north sydney olympic pool · page 2 north sydney olympic pool – catchment analysis and financial...

Prepared by SGL Consulting Group

www.sglgroup.net

North Sydney Olympic Pool

Catchment Analysis and Financial Modelling

SGL CONSULTING GROUP

SGL also has offices in

• Auckland • Christchurch • Wellington •

North Sydney Olympic Pool – Catchment Analysis and Financial Modelling

1 INTRODUCTION ............................................................................................................................ 1

1.1 Background ........................................................................................................................... 1

1.2 Aim .......................................................................................................................................... 3

1.3 Methodology ......................................................................................................................... 3

1.4 Community Consultation ...................................................................................................... 4

2 CURRENT MARKET ........................................................................................................................ 6

2.1 NSOP Management .............................................................................................................. 6 2.1.1 Staffing ...................................................................................................................................... 6 2.1.2 Contracted Services .............................................................................................................. 6 2.1.3 Financial Performance .......................................................................................................... 7 2.1.4 Attendances` .......................................................................................................................... 7 2.1.5 Pricing ........................................................................................................................................ 8 2.1.6 Car Parking .............................................................................................................................. 8

2.2 Profile of Customers .............................................................................................................. 9 2.2.1 Community Survey.................................................................................................................. 9 2.2.2 User Survey ............................................................................................................................. 10 2.2.3 Summary ................................................................................................................................. 11

2.3 Competitor Analysis ............................................................................................................ 11 2.3.1 North Shore Aquatic Facilities ............................................................................................ 11 2.3.2 South of Harbour Aquatic Facilities ................................................................................... 11 2.3.3 Health and Fitness ................................................................................................................. 12 2.3.4 Car Parking ............................................................................................................................ 17 2.3.5 Summary ................................................................................................................................. 17

2.4 Participation Data ............................................................................................................... 18 2.4.1 Swimming and Diving .......................................................................................................... 18 2.4.2 Health and Fitness ................................................................................................................. 19

2.5 Aquatic Markets .................................................................................................................. 19

2.6 Health And Fitness Market .................................................................................................. 20

2.7 Potential Demand ............................................................................................................... 20

3 IMPACT OF OPTIONS ................................................................................................................. 22

3.1 Summary of Development Options ................................................................................... 22

3.2 Potential Impact on Markets .............................................................................................. 23 3.2.1 Basic Upgrade Scheme ....................................................................................................... 23 3.2.2 Major Upgrade Scheme ...................................................................................................... 24 3.2.3 Generational Upgrade Scheme ........................................................................................ 25 3.2.4 Generational Upgrade Scheme with Diving and Hydrotherapy ................................ 27 3.2.5 Generational Upgrade Scheme with 60m Pool ............................................................. 27 3.2.6 Redevelopment of all elements ........................................................................................ 27

4 FINANCIAL MODEL .................................................................................................................... 31

4.1 Assumptions ......................................................................................................................... 31 4.1.1 Basic Upgrade Scheme ....................................................................................................... 31 4.1.2 Major Upgrade Scheme ...................................................................................................... 31 4.1.3 Generational Upgrade Scheme ........................................................................................ 32

TABLE OF CONTENTS


4.1.4 Generational Upgrade Scheme with Diving and Hydrotherapy ................................ 33 4.1.5 Generational Upgrade Scheme with 60m Pool ............................................................. 33 4.1.6 Redevelopment of all elements ........................................................................................ 33

4.2 Financial Projections ........................................................................................................... 34 4.2.1 Scenario Analysis................................................................................................................... 36

4.3 Whole of Life Costs .............................................................................................................. 36

APPENDIX A: OPTIONS TABLE


This chapter introduces the report by providing background information, the aims and

objectives and the methodology.

1.1 Background

The North Sydney 50m Olympic Pool (NSOP) was constructed in 1935 and since its

construction has undergone numerous minor upgrades and refurbishments. This iconic Pool

complex and its associated facilities is supported by aging infrastructure which is in need of a

significant upgrade to preserve the existing heritage fabric for the long term as well as to

meet modern user requirements.

The North Sydney Olympic Pool was built on the site that had been set aside for workshops

and steel work fabrication for the construction of the Sydney Harbour Bridge. Once the

bridge was completed in 1932, the site was vacated and returned to government ownership.

North Sydney Council acquired the site in 1934-35 and engaged the Architects Rudder and

Grout to undertake the design of the pool. The pool was opened on the 4April 1936 - one

year after the adjoining Luna Park site was opened.

Between 1998 and 2001 refurbishment and upgrading of the pool included:

An indoor 25m recreation pool, change rooms and outdoor area located to the north

of the 50m pool.

Gymnasium and restaurant along the western alignment of the existing enclosure

Main entrance shop, reception, foyer, and cafe along the eastern alignment of the

existing pool enclosure.

Council has engaged Brewster Hjorth Architects to prepare Master Plan options for the

upgrade of North Sydney Olympic Pool and its associated facilities.

The end goal of this project is to provide the people of North Sydney and the general public

with a visionary modern aquatic recreation facility that balances the contemporary needs of

current and future users while exploring all opportunities that the Pool complex‟s unique

harbourside setting has to offer.

To date, five concept options have been prepared by Brewster Hjorth Architects:

Option 1: Basic Upgrade Scheme

New 50m pool

New leisure pool

Upgrade existing change facilities

Part refurbish existing grandstand – current capacity 1700

Indicative Cost Estimate: $16.0 Million

Option 2: Major Upgrade Scheme

New 50m pool

New leisure pool

1 INTRODUCTION


Upgrade existing 25m pool to 8 wide lanes

New splash pad and water play area


New gym in the grandstand above change facilities

Full refurbish existing grandstand and shade structure maintain current capacity 1,700

Indicative Cost Estimate: $28million.

Option 3: Generational Upgrade Scheme

New 50m pool

New external leisure pool + Sunshade

New external waterslide

New external splash pad and water play area

Upgrade existing indoor 25m pool to full 8 wide lanes

New covered entry

New change rooms including family change facilities

New large gym and wellness centre under the 50m pool (1,650m²)

New events space in the grandstand above change facilities (610m²)

New grandstand and shade structure for 800 people

New concourse level Cafe / Kiosk

New “Ripples” Cafe in old gym area under Aqua dining


Option 4: Generational upgrade scheme with diving tower

New 51.5m pool with two booms

New diving tower (Not to international Standard) – No 7.5m or 10m platforms

Reduced external leisure pool + Sunshade

Reduced external waterslide

No new splash pad and water play area

New covered entry

Upgrade existing indoor 25m pool to 8 wide lanes

Hydrotherapy pool


New large gym and wellness centre under the 51.5m pool (1650m²)






Option 5: Generational upgrade scheme with diving and 66m pool

New 66m pool with two booms


No new external leisure pool

No new external waterslide

No new external splash pad and water play area

New covered entry


Hydrotherapy pool


New large gym and wellness centre under the 50m pool (1650m²)







Option 6: Generational upgrade scheme with aquatic facilities redeveloped

New 66m pool with 2 booms

Full international diving facility

New indoor leisure pool

New indoor splash pad and water play area

Reduced new indoor waterslide

New 6 lane indoor 25m pool with LTS platforms

New upper and lower change rooms including family change facilities


New hydrotherapy pool under the 50m pool


New grandstand + shade structure for 750 people

Landscaped roof – New harbour Foreshore Park

Underground parking for 125 cars




1.2 Aim

The aim of the study is to prepare financial models for each of the Master Plan options

currently being prepared for North Sydney Council by Brewster Hjorth Architects. The

financial models are to be supported by an accompanying Catchment and Market Analysis

Report which is to inform each different scenario in the modelling.

The key objective and deliverables is to prepare a well informed Financial Model for each of

the options currently being prepared and modelling the income and expenditure of each

design to assist Council in its decision making process on what option to proceed with.

The financial models are to be supported and informed by a detailed Catchment and

Market Analysis Report on aquatic services and facilities that is based on current market

research, trends, user requirements and possible staging scenarios for the project.

The financial model for each option will forecast the projected operating revenue and

expenditure for a period of 2, 5 and 10, 20 years after opening to assist Council in

determining a payback period if the project is to be funded through commercial borrowings.

1.3 Methodology

The catchment analysis and financial modelling was undertaken in three phases involving

the following tasks:

Phase 1: Project Inception

Project Inception Meeting

Councillor Briefing

Document Review

Phase 2: Data Collection

Operational Audit


Competitor Analysis

Key Stakeholder Interviews

Population Analysis

Participation Analysis

Leisure Facility Trends

Benchmarking

Demand Assessment

Phase 3: Catchment Analysis and Financial Model

Additional Research

Draft Report

Presentation

Final Report

1.4 Community Consultation

To date, a first round of Community Consultation has been undertaken to inform the

preparation of Redevelopment Options for the pool. The consultation was undertaken by

Council‟s Community Engagement Consultants Smart Connections Consultancy from 16

September through to November 30, 2014.

To maximise feedback from users, residents, workers and the broader community, Council

and Smart Connections Consultancy identified a wide range of stakeholders and a variety of

communication channels to encourage feedback. These are outlined in the table below.

