The continuum of utter crap, lies and DECEIT about the stadium project DOES NOT END with a statement from Mr Davies, let’s be perfectly clear

WE ARE talking the biggest heist in Dunedin’s history: THE STADIUM

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### ODT Online Tue, 21 Jun 2011
Money in meetings, not rugby: stadium boss
By Hamish McNeilly
Non-rugby events would be Forsyth Barr Stadium’s “bread and butter”, with the venue attracting international interest for conferences and meetings, Dunedin Venues Management Ltd (DVML) chief executive David Davies says.
Read more

Posted by Elizabeth Kerr

16 Comments

Filed under Economics, People, Politics, Project management, Sport, Stadiums

16 responses to “The continuum of utter crap, lies and DECEIT about the stadium project DOES NOT END with a statement from Mr Davies, let’s be perfectly clear

  1. Phil

    Intersting to link Mr Davies comments with those from Council’s own “specialist” consultants. The CST commissioned feasibility report, accepted by Council, stated very clearly that the stadium would not be financially viable without the financial success of the Highlanders franchise. The report didn’t say that the Highlanders would be enough, but that, without the Highlanders generating a direct profit for the stadium, the project would fail. In short, the stadium needed a successful rugby franchise (read: bread and butter), and a significant number of other events annually. As a minimum.

    The CST report goes against Mr Davies, who has dropped rugby down to a secondary income source. Which is where it belongs and is what most of us have been saying all along. There was simply never going to be enough money coming from rugby to pay its way in the stadium, and anyone who believed there would be was living far out beyond dreamland. There’s a reason why both the NZRFU and the DCC have continuously needed to bail out representative rugby in Otago. Given that Mr Davies has significantly more experience in stadium operations (albeit with mixed results) than the CST (although Malcom did supply free mouth guards to my son’s under 7 team a few years back), I’d tend to back him on this revelation.

    • Elizabeth

      Of course we agree with him about Rugby, Phil.
      Why on earth have the good citizens of Dunedin had to put up with every other bullswool artist backing Rugby.

      No wonder the grass at the stadium gives us carpet burn.

  2. The problem is that without large crowds at rugby, there is a large hole in the budget.
    There may be some income from conferences etc but a large part of this will be just taking business from the Town Hall and other venues.

  3. Phil

    That’s a fair call, Alistair. Meetings and conferences should only count if they are new to the city and if they could not have been catered for in existing facilities. Otherwise it’s just the same money being redistributed. It’s like saying that your new Range Rover is getting excellent fuel economy when all you’ve done is to buy a second Range Rover and started driving that instead.

  4. Peter

    In China they would take out the culprits responsible for gross mismanagement and shoot them. Fortunately for them they will be spared in New Zealand-the shooting that is.

  5. Peter

    David Davies is a self professed ‘rugby man through and through’ so what is he doing in his present job.

  6. David

    Alistair says “The problem is that without large crowds at rugby, there is a large hole in the budget.”

    From memory, the Highlander crowds required so the stadium would cover costs were 17,000 average, per game, and about 10,000 I think for NPC games.

  7. JimmyJones

    Alistair says “The problem is that without large crowds at rugby, there is a large hole in the budget.” The other problem is that even with large rugby crowds there is a large hole in the budget. And if there is a healthy number of conferences (and we pretend that they weren’t already going to being held here) then the problem is that there will be a large hole in the budget.

    Every year David Davies is compelled by law to predict the size of the large hole using legally accepted accounting techniques. You can expect some stretching of the truth, but there is a limit to this. The official prediction is useful to know because it is based on best-guess estimates of rugby and conference attendances. It is also useful because it is the only media-credible estimate. Sharemarket investors have the luxury of independent sharebrokers producing profit forecasts, but for Dunedin Venues Ltd (DVL) we only have Dunedin Venues Ltd.

    The deadline for DVL’s newest forecast (Statement Of Intent) is 30/6/11. Since the old one there has been some serious debt restructuring and the new forecast will be more truthful (a much larger loss). The total annual ratepayer sacrificial offering includes the principal payments on the huge debt, in addition to this operating loss.

