Dunedin ratepayers bail out Otago

The Forsyth Barr Stadium in Dunedin. Photo / Supplied

The Dunedin City Council is considering a debt write-off to help rescue the Otago Rugby Football Union, but only in return for a deal that seeks to secure the Forsyth Barr Stadium's financial future.

The package would see the ORFU's $399,000 unpaid bill to the council scrapped, but in return for a three-year programme of top-tier All Blacks test matches at the stadium, including a Bledisloe Cup clash against Australia.

The council - rather than the ORFU - would also receive the proceeds of a North-South charity rugby match to be played at the stadium in June, to offset the cost of the lost debt, and also wanted a long-term venue hire agreement tying the Highlanders to the stadium.

The Otago Daily Times understands, from sources close to the games, the deal has been agreed to by the New Zealand Rugby Union.

However, the entire package still required approval by councillors, and would be considered in a non-public part of today's extraordinary council meeting.

Details were expected to be made public if approved, and Mayor Dave Cull has scheduled a press conference for this afternoon, with ORFU and NZRU representatives to be present.

Mr Cull could not be contacted yesterday and council chief executive Paul Orders - who has been handling ORFU negotiations for the council - refused to comment when asked about the package.

The developments come after the Otago Daily Times this month reported All Black captain Richie McCaw was part of a high-powered rugby delegation in talks with the council over a rescue package.

The ORFU was saddled with $2.35 million in debt, including $1.2 million owed to the Bank of New Zealand, on top of the $399,000 owed to the council for the use of Carisbrook after its sale, plus rates arrears and other bills.

Speculation has mounted in recent days that the NZRU would come to a commercial arrangement with the BNZ to write off the debt owed to the bank by the ORFU.

In return, the bank would get increased sponsorship opportunities from the NZRU.

The bank already has a sponsorship agreement with the NZRU, its logo appearing on the front of the jersey of New Zealand Super 15 rugby sides.

Details of any other agreement with other creditors were not yet known, and ORFU change manager Jeremy Curragh declined comment when contacted yesterday.

BNZ staff did not return calls and NZRU media and public relations manager Mike Jaspers refused to comment on "what may or may not transpire" when contacted. Dunedin Venues Management Ltd head David Davies, through a spokeswoman, also declined to comment.

The Otago Daily Times understands the council deal is motivated by concerns its investment in the stadium could be at risk, unless a long-term agreement for the Highlanders to play at the venue is confirmed.

The Highlanders' franchise - owned by the NZRU - has offices inside the stadium complex, but used the venue for matches on a game-by-game basis, leaving open the possibility the team could relocate to another centre.

That could threaten private sector income from lounge memberships and seating packages, purchased on the basis that Highlanders - as well as Otago ITM Cup - matches would be staged at the stadium.

The loss of income could hit $4.6 million a year, posing a risk to DVML and the council, if the Highlanders relocated and those who purchased packages refused to pay, the Otago Daily Times understands.

The council had signed a venue hire agreement with the ORFU in 2009, which was intended to include the Highlanders, but the union and the franchise became separate entities the following year.

- Otago Daily Times