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03/10/2006 - Teen Advisory Board` City of Ea�an Mr. Tom Hedges Pat Geagan 3830 Pilot Knob Road MAYOR Eagan, MN 55122 Peggy Carlson Cyndee Fields Dear Mr. Hedges, Mike Maguire Meg Tilley Thank you for taking the time to listen to our presentation. For almost two years we have COUNCIL MEMBERS been working toward this goal of adding a coffee shop to the Eagan Teen Center and with your help, we can finally make this goal a reality. We are sometimes a loud group of Thomas Hedges individuals whose voices are often silenced or not taken into consideration. We applaud CITY ADMINISTRATOR the City of Eagan for providing us the unique opportunity to represent the voice of our peers before you and the Parks Advisory Commission. We thought that by utilizing a cart it would give both the Oasis and the ECC the most MAINTENANCE FACILITY flexibility and could also be used for special events. Something more permanent would 3501 Coachman Point be even more exciting for us. We understand that fiscally, it may make more sense to Eagan, MN 55122 have the coffee exclusively at the concessions area, however we were delighted to hear 651.675.5300 phone that you support a blended approach where services are available at both locations. 651.675.5360 fax Again, thank you for helping us attain our goal of making the teen center a booming 651.454.8535 TDD place. We look forward to your guidance and direction. www.cityofeagan.com Respectfully, rd �.ir/r'1 Eagan Teen Advisory Board Member THE LONE OAK TREE The symbol of strength and growth in our community. After your departure last week we continued to meet and discuss your feedback. Attached you will find a brief summary of our discussion for your consideration. We respect your suggestions and have divided up some of the tasks in order to work effectively as a group. We want to express our gratitude for your commitment to help MUNICIPAL CENTER make this coffee shop a part of the Oasis and the community center. We are excited 3830 Pilot Knob Road about the possibility of offering these services in the Oasis and Concessions. We truly Eagan, MN 55122-1810 believe that by adding components to the Oasis we are not only achieving our goal to 651.675.5000 phone create our Oasis niche in the teen center market but we are also providing opportunities 651.675.5012 fax for job training, a marketing point for recruiting more patrons, and strengthen the overall 651.454.8535 TDD atmosphere of the room. We will do our part to help assure its success. We thought that by utilizing a cart it would give both the Oasis and the ECC the most MAINTENANCE FACILITY flexibility and could also be used for special events. Something more permanent would 3501 Coachman Point be even more exciting for us. We understand that fiscally, it may make more sense to Eagan, MN 55122 have the coffee exclusively at the concessions area, however we were delighted to hear 651.675.5300 phone that you support a blended approach where services are available at both locations. 651.675.5360 fax Again, thank you for helping us attain our goal of making the teen center a booming 651.454.8535 TDD place. We look forward to your guidance and direction. www.cityofeagan.com Respectfully, rd �.ir/r'1 Eagan Teen Advisory Board Member THE LONE OAK TREE The symbol of strength and growth in our community. It was almost two years ago when the Eagan Teen Advisory Board came before this council to accept an award from the Minnesota Recreation and Parks Association for Volunteer Initiatives in Parks and Recreation. During that time, we shared with you a little bit about who we are as a group, what we do and what our plans are for the future. Our mission and vision remain unchanged-- the Eagan Teen Advisory Board strives to strengthen the community with a teen voice as well as to project a positive image of Eagan teens to the community. Along these guidelines, the board has developed goals to f indraise;.promote safe, social events for teens; and to provide service in the community. When we met with you in April of 2004, we discussed a future plan of adding a coffee and beverage bar within the Oasis teen center in the Eagan Community Center. This is the plan that brings us before you tonight. This idea is progressing, but in order to take the next steps and make it a reality, we are asking for your help. Our goal for the last year and a half has been to add coffee and beverage services in the Oasis at the community center. The services will include coffee, specialty drinks, smoothies, bakery items and snack foods and be coordinated under the current concessions management and Oasis staff. We believe that this would enhance the atmosphere of the Oasis and the services of concessions at the ECC, making it more teen oriented. The Oasis currently attracts younger teens; we feel that the beverage bar services