Cost of new Hobart Stadium to rise by $60 million as economic cost questioned

The estimated cost of Hobart’s planned waterfront stadium, a condition of Tasmania Tigers entry into the AFL, has increased to $775 million – before construction has even begun.

With the initial $715 million estimate for the new venue long considered unrealistic by industry insiders, the $60 million cost rise was included in a 269-page application for the 23,000-seat roofed stadium released today by the Macquarie Point Development Corporation (MPDC).

Advising that the goal was to build the stadium within the $715 million budget MPDC Chief Executive, Anne Beach stated “it has presented at $775 million ... and then we'll work through a scoping and value management exercise to bring it to budget.

"We started at what's required and we're working back about what we need to deliver."

The budget rise comes on the day that an economic report from consultants KPMG's suggests that the venue will have an operating deficit of $2.14 million in an average year.

With the Tasmanian Government facing ballooning debt, alongside a deficit for the foreseeable future, the KPMG study raises further questions over the viability of the venue.

KPMG says a deficit is "not unusual" for a project like this, "where a large component of benefit is either not quantifiable or not able to be monetised".

In its submission summary, the MPDC says it's a good outcome, given the Allianz Stadium in Sydney had a BCR of 0.62 and the Townsville Stadium had a BCR of 0.21 but both stadiums "continue to operate successfully and deliver benefits to residents".

The Tasmanian Government has pledged to cap its contribution at $375 million and make up any cost overruns via private investment.

The Federal Government is contributing in $240 million, while the AFL is putting in $15 million.

While media reports have suggested at least one private consortium is interested in partnering in the development of the venue, Tasmanian Minister for Sport and Events Nic Street said there had been informal approaches from private investors.

Minister Street stated “we'll have a formal process in place (and) we'll be completely transparent with the Tasmanian people about how we go about securing that investment.”

The application estimates the multi-purpose stadium will host 36 to 38 events per year, with an "optimistic" figure of 48 to 51 events.

The fixtures include seven Devils AFL home games, three AFLW home games, two pre-season matches, one cricket Test match and four BBL fixtures.

It says the venue has the potential to host women's Rugby World cup games in 2029 and attract international fixtures and World Rugby Sevens Series tournaments.

However, almost $50 million of unfunded "revenue-generating" features, such as kitchen and food and beverage fit-outs, audio-visual services and LED advertising signage, has not included in the headline cost based on the assumption that these would be funded by third parties, such as caterers looking for a long-term contract.

Yet KPMG says "there is little precedent … for such an approach being attractive to caterers".

Also unfunded are CCTV and public announcement facilities, at a cost of $6.8 million, and KPMG says they are "assumed" to be funded by the Tasmanian Government.

An independent planning body will assess the application, which must be voted through by both houses of parliament to get the green light.

Separate to the stadium, the Tasmanian Government has also promised $12 million per year over 12 years in start-up costs for the new club.

Queensland opposition against QSAC upgrades for 2032 Games
Also today Queensland’s Liberal National Party (LNP) leader David Crisafulli has shared his thoughts that people are “embarrassed” by the current Queensland Government’s proposal to host major Olympic events at an upgraded Queensland Sport and Athletic Centre.

Crisafulli, who previously opposed the proposed the rebuilding of the Gabba and a new stadium in Brisbane’s Victoria Park, has yet to share his and the LNP’s plan for a main venue for the 2023 Games.

Images: New concept for the Hobart Stadium from the Macquarie Point Development Corporation. Credit: Macquarie Point Development Corporation.