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The encyclopedia · Strategy & Leadership · Strategic decision · 2011–2023

Farglory's Taipei Dome added commercial space, cut fire safety — and sat idle for 5 years

Farglory packed a hotel, mall, and theater into the Taipei Dome without fire safety — the city halted construction for 5 years, and the cost jumped to NT$40B.

Farglory Group (遠雄集團) · 2023-10-20

What happened

The Taipei Dome (Farglory Dome) was a landmark BOT project to build a 40,000-seat indoor stadium in Taipei's Xinyi District. Construction began in October 2011 with an original completion target of 2015 and a total project cost of NT$37 billion. Farglory Group, the developer, had packed the site with a commercial complex — a hotel, shopping mall, and movie theater — to maximize revenue from the 50-year operating concession.

In May 2015, the newly elected administration of Mayor Ko Wen-je ordered a halt to construction, citing serious fire safety deficiencies. The city's safety review found that the enclosed commercial spaces blocked evacuation routes, creating a fire risk that could trap tens of thousands of people. The review also found that Farglory had modified the design without proper approvals, reducing the number of evacuation exits.

Farglory responded with a combative legal strategy, suing the city government and refusing to make the required safety changes. The legal battle dragged on for over five years. Meanwhile, the unfinished structure deteriorated — inspections in 2017 found rust on over 1 million spots across the 32,000m² floor area, requiring NT$400 million in repairs. The city imposed fines totaling NT$12.4 million for construction delays, and the dispute over rent and property taxes added another layer of conflict.

In 2020, both sides finally reached a settlement. Farglory agreed to reduce commercial space, improve fire safety, and pay higher rent. Construction resumed in August 2020. The dome opened in October 2023 — 12 years behind the original schedule. The total cost had jumped to more than NT$40 billion, and Farglory had spent years carrying the financial burden of a non-operating asset.

Why it happened

  • Farglory packed the Taipei Dome with a hotel, mall, and theater to maximize BOT revenue, but the enclosed commercial spaces created fire safety hazards the city government would not accept
  • Farglory responded to the construction halt with a combative legal strategy, suing the city instead of negotiating, which prolonged the halt for over five years
  • The unfinished structure deteriorated during the halt — rust on over 1 million spots required NT$400 million in repairs — and material costs rose year after year
  • Farglory and the city government could not agree on rent, property taxes, or design changes, adding years of arbitration to the construction delay
What it costNT$3B+ cost overruns, NT$400M rust repairs, 5yr lost revenuecostly

The lesson

A BOT project that maximizes commercial revenue at the expense of safety will eventually be stopped — and the developer bears the cost of every year it sits idle.

Aftermath

The Taipei Dome opened in October 2023, 12 years behind schedule. The total project cost exceeded NT$40 billion, up from the original NT$37 billion. Farglory operates the dome under a 50-year BOT concession with the Taipei City Government. The legal battle between Farglory and the city government over the 2015 halt set a precedent for public-private construction disputes in Taiwan. The dome has since hosted baseball games, concerts, and international events, but its financial viability remains uncertain given the massive debt carried from the construction period.

Sources

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