Auckland Business Chamber boss Michael Barnett questions why the Cornwall Park Trust is pursuing rent hikes against the likes of the ASB Showgrounds "unless they have another agenda".
The non-profit showgrounds board has warned it is struggling to see how the 8ha non-profit exhibition and events site can remain solvent in the face of a massive proposed rent hike by its landlord, the Cornwall Park Trust, and a string of major event cancellations due to Covid-19.
Cornwall Park Trust, itself a charity, wants to put up the showgrounds' annual rent from $750,000 to $2.3 million. Adjudication is set for May after mediation failed.
The park trust did not answer the Herald's questions about what would happen to the showgrounds' land, and recent buildings valued at $48m, if the entity had to be wound up.
In normal times the showgrounds host more than 250 exhibitions and events a year, attracting over 1.3 million visitors. The top 20 major shows generate more than $35m for the Auckland and New Zealand economies.
The showgrounds' board is a charity which operates commercially. Its only income is from events and exhibitions.
Chamber chief executive Barnett said it would seem the board's composition of six EMA members and six from the Auckland Agricultural and Pastoral Association should give it business and government "reach" in its predicament.
"But is it? Cornwall Park seems unwise to pursue rent hikes - unless they have another agenda - but the showgrounds should hold off spending any more on legal fees.
"There is only one winner there - with no plan forward."
The board has spent around $725,000 on legal and arbitration fees challenging the rent hike.
The showgrounds board last year unsuccessfully asked the Government for support in the form of a $750,000 loan and/or grant. Board chairman Kim Campbell said he had personally phoned Auckland Mayor Phil Goff to ask for support.
So far this year due to Covid lockdowns and alert responses the 150-year-old showgrounds have lost four major events, including the Home Show scheduled for last month and the Royal Easter Show, due next month.
Last year 14 major events were cancelled due to the pandemic response, plus 11 smaller shows and concerts.
"Like many other genuine landowners with an eye for the long game the [Auckland business] chamber has provided support for its tenants - perhaps this is something that should be considered," Barnett said.
The Cornwall Park Trust has offered the showgrounds a rent suspension - but the money has to be repaid, said Campbell.
The park trust board has refused Herald requests for a discussion instead asking for written questions.
In a written statement it said it had "responded positively" to the showgrounds' request for assistance over ground rent.
It said the current review was to set the rent as at November 2018, well before Covid-19 and a registered valuer had been used. At arbitration the rent would be set by a valuer independent of both parties. Meantime the showgrounds had not had to pay any increased rent.
To the Herald's observation that both parties were charities, the park trust agreed but said it had legal obligations under the Cornwall Park Trust Deed in exercising duties as trustees. The two charities had different purposes, it said.
The showgrounds' board was created by a 1972 Act of Parliament, which allocated it to New Zealand's agriculture ministry.
Asked to comment on the showgrounds' worsening situation since being approached for financial help last year, Agriculture Minister Damien O'Connor said the amenity did not then meet the criteria for targeted Covid-19 relief. He didn't respond to the Herald's question as to whether he would put a fresh case to officials.
"I do note with concern that the ASB Showgrounds' fiscal situation has worsened.
"Given that their economic management appears to have been sound, I would hope that their sponsors, landlords and local government would work to see them through exceptional circumstances."
The ASB Bank did not respond to a request for comment.
Auckland Mayor Phil Goff in a written statement to the Herald said he was sympathetic to all organisations facing a severe short-term impact from the virus, which had also hit the council hard with a $450m loss in the last financial year.
The loss was forecast to rise to around $1 billion by 2024.
"The ASB Showgrounds have not approached council for funding and in current circumstances the prospect of council being able to raise short and longer-term financial support [is] very limited."
Goff said he wrote to the Government in September to request financial support for the showgrounds.
The chamber's Barnett said he couldn't see Auckland Council being able to help the showgrounds given the "hole" in its revenues.
"It's almost an anachronism now with only the regions able to hold incredibly loved and commercially viable A&P shows."