DEL MAR — Turning Surfside Race Place into a concert venue would be “highly profitable” for the Del Mar Fairgrounds, where the venue is located, with a return on investment seen in less than five years.
It should hold about 90 concerts year with average ticket prices around $45 and be able to accommodate 1,900 seats.
That is the conclusion of a study conducted by students from California State University San Marcos and presented at the Dec.13 meeting of the 22nd District Agricultural Association, which governs the fairgrounds.
The team analyzed the concert industry, as well as concert venues in the area.
According to their research, a person will drive an average of 43 miles to attend a concert. Households will spend about $3,400 a year on entertainment and approximately $67 for a ticket to attend theaters, operas or concerts.
Looking at the age, education level and income of the 3.7 million people who live within a 45-mile radius of the fairgrounds, the team concluded that “conditions are present to support a local concert venue” of that size.
To determine how much people in the area would pay for a concert ticket, the students researched pricing at four comparable venues — House of Blues, Balboa Theatre, Humphrey’s Concerts by the Bay and The Observatory North Park.
According to their findings they recommended a conservative price of $45 per ticket and roughly two concerts a week. The projections were based on selling an average of 1,425 of the 1,900 tickets per show — or a 75 percent sellout.
The capacity at the four facilities ranges from 1,200 to 1,500, indicating a lack or larger venues in the 1,900-seat range. Additionally, the students said it is “critical” that the facility at the fairgrounds has the ability to convert from standing to seated shows.
It should also include a year-round restaurant.
Based on that information, and including the $11 million renovation cost, the students predicted a return on investment in 4.6 years.
Other recommendations include hosting all-age live music events, seeking advertising sponsorship opportunities and partnering with Belly Up, in nearby Solana Bach, to book talent.
The financial analysis did not include revenue from other events, such as private parties or comedy shows, that could be booked when a concert is not scheduled, or income from a restaurant and planned beer garden and tasting room.
Those ancillary revenue streams will be evaluated in phase two of the study.
The concert venue would complement, rather than compete with, Belly Up, which can hold about 600 patrons and turns away about 50 groups a year because they can’t accommodate them, General Manager Tim Fennell said.
Concerts would not be booked during the San Diego County Fair or KAABOO Del Mar, but a concert venue could provide horseracing fans a place to go after the thoroughbred races.
Surfside Race Place is an approximately 100,000-square-foot satellite wagering facility built in 1991 to accommodate 5,000 people. At one point it attracted about 2,700, but a decrease in offsite betting has resulted in an average daily attendance of about 350.
Satellite wagering would continue as an activity if the concert project moves forward.
Director Shewmaker Stephen Shewmaker, who has been spearheading the effort to repurpose the building since 2013, said would like to be able to authorize staff at the Jan. 2 meeting to seek financing and architectural and engineering drawings.
The study was conducted by students from the in Fully Employed MBA program, as well as a group of undergraduates, under the supervision of business professor Don Sciglimpaglia.