Sport New Zealand has come under fire from the Auditor General over payments totalling $800,000 made to an Auckland trust.
It comes after a series of complaints over Sport NZ's funding of the Harbour Access Trust, which was to lead the development of the ill-fated National Ocean Water Sports Centre, but later morphed into the Community Marine Hub, in Takapuna.
The facility proved controversial from the outset, with community groups railing against attempts to close down the popular Takapuna Holiday Park - the site for which the high performance centre was planned.
The project was scuppered in July last year, after four years of protracted battles with the local community board.
Over that time, Sport NZ paid out $800,000 to the Harbour Access Trust, led by Auckland developer Peter Wall, before a sod had been turned or resource consent granted. With efforts to build in Takapuna having been abandoned and Yachting NZ now scouting locations elsewhere for the centre, Sport NZ has little to show for that money.
One of the chief detractors of the project, Auckland man Colin Flavell, asked the Auditor General to investigate what he believes was "fiscal incompetence" from Sport NZ bosses, who demonstrated an "unsuitability to administer public funds".
The key allegations were:
• That Sport NZ produced an inadequate and flawed business case to justify an investment of $3m to HAT;
• Despite only committing $300,000 in "seed money", Sport NZ continued to pay out another $500,000 to fund a series of "wasteful and abortive attempts" to gain permission to build the centre on a public reserve;
• There was no written agreement or contract between Sport NZ and HAT;
• Sport NZ did not do its due diligence into HAT and had not resolved the ownership structure of the new building at the time it began funding the project.
A spokesman for the Auditor General's office confirmed the organisation is "going through a process" with Sport NZ in relation to concerns raised about HAT.
"Our correspondence with the parties involved is ongoing and we don't provide public updates on progress," the spokesman said in response to Herald enquiries.
However, Sport NZ boss Peter Miskimmin considered the investigation to be complete.
"[The AG's office] had a report into what we invested in Takapuna and that inquiry has been closed now. We've responded to their findings and that's where the matter is at the moment," said Miskimmin.
In June last year, the AG's office wrote to Sport NZ to express concerns over the shortcomings in its dealings with HAT. In particular, it found "the limited nature of the business case and the lack of a funding agreement ... did not represent good practice".
It also recommended Sport NZ address the funding agreement issues, before making any further payments to HAT.
Miskimmin said his organisation accepted the findings.
"There are issues related to tightening up our processes at our end, which we accept.
"It was a very unusual project, it had been going for nearly four years. It started with a lot of enthusiasm and we thought we were going to have a far straighter line at being able to develop the project there."
The central issue was the absence of a formal contract between Sport NZ and HAT, which led the project on behalf of Yachting NZ. When the plans for the $8.5m development were first floated in 2010, Sport NZ (then Sparc) committed $3m to the project, while the former North Shore City Council pledged the same amount.
Sport NZ agreed to release a sum of $300,000 to fund start-up project costs, such as architectural drawings, geo-technical surveys and a project manager. In its business case, Sport NZ noted chairman Sir Paul Collins agreed to this seed funding as "the other investors cannot release their funds until construction is under way".
Despite the project facing well-organised opposition by the local community, Sport NZ paid out a further $500,000 on receipt of just six invoices from HAT. The money went towards engineers reports, resource consent applications, project management fees, along with PR specialists to try to turn the tide of public opinion in favour of the community marine hub.
"They were dealing with a developer who was flying a kite," said Flavell. "The developer has a history of this. [HAT's actions] would have rung alarm bells with any responsible organisation."
Miskimmin said, at each hurdle, assurances were granted that the project would be able to proceed.
"We got caught up in a lot of local politics and a lot of competing community interests around that site. We accept that, but it was frustrating that we thought at various stages, we had consent to move forward, but that wasn't the case," he said.
"It got to the point where we had no confidence we were going to be able to carry on any work there and we had to cut our losses."
Despite the involvement of the Auditor General's office, Yachting NZ chief executive Dave Abercrombie is adamant the project is not dead in the water. The national body is now eying a site in Gulf Harbour for the facility, which has taken on a third moniker - the Yachting NZ centre of excellence.
"We've obviously burnt some of what we had, but Sport NZ is committed to helping us develop a yachting centre of excellence, as are our other funders."
The tortured history of the Yachting NZ High Performance Centre
Former Sports Minister Murray McCully unveils plans for an $8 million National Ocean Water Sports Centre in Takapuna. The planned centre would offer facilities for sailing, triathlon and ocean kayaking as part of a major expansion high performance sport.
The proposed location for the centre is moved to the reserve occupied by the Takapuna Holiday Park. The original site above the beach at The Strand, near Takapuna Boating Club, was dismissed, after concern about interference with prime public space. Instead, Auckland Council offered a site north of the reserve, which was to be freed up when the 80-year-old camping ground's lease expired in March 2013.
The plans are met with strong resistance by local community, prompting a well-organised campaign to save the holiday park. The holiday park is given a stay of execution and offered a month-by-month rolling lease.
It becomes clear Yachting New Zealand will face an uphill battle to get resource consent for the centre, renamed the "Community Marine Hub". A panel convened by the Devonport-Takapuna Local Board to consider the application receives a petition of 2037 signatures, seeking retention of holiday park.
October 2013Local body elections are held, with supporters of the yachting high performance centre faring poorly.
The future of the site is put to a community vote, with 80% in favour of keeping the holiday park, while only 8% supported the marine hub.
The Devonport-Takapuna local board vote to keep the campground, albeit with a section of it carved off for public use.
July 8 2016
Yachting NZ put in an application to the local board for landowners consent to build a smaller facility on the sectioned off piece of land adjacent to the camp ground.
July 20 2016
Yachting NZ have a change of heart and withdraw their application for landowners consent, abandoning efforts to build in Takapuna.