The budget to deliver a new 17,000-capacity arena in the Welsh capital of Cardiff has reportedly risen to £280m (€318m/$342m), with the opening date for the venue also pushed back until 2026.
Cardiff Council’s planning committee approved the project in March 2022. The arena is set to form part of the first phase of a regeneration of the city’s Atlantic Wharf area, with the phase also including a new hotel and associated landscaping.
The consortium behind the arena project includes Robertson Group as developers and Live Nation and Oak View Group as joint operators. The venue is ultimately expected to replace the 7,500-capacity Motorpoint Arena, which is operated by Live Nation.
The original projected cost of the arena was £180m but it has now emerged that this figure will be close to £280m. The original opening date of 2025 has also been delayed until 2026.
WalesOnline reports that the cost increases can be attributed to the increased price of construction materials. The report adds that the council had committed to covering the original cost through the UK government’s Public Works Loan Board scheme before signing a 45-year rental agreement with Live Nation.
Although the council is unable to increase its borrowing through the scheme, Live Nation has reportedly committed to funding the extra costs. Live Nation is looking to cut the costs to around £250m by reducing the size of the arena by 10%, something it hopes can be achievable without having to reduce the capacity.
A financing report that will be considered by the council’s economy and culture scrutiny committee, and has been reported by WalesOnline, states: “Following the pandemic the UK economy has experienced significant volatility with abnormal levels of inflation and significant interest rate rises. Inflationary pressures have pushed the original design of the new indoor arena from the procured figure of £180m to close to £280m.
“The council’s financial envelope established through a public procurement process is capped and therefore Live Nation has had to take responsibility for these price increases. Live Nation remain committed to the project and has secured board level approval to cover the costs. Nonetheless, Live Nation is now working to reduce the level of the increase through a review of the arena design and reconsideration of the infrastructure requirements.”
It is hoped that work on the arena can begin in January 2024 if a final contract is signed with Live Nation, although WalesOnline reports that this could be brought forward if a development funding agreement is signed in July.
Both the arena and the wider masterplan are in line with Cardiff Council’s 2030 climate-neutral aspirations, with energy strategies incorporated into the design and operational elements of the redevelopment set to achieve operational climate-neutral positions by 2030.