Consultation Methodologies

Methodology Description

Council‟s Website Anyone who was interested was able to complete an online survey.

The website provided a focal point for information sharing from

Council to the community.

User Survey All users of the Pool complex were invited to complete a user survey.

This was available in hard copy at the Pool and online at Council‟s

website.

Stakeholder

Meetings

Groups identified as having a high interest in the complex had the

chance to meet Smart Connection Consultancy provide feedback

and also encourage their constituents to complete the

questionnaire.

User Focus Group A selected number of Pool users were invited to join a focus group

facilitated by the consultant.

Letters A letter was sent to all stakeholder groups including past

users/members providing information and directing them to Council‟s

online survey

Community Group

Meetings(including

Precinct

Committees)

Interested Precinct Committees and Community Groups had were

informed and given the opportunity to meet the consultant.

General

Communications

Council used its regular communication channels including posters,

e-newsletters, social media, newspaper advertisement etc. to let the

community know about the survey.

School Survey Specific surveys for schools was put online

A specific survey for schools was put online at

https://www.surveymonkey.com/s/NSOP2014sch and was sent by mail to all private and

public schools in the LGA on 16 September (hard copy with reply paid envelope). On the 17

September 2014, Council also sent via email the school survey to all schools outside the LGA

who used the pool for school carnivals in 2014.

https://www.surveymonkey.com/s/NSOP2014sch


All P&C's (and equivalent) in the LGA were emailed on 17 September 2014 requesting them

to complete the community survey and forward on to others who may be interested in

having a say too.

Summary of the number of survey results is in Table 1.1. The full survey and community

consultation report from Smart Connections is available from Council on request.

Table 1.1: Survey Results 16 September to November 30, 2014.

Survey Group Number of Responses

Community Survey 1,035

School Survey 5

Pool User survey 105

Total 1,145

Council has been briefed on the project on the following dates:

1 Thursday November 13, 2014. Council briefing on the consultation that was currently

underway and the presentation of the project plan, program and three preliminary

options that had been developed to date.

2 Monday December 15, 2014. Council Workshop and update on community consultation

that was completed on November 30 and the presentation of three costed options that

had been prepared and developed from the last Council briefing and also now informed

by the outcomes of the consultation and stakeholder engagement.

3 Monday March 2, 2015. Council briefing on the further development of the options

(Option 5) based on the outcomes of the December 2014 workshop and the draft

financial modelling prepared by SGL consultants on all of the options developed to date.

Note: Council‟s Sport and Recreation Reference Group was also informed on the Community

Engagement Strategy for the North Sydney Olympic Pool Master Plan on September 22, 2014

(Sport and Recreation Reference group Report SR05- 22 September 2014).


This chapter reviews the current market and environment in which the NSOP operates.

2.1 NSOP Management

NSOIP is directly managed by Council, within the Open Space and Environmental Services

Directorate.

2.1.1 Staffing

NSOP Manager reports to the Director and is supported by:

An Assistant Manager

3 x Operations Coordinators

Reception and Aquatic Centre Attendants (permanent and casual)

Lifeguards (permanent and casual)

Health and Fitness Coordinator

Health and Fitness Supervisor

Casual Gym Fitness Instructors

During normal operating hours, the centre is staffed by a coordinator, two lifeguards

supervising the indoor and outdoor pools, a receptionist and a health and fitness instructor.

2.1.2 Contracted Services

Council staff are responsible for supervising general public use of the pools, and the health

and fitness centre. In addition to dry fitness activities, Council staff also offer aqua aerobics

classes.

Two businesses within the NSOP are contracted:

Swimming Coaching

Council has granted a licence to conduct swimming coaching (learn to swim classes) and

tuition (squad classes) at the Pool for 2015 with the option, at Council‟s discretion, for a

further two years.

The license provides use of three lanes of the 50 metre pool and two lanes in the 25 metre

pool. Additional pool space and time can be used on payment of the normal lane hire fees.

Under the terms of the license, Council receives a pool entry fee for each participant in the

swim school.

Restaurant and Café

Council has a contracted management of the restaurant at the western side and the

kiosk/café at the north western corner of the NSOP. These contracts are on a commercial

2 CURRENT MARKET


basis, returning over $500,000 in rent per annum.

2.1.3 Financial Performance

Table 2.1 summarises the financial performance of the NSOP. It does not include

depreciation, nor overhead costs incurred by Council (eg payroll and, management

supervision), and includes the rental from the restaurant and café/kiosk. Key points to note

are that:

Revenue is almost $3m, and whilst declined slightly in 2014, compared with 2013, it was

substantially higher than 2012.

Expenditure has increased from $2.5m to $2.8m over the three financial years.

Operating profit has declined between 2012 and 2014, to $113,619.

Table 2.1: Financial Performance 2012 - 2014

Operating Budget 2012 2013 2014

Income

Swim Entry $1,453,262 $1,592,664 $1,589,350

H&F Income $581,690 $575,316 $597,425

Merchandise $125,711 $144,587 $135,322

Leases $464,203 $526,261 $500,868

Car Parking $140,338 $151,650 $108,379

Total Income $2,765,204 $2,990,478 $2,931,344

Expenditure

Total Staffing Costs $1,431,783 $1,520,744 $1,592,627

Total General Costs $1,094,647 $1,217,445 $1,225,098

Total Expenditure $2,526,430 $2,738,189 $2,817,725

Profit $238,774 $252,289 $113,619

2.1.4 Attendances`

Table 2.2 summarised attendances in 2013/14. Total attendances are 353,535, which includes

196,279 adult swims and 53,748 child swims. The balance of attendances are primarily to the

health and fitness centre and spectators.

Table 2.2: Total Attendances in 2013/14

General Admission

Adults (Park & Swim) 12,011

Adults 68,580

Child 19,415

Benefit 4,084

Pensioner (FOC) 9,539

Senior 3,781

Child D/5 (FOC) 16,548

Spectator 29,468

Student 3,442

Sauna/Spa 7,592

20 Visit (Multi-Passes) 90,684

Membership/Subscriptions 55,888

Aerobics (CAS) 644


General Admission

Aqua (CAS) 7,832

Crèche 867

Sub Total 330,375

EVENTS:

New Year Eve AD 1,135

CH 1,606

Fleet Review AD 653

CH 355

Sub Total 3,749

On Account

Badger Programs (Schools) 9,500

Luna Park (Spin & Swim) 6,324

Vibe Hotel\ Harbour View Hotels 2,370

Miscellaneous 1,217

Sub Total 19,411

TOTAL 353,535

2.1.5 Pricing

Core prices charged by NSOP are:

Swimming Pools

Adult $7.30 Child (5yrs+ or attending primary/secondary school) $3.60 Full-time Tertiary student $6.00 North Sydney Pension card holder Free Senior card holder $6.00 Health Care and Non North Sydney Pension card holder $3.60 Sauna/Spa/Swim $11.70 Spectator/public $2.40 Shower $0.50

Lane 9 Gymnasium

(includes use of pools/spa/sauna)

Single visit $19

Bulk purchase (10 visits) $150.00

Personal training half-hour session $45.00

Aqua Aerobics and Aerobics program/class

(includes use of pools)

Single visit $17.50

Bulk Purchase (10 visit) $139.00

2.1.6 Car Parking

Customers using the NSOP can claim up to two hours free parking. Parking in Alfred St South is

free until 10am. After 10am, customers using the NSOP, including Lane 9 Gymnasium

can claim up to two hours free parking per day. Six Park & Swim meters, covering 62 parking

spaces are located in this area.

Additional car parking is available at the Luna Park car park which has 389 spaces. Entry to


the car park is via Paul Street, just off Alfred St South, Milsons Point. Cost is $7 per hour, with a

reduced rate after 2 hours.

2.2 Profile of Customers

Council has conducted market research into its existing customer base. Two questionnaires

were targeted to North Sydney residents and users of the NSOP. Details of the sampling and

survey methodology are not available (to be included). Key findings from the two surveys are

summarised.

2.2.1 Community Survey

The sample included 1,035 respondents. Key findings relating to demand are:

Figure 2.1 shows the postcode of users of NSOP. It clearly indicates that 78% of users live

within a 6 – 7 km radius of the pool, and 26% live in the immediate area surrounding the

NSOP.

Figure 2.1: Postcode of NSOP Users (Community Survey)

97% of respondents had used/visited the North Sydney Olympic Pool, complex in the

past 12 months

Of the 3% (N= 34) who had not visited in the last 12 months, 79% had used the NSOP. In

other words less than 1% of respondents had never used the NSOP.

The main reason respondents stopped using NSOP was either cost of availability of

parking.

The most commonly used components at NSOP were the 50m pool (73%),


café/restaurant (external) (72%) and 25m pool (66%). 29% and 31% of users of the 50m

pool and gym, respectively used the facilities at least 3 times per week.

The main purpose for using the NSOP was health and fitness (73% of users) with 75%

participating in lap swimming, recreation/leisure (58% of users )with 56% participating in

recreational swimming and sport (39% of users).

Almost half of user visit the NSOP by car (48%), other modes of travel were walking

(13%), bus (13%), train (10%), ferry (6%) and bike (6%).

57% of user were female and 43% males.

