new auckland

Auckland’s $100m Eden Park dilemma

It is a big weekend for Eden Park with the double-header of hosting a Phoenix football match and the opening Super Rugby clash between the Blues and Crusaders.

A bigger couple of weeks lies ahead.

The self-styled 'national stadium' is in the fight of its life.

Its owner, the Eden Park Trust, can't pay its debts or the cost of development work to keep it fit for purpose.

It is trying to persuade the Auckland Council to not only stump up the $40 million the council offered to guarantee when the park borrowed from the ASB Bank to host the 2011 Rugby World Cup - and which Eden Park cannot repay.

It also needs around $62 million from the public to pay for needed upgrades of the stadium over the next decade, including lighting, super screens and replacement turf.

Besides that $100 million ask, the trust separately owes the council $6.5 million, which has no fixed repayment date.

And, it is arguing strongly for the council to rethink its planning rules to allow Eden Park to host six music concerts a year as of right without seeking resource consents, and flexible timings on other events. Its attempt to achieve that and 60 percent more night events failed just three years ago during hearings for the city's Unitary Plan.

The trust claims Auckland lost shows by Bon Jovi, Eminem, Billy Joel and Monster Trucks in the past year because of Eden Park's restrictions.

The issue will put the Auckland Council on the spot.

Its own Regional Facilities Auckland, which runs Mt Smart Stadium, Western Springs and the QBE Stadium at Albany has just put forward its strategy for the future of stadia in the city at a private workshop for councillors last week.

The Eden Park Trust Board was subsequently granted its own private workshop to push its alternative case. 

The big decision goes both before the Planning Committee in an upcoming extraordinary meeting and is on the Finance and Performance committee's forward work programme. The council chief executive was charged last year with negotiating with ASB to 'acquire' the loan, which expires on September 30, inconveniently just before the local body elections.

Last year the council offered to extend its guarantee for six months but the trust wanted a broader commitment that the council would take over the loan.

If the council - which has been divided on such contentious issues - decides to give Eden Park the ratepayer money, and help it win an amendment to the Unitary Plan concert restrictions, it will be working against its own stadium company's interests. It will be giving away council money with one hand and losing council revenue on the other.

Concerts now held at the publicly-owned Mt Smart would inevitably go to the private Eden Park. The Warriors league team could similarly be expected to pack up and head to the newly-funded venue in Mt Eden. Plans to develop Western Springs as a cricket venue could be compromised.

It is understood a proposal floated in the past for the RFA organisation to take over the management of Eden Park for the trust - and spurned - may now be under re-consideration.

Further complicating the picture is a private Auckland business consortium's idealistic proposal to build a sunken stadium on the Auckland Waterfront - supposedly at no cost to the public (other than the value of land transferred for residential and commercial developments).

On top of the operational revenue implications for Mt Smart and RFA, the council itself would need to avoid taking on too much Eden Park cost, which could push the council closer to its debt ceiling imposed by financial ratings agencies.

The $100 million ask comes at a time when the expected cost of the City Rail Link tunnel project could balloon by at least $500 million and put that debt ceiling at real risk.

Eden Park has its fans on the council. One group of the elected councillors was hosted in what looked like a corporate box area at cricket this summer, with councillor Daniel Newman posting a photo on social media saying: "General Consensus: Eden Park has a great future." He tagged councillors Fa'anana Efeso Collins and John Watson and Manurewa Local Board chair Angela Dalton, who are in the picture.

One solution, typical of elected officials facing a fiscal conundrum, would be to agree to the 'no alternative' requirement of taking over the park's $40 million loan but putting off the $60 million upgrade costs for further evaluation, to buy time.

Eden Park Trust might countenance such a compromise deal if it can win support for its desired changes to the Unitary Plan limits on events and hope the extra revenues it could raise might help pay for the needed upgrades.

But that would cut across what was years of thinking, planning and public consultation in the forming of that Unitary Plan. It is, to some, the holy grail of urban planning and too freshly minted to be allowing ad hoc changes to advance private interests.

The financial state of Eden Park and its need for a bailout became public after the dogged work of journalist Todd Niall, in obtaining under the Official Information Act a report compiled by consultants EY who were engaged last September to check the state of the trust and its plans.

The EY report found Eden Park's business model was exposed to significant risk this year because of reduced test rugby and cricket events "and the continued restrictions on hosting major concerts". The trust would not make enough profit to cover its annual interest payments.

While there was already provision for 25 night-time events plus six concerts, the concerts are a "discretionary activity" under the Eden Park Precinct Plan developed with the Unitary Plan. EY said the park management explained that to host an event classed as a discretionary activity, resource consent was required. 

This opened concert plans to objections from locals and others.

In its annual report, the Trust argues "the mechanism for achieving resource consent is more or less impractical. By way of comparison it was noted an application for a permanent structure such as a marina development is processed in the same manner as a three-hour concert (plus associated activity).

"The timeframes are not workable in dealing with concert promoters, who require certainty in the short-term."

The annual report also swipes at the council's "conflicted role" as both regulator and competitor to the park - "with respect to the disparity between council facilities' rights to host concerts as a permitted activity at venues such as Wester Springs and Mt Smart, versus Eden Park's discretionary activity status requiring this application status."

Eden Park has tried a variety of new activities to raise revenue - including leasing part of the grandstand event space out to businesses for offices, a move which is understood to have raised eyebrows from one major sports body which has ongoing contracted rights to function space at major events.

The EY report says other money-raising initiatives include rooftop tours, stadium glamping and events such as 'party in the park' corporate Christmas events.

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