Submission: Darling Harbour South

Transcription

1 Sydney Harbour Foreshore Authority Level 6, 66 Harrington Street The Rocks NSW August 2010 Submission: Darling Harbour South The Sydney Business Chamber (SBC) is a division of the NSW Business Chamber and represents 130 of Sydney s leading corporations with an interest in contributing to the economic, social and cultural vitality of our city. Our members range from multinational corporations to iconic Sydney organisations and institutions. The SBC has a significant interest in major urban renewal projects that reinforce Sydney as a global city. The SBC welcomes this opportunity to comment on the future of the Darling Harbour South precinct in Sydney. Sydney: A Global City Sydney is Australia s only global city measured in terms of the number of international firms with a presence in Sydney and the fact that 45 per cent of Australia s international visitors arrive via Sydney Airport. When measured against other global cities it is Sydney s liveability that ranks Sydney at or near the top 1 of most international surveys. Sydney faces strong regional competition from Hong Kong, Singapore, Seoul and Tokyo as well as other Australian cities such as Melbourne and Brisbane. The SBC believes that revitalisation of the Darling Harbour South precinct would be a major advance in enhancing Sydney s competitiveness particularly in the highly competitive but lucrative business events market. The redevelopment of Darling Harbour South presents an opportunity to enhance Sydney s convention and exhibition capability, whilst simultaneously addressing emerging opportunities, including: connecting the Darling Harbour South precinct with the CBD; interconnectivity of the Darling Harbour South precinct to the significant development of Barangaroo on the Western Harbour; and taking advantage of the concurrent revitalisation of the adjoining Chinatown area and the University of Technology Sydney campus development. The redevelopment provides the city with a unique opportunity to exhibit itself as a redevelopment of excellence. Using the concept of place making as a guiding principle, the Darling Harbour South redevelopment should apply sustainability principles in the buildings and surrounding construction in economic, environmental and social terms, all while meeting the requirements for technical and functional performance. Creating a vibrant space and functions for those that live, work or study in the precinct is as vital as creating a space that supports major events, business events or exhibitions. 1 PricewaterhouseCoopers, (2010), Cities of Opportunity, p. 16 (Sydney ranked high in City Liveability indicator) 1

2 Economic Benefit of Business Events It is well established that business events make a significant contribution to the economy from a tourism perspective. The term business events is defined as a collective term referring to association conventions, corporate and government meetings, exhibitions and incentive travel reward programs. Business events are held for a specific purpose, in a specific venue, are hosted by an organisation and attract a minimum of 15 attendees. 2 However, Foley et al. in A Scoping Study of Business Events: Beyond Tourism Benefits 3 show that the results indicate that beneficial outcomes are realised in areas including: Knowledge expansion; Networking, relationships and collaboration; Educational outcomes; Fundraising and future research capacity; Raising awareness and profiling; and Showcasing and destination reputation. Foley et al. states that: And The events have brought the world s best practice and international knowledge to local sector researchers and practitioners in the fields of medicine, law, sport and the environment. Growing Australian knowledge has contributed to capacity building within each sector. The events have exposed delegates to new knowledge and ideas which have been incorporated into educational offerings. This has improved the quality of education in the various sectors, which has flow on benefits for the quality of graduates who enter the field after their studies. 4 The events have allowed the dissemination of new knowledge, techniques, materials, and technologies in each of the sectors, providing Sydney/NSW based educators, practitioners and researchers with access to a network of international colleagues. This networking has provided local delegates with new business and research collaborations, and will generate innovation, ideas and research agendas for many years to come. 5 The SBC highlights that these beneficial outcomes are invaluable to social and economic growth. Additionally, the study highlights that the events have showcased Sydney s capacities, putting the destination on the map, fostering a reputation as a place of highly skilled, capable, world leading researchers 6. The SBC believes that the hosting of important, global events will continue to advance Sydney as a global city. 2 Foley et al. (2010), A Scoping Study of Business Events: Beyond Tourism Benefits, p Ibid., p ibid., Executive Summary. 5 ibid., Executive Summary. 6 ibid., Executive Summary. 2

