Questions over how to fund the proposed events centre in Cork has left the project in limbo and the city still waiting for its first curtain call, writes Eoin English.
As Tanaiste Simon Coveney faces into another week of Brexit talks, he is also bracing for difficult negotiations and red-line issues on a project some have joked is almost as complex - the Cork event centre.
It was a few weeks before Christmas when the chief executive of Cork Chamber, addressing their Dublin dinner event, imagined the Cork of 2040 and spoke of his hope of seeing thousands of concert goers flooding into a gig at the venue earmarked for South Main Street. The ripple of laughter through the room at the mention of the stalled project spoke volumes.
Hard to blame the audience for sniggering really given the amount of announcements, assurances and timelines that have come and go since the outline of a new funding deal was agreed in principal almost one year ago, since the sod turning almost three years ago, and since the tender for the initial €20m in state-funding was awarded to developers BAM just over four years ago.
Now, just weeks after confirmation that state funding in the project can be increased from €20m to €30m, the Irish Examiner has learned of new complications linked to the terms and conditions attached to a large chunk of that additional funding.
It raises new concerns for the viability of the venture, which has been beset by delays, seen public investment almost double, and costs soar from €53m to just under €80m in four years.
Coveney, who is in his third ministerial portfolio since this tortuous process began, has repeatedly insisted since the politicians lined up for the 2016 sod-turning photo op that this is not another false dawn and that it will happen. As recently as last week, he said the latest funding complexities were expected and are the subject of new talks between all the stakeholders.
And while there is an argument that the city has never been closer to getting this project over the line, it could also be argued that we’re as far away as ever from seeing builders on site as clouds gather again over the stalled project.
The telling of this complex story is hamstrung by the fact that many of the documents which could provide insight are not being released under Freedom of Information legislation and that those involved remain tight-lipped while the process limps along.
This is what we know. And why yet another obstacle is looming.
Authorities in Cork have been trying for decades to secure the delivery of a large-scale multi-functional events or conference centre. The private sector looked at the possibility a few times during the 90s and early 2000s, and walked away because the figures just didn’t stack up.
Following confirmation in 2011 of market failure - that such a venue could not be built in the city without state-aid - the city council invited the private sector to tender for €16m in state funding to kickstart the project in a process that would be overseen by the city council.
BAM, with the former Beamish & Crawford brewery site on South Main St, and O’Callaghan Properties, with their Albert Quay site, were in the running. Entertainment giants Live Nation, one of the world’s largest live-entertainment companies, were, and still are, we are told, the only party interested in operating such a venue in Cork.
Live Nation operates in more than 40 countries, produces around 20,000 shows annually, and claims there is a Live Nation event somewhere in the world every 20 minutes.
It owns, operates, or has booking rights for more than 170 venues around the world, including House of Blues-branded music venues, and prestigious locations including San Francisco’s Fillmore Auditorium, Nikon at Jones Beach in New York, London’s Apollo Theatre, and Wembley Arena. It regularly produces tours for some of the biggest names in the music business, including U2, Coldplay, The Rolling Stones, Madonna, Lionel Richie, and Guns N’Roses.
In Ireland, the company owns and operates the 3Arena in Dublin, it operates and manages the Bord Gáis Energy Theatre in Dublin, and it manages the Olympia Theatre and the Gaiety Theatre. It also operates the SSE Arena in Belfast.
It had been exploring business opportunities in the south for several years, given the large volume of concert goers who have to travel from the south to concerts in its Dublin or Belfast venues, and it was lined up by both BAM and O’Callaghan Properties as the preferred operator for their proposed venues.
It was seen as a huge boost that a firm with Live Nation’s expertise and global reputation was interesting in running a venue in Cork. They were, as one source put it, “the only show in town”. That also made them the “kingmakers” in this complex deal. They still are the kingmakers.
But because Live Nation was the preferred operator for both bidders, they could not be involved in a competitive bidding process as rival bidders prepared request for tender (RFT) documents for the state-aid.
Their absence from the process at this stage would ultimately cause untold difficulties later.
Following an independent assessment of the tenders and a recommendation to council, it was announced at a city council meeting in December 2014 that BAM was the preferred bidder with their proposed 6,000-capacity venue, which had a tendered design costed at around €53m. Then the minister for Agriculture, Simon Coveney, watched the meeting from the public gallery.
