The Chula Vista Elite Athlete Training Center was struggling financially before the pandemic hit. COVID-19 has forced him to take a hard look at his way of doing business.
Over the past two years, the facility has endured state-mandated closures, lost $5 million in revenue, and could have lost millions more if its largest tenant — the U.S. Olympic and Paralympic Committee — had not agreed to pay a total of $6 million in 2020. and 2021.
But the center is embracing a new business model that the city, owner of the 155-acre campus, and its operator Elite Athlete Services says will ensure a more stable future.
More importantly, they say the changes will make it a world-class training and performance facility, just in time for the 2028 Summer Olympics in Los Angeles.
“With the eyes of the world on LA in 2028, I believe we are uniquely qualified to play the most important role of any training center on Earth,” said Brian Melekian, president of Elite. “And I don’t think that’s hyperbole, because we’re geographically close and we have a facility that nobody else in this world has.”
Located next to the Lower Otay Reservoir east of Chula Vista, the training center offers a wide range of facilities, including seven grass courts, track and rowing complexes, volleyball courts , BMX supercross tracks, a field hockey stadium, weight rooms and a boathouse. There are also 300 beds for athletes, a dining hall, sports therapy services and meeting rooms.
The campus has opened its doors to many American teams, including archery, rugby, football, track and field and Paralympic track and field, as well as teams from other countries such as Canada, the India and Qatar. At the Tokyo Olympics held last year, 93 medals were won by athletes who trained at the Chula Vista campus.
The goal, Elite officials said, is to bring out 100 gold medalists from the facility — 50 from Team USA and another 50 from other countries — at the 2028 Olympics.
“Given that we are 150 miles from the opening ceremony at SoFi Stadium, we believe the demand for training, for residents, for meals at this facility will be such that we are going to be packed and have a tough time to accommodate everyone,” Melekian said.
To prepare for this demand, Elite is looking to renovate some of its dorms, add more beds, more grounds, more dining space, and an indoor event venue. There’s also an idea to create wearable sports performance technology to track athletes’ sleep, training and other logistics. Elite officials estimate they need to raise around $50 million to create the facility they envision.
This is where the new business model comes in.
“We operate as a non-profit organization, but that doesn’t mean we can’t be profitable,” Melekianns said. “What we’re doing now is really trying to treat this like a business.”
Under Melekian’s leadership, Elite seeks to generate revenue from non-sports related sources rather than relying heavily on the Olympic and Paralympic Committee. On-site training has accounted for 95% of the center’s revenue, but by 2022 training is expected to account for 75% as corporate events and sponsorships play a larger role, city officials said.
Elite has hired a Revenue Manager to oversee sales of Trainings, Events, Camps & Clinics, Fantasy Camps and Sponsorships. Some of his new clients include the San Diego Legion, LA Galaxy, USC Rowing and New Mexico United.
One of the most recent and difficult changes involved the contract between the city and the Olympic and Paralympic Committee, which previously owned the campus. Since 2017, when the committee turned the site over to the city, the committee has agreed to minimum annual payments of $3 million to Chula Vista for beds and services for its athletes through 2020.
Just before the pandemic, the committee expressed its desire to end these financial commitments and have its athlete groups each pay Elite directly. In 2020, the committee said it would pay its $3 million for that year and in 2021. In March 2021, the committee returned and said it would end its commitments.
“It was a bit of a blow for us to have them say, ‘We’re going to stop automatic payments because we don’t like this model. It’s hard for us to be in the middle,” said Chula Vista deputy city manager Kelley Bacon. “But it also makes it a bit more difficult for our operator, because they now deal with all the different national sports governing bodies.
In January, the city and committee conceptually agreed to a contract extension through December 2024 with reduced annual commitments of $2.2 million in 2022, $1.75 million in 2023, and $1.5 million. dollars in 2024.
Rick Adams, the committee’s athletic performance chief, said in an emailed statement Thursday that the contract reflects “a more consistent operating model with other third-party-owned training facilities.” Support for the Olympic and Paralympic community at CVEATC remains strong, and we look forward to continuing this partnership on behalf of Team USA as we plan and prepare for Los Angeles 2028.”
Lower engagements won’t necessarily mean lower revenue, Bacon said, due to Elite’s readiness to attract new customers. and non-sporting businesses, as well as renting clinics to the committee, which they previously owned. The agency also welcomes the public to community events and fundraisers such as 5k runs, high school homecomings, and 4th of July fireworks.
Currently, it costs about $8 million a year to run the facility and it has generated about $9 million in revenue. Melekian predicts that strong demand for the center will translate into revenues of up to $15 million per year by 2027.