‘Big fish’ to vie for Tasmania Stadium project

Article posted by Coliseum, May 13^th, 2024

Image: AFL

The private capital consortium Plenary Group will bid for the right to partner with the Tasmanian Government (Australia) to deliver the proposed Macquarie Point Australian Football League (AFL) stadium.

‘abc.net.au’ stated that under a public-private partnership (PPP), assets including the stadium would be wholly-owned by the Tasmanian Government, with Stadiums Tasmania (oversees the management of Tasmania’s major stadiums) to operate the arena, which is expected to cost at least $715 million.

Melbourne (Australia)-based the Plenary Group is an independent long- term Investor, Developer and Manager of public infrastructure, specializing in public-private partnerships. It was founded in 2004 by three former ABN AMRO (the third-largest Dutch bank, with headquarters in Amsterdam, Netherlands) employees, with the Deutsche Bank (German multinational investment bank with headquarters in Frankfurt) taking a 20 percent shareholding.

The Macquarie Point Stadium is a proposed multipurpose stadium in Hobart, Tasmania, Australia, scheduled to begin construction in 2025 and open in 2029 as the home ground of the Tasmania Football Club.

The Tasmania Football Club, nicknamed the ‘Devils’, is a professional Australian Rules football club set to compete in the Australian Football League (AFL) from the 2028 season and the AFL Women’s from an unspecified date. The club will be based in Tasmania (Australia) with matches to be played across the State.

Melbourne (Australia)-based the Australian Football League (AFL) is the pre-eminent and only fully professional competition of Australian Rules football. It was originally named the Victorian Football League and was founded in 1896 as a breakaway competition from the Victorian Football Association, with its inaugural season held in 1897.

The Australian Rules football, also called Australian football or Aussie Rules, or more simply football or footy, is a contact sport played between two teams of 18 players on an oval field, often a modified cricket ground.

‘abc.net.au’ further stated that the stadium is currently being assessed by Tasmania’s Planning Commission and will need to pass both the Houses of Parliament when this work is finished, likely next year.

Billion-dollar investment and private capital firms will bid for the right to partner with the Tasmanian Government and deliver the Macquarie Point precinct development – including a 23,000-seat roofed stadium – as part of a blockbuster public-private partnership (PPP) agreement.

The Government, in need of private capital to fund the precinct and the stadium, will select a private partner as part of a competitive bid process – and one of Australia’s biggest private capital firms has confirmed that it will throw its hat in the ring.

The Plenary Group, which was co-founded and chaired by the Richmond Football Club (AFL team) President John O’Rourke, will bid for the right to deliver the broader Macquarie Point precinct, including the stadium.

The Managing Director of the Plenary Group, Damien Augustinus, said that the Tasmanian Government had a “golden opportunity” to partner with the private sector to deliver the project – “We support the consideration being given to the stadium and its surrounding precinct being procured as a public-private partnership. The Tasmanian Government has a golden opportunity to partner with the private sector to finance, deliver and manage a world-class sporting, tourism and entertainment precinct for decades to come.”

In a statement, a spokesperson said the Tasmanian Government was “considering a variety of options for partnering with the private sector and we will choose an approach that delivers the best outcomes and value for Tasmania.”

The stadium and the elements of the broader precinct could be bundled by the Government in what’s known as a ‘design-build- finance-maintain’ project, with high-powered consortiums set to jostle for the rights to the contract.

Confirmed interest will come as a relief to the Government after capping the State taxpayer funding for the Macquarie Point project to $375m, with a further $240m committed by the Federal Government and $15m from the AFL.

The responsibility for financing, management and maintenance of the precinct would fall to the successful consortium, with the Government to then make a yearly or quarterly payment to the consortium over the life of the deal, which would likely be 25 or 30 years.

After the contract period, the management and maintenance of the precinct would fall back to the Government.

Final Bill likely to exceed a billion dollars

A similar model was employed by the West Australian Government for the 61,266-capacity Perth Stadium in Burswood with the Government contributing 60 percent of the capital costs towards the project and the remaining 40 percent picked up by the Westadium Consortium.