It emerged afterwards that he had been centrally involved in last-minute talks to secure extra public funding, from €16m to €20m, to ensure the tender process didn’t collapse.
BAM’s event centre was to be the centrepiece of their joint-venture Brewery Quarter regeneration of the Heineken-owned former brewery site - with student apartments, offices, a cinema, a viewing tower and a visitor or heritage attraction in the brewery’s historic Counting House building. The cinema and viewing platform have since been ditched, and there are concerns that the heritage element of the entire project, earmarked for a site regarded as the Viking heart of Cork, has been watered down.
It is understood that the tender process included a six-month period for Live Nation to engage in detailed design talks with the winner bidder. This was expected to be routine.
Hopes were raised that this was it.
As 2015 rolled on, the line to the public was that detailed design works were ongoing as it emerged that BAM had acquired the brewery site from Heineken which was now withdrawing from the Brewery Quarter scheme.
Hopes were raised again in early 2016 that this was definitely it when Taoiseach Enda Kenny rolled into Cork in February for a pre-election sod turning on site. Demolition start dates were announced and Live Nation’s Ireland MD Mike Adamson, wearing wellies and a hard-hat, predicting a 2018 opening date.
Everyone smiled as the sod was hurled skywards and cameras clicked.
By May, there was still no sign of progress on site and city councillors, who rubber-stamped BAM’s selection as the preferred bidder two years earlier, were growing increasingly anxious and frustrated.
Two months later, it emerged that the detailed internal designs were still months from completion, and it would be September before demolition eventually started.
As the first anniversary of the sod turning approached, BAM was pressured into breaking its silence on the saga.
It restated its commitment to delivering the venue but then came the bombshell - a bigger venue was needed, costs had soared and the project would need more public money.
At a behind-closed-door briefing for city councilors in February 2017, BAM boss, Theo Cullinane, explained during what has been his only briefing to councillors on the entire saga, that because Live Nation hadn’t been involved in the preparation of the original tender, his company could only prepare a tender based on their experience of other event centres they had been involved in, and on the brief of requirements provided by PwC, which managed the tender process for the council.
Cullinane said it was only after the tender process was complete that Live Nation got involved and indicated that the €20m on offer wouldn’t be enough, arguing that what they required from an events centre in Cork would be quite different to what was in the original brief.
Cullinane told councillors that the building would have to increase from around 10,600 sqm in the tendered scheme to 13,500 sqm to deliver the additional functionality Live Nation needed to make the venue commercially viable.
Essentially, they needed a venue that could be all things to all people - flexible and adaptable enough to host up to 200 events a year, from large live rock concerts to intimate classical and opera shows, from hosting Cirque du Soleil to Macbeth, from indoor sports events like tennis or basketball, to conferences and dinners.
The larger venue could be delivered for €65m, Cullinane said, but that meant the state, which already had €20m on the table, would have to cough up another €18m - €12m basic, and a further €6m to cover what BAM called contingencies.
The revelation that a larger venue and more money would be needed triggered a long and tortuous process of negotiation on how to bridge that funding gap, which eventually led to a request that September from city council to the Department of Arts for an additional €10m in state funding.
And so began another lengthy process, including value-for-money audits and economic assessments involving the Department of Public Expenditure and Reform, the Department of Finance, the Taoiseach’s office and Coveney’s office, detailed legal scrutiny of the additional funding request involving the Chief State Solicitors Office and the Attorney General, and the to-ing and fro-ing between BAM, Live Nation and city council, and the impact the request for more money might have on the integrity of the original tender process.
There were fears that if the state upped its investment at this stage, the original tender could be open to legal challenge.
As the saga dragged on, they were several calls for greater openness and transparency, and several calls for the entire process to be scrapped and for a new tender to be advertised.
As the second anniversary of the sod turning approached in February 2018, with BAM and Coveney again under pressure on the issue, they announced the outline of a funding deal which they said had been agreed in principle.
It was hoped that this was the formula to bridge the funding gap.
They said the state would provide an additional €10m, BAM and Live Nation would each increase their investment to a minimum of €30m each, and that a mechanism would be found for the state to fund supporting or enabling infrastructure in the South Main St area to facilitate the project. It is understood that the state has also discussed buying the site and leasing it back to the developers to help bridge the funding gap.
It is understood that Live Nation now has board approval to spend up to €35m on the venue, and that BAM, which could ultimately spend as much, has already spent close to €10m - including an estimated €7m to buy the site from Heineken and several hundred thousand more on consultants involved in the planning process.
