Economic Impact !

Quality of Life

Message&from&the&Chair&
Economic&Impact&
Quality&of&Life&
Financial&Statements&
Capital&Improvements&
Leading&the&Way&
Acknowledgments&

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At!Cereal!City!Development!Corporation!!
we!strive!to!attract!a!variety!of!events!which!
!contribute!to!the!communitys!positive!!
economic!impact!and!quality!of!life.!
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!Message!from!the!
!!

!!!!!!!! !

!!CHAIR!!

!
!
Dear!Friends:!
!
The!2014!fiscal!year,!from!July!1,!2013!through!June!30,!2014,!was!an!important!year!of!transition!for!the!
Cereal!City!Development!Corporation!and!Kellogg!Arena.!!The!departure!of!veteran!staff!in!key!leadership!
positions,!a!challenging!economic!environment!and!a!pressing!need!to!address!aging!infrastructure!all!
contributed!to!a!year!of!significant!change.!!By!taking!on!these!challenges!(read!opportunities)!head!on!
we!have!successfully!identified!new!leadership,!added!event!activity!and!raised!the!funds!necessary!to!
complete!needed!renovations!and!repairs.!!!
!
Fiscal!year!2014!resulted!in!a!119%!increase!in!net!income!over!the!
previous!year!and!a!61%!increase!in!net!income!over!an!average!of!
the!three!fiscal!years!prior!to!the!last.!!Building!and!administrative!
expense!declined!by!1%!over!an!average!of!the!previous!four!fiscal!
years.!!After!several!challenging!years,!the!Arena!finished!the!current!
fiscal!year!with!an!increase!in!fund!balance.!!With!momentum!gained!
from!our!2013!The&Case&for&Investment&Report!we!have!successfully!
launched!our!Sustainability!Initiative!which!when!complete,!will!result!
in!approximately!$3.5!million!in!renovations!and!improvements.!!!
!
We!are!particularly!grateful!for!the!support!we!have!received!this!
year!from!the!City!of!Battle!Creek,!the!W.K.!Kellogg!Foundation,!the!
Battle!Creek!Community!Foundation,!the!Calhoun!County!Visitors!
Bureau!and!others!for!our!sustainability!initiative.!!By!investing!in!the!
Arena,!these!organizations!have!demonstrated!a!commitment!to!supporting!the!over!$11.0!million!in!
economic!impact!generated!by!arena!activity!each!year.!!Their!investment!will!also!be!used!to!support!a!
diversified!mix!of!activities!and!events!that!will!position!the!downtown!as!a!unique!quality!of!life!
destination.!
!
There!is!much!to!look!forward!to!in!the!year!ahead.!!We!are!developing!an!enhanced!strategic!approach!
to!programming!designed!to!extend!our!reach!and!increase!event!activity!and!economic!impact.!!!We!are!
looking!to!form!new!partnerships!and!leverage!existing!relationships!to!build!capacity!and!efficiencies.!!
Going!forward!we!are!seeking!to!leverage!recent!investments!into!jobs!and!opportunity!for!local!
residents.!
!
Thank!you!for!your!support!and!we!look!forward!to!seeing!you!at!Kellogg!Arena!in!the!next!year.!
!
Sincerely,!
!
Linda!Freybler,!Chair!
Cereal!City!Development!Corporation!

Cereal&City&Development&Corporation&Annual&Report&2014&
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Economic'
''

'''''''IMPACT'

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Definition'of'economic'impact:'A'macroeconomic'effect'on'commerce,'
employment,'or'incomes'produced'by'a'decision,'event,'or'policy'
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W'

e'believe'the'true'value'of'Kellogg'Arena'to'the'
local'economy'is'best'measured'in'terms'of'
economic'impact.'The'total'economic'impact'of'activity'
at'the'Arena'is'separated'into'three'distinct'parts:'direct,'
indirect,'and'induced.'The'direct'impacts'represent'the'
value'added'to'those'sectors'that'interact'directly'with'
the'visitor.'For'events'at'the'Arena'that'might'include'
local'bars'and'restaurants,'convenience'stores,'retail'
shops'or'any'other'business'benefiting'from'the'
purchases'of'attendees'before,'during'or'after'an'arena'
event.'The'indirect'impact'represents'the'benefit'to'
suppliers'to'those'direct'sectors.'This'would'include,'for'
example,'the'food'vendors'who'supply'concessions'to'
the'Arena'or'the'local'bars'and'restaurants'visited'by'
attendees.'The'induced'impact'adds'the'impact'of'wages'
generated'through'arena'activity'as'it'is'spent'in'the'local'
economy'and'the'tax'revenues'paid'to'local'government'
units.'While'the'impact'of'direct'spending'may'be'more'
obvious,'the'benefits'of'indirect'and'induced'spending'
are'equally'important'as'the'dollars'reGcirculate'through'
the'local'economy.'
During'the'2014'fiscal'year,'Kellogg'Arena'hosted'48'
unique'events'over'81'events'days'with'attendance'of'
77,634.''Roughly'27%'of'those'that'attended'arena'
events'came'from'outside'the'local'market'with'50%'of'
those'staying'an'average'of'2.1'nights.''In'all,'attendance'
at'arena'events'generated'over'$7.5'million'in'direct'
spending,'$1.5'million'in'indirect'spending'and'$2.3'
million'in'induced'spending'for'a'total'economic'impact'
of'over'$11.4'million.'

