Tortuous Cork event centre saga still needs more time
Covid-19 had a devastating impact on the global entertainment industry, virtually wiping out the global revenue streams of entertainment giants Live Nation, the company lined up by BAM, to operate the Cork venue. Picture: G-Net 3D
Beset for years by chronic delays, redesigns and soaring costs, stalled by funding issues, planning appeals and potential High Court challenges, there was almost a sense of ironic inevitability that a global pandemic would be the next thing to hit the beleaguered Cork event centre project.
The year started with a glimmer of hope when news emerged of a new funding arrangement that would see the State double to €50m its investment in the proposed 6,000-capacity venue earmarked for South Main Street in the city's historic core.
There was a sense that four years on from the project’s now-infamous pre-general election sod-turning ceremony, this was the shot in the arm needed to finally get it over the line, pending a positive decision from An Bórd Pleanála.
Then came news of a legal challenge to the funding arrangement from the operators of the INEC in Killarney, and the prospect of yet more delays.
As that potential legal challenge wound its way towards the High Court, and just as Covid-19 arrived in Ireland, An Bórd Pleanála gave the project the green light.
Hopes rose slightly a few weeks later following confirmation that the legal challenge to the new funding arrangement was being withdrawn.
After all the delays, the final obstacle had been cleared. Or so it was thought.
But, as so often has been the case in this tortuous saga, there would be yet another hurdle – this time in the shape of a global pandemic.
It would soon become clear just how devastating and far-reaching the impact of Covid-19 was to be on the global entertainment industry, virtually wiping out the global revenue streams of entertainment giants Live Nation, the company lined up by BAM, to operate the Cork venue.
Live Nation has previously been described as the kingpins in this project. Without them, the project just won’t happen.
Covid-19 forced it to cancel or postpone more than 6,000 of its scheduled shows, and then furlough more than 2,000 of its 10,500 staff, as its revenues fell 20% in the first quarter of the year.
It’s estimated that with the cancellation of live events globally, Live Nation has lost out on $7bn (€5.7bn) of revenue, forcing it to slash costs by at least $900m in 2020.
The figures are stark: in the third quarter of this year, the period ended September 30, Live Nation generated revenues from concerts, ticketing and sponsorship of just $184m – a staggering 95% decline compared to the $3.77bn it generated in the same period in 2019.
Given the scale of the challenge faced by the global giant, with its revenue virtually wiped out and it eyeing sweeping savings of up to $1bn, fears emerged about the company’s interest in, or its ability, to follow through on its commitment to the Cork project.
At a time when its finances are so fragile, and the entire entertainment sector was in survival mode, the question was, would Live Nation stay the course?
Independent councillor Mick Finn sought an update from city officials in November. His question was simple – after all the delays and challenges, and given the scale of the impact of Covid-19, was the events centre still viable.
And the answer, in a nutshell, was yes.
In the first public statement from the key players in almost seven months, council chief executive Ann Doherty said everyone involved was still committed to the project.
In a carefully crafted statement, she said meetings between Cork City Council, BAM and Live Nation Gaiety (LNG) were ongoing.
“All parties including the Government of Ireland recently reaffirmed their commitment to deliver this project,” she said.
“At present, roadmaps aren’t in place for the reopening of the global live entertainment industry as we continue to live with Covid-19.
“Despite this uncertainty, the parties continue to progress the project. All parties are intent on bringing the funding agreement [which dictates the terms on which Government support is granted] to as close a point as possible to where it can be signed off once revenue streams are restored in the events industry.”
But we’ve heard statements like this many times before.
Mr Finn said despite the fact that it was almost 1,800 days since the sod turning, there were still some reasons to believe it would still happen.
“I can understand the reluctance at the moment to elaborate on when this might happen, given the uncertainty of the entertainment industry, which has been decimated by Covid-19,” he said.
“But it will recover, and there is, and will be, huge demand from people to attend live events.
“The sands have shifted a lot on this project over the years but the hope is still there that building would start sooner rather than later.
“There have been too many false dawns on this but I still think it will happen. I think Covid-19 has pushed it out further rather than scrapping it altogether.”
Live Nation is confident that despite the devastating impact the pandemic has had on its business model, it will survive.
Its entertainment president and chief executive Michael Rapino moved to reassure investors in November, saying the firm continues to “maintain a strong cash management discipline while planning for the ramp-up to resume live shows as soon as possible”.
“We also continue to see strong fan demand across the board. Our sales and survey data tell us fan demand will be there when the time is right,” he said.
“Our refund rate on rescheduled shows remains consistently low, with 83% of fans globally keeping their tickets.
Against the backdrop of vaccine rollouts, the company has reported strong sales for festivals in 2021, with the huge EDC Las Vegas 2021 event sold out in less than 24 hours at a higher capacity than last year, and with ticket sales for Reading, Creamfields and Isle of Wight festivals in the UK all performing well.
