Large stadium developments in Greece show the lack of commercial savvy

Soccer clubs seek to appropriate public land because they lack the funds; AEK may be forced to relocate

By Makis Theodoratos - Kathimerini

Modern soccer grounds are complete real estate propositions, as clubs — or, rather, the corporations that they have become — not only cash in on ticket sales, but also on leasing commercial space surrounding the grounds. Cinemas, all sorts of shops, restaurants, gyms, bars and cafeterias fit in harmoniously with establishments such as club shops and museums, which also contribute to revenues. All this means that the venue must be located at a strategic point, with easy road access and, if possible, access to public transport, particularly train or metro.

There are plenty of examples abroad, where the construction of a soccer ground with supporting commercial uses fulfills the conditions of a multi-use property utilization plan. The one that stands out though is the new Wembley Stadium being built in northwest London.

More than just a soccer ground for the British capital, Wembley is a civic facelift project as it creates a new hub for commercial activity, recreation and sports. It is being developed by the consortium of Quintain Estates and Development Plc with Caesars Entertainment on an area of 492,328 square meters, including a 7,000 sq.m. casino (Caesars Wembley), a 400-room luxury hotel, a conference and exhibition center, a swimming pool with spa, and a multitude of shops, restaurants and pubs.

In addition, the old Wembley Arena has been reconstructed but remains a concert and recreation venue, while a 7,600 sq.m. square has been created in the area, along with new housing covering 3,700 sq.m. and offices covering 63,000 sq.m. Clearly, this type of commercial utilization not only allows for the ground’s funding, but also brings significant profits to the developer.

Returning to the Greek reality can only be depressing. Olympiakos soccer club has built a soccer ground on public property with some state funding and commercial uses, via a much-criticized contract leasing the property to Olympiakos for 49 years. The Panathinaikos soccer club, not to be left behind, is also seeking a state-owned plot, while AEK, lacking the necessary funds to construct a ground, is basing its efforts on developing commercial uses to be operated for some time by the developer.

To this end, AEK called last week for preliminary bids by potential investors according to the existing legislation, which allows for the development of commercial uses in an area of up to 20,000 sq.m. AEK’s call does not seem to be particularly attracting shopping center developers, whose managers have expressed their doubts about the prospects for a profitable development in the northern Athens suburb of Nea Philadelphia.

“A crucial issue in developing commercial uses is access. We hoped that the Attiki Odos would have made things better, but those forecasts never proved correct. The tolls and the junction created at Kifissou and Petrou Ralli have channeled traffic toward Nea Philadelphia and Nea Ionia, aggravating the situation there,” says a manager at a commercial property developing firm. The legal clause which forbids the operation of commercial spaces during sports events, so that the area is not further disturbed, worries potential developers, while the 20,000 sq.m. surface allowed for commercial uses is seen as insufficient for funding the entire project. Besides, given that this is a shopping center with a soccer ground as its “anchor store,” the kind of public a soccer game attracts, including hardcore fans with a propensity toward violence, may be a counterincentive for other consumers to visit it on two of the commercially important days of the week.

According to Yiannis Perrotis, CEO at the Lambert Smith Hampton consultancy firm with which AEK cooperates, “the call for bids will determine whether building a ground at Nea Philadelphia is feasible; if there is no interest, obviously the club’s administration will need to find an alternative solution,” he says.

On the question of the area, Perrotis suggests that “the choice must be made by a process of elimination, due to the ‘particular’ public that will become the main visitors to the installation. For example, due to its proximity to the Karaiskaki home ground of Olympiakos, AEK’s ground cannot be constructed at the former race course area, which would have fit the purpose marvelously. The ideal solution would have been between Nea Ionia and Nea Philadelphia, but there is no such plot available there,” says Perrotis. He concludes that “seeking the right spot must take account of access, the plot size that would allow development of sufficient commercial space to fund the project, as well as public satisfaction; after all, the project’s success depends on the public’s attendance.” AEK President Demis Nikolaidis, who wants the club to move from its traditional base to a larger and profitable installation, intends to prove that building a ground at Nea Philadelphia is not practical, but only after he has exhausted all possibilities.