the stadium and the city vol 2 section c

8/7/2019 The Stadium and the City Vol 2 Section C

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THE STADIUM & THE CITY VOLUME 2 - TECHNICAL REPORT

SECTION C GOVERNANCE AND FINANCIAL FEASIBILITY

Prepared by the Major Stadia TaskforceMay 2007

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SECTION CC-3

CONTENTS1.0 Governance and Venue Management C-5

1.1 Background C-6

1.2 Negotiations To Date C-8

1.3 Current Situation C-11

1.4 Governance Models For Major Australian Stadia C-12

1.4.1 Melbourne Cricket Ground Trust, Victoria C-12

1.4.2 Major Sports Facilities Authority (MSFA), Queensland C-13

1.4.3 Sydney Olympic Park Authority (SOPA), New South Wales C-14

1.5 Venue Management C-15

1.6 Taskforce Final Recommendations C-18

2.0 Financial Forecasts C-19

2.1 General Assumptions and Definitions C-20

2.2 Operating Assumptions C-27

2.3 Revenue Assumptions C-30

2.4 Cost Assumptions C-30

2.5 Projected Stadia Operating Results C-30

2.6 Net Operating Result to Venue Owner C-31

2.7 Projected Hirer Net Revenue from Venue Operations C-33

2.8 Review of Masterplan Proposals C-36

2.9 Sensitivity Analysis C-37

2.10 In Conclusion C-38

3.0 Impact on Sports C-39

3.1 AFL C-40

3.2 Rugby C-41

3.3 Cricket C-42

3.4 Other Hirers C-43


4.0 Funding and Delivery Options C-45

4.1 Summary of Funding Requirements C-46

4.2 Potential Sources of Funding C-46

4.3 Summary and Conclusions C-50

4.4 Possible Delivery Options C-50

4.5 Contractual Options C-52

4.6 Recommended Delivery Structure and Options C-53

5.0 Risk Matrix C-55

6.0 Stakeholder and Community Consultations C-61

6.1 Consulted Stakeholders C-62

6.2 Community Consultations C-62

6.3 Stadium Website C-63

6.4 Survey C-63

7.0 Major Events and Their Impacts C-65

7.1 Potential Major Events C-66

7.2 Requirements of Major Events C-67

7.3 Economic Impacts of Major Events C-69


8.0 Project Implementation C-73

8.1 Project Delivery C-74

8.2 Transitional Issues C-74

8.3 Implementation Process C-75


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C-5

SECTION C

1.0 GOVERNANCEAND VENUEMANAGEMENT

1.1 Background C-6

1.2 Negotiations To Date C-8

1.3 Current Situation C-11

1.4 Governance Models For Major Australian Stadia C-12

1.4.1 Melbourne Cricket Ground Trust, Victoria C-12

1.4.2 Major Sports Facilities Authority (MSFA), Queensland C-13

1.4.3 Sydney Olympic Park Authority (SOPA),New South Wales C-14

1.5 Venue Management C-15

1.6 Taskforce Final Recommendations C-18


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C-19

SECTION C

2.0FINANCIALFORECASTS

2.1 General Assumptions and Definitions C-20

2.2 Operating Assumptions C-27

2.3 Revenue Assumptions C-30

2.4 Cost Assumptions C-30

2.5 Projected Stadia Operating Results C-30

2.6 Net Operating Result to Venue Owner C-31

2.7 Projected Hirer Net Revenue from Venue Operations C-33

2.8 Review of Masterplan Proposals C-36

2.9 Sensitivity Analysis C-37



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SECTION C

3.0IMPACT ONSPORTS

3.1 AFL C-40

3.2 Rugby C-41

3.3 Cricket C-42

3.4 Other Hirers C-43



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SECTION CC-43

3.4 OTHER HIRERS

ARU

The ARU will significantly benefit from hosting its annual RugbyTest match at the 60,000 seat major stadium particularly due tothe significant capacity increase of corporate facilities and generaladmission / public seating compared to Subiaco Oval. The 60,000seat major stadium will remain a clean stadium as required by theARU and will provide state of the art facilities and uncompromisedviewing of rectangular events.

The fact that the 60,000 seat major stadium would become the3rd largest venue in Australia to host rugby events could result in

the ARU awarding more blockbuster matches to Perth includingBledisloe Cup matches. As such, the 60,000 seat major stadiumwould allow Perth to compete directly with Sydney, Brisbane andMelbourne for such events.

