Arena and Crown Works funding

The North East mayor has unveiled a £104 million cash injection aimed at salvaging two of the region’s most prominent stalled developments, writes Local Democracy Reporter, Daniel Holland.

Plans to build a world class arena on the Gateshead Quayside and a new film and TV studios on the banks of the River Wear in Sunderland are each in line for substantial funding from Kim McGuinness, in an effort to finally get them off the ground.

The concert venue will receive £24 million and Pallion’s proposed Crown Works studios £38.5 million of public money, under a major package to boost the North East’s cultural sector.

However, both flagship developments look set to be heavily scaled back from what had previously been envisioned.

The Tyneside arena project will be given £24 million to kickstart infrastructure building works this year on the problematic plot of vacant land, between the Glasshouse music centre and Baltic art gallery, and to find an investor-operator for a new 12,500-15,000 seat arena capable of attracting the world’s biggest music acts.

It is meant to act as a replacement for Newcastle’s Utilita Arena.

The Gateshead Quays plans had included an international grade conference centre, which is being dropped from the redrawn proposals.

North East Combined Authority officials said the latest planned works would now create a “stand-alone platform for a new arena”, as well as an open-air performance square and an urban park connecting the riverside to Baltic Quarter.

The investment has been described as a “significant turning point” to “derisk” a project that was announced back in 2018 but has suffered multiple setbacks as its estimated costs spiralled, in the hope of making it “a more attractive and commercially viable proposition”.

Meanwhile, the mayor has also committed to put £38.5 million into the Crown Works studios, where construction should now start this summer and be completed by the end of 2027.

The studios had been imagined as a £450 million complex with 19 sound stages that would potentially create 8,000 jobs in the North East’s creative industries and supply chains.

But, after financiers Cain International withdrew last year, the scheme is now expected to be limited in its initial scope to just two studios.

It is now encompasses one “super-sized new build” that could stage TV shows with a live audience, plus a refurbishment of the Doxford Printworks building.

Bosses announced on Monday evening that this public-funded “phase one” of the Crown Works site “aims to build out the site incrementally, with the initial investment expected to act as a catalyst to fuel public and private sector backing to expand the complex” over time.

The £38.5 million package includes a previously-announced £25 million originally offered by the Government in 2024 as part of the North East’s trailblazer devolution deal and subsequently reconfirmed by Chancellor Rachel Reeves.

There will be a further £11 million of “repayable funding” given to Sunderland City Council and operational revenue support of £500,000 per year for five years from the mayor’s office,  to help secure a private sector partner to run the studios.

Sunderland City Council hired real estate firm CBRE to find new private investors for the Crown Works last year, but none have yet been announced.

The original model for a far larger studio development driven by the private sector is now “no longer considered viable”, according to the North East Combined Authority (NECA).

The mayor’s announcement included a further £42 million North East Culture, Creative Industries and Sport framework, aimed at developing grassroots talent, improving small venues, and boosting access and participation across the region through a “diverse programme of festivals, events and sporting programmes”.

Council leaders are expected to sign off the investment package at a meeting of the NECA cabinet in South Shields on March 17.

On the Gateshead arena plans, Ms McGuinness said: “We’re one step closer to bringing the biggest bands to the North East with a new arena at Gateshead Quays. This is a really exciting step forward for this project which will mean local people can enjoy more world-class shows right here on their doorstep.

“Our region is hugely proud of our home-grown talent like Sam Fender and Jade Thirlwall, but we need a modern arena to bring more big names to the North East. Our funding will get the site ready for the development, so people will be able to see enabling works start on-site soon. We’re speeding up developments that benefit local people and it would be amazing to see the world’s biggest bands playing on the banks of the Tyne in the near future.”

The combined authority had stepped in last year to mount a review of the Quays plans, alongside Gateshead Council, and assess what market demand there was for the development. 

Officials now say that “extensive research confirmed at least four major operators’ interest in the site”, despite the long-running delays.

The arena vision was labelled a “pipe dream” in January, as Gateshead’s Lib Dem opposition called for it to be abandoned and the land given over to housing.

Previously, the Quays development was meant to be sponsored by Sage and operated by ASM Global, the owner-operator of the Utilita Arena which has more recently been rebranded as Legends Global.

Formerly used as a surface car park, the site was cleared for development several years ago and a multi-million pound multi-storey car park has already been built to serve a future arena site.

Labour council leader Martin Gannon said today that the arena would “put Gateshead on the map and spark new energy, confidence and opportunity across our region”.

He added: “Residents have waited a long time to see momentum, and this funding means that works will turn ambition into visible, tangible progress.”

Covid-19, the war in Ukraine, and major price inflation hitting the construction industry have all been blamed for the lack of progress on the Quays up to this point.

Ask:PATRIZIA, Gateshead Council’s development partner, remains on board.

John Hughes, managing director of Ask Real Estate, said: “We welcome the strong financial support of the mayor, and are ready to start on this transformational development which has significant benefits for the local people of Gateshead and the wider North East region.”

Sunderland City Council leader Michael Mordey described the Crown Works progress as “a huge moment, as we turn a transformational vision into reality”, following last year’s setback. 

He added: “From joiners, electricians and painter and decorators, who will create sets for TV and film, to data wranglers and digital creators, and forklift drivers to sound and lighting engineers, this studio development will bring with it opportunities for all kinds of people and professions. This is about unleashing the immense potential of our region.”