would help bring in older teens as well as keep the kids who already come to the center happy with what it offers. The idea for the addition of a coffee bar stemmed from the model of Eagan High School's MUSE Coffeehousea semi-annual event where bands and musicians play while students enjoy coffee beverages and a mellow atmosphere. As we thought of how we could enhance our own environment at the Oasis, coffee was a natural choice. At the Oasis, we host a bimonthly event known as Bring the Noise where local teen bands or solo musicians can come and play while teen center patrons enjoy the live entertainment and socialize with their peers. We feel that the addition of these services will enhance these and other events and make then even more successful. The coffee bar idea evolved into one where these services could be available to anyone that comes to the Oasis or the community center in general. The National Coffee Association polls only those who are over the age of 18, and so credible statistics regarding an increase in teen coffee consumption are limited, however just going to a coffee venue one can see the evident change in customer demographics. No longer are businesspeople the only ones spending their time and money in coffee shops, teens are as well. There has been a major increase over the past ten years in the number of teens who drink coffee and in the amount of money they spend on it. We felt that if we could get Eagan teens to spend some of their "coffee money" at the Oasis, we could introduce a revenue -generating element that contributes to overhead costs. Teens would be spending their money at the ECC to help support Eagan teen advisory goals, so we feel there would be a greater benefit to the community. One of our main goals as a Teen Advisory Board is to develop programs and services that support and enhance the "Oasis," and the community. Our fundraising efforts have provided us some opportunities to enhance the center since it opened in September, 2003, but we feel that developing concepts that enhance the Oasis and have potential to generate revenue would be worth investing in. It is also a way for us to be involved, give back to the community and express our voice. 2 By all means, the addition of a coffee bar isn't going to generate instant profit. We anticipate that revenue will cover all expenses for general operating materials, within. the first year. We also anticipate that within 3-5 years we will be generating enough revenue to contribute to overhead. As a board, we are asking for your assistance. We would like you to approve the addition and consider investing in the project financially. In our business plan we have outlined three options for you to consider to accomplishing this task. We have also presented options for funding the addition. The options range from $20,000-$40,000. By no means is this an exhaustive list. of potential options, but it is a starting point. As a Board, we feel united in the need for the addition and are presenting a repayment schedule for the initial capital investment from our annual fundraising campaign. If you look at the handout of our proposed budget, on page 4, you will see that in our projected expenses and revenue we estimate a balanced budget after the first year of operation. The budget that we have prepared is for services during the Oasis hours of operation. Additional hours can be added based on -demand and if staffing support can be arranged financially. We intend to continue working at reducing the initial investment by working with potential vendors and the Eagan Foundation. (ie: discounts towards labor and materials) Once the services have been added we feel that the potential consumer base increases significantly due to our location. With specialty coffee services available, it is our hope that teens will account for a large percentage of our consumer base and be the essential users during Oasis hours. After conducting a survey of 415 teens at the Oasis and area high schools we found that 63% are interested in a coffee bar just for teens. 73% would support the addition and 71% would stop for a beverage if the coffee bar opened. Our intention is to continue to increase awareness of the Oasis and the coffee bar enhancement. We met with teen advisory board members from the Hopkins Depot, who provide advisory feedback to the Depot management and assist in marketing. We are using some of what they have done as a model. We have worked with the Eagan High School Business Department Head Paul Kovach to formulate marketing ideas which will be executed by business students. These strategies tie the development of marketing techniques and promotion into business classes at Eagan High School. We feel that when teens are putting their energy into an idea, they will bring in as many people as possible to make sure that they succeed. When teens come together, they can make great things happen, like our Silence the Violence and Chill `n' Grill events. Other promotional tools that we feel would be effective are fliers, community bulletins, public access television and by having Oasis Staff and ETAB members circulate community events to spread the word. Teens are not the only group coming and going in the Eagan Community Center. Currently there are 250.