City back to square one over stadium

Published Dec 19, 2014

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Xolani Koyana

NOW that the “significantly higher” cost of running the Cape Town Stadium has put off the Western Province Rugby Union (WPRU), the city is left to look elsewhere for an anchor tenant for the struggling multibillion-rand stadium.

It is now banking on its bold commercialisation plan to ring the changes in order to boost the stadium’s financial viability.

The rugby union yesterday put to bed discussion about the possibility of it moving from the historic Newlands Stadium to the Cape Town Stadium.

After years of negotiations, its special general meeting on Wednesday unanimously voted against relocating, citing “higher” operating costs among others.

Union president Thelo Wakefield said they had hired independent consultants in October 2011 to investigate the feasibility of moving to Cape Town Stadium.

He said their investigation indicated that relocating would mean “significantly higher” operating costs compared to Newlands, but would not provide figures.

“This is a final decision. If we take a final decision it means we can’t fall back on it and there won’t be any talks (about moving to Cape Town) in the future,” Wakefield said. “The next discussions would probably come from our side to make them an offer, but I don’t foresee that happening.”

The union, which owns Newlands, said it would merely be a tenant at the Cape Town Stadium or a minority shareholder while the city retained ownership.

While selling Newlands and moving to the newer stadium would boost it once-off financially, the union was concerned that it would be difficult for it to ever own or build a stadium.

The union said

co-ordination of events at the Cape Town Stadium would be more difficult, considering that concerts were scheduled at least 18 months in advance, but the union would only finalise its Super Rugby and Currie Cup at shorter notice.

The stadium makes about R12 million a year but its up-keep costs the city and ratepayers about R40m.

Mayco member for tourism, events and marketing Garreth Bloor said while it was disappointed by the union’s decision, the city had alternatives.

“The financial viability of the stadium has never been solely dependent upon WPRU becoming an anchor tenant,” Bloor said. He said their business plan included the commercialisation of the stadium and selling the naming rights – an alternative that had already attracted offers of about R34m over a couple of years.

The city’s proposal for commercialisation of the stadium is out for public comment until January 23.

In it the city intends to re-zone the land-use and environmental conditions on the stadium property to allow for nightclubs, coffee shops and office space. Without commercialisation, the city made R11m from hosting concerts, conferences and other activities at the stadium for the 2013/14 financial year, Bloor said.

The commercialised aspect and securing an anchor tenant would drive hospitality, sponsorship, advertising and ticketing revenue streams.

“Should these streams be activated in tandem, financial sustainability may materialise within a five-year period. This is dependent upon the conclusion of the processes outlined above,” Bloor said.

Green Point Ratepayers and Residents’ Association chairman Mark Magielse was disappointed. “It makes sense for the rugby union to move to Cape Town. They will bring in more people and the stadium will |be well-managed.” Presently there was no better alternative.

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