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Build it, and the votes will come? Trends in sports and entertainment infrastructure procurement and delivery
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Build it, and the votes will come? Trends in sports and entertainment infrastructure procurement and delivery

Sydney

The Australian sports and entertainment infrastructure landscape is undergoing a facelift, with a number of procurement trends developing. Here are three positive trends to look out for in 2019 and beyond, write Goran Gelic and Mat Jessep.

The Australian sports and entertainment infrastructure landscape is undergoing a significant facelift, with recent, current and planned projects including:

  • the state-of-the-art ‘Optus Stadium’ in Perth opened in late 2017;
  • the Hoyts Esports Arena, home of the ‘Gfinity Elite Series’ in Moore Park, Sydney opened in 2018;
  • ‘BankWest’ Stadium in western Sydney set to open in April 2019;
  • the troubled redevelopment of ‘Allianz Stadium’, aka the Sydney Football Stadium;
  • a redevelopment of ‘ANZ Stadium’ in Sydney Olympic Park;
  • North Queensland Stadium in Townsville;
  • a new roof for ‘Ken Rosewall Arena’ at the Sydney Olympic Park Tennis Centre;
  • the Queensland State Netball Centre in Nathan; and
  • the recently proposed ‘Brisbane Live’ precinct in Brisbane CBD, to name but a few.

In addition, and increasingly, sports leagues and teams are also moving towards building their own dedicated high performance facilities (or, centres of excellence) including training fields, gymnasiums, hydrotherapy pools, sports science labs, lecture theatres, corporate offices, museums, and retail spaces for cafes and allied health professionals.

A good example here is the recently completed NSW Rugby League ‘Centre of Excellence’ in Sydney Olympic Park.

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Esports are firmly entrenched in the global sports and entertainment scenes with dedicated venues and arenas opening up in Asia, the US, Europe, and here in Australia. The Hoyts Esports Arena in Sydney hosts the ‘Gfinity Elite Series’ with seating for 220 fans in front of a custom built stage equipped with premium gaming equipment and a state-of-the-art broadcast and production suite designed to support professional events.

However, and in view of the issues currently being put to the NSW state electorate flowing from the rigid and diametrically opposed views of the major parties’ approaches to the development procurement of ‘Allianz Stadium’, these projects can often become politicised as alternative funding models and the latest procurement methods may be said to get overlooked when votes are on the line, seeing compromise and flexibility become collateral damage.

In this environment, it is timely to look beyond the politics and often heated discussions surrounding such projects and review several procurement trends that are positively influencing stadium construction in Australia, and internationally.

The main procurement trends relate to the use of:

1) collaborative contracting;

2) outcome based procurement; and

3) how digital technology is influencing sports and entertainment infrastructure in Australia.

We consider each trend in more detail below:

1) Focus on collaboration

Collaborative contracting generally has become a strong procurement trend in recent years due to its positive impact on the procurement process.

In 2018, the NSW government released its 10 Point Action Plan for the construction industry, encouraging NSW state agencies to procure and manage projects in a more collaborative way. This means engaging more actively with industry participants, utilising digital technologies (such as building information modelling (BIM), discussed further below), and moving away from a reliance on fixed price and lump sum procurement methods, as well as using either public funds or debt, in favour of more collaborative contracting models such as alliancing or public private partnerships (PPPs).

PPP models

PPP delivery models bring the state, designers, contractors and financiers together to deliver large government infrastructure projects with long project life cycles, such as stadiums.

The construction risk is born upfront by the private sector, with capital expenditure (for construction), operation and maintenance costs recovered through the operation and maintenance phase from the state (concluding at the end of the concessionary period). Delivering major infrastructure via a PPP (or other collaborative delivery means) is an attractive method for the state governments as it achieves the desired outcome without the entire funding burden being assumed by the state upfront.

States such as Western Australia have adopted such collaborative approaches already by utilising a PPP delivery model to successfully procure Optus Stadium.

We anticipate the adoption of collaborative approaches to procure projects to continue.

2) Outcome based procurement

Another key aspect of the 10 Point Action Plan (mentioned above) is to encourage NSW state agencies to procure and manage projects with an enhanced outcome-based focus as opposed to following strict government procurement processes.

There is a growing view in the market that government procurement must better focus on achieving desired project outcomes as opposed to following strict government procurement process. This does not mean government is not required to follow its own procurement process, but rather that government is becoming more open to innovation and diversity in its procurement approach (including the adoption of collaborative procurement, digital technologies and cutting red tape).

A good illustration of this approach is the approach championed by Tim Nicholls, the former Queensland state opposition leader, when discussing the Brisbane Live Project proposal. He described the project as a ‘game changer’ for Brisbane and that he would overhaul the market-led proposals process to speed up approvals.

The Brisbane Live proposal is a$2 billion entertainment precinct located in the Brisbane CBD progressing towards stage two of the Queensland government’s market-led proposals initiative.

In short, Brisbane Live will see the development of apartments, hotels, retail, commercial space as well as possibly cultural, education and research facilities based around the new 17,000 seat Brisbane Arena.

Brisbane Live will also tap into the existing transport hub and compliment other infrastructure projects, such as the Cross-River Rail and the Queens Wharf Development.

We have seen this approach successfully implemented in Los Angeles, California, where the LA Live precinct is now a bustling community within Los Angeles itself. Additional projects in this vein also include the Los Angeles Stadium at Hollywood Park project; an open-air ETFE roof-covered stadium and entertainment complex district under construction in Inglewood, California.

As well as the stadium itself being the future home of the Los Angeles Rams, the surrounding development around the stadium will include the new Hollywood Park entertainment centre and master planned neighbourhood, with 790,000 square metres for business parks and condominiums, a 6,000-seat performance and theatre venue attached to the stadium, ballrooms, an outdoor movie screen, a lake with a waterfall fountain, a luxury hotel, high-scale restaurants and an open-air shopping centre.

We anticipate this outcome-based outlook to be further adopted more widely by the states in the future.

3) The digital influence

Although the construction and infrastructure sectors have traditionally been viewed as being slow to adopt digital technologies in the procurement process, we are seeing the uptake of digital technology in the construction and infrastructure sectors being on the rise.

In particular, the use of BIM is starting to gain traction. For example, Optus Stadium in Perth adopted BIM to develop an overall design, construction, operation and maintenance strategy. Optus Stadium was also procured via a PPP method (mentioned above), which dovetails nicely in embracing more collaborative procurement methods.

We have also seen the Queensland government take a proactive approach to digital implementation by looking to progressively implement the use of BIM in the delivery of road infrastructure projects by 2023 – it is a matter of time before wider adoption occurs.

We expect that BIM adoption by both public and private sector will increase as Australian government agencies utilise BIM more comprehensively in procuring and managing social infrastructure assets such as stadiums and other entertainment precincts.

This is particularly encouraging given the success of Optus Stadium and the exciting sport and entertainment infrastructure on the horizon.

It is important to get many things right in delivering stadiums and venue infrastructure, including their procurement.

Elections come and go, as do politicians, but stadiums and entertainment venues (largely) service sports and entertainment organisations, stakeholders and, most importantly, their fans (the public) for decades.

As such, and in the interests of delivering optimum outcomes from the beginning, the narrative should shift to ensure that each project is maximising collaborative approaches, focused on outcomes, and utilising technology to assist.

Goran Gelic is a senior executive practitioner in DWF's Sydney office and Mat Jessep is a supervising lawyer in DWF's Sydney office. 

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