Under the above arrangement, the West Australian Government is expected to make a cost saving of 21 percent over the life of the deal, equating to about $320m.

The total level of investment at the Macquarie Point is highly likely to exceed $1 billion, with the stadium alone budgeted at $715m.

With that number likely to balloon, the amount of private capital will need to be in the hundreds of millions to cover any increased cost and the broader precinct build.

The public-private partnership model could provide a pathway for Dean Coleman’s Stadia Precinct Consortium – which is believed to include a prominent financier – to bid for the partnership rights in the wake of his Stadium 2.0 proposal at the nearby Regatta Point being knocked back by the Tasmanian Government.

Plenary was the key partner in Melbourne’s $1.75b Convention and Exhibition Centre and South Wharf precinct, as well as the $1.5b Footscray Hospital (public hospital in Footscray, Australia) and the $456m 1,000-capacity Geelong Convention and Event Centre in Geelong, Australia, set to open in 2026.

‘A Competition of Ideas’

The Infrastructure Partnerships Australia Chief Executive Officer (CEO) Adrian Dwyer says the bid process is likely to attract plenty of big fish – “A number of consortia would compete against each other in order to best meet the outcome at lowest cost to the taxpayers. Would there be interest? Absolutely. The talk of the Macquarie Point Stadium amongst the PPP providers that I talk to is very high and you’d expect a very competitive field to line up.”

Dwyer said the public-private model is designed for the Governments to shift most of the risk on to the private sector – “The Government gets, in return for availability payments or upfront capital contribution, the ability to transfer the risk in delivering the project. And then in operations it is then able to have a key performance indicator (KPI) regime around delivery of the asset. Those KPIs would include conditions around upkeep, maintenance and delivery of events. The Government will stipulate a 23,000-seat roofed stadium must be constructed, as well as social and essential worker housing, which was part of its agreement with the Federal Government to secure $240m of funding for the site. But the bidders will pitch a bevy of ideas for how the mixed-use element of the precinct might look, with a convention center and a hotel likely to be part of any successful bid in what the Plenary Managing Director Damien Augustinus described as a “competition of ideas’.”

Sydney-based the Infrastructure Partnerships Australia is an industry think tank and an executive member network providing research focused on excellence in social and economic infrastructure. They exist to shape the public debate and drive reform for the national interest.

The key performance indicator (KPI) is a quantifiable measure of performance over time for a specific objective. The KPIs provide targets for the teams to shoot for, milestones to gauge progress and insights that help people across the organization make better decisions.

A public-private partnership (PPP) is a long-term arrangement between a Government and the private sector institutions. Typically, it involves private capital financing the Government projects and services upfront and then drawing revenues from the taxpayers and/or users for profit over the course of the PPP contract.

Good news for Tasmania Devils

If the Plenary is successful, it would indirectly strengthen the tie between the fledgling Tasmania Football Club (also known as the ‘Devils’) and the Richmond Tigers, with the Tasmania-born Richmond head honcho Brendon Gale already linked to the new Chief Executive role at Tasmania.

The former Richmond champion and Tasmanian Jack Riewoldt has also played a major role in the formation of the ‘Devils’.

The Tasmania Football Club Executive Director Kath McCann said private interest in the stadium was “really positive” for the team, which requires the stadium to be built for Round 1 of the 2029 AFL season – “The more people that come on Board, whether that’s private sector, public sector, not-for-profit, the better.”

A Hobart stadium now has bipartisan support in the Tasmanian Parliament with the Tasmanian Labor Party switching its stance from opposition to support recently.

However, the Labor Leader Dean Winter did not directly endorse the Macquarie Point proposal, believing the rival 2.0 – or Mac2 – proposal still deserved consideration.

The Greens remain firmly against any Hobart stadium development.

Continue to follow Coliseum for latest updates on venues business news. Coliseum is dedicated towards building the best global community of sports and entertainment venue executives and professionals creating better and more profitable venues.

Become a member of the only Global Sports Venue Alliance and connect with stadiums, arenas and experts from around the world. Apply for membership at coliseum-online.com/alliance and make use of the 365Coliseum Business.

Watch 380 member-exclusive videos with valuable tips for your venue