Etihad Stadium in Melbourne's Docklands
Etihad Stadium in Melbourne’s Docklands – Mr McGuire proposes it be demolished and replaced with a new stadium on the other side of the CBD

The basics of Mr McGuire’s plan for a new football stadium near the MCG to replace Etihad Stadium in Docklands are:

  • The AFL sells the 55,000 seat 15-year-old Etihad Stadium in Docklands – which it will acquire at no cost in 2025 – for redevelopment.
  • Someone pays to build a new 60,000 seat replacement stadium (“Victoria Stadium“) on the current site of Hisense Arena adjacent to the Tennis Centre.
  • Someone pays to build a replacement for Hisense Arena on the current site of Richmond rail station on the cnr of Punt Rd and Swan St.
  • Someone pays to underground Richmond rail station so the new Hisense Arena can sit on top of it.
  • Someone pays to underground Olympic Way.

All this can be achieved according to Mr McGuire for $1 Billion, although it’s unclear who’d be footing the bill and how much of the proposed program the $1 Billion covers. Actually the entire proposal is lacking in detail, at least in the public sphere.

Mr McGuire says the pay-off would be:

  • Elimination of “all club debt”, presumably by football clubs sharing in the proceeds from the sale of Etihad for redevelopment.
  • A more modern stadium with state-of-the-art facilities.
  • And the zinger – creation of one of the biggest sporting precincts in the world.

You can bet your Nike Tiempo Legends the Government would end up paying the lion’s share of the bill if this proposal ever came to fruition. Red lights should start flashing anytime sporting industry figures and politicians start promoting the benefits that would flow from government investing in new sporting infrastructure.

A number of possible issues have already been identified. They include loss of parkland, increased peak demand on transport infrastructure, poorer access for fans living in the west and north, and fragmentation of the facilities used for the Australian Open (the relocated Hisense would be outside the Tennis Centre).

In my view there are two key problems.

The first is the breathtakingly optimistic cost estimate. Etihad opened in 2000 at a cost $460 million. Hisense also opened in 2000 and cost $65 million. Today’s construction market is vastly more expensive than it was 20 years ago; back then Sydney’s 10 km airport rail tunnel, which opened in 2000 with four stations, only cost $1.2 Billion (2012 $$).

Come forward in time and the renovation of Margaret Court Arena completed in 2014 cost $363 million. Melbourne Metro is estimated to cost $10 Billion. The extension of the rail line to Mernda is estimated to cost $600 million. Removing nine level crossings on the Dandenong line is costing $1.6 Billion i.e. $180 million each.

I think circa $2 – 3 Billion for both stadiums would be a reasonable working assumption.

The cost of building an underground station at Sth Yarra with two tracks and footways connecting to the existing station is estimated in the Melbourne Metro Business case to cost $0.75 – 0.94 Billion. Undergrounding Richmond station could be more difficult because it has 10 tracks, Swan St has tram tracks, and Punt Rd is a major artery.

I think $1.5 – 2.0 Billion would be a reasonable assumption for Richmond station. Then add in another $0.5 Billion for undergrounding Olympic Way.

Note that my early stage estimates of costs on things like Melbourne Metro, High Speed Rail and Doncaster Rail were frequently criticised at the time as too high. In all cases though, subsequent detailed technical studies showed my estimates were too low. That’s no great achievement on my part; early estimates from boosters are always too low.

The second problem is Melburnians wouldn’t get much for the outlay of taxpayers dollars. There’s no particular advantage in creating a precinct for the consumption of sport (or culture) like there is with a producer cluster such as Silicon Valley (see Is the Qld cultural precinct a laurel worth resting on?).

Melbourne’s sports precinct, like the cultural precinct, doesn’t have much production. Concentrations of consumer services work when they’re like shopping centres – lots of competing outlets that give patrons the opportunity to compare prices and quality (‘comparison shopping’); and to buy a range of goods in the one trip (‘complementary shopping’). A visit to the sports precinct is nothing like that.

Undergrounding Richmond station would provide a shiny new station that would presumably be better than the existing one, but there’s no reason to go to the considerable cost of placing it underground. There are better uses for scarce public dollars.

Etihad stadium is only 15 years old. It’s in the extended CBD and it’s closer to a major rail interchange (Southern Cross) than the site proposed by Mr McGuire. In nine years the AFL will own the stadium and presumably the problems clubs are having with the current management would be a thing of the past.

Nevertheless, if the AFL decides it wants to sell Etihad after it takes possession that’s fine. It would provide an opportunity to improve the less than perfect urban design in that part of Docklands.

If it also decides it wants to build a replacement at its own expense in the sporting precinct and can make a compelling case (and it hasn’t said it does; the current proposal is Mr McGuire’s), another option is to redevelop Punt Rd Oval.

It’s right next door to Richmond Station and would minimise land take. Here’s what Tigers’ legend Kevin Bartlett said this week:

Eddie McGuire can’t be serious, can he? Eddie — take your eyes off the Holden Centre and focus on the corner of Punt Rd and Brunton Ave. There lies the famous Punt Rd Oval. It’s already there Eddie, staring at you. And talks of it being redeveloped as a boutique stadium have been around for years. There may even be some plans floating around. With this much cash available, it’s a no-brainer. We head to Tigerland.

Governments aren’t good at managing private sector proposals; too often they’re suckers. This is a sketchy idea with obvious holes. The Premier should’ve slapped it down with a tolerant sigh and sent Mr McGuire on his way.