August 10, 2024, 3:44 p.m. • Last updated: August 10, 2024, 3:44 p.m.
New London – The city hopes to select an operator for its new community and recreation center later this year who will be responsible for overseeing the $40 million facility and making it financially self-sustaining within four years.
A request for proposals published on August 1 is seeking bids to operate the as yet unfinished 5,300-square-meter center on the Fort Trumbull peninsula.
“(Center’s) management will aggressively pursue an entrepreneurial approach to creatively generate revenue to cover operating costs and cross-subsidize the cost of programs and services for low- and moderate-income residents of New London,” the application states. Revenue will come from membership dues, corporate sponsorships, programming and donors.
The city identifies several priorities for the new center, with the needs of New London residents and youth-focused programs at the top of the list. The operator is expected to work with city officials, particularly those in the recreation department, to develop programming, membership and marketing strategies.
The proposal package includes a financial model originally created for a 2023 opening, but the center is now scheduled to welcome guests in July 2025. Despite the later opening date, the basic cost, revenue and membership projections and goals are still broadly accurate, said Felix Reyes, the city’s director of planning and economic development, on Friday.
One model estimates costs for the facility’s first year of operation, including payroll, advertising, materials and utilities, at $1.76 million, and estimates revenue of $1.15 million from admission and membership fees, rental income, vendor grants, sponsors and donations – a loss of $607,000.
By the fourth year, the city expects the center’s operating costs to increase to $1.92 million and revenue to increase to $2.15 million, yielding a profit of $229,000. Reyes said the city’s revenue expectations and contract terms will be negotiated during initial contract negotiations.
Reyes said it would be the job of the operator, who would be appointed as head of a city department, to figure out how to generate enough revenue to cover costs by the center’s fourth year of operation.
“We present them with a model and our goals,” he said. “They don’t have to follow that model exactly, but we want them to hit the sales target line.”
Reaching this break-even point depends in part on steady membership growth.
Models divide visitors into two main categories: those who live within a quarter of an hour’s drive from the center and those who live up to 30 minutes away.
Participants are further divided into “frequent” visitors, who predominantly purchase annual passes, “occasional” visitors, who purchase either monthly or daily passes, and “infrequent” visitors, who almost exclusively purchase daily passes.
The city is expected to welcome 162,000 visitors in its first year, rising to 356,700 by 2028. Reyes said these figures were determined through a market analysis that examined the region’s income, employment and travel data.
The center will feature a two-court gymnasium, a fitness center and an eight-lane swimming pool, as well as office and community spaces.
The tender documents must be submitted by October 11. The decision on the operator is expected to be made by late autumn.
