Auckland Council approves $63 million bailout for Eden Park

Eden Park. Photo / File

The Auckland Council has bailed out Eden Park to the tune of $63 million, and nearly $10m of that is a brand-new, no-strings grant.

Mayor Phil Goff, who was outvoted in the meeting, immediately condemned the decision. He told the Herald, "You can basically guarantee that Eden Park will be back for more, because why wouldn't they? That's free money we've just given them."

Goff supported a proposal from officials that the extra money, totalling $9.8 million, be a no-interest loan, secured against the Eden Park assets. But by a vote of 12-10, the Finance and Performance Committee preferred the option of a grant.

The committee comprises all councillors and two members of the Independent Māori Statutory Board (IMSB).

The issue arose because the trust has a $40 million loan due to ASB Bank, along with a $7 million credit facility. The trust cannot repay the loan, and under the terms of its deed the council was obliged to take it over. In addition, the council has a pre-existing $6.5 million loan to the trust.

The council has agreed to consolidate all those monies and create a new loan to the trust, worth $53.5 million, that will be interest-bearing.

There was no dispute among councillors over the need to take over the major loan and credit facility. All councillors made a point in their speeches of saying how valuable Eden Park is and how important it was to keep it running, at least for the next 10 years.

But there was a long and at times testy debate about the trust's request for an extra $9.8 million, which will be used over three years to pay for basic maintenance and renovations. Nearly $2 million of that will go to replacing the turf on the main ground, and nearly $3 million will be spent on roof repairs and other maintenance on the North Stand.

The argument about grant vs loan boiled down to what both sides called "prudence".

The proposal for a grant was put forward by Cr Desley Simpson. She argued that it served the principles of "integrity", "fairness" and "fiscal prudence" well. "We give grants," she said. "We don't give loans. We should not be burdening Eden Park with more debt."

Cr Chris Darby responded by telling her, "Cr Simpson often wears a value for money badge, but today the clasp just fell off."

He said he found it very hard to believe that Simpson, who is the deputy chair of the committee, was giving someone "a handout without any safeguards".

Cr Cathy Casey said what Simpson proposed was "throwing money at Eden Park". She said although council didn't own Eden Park it had a "duty of care". She said there is also "an emotional relationship – people love it".

"But," she added, "we have a responsibility to ratepayers. I don't mean any disrespect to the trust board, but what happens if they go under? What if they sell up? With a loan, we get the certainty of being repaid. That's the 'prudent' decision."

Eden Park makes a small annual operating surplus, but it does not have the resources or the income to keep going with current activities, without support from somewhere. It is rarely used for big cricket fixtures, numbers for rugby are declining and it cannot stage concerts.

In fact, the park is allowed to stage up to six concerts a year, but applying for a consent for each one is expensive and so time-consuming, the process can take more than a year. Promoters and the trust just don't bother.

The trust estimates it forgoes up to $1 million in net revenue per lost concert, while the city loses $150 million in economic activity.

Cr Ross Clow, who chaired the meeting, said he wanted it known he had "consistently opposed spending money to investigate new stadium options". He was "a strong supporter of keeping Eden Park in the mix".

But he was worried it might not be able to keep itself "in the mix".

"I am not confident of the trustees," he said. "What will they do if they are wound up?" He worried that the assets of the trust could be dispersed among sports clubs, rather than used for a new stadium if the need arose.

Cr John Watson supported the grant. He said it was "total nonsense" to suggest the trust might get into trouble. "Eden Park is our national stadium and it's here to stay," he said.

Despite his confidence, other councillors voted for the grant because they were concerned a loan would make the trust's position more precarious.

Cr Simpson explained that this was because a loan would appear on the trust's balance sheet as a debt. "We don't want to do that to Eden Park."

She added that the chair of the trust board, Doug McKay, is also chair of the BNZ, and he had advised against the loan. "He's an accountant and this decision now is going to be made by a whole lot of councillors who are not accountants."

Both members of the IMSB voted for the grant, for that reason. David Taipari worried about the liability of trust board members. "What basis have I got to put someone in jeopardy of insolvency?"

Tau Henare said, "I would never want to put anyone in a position of financial risk."

Cr Watson agreed after the meeting that he and the IMSB members had "used different arguments, but they all worked towards the same thing".

Cr Greg Sayers took the same view as Henare and Taipari. Referring to a presentation earlier in the meeting, he said, "There was a clear message from the trustees about not wanting to take on more debt."

Mayor Goff disputed that. He told the Herald, "That may have been the impression they gave, but there was a clear answer from our officials. Providing an interest-free loan creates no risk."

Cr Josephine Bartley explained to council that the online dating site Tinder has a popular acronym known as NSA. It means No Strings Attached. "That's what the trust is asking us for," she said. "An NSA date. I'm not interested. I'm going to swipe left."

Trust board chair Doug McKay responded to the decision by saying, "The Eden Park Trust Board appreciates the outcome from today's Finance and Performance Committee meeting. We acknowledge the moral and financial support from Auckland Council as well as its recognition of the important role Eden Park plays in the lives of New Zealanders. The Trust Board looks forward to further consultation with Auckland Council and contributing to Regional Facilities Auckland's Venue Development Master Strategy in the near future."

Eden Park has had its immediate financial worries resolved, and received a windfall $10 million to help it continue operating. But the council's decisions yesterday are not a long-term fix. There is much more debate to come.

Those in favour of the grant: Christine Fletcher, Tau Henare, Mike Lee, Daniel Newman, Greg Sayers, Desley Simpson, Sharon Stewart, David Taipari, Sir John Walker, Wayne Walker, John Watson and Paul Young.

Those in favour of a loan: Ross Clow, Josephine Bartley, Cathy Casey, Fa'ananu Efeso Collins, Linda Cooper, Chris Darby, Alf Filipaina, Phil Goff, Richard Hills, Penny Hulse.

Absent: Bill Cashmore.