Will ratepayers lose out?
Who will be accountable for ratepayers stumping up $7 million to buy Carisbrook, when a documented valuation puts the historic sports ground's value at $2.5m?
That is the question being asked by council critics, as an untabled council-commissioned consultants report dated February 2007 reveals the initial valuation of Carisbrook assets - formerly owned by the Otago Rugby Football Union (ORFU) - was $2.5m. The report put Carisbrook's highest possible fetching price at $3m.
The confidential document mentioning the $2.5m valuation, dated February 2007, was produced by consultants Horwath International. Titled "New Carisbrook Stadium Development: Financial Feasibility Study" and "Economic Impact Assessment", it was better known as Appendix 1 of the Carisbrook Stadium Trust's (CST) Dunedin Masterplan and Feasibility Report, and provided guidance for Dunedin city councillors considering whether to build Forsyth Barr Stadium.
"A leading Dunedin real estate firm has estimated that the existing Carisbrook site might sell for approximately $2.5m, " it said.
". . . under an optimistic scenario, it is assumed that there will be sufficient value to add to enable the trust to achieve a surplus of $3m." But Appendix 1 was missing from the report when tabled at council, council critic Bev Butler said.
Butler believed as a result - despite there being constant references to Appendix 1 in the CST report - few councillors saw the document, or requested to see it after the meeting.
A subsequent valuation obtained by the council hiked the Carisbrook price tag to $7m. At the time of the 2009 deal to buy the ground city leaders emphasised the need for the DCC to cover debt hanging over the ORFU because it was to be the new tenant at the stadium. The council borrowed to pay the higher valuation, resulting interest payments footed by ratepayers.
Butler and fellow lobbyist Russell Garbutt have lodged a complaint with the Office of the Auditor- General. The OAG confirmed it is considering the complaints.
Dunedin Mayor Dave Cull - a councillor when the DCC bought Carisbrook - last week dismissed the valuations issue.
"My understanding is there were either two or three valuations done and $7m was the lowest, I've only seen the one. In a sense it does not matter because council chose in 2009 to purchase Carisbrook in an effort to shore up the ORFU which was in financial strife because there was a plan to build a new stadium."
Last week D Scene revealed the possibility and that ratepayers also look set to take a bath in the recently announced sale of Carisbrook assets to Calder Stewart Construction.
It is possible no money will immediately change hands for the assets under the agreement. The newspaper understands confidential conditions may include a joint venture between the two entities that involves the construction company not having to pay cash up front for the site.