‘Business case for new arena is not financially convincing’
THE financial viability of a proposed 15,000-capacity arena between Cardiff city centre and Cardiff Bay has been questioned by the capital’s leading conservation group.
Cardiff Civic Society is sceptical about the city council’s claim that the arena would generate £100m for the local economy and bring a million visitors per year into the city, saying there is no explanation as to where the figures come from.
Nerys Lloyd-Pierce, who chairs the civic society, said: “The existing Motorpoint Arena [with a capacity of 7,500 for standing events and 5,000 for fully seated ones] is estimated to generate £29m per annum. Why is the new arena, with a capacity of 15,000, expected to generate nearly four times more income with the same number of events – around 140 per year?
“In an earlier assessment around 2013, the arena, then proposed as a conference centre, was said to have the capacity for holding events, but that this would not be a primary feature, as the city is already well served with venues.
“This raises the question of whether the new arena would take away revenue from established venues such as the Tramshed.”
The arena is being proposed as part of a regeneration of the Atlantic Wharf area of the city.
In a letter to the Welsh Government’s Climate Change Minister, Julie James, Ms Lloyd-Pierce said: “The business case for a new 15,000-capacity indoor arena has not been convincingly proved, and the demand for this has not been demonstrated. Alternatives, such as expanding the capacity of the Motorpoint Arena, have not been given enough consideration.
“It has not been shown that the sizeable subsidy the council will provide to the developers and operators of the arena is the best use of public money and the council’s borrowing covenant, at a time when many city services are stretched. Financial risks cannot be wholly discharged.
“The plans and funding for the arena are both in place but proposals for the wider regeneration [of Atlantic Wharf ] are still aspirational, with no assurances that they will happen. Promises on matters such as access to employment or support for the music strategy must be fulfilled.
“The climate and nature emergencies must be taken seriously. This arena does not compare well with others in its environmental consequences. Carbon emissions from both energy use and construction materials must be reduced. Repurposing should be preferred to demolish-and-rebuild. Every opportunity must be taken to maximise biodiversity gain.”
Russell Goodway, Cardiff council’s cabinet member for investment and development, said: “The regeneration of Atlantic Wharf is essentially about making use of under-developed land dominated by surface car parking. The proposals do not involve sweeping away any historical development or residential areas.
“In fact, not a single home will be displaced by these proposals, even though they cover an area in excess of 40 acres. The council’s drivers for the proposals have been as much about job creation as they are about place making, and promoting/delivering the Cardiff Bay metro.
“The arena development will deliver significant community benefit, including commitments from the developer/operator to employ local people through the construction phase and the long-term operation. The arena team has also committed to paying the Living Wage.
“In terms of economic impact, the new arena is projected to deliver a significant uplift on the current
Motorpoint arena. The last economic impact assessment done on the Motorpoint in 2015 estimated that the venue delivered around £30m of economic value per annum.
“The new arena will be nearly three times the capacity, and will have the potential to attract bigger, headlining acts, attracting more people to come to Cardiff and stay in Cardiff from outside the area.
“The 2015 study on the Motorpoint estimated that on average a local visitor spends around £30 per event, whereas an overnight visitor from outside the area will spend an average of £300 in the local economy.
“In 2015, the Motorpoint attracted around 12.5% in the £300 bracket. The aim of the new arena is to attract significantly more visitors that choose to stay overnight in the city.
“The £100m estimate is based on 140 events per annum attracting around one million customers and is comparable to the impact published by similar-sized arenas in the UK.”