Mayor sees stadium future in city hands
It hasn't even been formally opened but Stadium Southland moving into council ownership seems to be a fait accompli.
The stadium is owned by the Southland Indoor Leisure Centre Charitable Trust, but Invercargill Mayor Tim Shadbolt said he expected the council would be the proud owners of the new stadium within several years, a statement echoed by those behind the trust.
Trust chairman Acton Smith said it made sense for the council to take over Stadium Southland, but the situation would be vastly different for that faced by the Southland Outdoor Stadium Trust, which had a mountain of debt and an uncertain future.
The Indoor Leisure Centre Charitable Trust was determined to present the city with a debt free stadium, he said.
"The ultimate owner of the stadium will always be the city anyhow."
The stadium was already built on council-owned land, he said.
"In the long term it's not unlikely that the council will probably tuck it up into a company that manages all their event centres."
Mr Smith said the biggest issue the trust faced before the stadium collapsed was the cost of repairs and maintenance. For example, a new velodrome track or show court would cost about $750,000 each and needed to be replaced about every decade, he said.
It was the cost of ongoing repairs and maintenance that caused stadiums to run at a loss, he said.
Mr Shadbolt said the council did not expect the stadium to make money, but the council had a social responsibility to provide such facilities.
"I don't think any council facility makes profit."
Mr Shadbolt said he hoped both stadiums could be "lumped" into a company in Holdco, the council's holding company.
The Civic Theatre was already part of Invercargill Venue and Events Management Ltd, a Holdco company.
He expected the council to analyse the stadium's annual reports for the first year it was fully operational before making a definite decision.
Invercargill City Council finance and corporate services director Dean Johnston said Holdco had given the trust a $7 million loan, which was "ultimately secured" against the building.
Holdco is charging the trust 6 per cent interest on the loan, using money it had borrowed at a
lower interest level from the bank, he said.
If Holdco decided to write off the loan to the stadium, it would affect ratepayers because the dividend given to the council to subsidise rates would have to be used to repay the loan.
However, Electricity Invercargill Ltd was projected to continue to make profit and the increase in dividends could potentially cover the loan.
"Yes, it would hurt, certainly hurt, and then it would cost us."
But trust deputy chairman, ILT chairman and city councillor Alan Dennis said the indoor leisure trust would repay the money in full.
"I don't think it will be a burden at all."
Mr Dennis said running a stadium was a balancing act, but most councils around the country ran their local stadiums and the council had been lucky to have gone so long without having to take on the city's large sporting facilities.
"The city council in the last decade or two has got off pretty lightly."
He had made no secret that he favoured the council taking over the stadium, he said.
"It has been built with public money and this is a public asset."
But Mr Dennis said he wanted to present it to the city as a debt free, going concern.
"I don't want it to be a white elephant."
The Southland Times