Tim Murphy
Tim Murphy is co-editor of Newsroom. He writes about politics, Auckland and the media. Twitter: @tmurphynz
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Auckland
Outgoing Major Phil Goff predicted three years ago that the owners of Eden Park would get millions of dollars back from taxpayers, and he was proved right
Auckland Council could turn down the Eden Park Trust’s latest offer for a $6.3 million grant this year and for years to come and instead let the stadium’s owners lend the money.
The trust has made a belated offer for the grant after the council’s 2022-23 budget has been set, saying Auckland cannot risk looking like a city of failing assets when the stadium opens nine years early next year. hosts matches at the FIFA Women’s World Cup.
The $6.3 million-per-year bid from taxpayers comes three years after the city took over the Eden Park Trust’s $53 million bank and existing council debt and was persuaded to donate an additional $9.8 million for maintenance and repairs. upgrade.
A report by EY consultants estimated that Eden Park would have to spend $62.8 million in 10 years on capital maintenance and renovation, and now the trust has asked for a year, or one-tenth of that amount, in hopes that the taxpayer funding would be repeated annually.
Eden Park chief executive Nick Sautner explained to the council that Eden Park’s existence “results in significant cost savings” for the council as it did not have to fund another stadium. He argued that having the stadium with 50,000 capacity also meant that the city did not have high CO2 emissions from building a large stadium.
“The funding sought is critical to ensuring that Tāmaki Makaurau maintains its reputation as a state-of-the-art, modern and dynamic city, as opposed to one of failing assets.”
The trust says the $6.3 million would be spent this year on projects including grandstand ceilings, power systems, waterproofing, lighting, seating and refurbishing a banquet hall.
However, officials will recommend at Thursday’s full council meeting that instead of giving the trust another $6.3 million, which would have to be added to the council and the taxpayers’ total debt, the stadium’s owners pay the loan amount. of the council could increase to the total limit . At this point, $5 million is still available under that facility.
A loan rather than a gift means the council has some hope of getting the money back for taxpayers, and has a burden on the trust’s stadium assets if the land is sold, for example for housing.
A report to councilors says negotiations started in 2019 for Tataki Auckland Unlimited, the trust and council to agree on a single stadium operator for all of Auckland’s major facilities, had progressed but had not been completed.
The council staff’s recommendation would be that the loan be interest-free to the trust, saving about $125,000 in interest payments. The arrangement would only be in place until mid-2023, with the expectation that negotiations for one stadium operator would be completed by then.
Officials said of the $6.3 million cash offer: “As with many organizations, including the municipality, Eden Park’s financial position after Covid-19 is uncertain. The municipality is in a position of financial difficulties and has no funding in the 2022/2023 annual plan for this request.
“As key decisions for the 2022/2023 annual budget were made on June 7, 2022, including rates and spending budgets, a decision to provide taxpayer funding for this third party would be funded through additional municipal debt.
“A decision to grant grant, as requested by the Eden Park Trust Board, would require the council’s loans to be increased by the amount of the agreed financing and associated interest costs.”
In 2019, Mayor Phil Goff criticized the Eden Park Trust’s insistence that the $9.8 million then needed should be a grant rather than a loan, but was rejected in a council vote by 12-10 and the money was made available without obligation.
Goff argued — with foresight — that giving the additional $9.8 million unencumbered could bring confidence back to the council with further multimillion-dollar requests on an ongoing basis.
This month, the council’s 2022-23 budget postponed $230 million in planned capital expenditures over the next three years and identified $90 million in further cuts in the organization’s operating expenses. The rates will increase by an average of 5.6 percent (including targeted rates for climate, waste, water and nature).
*During Thursday’s meeting, the agenda item is immediately before Eden Park’s bid for the $6.3 million grant from the Returned Services Association requesting $25,000 from the council to address the reduced fundraising around Anzac Day as a result. of Covid fear. The RSA falls short of the services it provides to veterans. Officials say council funds not spent on hosting Anzac events cannot simply be re-allocated to the RSA without a political decision to allow a one-time ‘repurposing’.