Cup Village hides bad deals details

By BERNARD ORSMAN

The body which spent $85.7 million of public money on the America's Cup village is refusing to reveal details of several embarrassing projects involving millions of dollars.

Infrastructure Auckland, which ran the Cup village through a subsidiary, America's Cup Village Ltd, will not give any details of its investment in the exclusive $3 million floating yacht club it cannot sell or say how much money it lost setting up a nightclub that closed after only a few weeks.

The Herald understands about $700,000 of public money went into the Music Factory, set up in competition with privately owned bars and clubs in the Viaduct Basin.

Secrecy still surrounds the sudden departure of chief executive Rob Sutherland last May, followed by chairman Lindsay Fergusson in December.

Nor will Infrastructure Auckland explain in detail how it sunk to a $9 million shortfall in revenue when the 4.2 million visitors to the Cup Village was almost one million more than its own forecast.

The chief executive of Infrastructure Auckland, Richard Maher, said yesterday that the accounts of America's Cup Village would be made public.

But the village company was a local authority trading enterprise (LATE) and legislation did not require detailed information to be made public, he said.

"I'm just a mere servant of the legislation that we work with," Mr Maher said.

He did not feel a moral obligation to release details: "How does that help the public?"

Mr Maher also cited commercial relationships "that we will always protect. That was the understanding we entered into with the private sector."

Auckland City councillor Jon Olsen said the public had a huge interest in what happened at the village company with their money, especially as they were going to be asked to pay for it again.

Mr Olsen, who has been trying for months to obtain financial details, said it would be a disgrace if Infrastructure Auckland could not give details of what went right and what went wrong.

Local authority trading enterprises such as America's Cup Village are exempt from official information legislation, despite recommendations from the Law Commission and a 1990 parliamentary inquiry.

Local Government Minister Sandra Lee has promised law changes to make LATEs more socially accountable.

Guidelines issued by the Office of the Ombudsmen state that information relating to a LATE and held by a local authority is official information and may be requested under the Local Government Official Information Act.

Auckland councils are looking at setting up another LATE with public money to run the village for the next Cup regatta. America's Cup Village goes out of existence at the end of the month.

At the handover yesterday of the island over the drawbridge at the Viaduct Basin from the village company to Auckland City Council, Mayor Christine Fletcher said ratepayers would meet some of the costs of the next regatta.

But as there were regional and national benefits from the Cup, other councils and the Government would need to assist.

Council officials have estimated a shortfall of $15.48 million on expenditure of $34.4 million for running the next event.