-300 individuals/members that visit the Community center health club each day, and every one of them walks past the Oasis to reach the club. Instead of leaving the gym and stopping by a Caribou or Starbucks, we feel having coffee available within the community center would be much more convenient for them. After surveying 146 of these community center users through voluntary response, we found that 82% of the users drink coffee or tea and that 81 % would stop by the Oasis for a beverage, either before or after their workout. The Community Center is also host to many meeting areas, the blast, gym, and senior center. These areas are frequently used by renters, athletic associations and members of the community. We feel the Oasis coffee bar will provide a wonderful amenity for all of the Community Center users. The Community Center's location is near El one of the largest commercial zones in Eagan, making it convenient for employees at area businesses to utilize the availability of coffee nearby. Lockheed Martin, Unisys, as well as Argosy University with its 1500 faculty/students are within walking distance. ETAB was only permitted into Argosy to do surveys. 55 surveys were collected from the faculty and students there; 71% of the individuals surveyed indicate an interest in a coffee bar at the nearby community center. As we anticipate that during teen center hours, most of our. customers in the Oasis will be teens, the Community Center has wonderful gathering places that other customers would be able to utilize during teen hours in the Oasis to enjoy their treats. Obviously such a project as this is a huge investment. This is why ETAB has researched several implementation options for the coffee bar, depending on the response from you, the Eagan City Council. If you would like to follow in your copy of our business plan, you will find this information on page 7. The first option would be to have a mobile coffee unit which could be used in and outside of the teen center, depending on the time of day. The cost is approximately $20,00.0.for the unit and the necessary equipment. On the other end of the spectrum would be to construct a full-service coffee bar into the Oasis teen center. After extensive research and cost analysis, we have found that the estimated cost for this option is $40,000. As a good middle -ground we also propose an option which combines elements of both. Cabinetry and a mobile cart would be about $30,000. The decision is yours based on how you feel money would be best spent, if you choose to support us in this endeavor. On the same page in your copy of the business plan, you will find four ideas for funding. We are not asking you for these amounts blindly, we have done extensive research in preparation for this project and have already made huge steps toward gathering the background information by working with many people and companies in and around our community. With the help of the Mike Ferber from Fundraising Solutions, we have created formats for our annual fundraising campaign and grants. We've met with Skip Fay and Brent Hagen from Dunn Brothers Coffee and have received invaluable information and help from these industry experts. They have shared coffee store business plans, budget guidelines, answered many questions and have even offered to help us create "Oasis" label coffee to sell as well as training opportunities for staff. Cindy Douthett Nagel with the architects Krech, O'Brien, Mueller and Wass, Inc. has turned our vision into reality by developing a floor plan, and providing us with a bid and list of necessary equipment. After stripping the equipment list to the essentials, we met with Pamela Steinbach a representative from the Minnesota Department of Health; to look over the floor plan and equipment and make sure we were heading in the right direction with code compliance. You have heard our idea and have before you a packet of information that we hope you find helpful. We'd like to take this time to open up for questions. EAGAN TEEN ADVISORY BOARD REVISED 3/10/06 BUSINF,SS PLAN EXPANDING THE OASIS SERVICES TO INCLUDE A COFFEE / BEVERAGE BAR BUSINESS PLAN EXPANDING THE OASIS SERVICES TO INCLUDE A COFFEE / BEVERAGE BAR COMPANY SUMMARY Eagan Teen Advisory Board is a volunteer youth empowerment board working to ensure a teen voice is represented in the community. The board is active in the operations of the teen center, teen program development, surveying their peers and developing services through volunteering to enhance the community. This specific concept is designed to add to the services and atmosphere of the Oasis and the Community Center. CORPORATE OBJECTIVES One-year: 1) Open a coffee / beverage bar in the Oasis, the Eagan Teen Center. Five-year: 1) Realize a revenue source that supports the activities of the teen center, programs and concessions of the community center. The goal is not to recover all of the costs associated with these operations, just help support them. 2) Cover costs of operating the coffee / beverage bar during non -teen center hours. 