2.2.2 User Survey

The sample included 105 respondents. Key findings relating to demand are:

Facilities used and the proportion of users who participate at least 3 times per week

are:

Component Users More than 3x per week

50m pool 84% 67%

25m pool 49% 37%

Kiosk (internal 49% 25%

Gym 46% 52%

Almost half of user visit the NSOP by car (46%), other modes of travel were walking

(31%), bike (12%), bus (6%) and train (4%). No respondent user travelled by ferry.

Figure 2.2 shows the postcode of users of NSOP. It clearly indicates that 78% of users live

within a 6 – 7 km radius of the pool, and 44% live in the immediate area surrounding the

NSOP.

Figure 2.2: Postcode of NSOP Users (Users Survey)


2.2.3 Summary

The two surveys indicate that:

4 The most popular component is the 50m pool.

5 NSOP has a high proportion of users who participate at least three times per week.

6 The primary market is a catchment of within 6km.

7 Availability of car parking close to the pool is important given that almost half of user

visit by car.

2.3 Competitor Analysis

Six aquatic centre are located within the primary catchment area. Three are located on the

north shore and three on the south side of the harbour.

2.3.1 North Shore Aquatic Facilities

Lane Cove Aquatic Centre includes:

Outdoor 50m pool

Indoor 25m pool

Indoor Leisure Pool

Indoor program LTS Pool

Sauna, Steam, Spa

Large Gym

Willoughby Leisure Centre includes:

Indoor 25m pool

Small indoor Leisure Pool

Sauna, Spa

Small Gym

Mosman Swim Centre includes:

Indoor 25m pool

Nearby Gym

2.3.2 South of Harbour Aquatic Facilities

Leichhardt Park Aquatic Centre includes:

Olympic pool

2 children‟s pools

Indoor Program pool

Hydrotherapy Pool

Dive pool

1100m² Health Club

Three group exercise rooms


Cook and Phillip Park Aquatic and Fitness Centre includes:

50m indoor pool

Indoor leisure pool with „beach style‟ entry

Hydrotherapy pool with full ramp access

Full-size gym with separate cardio and weights studios

Spin room and group fitness room

Swim fees are adult: $7, concession: $5.20 and family: $18.50

Ian Thorpe Aquatic Centre

50-metre indoor pool

Indoor leisure pool

Warm water program pool

Fitness centre

Sauna and steam room

Café with indoor and outdoor seating

Swim fees are adult: $7, concession: $5.20 and family: $18.50

2.3.3 Health and Fitness

Table 2.4 summarises significant information regarding health and fitness centres in the

primary catchment area for NSOP. The location of these facilities are shown on Figure 2.3.

Twenty three health and fitness centres have been identified, including eight 24/7 facilities.

Clearly there is strong competition in the North Sydney health and fitness market. Information

on the number of members is not available.

Figure 2.3: Location of Health and Fitness Centres


Table 2.4: Health and Fitness Centres in the NSOP Primary Catchment Area

Name 24/7 Franchise Facilities detail Target market Other details

Fitness First

1 Elizabeth

Plaza

North Sydney

No Y Cardio Theatre

Cycle Studio

Free Weights

Loaded Weights

Group classes and PT

Gym Floor

Pilates

Yoga

Monsoon Shower

Aromatherapy

Relaxation Zone

High income

earners

fitness

conscious

Option of

contract or

prepaid

memberships

Upgrades

planned for to

include new Hot

Yoga Studio

Fitness First

100 Walker St

North Sydney

No Yes Cycle Studio

Free Weights


Gym Floor

Loaded Weights

Freestyle Group

Training

Pilates

Massage

Nutrionist

Yoga

High income

earners/fitnes

s conscious

Fitness First

55 Christie St

St Leonards

No Yes Pool – swim school

and Aqua

Cycle Studio


sessions

Gym Floor

Loaded weights

Pilates

Physio

Massage

Yoga

Playzone

Crèche

High income

earners/fitnes

s conscious

Upgrades

planned for St

Leonards include

sprint track, sled

track for strength

training, Iron

Edge Matrix

Cage,

technology bar

for Members‟

Lounge

Bounce

2/37 Ridge St

North Sydney

No No Two separate rooms

for weights and

cardio

PT

Outdoor bootcamp

and boxing classes in

various locations

around North Sydney,

Waverton, Kirribilli

4 tennis courts - 2

available for

members to use at

North Sydney Boys

High School

Local

professionals

Limited

memberships

Short term

membership

plans

Free tennis court

hire

Iron Grip Gym

1/104 Mount

Street, North

Sydney

No No Classes – Zumba,

Circuit, Boxercise,

Yoga, Pilates, Latin

Dance

Weights – free, plate

N/A „No Frills‟ gym



loaded

Cardio equipment

Strength equipment

Unity Gym

20 Berry St

North Sydney

No No Gym – free weights,

machines and

equipment for

strength and

resistance training

Calisthenics

Indoor boot camp

PT

Busy

Professionals

Limited

memberships for

better service

F45 Training

Lvl 2/129-139

Military Rd

Neutral Bay

No Yes Specialist circuit and

cardio classes

Nutrition

High

income/athle

tes

F45 is a team-

based high

intensity interval

training style.

Fast growing

international

exercise trend

F45 Training

13-19

Willoughby Rd

Crows Nest

No Yes Specialist circuit and

cardio classes

Nutrition

High

income/athle

tes

F45 is a team-

based high

intensity interval

training style.

Fast growing

international

exercise trend

Aspire

Strength and

Conditioning

19 Chuter St

McMahons

Point

North Sydney

No No Small group and

personal training

Training programs for

athletes at all levels

Free weights, racks,

rowers, plyometric

boxes

Cardio equipment

Classes

Open Gym

N/A Emergency

response

personnel,

students and

seniors receive

10% discount on

coaching.

Private Health

Clubs

9-17 Young St

Neutral Bay

No Yes Yoga

Spin

Pump and Circuit

Running, Boxercise,

Power Core and

Zumba Classes

PT

Massage

Creche

Sauna and salt room

Red Light Therapy

Bed

Cybex Training

Equipment

Bootcamp

Pilates

N/A Membership

capped for

better service

EnVie Fitness

Lvl 1, 184-186

Military Rd

Neutral Bay

No Yes Nutrition

Creche

Group and PT

Classes

Women only



Indoor and Outdoor

sessions

Weight machines,

cardio equipment

North’s Fitness

North Sydney

Leagues Club

12 Abbott St

Cammeray

No No PT

Group fitness classes

Rooftop Warrior

Life Fitness training

equipment

Pool – Aqua classes

Cardiac Rehab

Must be a

member of

North Sydney

Leagues Club

Part of group –

Norths Club,

Seagulls Club,

Tweed Heads

Seagulls RLFC; all

clubs have

affiliated

gyms/fitness

centres.

Crossfit Active

Garage 5/94A

Bay Rd

Waverton

No Yes Studio classes

Competitive athlete

development

Olympic weightlifting

Kettlebell training

High level

fitness/athlet

es

Specialised

CrossFit program

CrossFit „Games‟

competition

days held in

various gyms

around Sydney

Ninth Wave

Fitness

349 Pacific

Hwy

North Sydney

No No Group and PT

sessions

Nutrition

Infra Red Sauna

Boxing, Strength and

Conditioning, Cardio

classes

Free weights,

machines, cardio

equipment

MyZone Biometric

fitness tracking and

monitoring

N/A Elite level fitness

professionals

North Sydney

Tennis and

Gym

37 Ridge St

North Sydney

No No On top of Council

car park

Separate weights

and cardio rooms

Outdoor group

training in various

locations around LGA

- Boxing, Boot Camp,

Circuit and

Conditioning, Pilates,

Yoga

Nutrition

PT

Tennis Coaching

Kids after school sport

programs

Locals and

corporates

Boutique training

atmosphere

Short Term gym

memberships

Discounted

tennis court hire

for members

Jetts

Shop 2,

Ground Floor,

76 Berry St

North Sydney

Yes Yes Group and personal

training

Cardio and strength

equipment

Busy people

needing 24

hour access

Access to all

Jetts locations



Jetts

Shop 3, 199

Military Road

Neutral Bay


training

Cardio and strength

equipment

Busy people

needing 24

hour access

Access to all

Jetts locations

Jetts

205 Pacific

Highway

St Leonards


training

Cardio and strength

equipment

Busy people

needing 24

hour access

Access to all

Jetts locations

Anytime

Fitness

182 Blues Point

Road

McMahons

Point

Yes Yes Cardio equipment –

treadmill, elliptical,

exercise cycles, stair,

spin, rowing

Strength equipment –

free, plate loaded

weights, racks, kettle

bells

PT

Physio

Massage

Busy people Access to all

Anytime Fitness

locations

Anytime

Fitness 124

Military Rd

Neutral Bay



exercise cycles, stair,

spin, rowing


free, plate loaded

weights, racks,

circuit/selectorized

Health Plan discounts

Wellness programs

Boot camps

PT


Anytime Fitness

locations

Anytime

Fitness

118 Walker St

(new location)

North Sydney



exercise cycles, stair


free, plate loaded

weights, racks,

circuit/selectorized

Health Plan discounts

Wellness programs

Classes


Anytime Fitness

locations

Plus Fitness

362/364

Military Rd

Cremorne

Yes Yes Classes on Demand

Cross Fit style

functional training

zone

Free weights, cardio

equipment, strength

and resistance

machines

Unknown Opening in

January 2015

Access to all Plus

Fitness facilities

Heart and Soul

Health Club

28 Willoughby

Rd

Crows Nest

Yes Yes Yoga

Pilates

Free weights and

strength equipment

Circuit classes

PT

Yoga


2.3.4 Car Parking

A comparison of car parking at Sydney CDB pools is summarised in Table 2.3. On street car

parking is the norm for CBD aquatic centres. Only Ian Thorpe Aquatic Centre has on-site

parking, which costs $2.50 per hour.