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The&true&value&of&Kellogg&Arena&to&the&
local&economy&is&best&measured&in&
terms&of&economic&impact.&

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Kellogg'Arena'Box'Office'
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Kellogg'Arena'Economic'Impact'
Fiscal'Year'2014'

Total'attendance'
Region'visitors'
Overnight'stays'
Spending'(day'rate)*'
Spending'(overnight'
rate)*'
'
Total'direct'spending'
Total'indirect'spending'
Total'induced'spending'
'
Total'Economic'Impact'

77,634'
46,450'
21,205'
$41.10'
$181.00'

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$7,577,779'
$1,591,333'
$2,273,334'
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$11,442,446'

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Cereal&City&Development&Corporation&Annual&Report&2014&
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Quality&of&
&&

&&&&&&&&&&&&&&LIFE&

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Definition&of&quality&of&life:&Personal satisfaction (or dissatisfaction) with the cultural or

intellectual conditions under which you live (as distinct from material comfort)"&

O&

pportunities&to&be&inspired,&indulge&in&music,&find&
a&great&bargain,&or&root&on&an&individual&or&team&
all&contribute&to&quality&of&life&in&the&community.&While&
the&Arenas&contributions&to&quality&of&life&cannot&be&
quantified&as&easily&as&economic&impact,&most&citizens&
intuitively&understand&that&the&contribution&is&there.&In&
order&to&enhance&quality&of&life,&CCDC&pursues&a&
diversified&event&mix&that&while&focused&on&maximizing&
economic&benefit&also&provides&variety&with&a&little&bit&of&
something&for&everyone.&&
& Fiscal&year&2014&events&at&Kellogg&Arena&featured&
amateur&sports&such&as&volleyball&and&wrestling&including&
Michigan&High&School&Athletic&Association&State&
Championships&in&both&sports.&&Events&also&included&a&
visit&from&the&Harlem&Globetrotters,&MGM&Motorsports&
Midwest&Indoor&Racing,&roller&derby,&gymnastics,&job&
fairs&and&a&womens&expo,&an&RV&and&boat&show,&
community&garage&sale,&prayer&breakfast,&dance&
competitions,&the&Shrine&Circus,&pool&tournaments&and&
more.&&&The&visitation&resulting&from&these&events&is&
essential&to&establishing&the&downtown&as&a&central&
public&gathering&space&as&envision&in&the&Citys&
downtown&revitalization&initiative.&&The&diversified&
audience&drawn&by&arena&activity&to&the&downtown&is&
also&important&to&sustaining&the&eclectic&mix&of&
restaurants&and&shops&that&make&the&central&business&
district&a&unique&destination.&&By&aiding&in&the&
development&of&downtown,&Kellogg&Arena&supports&one&
of&the&most&visible&and&tangible&measurements&of&quality&
of&life&&a&vibrant,&thriving&city&center.&&

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By&aiding&in&the&development&of&
downtown,&Kellogg&Arena&supports&one&
of&the&most&visible&and&tangible&
measurements&of&quality&of&life&&a&
vibrant,&thriving&city&center.

Alice&in&Chains&&May,&2014&

Showstoppers&dance&competition&<&2014&

Community&Prayer&Breakfast&<&2014&

Cereal&City&Development&Corporation&Annual&Report&2014&
Page&4&of&9&

Statement'of'
FINANCIAL'POSITION'
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Statement'of'financial'position'as'of'June'30,'2014'with'comparative'totals'for'2013'
'

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Year'Ending' Year'Ending'
June'30,'
June'30,'
2014*'
2013**'
''
''
'$406,376'
$10,389'
'$88,933'
$114,432'
'$32,367'
$26,297'
'$24,524'
$20,887'
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'' ''
Assets%
'' Cash'and'cash'equivalents'
'' Accounts'receivable'
'' Inventories'
'' Prepaid'items'
'' ''
''

