The economy of Christchurch cannot make a big profit by spending nearly $ 700 million on a new stadium, economists say.
A warning was issued as Christchurch payers had only a few days left to submit their views on a perplexed megaproject.
Following a huge budget surge last month, the Christchurch City Council needs to decide whether to spend another $ 150 million to build a stadium, suspend it and redesign it, or dispose of it altogether. there is.
Approximately 24,050 public offerings have already been made, and city council members will make the final decision on July 14.
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Christchurch City Council / Supply
To get this 30,000-seat covered stadium, Christchurch will have to pay $ 683 million.
According to Victor Massison, a US sports economist who has been studying the economic impact of stadiums since the 1990s, stadiums are not making good use of payers’ money. Independent economists tend to feel that they “have little or no economic impact on the local economy,” he said.
Events and sports at the stadium often seemed busy, but Mathieson said other factors were at work.
One is the “alternative effect”, where residents will spend money elsewhere in the local economy without a stadium.
Big events also tended not to boost long-term tourism, but could lead to short-term surges, he said.
For example, after the 2000 Sydney Olympics, American tourists to Australia did not surge, but visitors were more likely to head to Sydney, Mathieson said.
Chris Skeleton / Staff
The Prime Minister will talk about the explosion of Christchurch’s $ 150 million stadium and whether the government plans to help.
The biggest benefit from the stadium was actually cultural comfort, as hosting the event made people happy, he said.
“I think this is worth the money, so if you want to do this, I think it will bring happiness to the people of Christchurch, so I’m not going to complain about it.”
According to Mathieson, the money was spent on parks, museums and architecture without getting it back.
Dr. Sam Richardson, a sports economics researcher at Massey University, said the benefits of the stadium are not in the economy, but in “quality of life.”
Christchurch City Council / Supply
This is a conceptual image that shows what it looks like inside the stadium. (Impression of the artist)
Studies show that stadiums will increase employment in the construction sector in the short term, but once built, no increase in tourism or hospitality employment was detected, he said.
“The economic impact isn’t there,” Richardson said.
“It’s very rare to actually see what a stadium creates and maintains quickly.”
Councilors need to figure out what the stadium will bring, according to Richardson.
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This image shows the northern end of the stadium where light flows in. (Impression of the artist)
“Unless it brings something brand new and the city brings something never before, we can’t really expect it to produce more than it is now.”
The ongoing reconstruction of Christchurch changed the situation slightly, but Richardson wondered if the planned stadium would generate the most profit.
In 2019, when the estimated cost of the stadium fell by $ 200 million, cost-benefit analysis showed that the construction and operation of the stadium outweighed the profits.
The local economy was estimated to be able to recover only 87 cents per dollar spent on the stadium. Given the cost overrun, this ratio is “significantly lower,” said Major Lian Darjeel.
Hannah Peters / Getty Images
Christchurch hosted the finals of the Women’s Cricket World Cup earlier this year.
Christchurch NZ, the council’s economic development agency, said last year that two international concerts and two major sporting events would attract 43,000 visitors and $ 16 million in annual visitor spending. Estimated.
Major live events said it would bring “profile and exposure” to the city.
ChristchurchNZ said the 2022 Women’s Cricket World Cup in March generated $ 740,000 in visitor spending in Canterbury, despite border closures and changing Covid alert levels. I did.
Karena Finnie, head of major events in Christchurch NZ, said the 1740 people who participated in the tournament came from outside Christchurch.
About 6,000 people participated in the final at Hagley Oval.
According to a cost-benefit analysis, the World Cup generated a profit of $ 1.35 for every $ 1 spent on organizing and installing.
Due to the lack of a suitable stadium, Christchurch had the opportunity to host the 2023 FIFA Women’s World Cup.
Christchurch City Council public consultation on Tekaha Stadium will be held until the end of Tuesday, July 5. You can submit it online.