Table 2.3: Car Parking at CBD Aquatic Centres

Pool

Site and Parking details Onsite parking costs

Cook and

Philip

Pool situated in CBD and close to tourist

areas – Hyde Park and St Mary‟s Cathedral

Metered street parking available.

Accessible by public transport

NIL

Boy Charlton Pool situated within a park/not on a main

road; metered parking available on Mrs

Macquarie‟s Road near Botanic

Gardens/National Gallery.

Some parking (free) available in surrounding

areas ie Woolloomooloo within walking

distance.


Council metered

Ian Thorpe Pool situated close to CBD; metered street

parking available

Onsite parking (99 vehicles); entrance via

Pyrmont St.


$2.50 per hour;

increases in 30 min

increments

Payment required

at pool reception.

Cheaper than

street parking

Prince Alfred Pool situated in a park; entrance accessible

by foot from main roads.

Metered parking available within walking

distance on Chalmers Street and local

streets; restricted hours due to busy area


NIL

Victoria Park Pool situated in a park, behind University of

Sydney; entrance accessible by foot from

main roads.

Metered parking available on City Rd and

Parramatta Rd; restricted hours due to busy

area

2 hours free parking available in Broadway

shopping centre (within walking distance)


Limited 2 hour free

parking onsite (20

bays

approximately).

2.3.5 Summary

NSOP has six pools within or close to its primary catchment area. It is likely that substantial

“leakage” of customers from its primary catchment area occurs. In simple terms, NSOP is

subject to intense competition for customers, and therefore must differentiate itself in the

market to attract and retain customers.

NSOP has 23 health and fitness centres located within its primary catchment area, including

eight 24/7 facilities. The range of facilities is substantial, with most fitness markets serviced by

at least one health and fitness centre. As with swimming pools, competition for the health

and fitness customer is intense in this geographic market.


Car parking is obviously a major consideration for all aquatic centres. If customers travel by

car the cost of car parking is an “extra” to the entry fee. A competitive advantage will

accrue to any pool which is able to offer free car parking. This is likely to be a significant

incentive in attracting families and caregivers taking children to swimming lessons.

2.4 Participation Data

The Australian Bureau of Statistics produce two statistical reports relating to participation in

sport. Participation in Sport and Physical Recreation, Australia, 2011-12 addresses

participation at least once in the previous 12 months by people living in NSW, aged over 15

years and Children's Participation in Sport and Leisure Time Activities, 2003 to 2012 addresses

national participation at least once outside of school hours, in the previous 12 months by

people aged 5 to 14 years.

2.4.1 Swimming and Diving

In relation to swimming the reports have found:

Age (Years) 15–17 18–24 25–34 35–44 45–54 55–64 65 + Total

Swimming/Diving 8.6% 5.3% 11.5% 10.8% 8.6% 9.0% 5.6% 8.6%

Annual

Participation

1–12

times

13–26

times

27–52

times

53–104

times

105+

times

Swimming/Diving 15.9% 22.7% 31.4% 14.8% 15.2%

Type of

Participation

Organised

only

Non-organised

only

Both organised and

non-organised

Swimming/Diving 5.7% 90.4% 3.9%

Children’s Participation 2012

5 – 8 Years 24.5%

9 – 11 Year 18.1%

11 – 14 Years 8.0%

This data the popularity of swimming for young children, and for non organised participation.

It is also likely that a high proportion of young children participate in swimming lessons.

Using the swimming participation rates and the age profile of North Sydney, an estimate of

the total number of swims per annum can be made:

Minimum: 212,013

Maximum: 346,067

This estimate includes swimming at all places outside including the home, beaches and all

categories of aquatic facilities (eg indoor and outdoor swimming pools). It is not known what

proportion of swimming is undertaken a venues other than traditional swimming pools.

The 2013 CERM PI Operational Management Benchmarks for Australian Public Sport, Leisure

& Aquatic Centres found that the average number of visits per annum by people living within

a 5km catchment was 5.5. This finding was based on a survey of 90 indoor and outdoor

pools throughout Australia. Based on the population of North Sydney of 62,300, the

projected annual attendance will be approximately 342,650.


2.4.2 Health and Fitness

In relation to swimming the reports have found:

Age (Years) 15–17 18–24 25–34 35–44 45–54 55–64 65 + Total

Fitness/gym 10.4% 27.5% 22.9% 20.6% 16.6% 9.4% 6.1% 16.6%

Annual

Participation

1–12

times

13–26

times

27–52

times

53–104

times

105+

times

Fitness/gym 7.7% 10.9% 18.4% 22.8% 40.2%

Using the fitness/gym participation rates and the age profile of North Sydney, an estimate of

the total number of participants and number of times residents participate in fitness/gym

activities per annum can be made:

Participants: 10,333

Maximum visits: 627,806

Minimum visits: 881,198

This participation does not take account of people who work in North Sydney (or Sydney)

CBD and are members of local clubs. Similarly, no allowance is made for people who live in

North Sydney and use venues outside the municipality.

2.5 Aquatic Markets

The aquatics market comprises at least six distinct segments, each requiring a specific

marketing mix to maximise market share:

1 Lap swimming – tend to swim early in the morning or after work, supplemented by

some who swim during their lunch time. Require lane space (at least 25 metre pool

size), with speed indicators for each lane (ie slow, medium, fast). Tend to swim on a

regular basis, and often more than once per week. Water temperature is preferably

between 260C and 280C. Most lap swimmers prefer to swim year round.

2 Swim coaching/squads – usually children and young people up to about 16 years,

supplemented by adult squads mainly masters swim squads and triathlon swim squads.

Main squad training times are early morning (from 5.30am) and early evening (5.30pm

– 7.30pm). Require reserved lane space, for between three and 10 times per week.

Water temperature is preferably between 260C and 280C. As with lap swimmers,

squads swim year round.

3 Learn to swim lessons (private, group and school) – lessons are offered to all ages, from

“mothers and babies” to adult lessons. Most lessons are conducted after school (4pm

to 6pm) and on Saturday and Sunday mornings. Adult lessons tend to be offered later

in the evening and “mothers and babies” classes are usually on weekday morning

between 9am and noon. Most classes are offered once a week, often for a ten week

term or block. Water temperature is preferably between 290C and 310C. The number

of people in swim lessons declines in winter, although many children participate in

lessons year round.

4 Recreational aquatic play – all humans play and socially interact. In an aquatic

environment, play is often defined by the age of participants (ie pre-schoolers, junior

primary school age, senior primary school age, young teenagers, young people and

adults). Play equipment is larger and more adventurous the older the participant.

Play experiences are enhanced by either moving water (eg water cannons and rapid

rivers) or moving the participant (eg water slides and climbing structures). Most

recreational play is conducted after school/work time (eg weekday evenings and


weekends). It can also involve relaxation (eg sunbathing, and “hanging about”) and

supervising young children. Water temperature is preferably between 280C and 310C.

5 Aquatic fitness programs – in addition to lap swimming, aquatic fitness programs

include aqua aerobics (group exercise to music in water), water walking (using a

floatation vest), and other similar gentle exercise activities. These activities tend to

attract older adults, particularly women. Classes are held at times to suit the

participants (eg older women on weekday mornings). Water temperature is preferably

between 280C and 310C.

6 Therapeutic and rehabilitation programs – tend to be supervised by a physiotherapist.

In some instances an individual will perform prescribed exercises for warm water

exercise without supervision. The main requirement is warm water (approximately

340C) of about 1.5m in depth.

2.6 Health And Fitness Market

The health and fitness market has changed substantially in the last few years. The

introduction of franchised 24/7 venues has resulted in a massive proliferation of centres and

heavy discounting. This puts considerable strain on sales to new members and member

retention. In addition, these gyms are low cost models, with many not offering group fitness

classes, crèche or fitness assessments. The outcome is membership fees for “no frills”

membership are now about the same as 10 years ago.

2.7 Potential Demand

Based on participation rates for swimming in NSW, the total number of swims per annum by

North Sydney residents aged over 15 years is between 212,00 and 346,000. Attendance

statistics for 2013/14 indicate that approximately 196,200 adult swims occurred. In addition,

and based on research data provided by Council:

Approximately 75% of customers are live within 6 – 7 km of the NSOP.

80% of customers visited the pool by car, walking, bike and bus, suggesting they live

locally.

It is not known what proportion of residents use aquatic centres in other municipalities.

