Denver financier Philip Anschutz is betting that his golden touch will turn London’s former Millennium Dome, widely considered a white elephant, into another jewel.
His entertainment company plans to roll out the same kind of development it is planning in Los Angeles – using a sports arena as the centerpiece of a broader project that includes theaters, hotels, offices and housing.
“The entertainment district becomes like Times Square. It becomes a must-see, must-be, must-play place,” said Timothy J. Leiweke, the company’s president and chief executive.
AEG, formerly Anschutz Entertainment Group, also has plans to develop 50 acres on the Spree River in Berlin, Leiweke said.
The British government built the dome, whose name was changed Wednesday to The O2, in time for millennium celebrations in 2000 and had high hopes for its continued viability as an entertainment venue. Instead, the attraction – located on the Greenwich Peninsula at a bend of the Thames river – was a flop.
Anschutz, founder of Denver-based telecom Qwest, got the 23-acre, Teflon-coated fiberglass tent for free and cut a deal to build an arena in it.
AEG this week announced an $11.3 million-per-year naming-rights deal for the arena with British wireless company O2.
AEG expects to spend $1.8 billion to develop the area around The O2.
A 23,000-seat indoor arena similar to Denver’s Pepsi Center will be the focal point of the redevelopment. The new dome will feature 10 restaurants, eight bars, a British music hall of fame, a Jazz and Blues street, a 1,800-seat theater and a 2,200-capacity music club. A super-casino could also be built, although government gambling regulations make that uncertain.
In Los Angeles, AEG hopes to break ground in September on a similar $1 billion project on 28 acres surrounding the downtown Staples Center sports complex it owns.
Plans call for a 7,000-seat theater and a 45-story, 1,200- room convention hotel, as well as shops, restaurants, offices and 500 housing units.
Anschutz has a reputation for buying underperforming assets on the cheap and turning them into moneymakers. He built the world’s largest movie-theater chain, Regal Entertainment Group, by purchasing the debt of three struggling chains and gaining control of them when they filed for Chapter 11 bankruptcy protection.
The theater chains cost An schutz less than $500 million; last year, Regal had $643.1 million in revenues.
AEG won the right to develop The O2 without paying for the structure. Instead, the British government turned over the dome and 189 acres surrounding it to a company called Meridian Delta Ltd. AEG is Meridian’s partner and will have responsibility for developing and running the new venue. In exchange for the site, the partners promised to share future profits with the government.
AEG has other assets that could work in tandem with its arena developments. A subsidiary, AEG Live, is the second-largest live-entertainment company in the world, producing, marketing and servicing tours, festivals and special events. It has promoted tours by Britney Spears, Fleetwood Mac, the Dixie Chicks, Paul McCartney and others.
With venues from theaters to stadiums, AEG can send a strong message to artists that they should should use its production arm, Leiweke said.
“We have every facility to fit for that artist,” he said. “We are completely one-stop shopping.”
AEG also has its sights set on Berlin for a project that could mirror L.A. and London, but it has not announced financial details.
AEG owns other arenas, including London’s Manchester Evening News Arena, and is building soccer stadiums in Chicago and New York. But so far, plans for The O2, Staples Center and Berlin are the most far-reaching.
“What we are going to do is pick markets that are world- class markets where these kinds of districts will have a greater chance of success,” Leiweke said.
AEG isn’t the only one planning developments anchored by arenas. In Commerce City, Kroenke Sports Enterprises is planning a Major League Soccer stadium for its Colorado Rapids, along with new shops and restaurants. The project will be part of a redevelopment of the Rocky Mountain Arsenal land.
Staff writer Tom McGhee can be reached at 303-820-1671 or tmcghee@denverpost.com.
