Council pays more millions to bail out stadium

By GREGG WYCHERLEY

The Hamilton City Council has been forced to pay at least $5.5 million to bail out the troubled Waikato Stadium project, narrowly averting a threatened lockout by the construction company.

An emergency council meeting yesterday voted by a narrow margin to take over the project and provide $3 million immediately, on top of the $9 million the council had been persuaded to provide.

The decision will allow the Chiefs' Super 12 game against the Stormers on April 20 to go ahead, but saddles the council with a huge budget shortfall after a blow-out of the original $29 million budget.

The Waikato Stadium Trust, of which Hamilton mayor David Braithwaite is a member, could not guarantee payment to its main contractor, Holman Construction, which had refused to release the stadium until about $3 million was paid.

Council chief executive Tony Marryatt said he would write a cheque for just over $3 million tomorrow to get Holman back to work, but he expected the final cost to be more than the early estimate of $5.5 million. The council would pay Holman from its budget and seek contributions towards the shortfall from other councils and community trusts in the Waikato.

The possibility of a rate rise to pay for the shortfall was remote.

He was unhappy the council had been forced into the risky position of having to effectively write a blank cheque to get the stadium running.

"We've got a facility that's 98 per cent finished that we need to get finished and available for use to the community," he said.

He agreed it would have been better to wait until the final shortfall was known, but felt the council needed to "make the best of a bad situation".

The controversy deepened as Mr Braithwaite declared a conflict of interest and opted not to attend yesterday's meeting.

Councillor Dave Macpherson had complained to the Auditor-General that Mr Braithwaite had a pecuniary interest in a deal to underwrite for Holman any shortfall in the project.

He criticised Mr Braithwaite as the former head of the trust that had overseen the "fiasco" the project had become.

"We've been burned and the community's been burned," he said. "The stadium trust and the mayor's credibility have been shot to pieces."

Mr Braithwaite told the Herald he was relaxed about not attending the meeting, and confident alternative financing would cover the shortfall.

The rescue package followed a bailout in February, when Hamilton businessman Brian Perry paid $2 million to ensure the stadium's debut game went ahead on March 1.

Waikato Rugby Union chief executive Gary Dawson said the decision came as a huge relief, but disputed allegations that the union had not contributed its fair share.

He said it paid $500,000 a year in rent and had agreed to provide Mr Perry with the naming rights for some lounges and gates at the stadium to compensate him for the $2 million he had paid.

The union lost $315,000 last year when the stadium was not completed in time for the NPC and it had to use WestpacTrust Park.

Last year's attendance dropped to 6500 from 11,000 the year before and game income fell from $465,762 to $109,531.