However, based on the research it would appear that in the order of 147,000 swim

attendances were by North Sydney residents. Thus it is likely that in the order of at least

65,000 (211,000-147,000), and up to 199,000 (346,000-147,000) swims are undertaken by North

Sydney residents other venues. Consequently, substantial potential exists to increase swim

attendances at NSOP from North Sydney residents. It will depend of the facilities included

and elimination of barriers to participation, such as car parking. This analysis only relates to

residents of North Sydney, it does not include workers and visitors to Sydney and North

Sydney CBD, or residents in the suburbs abutting North Sydney.

Attendance data in 2013/14 indicated that approximately 56,500 visits were for health and

fitness activities (Membership/Subscriptions - 55,888, Aerobics – 644). Given that the

catchment for health and fitness centres is highly localised, that is close to home or work, it

suggests that NSOP is operating in a large market and has a small share of the market.

Potential therefore exists to increase market share, based on high quality management and

god quality facilities, equipment, programs and appropriate pricing.

To estimate the level of saturation in the North Sydney health and fitness market, a series of

assumptions have been used:

Each health and fitness centre has been classified as a full service gyms (N=8 - offers full


range of health and fitness programs and services), specialist gyms (N=11 - targets a

specific market or offers a small range of programs and services) or a 24/7 gyms (N-8 -

open all hours).

The number of members in each category of gym is estimated based on “industry

knowledge”. Full service gyms = 2,000, Specialist gyms = 300, and 24/7 gyms = 1,000. No

formal benchmarks exist for health and fitness membership, although it is known that 2

to 3 members per m2 is a formula used by the full service gyms.

Based on these assumptions, the 23 (excluding NSOP) health and fitness facilities cater for

27,300 members. This is 265% more than the projected number of participants (refer to

section 2.4.2).


This chapter reviews the potential impact of the three original development options, and

additional options prepared based on feedback from Council.

3.1 Summary of Development Options

Six development options have been proposed:

Basic upgrade scheme

New 50m pool

New leisure pool


Part refurbish existing grandstand – current capacity 1,700

Major upgrade scheme

New 50m pool

New leisure pool

Upgrade existing 25m pool to 8 wide lanes

New splash pad and water play area


New gym in the grandstand above change facilities

Full refurbish existing grandstand and shade structure maintain current capacity 1,700

Generational upgrade scheme

New 50m pool

New external leisure pool + Sunshade

New external waterslide

New external splash pad and water play area

Upgrade existing indoor 25m pool to full 8 wide lanes

New covered entry







Generational upgrade scheme with diving

New 51.5m pool with two booms


Reduced external leisure pool + Sunshade

Reduced external waterslide

No new splash pad and water play area

New covered entry


Hydrotherapy pool


New large gym and wellness centre under the 51.5m pool (1650m²)


3 IMPACT OF OPTIONS





Generational upgrade scheme with diving and 66m pool

New 66m pool with two booms


No new external leisure pool

No new external waterslide

No new external splash pad and water play area

New covered entry


Hydrotherapy pool







Generational upgrade scheme with aquatic facilities redeveloped

New 66m pool with 2 booms

Full international diving facility

New indoor leisure pool

New indoor splash pad and water play area

Reduced new indoor waterslide

New 6 lane indoor 25m pool with LTS platforms

New upper and lower change rooms including family change facilities


New hydrotherapy pool under the 50m pool


New grandstand + shade structure for 750 people

Landscaped roof – New harbour Foreshore Park

Underground parking for 125 cars



3.2 Potential Impact on Markets

The potential impact on attendances for the proposed developments are described.

3.2.1 Basic Upgrade Scheme

Basic Upgrade Scheme

Potential Impact

New 50m pool While redevelopment occurs, customers will relocate to

alternative pools. It is likely that attracting existing customers

back to NSOP will occur over a 3 to 6 month period. If a

targeted marketing strategy is adopted it will initially

encourage customers who currently use other pools to try out

the new facilities. The nett effect should be neutral. It will be

heavily dependent upon the re-opening marketing program.

Given the new facility is a replacement of the existing pool, it is

unlikely that a significant increase in attendances will occur. At


Basic Upgrade Scheme

Potential Impact

a minimum an increase of about 5% in adult swimmers may be

expected.

It is expected that the new plant and equipment will be

environmentally sustainable, which could result in utility costs

being reduced by 10% or more or about 5% total utility costs.

New leisure pool This pool is primarily targeted at children and families. As it is

being developed as a replacement pool, and given the

current leisure pool has little use, it is not likely that significant

increase in child attendances will occur. The increase will

potentially be less than 5%.

Upgrade existing change

facilities

Unlikely to have any impact on attendances. This development

will remove a “dissatisfier” rather than add an attraction.

Part refurbish existing

grandstand

Unlikely to have any impact on attendances, as it is not a

revenue generating feature.

3.2.2 Major Upgrade Scheme

Major Upgrade Scheme

Potential Impact











expected.









New splash pad and

water play area

This feature is expected to attract families with young children.

An increase in child attendances of another 5% could be

expected – a total of 10% with the synergetic effect of the new

leisure pool.

Whilst this feature will not require an increase in lifeguard

supervision, it will result in an increase in utility costs.

Upgrade existing 25m pool

to 10 wide lanes

The main impact of this extension is to increase the capacity to

conduct aquatic education classes. NSOP receives pool entry

fees, which should increase by about 10% (ie about 1000

students or 2% increase in child visits). There may be marginal

increases in adult use of the indoor pool.


Major Upgrade Scheme

Potential Impact

The increase in pool size (25%) will result in an increase in utility

costs in the order of 25% or about 15%.

Upgrade existing change

facilities

Unlikely to have any impact on attendances. The improved

change facilities in the development will remove a

substandard “dissatisfier” facility rather than add a large

attractor

New gym in the

grandstand above

change facilities

An increase in membership could be substantial, depending

upon the quality of the redevelopment. The main factors which

influence the increase in attendances will be how existing

competitors react in terms of pricing and market positioning.

The number of members which can be accommodated will

depend upon the floor space. A basic rule of thumb is 2

members per m2. However, the intense competition in the

North Sydney market may impact on membership growth.

An expansion of the health and fitness suite will also result in

increased staffing, such as fitness instructors and group fitness

instructors.

Part refurbish existing

grandstand Full refurbish

existing grandstand and

shade structure


revenue generating feature. The benefits are visitor amenity,

health and wellbeing (Protection from the sun / weather

elements).

3.2.3 Generational Upgrade Scheme

Generational Upgrade

Scheme

Potential Impact











expected.









New splash pad and

water play area

This feature is expected to attract families with young children.

An increase in child attendances of another 5% could be

expected – a total of 10% with the synergetic effect of the new

leisure pool.



Scheme

Potential Impact

Whilst this feature will not require an increase in lifeguard

supervision, it will result in an increase in utility costs.

New waterslide The waterslide has the potential to increase the number of

young people aged 10 – 15 years, depending upon the “thrill”

factor. Additional revenue will be generated if it is an

attraction. Additional supervision costs will be incurred.

Upgrade existing 25m pool

to 10 wide lanes




students or 2% increase in child visits ). There may be marginal



costs in the order of 25%, an overall increase of NSOP utility

costs of 15%.

New change rooms

including family change

facilities

Unlikely to have any impact on attendances. The improved

change facilities in the development will remove a


attractor.

New large gym and

wellness centre under the

50m pool


upon the quality of the redevelopment. The main factors which

influence the increase in attendances will be how existing

competitors react in terms of pricing and market positioning.

The number of members which can be accommodated will

depend upon the floor space. A basic rule of thumb is 2

members per m2. However, the intense competition in the

North Sydney market may impact on membership growth.



instructors. Staff costs expected to increase in line with

membership increase. Doubling staffing costs will result in a 5%

increase in total staffing costs.

The initial plans indicate a health and fitness suite of 1,732m2

excluding amenities, and including 200m2 for a wellness centre.

When the scope and extent of the wellness centre is clarified, a

better appreciation of its revenue potential can be assessed.

New events space in the

grandstand above

change facilities

It is assumed that the event space will be commercially hired to

external groups and potentially catered for by the adjoining

restaurant (Weddings – School Formals and the like. It seats 500

for a banquet style event and 700 standing for a cocktail

event. Initial financial modelling based on comparable large

public venue spaces for hire (Taronga Centre) has allowed for

full commercial hire at $1500 during the day up to 4pm and

$2000 from 4pm onwards. This compares with Taronga Zoo

Venue Hire. The modelling has allowed for 2 days hire a week.

New grandstand and

shade structure




elements).

Carpark Clearly a major revenue generator. It revenue potential will be

determined by its size and location. It is assumed that its

primary market will be the commuter market.


3.2.4 Generational Upgrade Scheme with Diving and Hydrotherapy

To date there has been no specific research undertaken on whether an international diving

tower and deep water will increase attendances from clubs or specific user groups. Further

public consultation and research on this option would need to be undertaken to gain a

better understanding of future demand for this facility. Specific programming and marketing

would also be required for a diving facility to ensure that it is adequately utilised. This

research could be undertaken during the exhibition of Councils preferred scheme and would

be used to inform Council in its decision making for a final scheme.

