Power politics laid bare at Auckland Council
Auckland Mayor Phil Goff made the people who run Eden Park an offer they couldn't refuse yesterday - but they refused it point blank and got what they wanted.
They walked away with a $10 million gift from the people of Auckland to top up a new $53m suite of low interest loans in a total bailout of $63m.
In a remarkable exhibition of brinksmanship and the exercise of political power, the Eden Park Trust refused to receive the $9.8m as an interest-free, open-ended loan with a sole condition that it must be paid back to ratepayers if the trust ever sold up the land the stadium stands on.
Thanks, but no thanks, said the trust chairman Doug McKay to a meeting of the council's finance committee that debated the issue for around five hours.
The trust is financially strapped, unable to pay for its own development or capital costs including replacing big screens, the main turf and security cameras and turnstiles. It blames the cost of an existing loan, which has soaked up its funds on interest, and planning rules stopping it holding regular concerts as of right.
McKay, who was once the council's chief executive, wanted the $9.8m unencumbered. As one councillor put it, it was like Eden Park using the equivalent of Tinder's 'NSA' (No Strings Attached) abbreviation and requiring the council to swipe right.
Swipe right it did. By 12 votes to 10, councillors and the two members of the Independent Maori Statutory Board handed over the money by way of grant rather than loan. Auckland ratepayers will not see that cash again.
The committee's debate was full of love for Eden Park, from all sides. Some councillors loved the trust (with directors appointed by the Government, Auckland Cricket and Auckland Rugby, but none by Auckland Council) more than others. The beneficiaries of the trust, those who would eventually get any money if it is sold for redevelopment, are the two sports bodies.
Next stop for the trust appears to be the door of finance and sports minister Grant Robertson. While the government declined to stump up the equivalent of what Auckland Council has now agreed to put in as it does not fund 'regional stadiums', the trust wants to win money for its development by obtaining one-off funding for the upcoming Women's Rugby World Cup, Women's Cricket World Cup and the Te Matatini festival.
It will also seek changes to Auckland's newly minted Unitary Plan, which allowed the park six concerts a year if it notified the public under planning rules. Eden Park regards these as excessively restrictive and costly. It believes if it wins more concerts as of right it can bring in healthy new revenues which will help pay for its facility upgrades - alongside the $9.8m gift approved yesterday from ratepayers.
The bid to overturn its planning restrictions was the issue that, yesterday, dared not speak its name. McKay said he was aware he shouldn't mention it and councillors shied away because of the risk that political comment in advance could pollute any future planning hearing.
For the Trust, McKay said its directors could not agree to take on more debt and would be personally at risk and uncomfortable to accept a $9.8m loan. It should be a grant, to be consistent with Auckland Council's grant funding to other entities.
Goff spoke strongly in favour of the money being a loan, so ratepayers would get it back in the event of a sale of the Eden Park land for redevelopment. The other suite of loans - a $40m loan the council will take over from ASB Bank at low interest to the Trust, a $7m working capital loan and an existing $6.5m loan Auckland had made to Eden Park at the end of last century - will have security over the Eden Park asset.
Goff said giving the extra $9.8m unencumbered could see the trust come back to the council with further requests for millions of dollars on an on-going basis. He rejected McKay's claim the trustees could put themselves at legal risk by taking the money as a loan with an ultimate repayment condition.
"Can you explain why you would be putting yourself at risk to accept a limited recourse loan at no interest, no final date for repayment but if you liquidate assets the investment from ratepayers would come back?
"That's free money that most of us would kill for. It is designed to help you but designed to protect the ratepayer."
Goff revealed a trustee for Auckland Cricket had told him that organisation gets $1m a year 'in kind' from its cheap use of the park.
And the mayor said the total $63m package for Eden Park put other council funding decisions in the shade. Last year "we came together and felt pretty good because we are putting $5m to house people who were homeless."
Other councillors however had been persuaded by Eden Park's concerted lobbying and presentations in two confidential workshops. One, Desley Simpson, moved an amendment to make the $9.8m a grant and won enough support to defeat Goff's wishes and the recommendation of the council executives.
Simpson said Eden Park had believed it would get up to $32m as a grant over the next 10 years because of a previous, confidential council decision last May. It had subsequently agreed to just three years of funding at $3.2m a year but had been blindsided by the latest move to provide that by way of a loan rather than a grant with no strings.
Giving the money outright was "a financial model that works for them and works for us."
Her advocacy for the giveaway was mocked by another councillor, Chris Darby, who said she would lose the right to wear "the value for money badge" that she had claimed in the past.
Many of those backing her were, for one reason or another, political opponents of Goff. The core of Simpson's support was from the so-called B-Team of councillors who defeated Goff on a big vote late last year over moving speedway to a new venue in Manukau. More and more, they are becoming the A-team.
The significance of Goff's defeat was not so much the dollar value being given away but in the power dynamics around the council table and the Eden Park Trust's careful exploitation of that shift to front up and get its way.
With local body elections in October, Goff needs not only to retain his mayoralty but to hope he somehow gets a new mix of councillors who are willing to back him on issues he has publicly advocated. After the meeting Goff issued a statement saying councillors and the Maori statutory board members would have to explain to their constituencies why they opted for a grant rather than the loan option he claimed had substantial backing from Aucklanders.
Councillors, for their part, can campaign on the fact they are not being herded towards decisions by officials and the Mayor and have exercised the independent judgments mandated by their voters.
For now, Eden Park Trust has its loan burden taken care of, its $3.2m a year for three years to pay for some upcoming capital expenditures and confidence to turn its persuasive political charms on Grant Robertson, the planning process and the Environment Court.
Longer term, Auckland Council made clear yesterday, it will also be lobbying Robertson and the Government - to seek control of the appointments of trustees. Now it is the main funder of the park, it wants the power to influence it. And then, perhaps, it can make various trustees an offer they really won't be able to refuse.
* Voting with Goff for the $9.8m to be a loan were: Councillors Ross Clow, Josephine Bartley, Cathy Casey, Alf Filipaina, Richard Hills, Penny Hulse, Chris Darby, Fa'anana Efeso Collins and Linda Cooper.
Voting with Simpson for the $9.8m to be a grant were: Councillors Christine Fletcher, Mike Lee, Daniel Newman, Greg Sayers, Sharron Stewart, Wayne Walker, John Walker, John Watson and Paul Young. Independent Maori Statutory Board members David Taipari and Tau Henare also voted for the grant.
Deputy mayor Bill Cashmore was absent.