Letters: Crankworx not a great investment

Crankworx Slopestyle, April 2017. Photo/File

The July 6 meeting of the O&M Committee of council heard deputy mayor Donaldson, Crankworx board chair, and manager Tibble, report that Crankworx had achieved its first provisional surplus of $8764.

This was an 0.5 per cent return on revenue, and clearly not sustainable, so in my view they distracted council with imagined impacts on the local economy.

As half-owners and financiers of Crankworx, Rotorua's residents and ratepayers are concerned about risk and debt. Recall, Crankworx reported a 3.3 per cent loss on revenue a year ago, following an 8.5 per cent loss on revenue in its first year of operation, 2015. Not a brilliant return on public investment.

On our behalf, council underwrote Crankworx to a maximum of $500,000 across the first three years (2015-2017). The losses in the first two years required $93,889 and $38,630 in subsidies from council, with nothing yet repaid.

The promise made to O&M, that "Any gain will be directed back towards the underwrite and then we'll move forward to 2018", should have been challenged. The 2017 surplus will only pay off 6.6 per cent of the $132,519 drawn down to date, and at this rate, take another 15 years to pay off.

Instead, council should have insisted on fresh governance and a new business model, or sold up, not simply extended the term of the underwrite until 2021.

It is a good thing that councillors are not in business. But wait, they are, using our rates to pick "winners" like Crankworx!

REYNOLD MACPHERSON
Rotorua

SHA and Smith
During the Rotorua Lakes Council Strategy, Policy and Finance Committee meeting on Thursday there was discussion around a meeting held between council and Building and Construction Minister Nick Smith about the proposed Rotorua Special Housing Accord (SHA).

In this discussion councillors mentioned that during the meeting they asked Minister Smith about an example of best practice from other councils' experiences with SHAs, Minister Smith said that his home city, Nelson, was a good example to use.

Unfortunately, this is the equivalent of saying the New Zealand Warriors are a great rugby league team, if you just look at 2002 and 2011 seasons when they almost won the Grand Final, and ignore the other 22 seasons.

For example, in 2014 the National Government announced a SHA at Red Hills, Auckland, of which to date, zero houses have been built. Zero.

More recently, when under questioning in Parliament, the National Government could not confirm if a single affordable home had been built within their Auckland SHAs. Let alone when Minister Smith suggested land for SHAs in Auckland, which later turned out to cemeteries and electrical substations.

There is no doubt that strong, progressive action needs to take place in order to speed up the delivery of housing to meet Rotorua's projected population growth, however in my view it would be with great apprehension, given his numerous failings, that anyone should let Minister Smith take the lead.

I would implore the Rotorua Lakes Council to ensure that if any SHA is developed, that it is done the Rotorua way, not the Smith way.

RYAN GRAY
Rotorua