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Home / New Zealand

'No good argument' for Team NZ to keep free rent of Viaduct Event Centre says mayor, after $14m in subsidies

By Tom Dillane & Bernard Orsman
NZ Herald·
30 Mar, 2022 05:30 AM5 mins to read

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PM Jacinda Ardern was 'disappointed' with the move of the America's Cup offshore while Auckland Mayor Phil Goff revealed more details about what will happen to the former team base locations. Video / NZ Herald / Getty Images

Negotiations with Team New Zealand will commence in the coming days to settle a "fair market rent" for their future use of Auckland's Viaduct Events Centre - which they have occupied for free since 2018 at a cost of $14 million to ratepayers.

The negotiations with Auckland Council over the publicly owned venue begin after Team NZ confirmed today they had sold hosting rights for the 37th America's Cup offshore to Barcelona.

Team NZ has enjoyed completely subsidised rent of the 6000sq m building on Auckland's waterfront since November 2018.

The seven-room Events Centre once earned Auckland Council $3.5m-$4m per year and held hundreds of functions annually: including NZ Fashion week and political party launches.

In 2020, Official Information documents revealed Emirates Team NZ was paying $1 a year to use the events centre as its America's Cup base until March 2022 - with a "maximum" lease term until September 2027.

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Team NZ indicated to the Herald they do intend to pursue a lease of the Viaduct Events Centre until the completion of AC37 in 2024.

​​"Emirates Team New Zealand have a lease to occupy the VEC until the final date of the completion of AC37 and the negotiations re the rent component of the lease are in the early stages," a Team NZ spokesperson said.

Launch of Te Kahu the Emirates Team New Zealand practice yacht at the Viaduct Events Centre, Wynyard Centre, Auckland 22 January 2020. Photo / Emirates Team New Zealand
Launch of Te Kahu the Emirates Team New Zealand practice yacht at the Viaduct Events Centre, Wynyard Centre, Auckland 22 January 2020. Photo / Emirates Team New Zealand

Auckland Mayor Phil Goff told the Herald that now the initial lease period is up, he expects a full market rate of the Viaducts' Event Centre will be pursued.

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"There is no good argument for the council to subsidise ETNZ through free rent of the Viaduct Events Centre when the defence of the Cup is not taking place in Auckland," Goff said.

"According to the terms of the current lease, the council – through Eke Panuku and Auckland Unlimited – will negotiate a fair market rent with ETNZ in the event that AC37 is not defended in Auckland.

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"Alternatively, ETNZ may choose instead to vacate the premises. These negotiations will commence in the coming days, now that the decision on the Cup venue has been announced."

Goff has been briefed about the start of the negotiations by Auckland Council CCOs Auckland Unlimited and Eke Panuku, but will not be directly involved.

David Rankin, chief executive of Eke Panuku, said discussions with Team NZ about the future use of the Viaduct Events Centre are "in the very early stages". The review of the rent of the Events Centre will be backdated to March 1, 2022, when finalised.

Grant Dalton at the launch of Emirates Team New Zealand AC75 outside the Viaduct Events Centre on September 6, 2019. Photo / Michael Craig
Grant Dalton at the launch of Emirates Team New Zealand AC75 outside the Viaduct Events Centre on September 6, 2019. Photo / Michael Craig
Huge crowds at the Viaduct Basin in Auckland, as people watch the undocking of Luna Rossa and Team NZ prior to the America's Cup final in March 2021. Photo / Alex Burton
Huge crowds at the Viaduct Basin in Auckland, as people watch the undocking of Luna Rossa and Team NZ prior to the America's Cup final in March 2021. Photo / Alex Burton

In a surprising parallel development, the Herald understands competing America's Cup syndicate Ineos Team UK is also seeking to negotiate a new lease of its makeshift base a few hundred metres from Team NZ in the Viaduct on Wynyard Wharf.

Auckland Council made a huge investment in the 2021 America's Cup event held in Auckland, which was held with closed international borders and without the tourism market that provides the main avenue for host cities to recoup costs.

A cost-benefit report released in July 2021 of the 36th America's Cup in 2021 revealed Auckland Council had spent $215.2 million for the event - which included some "already planned" infrastructure projects and the free rent of the Viaduct Events Centre.

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Auckland's economy alone was left with a financial deficit of $146m following the event - with a financial return of 72 cents back for every dollar put in.

Auckland Councillor Chris Darby. Photo / Dean Purcell
Auckland Councillor Chris Darby. Photo / Dean Purcell
Huge crowds at the Viaduct Basin in Auckland, as people watch the undocking of Luna Rossa and Team NZ prior to racing in the 2021 America's Cup. Photo / Alex Burton
Huge crowds at the Viaduct Basin in Auckland, as people watch the undocking of Luna Rossa and Team NZ prior to racing in the 2021 America's Cup. Photo / Alex Burton

Auckland Councillor and planning committee chairman Chris Darby said the public funding of Team NZ, for them to not repay the gesture with defending the cup on home soil, should be a lesson.

"One of the things we've really not had with Team NZ is an open book approach to see the finances in a transparent way," Darby said.

"If there's any lesson Government and council can learn here is if any entity comes calling in the future, be it Team NZ or any other sporting event, we've got to an open book examination of the finances. This has been far too much a closeted deal-making history with Team NZ.

"I think they've expunged their social licence Aucklanders and New Zealanders have granted them over decades and that will be very difficult to get back. The biggest winners are the bank balances of some individuals."

Team NZ chief executive Grant Dalton justified the selling of the hosting rights for AC37 offshore by claiming the Government's re-hosting offer of $99m to fund the 2024 event in Auckland would not be enough to retain Team NZ personnel from lucrative offers by competing syndicates.

"If we thought it was possible to fund and hold the America's Cup in New Zealand, it would have been there. It was obvious very early on it was going to be very very difficult or you would lose," Dalton said.

"Now there's no guarantee we're going to win over here as well, but we've got a chance. We had no chance at home."

From left: Team New Zealand boss Grant Dalton, Prime Minister Jacinda Ardern, chief science adviser Juliet Gerrard and Sustainable Coastlines co-founder Camden Howitt in 2019. Photo / Jason Oxenham
From left: Team New Zealand boss Grant Dalton, Prime Minister Jacinda Ardern, chief science adviser Juliet Gerrard and Sustainable Coastlines co-founder Camden Howitt in 2019. Photo / Jason Oxenham

However, speaking this morning, Prime Minister Jacinda Ardern maintained the $99m was a fair offer, given Covid-19 austerity measures they were working within, and the $136.5m the Government already put into the 2021 event.

"I probably feel the same way as many New Zealanders. I am disappointed around the decision that's been made on where the America's Cup will be held," Ardern said.

"As a government we certainly stumped up sufficient funding for it to be hosted here. We wanted it to be hosted here. So for it to depart is a disappointment.

"For us we wanted it here because New Zealand treats it as a national event. I don't think any other country in the world treats the America's Cup in the way that we do. We all celebrate it but at the same time, we have to consider all the other costs. We put enough on the table for it to be hosted here but ultimately a different decision was made."

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