Consequences of new construction and renovation for operations

Securing the budget and functionalities of cultural and entertainment properties

Traditionally, building costs are the focus of discussion in new construction and renovation projects for cultural and entertainment properties. These often vary significantly from the original plans. Examples such as the Elbphilharmonie are just extreme cases. An actori study in which 40 cultural and entertainment properties in German-speaking countries were examined with regard to construction costs shows that at least 50% of the buildings exceeded the originally planned investment sum.

In addition to planning errors, a failure to address later use or operation often plays a role. In many cases, adjustments have to be made after planning in order to achieve the desired uses. Intensive examination of the later use or operation is also relevant for other reasons: While construction investments represent a sum that is calculated and decided on once, the use and business model of a property entails ongoing annually recurring follow-up costs in operations.

In order to keep an eye on the construction plans as well as a later development of costs in the business, a timely discussion with concretely planned use and function is essential. Examination of the envisaged business model and the organisation required for viable operation is just as important as clarification of the operator and financing model. Last but not least, a focused marketing that reliably opens up all sources of acquisition of a cultural or entertainment property is most important.

In recent years, we have supported different types of real estate in new construction or renovation processes with similar issues: from content support in the development of a modern museum building to examination of the economic and organisational effects of a comprehensive renovation of a theatre building.

An excerpt from our references