Adelaide races ahead of NZICC. Photo / SkyCity
SkyCity Entertainment Group expects to finish $1.05 billion worth of projects later next year, but Adelaide has been picked to beat Auckland as construction in the two cities run neck-and-neck.
"If I was a betting man - and I'm not - I'd probably put my money on Adelaide," chief executive Graeme Stephens told the AGM in Auckland today. "There's a degree of competitiveness between the Kiwis and the Aussies."
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The Adelaide project only started last year yet the NZICC was signed in 2015 and has suffered continued delays, with SkyCity losing nearly 8000 delegates booked for next February to April.
Stephens says now conferences might not be held there until 2021, as the end of next year is not the best time with Christmas and holidays soon after expected completion.
Work has sped ahead on the new A$330m ($353m) hotel on Adelaide's river while the $703m NZ International Convention Centre on an entire Auckland city block has been so pitifully slow that Stephens said liquidated damages of $40m had already been collected.
Adelaide is a 123-room luxury hotel, new VIP gaming facilities, three new bars and three additional signature restaurants and an upgrade of facilities within the neighbouring historic railway station building.
Richard Didsbury, a SkyCity director, said today of the NZICC: "The completion date has continued to drift both for Fletchers and ourselves. There are hundreds of tradespeople on the site and progress is being achieved every day, albeit slowly."
A constructive dialogue was taking place between SkyCity and Fletcher.
"Hopefully, the NZICC will be finished towards the end of next year and the hotel earlier," Didsbury said of the neighbouring new Horizon Hotel.
Even installation of Goliath, the giant four-lane glass/steel airbridge to span Hobson St, is delayed, Stephens revealed: instead of this month as previously anticipated, it won't now be hoisted into place till a public holiday in 2020, possibly February.
But some good news: the NZICC will host APEC in 2021, meaning Donald Trump and Vladimir Putin could come if still in power.
Shareholders also heard about a second new conference: the International Federation of Library Associations and Institutions in August 2022, requiring 15,000 room nights and bringing in up to $8m.
Shareholder Coralie van Camp asked what SkyCity was doing to appease union protesters gathered on Hobson St outside the AGM.
"We will fight you forever and ever," chanted 31 union protesters in te reo Māori outside.
SkyCity chairman Rob Campbell said the wage demands could amount to $40m, hitting SkyCity's bottom-line and "for most of the staff, this is not an issue. That's shown by low numbers of demonstrators. We wish it wasn't happening."
Minimum worker wages would rise to $20/hour next year and staff had agreed to a new values slogan "own it, share it, live it."
Shareholders also heard of new anti-problem-gambler facial recognition technology, tried out in Auckland but planned to be introduced here, at Hamilton and Queenstown soon. Stephens said SkyCity wanted to advance its role in New Zealand's online gaming sector, using data it had already collected on problem gamers to restrict who could participate.
SkyCity's plans for its existing Albert St/Federal St convention centre are also advancing: chief financial officer Rob Hamilton said after the AGM that by next month, the All Blacks' experience lease of level four would have begun and by next April, Academy Award-winning design and effects company Weta Workshop would have leased level five - arrangements all made based on earlier NZICC opening forecasts.
SkyCity could, therefore, have no big convention space to lease from next April to the end of next year when the NZICC is finished - and Emirates Team NZ has leased the Viaduct Events Centre, further squeezing convention space, although SkyCity did not mention that.
Interactive entertainment experiences are planned for levels four and five, aimed at international and domestic tourists, shareholders heard.
The SkyCity Theatre where the AGM was held will also change, although nothing has been announced. "It's a little uncertain," Campbell said. "It's not particularly productive in income. We are looking at options for better use of this place."
A shareholder asked about SkyCity's $125m share buyback, saying that failed to boost the share price, while another investor complained about a $4m glass ceiling.
Campbell said the board had considered a cash payout to investors of the approximately $450m from the Auckland carpark and Darwin casino sales but decided on the share buyback course instead. So far, $50m of shares had been bought back at prices "below our internal valuations".
Another shareholder asked if getting $70,000/carpark was enough, citing $150,000/carpark sales. But he was told of the bulk nature of that deal and the number of carparks involved.
SkyCity shares are trading around $3.93 on the NZX.
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