Costs for the conversion of the Cape Town Stadium into a more commercial-activity friendly environment could escalate to R60 million, according to a released draft report.
The environmental assessment report, worked on by the Environmental Partnership, said that the costs were an estimation, which would depend on the stadium’s full commercial potential being realised. If more limited specifications are introduced, the amount could be reduced drastically. The costs of the refurbishments are being weighed up against the projected income of R31 million annually for office and retail space within the stadium.
The stadium cost the City of Cape Town R4.4 billion to build, and has been running at an annual loss of R39 million per annum since the 2010 World Cup. The costs of the refurbishments are being shared amongst City of Cape Town ratepayers, with Luke Stevens, spokesman for the Camps Bay Residents' and Ratepayers' Association (CBRRA), saying: "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 stressed that the association is not objecting to the commercialisation of the stadium, but rather that they placed “very little faith” in the planned business plan and projected revenue streams. The Environmental Partnership confirmed that the City has yet to adopt a formal business model for the stadium, with work on that side being done as a separate exercise.
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".
The stadium will provide an estimated 20 000m2 of potentially lettable space for offices, restaurants, and retail outlets, with the proposed commercialisation of the precinct being limited to the stadium alone. The Environmental Partnership confirmed that the remainder of the shortfall will be made up from other revenue streams including the development of suites, commercial parking, advertising and the further development of the Granger Bay precinct.
The development of this precinct could bring in between R27m and R98m, depending on which proposal was accepted.