The multi-purpose venue, on the site of the old Crowtree Leisure Centre, is set to attract hundreds of thousands of visitors to the city every year and will feature a food hall, restaurants, a hotel and studios.
Sunderland City Council is working with a range of partners to deliver the project, including a UK based industry-leading operator, and more than £20million in funding for the project has also been sourced from the local authority and Government.
The arena will move into advanced design stages if the council cabinet sign off the proposed budget for the scheme.
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Councillor Graeme Miller, leader of Sunderland City Council, said: “The rate of transformation in our city points to the level of regeneration we are delivering for Sunderland, and this development raises that bar higher”.
“We set out an ambition to bring more experiences to the city as part of our Riverside Sunderland investment strategy, and you only have to look at the change to date in the city centre to see that it is more than an aspiration – it’s something we’re determined to make a reality.
“We’re transforming Sunderland – we’re delivering on our promises to residents – and we’re proud to be spearheading a programme of change in Sunderland that is unlike any period of change in living memory. This new investment will be an incredible addition to the city centre.”
City bosses say the arena will complement the existing cultural attractions in the city, such as the Empire Theatre, the new Auditorium and the investments in Keel Square including the planned Culture House and the Keel Square Holiday Inn.
The arena forms part of the council’s successful bid to the UK Government’s Future High Street Fund, which is earmarked to enable the demolition of the remains of the former leisure centre.
The council said the development will be subject to a long-term lease agreement with a leisure operator, the income from which will recoup the council’s initial investment.
Plans for the arena were welcomed by key figures in the city.
Sharon Appleby, chief executive of Sunderland BID, said: “The most aspirational and successful city centres are those that are able to attract visitors and residents, with a blended offer of retail, food and drink and experience-led leisure.
“Today’s announcement is a significant one, creating a new leisure destination that will attract yet more businesses who want to be part of the city’s journey and who can take advantage of the huge investment and transformation underway in the heart of Sunderland.
"This is good news for our traders, delivering a facility that will complement the existing offer in Sunderland, and grow Sunderland’s reputation as an ambitious city with world class facilities and attractions. And its great news for residents, who can look forward to the next exciting stage of the city’s evolution.”
Sir David Bell, vice chancellor and chief executive of the University of Sunderland, said: “I have always said that a strong university needs a strong city and today’s announcement further strengthens Sunderland’s ambition to be a great place to live, work and study.
Ellen Thinnesen, chief executive of Education Partnership North East and chair of Sunderland Business Partnership, said: “There is a palpable sense of excitement and ambition in Sunderland right now, and a real momentum-build with positive announcement after positive announcement. What a brilliant time for the city and a bright future ahead.”