Given the importance of the lap swimming market to NSOP, there could be a potential

impact on attendances if lap swimming lanes are closed to allow diving or other deep water

activities. The extra volume of water will also increase water sanitation and heating costs.

The actual increase in these costs will be directly proportional to the increase in water

volume.

To date there has been no specific market research undertaken to ascertain demand for a

hydrotherapy pool. It is likely to be used primarily by either physiotherapists treating patients

or individuals who are undertaking rehabilitation exercises. Further market research with local

hospitals such as Royal North Shore, The Mater and local nursing homes would need to be

undertaken to ascertain institutional demand for a Hydrotherapy facility.

Specific programming and marketing would also be required for a Hydrotherapy Pool to

ensure that it is adequately utilised. This research could be undertaken during the exhibition

of Councils preferred scheme and would be used to inform Council in its decision making for

a final scheme.

It is worth noting that under Council‟s current pricing policy North Sydney residents with a

pension card have free entry to the NSOP and its associated facilities. It is likely that a high

percentage of users will be older North Sydney residents, hence additional revenues will be

minimal from a hydrotherapy pool.

The hydrotherapy pool will also increase utility costs, in total the increase potentially in the

order of 5%.

3.2.5 Generational Upgrade Scheme with 60m Pool

This Scheme includes extending the main pool to 66m. To date there has been no market

research or community consultation to ascertain whether the increase in pool size with have

a direct impact on attendances. Further public consultation and research on this option

would need to be undertaken to gain a better understanding of future demand for the

expanded facility. Specific programming and marketing would be required to ensure that an

expanded 66 metre pool and associated facilities is adequately used.

This research could be undertaken during the exhibition of Councils preferred scheme and

would be used to inform Council in its decision making for a final scheme.

The main impact will be on increasing the cost to sanitise and heat the extra water space,

which may be in the order of 5%.

3.2.6 Redevelopment of all elements


Scheme

Potential Impact

New 66.0m pool with 2

booms

While redevelopment occurs, customers will relocate to




Scheme

Potential Impact






To date there has been no market research or community

consultation to ascertain whether the increase in pool size with

have a direct impact on attendances. Further public

consultation and research on this option would need to be

undertaken to gain a better understanding of future demand

for the expanded facility.

However, as it is proposed to be a new pool, an increase of at

least 5% in adult swimmers may be expected.



being reduced by 10% or more or about 5% total utility costs for

a 50m pool. If extended to 66m and deepened for a diving

pool, the cost to sanitise and heat the extra water space, may

be in the order of 15%. The net effect will be an increase of 10%

in utility costs.

Full international diving

facility

To date there has been no specific research undertaken on

whether an international diving tower and deep water will

increase attendances from clubs or specific user groups.

Further public consultation and research on this option would

need to be undertaken to gain a better understanding of

future demand for this facility.

Specific programming and marketing would also be required

for a diving facility to ensure that it is adequately utilised.

An increase in lifeguard costs may occur if the diving tower is

open for general recreational use. If use is restricted to training

and coaching by accredited coaches and divers, additional

supervision may not be required.






If it includes water play equipment, such as a tipping bucket,

jets and sprays an increase in child attendances of another 5%

could be expected – a total of 10% with the synergetic effect

of the new leisure pool.

New waterslide The waterslide has the potential to increase the number of

young people aged 10 – 15 years, depending upon the “thrill”

factor. Additional revenue will be generated if it is an

attraction. Additional supervision costs will be incurred. Until the

“thrill factor” is known it is prudent to assume an increase in

revenues will be offset by increased supervision costs.



Scheme

Potential Impact

New 8 lane 25m pool with

LTS platforms




students or 2% increase in child visits ). There may be marginal



costs in the order of 25%, an overall increase of NSOP utility

costs of 15%.

New upper and lower

change rooms including

family change facilities

Unlikely to have any significant impact on attendances. The

improved change facilities in the development will remove a


attractor.

New large gym and

wellness centre under the

50m pool


upon the quality of the redevelopment and marketing. The

main factors which influence the increase in attendances will

be how existing competitors react in terms of pricing and

market positioning. The number of members which can be

accommodated will depend upon the floor space. A basic

rule of thumb is 2 members per m2. However, the intense

competition in the North Sydney market may impact on

membership growth.



instructors. Staff costs expected to increase in line with

membership increase. Doubling staffing costs will result in a 5%

increase in total staffing costs.

The plans indicate a health and fitness suite of 1,650m2

excluding amenities, and including a wellness centre. When

the scope and extent of the wellness centre is clarified, a better

appreciation of its revenue potential can be assessed.

New hydrotherapy pool To date there has been no specific market research

undertaken to ascertain demand for a hydrotherapy pool. It is

likely to be used primarily by either physiotherapists treating

patients or individuals who are undertaking rehabilitation

exercises. Further market research with local hospitals such as

Royal North Shore, The Mater and local nursing homes would

need to be undertaken to ascertain institutional demand for a

Hydrotherapy facility.

Specific programming and marketing would also be required

for a Hydrotherapy Pool to ensure that it is adequately utilised.

This research could be undertaken during the exhibition of

Councils preferred scheme and would be used to inform

Council in its decision making for a final scheme.

It is worth noting that under Council‟s current pricing policy

North Sydney residents with a pension card have free entry to

the NSOP and its associated facilities. It is likely that a high

percentage of users will be older North Sydney residents, hence

additional revenues will be minimal from a hydrotherapy pool.



Scheme

Potential Impact

New 750m2 events space

in the grandstand above

change facilities

It is assumed that the event space will be commercially hired to

external groups and potentially catered for by the adjoining

restaurant (Weddings – School Formals and the like. It seats 500

for a banquet style event and 700 standing for a cocktail

event. Initial financial modelling based on comparable large

public venue spaces for hire (Taronga Centre) has allowed for

full commercial hire at $1500 during the day up to 4pm and

$2000 from 4pm onwards. This compares with the Taronga

Centre Venue Hire. The modelling has allowed for 2 days hire a

week.

New grandstand and

shade structure




elements).

Underground parking for

125 cars

Clearly a major revenue generator. Its revenue potential will be

determined by its size and location. It is assumed that its

primary market will be the casual parkers and major event

parkers market.

Landscaped urban roof

park

Based on Wendy Whitely Gardens, Council expect it to be

rented for between 1 and 2 times per week for between $1,500

and $4,000 per hour.


4.1 Assumptions

The following financial projections are based on a series of assumptions:

1 The base which has been used is the 2013/2014 actual financial results.

2 The basic assumptions outlined in the previous chapter have been used to increase

income and decrease expenditure based on the three options.

3 The current management strategy will continue in which the NSOP is managed in-

house by Council staff. The food and beverage facilities will continue to be leased to a

commercial operator as will the swim coaching concession. No allowance for an

increase in lease fees has been included in the projections.

4 CPI increase of 3% per annum has been used for income and expenditure for Years 2

to 20,

5 Buildings are depreciated at 2% per annum (ie 50 year life) and plant and equipment

at 6.7% (ie 15 year life).

6 Projected attendances and memberships are achieved in Year 1. No allowance has

been made to build up patronage during the first and second year.

4.1.1 Basic Upgrade Scheme

1 Current patronage levels in the swimming pools will return to 2013/14 levels within 12

months of re-opening

2 Additional marketing costs ($20,000) will be required to advertise re-opening

3 At a minimum an increase of 5% in adult swimmers may be expected.

4 New plant and equipment will be environmentally sustainable, resulting in utility and

pool chemical costs being reduced by 10% or more, or 5% total utility costs.

5 The increase in child attendances will be negligible.

6 Increases in spectators will be directly proportional to the increase in swimming

attendances.

7 Income from street car parking meters are not included in NSOP revenues.

8 Foregone revenue of $350,000 from the Park and Swim scheme is included as an

expense to NSOP.

4.1.2 Major Upgrade Scheme





4 FINANCIAL MODEL



pool chemical costs being reduced by 5%. The new splash pad. water play area and

extended indoor pool will increase utility and pool chemical costs by 15%. The net

increase in utility and pool chemical costs will be 10%.

5 The increase in child attendances will be 10% due to the leisure pool combined with

the splash pad and 2% increase in aquatic education attendances.

6 Health and fitness instructor costs will increase total staffing costs by 10%.

7 Additional health and fitness equipment is purchased at a cost of $500,000.

8 Health and fitness equipment is leased over 60 months, at 6% interest with no residual.

9 In year 6 the equipment has no value and new equipment is leased for $500,000 on the

same lease terms and conditions.


attendances.



expense to NSOP.

4.1.3 Generational Upgrade Scheme






pool chemical costs being reduced by 5%. The new splash pad. water play area and

extended indoor pool will increase utility costs by 15%. The net increase in utility costs

will be 10%.


water slide and splash pad and 2% increase in aquatic education attendances.

6 Health and fitness revenue will increase by 100%.


8 $5 charge to use water slide for adults and children – in addition to pool entry.

9 20% and 5% of child and adult entries respectively will use water slide.

10 Water slide open and supervised by one lifeguard for 3 hours on weekdays and 6 hours

on weekends from 1 October to mid December and from beginning February to end

of March (20 weeks) and 6 hours every day from mid December to end of January (six

weeks).

