Projects seek council help

Two big community projects are asking the Nelson City Council for hundreds of thousands of dollars to help them over final hurdles.

The Theatre Royal Trust has asked for a $300,000 top-up loan from the Nelson City Council, bringing its total loan request since last year to $1.5 million as the possibility of the council buying the theatre is discussed.

The council is also stepping in to help bridge a $669,000 cost over-run on the Saxton Field Sports Stadium, city councillors heard during this week's draft annual plan discussions.

The council now faced the possibility of having to raise loans totalling $491,000 to help the two projects, and a $366,000 grant to the stadium.

The debt, which was between the society which steered the stadium's development and the construction firm that built it, had already been trimmed by a $112,000 contribution from the Tasman District Council.

The council's finance manager, Chris Fitchett, said the amount outstanding would be met by way of a $366,000 city council grant and a $191,000 loan. The society had $77,000 it could repay part of the loan with, and it would have to ask the Tasman council for the remainder but it was unlikely to give any more, city councillors were told this week.

Nelson Mayor Kerry Marshall was concerned that a trend could be set by the council stepping in to help. "This sends a terrible signal, in that when you run out of gas, come to us."

Tasman district mayor Richard Kempthorne said TDC had not had a request for additional money. If it did, it would get a report on the issue, then decide.

At Nelson City Council, during the second day of considerations yesterday, councillors were told that members of the theatre trust had taken part in a confidential workshop with the council late last year, at which the extra loan was asked for.

The theatre refurbishment bill was now likely to be more than $6m but it was not a case of needing extra money, trust chairman Greg Shaw said.

It was money needed to get the theatre finished by the June 1 deadline.

"It's as simple as that. Last year we asked the council for an $800,000 grant and the request was turned down," Mr Shaw said.

Mr Fitchett said yesterday that the theatre trust loan would not begin loan repayments until after July 2011, to give it enough time to get the theatre up and earning.

The trust was given a $1.2m council loan during last year's annual plan round to assist with the refurbishment.

Mr Shaw said that since then the trust had done more fundraising, and had gone back to the council to ask for the $300,000 loan which would be paid back.

He declined to say how much had been raised from two open days and sponsored seat sales.

Mr Fitchett said loan funding had minimal impact on rates, which were used to finance the cost of the loan.

The council's draft annual plan makes scant reference to the request since the 2009-19 long term plan was finalised last year, when a $1.3m loan to the trust was approved.

Deputy Mayor Rachel Reese questioned the lack of any paper trail leading up to the point when a further loan was asked for.

She also said the trust was aiming for a possible sale of the theatre to the council.

"It's logical that if we are loaning more and suspending loan repayments, then maybe the financial viability of the current structure is somewhat compromised.

"Are we looking at writing off this loan?" Ms Reese asked.

Mr Fitchett said that could be part of negotiations around any possible purchase of the theatre by the council.

Mr Reese said there was merit in the city owning the theatre, which she agreed was a "big success story" for Nelson.

Councillor Graeme Thomas queried the likely purchase price of the theatre.

Council chief executive Keith Marshall said discussions had only gone as far as what the council might or might not buy it for in return for the loan.

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