Stadium: Private sector funding

UPDATED

The Carisbrook Stadium Charitable Trust (CST) states that sources of project funding for design and construction of Forsyth Barr Stadium include:

Private Sector Funding of $31 million (from a total of $45.5 million).

Last week, Guy Hedderwick, commercial manager at Dunedin Venues Management Ltd (DVML), in reply to a question from Cr Lee Vandervis confirmed that the donations total was still “around $330,000”.

Only $330,000 raised of the tens of millions required.

Meanwhile, Dunedin City Council has been forced to raise debt to meet the massive shortfall and is required to pay interest on this debt.

The Carisbrook Stadium Charitable Trust has serious work to do.

The Trust, at its Funders webpage, states the University of Otago will contribute $10.0 million of project funding for stadium design and construction.

Cr Lee Vandervis says “My clear understanding is that the University of Otago is not allowed to fund such things as the stadium, and that not one single dollar of university funding has built the stadium. They have merely built a university building on adjoining land next door.

“While I was on Council in 2007, Malcolm Farry, chairman of the Carisbrook Stadium Trust, said there would be $10m worth of ‘synergies’ between the University Plaza building and the stadium, but when I questioned harder these synergies turned out to be bull-dust.”

Cr Vandervis might care to check the construction and or architectural synergy between the stadium and the university building, and how the associated costs were met.

Posted by Elizabeth Kerr

9 Comments

Filed under CST, DCC, DVML, Economics, People, Politics, Project management, Stadiums

9 responses to “Stadium: Private sector funding

  1. Russell Garbutt

    Yes, the CST has a power of work to do, but so do a lot of other people who still haven’t figured just what the lack of private funding actually means. And I include that wonderful Office of Sitting on Our Hands and Doing Nothing, the Auditor General’s office.

    What, what, oh what, is so freaking difficult to understand about Farry saying that he is going to raise more than $40m of private money for construction costs of the new rugby stadium, and then saying that pre-sold product counts for this? It never has, and it never will. Advance sales are part of revenue. The only way in which advance sales could be used as part of a contribution towards construction is if the stadium was running at a huge annual profit and we already know that this isn’t going to happen despite “optimistic projections” as seen in DVML and DVL financial forecasts. Even these forecasts show that this simply can’t happen.

    It cannot be put more plainly than this.

    Farry and the rest of the rabble that formed the “less than 20” people that caused this to happen relied on the complicity and/or stupidity of the last Council and the last Regional Council to ram this thing through. Until we have a totally independent review of the finances of the stadium deal in exactly the same way we have had an independent review of the governance issues surrounding DCHL and DCC, all the people that should be held accountable will remain hidden. We all need to know who of the last Council were complicit and who were stupid. Isn’t that our right?

    Speaking of which, I assume everyone notes the fact that when my letter was published in the ODT today calling on Hudson to resign, it had been referred to him and he had failed to respond within the normal generous time allowed by the ODT. We can only assume that he is going to try to weather out the situation.

  2. Anonymous

    There is a shared wall. The back of the West stand is the same wall as the University Plaza building. The steelwork for the stand sits on supports on the top of that wall.

  3. Russell Garbutt

    According to the figures on this Funders webpage, the amounts don’t add up. The amount from the DCC, the ORC, the Government, the University, the CTO all add up to $168m. The cost, which the DCC says it can’t yet confirm, is listed on this site as $198.3 which means that the private sector funding is $30.3m. We all know that the private sector funding has gone into revenue, so the question still remains – where is the $45.5m of cash that Farry promised? It is actually a myth.. It is, like the famous parrot of John Cleese fame, non-existent.

    Go on Farry, show me the dough.

  4. Peter

    So a wall is a ‘synergy’. That’s exciting. What an amazing contribution by the university. Half share in a wall….and some plaza paving.
    Of course, as we know, all this was cooked up to give the stadium some gravitas by having an association with the university.

    • Elizabeth

      It’s my understanding that the university and DCC are still in negotiations for meeting the cost of the University Plaza landscaping. Details, details, folks.

  5. Calvin Oaten

    Russell, the DCC has picked up the missing PF. It was originally (and still probably is) shown as an operating overdraft of just on $30 million. Together with the central government windfall of $15m we have the $45m. Any money Farry does get (at present just $330,000 according to Lee Vandervis) goes to DVML’s revenue account. Let’s face it, it has to, otherwise DVML will have no cash flow at all.
    Proof that all this is true is borne out by the recent move to increase the share capital of both DVML and DVL. DVML to $10m and DVL to $160m. A total of $170m. That takes care of the overdraft plus the construction capital committed by the DCC.
    Now, if we add DCC $170m, ORC $37.5m, OCT $7.5m, Otago University $10m and central govt $15m we have a total of $240m. This is the total to date, not including extraneous items such as Carisbrook purchase, State Highway 88, and whatever else surfaces in the wash up in the next month or two. Then of course there are the as yet unquantified accumulated operating losses of DVML and loan interest costs over the next FORTY years.
    Someone, besides me should remind old ‘Rodders’ at ‘City Talk’ as he has just told the citizens that the cost is just $198m.

  6. Phil

    I seem to recall an about face from Malcolm with regard to “extra” private funding some months back. It appeared that any money sourced, or any money saved, would be used to pay for construction “extras” (such as the grass, cough cough), and would never make it as far as DVML.

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