3 (a) Options for an expanded convention and exhibition facility on the site of the existing Entertainment Carpark. An expanded convention and exhibition facility on the site of the existing Entertainment Carpark is essential if SCEC is to capture the growth in exhibitions and conventions. Sydney Entertainment Centre (SEC) is owned by the Sydney Harbour Foreshore Authority (SHFA) and is operated by Darling Harbour Convention and Exhibitions Pty Ltd. The Sydney Convention and Exhibition Centre (SCEC) is also owned by SHFA and is privately managed by Darling Harbour Convention and Exhibitions Pty Ltd. These close linkages allow SHFA to manage the development effectively and to seize the opportunity to create a seamless plan of management. John O Neill AO highlighted a number of points in his Review into Sydney Convention and Exhibition Space which the SBC notes: And SCEC has run into some capacity constraints. These are predominantly to do with the demands of domestic exhibitions, since Australia does not host international exhibitions and the international conventions being won by Sydney have been declining in number size. 7 Organisers of fourteen major exhibitions currently based at SCEC are or would soon be in a position to request additional space beyond that currently available at SCEC. 8 Additional space is vital to meet the requirements of current exhibitions to attract the growth in exhibitions that SCEC has been unable to accommodate previously. Expansion of the exhibition space will also equip SCEC to bid for international conventions that require significant exhibition space. Organisers of six exhibitions have indicated that they would like to lease more than 27,200m² that is available at SCEC. Four of these have indicated that they would be able to lease out in the order of an additional 15,000m², while two others are seeking up to an additional 10,000m². In addition, organisers of another eight exhibitions are seeking an additional 5,000m² to 10,000m², but these requests would not be able to fit within the current 27,200m² footprint of SCEC, if it were not for the conflicts with other exhibition space users. 9 Sydney cannot continue to rely on its reputation as a tourist destination, either in visitor numbers or in the value tourism adds to the State s income. Despite the attraction of Sydney, NSW is progressively losing market share of Australian tourism. Not only is NSW losing market share of Australian tourism but Australia as a whole is losing share of overall global inbound tourism. 10 As already noted, Sydney needs to remain competitive with other global cities, and in doing so, needs to offer infrastructure and facilities which meet the best international standards. Business events play a vital role in the broader economic strategy of the state. Business events may contribute to the economy from a tourism perspective but the most significant contribution includes impacts from business events in areas such as 7 John O Neill AO, (2007), Review into Sydney Convention and Exhibition Space, p ibid,, p ibid,, p John O Neill AO, (2008), Review into Tourism in New South Wales, pp. 1, 2. 3

