Eden Park offer laden with debt

SIMON DAY
Last updated 14:46 12/02/2013
Eden Park
TALL ORDER: Auckland Council could take on more than $50m in debt from Eden Park.

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The government's offer to gift its interest in Eden Park and Queen's Wharf to Auckland City Council is a "good deal for Auckland" despite financial risk for ratepayers, according to Mayor Len Brown.

The council already owns half of Queens Wharf, bought from Ports of Auckland Ltd in 2009 for $40 million, and the area has become a key feature in the redevelopment of the waterfront.

The deal would also give the council power to appoint five of the nine Eden Park Trust Board trustees.

However, in taking on the government's interests, the council will take on the costs of upgrading and maintaining the Cloud and the government has refused to provide financial support for the council's $50m debt in Eden Park. 

The government wrote off a grant of $190m for the redevelopment of Eden Park but ratepayers are exposed to a $40m underwriting of a loan to complete the $256m stadium upgrade for the Rugby World Cup.

Greater control over Eden Park would allow the council to make better choices for the stadium, Brown said.

"It doesn't change Eden Park's financial arrangements in any way. But it puts us in a much better position to engage the Auckland community on the future of the park," he said. 

Maintenance of the Cloud is expected to cost $300,000 to $400,000 over the next five years including potential further investment in air conditioning, kitchen and cooking facilities, and a fire sprinkler system.

The cost of removing the Cloud and repairing the surface of the wharf in the future has not been addressed with the government. The cost of deconstruction may rest with the council and is estimated at $625,000.

However, the cost of the facility will be offset by the income generated from its use, Brown said.

"Queen's Wharf and the Cloud have become highly active and well utilised, and are bringing Aucklanders back to the waterfront. This deal should significantly improve the performance of these assets."

"Patronage of the wharf and Cloud could double or triple and would more than account for the cost of maintenance," he said.

Since the 2011 Rugby World Cup the Cloud has been used for events and "is a useful interim facility until a longer term plan for this site is agreed," according to a report by the council's Accountability and Performance Committee.

"Assuming full ownership of Queens Wharf and the Cloud enhances the council's ability to confidently plan for the future redevelopment of the waterfront site," it said.

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The power to appoint five of Eden Park's trustees (two each are appointed by Auckland Cricket and the Auckland Rugby Union) allows the council to influence positive outcomes for Eden Park, and the Auckland region more generally, it said.

"The stadium is an important feature of Auckland's sporting and cultural fabric and contributes to a number of the council's strategic objectives."

Minister for Sport and Recreation Murray McCully said the government supported the establishment of the super-city so it "should listen to them when they say they would like to manage their major entertainment facility as part of an integrated package of entertainment facilities, in the same way that Sydney or Melbourne would do".

- Auckland Now

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