3) Enhance the atmosphere of the teen center to reflect the interests of the teen population. 4) Enhance the atmosphere and services of the Eagan Community Center. BUSINESS STRUCTURE The Eagan Teen Advisory Board is a volunteer board that provides a voice for teen perspectives. However the daily operations and management of the coffee / beverage bar would fall under the management of the concessions provided by the Eagan Community Center and the Eagan Teen Center Supervisory staff The service would be a branch of concessions service based in the Oasis. The equipment will be available for concessions to utilize during non Oasis hours/events. STORE LOCATION The Oasis teen center located in the Eagan Community Center, 1501 Central Parkway, Eagan Minnesota 55122. W PRODUCTS & SERVICES Private label "ETAB" high-quality coffee and specialty drinks, smoothies, light healthy snacks, cookies, brownies, rice crispie bars, muffins, (coordinated with concessions) live music some evenings and a comfortable environment in which to enjoy them. COMPETITIVE COMPARISON There are. a number of local coffee shops including Caribou Coffee, Starbucks and Dunn Brothers within Eagan service areas. Our location presents some unique characteristics which provide a competitive_ edge and are driven by location, policies and current audience requests. These will be discussed in the Marketing Plan section. BUDGET The proposed budget outlines minimal operations for the coffee/beverage bar and only during Oasis regularly scheduled teen hours. The staff wages will be absorbed by the Oasis staff unless the burden for managing both is not possible to be handled by one person. The budget outlines the wages to provide a realistic picture of costs, however removes them from the totals to show actual revenue over expenses already part of the City budget. The special events outlined in the budget are Oasis special events. In addition to these regularly scheduled events we anticipate relocating the moveable cart to the lobby or other areas of the ECC to accommodate services for other large functions; such as the employment fair, MOMs garage sale, EAA tournaments, etc. The budget is conservative. Daily, there are over 300 patrons visiting the Community Center. The daily attendance in the Oasis is between .5-15 youth. Special events attract anywhere from 45- 450 attendees. ECC member visits range from 250-300 daily. This does not include potential consumers who utilize the blast, oaks, gyms or lone oak room. - These services would be available to add to regular concessions during -non -teen hours/special events and would increase the potential for income. This addition is not included in the attached budget. . All proceeds will be captured under the concessions revenue itemizing under coffee services to efficiently identify actual revenues collected. 3 I Projected Annual Budget C:nf nP/RP\iPranP I Prnnrnm Program: Bar �I Number: I + 3058/6811 REVENUE: Description Price/avg. # daily Days Open Weeks/yr Total $$ Average Daily Coffee/Beverage Sales $2.75 5 6 52 $4,290.00 Average Spec Event Coffee/Beverage Sale $3.75 25 1 24 $2,250.00 Treats only sales $2.05 2 6 52 $1,279.20 Subtotal product sales $7,819.20 Potential Impact in Vending $0.25 25 6 52 $1,950.00 Projected Revenue $9,769.20 EXPENSES Coffee Bar General Oasis Hours Hrs # of Emp. Pay Rate # hours # days # weeks Total M -F 2:30-8:30 1 8.08 6 5 52 $12,605.00 Sat 12:30-6:30 1 8.08 6 1 52 $2,521.00 SubTotal Seasonal Salaries $15,126.00 Special Events teen center staff wages absorb these expenses Varies 1 8.08 5 24 1 $970.00 Total Wages ' • $16,096 (wages currently budgeted in 3058) ($11,555.00) Total Salary not included in Oasis Budget $4,541.00 Estimated Costs of Operation 9 Price/avg. # daily Days Open Weeks/yr Total Cost Beverage Materials (average cost per bev.) $1.04 5 6 52 $1,622.40 (coffee beans, smoothie mixes...) special events ay.sale $1.41 25 1 24 $ 846.00 Paper Products / yr $ 750.00 Treats $.90 2 6 52 $ 561.60 Subtotal Goods Expenses $3,780.00 Total Expenses $8,321.00 Marketing Plan — Initial Customer Base Teens The coffee / beverage bar -is to be located in the Oasis, which is in the Eagan Community Center. The Oasis is the city teen center and home to drop in activities, programs, and special events for -area teens: Currently teens are attracted to the location, primarily for programs and special events from Eagan and surrounding cities, which include; Hastings, St. Paul, Apple Valley, Farmington, Burnsville and such. Over, 5600 teens have visited the Oasis or participated in special events hosted at/by the Oasis since September 2003. ETAB members have surveyed over 300 teens and interviewed participants at .Oasis special events, receiving overwhelming support and enthusiasm from peers for the addition of a coffee bar as an amenity to the Oasis. Attendance at the Oasis has gradually increased since its opening in September of 2003. In 2005 over 2700 teens participated in drop-in, special events or programs based in the Oasis, surpassing the total numbers for the 2004 calendar year. Students search us out, for program development, special events and booking for performances. Store opening is expected to occur mid 2006. MARKETING STRATEGIES PROMOTION The Oasis would offer a unique service in a pleasurable atmosphere that would appeal to anyone. During teen center hours, customers who are not teenagers would be able to take advantage of the services and then enjoy their beverages in the welcoming lobby of the community center complete with comfortable lounging and fireplace. Flyers will be distributed to individuals registered in programs, daily users, fitness member's newsletters, in sports manager's packets and by the community center. In addition, promotional information tables will be set up during key events, tournaments and special events to market the coming opening of the facility. At least four percent of revenues will be devoted to promotional activities. This fund is to be used to further general public recognition, conduct market research, and promote awareness of services and products. In addition, time will be spent on developing community sponsorship, donations, and local marketing activities such as flyer and coupon distribution and local signage. A team of Oasis / ET -AB members will visit area businesses, civic groups, organizations and schools during lunch hour, meetings, or gatherings with an information and sample booth announcing the services and offer coupons for incentives to visit. Public service announcements will be distributed to local paper, TV and radio spots as well as local church newsletters and community brochures, and flyers. Teens will become involved through business classes, school projects and contests in the development of marketing components of the Oasis including the coffee bar. PRICING Prices will be set to be competitive with the average price at area coffee shops. 5 SALES FORECAST The sales forecast is included as part of financial projections that follow. POTENTIAL CUSTOMER BASE The following customers are identified by proximity to the Oasis or as current users of the Community Center facility. Although these customers are not teens they will be welcome customers and will be encouraged to use ECC lobby during Oasis teen hours. College students and faculty Argosy University is located less than a block away from the Community Center and currently has 1500 students and faculty. These students and faculty will not only be a source of customers, but also employees. Students will appreciate the relaxed environment in which to study, plan a school work session or volunteer as a mentor during teen center hours. Surveys were distributed through the front desk to faculty and to students via the student lounge to gauge their interest in our project. The survey results primarily reflect interests of the faculty as students were difficult to gain results from due to the informality of the distribution of the surveys. The surveys were made available for one and a half weeks, after which 55 were completed. Of these 85% were coffee drinkers and 71% would patronize the Oasis coffee bar. Literature drops in mail boxes, coupons and flyers would be distributed to the college to market the services. Communiy center customers — Fitness — the Blast — Banquet Facilities — Gym — Lone Oak The Community Center is a hub of activity. There are natural customers by nature of the activities and services that are offered at the center. This include a full fitness membership, adult and youth sports leagues and tournaments, the indoor playground the Blast, meetings and weddings, and large scale community festivals. All of which are potential customers for our coffee / beverage bar. Currently there are 250-300 individuals/members that visit the community center health club each day. Over the past year there have been 1200 adult league participants, 7,000 blast passes sold to youth with parents free, over 5,000 adult/youth participants in open gym programs, and over 7,000 area youth athletic association participants. A few ETAB members staffed a table near the entry to the Fitness center during winter break. The table remained available for ECC members to complete surveys for one and a half weeks. 