High Point Park
Our Neighborhood
Team Member
Program
Dawn Holmes
Heinz
Emeka Onwugbenu
Tepper
Ajinkya Ratnaparkhi
Heinz
Pallavi Kumar
Heinz
Meera George Palackan
Heinz
Imagine!
Agenda
• Product Concept
▫ The Neighborhood
• Market & Competitor Analysis
• Triple Bottom Line Approach
▫ Financial
▫ Social
▫ Green
• Roadmap to Success
Our Neighborhood 840 feet in the Air
Design
• US Steel
• Topography
Green
• Water
• Wind
• Electricity
Business
• Buys Local
• Affordable
Community
• School
• Hiring
• Exhibits
Welcome to the Neighborhood
1 acre
Observation Deck
Green Spaces
Restaurant / Bar
Conference Area
Functions in winter and summer
Our Neighborhood Offers Multiple
Amenities
Restaurants / Bar
Breathtaking Views
Office / Conference Room
Accessibility
Green Space
Unique Product in an Untapped Market
Total Market Area
Total Market Volume= 6.26MM people
Ticket
4.89MM
Restaurant
4.78MM
Limited Competition Provides Unique
Business Opportunity
Observation
Deck
• Mount Washington
Restaurant
•
•
•
•
The Grand Concourse
Capital Grille
Ruths Steak House
Nakama Japanese Steak House
Conference
Hall
•
•
•
•
David L. Lawrence convention centre
The Pittsburgh expomart
Carnegie Museum of Natural Art and history
The Grand Hall
Strategic Green Elements
Wind
Water
• Use passive
ventilation and
shading
• Potential
reinvestment in
micro turbines
• Greywater
Recycling
System
• Rain water
Harvesting
LEED
Certified
• Gold standard
possible
• Buy green
energy for
electric needs
Relatively Low Implementation Cost
Space
Interior
Exterior
TOTAL
Amenities
Hard Cost
Soft Cost
Contingency
Total Cost
Restaurant / Bar
$3,600,000
$4,140,000
$828,000
$4,968,000
Conference Rooms
$8,800,000
$10,120,000 $2,024,000
$12,144,000
Observation Deck
$6,000,000
$6,900,000
$1,380,000
$8,280,000
$966,000
$193,200
$1,159,200
Central Outdoor Space $840,000
Green Space
$1,400,000
$1,610,000
$322,000
$1,932,000
Wood Deck
$3,300,000
$3,795,000
$759,000
$4,554,000
$23,940,000 $3,591,000 $5,506,200
$33,037,200
Key Assumptions:
1. Soft Cost is 7%
2. 20% Contingency Cost
3. Maintenance Cost is 30% of Gross Revenue
4. 20% of NOI saved as cash reserve
5. 30% tax rate
Multiple Revenue Streams
Sources
Tickets
Restaurant
and Bar
Conference
Rooms
Avenue
Annualized
Pittsburghers
$1.6 M
Tourist
$7.8 M
Sub-Total
$9.45 M
Leasable Space
$2.1 M
Profit Sharing @ 10%
$0.7 M
Sub-Total
$2.87 M
Rental Income
$2.0 M
Sub-Total
$2.0 M
Total
$14.387M
Summary
Value
Cost
$33.037 M
Annual Revenue
$14.387 M
Payback Period
9.5 Years
IRR
36%
Key Assumptions:
1. $10 Ticket Price
2. 70% Utilization of Conference
3. $857 / Sq-ft for restaurant revenue
4. 10% profit sharing
5. 7% of Pittsburgh population
6. 20% of Tourist population
Healthy P&L Statement
Year
Total Revenue
Operating Cost
Operating Income
EBITDA
Depreciation
Amortization
EBIT
Taxes
Net Profit
Cash Reserve
Profit
2014
2015
2016
2017
2018
2019
2020
2021
$15,107,395 $15,862,765 $16,655,903 $17,488,699 $18,363,134 $ 19,281,290
$20,245,355 $21,257,622
$4,532,219
$6,073,606
$4,758,830
$4,996,771
$5,246,610
$5,508,940
$ 5,784,387
$6,377,287
$10,575,177 $11,103,936 $11,659,132
$12,242,089 $12,854,193 $ 13,496,903 $14,171,748
$14,880,336
$10,575,177 $11,103,936 $11,659,132
$12,242,089 $12,854,193 $ 13,496,903 $14,171,748
$14,880,336
$634,511
$666,236
$699,548
$734,525
$771,252
$
$892,820
$4,488,697
$4,488,697
$4,488,697
$4,488,697
$4,488,697
$ 4,488,697 $4,488,697
$6,720,990
$7,281,475
$7,869,983
$8,487,917
$9,136,748
$ 9,818,020 $10,533,356 $11,284,459
$2,016,297
$2,184,442
$2,360,995
$2,546,375
$2,741,024
$ 2,945,406 $3,160,007
$3,385,338
$4,704,693
$5,097,032
$5,508,988
$5,941,542
$6,395,724
$ 6,872,614
$7,373,349
$7,899,121
$940,939
$969,167
$998,242
$1,028,189
$1,059,035
$ 1,090,806 $1,123,530
$1,157,236
$3,763,755
$4,127,866
$4,510,747
$4,913,353
$5,336,689
$ 5,781,808
$6,741,885
809,814 $850,305
$6,249,819
$4,488,697
Potential Sources of Funding
URA – Urban Redevelopment
Authority
Angel Investors and Private
Equity Funds
Funding & Exemptions for Green
Ventures
Guaranteed Contracts
