Is a cheaper stadium the better option for Christchurch?
This article was originally published in the Press on the 4th of December 2018. Written by Barnaby Bennett and James Dann who were editors of the book Once in a Lifetime: City-building after disaster in Christchurch.
After eight long years, Christchurch has turned its attention to the creation of a suitable facility for sports and events. Momentum is building for the construction of a $480 million dollar covered stadium, a bigger version of Dunedin’s.
A 2017 report (a pre-feasibility study)suggested a covered stadium would cost between $465 and $585 million. The Christchurch City Council has put aside $254 million and the Government has recently announced an additional $220 million of the $300 million ‘Christchurch Regeneration Acceleration Fund’, meaning there is now $474 million to build a covered stadium.
Much of the momentum for this decision comes from a report generated by the Department of Prime Minister and Cabinet (DPMC) under the last government. It has informed the council’s decision to use most of the $300m pledged to Christchurch by the Labour party during last year’s election campaign.
We, as sports-loving authors, argue that this report doesn’t sufficiently justify such a significant project, and a well-designed $350m uncovered stadium is likely to better suit the city’s needs, be less financially risky, and allow new opportunities to be created with the money this would save.
The DPMC report outlines four options. Option 1 is a high-quality uncovered stadium with a roof that would cover 80 per cent of the spectators. Options 2–4 are variations of covered stadia. The report recommends option 3: a covered stadium with a retractable pitch that will cost around $480m, and provide increased capacity for year-round sport and non-sport options. It appears the Government and CCC favour the second option, essentially a bigger version of Dunedin’s stadium.
The core calculus in the funding is that the covered stadium would be more expensive but enable more events to take place, which means they make more money. We think the big sacrifices made in the creation of the temporary stadium in relation to wind, rain, and quality of experience are affecting people’s ability to think about how good high quality uncovered stadiums can be.
Sporting events would create around 20 big occasions with any of the options. The covered stadium options enable many smaller events: music, conferences, other community events. These are forecast to produce small ‘profits’, as opposed to the uncovered option that would generate small ‘losses’. A massive caveat is that when the 25-year life cycle of ALL of the options is considered, (big venues need substantial reviews every 25 years or so), all of them lose about $7–8m a year.
Hence the report favours the bigger spend, arguing it would create more activity, and lose about the same amount of money over the long term. It is worth stressing this again; even with the most optimistic predictions for stadium use in the report, the best-case scenario still forecasts it costing us $7–8m year; on top of the $474m construction cost.
We favour a more financially conservative approach that would mean going with option 1. This would create a world-class uncovered stadium that would be the perfect size and amenity for Christchurch, and would release around $120m for other important regeneration/future projects. We think the uncovered stadium is a better option as we have concerns about three of the assumptions in the report that, if not addressed, could lead to the construction of (another) increasingly problematic white elephant.
Firstly, the assumptions of increased crowds are wildly optimistic. While there would be a demonstrable increase in the first couple of years, after this honeymoon period the trend is most likely to resume — and that trend is down. In Dunedin, after an initial boost due to the new stadium, and the Highlanders winning their first Super Rugby title, crowd numbers have dropped 20 per cent since 2015. The trend is for declining attendances across all the New Zealand franchises. Even with a team that plays attractive rugby and has a loyal and lively fan base, the Highlanders’ audience is shrinking.
Secondly, the report does not identify how much of the activity the stadium might generate is new. This is important, as if, for example, an exhibition that was going to be held at Horncastle Arena is then moved to the stadium, we haven’t generated any new revenue; we’ve merely moved it from one council-operated venue to another. In the hypothetical case of concerts, a big selling point for enclosing the roof, we’d just be moving the economic activity 400km up SH1 from Dunedin. It’s good for the stadium’s bottom line, but not necessarily for the other venues and facilities in Christchurch and the wider region.
Thirdly, the report doesn’t make any measuring of the opportunity cost of the $120m or so that would be released for the city. This is about the cost of the amazing new library. For $120m we could finish the arts precinct; fund the currently non-funded Cathedral Square renewal; upgrade Horncastle Arena into a proper world-class music venue. Or perhaps, a more visionary city could create a $100m climate change fund, and become one of the world’s leading cities in response to the impact of climate change. Perhaps part of this money could be used to secure a second major franchise for the city, a football or league team to make the stadium more financially viable.
There is a compelling case for an uncovered stadium. It would be a less complex build, and finished 18 months earlier. It might cost less, but could still be something we could be proud of as a city. There are plenty of examples of stadia that seat 25,000–30,000 people being built in Australia and Europe at the moment. A good design might leave in the capacity to build a roof in the future, when the city can better afford it, and when we have a better idea about future attendances for live sport.
Good examples include North Queensland Stadium in Townsville, which will seat 25–30,000 people when it opens in 2020 — and is costing around $NZ370m. Or more expensive versions such as Melbourne’s State of the Art AAMI Park, that seats 29,000 and cost $A268m in 2010. Or slightly cheaper options like Orlando City Stadium, which seats 25,000 and will cost $NZ230m.
We find it staggering that, to the best of our knowledge, the Government has not yet worked with the city to better understand what facilities are being planned, and how they can all work together. On the one hand, the council is tasked with building a facility that will accommodate not only sports, but also concerts, conferences, and exhibitions, while on the other hand, the government-led convention centre is still shrouded in secrecy.
We could be committing to one $500m project in direct competition with another $500m project just a few city blocks away. We’re calling on our leaders — both in council and the Beehive — to take a sober look at the numbers in this report, before committing half a billion dollars on a facility with a business model that will cannibalise many other existing amenities in the city.
The stadium is a great opportunity, which also has a great opportunity cost — but ultimately it will be the ratepayers of Christchurch who pay the bill. Luckily there is a good, quick and sound option on the table.
Barnaby Bennett and James Dann are editors of the book Once in a Lifetime: City-building after disaster in Christchurch.