146 surveys were completed. 82% of these patrons drink coffee and 81% of them would utilize the coffee bar at the Oasis if they were provided with these services. The addition of these services will be promoted in program newsletter (seniors/teens), flyers, brochures, posters community bulletin boards with opening announcements and coupons to introduce individuals to the new amenities. Residents The community center is located within walking distance of a large neighborhood which includes single family homes, town homes, condominiums and apartment buildings totaling over 1,500 units. Flyers will be distributed to announce the opening of the services. Professionals Local corporate companies boarder the Eagan Community Center / Oasis facility, they include, Lockheed Martin, Northwest, Wells Fargo and Unisys. All of these large companies are within walking distance of the community center / Oasis. The marketing plan will include strategies to promote the services to employees of these local businesses. These strategies may include, establishing a sample booth at their location, car flyers, end of shift distribution of information. They will work with the Business classes at EHS to identify other strategies that may be beneficial to entice new customers. ETAB were unable to survey current employees to gauge their interest due to restrictions on access to these facilities. IMPLEMENTATION OPTIONS The Eagan .Teen Advisory Board recommends Option 1. It is the intention of the board to further research potential costumer base and minimizes the initial investment by starting small. If funds are available for a blended approach Option 2 would be a great start and afford us more flexibility. Option 1: purchase a mobile bar with equipment. Estimated Cost: $21,000 Option 2: Purchase of a mobile bar with equipment and cabinetry on back wall. Estimated Cost: $30,000 Option 3: add the coffee/beverage bar full service into the Oasis. Estimated Cost: $40,000 FUNDING IDEAS Idea 1: Eagan City Invest in the capital, construction and start-up costs. Eagan Teen Advisory Board will re -pay the entire start up investment over time, with yearly contributions, from their annual fundraising campaign. Idea 2: Coordinate a Capital Improvements Campaign along with their annual fundraising campaign to include the coffee / beverage bar and other teen requested items. Idea 3: Allocate the forecasted income from operations towards the capital investment. Idea 4: Incorporate and purchase necessary equipment through ECC Snack Bar operations. Coordinate use of equipment and serving areas during Oasis open time and events to promote use by both teens and ECC users. City Council Recommendation. 7 Capital Investment Option 1 Total Cost Espresso Cart $21,150.00 Cart and start up product included Espresso Cart Shipping Unsure/ CMC espresso will offer a 10% discount on the purchase Delivery Total Cost Option 2 $ 1,600.00 1 $28,883 $890.00 Plumbing / Electrical Estimate Total Cost Option 1 $21,150.00 Capital Investment Option 2 Unit Cost Total Cost CabineLry Labor/Installation $ 5,243.00 $ 890.00 Espresso Cart $21,150.00 Delivery Total Cost Option 2 $ 1,600.00 1 $28,883 Capital Investment Option 3 Unit Cost Cabinetry Front and Back $11,205.00 Labor/ Installation $890.00 Plumbing / Electrical Estimate $10,000.00 Equipment / Start Up Materials: brewers, fqg, signs.... $15,304.00 Delivery $ 1,600.00 Total Cost Option 3 PROFESSIONAL AND ADVISORY SUPPORT The professionals listed below have provided expert advisory support to the teens, and have committed to assisting through implementation. ARCHITECTS Cindy Douthett Nagel, CID Krech, O'Brien, Mueller & Wass, Inc 6115 Cahill Avenue Inver Grove Heights, MN 55076 FUNDRAISING Michael Ferber Fundraising Solutions 725 Granite Drive Eagan, MN 55123-3992 9 DUNN BROTHERS Skip Fay Dunn Bros. Coffee, Franchise Office 111 Third Avenue South, Suite 160 Minneapolis, MN 55401 Brent Hagen Dunn Bros. Coffee Independent Franchise Owner 607 Marquette Avenue, Skyway Minneapolis, MN 55402 APPENDIX A: OASIS/ EAGAN COMMUNITY CENTER LOCATION LOCATION The Oasis is located on Central Parkway just off of and -west of Pilot Knob Road. The map below shows the location and surrounding area. r nity center Central Pkwy Yantee Doodle Rd The map below shows the layout of the development surrounding the Community Center location. Ey 1. T L 3- , iR- MdrunlrY C-.,wm�y rLJ R -41P R- L E�]� rr PD P RD A R-2 —"I L -B 4W NE3 YANKEE b 0 C)jX E PD J M' '7 PD e��PD RD -Research and Development.= LB -Limited Bwswcsz, NS-Neighbvfhamd 6osine:s CSC -Community Shopping Center 7 P -Park R-1 -Residential Single Family = R-1 S -Small Lot Single Family = R -2 -Residential Double = R -3 -Residential Townhouse = PD -Planned Development = R -4 -Residential Multiple 7