The economic cost structure is not
significantly increased by ‘going green’
Reinvest Savings in Green Energy and Social Projects
Social Benefits Reflective of Local Values
Rebrand
PITTSBURGH
Aid
Pittsburgh
PROMISE
Local
Employment
Use
sustainable
energy
Free green
project
exhibit
Increase
tourism
Support Local
Businesses
Quantifiable Social Benefits
Buying local:
$24M construction
$1M every year local food
Employing Welfare-to-work:
90-100 restaurant
30-40 conference
4.5% job market tourism
In-kind donations
Free tickets to schools
Free exhibition space
for children
for green industry
Engaged and Dedicated Stakeholders
•Owners:
US Steel Tower
Restaurant owner
Vendors
•Regulations: State and
Federal
City ordinances
Regulate
•Project Managers:
Construction
Knowledge
Architects
•Expert/consultant:
Green Building Alliance
City engineers
Dicks Construction
Marketing consult
Resource
Public
Interest
• Workforce:
Welfare to work
agencies
• Raw Material:
local providers
• Funding
• Community
• Environmental
groups
• Hospitality Industry
• Green Industry
Roadmap To Success
Due Diligence
2010
Construction
Finalizing
Concepts
Raw Material
Orders
Capital Building /
Finance
Work
Distribution
Team Formation
(Lawyers)
Implementing
Blueprints
Permits & Control
LEED
Certification
Final Architectural
details / Blueprints
Interiors
2011
Launch
Inspection
Marketing
Unveiling
the Roof
2013
18
2014
Imagine!
Our Neighborhood Revitalized!
Economic
• Less than 10 Years
Payback
Green
• Gold LEED
Certified
Social
• Job Creation &
Rebrands
Pittsburgh
Q&A Session
Team Members
Dawn Holmes – Heinz
Emeka Onwugbenu – Tepper
Ajinkya Ratnaparkhi – Heinz
Pallavi Kumar – Heinz
Meera George Palackan – Heinz
Appendix
Supplementary slide SWOT ANALYSIS
WEAKNESS
Weather at the altitude of 840 feet
Expected high cost of construction
STRENGTHS
360 degree view
Large capacity
Complemetarity
Green elements
SWOT
OPPORTUNITIES
Tourism
Adds to the uniqueness of Pittsburgh
Benefit to State Economy
THREATS
Competition mainly to conference rooms
Social Entrepreneurship
A business model to measure the triple bottom line
Partner
network
Key
activities
Good or
service
Key
resources
Customer
relations Customer or
market
Distribution
channels
Economic Cost structure
Economic Revenue streams
Environmental Cost structure
Environmental Revenue
streams
Social Revenue
Social Cost structure
• Self sufficient from mostly un-related income
• Success measured for each bottom line
Assumptions
Soft Cost is 7% of Construction Cost
Construction Contingency Cost
Pittsburgh Population
Annual Tourist
Ticket Price
Annual Restaurant Revenue / Sq-ft
Utilization of Conference Rooms
Building Maintanance Cost
Cash Reserve Percentage
Tax Rate
15%
20%
23,64,000
39,00,000
$10
$857
70%
30%
20%
30%
Sq-Ft
Restaurant / Bar
Interior SpaceConference Rooms
Sub-Total
Observation Deck
Central Outdoor Space
Exterior Green Space
Wood Deck
Sub-Total
TOTAL
Restaurant / Bar
Interior Space Conference Rooms
Sub-Total
Observation Deck
Central Outdoor Space
Exterior
Wood Deck
Sub-Total
Rate ($/Sq-Ft)
Hard Cost
12,000 $
300 $ 36,00,000
32,000 $
300 $ 96,00,000
44,000
$ 1,32,00,000
20,000 $
300 $ 60,00,000
2,400 $
350 $
8,40,000
4,000 $
350 $ 14,00,000
11,000 $
300 $ 33,00,000
37,400
$ 1,15,40,000
81,400
Soft Cost
$
$
$
$
$
$
$
$
-
$ 2,47,40,000 $
-
12,000
32,000
44,000
20,000
2,400
11,000
33,400
Sub-Total
$ 36,00,000
$ 96,00,000
$ 1,32,00,000
$ 60,00,000
$ 8,40,000
$ 14,00,000
$ 33,00,000
$ 1,15,40,000
$
$
$
$
$
$
$
$
Contingency
-
Total Cost
$
$
$
$
$
$
$
$
36,00,000
96,00,000
1,32,00,000
60,00,000
8,40,000
14,00,000
33,00,000
1,15,40,000
$ 2,47,40,000 $
-
$
2,47,40,000
Total population
Above $50000
Tourists
Population to whom this facility is affordable
Total
Expected
Not expected
23,64,622
37.3
3900000
882004.006
62,64,622
4782004.006
14,82,618
Ticket sale
Total population
42% willing to pay above $10
Poplulation expected
Tourists
expected ticket sale
total ( tourists +total population)
Not expected
23,64,622
993141.24
3900000
4893141.24
6264622
1371480.76