There are reasons they are bigger than Hull. They are not small time and small minded.
Folks from Paull, Brid, Goole, Beverley, Cottingham, Scarborough etc are either on the doorstep of or have to drive past Hull to get to Leeds, Sheffield, Liverpool, Manchester to get to these venues it would be easier to go to one in Hull PLUS we would then get BIG acts in Hull.
I have visited Leeds, Manchester, Sheffield arenas more than once and then faced getting home in the early hours. I can assure you I would rather visit a Hull arena and get home at a reasonable time as well as keeping my cash in the city of Hull.
The arguement of 'Well we are not as big as Leeds etc' as a reason not to do something is a self fulfilling proficiency.
3,500 is perfect, more than adequate for most bands and comedy acts.
Saying we need more seats to attract bigger artists may be true but have you considered this venue isn't designed for that purpose? We have no venue to compete with the O2 academy or Manchester Apollo, these are the venues that are booked out every night with a diverse range of acts. More people use these venues and the cost of visiting is significantly cheaper than the big arenas.
By building a venue this size the city are providing affordable entertainment to a range of people most nights a week, that's what we need, not the occasional huge pop act that charges £65 a ticket and a venue that's empty the rest of the time.