Be wary of Chch stadium estimates

The latest cost estimates for a new Christchurch sports stadium need to be taken with a grain of salt, David Williams writes.

COMMENT: Dunedin is a good example of the motto from the film Field of Dreams: “Build it and they will come.” But the southern city offers another lesson for Christchurch, as it pursues its own stadium – that cost estimates rise and ratepayers will be left footing the bill.

Yesterday, the Christchurch City Council announced its intention to use $220 million of the Labour-led Government’s $300 million capital acceleration fund, for post-quake projects, to help build a new covered stadium. If agreed by councillors and confirmed by the Crown the other $80 million would be divided between road upgrades and seed money for projects in the residential red zone.

Cantabrians will almost certainly get a covered stadium with 30,000 seats.

But the indicative costs are so sketchy the public should expect the shortfall to rise above $220 million. In fact, other Canterbury councils might be asked to pick up the slack if costs rise or the budget is blown.

Turning pink with envy

Dunedin’s stadium history is instructive. The initial cost was put at $188 million. The final costs, including land purchases and external advice, pushed the total cost to $266 million. (The Otago Regional Council paid $37.5 million because of the perceived regional benefits of the stadium.)

Of course, with a successful series of events and concerts recently – from top musicians like Pink, Kendrick Lamar and Ed Sheeran – stadium supporters will argue the regional economic benefits have been worth the investment. (Christchurch has just nabbed its own big-name star, Phil Collins, who’ll perform at Christchurch Stadium next February.)

The Dunedin stadium’s ongoing costs, including interest on debt, are more than $9 million a year. Some would argue that’s just part of being a grown-up city. Certainly, that’s an argument Cantabrians will use, who want to see more All Blacks tests and concerts in Christchurch.

The Christchurch City Council’s report – released yesterday ahead of a full council meeting this Thursday – is heavily caveated. And so it should be. The most solid figure in it is the $253 million that the city council has set aside for a new stadium since 2013.

Costs preliminary

Written by its general manager of strategy and transformation Brendan Anstiss, the report assumes a new stadium will cost about $473 million – “as best known at this preliminary stage”. Estimates range from $450 million to $550 million, excluding land, cost escalations and inflation.

In March, as Christchurch Rebuild Minister Megan Woods made it clear to Newsroom the city’s current stadium wasn’t up to scratch, she panned a previous estimate of $496 million for a new Christchurch stadium as a “pre-pre-feasibility study”. It would be interesting to hear her assessment of the $473 million figure. (Her office didn’t answer our query last night.)

The already-started detailed business case for the new stadium will look at potential savings but also the procurement and delivery options. It’s that last part that should make Cantabrians shudder.

Given the high-profile collapse of Ebert Construction in August, and the ongoing problems with construction giant Fletcher Building – with huge losses in the SkyCity Convention Centre, in Auckland, and Christchurch’s justice precinct – the construction industry is pushing project funders, including the Government, to take more risk.

There might also be competition for construction workers, as the stadium build will cross over with the city’s metro sports centre.

Road revolt

A curious undertone of yesterday’s announcement is the anger at the lack of road-fixing in Christchurch.

If Ministers agree, the city council will spend $25 million of the capital acceleration fund on fixing roads in the worst-affected areas – Richmond, New Brighton, Linwood/Woolston, Spreydon and Riccarton – and an extra $5 million for second coat chip seals.

In the eight years after the quakes started, the council has spent hundreds of millions of dollars on cycleways, new swimming pools and a new central library featuring a controversial $1.25 million digital touch wall.

The council’s just completed a 10-year plan, with a capital spending programme of more than $4 billion. Yet it couldn’t find $30 million to spend on its worst roads?

No wonder Christchurch residents are revolting. The council’s recent residents’ survey showed only 20 percent of people were satisfied with the condition of local roads, and just 34 percent were satisfied with the city’s footpaths.

Yet, it’s not certain the capital acceleration fund will come to the rescue. If the stadium costs change dramatically, city councillors might choose to divert more of the capital acceleration money into that project. The question is, will Ministers let them?

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