Former Illinois Bell and Ameritech Director of Corporate Planning Joseph L. Daleiden, who also served as Economic Advisor to the Executive Office of the White House, Office of Management and the Budget during the Carter Administration, prepared a report about the viability of Lakewood’s proposed SportsPlex as presented in an application to the Upper Illinois River Valley Development Authority. It will run in three parts.
In his cover message, Daleiden, wrote,
“…my critique of the proposed Lakewood Sportsplex based on their feasibility study submitted to the Upper Illinois River Valley Development Authority (UIRVDA) .
“As you can see the proposal was, if not a scam, an amateurish, ill-conceived plan filled with errors, unverified assumptions and seems devoid of any substantive research.
“That the request for $18 million federal stimulus money was approved by both the McHenry County Board and then UIRVDA is classic example why, as a rule, governmental bodies should not subsidize business ventures. (Some day I’ll write about my trip to Cleveland to visit a sweet potato chip entrepreneur as the Budget Bureau guy with the Small Business Administration budget. I reached the same conclusion as Mr. Daleiden mentions above. Government officials have little clue what businesses will succeed and which will fail.)
“They simply are unable to do the adequate due diligence that a bank or other financial lenders can do (at least theoretically) on a request for a loan or the issuance of bonds.”
Critique of the Crystal Lake Youth Sports Complex Feasibility Analysis submitted to the Upper Illinois River Valley Development Authority
Part 1 – Demographics
1. Sportsplex estimates are miscalculated and misleading
Page 2 of the report estimates “the total youth population of McHenry County between ages of four and 18 is 98,217″ and that roughly 50% are involved in at least one sport. However, on page 3 it states McHenry County has “45,217 youth aged children of which 22,133 are involved in athletics in McHenry County” Is this obvious contradiction representative of sloppy analysis?
The report then refers to the “second layer of population to use the facility is men and woman between ages of 25-45″ (for some reason ignoring those between 19 and 25) as 192,468, They go on to state, “This population group as evidenced by US census information has 36% regular competitive athletics each week. This allows for another 55,000 who will use this facility.”
This statement certainly does not reflect census data and is 50% overstated. The correct census data calculated from The US Census Bureau 2005-2009 American Community Survey 5 – Year Estimates for Illinois (S0101) – including the 19-25 age group – is 132,207, still about 60,000 less than the Sportsplex estimate.
Even worse, these estimates are completely misleading for the following reasons:
- McHenry County as a whole is not the relevant market. On page 15 the report states that “leagues are targeted primarily towards a constituency within a 20 miles areas with the majority coming from the local (ten miles) population.” Moreover, the 20 mile circle would significantly overlap with the Elgin sports complex (which is already losing money despite a far denser population area.
The report assumes that all persons involved in sports are part of the market, whereas the census estimates of the percent of persons involved in sports includes all sports including track and field, football, swimming, hockey, tennis, golf, bowling, weightlifting, wrestling, bicycling, even simply walking for exercise and fishing. The proper estimates of potential persons in the Sportsplex would include only those persons involved in sports offered by the Sportsplex as calculated below.
- The vast majority of school-aged athletes use the facilities supplied by schools and park districts. The same is true of adults who have access to park district softball and soccer fields throughout McHenry County. Why would people travel substantial distances and pay high fees to participate in sports with low cost public facilities nearby?
2. A more realistic estimate of the relevant market would be calculated as follows:
- Total population in McHenry County within ten miles of facility 160,000
(To this could be added some portion of population within
20 miles taking into consideration the large overlap with the
Elgin sports facility but should exclude the number of seniors
in Sun City)
- Percent of population in the 10 to 19 age group
(including ages 4-9 is absurd) 27%
- Total of 10-19 age group (1 x 2) 43,200
- The Census Bureau’s estimates that over 90% of children are involved
in some sport. But the number involved in baseball, softball
and soccer is about 40% 40%
- Total age 10 to 19 (3 x 4) 17,200
- Percent of population in 20-40 age group 36.5%
- Number in 20-40 age group (1 x 6) 58,400
- Percent in 20-40 age group playing baseball, softball or soccer 6%
- Total 20- 40 age group playing baseball, softball and soccer (7 x 8) 3,500
- Total market (5 + 9) 20,700
- Per cent that have access to school or park facilities during 90 -100% ? Percent that are willing to pay $1500 to $3000 per year to use NA
- Percent that are willing to pay $1500 to $3000 per year to use facilities instead of existing school and park facilities
for far less cost NA
Conclusion: even if we included some portion of those living in the 10-20 mile radius, the maximum size of the market for the relevant sports is perhaps 30,000 children and adults, virtually all of which have access to school and local Park District facilities, including dozens of soccer and baseball fields which are at present under utilized. Although in winter an indoor park offers a unique advantage, it is severely limited by the number of games that can be played on one field.
= = = = =