Heavy debt puts student bar in doubt
The future of Auckland University's student bar Shadows is in doubt after the student association took a "wrecking ball" to its services over spiralling debts.
Catering company Bacchid went into liquidation on October 31 in what is the latest financial knock for the Auckland University Student Association (AUSA).
Bacchid operated Shadows and a cafe on campus, for which AUSA was the only shareholder.
Students expressed fear on social media that student radio bFM and newspaper Craccum could be next.
However, AUSA president Arena Williams played down the financial woes and said the university had guaranteed Shadow's survival.
She said the association would vie for Shadow's lease for 2013, but it was not a sure thing.
"We're doing everything we can to keep the student bar under student control."
The liquidation of Bacchid would have no direct effect on AUSA or its finances, she said.
Although vice-president Dan Hain didn't share the same view when he recently voiced his concerns in the student paper Craccum.
"In some ways we have taken a wrecking ball to the Student Association and destroyed it.
"I do not think we are out of the woods yet but I don't regret any of the things that have happened this year."
He apologised to the employees of Bacchid for the stress caused this year.
The catering company folded after AUSA couldn't afford repayments on a million dollar debt, despite paying just $1 rent for the premises under an agreement with the university.
"In my heart of hearts, a company that doesn't pay rent should be able to make money," Hain said.
AUSA's financial problems stemmed back to 1999 when student membership became voluntary, he added.
"Cash reserves were consumed making up the deficits, investment portfolios were stripped to pay for the deficit when the cash ran out," Hain said.
"Successive inabilities to make a zero budget got us into the situation we are in now."
Hain did not respond to requests for comment.
A $460,000 overdraft still hangs over AUSA and the association's September budget showed debt was expected to balloon to $700,000 by January.
AUSA owns student bar Shadows, radio station bFM, Student card, UBS Bookshop and the main Café.
The University funded clubs, sports, welfare, advocacy and events.
Under an agreement with the university, AUSA loses its $1 lease following Bacchid's liquidation.
Fans of Shadows vented their frustration on social media sites Twitter and Facebook.
Nigel Bernie wrote on Shadow's Facebook page it would be an end of an era if the bar closed.
"I hope like hell that the AUSA Executive realise they have destroyed a student icon."