annual operating expenses associated with the proposed arena, prudent
planning suggests that a capital reserve be established to fund future major repairs and
replacement of equipment. Generally, capital reserve accounts are funded either by non-
operating sources, such as a public sector entity, or through the annual operations of the
arena.

Based on a review of selected comparable arenas, contributions to capital reserve
accounts approximate 0.5 percent of hard construction costs of a facility. Based on an
estimated hard construction costs for a new multipurpose arena in downtown Tucson, an
annual capital reserve in the amount of approximately $232,000 to $436,000 should be
established.




                                            142

				
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