Editorial: SkyCity's plan ticks all the right boxes

An artist's impression of the proposed convention centre. Photo / Supplied

Opinion

Governments have been talking for 10 years about the need for a convention centre in Auckland large enough to compete for the lucrative international conference trade. It is a year since the Ministry of Economic Development received expressions of interest from five prospective ventures, each with a different site in mind. And it has been nine months since the Cabinet began considering the bids.

Now that it has decided in favour of a proposal from SkyCity, it might be wondered why the decision took so long. SkyCity has offered to meet the full cost of a 3500-seat facility adjacent to its casino. No public money is involved. The company appears satisfied it can recover the $350 million capital cost and make the centre pay its way, asking in return for more gambling capacity and an extension of its casino licence from 2021.

The gambling concessions remain subject to negotiation and the Government must try to divorce its consideration of those issues from its desire to see a convention centre built and run at no cost to taxpayers. It is encouraging that it has already ruled out any discussion of reducing the age of entry to casinos or granting an internet gambling licence or additional casino licences.

The Government's negotiating hand from here on will depend on whether any of the rival bids involved no financial support. Infratil's proposal for a convention centre on the site of its bus yard in the Wynyard Quarter might also have been financially independent, though it faced the difficulty that the site is some distance from Queen St.

A Ngati Whatua proposal on the eastern periphery of the central business district faced the same difficulty, as did the ASB Showgrounds in Greenlane. The need for sufficient hotel accommodation nearby probably requires that the convention centre be comfortably within the CBD. On that score, only two bids were strongly in contention: SkyCity and the former Auckland City Council's site behind the Aotea Centre on Mayoral Drive.

The council's scheme, incorporating a convention centre in its "Edge" entertainment precinct, has been supported here over the years, especially as a restoration of the St James cinema in Queen St has been part of the proposal. Government interest in a convention centre as a catalyst for economic development made it seem likely that public finance would be provided no matter what scheme was chosen and the council scheme seemed to offer more public benefit.

But if SkyCity can make a convention centre pay without need of a public subsidy, its case is better. It means the public will not be taking on the risk that the centre will not attract sufficient conferences on the scale required - a risk all the greater when it is operated by a public body with public finance to fall back on.

SkyCity will carry the risk, giving it every incentive to compete keenly with other international conference destinations. Auckland's interest will be carried by a company that already runs a smaller convention centre with its casino. It is, as a Labour Party spokesman complains, a "multinational". It knows the business and must have confidence that Auckland can compete.

It is not clear whether the company's request for additional casino capacity is vital to its convention plans. It may be that the only thing the company needs from the Government is an assurance that it will not fund a competing facility. No business can compete with a bottomless public purse.

SkyCity has proven its competence and its commitment to Auckland. This investment offers more jobs, more visitors, more business for the city at no public outlay. In the end, that must recommend it.