Copenhagen Tried Hedging Arena Bets

Copenhagen council may have been fully behind AEG’s bid to build the Danish city’s new arena but appears to have hedged its bets in case the U.S. giant didn’t come through.

Although the full council reportedly gave unanimous backing to the Los Angeles-based company’s tender March 12, it also tried to keep a rival bidder on board in case AEG didn’t come up with the money.

“They did ask if we would keep our bid on the table, but we withdrew because of the amount of investment money that would have been lying dormant in a project that had been awarded to someone else,” said FC Amager soccer club chairman Brian Mollerup, who led the consortium that lost out to AEG in the tendering process.

AEG was given until June 15 to show it had raised the $225 million needed to complete the build. When the deadline came, AEG had raised half the cash and the Kommune has given it until Oct. 1 to find the rest.

The local authority’s regulations allowed it to turn to any of the rival bidders, but only if those bidders had opted to leave their tenders on the table.
City council head of culture and leisure Carsten Haurum admitted the authority had to grant an extension because AEG is “the only game in town.”

Haurum has acknowledged that it would be difficult to raise the arena cash in the current economic situation, particularly in a city as small as Copenhagen, but says the council can’t keep extending deadlines.

“If the money isn’t there, then we can’t build an arena,” Haurum told Pollstar, explaining that some councilors may begin questioning the 200 million kroner ($38.3 million) loan the authority has taken out to fund its stake in the arena.

AEG may have had its own doubts about fulfilling the project, with European vice president of AEG facilities Brian Kabatznick originally refusing to comment on Danish newspaper speculation that his company was one of the bidders.

Kabatznick says AEG took a low-profile approach because it had seen itself only as “a catalyst” that would help pull in investors, but having to “raise $225 million in 95 days” turned out to be too tough a deadline.

“The good news is that we have half, and the bad news is that we don’t have the other half,” he said, although the company is in ongoing dialogues with interested parties that could take the total raised much closer to the target.