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Eden Park seeks $6.3m more from the ratepayer well

Newsroom logo Newsroom 22/06/2022 Tim Murphy
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Outgoing mayor Phil Goff predicted three years ago that the owners of Eden Park would be back for millions of dollars from ratepayers, and he has been proven right

Auckland Council could turn down the latest bid by the Eden Park Trust for a gift of $6.3 million this year and in future years, and instead make the stadium's owners borrow the money.

The trust has made a late bid for the grant after the council's 2022-23 budget has been set, saying Auckland cannot risk looking like a city with failing assets when the stadium hosts nine games at the Fifa Women's World Cup early next year.

The bid for $6.2 million from ratepayers comes three years after the council took over the Eden Park trust's $53m bank and existing council debt and was persuaded to donate a further $9.8m for maintenance and upgrades.

A report by consultants EY estimated Eden Park would need to spend $62.8 m over 10 years on capital maintenance and refurbishment, and now the trust has asked for one year, or one-tenth of that sum, with the hope that ratepayer funding would be repeated annually.

Eden Park chief executive Nick Sautner submitted to the council that the existence of Eden Park "results in significant costs savings" to the council as it did not have to fund another stadium. He argued that having the 50,000-capacity stadium also meant the city did not incur high carbon emissions in constructing a large stadium.

The trust says the $6.3m this year would be spent on projects including grandstand ceilings, power systems, water proofing, lighting, seating and refurbishing a function room.

However officials will recommend to Thursday's full council meeting that instead of giving the trust another $6.3m, which would have to be added to the council and ratepayers' total debt, the stadium's owners could increase the amount borrowed from the council up to its total limit. At present there is $5m plus still available under that facility.

A loan rather than a grant means the council has some hope of having the money returned for ratepayers, and has a charge over the trust's stadium assets should the land be sold, for example, for residential development.

A report for councillors says negotiations that started in 2019 for Tataki Auckland Unlimited, the trust and the council to agree one stadium operator for all Auckland's major facilities had made progress but not concluded.

The recommendation by council staff would be for the loan to be interest-free to the trust, saving it around $125,000 in interest payments. The arrangement would be only until mid 2023, with an expectation the negotiations for one stadium operator would be concluded by then.

Officials said of the bid for $6.3m cash: "As with many organisations, including the council, Eden Park’s post Covid-19 financial situation is uncertain. The council is in a position where it has challenging finances and has no funding in the Annual Plan 2022/2023 for this request.

"Given key decisions for the Annual Budget 2022/2023 were made on June 7, 2022, including rates levels and expenditure budgets, a decision to provide ratepayer funding for this third party would be funded through additional council debt. 

"A decision to provide grant funding as requested by Eden Park Trust Board would require council borrowings to be increased by the amount of any funding agreed and the associated interest costs."

In 2019, Mayor Phil Goff criticised the Eden Park Trust's insistence that the $9.8m needed then should be a grant rather than a loan, but was defeated in a council vote 12-10 and the money was made available with no strings attached.

Goff argued - presciently - that giving the extra $9.8m unencumbered could see the trust come back to the council with further requests for millions of dollars on an ongoing basis. 

This month the council's 2022-23 budget deferred $230m of planned capital spending over the next three years and set $90m in further cuts to the organisation's operating costs. Rates will rise by an average of 5.6 percent (including targeted climate, waste, water and natural environment rates).

At Thursday's meeting, the agenda item immediately before Eden Park's bid for the $6.3m grant is from the Returned Services Association seeking $25,000 from the council to make up for its reduced fundraising around Anzac Day due to Covid fears. The RSA is running short for the services it provides veterans.  Officers say council funds that were not spent in organising Anzac events cannot simply be re-granted to the RSA without a political decision to allow a one-off 'repurposing'.

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