D-Day for Rugby Park
"It's high noon at the OK Corral."
The future of Rugby Southland and its flagship team, the Southland Stags is at stake today.
The deadline has arrived for a solution to the financial strife and possible collapse of the Southland Outdoor Stadium Trust, which owns the multimillion-dollar stadium, Rugby Park.
The financial burden of the stadium has been hanging over the city for years.
But the region's major funders and the Invercargill City Council are no longer able to ignore the beleaguered facility, riddled with $1.5 million of debt.
The city's leaders will meet today, with the stadium trust, Rugby Southland, the Invercargill City Council, the Community Trust of Southland and the Invercargill Licensing Trust all crunching numbers to find a solution for Rugby Park.
The stadium trust has three debts lingering over it: A $600,000 debt to Rugby Southland, which if not paid back would cause the union to become insolvent.
A $150,000 debt to Pacific Dawn Ltd, which was formerly owed to South Canterbury Finance. And a $750,000 debt to the Community Trust of Southland, which is secured against the stadium.
But while the Community Trust of Southland refuses to back down on its loan and turn it into a grant, it has emerged the organisation has more than $190m of capital and plans to build that to $230m in coming years.
However, community trust chairman Tracy Hicks remains adamant it should not have to pump more money into the stadium trust.
"It's just about us being responsible with that funding. It's everybody in Southland's money and we want to make sure that it is there for future generations."
"We have got a [$750,000] debt there and we want that debt to be managed and repaid in time."
However, the community trust's debt is held against the stadium, meaning the trust could be the new owner of the stadium.
"Let's see how it goes [tonight], but I hope not."
Hicks said the obvious owner of the stadium was the city council.
But city council chief executive Richard King said the council would not be willing to take on the $750,000 debt.
The solution the council favoured was one where the community trust wiped the debt, the licensing trust covered the $150,000 debt and the city council took on the Rugby Southland debt and that was wiped over time, in lieu of rent, he said.
The council would still take a big hit, having to foot the bill for the maintenance, averaging about $200,000 a year, plus the unknown cost of earthquake strengthening, he said.
"I think three of the parties are pretty close [to a solution]."
The Southland Times understands the Community Trust of Southland is the one group not happy with the council's proposal.
King said an interim solution had to be found tonight and if that involved the council, it would then have to be put out for public consultation and voted on, but it had to move quickly.
"It's high noon at the OK Corral."
A similar sentiment was echoed by stadium trust chairman Ian Tulloch.
He said today's date had been set because discussions had been going on for years about the future of the stadium and it now needed to be sorted out with some urgency.
Tulloch was unable to predict what the outcome would be, but said it was unlikely the stadium trust would want to continue for much longer.
"We are hoping the parties that have agreed to meet have a satisfactory solution and, hopefully, a win-win solution for everybody."
Rugby Southland chairman Paul Menzies was also hoping for a positive outcome.
He believed it was unlikely the New Zealand Rugby Union would be able to assist, after a visit from chief executive Steve Tew earlier this month.
The NZRU posted a $2.9m profit last week.
"He only indicated support for us in trying to achieve a solution."
Tew did indicate that Southland could benefit from a Lions tour game in 2017, if the stadium was still running, Menzies said.
"That's the sort of potential we will miss out on."
Without a solution, Rugby Southland faces insolvency and without a stadium the Southland Stags could be booted out of the national provincial championship, he said.
But Menzies was realistic about the difficulties plaguing the stadium.
"Each of those groups have all got difficult constraints and we are living in a pretty constrained time, there's just no money flowing around," he said.
Community Trust of Southland turns a $750,000 loan into a grant
Favoured by the Invercargill Licensing Trust and the Invercargill City Council.
The ILT covers the $150,000 debt owed to Pacific Dawn (formerly South Canterbury Finance).
The city council takes over the stadium.
The remaining $600,000 debt to Rugby Southland is absorbed by the city council and an agreement is reached to write off the debt in lieu of rent from Rugby Southland.
Ratepayers have to fund $200,000 to $300,000 in maintenance each year plus be responsible for paying for required improvements to bring the stadium up to new earthquake building standards (cost yet to be determined).
Rugby Park is handed to community trust
The Community Trust of Southland secures its $750,000 loan to the stadium trust against Rugby Park.
If the stadium trust defaults on its loan, the community trust owns the stadium and is responsible for making the changes to bring the stadium up to new earthquake building standards (cost yet to be determined).
Rugby Southland's $600,000 debt is not repaid, and it becomes insolvent.
Questions remain around the repayment of the Pacific Dawn debt.
The stadium is sold
The stadium trust puts Rugby Park for sale on the open market and, if it is sold, pays off its debts.
Whoever buys the stadium has two options - demolish and redevelop the site, or fund essential earthquake strengthening work (cost unknown).
The home of the Southland Stags may be lost and without a stadium they are booted out of the national provincial championship.
A private benefactor steps in
Rugby Southland chief executive Paul Menzies says he has been fielding calls from people who want to donate to the cause. But could a a private benefactor bail out the stadium? Or should we fire up the barbecue and start fundraising to pay off the debts?
The Southland Times