Highest and Best Use Study Presentation for the November 19, 2008

 Study was conducted in response to request for long-term lease of the racetrack  Study was originally focused on future use of the Fairgrounds, as a Fairgrounds – not moving  Board members posed two questions that refocused the study

 What is the future potential for the annual Tennessee State Fair?  How does the future of the Fair impact site and facility needs?

I. Assessment of Long-Term Viability of the Fair and Identification of Potential Future Uses of the Fairgrounds II. Recommendations of Future Fair and Fairground Use

Potential Future Uses Mission and Operating Realities Interviews Input and Comments Economic And Demographic Factors Competitive Factors Fairground and Event Facility Trends Request for Information Racetrack Lease Historical Events and Activities Current Physical Conditions Viability of the Tennessee State Fair

To be a major venue for agricultural, exhibition, entertainment, cultural, and educational uses to enhance the economic and social benefits to the residents and visitors to the middle Tennessee region. Of primary importance is the staging of the annual Tennessee State Fair that showcases agriculture, commerce, technology, and industry of the region and provides quality educational and entertainment opportunities for its patrons.

 Tennessee State Fair – a county/regional fair  Declines in paid and total attendance  Perceived “static” programming  Perceived safety issues  Decline in 4-H participation

 Tennessee State Fair’s future is very viable – potential to become a true State Fair  Requires changes to operating model, programming, facilities and, perhaps, site location  Potential for strengthened and new partnerships with key organizations

 Public meetings in January, May, August  Neighborhood district visioning session  Comments submitted at websites  Interviews of current users, stakeholders, interested parties and public officials

 Access/Road System, Public Transportation  Site Size and Layout  Surrounding Land Uses  Zoning and Deed Restrictions  Topography and Special Conditions

 Approximately 117 acres  35 acres in floodplain and embankments  About 23 acres for main facilities  About 14 acres related to grandstand, racetrack and pit areas

 Population trends of the Nashville/Davidson County area  Socio-Demographics of area within 15 miles of the Fairgrounds

 In 2007, attendance represented 12.6% of County resident population  True state fair should be able to garner 25% to 35% market penetration  Range of potential attendance – 350,000 to 500,000

Three Principal Business Units  Annual Tennessee State Fair  Monthly Flea Market  Non-Fair Rentals and Leases

Exhibition Space Competition  Nashville Convention Center  Gaylord Opryland Convention Center  Local area hotels

Spectator Event Facility Competition  Municipal Auditorium  Sommet Center  Curb Event Center  Allen Arena

 Current lease provides base rent of $50,000 per year for all facilities plus percentage of concessions revenues  Base rent – less than $140 per day for the facilities included in the agreement  Ten years ago the lease payment exceeded $250,000 per year

 Though car counts are up in recent years, attendance has been unremarkable

 NASCAR’s televising of major races has negatively impacted weekly racing series attendance nationwide  Continued competition from Nashville Superspeedway and Music City Raceway

Review of State and Regional Fairgrounds  100% have livestock and exhibit facilities  92% have horse show facilities  72% have an arena  69% have RV facilities (average of 250 to 300)  53% have a grandstand  14% have amphitheater

 Multi-purpose event facilities  Addition of sports and recreation venues  Partnerships with carnival operators for permanent rides and entertainment areas  Lease of out lots for retail, commercial and hotel developments

 In June, issued RFI to public organizations and private companies  More than 100 – real estate developers, sports and entertainment, racing, economic development  Purpose of the RFI: Solicit interest and ideas for the possible redevelopment of the Fairgrounds

 Nine Responses  Two Did Not Meet Development Criteria  Five Were Similar in Redevelopment Concepts and Impacts  Two Were Unique in Concept and Impact

 Presentation to Fair Board on August 5  Public Presentation on Aug 20 by  Southern Land Company  TEAM 821  Tennessee Motor Sports Conservancy  Wedgewood Partners

Mixed-Use, Town Center Concept  For Sale/Rental Housing (1,000 – 1,100 Units)  Entertainment District (Amphitheater)  Retail/Commercial (350K – 500K sq. ft.)  Park Area (43 acres)

IMAGE Mixed Use Entertainment / Venue District Single-Family Cottage District Residential Overlook District Green District

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Film and Entertainment Development  Film and Television Production Studio  Higher Education Film School  Mixed-Use Office and Housing  Arts and Entertainment Venue

Sports and Entertainment District  NASCAR Speed Park  Water Park Hotel  Baseball Stadium  Hall of Fame  Entertainment District (800K sq. ft.)  RV Park  Educare  Amphitheater  Music City Motorplex

Mixed Use Development  Office – 60%/65%  Retail – 15%/20%  Housing – 15%/20%

 All would purchase the site at market value  TN Motor Sports Conservancy proposed the Fair remaining at the site, make substantial improvements to existing buildings  Wedgewood Partners proposed a site specific swap, building program and endowment

 Mixed use development (housing/retail/commercial) investment potential - $275 million to $1.2 billion over 10 years  Benefits to County in form of real estate and sales taxes - $12 million to $42 million per year  Best meets the needs/desires of the surrounding neighborhoods

 Browns Creek Development investment potential of $500 million over 10 years  Benefits to County in form of real estate and sales taxes - $18 million to $20 million per year  Compatible with surrounding neighborhoods  Financially, more risk than mixed-use development

 TN Motor Sports Conservancy investment potential of $150 million to $160 million  Benefits to County in form of real estate taxes – $2.5 million to $3.0 million per year  Least compatible with surrounding neighborhood  Question as to market potential for continued racetrack operation

 Highest and best future use(s) of the Fairground site depends on one of two choices:  Continue as county/regional fair  Re-invent as true State Fair

Required changes to operations and facilities:  Consider taking over racetrack operations  Contract with private management company  Plan and implement landscaping, beautification and building upgrades - $5.5M to 7.5M  Create a foundation for capital projects and educational programs

Initial Options for Site:  Move to another site and construct a new Fairgrounds  Make significant changes to existing site layout, buildings and structures

Initial Options for Site:  Move to another site and construct a new Fairgrounds  Site size ranges between 225 acres and 380 acres

 Wholesale change in governance model  Fair Authority  Division of State Department/Agency  Fair must be more “state” focused in educational programming, competitive exhibits, sponsorships and attendance appeal

Highest and best use for current site is a mixed- use/commercial development Best addresses issues of:  Neighborhood compatibility  Fiscal benefits to local and state government  Catalyst for growth/development of South Nashville area

Motor Sports and Entertainment Development  Historical operations and current market factors do not support projected attendance  Development concept lacks compatibility with surrounding neighborhoods

 Sale of fairground site at highest market value  Dedication of portion of future property taxes or fees  Partnership with State of Tennessee  Major donations/capital drive and naming rights sponsorships

 Decide what the Tennessee State Fair will be in the future  Determine needed facilities for the future Tennessee State Fair

Highest and Best Use Study Presentation for the November 19, 2008