Total%assets%

'' ''
Liabilities%
'' Accounts'payable'and'accrued'liabilities'
' Payroll'
' Sales'Tax'
' LongSterm'notes'payable'
'' Customer'Deposits'
'' ''
''
Total%liabilities%
'' ''
'' ''
Capital%
'' Retained'Earnings'
'' Fund'Balance'
'' 'Net'Income'
''
Total%Capital%
'''

' Total%liabilities%and%Capital%(fund%balance)%

'$552,200'
''
''

$171,986'
''
''

'$110,597'
$98,249'
$2,273'
$380,000'
'$35,578'
''

$173,518'
$72,698'
$3,441'
$0.00'
$33,108'
'

'$626,696'

$282,765'

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''
'($3,319,639)'
'$3,208,860'
'$36,282'
'($74,497)'
''

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($3,132,882)'
$3,208,860'
($186,757)'
($110,779)'
'

'$552,200'

$171,986'

*Pending'final'audit.'
**See'annual'audit'for'notes'and'additional'information.'

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Cereal&City&Development&Corporation&Annual&Report&2014&
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Statement'of'
'''''''''''ACTIVITIES'
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Statement'of'activities'as'of'June'30,'2014'with'comparative'totals'for'2013'
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Year'Ending'
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June'30,'2014*'
'Kellogg&Arena&Operations&
'
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''
'' Event'Activity'
''
'' '' Event'Revenue'
$518,763''
'' '' Event'Expenses'
($277,110)'
'' ''
Net&Event&Income&
$241,653''
'' '' ''
''
'' Ancillary'Income'
''
'' '' Concessions'Kellogg'Arena'
$78,380''
'' '' Novelty'
$4,120''
'' '' Beverage'
$34,439''
'' ''
Total&Ancillary&Income&
$116,939''
'' '' ''
''
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Total&KA&Operations&Income&
$358,592&&
'' '' ''
''
Contract&Services&
''
'' Contract'Labor'
''
'' '' Revenue'
$728,776''
'' '' Expense'
($710,154)'
'' ''
Net&(Park&Maintenance)&
$18,622''
'' '' ''
''
'' Concessions'(Bailey'Park)'
''
'' '' Revenue'
$92,026''
'' '' Expense'
($62,320)'
'' ''
Net&Concessions&(Bailey&Park)&
$29,706''
'' '' ''
''
'' ''
Total&Contract&Income&
$48,328&&
'' ''
&& ''
Other&Income&
''
'' '' Support'
$300,000''
'' '' Sponsorships'
$21,608''
'' '' Other'
$30,878''
'' ''
Total&Other&Income&
$352,486&&
'' '' ''
''
'' ''
Total&Income&(All)&Operations&
$759,406&&
'' '' ''
''
Indirect&Expense&
''
'' '' Building'Expenses'
$230,357''
'' '' Administrative'Expenses'
$492,766''
'' '' Total&Indirect&Expenses&
$723,123&&
'' '' ''
''
Net&Income&
$36,283&
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*Pending'final'audit.'
**See'annual'audit'for'notes'and'additional'information.'

Year'Ending'
June'30,'2013**'
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''

$592,286''
($430,795)'
$161,491&&

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''
$71,284''
$9,842''
$107,065''
$188,191&&
''
$349,682&&
''
''
''
$799,648''
($744,174)'
$55,474''
''
''
$110,806''
($68,555)'
$42,251&&
''
$97,725&&
''
''
$210,377''
$34,055''
$2,204''
$246,636&&
''
$694,043&&
''
''
$230,847''
$635,700''
$866,547&&
''
($172,504)&

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Cereal&City&Development&Corporation&Annual&Report&2014&
Page&6&of&9&

Capital'
''

'''''''IMPROVEMENTS'

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$3.5'million'in'capital'improvements'initiated'in'2014'will'help'position''
Kellogg'Arena'for'success'in'2015'and'beyond'
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n'2014'the'Cereal'City'Development'Corporation'
aggressively'advanced'its'Kellogg'Arena'
Sustainability'Initiative'by'securing'needed'capital'
improvement'dollars'for'arena'enhancements.''Buoyed'
by'the'2013'The&Case&for&Investment&Report,'CCDC'
secured'$3.0'million'in'bond'funds'from'the'City'of'Battle'
and'an'additional'$380,000'in'philanthropic'support'
from'the'W.K.'Kellogg'Foundation,'the'Battle'Creek'
Community'Foundation'and'the'Calhoun'County'Visitors'
Bureau'for'capital'improvements.''The'Arena'and'its'
various'partners'are'supplementing'the'community'
investment'with'an'additional'$120,000.'
' Thanks'to'this'generous'support'from'the'community'
CCDC'is'in'the'midst'of'several'renovation'and'
improvement'projects'designed'to'maintain'and'enhance'
the'Arenas'economic'contributions'by'positioning'the'
Arena'as'a'venue'of'choice'in'the'region.''Projects'
include'a'total'roof'replacement,'all'new'interior'seating,'
building'envelope'improvements,'water'conservation'
and'energy'efficient'lighting'upgrades,'locker'room'
renovations'and'security'and'technology'enhancements.''
Many'of'the'improvements'are'designed'to'increase'
energy'efficient'and'decrease'energy'use'and'cost.'''
' Improvements'are'expected'to'continue'into'the'2015'
fiscal'year.''When'all'projects'are'completed'roughly'
$3.5'million'will'have'been'spent'to'help'secure'the'
Arenas'economic'future'and'provide'an'invaluable'boost'
to'the'ongoing'efforts'to'transform'the'downtown.''

