Bristol City Council revealed it had taken the decision due to fears over rising costs and the huge sums of the money that would need to be borrowed in order to build the arena on Temple Island.
In 2016, Bouygues UK was tasked to build the project but failed to agree on terms with the local authority and walked away as costs rose to £90m from the £80m sum first agreed.
A pre-construction services deal was then handed to Buckingham Group Contracting. However, the plans could not be delivered despite an increased budget of £123.5m. In November last year, KPMG was commissioned to review the project and by January 2018, spending had topped £10m including KPMG's fees.
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With the Arena plans now being shelved, the council has started exploring options for delivering a mixed-use development on the Temple Island site, which would include a bespoke conference centre and a four or five star hotel, commercial spaces with supporting retail and residential homes for city centre living, and affordable homes on the site next to Bristol Temple Meads. Work is now underway to explore the alternative mixed use scheme with potential partners, Legal & General.
Marvin Rees, Mayor of Bristol, said: "It is the council's duty to seek the best possible value for public money and the greatest economic benefit for Bristol and this has been central to the decision. We cannot ignore the evidence which shows that a mixed use scheme on Temple Island would bring an extra £500 million in economic benefit to our city and create three times the number of jobs for the people of Bristol.
"We are committed to developing and sustaining a thriving city centre and the emerging options for the alternative scheme offer the lasting economic and social benefit we desperately need in Bristol. We now have the opportunity to deliver a development that raises the bar in terms of quality, sustainability and economic impact."
(LM/MH)