4 innovation, education, networking, trade, research and practice [which] are likely to far outweigh the financial returns of the tourism spend 11. John O Neill AO remarks that: It makes no sense for the Government to invest hundreds of millions of dollars in facilities intended to attract the type of international and national business events that have very substantial economic and strategic benefits for the State and then impose a booking regime that discourages those events and their benefits. Whist such a regime may return a little more revenue to the State than otherwise would be the case, it is still much less than the value of the economic and strategic benefits foregone. 12 The role and importance of business events and exhibitions has been grasped by key cities in the Asia Pacific region. For example, Suntec Singapore International Convention and Exhibition Centre is at the heart of a self-contained, totally integrated events infrastructure. In addition to its first-class facilities, Suntec Singapore offers direct access to 5,200 hotel rooms, 1,000 retail stores, 300 restaurants and the region s new centre for performing arts, Esplanade Theatres on the Bay. 13 Sydney needs a similar vision for an integrated multifunctional precinct if it is to be recognised as a world leader in exhibition and events hosting. Therefore, the expansion and redevelopment of the SCEC should recognise that world-class exhibition and convention centres are multi-purpose and capable to run a number of events concurrently. The Hong Kong Convention and Exhibition Centre (HKCEC) can host exhibitions as well as major conventions and multiple smaller events at one time. The HKCEC is a prime indoor venue for all-star entertainment, cultural and sporting events. With spacious and multi-purpose venues, the HKCEC can accommodate a diverse range of special events, such as fashion shows, concerts, film premieres, sport events or even pet shows. 14 Hong Kong has one of the strongest exhibition portfolios of any exhibition venue in the world. Every year, Hong Kong presents more top global events than any other Asian city and over 50 of these events are major regional and international trade fairs. 15 SCEC can build a strong international convention portfolio and transform Darling Harbour South into a vibrant precinct. An upgraded SCEC will enable Sydney to bid for events of all sizes enabling it to host a broader range of events to suit a range of clients beyond that which has been delivered successfully using existing facilities. John O Neill AO states: The absolute priority for SCEC should be to host large international and national conventions. It would, of course, host other business events but they should be lower 11 Foley et al. (2010), A Scoping Study of Business Events: Beyond Tourism Benefits, Executive Summary. 12 John O Neill AO, (2007), Review into Sydney Convention and Exhibition Space, p Suntec Singapore International Convention and Exhibition Centre, (2010), < 14 Hong Kong Convention and Exhibition Centre, (2010), < 15 ibid., < 4

5 priority and fit around the top priority ones. In that context, the further development of SCEC would be carefully planned to maximise its suitability for this priority. 16 And The non-cbd location (ideally Sydney Showground) should be developed to deal primarily with domestic exhibitions and with national conventions. It should be a site that can accommodate substantial future growth so that as the CBD site reaches its future capacity limit, then more events, such as national conventions, can move to the non-cbd location which would be gradually developed to accommodate them. 17 The SBC believes that redevelopment of the existing Entertainment Centre and car park would enable the development of a new enhanced multifunctional precinct incorporating a hotel, ideally of five star rating. Provision of such a facility within the footprint of the building would place Sydney on a footing with facilities in other cities and enhance the competitive position of Sydney. Sydney s underdevelopment of five star rated hotels in Sydney since the 2000 Olympics is a disincentive to attracting major business events and other major events. Overall, sufficient visitor accommodation in Sydney s CBD will be critical if Sydney is to grow as both an international tourist and business centre. 18 The current catering facilities at the SCEC are at capacity. The SCEC has a single kitchen which is required to service all the events. Further, it cannot be renovated to provide for any further expansion. Therefore, any redevelopment of SCEC will require an additional kitchen or kitchen shared with the new five star hotel. The SBC envisages a core service area with underground service corridors providing efficiency. Suntec Singapore has a world-class team of chefs in the most versatile banquet kitchen, a 3,700m² 6-kitchen complex capable of catering up to 10,000 meals 19. From elaborate set-ups to luxurious decorations the team is equipped to handle all the events. The redeveloped SCEC will need to have the catering requirements of expanded events management taken into consideration. Recommendation: Expand the Sydney Convention and Exhibition Centre to reflect a world-class convention facility that can host major conventions and exhibitions and run other smaller events at the same time. Develop Sydney Convention and Exhibition Centre to house spacious multi-purpose venues that can accommodate a wide range of special events such as fashion shows, film premieres, and other entertainment, cultural and sporting events. Develop Sydney Convention and Exhibition Centre to host large international and national conventions and move domestic exhibitions and some national conventions to a non-cbd location such as the Sydney Showground that will be complementary. Develop a 5 star hotel as part of the new development. Create new shared facilities across the whole facility, including IT and kitchen facilities with interconnected underground service corridors. 16 John O Neill AO, (2007), Review into Sydney Convention and Exhibition Space, p ibid., p John O Neill AO, (2008), Review into Tourism in New South Wales, p Suntec Singapore, (2010), Our Venue, < 5