11 The wellness Centre occupies 200m2.

12 Suites in the Wellness Centre will be permanently rented at a rate of $400/m2 – all

outgoings are the responsibility of the tenant (eg utilities and cleaning).

13 Wellness suites have 100% occupancy

14 The Event Centre occupies 600m2.

15 The Event Centre will be permanently rented at a rate of $400/m2 – all outgoings are

the responsibility of the tenant (eg utilities and cleaning).

16 The Event Centre is fully let from the first day of re-opening of NSOP.




19 In Year 6 the equipment has no market value and new equipment is leased for

$500,000 on the same lease terms and conditions.


attendances.



expense to NSOP.

4.1.4 Generational Upgrade Scheme with Diving and Hydrotherapy

1 All the assumptions in the Generational Upgrade Scheme will apply

2 Hydrotherapy pool will attract 50 additional customers per week over 48 weeks, with

90% being North Sydney pensioners who are not charged entry. The balance will be

older adults paying pensioner entry fees. To significantly increase usage of the

Hydrotherapy pool institutional patronage from local hospitals and marketing would be

required. It is recognised that the commercial value of the Hydrotherapy pool is limited

and that it is more for general community health and wellbeing purposes.

3 Utility and pool chemical costs will increase by 5%.

4.1.5 Generational Upgrade Scheme with 60m Pool

1 All the assumptions in the Generational Upgrade Scheme with diving and

hydrotherapy will apply.

2 Utility and pool chemical costs will increase by 5%.

4.1.6 Redevelopment of all elements






pool chemical costs being reduced by 5%. The new splash pad, water play area and

larger outdoor and indoor pool will increase utility costs by 30%. Hydrotherapy pool

utility and pool chemical costs will increase by 2%. The net increase in utility costs will be

27%.


the water play equipment and 2% increase in aquatic education attendances.

6 Health and fitness revenue will increase by 100%.


8 $3.25 charge to use water slide for adults and children – in addition to pool entry.

9 20% and 5% of child and adult entries respectively will use water slide.

10 Water slide open and supervised by one lifeguard for 3 hours on weekdays and 6 hours

on weekends during school term time and 6 hours every day during school holidays.


11 The wellness Centre occupies 200m2.

12 Suites in the Wellness Centre will be permanently rented at a rate of $400/m2 – all

outgoings are the responsibility of the tenant (eg utilities and cleaning).

13 Wellness suites have 100% occupancy

14 The new Events space is commercially hired out to private functions such as weddings

and school formals at least 2 x a week at $1,500 during the day up to 4pm and $2,000

from 4pm onwards. This compares with Taronga Centre - Venue Hire rates.



17 In Year 6 the equipment has no market value and new equipment is leased for

$500,000 on the same lease terms and conditions.

18 Hydrotherapy pool will attract 50 additional customers per week over 48 weeks, with

90% being North Sydney pensioners who are not charged entry. The balance will be

older adults paying pensioner entry fees.



expense to NSOP.

21 124 car parking spaces will be rented at an average casual income per day per space

monthly rental of $18.58 (ex GST) for 355 days per annum

22 Current restaurant and café leases will be re-negotiated on current financial terms and

conditions. The additional café will be leased at a rate of $1,150/m2.

23 Merchandise sales and cost of goods sold will increase proportionally with increases in

attendances.


attendances.

25 New foreshore park is hired for an average of 3 function every two weeks, over 52

weeks at an average rate of $2,000 + GST.

4.2 Financial Projections

Using the assumptions summarised above financial projections for the impact of upgrading

NSOP in line with Options 1, 2, 3, 4, 5 and 6 have been prepared in Table 4.1. The projections

indicate an operating loss of $290,174 in Option 1 ranging up to a profit of around $300,000

for Options 3, 4 and 5 and $1,176,886 for Option 6.

[Note: Option 1: Basic Upgrade Scheme

Option 2: Major Upgrade Scheme

Option 3: Generational Upgrade Scheme

Option 4: Generational Upgrade Scheme with Diving and Hydrotherapy

Option 5: Generational Upgrade Scheme with 60m Pool

Option 6: Redevelopment of all elements]


Table 4.1: Projected Operating Budget for three Options

Operating Budget

Option 1 Option 2 Option 3 Option 4 Option 5 Option

INCOME

Casual swimmers

Adult $465,587 $465,587 $465,587 $465,587 $465,587 $465,587

Adult concession $495,398 $495,398 $495,398 $507,180 $507,180 $507,180

Child $103,275 $115,668 $125,996 $125,996 $125,996 $115,668

Child concession $31,167 $34,907 $38,024 $38,024 $38,024 $34,907

Spectators $60,056 $61,547 $62,789 $62,789 $62,789 $62,102

Coaching $43,256 $43,256 $43,256 $43,256 $43,256 $43,256

Aquatic Programs $264,293 $264,293 $340,170 $340,170 $340,170 $264,293

Miscellaneous $174,347 $174,347 $174,347 $174,347 $174,347 $330,347

Sub Total $1,637,379 $1,655,003 $1,745,567 $1,757,349 $1,757,349 $1,823,340

Swim School $0 $0 $0 $0 $0 $0

School Swim $0 $0 $0 $0 $0 $0

Total Aquatics

Income $0 $0 $0 $0 $0 $0

H&F income $597,425 $1,194,850 $1,194,850 $1,194,850 $1,194,850 $1,194,850

H&F income $597,425 $1,194,850 $1,194,850 $1,194,850 $1,194,850 $1,194,850

Merchandise $135,322 $135,322 $135,322 $135,322 $135,322 $145,423

COGS $79,636 $79,636 $79,636 $79,636 $79,636 $85,581

Merchandise

gross profit $55,686 $55,686 $55,686 $55,686 $55,686 $59,843

Commercial

Venue Hire $500,868 $500,868 $820,868 $820,868 $820,868 $907,368

Car parking $0 $0 $0 $0 $0 $817,892

TOTAL INCOME $2,791,358 $3,406,407 $3,816,971 $3,828,753 $3,828,753 $4,803,292

EXPENDITURE

Total staffing costs $1,592,627 $1,751,890 $1,801,544 $1,801,544 $1,801,544 $1,801,544

General Expenses $0 $0 $0 $0 $0 $0

Maintenance $322,551 $322,551 $322,551 $322,551 $322,551 $322,551

Pool chemicals $82,858 $95,941 $95,941 $100,738 $105,775 $110,768

Security $0 $0 $0 $0 $0 $0

Utilities $421,709 $488,294 $488,294 $512,709 $538,345 $563,758

Tele

communications $4,687 $4,687 $4,687 $4,687 $4,687 $4,687

Insurance $53,643 $53,643 $53,643 $53,643 $53,643 $53,643

Advertising $20,416 $20,416 $20,416 $20,416 $20,416 $20,416

Legal and

accounting $0 $0 $0 $0 $0 $0

General

administration $15,748 $15,748 $15,748 $15,748 $15,748 $15,748

Bank charges $10,195 $10,195 $10,195 $10,195 $10,195 $10,195

Program Expenses $119,204 $119,204 $119,204 $119,204 $119,204 $119,204

Travel costs $13,478 $13,478 $13,478 $13,478 $13,478 $13,478

Training $0 $0 $0 $0 $0 $0

H & F Lease $0 $115,997 $115,997 $115,997 $115,997 $115,997

Staff Uniforms $6,308 $6,308 $6,308 $6,308 $6,308 $6,308

Miscellaneous $68,109 $68,109 $68,109 $68,109 $68,109 $68,109

Carpark expenses $350,000 $350,000 $350,000 $350,000 $350,000 $400,000

Total general

costs $1,488,906 $1,684,571 $1,684,571 $1,713,783 $1,744,455 $1,824,862


Operating Budget

Option 1 Option 2 Option 3 Option 4 Option 5 Option

TOTAL

EXPENDITURE $3,081,533 $3,436,461 $3,486,115 $3,515,327 $3,545,999 $3,626,406

PROFIT/LOSS -$290,174 -$30,054 $330,856 $313,426 $282,754 $1,1768886

4.2.1 Scenario Analysis

Two scenarios have been prepared based on variations to the assumptions detailed above:

A B

Increase in adult swimmers (main pool) 10.00% 20.00%

Increase in child swimmers (Leisure pool) 10.00% 15.00%

Increase in child swimmers (Splash pad) 10.00% 15.00%

Increase in child swimmers (Coaching) 0.00% 0.00%

Increase in child swimmers (water slide) 10.00% 15.00%

Increase in hydrotherapy customers per week 200 200

Percentage North Sydney pensioners -15.00% -15.00%

Profit/Loss $1,382,746 $1,566,744

Adults attendances 228,121 247,749

Child attendances 76,322 84,384

Total 304,443 332,133

4.3 Whole of Life Costs

Twenty year whole of life costings (Table 4.2) have been prepared for the five options using

the following assumptions:

CPI annual increases: 3.0%

Depreciation pool: 2.0% 50 year life

Depreciation buildings: 2.0% 50 year life

Depreciation P&E: 6.7% 15 year life

Option 1 Option 2 Option 3 Option 4 Option 5 Option 6

Total capital cost $16,000,000 $28,000,000 $49,000,000 $49,000,000 $49,000,000 $72,000,000

Cost of buildings $12,000,000 $22,000,000 $41,000,000 $41,000,000 $41,000,000 $66,000,000

Cost of P&E $4,000,000 $6,000,000 $8,000,000 $8,000,000 $8,000,000 $6,000,000

[Note: Detailed capital development costs have not been provided. The costs above are

based on the initial cost estimate provided by the architectural team. A breakdown of pool,

building and plant and equipment has been done on a simplistic basis and must be refined

by the quantity surveying team.]


