Independent Analysis Exposes Major Flaws in Catalyst Feasibility Studies

A comprehensive review by Newmark Valuation & Advisory has identified serious problems with the feasibility studies used to justify Greeley's proposed Catalyst development. Here's what independent experts found:

Arena Projections Are Overly Optimistic

• H&LA's arena analysis relies heavily on Oak View Group's aggressive projections that don't match actual performance of comparable venues

• CBRE's more conservative study forecasts $2-3 million less in annual operating income than H&LA and OVG

• Based on comparable arenas, experts expect the facility will either:

  • Lose $250,000 to $1.2 million annually, OR

  • Break even to modest surplus of $0-$1.2 million under best-case scenarios

• These figures don't include debt service, capital reserves, or opportunity costs

Maintenance Costs Are Severely Underfunded

• H&LA assumes only 3% of revenue for capital replacement reserves

• CBRE assumes 5% of revenue

• Industry research shows 9% of revenue is actually needed for proper maintenance

• Indoor waterpark resorts have even higher maintenance costs due to harsh operating environments

• Underfunding reserves shifts future costs to taxpayers when systems fail

Debt Service Numbers Don't Add Up

• H&LA's study uses a $665 million development budget

• RBC's actual bond model requires $805 million in bond issuance

• This discrepancy means H&LA significantly understates actual debt payments

• When corrected for actual debt service, the project shows negative cash flow of over $313 million by end of bond term

Economic Impact Claims Are Inflated

• Study presents "gross" economic impact without accounting for:

  • Substitution effect: Spending simply shifted from other local businesses

  • Leakage: Money flowing to I-25 corridor retail in Loveland/Johnstown instead of Greeley

  • Opportunity cost: What else could be done with public funds

• Academic research consistently shows such studies overstate actual benefits

• Greeley lacks destination retail (no Costco, limited major retailers) so visitors will likely shop elsewhere

• Up to 80% of projected retail spending may occur outside Greeley city limits

Project Costs Far Exceed Expected Value

• Studies fail to compare development cost to actual market value the project will create

• This is a critical omission - cost doesn't equal value

• Private investors won't fund projects where cost exceeds value without substantial public subsidy

100% Public Financing Is Unprecedented

• Typical public incentives for similar projects: 10-50% of total cost

• Catalyst proposal: 100% public financing

• No comparable examples exist of municipalities fully financing both arenas AND waterpark resorts without significant private capital

• This level of public assumption of risk is far outside industry norms

What This Means for Greeley Taxpayers

The independent analysis confirms what many residents suspect: the Catalyst project's financial projections are unrealistic and the risks to taxpayers are enormous. When costs exceed value by hundreds of millions of dollars, when operating income can't cover debt service, and when maintenance is underfunded, taxpayers become responsible for covering shortfalls for decades to come.

The Bottom Line: This project doesn't make financial sense. Vote YES on 1A to repeal Ordinance 30 and protect Greeley taxpayers.