6 (b) Options for the Sydney Entertainment Centre, with all options ensuring an ongoing CBD entertainment facility. In order to facilitate the expansion of SCEC and provide an improved CBD entertainment facility, SBC believes that the optimal solution is to demolish the Sydney Entertainment Centre (SEC) and its adjacent car park and build a larger and multi-functional facility. The combined site could accommodate an additional 20,000m² of exhibition space 20. The Entertainment Centre car park could host approximately 10,000m², while the current Sydney Entertainment Centre site could accommodate an additional 10,000m². It is understood that the construction of a new, improved, multifunctional Sydney Entertainment Centre would take up to three and a half years. Whilst this would significantly reduce Sydney s events capacity during that time, the longer term benefits outweigh the disruption. In so planning, the SBC encourages a timely approval process, guaranteed timeframe for completion with private sector financial commitment, underwritten by appropriate risk mitigation. As a model that draws together the multi-facets the SBC notes that the Esplanade Theatres on the Bay in Singapore is one of the world s busiest arts centres catering to diverse audiences. It houses world-class performance spaces, supported by a comprehensive range of professional support facilities and services. The Esplanade is linked with the Suntec Singapore International Convention and Exhibition Centre. 21 Integration of SCEC with SEC and construction of luxury accommodation would not just strengthen bidding for international conventions, but also enforce Sydney s position as a global city. Although the number of international association meetings held in Sydney (Appendix I and II) has remained relatively steady over the past decade (average 58.5 per year with 61 in 2009), the size of the market globally has grown 60 per cent. 22 Unlike Sydney, our regional competitors have captured their share of this growth (Singapore 80%, Beijing 113%, Seoul 190%, Bangkok 324%). Sydney could significantly improve its ranking if it were to follow the lead of its very successful competitors. Recommendation: Demolish Sydney Entertainment Centre and Sydney Entertainment Centre car park to build a multi purpose facility that will act as an extension of the Sydney Convention and Exhibition Centre. 20 John O Neill AO, (2007), Review into Sydney Convention and Exhibition Space, p The Esplanade, (2010), < 22 International Congress and Convention Association, (2009), Statistics Report: the International Association Meetings Market , p

7 (c) Issues of precinct integration with respect to the tertiary education cluster to the south of the precinct, Chinatown, Powerhouse Museum, integration with Darling Walk redevelopment and enhanced public domain, and interface opportunities with Barangaroo. The development of South Darling Harbour needs to integrate with surrounding precincts including the University of Technology Sydney, Barangaroo, the CBD and Chinatown. UTS is constructing a new building (Dr Chau Chak Wing Building) designed by Frank Gehry scheduled to be completed by the end of The building will be an architectural landmark and, as a Gehry building, it is likely to attract considerable visitor interest. There is an additional opportunity to provide interconnection between the UTS and East Darling Harbour attracting students to the precinct. Universities provide the body of knowledge that conferences might draw from, forming an excellent conduit for meetings and conferences which SCEC could facilitate. It is essential that South Darling Harbour complements the new developments along the western harbour foreshore known as Barangaroo and is well connected with public transport for better and faster linkages to other precincts and to the CBD. Furthermore, it needs to connect with the redevelopment of the Darling Walk. Since the Darling Walk project will combine commercial office and leisure space, a new pedestrian gateway linking Darling Harbour and the CBD, and improved pedestrian access to other precincts is critical for improved connectedness. The redevelopment of the precinct presents an opportunity for a new vision for Sydney, one built around a vibrant new precinct where students, office workers, residents, visitors can interact within new, multipurpose, dynamic areas of Sydney. Just as Federation Square in Melbourne created a vibrant, dynamic, new place where Melbournians and visitors gather, the Darling Harbour South precinct offers Sydney a unique opportunity to create a new business and living precinct for Sydney. Such a precinct complement the Barangaroo development where the core of the new precinct will contribute to Sydney as a global city with high-end commercial space. Recommendation: Connect Darling Harbour South with the University of Technology Sydney and integrate the precinct with Barangaroo and the CBD. Barangaroo to be complementary to Darling Harbour. 7

