Eden Park stadium is to get a $63 million bailout from Auckland Council.
Councillors on Thursday backed a $53.5 million bundle of loans which takes care of the stadium's debt, and a $9.8 million grant for major essential maintenance over the next three years.
The outcome was a partial defeat for the mayor Phil Goff, who wanted all the funding to be in the form of loans.
The bailout was triggered by the trust-owned stadium's inability to pay back a $40 million ASB bank loan which expires this year, which the council had guaranteed.
The council will lend a similar amount directly to the stadium, along with a $7 million loan to replace another ASB 'facility', renew an existing loan of $6.5 million from the council, and a grant of up $9.8 million to pay for essential upgrades.
The contentious element of a discussion which lasted nearly five hours, was over the maintenance funding.
The grant move was put by councillor Desley Simpson, opposing Goff who wanted all assistance to be in the form of loans which could be repaid if the stadium was ever sold by the Trust Board which owns it..
"It needs to be a grant" said Simpson, agreeing with the Eden Park Trust Board that having an extra loan its accounts did not entirely help it finances.
Goff told councillors the choice was simple one.
"The one difference to this - is if the asset is sold the ratepayers interest is protected - who thinks we shouldn't protect the ratepayers' interest," said Goff.
Councillor Linda Cooper said most of the politicians wanted Eden Park to remain, but opposed the grant.
"We love Eden Park but we're not throwing money at it, because the begging bowl will be back again," she said.
Cooper called approving the loan a win-win, letting the board do all that it needs to do, while protecting ratepayers' money.
Goff lost the loan versus grant vote 12-10.
At the start of today's council debate, the Eden Park Trust Board told councillors it would prefer a maintenance grant to new loans, even though it was interest-free.
"We cannot afford the debt we have got - its just not palatable," said Doug McKay, the chair of the Eden Park Trust Board.
McKay told councillors they should take a wider view of the benefits of supporting the stadium, as it would avert $482 million of council spending that might be needed over the next decade to upgrade council-owned stadia.
He said the $40 million ASB loan had been necessary as Auckland's pre-amalgamation councils had declined to contribute that amount, alongside the government's $190 million grant for the upgrade for the 2011 Rugby World Cup.
"The cumulative interest over 10 years has ben more than $15 million - without that debt, we would not be here today, we would have had $15 million to spend on Eden Park," he said.
Exchanges became testy, between McKay, and the mayor Phil Goff and senior councillor Chris Darby.
"I've answered you, you keep asking the same question," said McKay to the mayor.
"This is not an inquisition," said one councillor as Darby pressed a point.
The committee chair Ross Clow intervened, with a nod to Friday's mosque shootings in Christchurch.
"Can we pull our heads in and keep calm, and reflect on the situation in New Zealand - this is minor," Clow told councillors.
The Trust Board had listed three options as to how it wished to receive money from the council, and the $9.8 million as a loan, was an option, but its least preferred one.
Council staff had told the meeting, assistance to other organisations was often in the form of grants, which had the ability to be recovered if they hadn't been used for the purpose they were made.
However in the Eden Park case, staff recommended the $9.8 million be a loan without a repayment date.
The biggest items covered by the $9.8 million are $1.5m to replace the stadium turf which is more than twice the ideal seven-year age for use, $2m to upgrade lifts in the North Stand, and $2m to refurbish kitchens.
A report commissioned by the council from consultants Ernst and Young, forecast the stadium could run up losses of up to $80m in the next decade.
The report
confirms comments made on Friday by Goff, that the trust board wanted fewer restrictions on staging concerts.
"Additional events are expected to significantly improve the financial performance of Eden Park Trust within a three-year period (based on the time needed to obtain the consent and schedule in a programme of concerts or other events)."
Eden Park presently has the right to apply for consents for up to six concerts a year, but has so far shied away from what can be a lengthy and costly planning process.
If concerts were to be deemed a "permitted" activity in planning rules, Eden Park could stage them almost as of right, with some conditions.
https://www.stuff.co.nz/auckland/111377748/eden-park-funding--councillors-agree-bailout
