Cardiff council is set to make its first financial commitment to bring a £50m International Conference and Convention Centre (ICCC) to the capital.
The Liberal Democrat/Plaid Cymru- run authority has identified the St David’s House office block, on Wood Street opposite central bus station, as its preferred location.
The owners of the building, a group of investors based in Ireland and London, last night confirmed talks were under way with council officials about the future of the site.
Hoteliers, who have long called for a centre to help boost bookings, said the ICCC was crucial if Cardiff is to compete with rival cities in the corporate sector.
Council leader Rodney Berman said studies had shown the centre – which is likely to have capacity for around 1,500 delegates – will bring about £46m a year into the economy.
In his administration’s proposed budget for the next financial year, Coun Berman commits the council to setting aside £3m over the next three years to the project.
This cash will then be used to cover repayments on a £15m loan which would be taken out in the 2015-16 financial year.
As well as attracting private sector investment, the £30m shortfall could be covered by a new funding mechanism known as Tax Increment Financing (TIF).
TIF allows local authorities to borrow money to fund new developments by using the business rates they will accrue in the future as collateral.
In the case of a convention centre, it would allow the council to borrow money using the extra business rates they would receive to pay off the loan. Edinburgh council used TIF to finance the redevelopment of the Scottish capital’s waterfront.
Cardiff council must first get the approval of the Welsh Government to use TIF. The authority made a formal request for the powers as part of its submission for an Enterprise Zone at its proposed Central Business District (CBD).
A Welsh Government spokeswoman said it was due to respond to the submission before the zones go live in April.
Coun Berman said Cardiff would not get a convention centre without some form of investment of council taxpayers’ cash, but he was hopeful of attracting private investment as a partnership deal.
“This is about us signalling our strong intent to move forward with the convention centre and back that up with council resources,” he said.
“It has been an aspiration for some time, but this project is now firmly on the horizon for delivery in the next few years.”
Coun Berman said St David’s House was the preferred location because of its proximity to the bus and railway stations, as well as the city’s restaurants, shops and hotels.
A spokesman for the owners of St David’s House said: “We believe there is sufficient detail in terms of project management to ensure there is future investment around this important area of the city which will fit in with our plans.”
Marie Fagan, chair of Cardiff Hoteliers’ Association, said a convention centre was “pinnacle” to Cardiff’s growth in the corporate sector.