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Suburban U.S. City (Public Sector)
Recreation/Fitness Center — Development Feasibility Study

Challenge:
Allegro was retained by the Parks and Recreation Department of a surburban municipality to conduct a feasibility study on a new recreation and fitness center. The City’s existing recreation/fitness center was successful, however, the facility was outdated and no longer financially self sufficient. The new center needed to be self-sustaining, with revenues covering both operating expenses and debt service. The facility needed to house a joint wellness program with a local hospital, meeting room space, a banquet hall, and all of the amenities of the existing facility.

Solution:
Allegro conducted a feasibility study and took the following steps to determine the viability of a new recreation and fitness center:

Tested the market demand and potential increase in usage for the new facility by benchmarking comparable municipally owned fitness centers and hospital health center programs and conducting surveys of corporate and individual users;
Identified additional opportunities to increase market share including advantageous membership programs, memorabilia bricks, and school programs; Reviewed the current cash flow model, met with project stakeholders, and assessed site characteristics with respect to the project’s potential impact on financial viability of a new facility;
Tested the assumptions for construction cost estimates and estimated operating expenses; and
Addressed concerns related to the impact on the existing recreation/fitness center while the new facility was under construction, including parking constraints, traffic, access, and visibility.
The information from the study was used to justify the construction of a new recreation and fitness center.