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Thursday 29 July 2021: Q&As around the new CMUA design

The Council’s decision to change the design direction for the Canterbury Multi-Use Arena has sparked significant public debate. Here we answer some of people’s questions about that decision.

When did the Council become aware the $473 million budget for the arena would be insufficient for a 30,000 seat arena?

This only became clear in late June 2021 when the consortium appointed to design and construct the multi-use arena, BESIX Watpac NZ Ltd (Kōtui), were validating the projected costs to ensure the project could be delivered within budget.

What did they find?

Their estimates, based on current construction costs, put the cost of building a 30,000 seat covered arena at $604.4 million. That figure was brought down to $561 million by reducing the specifications of some non-fundamental aspects of the arena. However, that is still $88 million over budget.

Why have the costs increased so much?

The scope changes from the initial Investment Case and the rapidly escalating price of steel and shipping costs worldwide since the outbreak of the COVID-19 pandemic are the main factors in the cost increase.

What did the Council do when it found out about the escalating costs?

It set up a team of Council staff and Venues Ōtautahi staff to identify options for keeping the project on budget. That team worked with BESIX Watpac NZ Ltd (Kōtui) and project consultants. It also took advice from sporting bodies, promoters, ChristchurchNZ, and Treasury officials.

What was the outcome of that work?

The team recommended the Council reduce the footprint of the arena by reverting back to a seating capacity of 25,000. They also recommended building the covered arena with a U-shaped concourse with a stage at the northern end rather than a full level 1 concourse. This recommendation was accepted by the Council on Thursday 22 July.

What did the CMUA Delivery Board recommend to bring the project back in budget?

It recommended the Council proceed with designing a 25,000 seat arena, in line with the Investment Case.

Why can’t the Council simply increase the budget for the arena?

The Council has already approved its 2021-31 Long Term Plan. If the Council wanted to increase the budget for the arena by $88 million, it would need to go through a special consultative procedure to amend the Long Term Plan.

This would take at least four months, delaying the design and construction of the arena.

The Council would need to borrow to raise the extra capital for the arena. If it borrowed $88 million, it would add 0.75 per cent to rates.

Why is 25,000 seats considered enough for Christchurch’s arena when other cities have much larger arenas?

Globally attendance at live sporting events is on the decline and many large stadiums are struggling to fill their seats.

Demand projections prepared as part of the Investment Case for the Canterbury Multi-Use Arena suggests there are few events that are likely to require seating capacity of more than 25,000.

ChristchurchNZ has forecast that the city is likely to attract at least one with the possibility of up to three sporting events per year with more than 25,000 spectators.

The Investment Case and Venues Ōtautahi report estimate that more than 90 per cent of sporting events attract crowds of less than 20,000.

The CMUA Project Delivery Ltd Board and BESIX Watpac, who have been involved in building many premier international stadia, consider that an arena with seating capacity for 25,000 is the right size for Christchurch.

What about the wider social and economic benefits to the city?

The Investment Case indicates that an arena with a seating capacity of more than 25,000 will not provide significantly greater returns to the city overall.

Will Christchurch miss out on All Black tests because of the reduced size of the arena?

No. Christchurch will still be able to host some All Black matches. However, if it wants to host All Black matches against top tier teams such as Australia and South Africa, it will need to pay a larger than usual incentive fee to New Zealand Rugby.

In the long run it will be cheaper for the city to pay the higher incentive fee than to spend $88 million for an extra 5000 seats that will be filled only occasionally.

Will the arena be big enough to host concerts by top international acts like Ed Sheeran?

Yes, there will be room for 36,000 people to attend concerts. That is unchanged from the Investment Case.

Dunedin’s Forsyth Barr Stadium is bigger. Does that mean promoters are more likely to bring international acts to Dunedin rather than Christchurch?

No. When selecting venues, promoters take into account more than just seating capacity. Christchurch has an international airport, quality hotels and a large urban population to drive ticket sales so it is an attractive proposition for promoters.  Canterbury’s multi-use arena will also offer superior acoustics and a better experience for concert-goers.

What difference will the change in concourse design make?

Having a U-shaped concourse with a stage on the northern end will result in better turf health. With a full level 1 concourse, the stage set-up would have caused recurring damage to the turf. Repairing the turf would have added an extra $1 million to $1.4 million to the arena’s annual operating costs.

What is going to happen next?

BESIX Watpac NZ (CMUA) Ltd will now work on the preliminary designs for the arena. These should be completed by the end of the year.

Is the change in design direction going to delay the arena?

It will delay the project by four to eight weeks.

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