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...CCDC&is&in&the&midst&of&several&
renovation&and&improvement&projects&
designed&to&maintain&and&enhance&the&
arenas&economic&contributions&by&
positioning&the&arena&as&a&venue&of&
choice&in&the&region.&&

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Seating'replacement''West'Perms,'2014'

Seating'replacement''West'Perms,'2014'

Retractable'bleacher'drive'mechanism'

Cereal&City&Development&Corporation&Annual&Report&2014&
Page&7&of&9&

Leading(the(
((

(((((((((((((((((WAY(

A(dedicated(group(of(professional(stakeholders(in(the(downtown(along(with(an(
experienced(staff(provide(leadership(and(direction(to(the(organization(
(
(

T(

he(Cereal(City(Development(Corporation(is(led(by(a(
dedicated(group(of(professionals(with(a(vested(
interested(in(the(economic(vitality(of(the(downtown(and(
the(community(as(a(whole.(((Representing(a(variety(of(
business,(public(and(philanthropic(interests,(the(CCDC(
board(provides(the(leadership(and(direction(needed(to(
ensure(the(organizations(success.((((

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Staff!

Board!of!Directors!

!
Linda!Freybler((Chair)((President,(Calhoun(County(Visitors(Bureau(
!
Robert!Sharkey((Vice&Chair)((Attorney,(Vandervoort,(Christ(&(
Fisher,(P.C.(
!
Cheryl!Beard((Secretary)((Director(of(Commercial(Development,(
Battle(Creek(Unlimited(
!
Kevin!Smith((Treasurer)((Revenue(Services(Manager,(Battle(Creek(
Parks(and(Recreation(

!
Susan!Buckham!(Director(of(Operations,(Covance,(Inc.!
!
Tony!DeRose!(Retired,(Western(Michigan(University!
!
James!McMahan!(Chief(Information(Officer,(FireKeepers(Casino(
!
Linda!Morrison((Director(of(Finance,(City(of(Battle(Creek(
!
Tim!Surprise((President,(Acadia(Brewing(Company(
!!

(
Contact'information'
Cereal(City(Development(Corporation((
(DBA:(Kellogg(Arena)(
One(McCamly(Square(
Battle(Creek,(MI(49017(
269[963[4800((office)(
269[968[8840((fax)((

(
(

Ted(Dearing(
Lindsay(Lerette(
Ben(Randels(
James(Biggs(
Bob(Bengtsson(
Marilyn(Maurer(
Junelle(Burke(

General(Manager(
(
Sales(and(Marketing(
Manager(
(
Operations(Manager(
(
Food(and(Beverage(
Manager(
(
Director(of(Finance(
(
Payroll(Manager(
(
Administrative(Assistant(
(

Cereal&City&Development&Corporation&Annual&Report&2014&
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Acknowledgements.
..

............WITH.GRATITUDE.....

We.offer.our.sincerest.appreciation.for.those.who.contribute.valuable.financial.
support.throughout.the.year..
.
.

T.

he.Cereal.City.Development.Corporation.would.
like.to.extend.our.deepest.thanks.to.those.
organizations.that.provided.support.during.the.2014.
fiscal.year...In.particular,.we.would.like.to.thank.those.
who.have.chosen.to.invest.in.Kellogg.Arena.through.our.
sustainability.initiative.and.those.sponsors.who.
contribute.valuable.financial.support.....

Investors!

!
City!of!Battle!Creek!
!
W.K.!Kellogg!Foundation!
!
Calhoun!County!Convention!and!
Visitors!Bureau!
!
Battle!Creek!Community!
Foundation!

$3,000,000.

!
!

$350,000.
$30,000.

$10,000.

!
.

Sponsors!

.
Hungry!Howies!
!
Atlas!Sales!
!
Buffalo!Wild!Wings!
!
Battle!Creek!Rental!
!
B.C.!Sound!
!
Pepsi!

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