Wellington ratepayers bail out tourist attractions

BY DAVE BURGESS AND EMILY WATT

Some of Wellington's key visitor attractions are in dire financial straits, and it is ratepayers who will be asked for a bailout.

Zealandia: The Karori Sanctuary Experience has received another $2.3 million in a secret deal sealed behind closed Wellington City Council doors – and it now wants more money to set up a cafe.

Council documents reveal funding issues for other organisations, including the St James Theatre, which is so broke that it tends to avoid risky shows, the cable car, which might have to ask the council for more money to pay for safety upgrades, and the Basin Reserve, which cannot afford to maintain its LED replay scoreboard.

Mayor Kerry Prendergast and council chief executive Garry Poole refused to answer questions.

However, documents obtained by The Dominion Post show the council agreed last April to stump up a further $2.38m, to be added to an earlier $8m interest-free loan, to cover cost overruns of the Karori sanctuary's new $16.6m visitor centre.

The Karori Sanctuary Trust is also asking for more than $200,000 to fit out a cafe at the centre after the trust failed to find a cafe operator willing to pay for it.

Cash, or a lack of it, is the problem for the St James Theatre Charitable Trust, which is also responsible for the Opera House. It has minimal cash reserves and may have to go into the red to cover costs.

"The low cash position will continue to affect its ability to take risks on shows," the papers say.

New safety assessments set by the New Zealand Transport Agency have raised a number of "non-compliance" issues for the cable car.

It may have to approach the council for funding to remedy them.

Wellington Zoo is also concerned about maintaining visitor numbers and sponsorship.

The Monstavision LED screen at the Basin Reserve is causing financial headaches, with the Basin Reserve Trust unable to fully fund its depreciation – meaning there will be no money in the kitty when it needs to be replaced.

The 55-square-metre screen was funded through donations, including a sum from Sir Ron Brierley, and installed early last year. Its cost has not been revealed.

Capacity, the city's water company, has also failed to meet savings targets in the past and may fail to do so again this year.

The Wellington Regional Stadium Trust is not controlled by the council but is included in the briefing papers, which warn that it may be unable to repay a $15m council loan due to ground upgrades ahead of the rugby World Cup.

The trust has also yet to renew the contract for the NZI Sevens from 2012 and beyond.

Councillor Brian Pepperell said the council could not continue to spend ratepayers' money like this. "Loans have been written off. There's a long history of money that just slips away," he said.

Council debt continued to rise, and was projected to be at $287m by the end of 2010 and $335m by the end of 2019. He thought the proposed indoor sports centre would make this even higher. Ratepayers did not have bottomless pockets, he said.

Councillor Rob Goulden said he had been concerned for a long time about financing bad business cases which then needed council help. "We can't just keep bailing these things out. It's not fair on the ratepayers," he said.

WHAT THE SECRET PAPERS SAY

Karori wildlife sanctuary

* WCC has bumped up an interest-free loan by $2.38m to $10.38m.

* Trust failed to find a cafe operator willing to pay to fit out the cafe.

* Has asked WCC to release more than $200,000 to do the fitout itself.

Basin Reserve Trust

* Is unable to fully fund depreciation on its assets, notably the giant replay screen.

St James Theatre Charitable Trust

* Has minimal levels of cash reserves, affecting its ability to take risks on shows.

* Increased likelihood that it will need to use its overdraft facility.

Wellington Cable Car Ltd

* Strong financial performance but has safety issues which may require extra WCC funding.

* Trying to generate further revenue from third party use of the trolley bus lines.

* Negotiating for a funding agreement with Greater Wellington regional council.

Wellington Museums Trust

* Is increasingly reliant on council funding.

* Had to defer some internal fitouts at City Gallery.

Wellington Zoo Trust

* May ask for more WCC funding should it not meet sponsorship or visitor targets.

Wellington Regional Trust Stadium

* Budgeting for upgrades ahead of the rugby World Cup creates a risk that the trust will not be able to repay a $15m council loan on time.

* Working with contractors to fix problems with roof, which has a 15-year warranty.

* Has yet to renew the contract for the NZI Sevens from 2012.

Positively Wellington Tourism

* Focusing on the Australian tourist market.

* The Government is considering extra funding to match that from WCC.

Wellington Waterfront Ltd

* Development plan could be unaffordable if it loses another Environment Court appeal. Slow regulatory processes threaten development momentum.

Capacity

* Potential for further regionalisation of water services.

* Annual savings target of $432,000 in doubt. Service cannot be compromised to hit target.

- © Fairfax NZ News