  8. Peter

    Which leaves the question, Jimmy, what is the Council going to do about it? Not much from what I can see. How long can they bury their heads in the sand? Before the last election Dave Cull and his GD group said they’d only put more money into the stadium for what was absolutely necessary to ‘make the stadium work’, so it could open its doors.
    Now there is one tranche for stadium extras (exclusions) of $5.15m, which was reported, and one loan, done behind the scenes, of $1.4m. It has also been established that DVML in its Statement of Intent can borrow up to to $1m at a time without going through Council. The $1.4m of course breached that. This shows no commitment to curtail stadium spending…..along with other spend ups.
    With two years to go Dave Cull could very well find himself in Peter Chin’s position at the last election. Some of the spenders will survive, if you go by what happened last time, but Dave Cull will take the brunt because he is the Mayor. You’ll notice Chris Staynes and Richard Thomson keep very quiet about this. Believe it or not they seem to have learned a thing or two from someone like Bill Acklin. You’d think they’d speak up in support of their Mayor.

  9. JimmyJones

    Peter, Dave Cull has been very quiet, but I think that he will soon have to start being honest with us about the stadium total capital cost and the total annual ratepayer impact. The time to release this information was straight after the election; wasn’t that the promise: no secrets, open the books? I think that the cone of silence is starting to lift and it would be best if Mr Cull spilled the beans now, before the whole thing unravels.
    Dave, in part, owes his election success to his stadium opposition. The stadium was useful to him then, so it is appropriate that it would lead to his demise at the next election.

  10. Peter

    Yes, I agree, Jimmy. Dave Cull’s stadium opposition was pivotal to his success and was acknowledged to STS after the STS Town Hall meeting. He saw it as his springboard for the mayoralty. How things have changed. He is an intelligent man and I’m amazed he has fallen in so easily to the stadium promoters’ cause. Was he threatened somehow if he didn’t do so? Or did he not care anymore as the stadium opposition cause had outlived its usefulness for his political aspirations? You’d hope he wouldn’t be so cynical. But that’s politics, I guess.
    I think he has now dug himself in too deep. When the crap really surfaces, he’ll find himself on the wrong side if he doesn’t watch it.

  11. Russell Garbutt

    I would love some clarification about the forthcoming Phoenix fixture at the stadium.

    I believe that I read in the Oddity that DVML were acting as the promoter for this event and that they would be taking all the risk including meeting all the costs of turning the ground round from rugby to soccer and then back again – including dealing with the necessary change in grass length.

    DVML would be meeting all costs associated with staging the event and taking all income from the event. I assume that included in the balance sheet for such an event would be a realistic commercial cost for hiring the stadium.

    So the question I would love answered, as a DCC company, can we have access to the projected balance sheet for this event from DVML?

    • Elizabeth

      Russell, given half a chance you would bring to an end the noble tradtion of underhand hidden budgeting that equates with the entire stadium project. Something like treason, are you ready to take the consequences?

  12. Russell Garbutt

    Given half a chance, I’d like to see some people inside looking out as the old saying goes. I don’t think it too long a bow to draw to suggest that some people in this town thoroughly deserve to be in that position, do you?

    As far as I’m concerned, there are some who believe that thinking of holding those responsible for putting the town into irretrievable debt is “negative” – I’m quite happy to declare that this is not acceptable. They, not me, are answerable to that charge.

    • Elizabeth

      ### ODT Online Tue, 28 Jun 2011
      Stadium margins tight
      By David Loughrey
      Dunedin’s Forsyth Barr Stadium is set to begin operations with tight profit margins, and no guarantee financial predictions promising profits will prove accurate. Both Dunedin Venues Management Ltd (DVML), the company set up to run the stadium, and the Dunedin City Council, agree profitability would be unknown until it had been tried and tested.
      Read more

  13. JimmyJones

    Last week (22/6/11) I wrote about Dunedin Venues Limited’s (DVL) forthcoming Statement Of Intent (SOI) and said that “there has been some serious debt restructuring and the new forecast will be more truthful (a much larger loss)” and also “You can expect some stretching of the truth, but there is a limit to this.” I was completely wrong on both counts. I thought that respect for the law and the accounting standards would ensure a more accurate profit forecast. It didn’t. Sorry.
    The old DVL SOI predicted that the Net Profit would be a loss of about $8 million per year. The new SOI predicts ongoing losses of only $6.5 million even though its debt has increased. The real size of the losses should be over $15 million per year. The good news is that the losses should reduce after 20 years (after consuming $300 million of renters’ and ratepayers’ money). The losses will continue beyond 20 years. The other bad news is that $15 million doesn’t include principal payments on the enormous debt.
    It is clear to me that there is a financial advantage to the city to abandon the construction even now, just before completion. Yes, building it will cost us money, but letting them operate it will cost even more. Trash the piece of junk.

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