Loss isn't $57m, says Viaduct Basin chief

By BERNARD ORSMAN

The company managing the America's Cup yachting and marina facilities denies the $85.7 million development has lost $57 million in value.

The figure is based on a valuation of the facilities two months ago when the company, wholly-owned by Infrastructure Auckland, was negotiating renewed leases for the syndicate bases.

Infrastructure Auckland and the managing company, America's Cup Village Ltd, agreed then that the facilities were worth $29 million.

However, the board of Infrastructure Auckland has since accepted a $40 million valuation.

Papers released under the Official Information Act show that Infrastructure Auckland valued the assets in June at $29 million, insisting that $40 million did "not reflect good value."

But yesterday Infrastructure Auckland chairman John Robertson said the board was now using the $40 million valuation provided by ACVL, which is based on the asset's value at the end of the next America's Cup in 2003.

Asked about the change, Mr Robertson said he could not recall the June debate but the board was now comfortable with the independently commissioned $40 million valuation and he had every confidence the ACVL board and management could maintain that value.

Audit New Zealand has approved the method of valuation used by ACVL but said there was a "fundamental uncertainty" that could result in a significant writedown in the value of the assets.

Any loss in value of the assets will add to loss from the public's $85.7 million investment in the cup village by ACVL. A $29 million valuation would add $11 million to the loss.

ACVL chairman Peter Kiely has stated that building the yachting facilities and managing the cup village cost the Auckland region $23.5 million, of which $9.5 million came from losses running the event and a "community benefit" of $14 million creating the infrastructure.

He said the claim by the Herald of a $57 million loss was "false and totally inaccurate."

Former ACVL chief executive Rob Sutherland, who left the company in May last year after a sponsorship ruckus, said in July that the event would cost the public $40 million, based on a much lower asset valuation he claimed to have seen.

The Herald reported last week that the real loss from the public's $85.7 million investment could be nearer $57 million, based on the yachting and marina assets being worth $29 million at the end of the America's Cup. A $40 million valuation would reduce that loss to $46 million.

ACVL has chosen not to include a taxpayer contribution of $10 million in its losses and has repeatedly refused to provide a detailed analysis of income and expenditure.

It continues to hide details about how much public money bailed out commercial blunders like the exclusive American Express Yacht Club for wealthy cardholders and a disastrous 1980s-style nightclub called the Music Factory.

Mr Kiely told the Herald that no public money went into setting up the nightclub, though a cashflow report by ACVL to Infrastructure Auckland on January 16 referred to a "$29,250 expense for starting up the Music Factory."

America's Cup feature