Stadiums and event centres promise excitement. But as GRAHAM REID and WARREN GAMBLE discover, it is possible to have too much of a good thing.



The discussion on Thursday night was probably not what any of the 20 Manukau City councillors wanted to have. Richard Jeffery, CEO of the Counties Manukau Pacific Trust, was there looking for financial backing for the proposed multi-purpose events centre on Great South Rd.



The building - with the unlovely name TelstraClear Pacific Multi-Purpose Events Centre, commonly known simply as "Pacific" - was dreamed up three years ago by local business people with an initial cost estimate of $38.2 million, excluding the land.



The trust was formed in 2000 and the council guaranteed the start-up phase of planning to a limit of $1 million. The council also offered the lease on part of the 26ha site and would also grant the net proceeds from the sale of the balance of it. The council would not, and hasn't yet given, consent to the sale of this surplus land until the trust had satisfied the requirement to obtain adequate funding.

Advertisement


And that's become the sticking point and why Jeffery was back before a full council meeting this week. Despite receiving positive indications from various groups and agencies for monies there is a shortfall of almost $9 million and the question was, would the council keep its options open so the project could proceed?



But with stadiums and events centres around the country in financial difficulty and cap-in-hand presentations almost a council commonplace, Jeffery knows the public watches carefully such ambitious projects and is loathe to start underwriting them.



North Harbour Stadium carries a debt mountain and this week Auckland City Council approved the redrawing of about $2.2 million of principal repaid on a $10 million 1998 loan for the Eden Park Trust Board.



In Hamilton last night "The Boot" - Don Clarke - kicked off the first match at the new Waikato Stadium. But the city has been rucking and mauling over the ambitious project to redevelop its rusting Rugby Park for almost six years.



Wearily, the Waikato Times wrote in an editorial this week: "Truth is, this project has been a catalogue of disasters since the day we were duped by an artist's impression of an ultra-modern year-round stadium with a $30 million price-tag."



To keep within a Mooloo's roar of the budget, the stadium shrank. Within two years it was to be a venue for 22,000 rather than 30,000. Three chairmen and more than one chief executive came and went.



In 1997 longtime councillor and city benefactor, David Braithwaite, stepped in; completing the stadium was a prime plank in his successful mayoral campaign last year.



The city council ($9.7 million) and two local trusts, Weltrust ($8.1m) and Trust Waikato ($7.5m), put up most of the money, but there has been sniping about the lack of interest - or capital - from the region's cash-rich Environment Waikato.



Back in Manukau, Jeffery notes that the Manukau trust had approached the Lotteries Commission for $5 million for stage one, and $2.5 million for stage two. It came back with $1.2 million all up.



"We've over-performed in the corporate sector," he said. "We're still looking for funding but for stage one we've got $6.1 million from the corporate sector plus another $3 million for stage two, so a good job has been done there.



"It's all well and good to be negative [about the Government] but it's got other priorities. Who knew two years ago they were going to have to bail an airline, who knew the state of the health sector? I'm not going to beat up on the Government because the goalposts have changed for them."



But that doesn't change the fact he was back before the council making his case for the project.



Jeffery and others are anxious to point out that this is not a stadium - which are often financially dependent on the changing fortunes of sports teams - but is a centre and community focus for many groups. He cites the Counties Manukau rugby team and a commitment that the Warriors would play a pre-season game there. There could be cultural events such as the Cook Island festival and the secondary schools festival. There could be meetings, exhibitions, concerts, banqueting for up to 1600 people; it could be a place for the burgeoning hip-hop scene in South Auckland ...



Words like "architectural landmark" and "a Manukau icon" are used by mayor Sir Barry Curtis about the centre so it would seem a churlish councillor who would deny such a proposal.



But on Thursday nine did, being narrowly outvoted by the other 11. Now the matter has been referred to the annual plan committee, which will examine the trust's request for $8.4 million over the next three years to complete stage one of the project.



The committee will make recommendations before a special council meeting on March 21 then written public submissions can be made until May 13.



Under the distinctive arch of the North Harbour Stadium's main grandstand, its trust chairman Peter Fitzsimmons is up front about the project's debt - $18 million to the ASB Bank, $5.9 million to the North Shore City Council, $4 million in interest.



That's $22 million that the trust, made up of businessmen and sports figures, cannot begin to pay back. The modest operating surpluses the stadium makes are put into maintenance and minor capital works.



As loan guarantors the council will have to start repaying the debt soon and is looking at new financing options.



Fitzsimmons, a company director and business adviser appointed 18 months ago, says the trust should be lauded for its drive and vision in launching the project.



But he says the ability to repay the initial loans was hamstrung when projected income from ground memberships - an elongated season ticket - did not hold up.



Fitzsimmons says the problem has been common to all sports stadiums. Competition for a limited number of events from other stadiums, competition from live television, and a corporate shift to picking and choosing events (rather than sinking a large chunk of entertainment money at one venue) have hit sales.



The stadium had a painful lesson in event competition when the Kingz soccer team were lured to Ericsson Stadium two years ago.



North Shore leaders cried foul that an Auckland Regional Council-owned facility they supported through levies had turned poacher.



This year North Harbour has won back three Kingz games and is planning to make the stadium the home of national soccer. It will host one Super12 rugby match, at least four North Harbour national provincial championship games, and possibly a second-tier All Black test.



It's not enough.



While they are out pitching for more events, the trust's new commercial focus has turned to making more out of its grandstand function space.



Work is also expected to start this year on a hotel linked to the stadium.



"Can we continue to build new stadiums when existing ones are under-utilised?" Fitzsimmons asks.



"In the Auckland region why can't we have some agreement on what the region needs and how it can be provided? My real concern is that all we are doing by competing is averaging our prices down."



Should the community have been told at the start that they would bear the financial burden?



"Would it have got started at all?" replies Fitzsimmons.



"I think you have to start with bold ambitions, do your very best and that's certainly the case here. In the end it ends up being a partnership and that's not a bad thing."



Across the bridge, the Auckland City Council is planning a different approach for its proposed Quay Park indoor arena, on land near the old Railway Station.



The arena faces crunch time in the next few weeks as councillors consider three proposals from Australian developers.



To avoid repeat funding requests the council has capped its proposed contribution at $50 million. A developer would fund the estimated $10 to $30 million required to build the 10,000 seat arena, and would be able to run it for 30 years before returning it to the council.



The chairman of the council's recreation and events subcommittee, Scott Milne, says the approach was about sharing the risk.



The council, backed by ratepayer surveys, wanted a large indoor arena to fill a glaring gap in the city's infrastructure - the ageing Supertop tent at Ericsson Stadium did not fit the bill for many visiting entertainers.



The deal would allow private developers to make a return on their investment, and they could not come back to the council for a top up.



Milne says because Quay Park and the smaller Manukau indoor arena are filling gaps in the market it should not affect other projects. But he says there is a risk Auckland is getting "near saturation point" with outdoor stadiums and that there is a possibility of a "rationalisation on the horizon".