Introduction

Our feasibility study evaluates the financial viability of building a new amphitheater in Irvine,
California to replace the current amphitheater that is being torn down in 2017. The purpose of
this amphitheater is to fill the void for music that the previous one will leave behind when it is
torn down. This study will hopefully provide us with enough information to determine whether
or not it would be wise to move on to Phase II of the feasibility study. The amphitheater will not
only provide entertainment, it will also give the residents of Irvine a place to interact with other
members of the community. There will also be places that will sell food, alcohol, as well as a
VIP section, which will be the only place in the venue to sell liquor. The market analysis will
include a list of the government of Irvine and Orange County committees that we will
communicate with during the process of building the amphitheater; it will also include the
demographics, psychographics for Irvine, as long with the venue data. This will include
consumer spending habits, population numbers, possible venue location, and other important
statistics. The venue will be privately funded, because the people that operate Orange County
Great Park would build it (FivePoint). The project description will breakdown the market
analysis numbers and show why the market is good for the building of a new amphitheater. The
economic and fiscal impact shows us that the Orange County area is a very good area to build
this amphitheater. With Orange County being a very wealthy area, there is a lot of money to be
spent on going to concerts and other events that will be held at the venue; it will also create a lot
of job opportunities that people who live under the poverty line desperately need. This
amphitheater has the opportunity to provide a big boost for the Irvine economy.

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Market Analysis

Overview of Municipalities

To build a new amphitheater in Irvine, California the developer would need to get the
appropriate permission from the County and City government. Here are the different boards and
committees that would need to approve the building.

Information from: City of Irvine, CA Website

(http://legacy.cityofirvine.org/council/comms/default.asp)

Orange County Great Park Board of Directors

Planning Commission
Finance Commission
Green Ribbon Environmental Committee
Investment Advisory Committee
Irvine Children, Youth and Families Advisory Committee
Zoning Administrator
Irvine Residents with Disabilities Advisory Board
North Irvine Transportation Mitigation Committee
Alcohol & Drug Advisory Board
Emergency Medical Care Committee
Orange County Development Board
Orange County Fire Authority
Orange County Park Commissions
Orange County Planning Commissions
Orange County Visitors Association
Orange County Waste Commission
Orange Park Acres Advisory Committee
Public Finance Advisory Committee
Traffic Committee

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Demographic and Psychographic Data

Per the 2015 U.S. census, the population of Irvine, California was 211,906 with a 2015
estimated population of 256,927. From 2010 to 2015, the population of Irvine grew at an annual
rate of 4.24%. Listed below are some key demographic numbers on Irvine:

Median household income 2010-2014 - $91,999

12.4% Persons in poverty
Orange County Population per square miles: 3,807.7

Racial Breakdown
White

9.2
African
American
39.2 50.5
Asian

Hispanic or 1.8
Latino

Age Demographic
8.7

21.5

69.8

Under 18 Between 18-65 Over 65

These statistics help to show us what kind of people live in Irvine, CA and the Orange County
area. 69.8% of the population is between the age of 18 and 65, this is significant because a
concert amphitheater would be targeting that general age range. 12.4% of the population lives
below the poverty line. The creation of the venue would provide construction jobs that would
help add jobs to the area. However, the median household income in Irvine is $91,999 which
means there is enough money in the area to support a concert venue.

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The psychographic data will show us how people in this area tend to spend their money. There
is already a concert venue in this area so the people are used to spending their disposable income
on attending events at the Amphitheater.

Irvine, CA is above the national average in all of these categories for their consumer spending
habits. This means that the residents of Irvine have a lot of disposable income to spend. Also
you have to take into account how much the cost of living is in California therefore making
spending numbers higher. Their entertainment is 140 above the national average, which would
mean that the residents of Irvine, California would be more likely to attend events at the
amphitheater.

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Venue Data

The area inside of the black box is where we purpose the new ampitheater will be placed.
FivePoints the developer of the area own all of the area in the park so the red which is the old
Military runway would be made into a parking lot. Because of the concerte already being there it
makes it the idea location for a parking lot.

This graph shows the average weather for Irvine, CA. This shows that the temerpatrue
throughout the year is between 46 F and 82.31 F. This means the outdoor amphitheater can be
used for concers almost year around. This is a big asset to having a venue here because you are
able to operate there year around. Also the average annual precipitaion is 13.59 inches which is
very low. This is a good thing for an outdoor venue and makes Irvine a prime location for a
outdoor amhpitheater.