FFA

Similarly, the increased capacity of the 60,000 seat major stadiumcould result in the FFA scheduling a greater number of Asia Cupmatches in Perth and consider awarding international matches against

top ranked opponents to Perth.

Perth Glory

Finally, the Perth Glory is believed to benefit from playing at a 25,000or 35,000 seat venue. In the short-term, the key benefits for thePerth Glory are less likely to be capacity-related but the club is l ikelyto be better-off from having access to a clean stadium with stateof the art / upgraded facilities.

Other Events

The 60,000 seat major stadium will generally allow Perth tobetter compete for high-profile national and international sports/ entertainment events. The type of events, the requirementsassociated with hosting / competing for these events and thepotential economic benefit of such events is discussed in detail inSection C7 of this report. 3.5

3.5 IN CONCLUSION

Based on this comparative assessment the Taskforce and itsconsultants believe that all key tenants of the new stadium have thepotential to be significantly better off in both financial and qualitativeterms (facilities, services etc ) . Essentially all sports are beingoffered the opportunity to stage their sporting events in a state ofthe art venue, with significantly enhanced facilities, greatly expandedcapacities (all provided as a clean stadium), with priority accessarrangements.


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SECTION C

4.0FUNDING ANDDELIVERY OPTIONS

4.1 Summary of Funding Requirements C-46

4.2 Potential Sources of Funding C-46

4.3 Summary and Conclusions C-50

4.4 Possible Delivery Options C-50

4.5 Contractual Options C-52

4.6 Recommended Delivery Structure and Options C-53


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Contractor may introduce design efficiencies particularly buildability and material selection through value management of the 4.6 RECOMMENDED DELIVERY


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SECTION CC-53

y g gunresolved design which may translate into improved tenderprice competition; and

Members of the novated design team can provide expert reportsto the Principal confirming conformance during the constructionprocess by agreement with the Contractor.

Disadvantages

The Client contracts out of direct access and control of thedesign team after the contract is executed;

Client loses control of design team and tenders the work beforedesign is fully defined;

This risk can be mitigated by ensuring functional brief is detailedand comprehensive in setting down performance requirements;

The Contractor and design team may be disadvantaged by havingto enter into pre-determined terms; and

The compatibility of the Contractor and nominated design teammay be less than desired.

Outcome

A successful novated design and construct project achieves theright balance between design control and transfer of design risk tothe Contractor with sufficient safeguards to maximize the matchbetween Principals expectations and Contractors obligations.

In recent times Telstra Dome, the Millennium Stadium, WembleyStadium and the recent MCG redevelopment have been deliveredusing this option. An alliance contract arrangement with a preferredcontractor secured under agreed selection criteria would be apossible variation to a traditional novated design and constructcontract.

STRUCTURE AND OPTIONSIt is recommended that the WA Government establish a Government

owned entity (i.e. statutory authority, Government ownedcorporation) to oversight the development of the preferred stadium(ia)options. The role of this entity could be extended after thecompletion of the new stadium to fulfil the role of the Governments(owner) representative to oversight the ongoing governance andmanagement of the venue (refer Section C1). The Governmentshould appoint the Board of this entity on the basis of relevant skillsand experience required to effectively oversight the delivery andongoing governance of a major stadium(ia) project.

Further it is recommended that the WA Government utilise a NovatedD & C Contract as the preferred means of delivery, which will allowthe Government to have a role in the appointment of the design teamand in the development of the projects functional design brief beforegoing to tender.


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5.0


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SECTION C

RISK MATRIX

During the development of the financial feasibilities and masterplanconcepts for the various sites for the Stage 2 study for the major


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stadia facilities in Perth it has been necessary to make some keyassumptions based on the level of information, time and fundingavailable.

The key areas of risk associated with the project have been identifiedas follows:

Governance and management;

Users / sport code agreements;

Community and local neighbourhood support;

Transport and traffic management;

Funding;

Agreeing acceptable terms for the land sale and purchaseagreements where required;

Project procurement;

Obtaining acceptable development approval and conditions onselected site;

Design, quality and cost; and

Programme.