In a statement at the time, BAM said they hoped that if the various funding agreements were finalised, building could start in the third quarter of the year.
Hopes were raised again. But again, nothing.
As Viking artefacts found during archaeological digs on the site were unveiled at the Cork Public Museum last May, Cullinane was doorstepped by the media and conceded that the timelines outlined in February would not be met. He insisted however that BAM was fully committed to the project, and that it would be delivered.
By August, came proof that extensive work had been underway in the background as BAM lodged a new planning application for the enlarged venue.
The planning documents say the total area of building now proposed measures some 13,320 sq m - an 11,144 sq m arena and 2,176 sq m of new office units to serve as logistical, management and back-of-house support functions for the event centre and arena.
Its design triggered extensive debate online and not surprisingly, last October, planners requested further information, citing concerns about the bulk and scale of the building, the “extent of dead frontage”, and stating that a “less defensive” design in some areas would be more appropriate.
But with no certainty yet on the request for additional state funding, BAM was reluctant to spend any more of its own money addressing the planning issues until that was nailed down. Some estimates have put the cost of dealing with the planning issues at around €250,000.
Then, just days before Christmas, came what many thought was the breakthrough - confirmation that the state was legally cleared to increase its investment in the project from €20m to €30m, without jeopardising the integrity of the original tender.
Again, renewed hope that this was it. But as so often been the case with this project, there is yet another catch.
According to the Department of Arts, the €30m would be sanctioned as €21m in grant aid and a €9m repayable loan to the developer.
Sources close to the process say it was always the understanding of those overseeing the process in Cork that the legal advice on the request for additional funding was that the €30m in total would be grant-aid - no mention of a loan.
It is understood that the department has written to the city council asking it to outline its view, and that of BAM’s in relation to the loan element. It is also understood the department has sought written assurances that no further public funding will be required for this project.
On foot of that, the city council is seeking new legal advice on the department’s position in relation to the loan element. Sources familiar with the process say the entire saga has now reached a critical point. Again.
As the third anniversary of the sod turning approaches, the talks on funding arrangements have yet to be agreed, more legal advice is being sought, planning has yet to be secured, and the ever-present possibility of an appeal to An Bórd Pleanála looms large over the entire project.
There are, however, some signs of hope as Cork stands on the cusp of a period of phenomenal growth, a city boundary extension in May, several docklands developments underway, massive investment in public transport planned, and new hotels springing up across the city.
The civil servants in Cork charged with managing this process from the outset have had one overarching objective - to ensure everything is signed, sealed and agreed before building work starts to protect the public purse.
Coveney insists the venue can be delivered. The Taoiseach too has committed publicly to delivering it. BAM and Live Nation are still on board. For now.
It’s not a popular view, but Cullinane, who has a reputation for tough talking and negotiation, deserves some credit too for sticking with it, and for persuading his board to stick with it, despite the complexities, headaches and money involved.
BAM, which is involved in the construction of the National Children’s Hospital, a project also embroiled in controversy over soaring costs multiples of the event centre, has been involved in the development of fully state-funded event centre in Leeds, Hull, Bristol and Berlin. BAM built the Capitol development in Cork which had its sod turned on the same day as the event centre.
BAM has also delivered several major projects in the city, including the award-winning One Albert Quay, Cork Airport’s terminal building, the Western Gateway building for UCC, and the city’s restored and expanded district court complex on Anglesea St. It has built the new control tower at Dublin Airport, one of the tallest structures in Ireland, and it has now embarked on the massive HQ office, hotel and apartments development on Cork’s Horgan’s Quay.
Meanwhile, O’Callaghan Properties have built Cork’s largest office block on its Albert Quay site. The first phase of Navigation Square is about to open.
With rumours swirling that Limerick is also pursuing the development of an events centre, and construction inflation running at around 6% to 7% annually, the choice facing the southern capital is stark: stay patient and hope that given the amount of time, effort and energy everyone has put into this, a solution will emerge, or accept that if the whole thing collapses, it’s back to the drawing board.
Up to 15,000 people a week will be required to attend concerts, theatre shows, conferences, exhibitions, and banquets in the Cork event centre to make it a commercial success.
As well as underlining the potential economic boost to the city, the figures also underline the challenge facing designers tasked with creating a venue flexible enough to host as wide a variety of events as possible.
