National Indoor Arena makeover to go ahead, but £20m isn’t enough
The start of a scheme to refurbish Birmingham’s has been delayed because a £20 million budget turned out to be an under-estimate.
Work on modernising the iconic sporting complex was supposed to begin at the end of last year.
The project, one of the last large construction schemes to be approved by the city council’s former Tory-Liberal Democrat coalition, involves a new entrance to the NIA and improving catering facilities.
The cost of transforming the NIA is to be paid for through borrrowing by the city council, which owns the building through the NEC Group.
However, a report to the council cabinet states that increased construction costs means that the scheme cannot be delivered for £20 million.
It’s now likely that work on the improvements is likely to begin later this month after the NEC stepped in to guarantee the unspecified shortfall in development costs.
A report to the public session of the cabinet meeting makes no mention of how much more the building work is likely to cost, but says the NEC has “identified further revenue streams within the business case” which will allow construction to begin.
The council will not have to meet any of the additional costs.
The report adds: “Projected construction costs have increased as the project has moved through the design stages. The NEC Group team has undertaken significant value engineering, although not beyond the point at which they believe the design will compromise the achievement of the vision set out above and the related business case.
“The detailed financial projections of build costs are set out in the private report. They represent an increase against the position in the October 2011 cabinet report. However, the NEC Group team has identified further revenue streams within the business case that are sufficient to service the additional borrowing requirement.
“On that basis, the additional project costs can be funded at no net revenue cost to Birmingham City Council.”
The report warns that Birmingham has no option but to modernise the NIA in order to keep ahead in the highly competitive indoor arena field.
It adds: “Opening in 1991, the NIA has been leading the way for 20 years in the provision of diverse entertainment to mass audiences, ranging from music, world class sport and corporate to comedy and family events.
“With Birmingham city centre on its doorstep, its central proximity, along with its considerable flexibility to accommodate any production, presents the NIA as an attractive location to sports, entertainment and other event organisers.
“The UK arena market continues to be highly competitive, and an ever increasing number of arenas are vying to stage limited performances from the major touring acts. Likewise, competition in Europe is increasing rapidly as new arenas develop.”
The report claims the NIA delivers £150 million of direct and indirect economic benefit a year to Birmingham.
