America’s Cup base: Then there was one

City officials want the Auckland Council to opt for a 'dispersed' option for the America's Cup village across several downtown wharves - and costing around a quarter of a billion dollars.

Their favoured option is one based on Wynyard Wharf, Hobson Wharf and Halsey Wharf, which is $40 million cheaper than one big village on a greatly expanded Halsey Wharf but which could have higher costs to run during the event as teams spread out on the waterfront.

The costs for the $130 million base, plus $18 million to move current users off the needed wharves and surrounding spaces, and $90 million of downtown capital projects that the council has not budgeted for, mean the city, government and private sector are looking at an investment of around $240 million.

Team NZ is known to favour the costlier village of bases on the bigger Halsey Wharf and would need to agree to the lesser, dispersed option before Auckland Council moves to seek planning consent in a special 'single hearing' process taking until the middle of next year. Team NZ has reserved the right to hold the event overseas, possibly in Italy, if Auckland arrangements cannot be negotiated satisfactorily.

Officials want Auckland Mayor Phil Goff and the council chief executive Stephen Town to have the right to negotiate with Team NZ, the government and private investors over the next month and report back to the December council meeting for a decision. Town is chairing a joint council-government taskforce preparing the plans.

The recommendation to the council is that it should let Team NZ and the government know the dispersed option is its 'preferred' outcome from negotiations over the short, short list of three locations.

An economic impact report prepared for the Ministry of Business, Innovation and Employment (MBIE) and released on Tuesday estimates a positive impact from hosting the event of between $555 million to $977 million in value added to the country's economy between next year and 2021. It estimated extra jobs created would be between 4700 and 8300.

"As with all economic models and tools, there are limitations and caveats. Nevertheless, the analysis suggests hosting the event is likely to result in positive economic impacts over the short and long term and these impacts will be significant," that report's authors, M.E Consulting, say.

"This increase reflects a permanent step-change in the size of the economy and is driven by an increase in the super yacht market and receiving export receipts."

M.E.'s estimates for spending by various parties puts central and local government at up to $100 million each and Team NZ at up to $120 million. Other syndicates would be expected to spend $10m here between them and the regatta organisers a further $10m. Sponsor spending around the event (not the teams) is expected at up to $14 million.

The economic impact study sounds a note of caution about public support for the event. "In the context of [America's Cup #36] this suggests that the national pride is more associated with winning the event (in Bermuda) than with hosting it. Of course, hosting the event is a by-product of the recent success."

It did not look into matters beyond the economic, noting there are both upsides and downsides for adding infrastructure and building into the harbour. "On one side of the ledger, adding new space will add to the real estate market with flow on effects such as increasing the council's rating base, and adding to the economic activity undertaken at the Viaduct/Wynyard Quarter.

"However it can also be argued taking up space will lead to a loss of other values... intangible values associated with the harbour including ecosystems, service values, cultural values, option values and so forth, that would be lost (or diminshed) if water space is developed."

The report to the council from city officials, while recommending the 'dispersed' village option, based on Halsey and Wynyard wharves, says the option presents 'multi-faceted' issues. "Construction could be more complicated by operating across multiple sites and next to sites that are close to bulk liquid operators. There are a greater number of commercial complexities to manage."

They also say some of the infrastructure on Wynyard Wharf could be temporary to cater for the event and then be removed to allow for normal business activities to resume. 

A report to the full council meeting on Thursday says the Halsey Wharf extension option 'best delivers for the event requirements, for public access and consolidating activities on one location to support the operation of the Village".

But the dispersed option, which they favour, "goes some way to deliver on event requirement for public access."

"Activities are spread out and there is an uneven distribution of those bases with access to sheltered water space. The option does provide some additional berthage for supporting vessels and super yachts.

"Due to its dispersed nature it is likely that running costs for the village (security, operations) will increase."

The report notes the dispersed option "does start to introduce the public and visitors to Wynyard Wharf as a future destination for commercial, residential and public open space."

While some of the additional structures may be temporary, there was an opportunity to retain and reuse them for future ferry infrastructure.

On land, associated capital works downtown would total $220 million - with the $90 million of unbudgeted spending being included in that figure. The report says some of this "critical work" includes the Quay St seawall, Quay St upgrade, downtown public spaces improvements, the first phase of reconfiguring the ferry terminal and a bus interchange.

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