Cape Town - Ratepayers are not done paying for the Cape Town Stadium just yet, because a draft environmental assessment report released for public comment reveals it could cost as much as R60 million to refurbish parts of the stadium to make it suitable for commercial activities.
The consultants working on the assessment, the Environmental Partnership, said this was an “approximate” cost that would depend on the stadium’s full commercial potential being realised. With more limited specifications, the amount could be drastically reduced.
But the use of the stadium for office and retail space could bring in an annual revenue of R31m.
It has cost the City of Cape Town R4.4 billion to build the stadium for the 2010 World Cup, and the facility has been running at an annual loss of R39m since then.
Luke Stevens, spokesman for the Camps Bay Residents’ and Ratepayers’ Association (CBRRA), said: “Our greatest fear as ratepayers is that the city will throw significant amounts of good money - such as R60m - in speculative redevelopment to discover that even after the removal of the constraints to business activity, the stadium remains technically unprofitable.”
Stevens said the association did not object to the commercialisation of the stadium precinct, but had “very little faith” in the business plan upon which the projected revenue streams were based.
The city had yet to adopt a business model for the stadium, and work on this was being done as a separate exercise, said the Environmental Partnership.
Stevens said this process “remains opaque and we continue to suspect, given the competencies of the International Risk Mitigation Consultants who compiled the business plan, that the hidden emphasis in the business plan’s terms of reference was to find a way to dislodge Western Province Rugby from Newlands rather than to find real alternatives for Cape Town Stadium”.
An estimated 20 000m2 of potential lettable space for offices, restaurants or retail outlets was available within the stadium structure. The proposed commercialisation of the precinct was limited to the stadium and would not infringe on the Urban Park.
The Environmental Partnership said the remainder of the shortfall would be made up from various revenue streams, such as the development of suites, commercial parking, advertising and the development of the Granger Bay Precinct.
The development of this precinct could bring in between R27m and R98m, depending on which proposal was accepted.
There was a separate environmental impact assessment under way for the Granger Bay area but the legislation was changed last December, and the proposed redevelopment was no longer a listed activity and therefore did not require an environmental authorisation. However, the development would still need land use and heritage approvals.
Given the ongoing operational and maintenance budget shortfalls for the stadium, the city needed to find a sustainable business model that would make the precinct commercially viable.
This could only be done if the existing environmental authorisation that restricted these activities was amended.
“It is anticipated that the income generated from commercial activities will assist in reducing the annual deficit of R39m incurred by the municipality and subsequently the ratepayers. From an economic point of view, the stadium’s viability needs to be improved and municipal spending on this existing facility reduced,” said the report.
The draft environmental report forms part of this process.
After feedback from the Department of Environmental Affairs and Development Planning, it was recommended that two rezoning proposals should be considered - general business and a split zoning, which would allow the South Forecourt to be used for general business subzone 1, while the remainder would be for subzone 7.
While both zones would allow for commercial activity that include retail, business or office space, places of worship, a multiple parking garage, a service station, places of entertainment or hotels, the South Forecourt would have a height restriction and floor space restrictions.
Additional use rights include an adult shop subject to certain provisions.
The split-zoning was the preferred alternative, as it would be more likely to protect the integrity of the South Forecourt while allowing this portion of the precinct to become more functional.
Some of the major impacts identified in the report include the additional lighting at the stadium, potential traffic impact on event days, and future development risks associated with the South Forecourt.
The report also recommended conditions of approval, such as the use of signals on the Green Point traffic circle to cope with the increased traffic and a heritage assessment of any development on the South Forecourt.
This area of the stadium must be used as a functional open space, said the Environmental Partnership.
This condition was welcomed by CBRRA.
“We stress that open space is vital to the promotion of a healthy and productive society. These spaces are not fallow, wasted areas,” said Stevens.
The findings of the draft environmental impact report will be available at an open meeting at the stadium on April 21, from 4pm until 8pm, with a presentation starting at 6pm.
Cape Argus