Rudman's city: Basin or bottomless pit?

By BRIAN RUDMAN

It is nice to see someone making a killing out of the America's Cup.

What a pity though, that none of the billionaires thrusting dollars at our sailors have shown any interest in buying the management rights for the America's Cup Village as well.

If that were to happen, my joy as an Auckland ratepayer would be complete. Then I could relax knowing no more of our money would be disappearing down the Viaduct Basin gurgler on this event.

Right now, I'm not so confident. A draft budget for the village has already been drawn up by the Auckland City Council to cover the three years up to the next challenge and the bottom line is in red ink.

It predicts a shortfall of $15.48 million on expenditure of $34.4 million. The deficit, it is hoped, will be funded by sponsorship and Government assistance and other such imponderables.

Given the estimated $10 million loss from the last regatta and the on-going inability to turn a profit on past yacht race stop-overs, it takes a supreme optimist to believe in such pennies from heaven.

As you'll recall, Auckland regional ratepayers forked out $120 million for the flash boat garaging facilities for last summer's regatta. Experienced businessmen were charged with making the village break even. It didn't.

Auckland City officials are now leading the drive to establish a trust to manage the America's Cup Village. This plan has the support of other regional mayors and present owners, Infrastructure Auckland.

Details are still under wraps but it seems that Infrastructure Auckland will sell the village to the proposed trust, with payment deferred for 25 years. The sale will be arranged in such a way that the village company's tax losses are preserved.

Approved by the mayoral forum on May 5, the proposal was to be presented to Government this week by a delegation including Auckland mayor Chris Fletcher. Yesterday Mrs Fletcher said the trip had been postponed until sometime before July.

The trust would control the village environs currently owned by Infrastructure Auckland, Auckland City and Ports of Auckland. However Mrs Fletcher says she will only support the trust proposal if she can be assured of central and regional Government underwriting to guarantee Auckland City ratepayers don't end up paying for future event losses. She wants the Government to pay for branding rights to the village - a sort of sponsorship for Brand New Zealand.

Bob Wakelin, director of city enterprises, in a breakdown of the proposed $34.4 million expenditure, estimates the hosting of the America's Cup will cost $10.4 million. Added to that is $5 million to build a new breakwater, $6 million to cover cleaning and other associated costs outside the village, $4 million for other assets such as barriers, and $9 million for day-to-day running costs over three years. Only 55 per cent of these costs will be recoverable, he says.

What I find hard to accept is why the public - whether as ratepayer or taxpayer - has to take the risk of "hosting" the event. One has to wonder too, why public officials start off with the expectation there will be a loss.

A call to event organiser Rendell McIntosh of NZ Events Ltd suggests I'm not alone in my wondering.

Mr McIntosh reckons he and rival event organisers would be queueing up to pay - yes, pay - money for the rights to manage such an event.

He talks of a six-month festival with regular exhibitions highlighting the culture and products of the countries of the competing syndicates; of a think tank of professionals like himself to advise the proposed trust. Best of all, he talks of making a profit out of our $120 million investment.

It's time Mr McIntosh was invited to the Town Hall for a chat.