Market offering on $2.5bn Brisbane Arena Olympics venue ‘suspended’
Moves to take $2.5bn Brisbane Arena to market have been ‘suspended’ in a sign of growing tension between federal and state governments over 2032 Olympics’ costs.
Federal inaction has been blamed for the “suspension” of moves to take a key Brisbane Olympics project to market amid ongoing rumblings about a controversial state deal optioning the future management rights of the $2.5bn Brisbane Arena.
The Queensland government was to invite commercial expressions of interest in the showpiece development – set to host the swimming at the 2032 Games in a drop-in pool – but backed away this week when federal ministers failed to sign on, a senior state source said.
The delay is a sign of emerging tension over the cost-sharing agreement on Olympic venues struck between Anthony Albanese and Premier Annastacia Palaszczuk in February. Under this, Brisbane Arena will be funded by the commonwealth while the state has carriage of the $2.7bn rebuild of the Gabba stadium.
In a further complication, Queensland government officials this week extended a timed-out contract with Brisbane businessman Harvey Lister recognising his intellectual property over Brisbane Arena – despite it being cited as a potential disincentive to private investors.
While continuance of the so-called deed of early operator engagement is understood to be short-term, it means Mr Lister’s company, ASM Global Asia-Pacific, remains in the box seat to secure the lucrative rights to manage the 17,000-seat hall after it comes on line.
The $2.5bn price tag makes Brisbane Arena the most expensive indoor entertainment venue ever built, at an eye-watering cost of $147,058 per seat.
The senior state source said the Queensland government had received no explanation why taking it to market hadn’t been cleared by the economic review committee of federal cabinet, as foreshadowed.
In the absence of ERC approval – possibly due to next month’s federal budget taking precedence – the planned soundings with construction companies, contractors and master planners had been “suspended”. This could last weeks or even months, the source said. “They haven’t explained to us what their concern is. Obviously they have a lot more control over the area now because they are funding it.”
Federal Infrastructure Minister Catherine King was approached for comment.
Mr Lister, a four-decade veteran of the live entertainment industry who manages some of the country’s biggest stadiums and venues, came up with the idea to construct an auditorium over the busy Roma St railway station on the CBD fringe before persuading the state to recognise his IP about five years ago.
The deed from the Queensland government was to expire this month. The short duration of the extension was to allow its future to be “dealt with properly”, the senior state source said. If the Queensland government opted not to renew, Mr Lister and his company would be entitled to compensation. “On a $2.5bn project it might be $10m,” the source said.
However, the source insisted the arrangement was standard for a “market-led” project. “Harvey came into the market-led proposal process and got the same contract everyone does, which is that their proposal has IP protection,” the source said. “Which means that throughout the process, he advises on what the best outcome would be from an operator perspective.
“Then if he doesn’t get the operator rights, he gets reimbursed for his consultant time and his IP … you need to be able to do that.”
Mr Lister declined to comment, referring The Weekend Australian to the Department of State Development headed by Deputy Premier Steven Miles.
The source insisted Mr Lister’s IP was not a sticking point with Canberra: “We have an agreement between us and the feds … The delay on market sounding is unrelated.”
The Live Nation group, one of the world’s biggest live music promoters which also has on its books blockbuster acts such as U2, Madonna, Pink and Fleetwood Mac, has expressed interest in investing in Brisbane Arena provided the management rights are on the table. The multinational company would lead a consortium of US financier Oak View Group and project and asset managers the Plenary Group, specialising in public-private partnerships.
“With this global expertise and approach, we welcome a fair, competitive process that will ensure value is achieved for the state and federal governments and ultimately the taxpayer,” Live Nation’s Asia-Pacific president Roger Field said on Friday. “We’re keen to get started.”
Mr Lister has said previously that ASM Global is the world’s largest operator of sports and entertainment venues across 393 sites. Its Australian properties include Suncorp Stadium in Brisbane, Optus Stadium in Perth and the Sydney SuperDome.
The only independent cost-benefit analysis to be conducted on Brisbane Arena, by state agency Building Queensland, found the project’s cost far outweighed any economic dividend.
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