2016 08 09 - S&O Agenda - Item 8, Att 2 - AEC Noosa Convention & Performing Arts Centre Pre-feasibility Review

PRE-FEASIBILITY OF CONVENTION AND PERFORMING ARTS CENTRES


5.4            OPERATING EXPENDITURE

5.4.1          Convention Centre
The following table provides a breakdown of operating expenditure items for the proposed Convention Centre,
based on industry benchmarks.

Table 5.6: Estimated Operating Expenditure Items – Convention Centre
 Expenditure Item                                               Value    Assumptions
 Labour Costs                                               $693,226      30% of total operating expenditure
 Cost of Sales/Other Materials and Services              $1,046,188       50% of venue hire revenue
                                                                          80% of delegate fee revenue
 Marketing and Promotion                                     $43,522      3% of total revenue
 Electricity                                                $175,000      $175 per sqm per annum
 Water, Sewerage and Waste                                   $40,000      $40 per sqm per annum
 Maintenance Costs/Renewal Reserve                          $150,000      0.75% of capital cost
 Management and Administration                              $145,072      10% of total revenue
 Total Operating Expenditure                             $2,285,402
Source: AEC.


5.4.2          Performing Arts Centre
The following table provides a breakdown of operating expenditure items for the proposed Performing Arts Centre,
based on industry benchmarks.

Table 5.7: Estimated Operating Expenditure Items – Performing Arts Centre
 Expenditure Item                                               Value    Assumptions
 Labour Costs                                               $727,339      40% of total operating expenditure
 Cost of Sales/Other Materials and Services                 $720,442      75% of total revenue excluding bar/kiosk/café sales and
                                                                           other revenues
                                                                          65% of bar/kiosk/café sales
 Marketing and Promotion                                     $42,000      5% of venue hire/ticketing/leases/recoveries revenues
 Electricity                                                $122,500      $175 per sqm per annum
 Water, Sewerage and Waste                                   $28,000      $40 per sqm per annum
 Maintenance Costs/Renewal Reserve                          $112,500      0.75% of capital cost(a)
 Management and Administration                              $103,067      10% of total revenue
 Total Operating Expenditure                             $1,880,849
Source: AEC.
Notes: (a) It is assumed that 50% of the current replacement cost of The J would be retained for capital value purposes, i.e. roughly $5 million, in
addition to the $10 million spend on new capital works.


5.5            DEPRECIATION EXPENSE
An average useful life of 35 years has been adopted to estimate the depreciation charge for both facilities. It is also
assumed that 50% of the current replacement cost of The J would be retained for capital value purposes, i.e.
roughly $5 million, in addition to the $10 million spend on new capital works for the proposed Performing Arts
Centre.

The depreciation charge for the proposed Convention Centre is estimated at $571,429 per annum.

The depreciation charge for the proposed Performing Arts Centre is estimated at $428,571 per annum.


5.6            PROFITABILITY
The following table provides a high level summary of the modelled financial performance of the proposed
Convention Centre and proposed Performing Arts Centre, as well as in aggregate, and compares the outcomes
with the 2015/16 budget for The J.




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