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Production Despcription (based upon market analysis)

This project is to give Orange County Greak Park, Irvine, CA and the surronding area a
new outdoor amphitheater to replace the one that is being taken down. This is something that the
city and county would be involved in buidling and operating because it would provide jobs and
entertainment to the city. The developers of the area FivePoints owns the park and will be able
to build a new venue and adequate parking for the venue. The old amphitheater was 16,000, our
plan for the new one is to make it 10,000. With 8,000 permanent seats and 2,000 lawns seats.
The reason for the decrease is this would decrease the number of tickets therefore increasing
sacrity and decreasing the amount of security you would need. The 2,000 lawn seats would
include an open area infront of the stage along with some behind the permanent seats. The
weather in Irvine, CA is ideal for an outdoor venue because the temperature typically ranges
between 46-82.31 degrees Farenheit and only 13.59 inches of rain annually. This is perfect for
an outdoor venue and will allow them to book acts throughout the vast majority of the year.
Also the consumer spending habits in Irvine, CA are above the National Average in all
categories and espseically entertainment. Showing that the people of the area are willing to
spend money to see events. With close to 70% of the population being between 18 and 65 it
gives them a good target market to bring in a variety of acts for different ages. With 12.4%
people living below the poverty line hopefully the construction jobs to build the venue and the
jobs for the daily operations will provide the area with jobs to help decrease that number. Music
is big in society and espsecially out on the west coast therefore the amphitheater would do very
well in Irvine and attract people into the city and have a positive economic impact.

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Key Project Assumptions

Financing Options

The Orange County community wants a new outdoor concert venue after Irvine Meadows
Amphitheater closes this year, but they also view that want as a need. The potential to bring in
money to the local community is significant based on the history of Irvine Meadows
Amphitheater playing host to shows such as Michael Jackson, Billy Idol, and other music icons.
Shows like those draw large crowds from all around which could bring in big money to the
surrounding community. Since FivePoint already owns the land there would be no cost for that.
We plan to take out a 10 million dollar loan with a 3% interest rate to fund the building of the
amphitheater. This would be payed off in 15 years with payments of 837,665.80 plus interest.
With our projected revenue this would be a managable yearly payment.

Revenue Sources

The main source would be from ticket sells which is projected at 23.5 million if the
amphitheater host 50 concerts and sells out at an average of 45 dollars a ticket. The other main
revenue would be through selling naming rights to a company. We plan to sell that for a price of
1 million a year which would come out to 20,000 dollars a concet. The other sources would be
concessions projected at 4.1 million, merchandise which is projected at 4 million and parking
project at 1 million. All of these revenues we have increasing at 5% per year.

Projected Expenses

Our biggest expenses would come from the utility cost to run the amphitheater. That is
projected at 10.6 million a year for utilites and 2.5 million for maintenance. The other big part is
from salaries which between part-time and full-time would be 5,525,000 a year. The other
expenses are interest on the loan which is 300,000. All of these expenses are projected to
increase at 3% per year.

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Economic and Fiscal Impact

Irvine Meadows Amphitheater in Irvine, CA is in its final season, so the need for a new
outdoor music venue is wanted and needed for Orange County residents. The new amphitheater
will stay in Irvine, and will be in the Orange County Great Park which is about 1,300 acres in
total size, and sits on the former Marine Corps Air Station El Toro. The outdoor concert venue
will be about 12 acres in size with a capacity of about 10,000 guests, with 8,000 permanent seats
and a capacity of 2,000 on the lawn.

The new venue will be built and operated by the private developer FivePoint. FivePoint is
developing Great Park in its entirety, and wants to be the destination for the new amphitheater
that Orange County residents want. A venue in Orange County is also sought out by residents by
residents in Los Angeles, San Diego, and other inland counties, so visitors from other areas
around the state can bring in money to local businesses, restaurants, and hotels in Orange
County. Residents from San Diego would be the visitors most likely to stay in Orange County
hotels overnight. The Irvine Spectrum Center is an outdoor shopping center that is just a couple
minutes down the road from the Great Park, so visitors who spend the day in Irvine before the
concert or those who stay overnight can go shopping, which would bring money into the
surrounding areas.

Because FivePoint already owns the land in the Great Park, there would be no additional
property taxes. While the new venue would be smaller than the current one, the potential to at
least equal the amount of employees at the current venue still exists because the new venue is
envisioned to be more modern, so there may be more amenities that would need employees to
work them. The runway from the old military air field will be repurposed as the parking lot,
which will eliminate most (about 95%) of the cost required to build a new parking lot. Because
of the temperate weather in Southern California, the amphitheater can host more than 50 shows
in a concert season.

Lets say the average concert ticket price is $45 and increases an average of 5%, and the venue
sells out all 10,000 tickets for 50 concerts, the venue would bring in a max of $22,500,000 (if all
concerts sell out) just on tickets during the first full concert season. There would also be naming
rights and advertising opportunities for corporations and local businesses. Irvine Meadows
Amphitheater used to be named Verizon Wireless Amphitheater, and there is no name in place

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for the new venue, so a business has the opportunity to make a pitch for advertising and naming
rights deals. There will be about 4,000 parking spaces; the current venue includes parking in the
price of admission, but the new location may not be the same. Imagine parking costs $5, in a full
season, parking could potentially bring in $1,000,000. There are many ways the new
amphitheater in Irvine could have a significant positive impact on the Irvine community and
Orange County as a whole.