Rapino said they were encouraged by the enthusiasm for the recent events and gatherings that have started to take place, including Live Nation’s first sold-out arena tour with 20,000 fans in New Zealand, where business, he said, is headed back to normal.
“We are working on our roadmap to get back to live safely. We are encouraged by progress on testing technology, treatments and vaccines, which helps us build our plans. We still expect shows at scale next summer, but recognise that the exact timeline of this return will vary by region, and so we continue to focus on remaining flexible,” he said.
The question now is where does the Cork event centre fit into that roadmap.
BAM’s chief executive, Theo Cullinane, did not respond to requests for comment.
But publican Paul Montgomery, who has invested millions in the redevelopment of Clancy’s bar in Cork city centre, said he believed the Cork venue would help in the company's recovery.
“I trust the process. I think Live Nation can afford to take the hit for a year. Covid-19, while it has gone on longer than anyone would like, is, in the big scheme of things, a short-term thing. I think this year is more of a pause rather than anything else,” he said.
“With a vaccine on the horizon, I think Live Nation will be taking a long-term view. And there is such a pent-up demand for people to get on planes and travel, to go on holidays, to get back to live entertainment events, that I wouldn’t write this project off at all. And politically, there is too much invested in it over the years.
“Once the political will and support are still there, I think this will happen.”
The question, which has loomed since 2014, is when.
Independent councillor Ken O’Flynn, who has been a long-time critic of the delays, said the urgency has never been greater.
He pointed to the start of site clearance work on the first phase of the ambitious Opera regeneration scheme in the heart of Limerick city as part of the Limerick 2030 plan.
A development which was first suggested nearly 17 years ago, it got planning from An Bórd Pleanála in February and work is now under way on the 1.62-hectare site, located in the city centre at the junction of Patrick and Ellen streets and close to Arthur’s Quay Park on the banks of the Shannon.
It will be developed over the next six years at a total cost of about €180m.
The scheme is fully funded, thanks in the main to €170m funding from the European Investment Bank and the Council of Europe Development Bank loans.
Described as what will become a day-time employment hub, capable of employing up to 3,000 people across a 450,000 sq ft campus accommodation, with retail and apartment space, a new city library, commercial space for the Revenue Commissioners in the city and an aparthotel, its promoters say it will transform into a “bustling night-time destination” complete with restaurants, bars and open entertainment spaces.
The site is being developed by the Limerick Twenty Thirty LTT company, a special-purpose company established by Limerick City and County Council in 2016 to stimulate economic and social development by building and promoting disused sites in Limerick.
Mr O’Flynn said the start of this project, just over an hour up the road, should focus the minds of all involved in the Cork event centre project to ensure the city doesn’t get left behind.
Conor Healy, the chief executive of Cork Chamber, said despite all the delays, those involved in the Cork project need to be given time to work through the massive challenges posed by the pandemic.
“The Covid-19 crisis has highlighted the importance of the entertainment and hospitality sectors to all our lives, and the social engagement that comes from that.
“The developers and Live Nation, in context of the global situation, need to be given the time now to work through the current situation to get to a point where they are able to say what the plans are for the future."
As has always been the case in this saga, time will tell.
The sod is turned on the proposed Cork event centre on the site of the former Beamish and Crawford brewery, just weeks before a general election.
The project is blighted with delays over redesigns, planning and complex funding issues. Not a single brick is laid.
Cork City Council publishes a special voluntary ex-ante transparency notice in the to inform ‘the market’ of proposed changes to the project’s funding agreement, and of its intention to conclude a contract with developers BAM.
It’s revealed that State funding will be doubled to some €50m, as a non-repayable grant to BAM, which won the original tender for €20m in State aid in 2014, and to the venue operators, Live Nation.
The new funding package faces a High Court legal challenge from Gleneagle Hotel (Killarney) Ltd, the owners of the Irish National Event Centre (INEC) in Killarney. They plan to seek court orders suspending the council’s decision to award the contract to BAM Contractors Ltd.
Central to the case is the €50m in public funds set to be ploughed into the project. The council rejects the allegations and intends to contest the case rigorously. The case is due to be heard in May.
An Bórd Pleanála upholds the decision made the previous October by Cork City Council to grant permission for the long-stalled project.
As the scale of the Covid-19 crisis becomes clear, the legal challenge is withdrawn. With planning and funding now in place, it is thought the final hurdle has been cleared.
But as the full scale of the impact of Covid-19 emerges, and Live Nation’s global revenue stream is decimated, the project stalls again.
Amid fears the project has hit the rocks, former tánaiste Simon Coveney insists it is still viable. “Life will move on from Covid-19. We will have concerts again, we will have events again,” he says.
City Council CEO Ann Doherty says all parties are intent on bringing the funding agreement, which dictates the terms on which government support is granted, to as close a point as possible to where it can be signed off once revenue streams are restored in the events industry.
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