Table 4.2: Whole of Life Cost

Option 1

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Income $2,791,358 $2,875,099 $2,961,352 $3,050,193 $3,141,699 $3,235,950 $3,333,028 $3,433,019 $3,536,009 $3,642,090

Expenditure $3,081,533 $3,173,979 $3,269,198 $3,367,274 $3,468,292 $3,572,341 $3,679,511 $3,789,897 $3,903,594 $4,020,701

Operating Profit/Loss -$290,174 -$298,880 -$307,846 -$317,081 -$326,594 -$336,392 -$346,483 -$356,878 -$367,584 -$378,612

Depreciation buildings $240,000 $240,000 $240,000 $240,000 $240,000 $240,000 $240,000 $240,000 $240,000 $240,000

Depreciation P&E $266,667 $266,667 $266,667 $266,667 $266,667 $266,667 $266,667 $266,667 $266,667 $266,667

Total depreciation $506,667 $506,667 $506,667 $506,667 $506,667 $506,667 $506,667 $506,667 $506,667 $506,667

Gross Profit/Loss -$796,841 -$805,546 -$814,513 -$823,748 -$833,260 -$843,058 -$853,150 -$863,545 -$874,251 -$885,278


Income $3,751,352 $3,863,893 $3,979,810 $4,099,204 $4,222,180 $4,348,846 $4,479,311 $4,613,690 $4,752,101 $4,894,664

Expenditure $4,141,322 $4,265,562 $4,393,529 $4,525,335 $4,661,095 $4,800,928 $4,944,956 $5,093,304 $5,246,103 $5,403,487



Depreciation P&E $266,667 $266,667 $266,667 $266,667 $266,667 $266,667 $266,667 $266,667 $266,667 $266,667


Gross Profit/Loss -$896,637 -$908,336 -$920,386 -$932,798 -$945,581 -$958,749 -$972,311 -$986,281 -$1,000,669 -$1,015,489

Option 2


Income $3,406,407 $3,508,599 $3,613,857 $3,722,273 $3,833,941 $3,948,960 $4,067,428 $4,189,451 $4,315,135 $4,444,589

Expenditure $3,436,461 $3,539,555 $3,645,741 $3,755,114 $3,867,767 $3,983,800 $4,103,314 $4,226,413 $4,353,206 $4,483,802



Depreciation P&E $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000





Income $4,577,926 $4,715,264 $4,856,722 $5,002,424 $5,152,497 $5,307,071 $5,466,284 $5,630,272 $5,799,180 $5,973,156

Expenditure $4,618,316 $4,756,865 $4,899,571 $5,046,559 $5,197,955 $5,353,894 $5,514,511 $5,679,946 $5,850,344 $6,025,855



Depreciation P&E $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000



Option 3


Income $3,816,971 $3,931,480 $4,049,424 $4,170,907 $4,296,034 $4,424,915 $4,557,663 $4,694,393 $4,835,225 $4,980,281

Expenditure $3,486,115 $3,590,698 $3,698,419 $3,809,372 $3,923,653 $4,041,363 $4,162,604 $4,287,482 $4,416,106 $4,548,589

Operating Profit/Loss $330,856 $340,782 $351,005 $361,535 $372,381 $383,553 $395,059 $406,911 $419,118 $431,692


Depreciation P&E $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333

Total depreciation $1,353,333 $1,353,333 $1,353,333 $1,353,333 $1,353,333 $1,353,333 $1,353,333 $1,353,333 $1,353,333 $1,353,333

Gross Profit/Loss -$1,022,477 -$1,012,552 -$1,002,328 -$991,798 -$980,952 -$969,781 -$958,274 -$946,422 -$934,215 -$921,641


Income $5,129,690 $5,283,580 $5,442,088 $5,605,350 $5,773,511 $5,946,716 $6,125,118 $6,308,871 $6,498,137 $6,693,082

Expenditure $4,685,047 $4,825,598 $4,970,366 $5,119,477 $5,273,062 $5,431,253 $5,594,191 $5,762,017 $5,934,877 $6,112,924



Depreciation P&E $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333




Option 4


Income $3,828,753 $3,943,615 $4,061,924 $4,183,781 $4,309,295 $4,438,574 $4,571,731 $4,708,883 $4,850,149 $4,995,654

Expenditure $3,515,327 $3,620,787 $3,729,410 $3,841,292 $3,956,531 $4,075,227 $4,197,484 $4,323,408 $4,453,111 $4,586,704



Depreciation P&E $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333


Gross Profit/Loss -$1,039,907 -$1,030,505 -$1,020,820 -$1,010,844 -$1,000,570 -$989,987 -$979,086 -$967,859 -$956,295 -$944,383


Income $5,145,523 $5,299,889 $5,458,886 $5,622,652 $5,791,332 $5,965,072 $6,144,024 $6,328,345 $6,518,195 $6,713,741

Expenditure $4,724,305 $4,866,034 $5,012,015 $5,162,376 $5,317,247 $5,476,764 $5,641,067 $5,810,299 $5,984,608 $6,164,147



Depreciation P&E $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333



Option 5


Income $3,828,753 $3,943,615 $4,061,924 $4,183,781 $4,309,295 $4,438,574 $4,571,731 $4,708,883 $4,850,149 $4,995,654

Expenditure $3,545,999 $3,652,379 $3,761,950 $3,874,809 $3,991,053 $4,110,785 $4,234,108 $4,361,132 $4,491,966 $4,626,724



Depreciation P&E $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333


Gross Profit/Loss -$1,070,580 -$1,062,097 -$1,053,360 -$1,044,361 -$1,035,092 -$1,025,544 -$1,015,711 -$1,005,582 -$995,149 -$984,404



Income $5,145,523 $5,299,889 $5,458,886 $5,622,652 $5,791,332 $5,965,072 $6,144,024 $6,328,345 $6,518,195 $6,713,741

Expenditure $4,765,526 $4,908,492 $5,055,747 $5,207,419 $5,363,642 $5,524,551 $5,690,288 $5,860,996 $6,036,826 $6,217,931



Depreciation P&E $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333 $533,333



Option 6


Income $4,803,292 $4,947,391 $5,095,813 $5,248,687 $5,406,148 $5,568,332 $5,735,382 $5,907,443 $6,084,667 $6,267,207

Expenditure $3,626,406 $3,735,198 $3,847,254 $3,962,672 $4,081,552 $4,203,998 $4,330,118 $4,460,022 $4,593,822 $4,731,637

Operating Profit/Loss $1,176,886 $1,212,193 $1,248,559 $1,286,015 $1,324,596 $1,364,334 $1,405,264 $1,447,422 $1,490,844 $1,535,570

Depreciation buildings $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000

Depreciation P&E $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000




Income $6,455,223 $6,648,880 $6,848,346 $7,053,796 $7,265,410 $7,483,373 $7,707,874 $7,939,110 $8,177,283 $8,422,602

Expenditure $4,873,586 $5,019,794 $5,170,388 $5,325,499 $5,485,264 $5,649,822 $5,819,317 $5,993,896 $6,173,713 $6,358,925

Operating Profit/Loss $1,581,637 $1,629,086 $1,677,958 $1,728,297 $1,780,146 $1,833,550 $1,888,557 $1,945,214 $2,003,570 $2,063,677

Depreciation buildings $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000 $1,320,000

Depreciation P&E $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000


Gross Profit/Loss -$138,363 -$90,914 -$42,042 $8,297 $60,146 $113,550 $168,557 $225,214 $283,570 $343,677


Option 3 3A 4 5

AQUATICS

New 50m Pool

66m

66m

New Leisure Pool

8 lane 25m Pool

new

New Splash Pad and Water Play Area

New Waterslide

International Standard Diving Facility

CHANGE ROOMS


New Change rooms including Family Change facilities

GYM / WELLNESS CENTRE

New large Gym and Wellness Centre under 50m Pool

New Hydrotherapy Pool

EVENTS SPACE

New 610m² Event Space

750

GRANDSTAND

Part refurbished existing Grandstand

Full refurbished existing Grandstand & Shade Structure

New 800 seat Grandstand & Shade Structure

750

New underground parking for 125 cars

Note: The above table excludes Option 1 - Basic Upgrade and Option 2 – Major Upgrade

Note: The hollow dots in the table above indicate the following:

1 The 25metre pool in Options 3, 4 and 5 is an extension to the existing indoor 25metre pool

– in option 5 it is a completely new 25metre indoor pool.

2 The international Diving Facility in Options 4 and 5 does meet international diving

standards as it does not have a 7.5m and 10m diving platform.

APPENDIX A: OPTIONS TABLE

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