When Live Nation got involved in the process in early 2015 and decided the tendered venue wouldn’t be commercially viable, a team led by award-winning stadium and arena designers Populous and theatre and acoustics consultants Charcoalblue — both global leaders in arena, stadium, and event centre design — began looking at BAM’s tendered design.
Following more than a year of complex architectural and engineering assessment, in association with Live Nation and Scott Tallon Walker Architects, they finalised an internal design solution to allow the proposed 6,000-capacity venue to be one of the most flexible standalone venues in the world.
The plans were unveiled last year, with outstanding external design issues yet to be addressed.
However, with that internal flexibility came a larger price tag, then the request for additional State funding, and all the additional complexities and delays that flowed from that.
The design allows for the venue to be configured quickly in more than a dozen modes to host:
Plans seen by the Irish Examiner show how seats can be deployed, reconfigured, and stored; how acoustics and sight-lines can be maintained depending on the mode; how special acoustic curtains can be dropped to ensure that the venue doesn’t look, feel, or sound empty for smaller events; and how sound, lighting, electrical, air-conditioning, and fire-safety systems can be installed or moved to suit each mode.
A Live Nation report in the original planning file said the venue could host a standard seated audience of 4,505, and maybe higher for ‘in-the-round’ events such as boxing, and that the venue could accommodate 6,000 people through a standing capacity of 3,200 and 2,800 seated.
However, that breakdown has probably changed with the new venue.
Documents prepared by CHL Consultants in the original planning file suggest the venue could host 31 maximum capacity concerts, 78 reduced capacity concerts, and 32 stage productions in year one.
Again, those figures have most likely increased.
An economic analysis of the proposed venue, which has been used to justify the initial level of public investment, says the arena will generate more than €17m for city businesses, together with more than €4.5m in tax revenues, and support up to 160 jobs.
Populous, which was involved in the design of the 3Arena in Dublin, has worked on some of the most iconic stadium and arena venues in the world, including:
Timeline of events
May: Beamish & Crawford brewery on South Main St closes with the loss of 120 jobs.
Brewery site owners Heineken announce an international competition to select a development partner to regenerate the site. BAM wins with its €150m Brewery Quarter plan to include offices, student apartments, and a 6,000-seat concert, events and conference.
Planning granted for Brewery Quarter. Work is due to start on the event centre first.
April: Cork City Council invites the private sector to pitch for an initial €12m in public funding to secure the development of an events centre in the city.
December: Following a protracted tendering process, and last minute talks to increase the public funding to €20m, BAM wins the tender.
BAM acquires the site in full from Heineken, which now withdraws from the joint venture. There are no signs of construction starting on the event centre.
February: Just weeks before the general election, Taoiseach Enda Kenny turns the sod on the project. The public is told demolition will start within weeks, and the venue could be open by 2018.
May: Still no sign of construction work. City councillors demand a briefing from BAM but are told it will be October before it can take place.
August: It emerges that detailed internal designs on the venue are months from completion and that it won’t open by 2018, as predicted.
September: Demolition work and minor archaeological investigations start on site.
January: BAM restates its commitment to delivering an events centre for Cork, and insists the project is still on track.
Early February: The internal design is complete. But the then Housing Minister Simon Coveney concedes that €10m more in state funding will be required.
February 20: BAM boss, Theo Cullinane, tells city councillors at a private briefing that a larger venue is needed, that project costs have soared, and that another €18m is needed - €12m plus €6m for contingency costs.
September: Cork City Council applies to the Department of Culture for an extra €10m for the project. It is subjected to rigorous legal scrutiny.
February: BAM and now Tanaiste Simon Coveney reveal the outline of a funding deal they say has been agreed in principle. BAM says if deal is agreed, building could start in Q3.
May: BAM boss Theo Cullinane concedes that timelines outline in February will not be met. He insists the project will be delivered.
August: BAM lodges planning application for the enlarged venue.
October: Planners request further information, citing concerns about the design of the building. Tanaiste confirms that legal advice from Attorney General on the extra funding request is still not ready.
November: Government includes South Main St area in urban regeneration funding programme to provide public realm upgrades in support of the development of the event centre.
December: Tanaiste confirms that legal advice clears an increase in state investment in the project from €20m to €30m - comprised of €21m grant aid and a €9m repayable loan.
January: Tanaiste confirms that talks on the schedule of payments for the €30m, including the repayment mechanism for the €9m loan element, are underway.