Blair’s Folly Has Its Uses

Even before the 22,000-capacity arena has been built, the Los Angeles-based Anschutz Entertainment Group (AEG) looks set to see a return on the former Millennium Dome.

The International Olympic Committee’s July 6 decision to award the 2012 Games to London will almost certainly mean it will be a key venue for basketball and gymnastics.

AEG, which owns hockey’s Los Angeles Kings and the city’s Staples Center, is planning a billon-dollar upgrade of what’s been widely regarded as an embarrassing white elephant for the city and Prime Minister Tony Blair.

“We took a huge risk and were roundly criticized in the real estate industry and in London, and it will probably be the best project this company has ever done,” AEG President Tim Leiweke told the Los Angeles Times.

The US$1.2 billion dome, covering 1.2 million square feet in southeast London, was built by the government to usher in the new millennium in 2000. However, a number of exhibitions – including one that explored the human condition at the turn of the century – didn’t attract as many visitors as anticipated.

The original Dome budget depended on it getting 12 million paying visitors during the course of that year, but less than half that number actually bothered to trek out to Greenwich and take a look. Blair would make a poor promoter, but it’s doubtful if the same can be said of Anschutz.

Having failed to hive off Blair’s folly to a succession of interested parties including Japanese bank Nomura, a consortium headed by the Duke Of Westminster’s Grosvenor Estates that included promoter Harvey Goldsmith, Legacy Plc (which would have turned it into a high-tech business park) and even former Dome CEO Pierre-Yves Gerbeau, the government was pretty well forced to come to a deal with Anschutz and Meridian Delta consortium.

Although the live music industry may welcome a new arena in the capital, and Meridian’s development of the site will rejuvenate the Greenwich site, the media (and the British taxpayers) were more than a bit irked that it had been sold for a peppercorn and – until the redevelopment takes place – the public will be paying the maintenance costs. That’s around US$54 million at the last count.

At the time of the May 2002 sale, London Evening Standard architecture critic Rowan Moore said, “This week, the government will finally get the Dome off its hands but, by refusing to knock it down and sell the land, Labour’s face-saving deal wastes yet more public money.”

In a comment column in The Daily Mail, Edward Heathcoat Amory wrote that the government is making “a determined attempt to make as much of a mess of the demise of the Dome as it did of its creation” rather than “administer the coup de grace to its mortally wounded white elephant.”

Under the agreement with the government, AEG was able to demolish the exhibitions and drew up plans for a sports and entertainment complex inside and around the dome. The centrepiece is to be the indoor arena, which will host music and sport events.

It will also have a music hall of fame, exhibition space, music club, 10-screen movie theatre, ice rink, restaurants, bars and possibly a casino. AEG is naming the dome the O2 after the British mobile phone provider. O2 has agreed to pay more than US$11.3 million annually for six years for the rights.

AEG’s support of the London Olympic bid included lobbying by COO Scott Blackmun, who is a former chief executive of the U.S. Olympic Committee.

The company began work on the Dome site about five months early so Olympic officials could see progress during a February visit.

AEG is also building a music club in New York City’s Times Square, indoor arenas in Berlin and Kansas City and a soccer stadium in Chicago. It expects to start a US$1 billion entertainment district and hotel next to the Staples Center in September.

John Gammon