Stadium deal critical - Christchurch mayor
The Christchurch City Council is putting heat on its insurer to settle its claim on the former AMI Stadium because it says it is "core critical" to its financial position.
The council had the stadium insured for $143 million.
It believes it is entitled to a full payout as all the engineering advice it has received suggests that it is uneconomic to repair because of the extent of the damage to the land and the stands.
But engineers engaged by Civic Assurance, the council's insurers, and by their re-insurers are arguing the old stadium can be fixed.
Consequently, they have yet to reach an agreed position with the council on the size of the payout it is entitled to.
Christchurch Mayor Lianne Dalziel told The Press yesterday that getting a resolution to the insurance impasse was critical as the council's budgets were predicated on it receiving a full settlement.
"A settlement is core critical to the financial position of the council," Dalziel said.
The council had engaged engineering consultancy Beca to conduct a thorough and complete assessment of all aspects of its claim relating to the stadium.
A final peer review of that assessment was currently being done and a report was scheduled to be completed within a few weeks.
At that point the council hoped to bring all the parties' engineers together in an attempt to reach an agreed position.
Dalziel said she was unable to release any of the engineering reports into the stadium as it could prejudice negotiations.
But she stressed that at no time had the council received advice from its professionals that would contradict its position that the stadium would cost more to fix than its insured value and was therefore uneconomic to repair.
The mayor said the new council was pushing hard to get all its outstanding insurance claims settled.
It would consider a global settlement that included the former AMI stadium if one was offered.
"There is always a possibility of a deal," said Dalziel.
She acknowledged that if the insurance payout fell short of expectations it would hurt the council financially and potentially impact on plans for the new stadium.
Dalziel said the Cost Sharing Agreement the council signed with the Crown last year included some flexibility around the provision of a new stadium.
Under that agreement, the Government has until the middle of next year to prepare a business case for the new stadium and to reach a decision on whether it should be a 35,000-seat covered stadium, as provided in the Christchurch Central Recovery Plan, or whether the plan should be amended to allow the council to build a 35,000-seat, rectangular, uncovered stadium.
If the Crown goes for the covered stadium option, the agreement states the costs will be split with the council 50/50.
The council's contribution would be capped at $253 million.
If an uncovered stadium is built, the Crown will contribute the land to the project.
The council will fund all other costs.
Dalziel said the council could also, if it needed to, invoke clause 6.4 of the Cost Sharing Agreement which allowed the parties to vary or revoke the agreement if unforeseen circumstances arose.
"The unforeseen circumstances that could lead to the parties varying the agreement would be if the council did not receive the insurance it was expecting," Dalziel said.
- © Fairfax NZ News
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