8 (d) Additional Comments: Private Sector Participation Private sector participation in the development and operation of an expanded convention centre in Sydney could comprise some or all of the following roles: Design Construction Financing Maintenance Operation (with a spectrum of possibilities for involvement in operation ranging from cleaning, food and beverage, and security, to management of bookings and marketing of events). There are benefits from the private sector s involvement in delivering the expanded convention centre. In addition to assisting to fund the convention centre, private involvement is expected to contribute to better value for money results for government than traditional procurement methods. Furthermore, the integration of expanded convention and exhibition facilities with retail, commercial and/or residential development will provide opportunities for the private sector to offset some of the expansion costs, as well as ensuring a vibrant and active precinct. Other specific benefits of private sector participation may include: Improvement in project delivery Reduced procurement costs Greater certainty with full life cycle costing Higher levels of innovation and technology Better quality service outcomes. The SBC urges the development of a PPP model where the private sector contributes funding of the expanded convention and exhibition facilities in return for appropriate commercial opportunities to offset some of the costs. Recent development of the new Melbourne Convention Centre, which is integrated with the Exhibition Centre was delivered by the Victorian Government through partnership with a PPP consortium. This partnership delivered a $1.4 billion revitalised riverside precinct incorporating the expanded convention and exhibition centre, a new hotel, an office tower, 60,000 m 2 of retail and a rejuvenated river promenade. The involvement of the private sector allowed the Victorian Government to offset some of the costs of the development, contributing only $367 million of the total $1.4 billion development, with the City of Melbourne is contributing a further $43 million spent on municipal works around the precinct. As part of the PPP arrangements, Victoria also received $93.2 million from the Plenary Group for development rights of the precinct. Recommendation: Explore alternative financing models for the redevelopment. 8

9 Recommendations: Expand the Sydney Convention and Exhibition Centre to reflect a world-class convention facility that can host major conventions and exhibitions and run other smaller events at the same time. Develop Sydney Convention and Exhibition Centre to house spacious multi-purpose venues that can accommodate a wide range of special events such as fashion shows, film premieres, and other entertainment, cultural and sporting events. Develop Sydney Convention and Exhibition Centre to host large international and national conventions and move domestic exhibitions and some national conventions to a non-cbd location such as the Sydney Showground that will be complementary. Develop a 5 star hotel as part of the new development. Create new shared facilities across the whole facility, including IT and kitchen facilities with interconnected underground service corridors. Demolish Sydney Entertainment Centre and Sydney Entertainment Centre car park to build a multi purpose facility that will act as an extension of the Sydney Convention and Exhibition Centre. Connect Darling Harbour South with the University of Technology Sydney and integrate the precinct with Barangaroo and the CBD. Barangaroo to be complementary to Darling Harbour. Explore alternative financing models for the redevelopment. 9

10 Appendix I Number of Meetings Per City (Global) Rank City Vienna Barcelona Paris Berlin Singapore Copenhagen Stockholm Amsterdam Lisbon Beijing Buenos Aires Seoul Budapest Madrid Prague London Istanbul Sao Paulo Bangkok Athens Brussels Kuala Lumpur Rome Hong Kong Taipei Rio de Janeiro Sydney, NSW Data obtained from: International Congress and Convention Association, (2008), Statistics Report: The International Association Meetings Market

11 Appendix II Number of Meetings Per City (Asia-Pacific) Rank City Singapore Beijing Seoul Bangkok Kuala Lumpur Hong Kong Taipei Sydney, NSW Data obtained from: International Congress and Convention Association, (2008), Statistics Report: The International Association Meetings Market