The following table lists the key project risks identified during themasterplan and concept feasibility stage. The risks vary from siteto site and will be dependent on the ability to agree governance andfinal site selection and availability. It should be noted that theserisks relate to the delivery phase of the project and will need to becontinuously monitored and managed throughout the developmentof the project. Appropriate action plans need to be developedto minimise their effects on the delivery of the project. Further

investigation and consultation will be required to mitigate or reducethe impact of these risks on the project.


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6.0STAKEHOLDER


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SECTION C

STAKEHOLDER

AND COMMUNITY CONSULTATIONS

6.1 Consulted Stakeholders C-62

6.2 Community Consultations C-62

6.3 Stadium Website C-63

6.4 Survey C-63


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7.0MAJOR EVENTS


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MAJOR EVENTS

AND THEIRIMPACTS

7.1 Potential Major Events C-66

7.2 Requirements of Major Events C-67

7.3 Economic Impacts of Major Events C-69


Perth is strategically located within the Indo-Pacific region and has the opportunity to promote itself as a major hub of all leisure and sportsactivities for this area.


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Goodwill Ga mes

The Goodwill Games are based on a similar concept to theCommonwealth Games, however have only received limitedpopularity and have been discontinued after the last event held

7.4 IN CONCLUSION

The bidding for major events is typically not the role of the actual


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popularity and have been discontinued after the last event heldin Brisbane in 2001. Media reports suggest that the QueenslandGovernment anticipated the Brisbane Goodwill Games in 2001 togenerate 2,000 jobs and inject approximately $170m into the Stateeconomy (Source: Goodwill Games Inc).

Athletics World Championships

The Athletics World Championships are held every two years and areconsidered as the worlds most prestigious athletics event. The eventis held over nine days in a dedicated stadium, however to date hasnot been held in Australia. Brisbane is currently in the running for thehosting rights for the 2011 world championships with an outcomeexpected shortly. The event attracts an estimated television audienceof four billion viewers worldwide.

KPMG has recently been engaged to undertake a cost-benefitanalysis of hosting the 2011 World Championships for QueenslandEvents. However, in a recent press release the Queensland Premiercited that the Spanish city of Seville recorded direct economicbenefits of $380m from hosting the event in 1999 (Source:Queensland Department of the Premier and Cabinet). Due toBrisbanes bid for the event still being under consideration KPMGcannot release the estimated economic benefit for Queenslandresulting from hosting the event.

venue manager and would require a successful bid by EventsCorp,

the events division of Tourism WA. The development of a 60,000 seatmajor stadium would provide Perth with the third largest venue inAustralia. Perth / WA would have the opportunity to more effectivelycompete with the Eastern States and internationally for major events.Major events would provide benefits for the stadium owner in theform of additional revenues and would be likely to generate economicbenefits for the State.

8.0PROJECT


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SECTION C

IMPLEMENTATION

8.1 Project Delivery C-74

8.2 Transitional Issues C-74

8.3 Implementation Process C-75


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8.3 IMPLEMENTATION PROCESS

Figure 8 provides an overview of the suggested implementationprocess for delivering the major stadium

WACA GroundTh f t f th WACA d ill b d t i d b th WACA b


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process for delivering the major stadium.

Figure 8: Implementation Process

Determine governance issues

Government decision announced(60,000 seat multi-purpose venue

and minor works to MES)

Establish Heads of Agreement(commercial terms with key tenantsAFL, Rugby WA, WACA, ARU etc)

Project not toproceed *

Appoint Owners entity tooversight delivery / governance

Yes

No

Engage expert advisers regardingdesign, operations and finances

Progress concept developmentdesign and full functional brief

Update business plan and re-assessproject viability

Confirm project delivery method

Appoint stadium project manager

Appoint design team to progressthe design development phase

Appoint D & C contractor andnovate design team

Implement and manage projectdelivery

Appoint Stadium Operator

The future of the WACA ground will be determined by the WACA members.However to enable the major stadium to be developed the Taskforceconsider that the following steps should be undertaken during thedevelopment of the major stadium with the objective that all internationalcricket games are hosted at the major stadium upon its completion.

encourage WACA to sell Western Australian Cricket Ground forhighest and best use;

WACA to fund development of domestic cricket venue fromproceeds of sale; and

WACA to be sold on long term settlement to enable development

of domestic cricket venue.

Members Equity StadiumThe design, documentation and construction of the minor works to MEScan occur as required within its own time frame independent to that of themajor stadium.


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