North East leaders to 'assess demand' for stalled Gateshead Quays and arena regeneration
New work is under way to assess whether a stalled international conference centre and arena development on the Gateshead Quayside can be built.
Serious doubts have surrounded plans for a “world-class” regeneration project on the riverside which it is claimed would deliver a £70 million annual boost to the North East economy.
Construction on the prime plot, nestled between the Glasshouse music centre and the Baltic art gallery, was meant to begin in autumn 2023.
But the development has become heavily delayed as its costs have spiralled and the site remains vacant, despite Gateshead Council assurances that the flagship scheme known as The Sage will go ahead.
It has now emerged that the North East Combined Authority (NECA) is funding a new push to “assess market demand” for the ambitious vision and “inform potential ways forward on its size and scope”.
In January 2023, the estimated cost of the conference centre and a 12,500-seat arena on the Gateshead Quays had jumped from an original £260 million to more than £350 million.
The Local Democracy Reporting Service understands that figure has continued to rise significantly since then, leading to what has been described as a “massive” funding gap, with factors including Brexit, the war in Ukraine, and major inflation hitting the construction industry blamed.
A £3.5 million contribution to the project was set aside in 2024 as one of the first moves following the agreement of the North East devolution deal, several months before the election which saw Kim McGuinness named as the region’s mayor.
NECA documents confirm that £500,000 of that money is now being drawn down to work on a “revised business case” for the Quays scheme, the first version of which was granted planning permission as long ago as November 2020.
The combined authority said: “The North East Combined Authority is committed to supporting Gateshead Council to explore the best way forward, in light of the challenges posed by inflation and market conditions.
“The £500k approved in April 2025 is drawn from the previously agreed funding for the business case development. The purpose of the funding is to assess market demand for the footprint and scale of such a project, working with specialist advisors from relevant sectors, to inform potential ways forward on its size and scope.”
Speaking to the Local Democracy Reporting Service in March, Gateshead Council leader Martin Gannon said it was “inconceivable” that the conference centre would not be built.
He added at the time: “Yes, it is a challenge to deliver it and we will continue to work with the combined authority as we go through a process of evaluation and whether costs can be reduced. We are looking at a series of options which I am convinced will come up with a positive answer. We will be able to go ahead and we remain absolutely committed to it.”
Gateshead Council has also faced questions over why a £23 million multi-storey car park has already been built near the proposed conference centre site when the main development is yet to go ahead.
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