The Revival of London's Millennium Dome

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Simone Joyner / Getty

Sir Elton John performs live on stage at the O2 arena on September 5, 2007 in London, England.

As white elephants go, they didn't come much bigger than the Millennium Dome.

Located in East London's gritty Docklands region on the banks of the River Thames, the white, 80,000-square-meter, tent-like structure — designed by famed architect Richard Rogers — is one of the few manmade objects visible from space. Opening to great fanfare on Dec. 31, 1999, on the cusp of the new millennium with Queen Elizabeth II and U.K. Prime Minister Tony Blair in attendance, the Dome was initially considered a failure. Sure, it lured 6.5 million visitors to its themed Millennium Experience attractions during its year-long run — many more than any other U.K. attraction — but the government had naively promised to draw 12 million. Moreover, Britons largely considered its publicly-funded $1.22 billion price tag a waste of lottery and public money. That it took another three years to finally unload it — at a cost of around $60 million more for upkeep — only hardened negative attitudes toward the Dome. It's new owner is AEG, an American entertainment and sports conglomerate that also owns the Staples Center in Los Angeles and several sports teams, including the L.A. Kings hockey team.

Yet, within the space of the last four months, the Dome has become a hot destination. Now redubbed the O2 — after the mobile telecommunications operator paying $12 million a year for naming rights — and centered around a newly built, 20,000 seat arena, the O2 has quickly established itself as London's hippest concert venue since opening in June. Prince sold out 21 nights at the arena in August and September. Other top acts to play it so far include the Rolling Stones, Justin Timberlake, Elton John and the White Stripes. A reunited Led Zeppelin will play a one-time only gig at the O2 next month (it was originally scheduled for November but an injury to guitarist Jimmy Page has pushed it back to December 10th.) Some 25 million fans surged online for that show's 18,000 tickets, crashing the arena's website (which goes to show that online, the O2 still has some way to go in terms of dealing with expectations). Other upcoming big draws include Bruce Springsteen, the long awaited return of the Spice Girls, (whose tour sold out in 38 seconds) and Kanye West.

AEG needs between 120 to 150 events a year to make the O2 viable, but it's already on track to host up to 180 in its debut year. "We're well ahead of the game," says David Campbell, chief executive of AEG Europe. According to Billboard, O2 sold 601,056 tickets in its first three months, making it the fourth most popular arena in the world after Madison Square Garden, the Manchester Evening News Arena and Wembley Arena. Legendary British promoter Harvey Goldsmith, organizer of the Zeppelin show, isn't surprised by the O2's success: "It's a state of the art venue." That's not to say it can't accommodate nonmusical events. It's already hosted an NBA basketball exhibition game and the opening games to the NHL season, is currently featuring Disney on Ice, and will be used during the 2012 Olympic games for basketball and gymnastics.

AEG also ensured that the arena's not the only attraction. Restaurants, bars and an 11-screen cinema are aligned around a faux street scene that nearly rings the arena. A smaller, 2,500-seat club, Indigo, hosts less mainstream acts, such as funkster George Clinton and jazz great Al Jarreau. Prince also played at many of his aftershow parties into the wee hours. Its exhibition space opens next month, kicking off with a nine-month run of a King Tut exhibit expected to draw up to 2 million visitors. Also in the works: a British music hall of fame, another nightclub and a permanent Cirque de Soleil theater.

One big hurdle remains: finding a catalyst for the $700 million second phase of the redevelopment, which includes plans for a 650-room hotel next to the O2. Originally AEG expected to build a supercasino inside, but that idea got nixed by the government. One option is a cruise-ship terminal. AEG and the Port of London Authority are conducting a study to see if the Thames can be suitably dredged to allow the large ships to reach the O2. If given the go-ahead, this would open in time for the start of the 2012 London Olympics. Another possibility is a convention center. "Either would work," Campbell says. "We just need a driver for the hotel."

Campbell thinks the results have finally silenced naysayers who called the Dome a doomed disaster. Critics may have hated the Millennium Experience, he says, "but the building was always cool. The Rogers design, it's a fantastic, iconic structure." And now, thanks to a hot new arena, what's inside is cool, too.