Asset sales (remember the days)

One of our correspondents supplied copy today of an email by Tim Calder, sent to the Our Stadium mailing list (May 2007).

Note the mention of asset sales in the paragraph we have highlighted.

The correspondent says: “It is obvious that the original plan when they pushed the stadium was to partly fund it from asset sales. I also remember Malcolm Farry and Damien Newell (fawning over Farry) on the Ch9 debate back in 2007 talking about selling Citibus and City Forests. People shouldn’t be surprised about asset sales.”

Tim Calder is now based in London, working as an analyst for Aviate Global [financial services]. His personal profile notes past positions as chief executive at EZY STOR Self Storage, general manager at Willowbank Quarter, International Trade at Otago Chamber of Commerce. Educated at University of Otago. His blog has not been touched since 2009.

—– Original Message —–
From: Our Stadium
To: supporters@ourstadium.co.nz
Sent: Wednesday, May 16, 2007 3:58 PM
Subject: [Our Stadium] Our Stadium News Update 16 May 2007

NO STADIUM MEANS… NO MORE TEST MATCHES AND GOODBYE HIGHLANDERS FRANCHISE

Join the positive and proactive www.ourstadium.co.nz to keep international rugby in Otago and help create an on-going future for the city, the university and the next generation of young people.

National TV News and Radio have been carrying the headline over the last few days that Otago will lose the Highlanders Super 14 franchise within three years unless a new stadium is built. Already Dunedin has lost test matches. The threat to the Highlanders is real and if you care you need to act now.

So what’s the significance for people in the region? The answer is plenty. Rugby is a national and international event that gets screened into households throughout New Zealand and around the world. Without All Black tests and the Super 14 showcase Otago will fall of the radar. Without rugby there will be no stadium. Neither Carisbrook as it stands, nor the new covered Logan Park complex will exist.

Why is that important for people who don’t follow rugby? The answer lies in the region’s biggest employer – the University of Otago. Seventy percent of students come from outside the region. They bypass six other first class universities, dozens of polytechnics and pay many thousands of dollars more to come to Otago. Without rugby to keep Otago on the map for prospective students, and with other universities stepping up their marketing, this trend could easily be reversed.

What difference will a few students make? Plenty. The economic benefit generated from each student is more than $60,000 a year. Do the maths yourself. One hundred fewer students is $6 million less for the region. One thousand is $60 million. Once a trend starts it will be hard to stop.

But the ratepayers of Dunedin can’t afford to pay for the new stadium? There has been an enormous amount of hype around the cost to ratepayers. The Otago Daily Times figures are $1.13 a week for an average householder. Our Stadium acknowledges even this amount is significant for some homeowners and a member of the executive team is working on ways to lower this cost to individuals who need it. We also don’t know how Dunedin City will fund its share. DCC may in fact exchange an asset like their forest for the stadium, or reprioritise their asset programme, which may reduce the individual cost to ratepayers even further.

Why should rugby get such a huge handout when it’s professional? The beauty of the stadium is that it’s not exclusively for rugby. It is multi-use and with the completely covered pitch it will be the second largest indoor venue in the southern hemisphere, second only to Melbourne’s Telstra Dome. This means it becomes more internationally marketable than any other stadium in New Zealand. In addition, part of the complex will used by the University meaning it will be in use seven days a week, rather than just for an 80 minute rugby match. Being covered also makes it attractive for conferences and exhibitions.

Could everyone that receives this email please forward it to your entire address book. For those of you that indicated that you would volunteer your time could you please make an effort to sign up at least 10 new members. Nobody is too young or old to have a say so if your children, parents, friends or colleagues are supportive get them to sign up. Our membership database will be used to show the council the support there is for the proposed multi purpose Stadium. So keep those new members rolling in.

IF YOU CARE ABOUT THE FUTURE OF YOUR CITY AND YOUR REGION
JOIN UP ON LINE WWW.OURSTADIUM.CO.NZ

Tim Calder
Secretary
Our Stadium Visionaries Club Inc.

Posted by Elizabeth Kerr

27 Comments

Filed under Business, Construction, CST, DCC, Economics, Hot air, Name, People, Politics, Project management, Property, Site, Sport, Stadiums

27 responses to “Asset sales (remember the days)

  1. ormk

    $1.13 a week! Yeah right.

    If the stadium is going to get a rates rebate then every other entertainment value in town should get one too. Hoyts, Rialto, the Fortune theatre, all the restaurants will be able to keep their charges down if they are absolved of rates bills.

  2. Anonymous

    The status of the Our Stadium page at http://www.ourstadium.co.nz is consistent with the whole project: A scam from the start, milked for all its worth and already forgotten by the stakeholders who live elsewhere.

  3. Anonymous

    The people who make the big money out of so called “public good” projects are the spruikers, the feasibility consultants and of course the “in the know” landowners who position themselves to convince City Councillors to build the structure on their land which just happens to be available at 10x the value of what they paid for it. Once those riches have been made and the daily grind of admin, poor gate sales, maintenance, kick in it’s just a simple public relations exercise in socialising those losses onto hapless ratepayers.

    Whilst I agree Rugby is a great sport and creates all sorts of business opportunities for Otago – that should be the very reason that ORFU and its officials are made to open the books to an independent audit.

    I’m not sure this type of feel good rhetoric actually cuts the mustard with the locals in tough economic times and the DCC should take note.

    Here’s another irony – the latest Political furore over the $20k of Whanau ora money going to the Dunedin Mongrel Mob. Compare that to ORFU and Racing having an ownership in 3 South Auckland Bars and systematically fleecing $6-7 million of pokie money from that community because of “arrangements” it has with a pokie trust called TTCF Inc and later TTCF Ltd. That Pokie Trust is annually licensed by the Government (the DIA) on the basis that it has a fiduciary duty to manage and distribute pokie funds both fairly and transparently on behalf of the community. Hmmm!!!

    • Elizabeth

      Anonymous – when the Mob’s Whanau ora news broke, it should have said to everyone (lay person or not), that what the rugby ‘rort’ represents is organised crime – nothing more, nothing less. Amazing how many gutless people in positions of power will not think wrong of the boys. Never! Oh, wait…

      • Elizabeth

        “Whanau Ora is a $174 million Maori Party slush fund set up with money taken from worthier social services.” -Winston Peters, New Zealand First

        ### ODT Online Thu, 2 Aug 2012
        Mob used Govt cash for drugs: police
        Intercepted conversations between Mongrel Mob members reveal they used funding from the Government’s Whanau Ora programme paid to a Dunedin anti-violence trust to buy cannabis for drug-dealing, police allege. New Zealand First leader Winston Peters says confirmation the gang used Whanau Ora money in its cannabis dealings would be a “national disgrace” and should lead to the programme being shut down.
        Read more

        ****

        ### ODT Online Thu, 2 Aug 2012
        Government backs Whanau Ora
        The Government says it is backing Whanau Ora amid allegations the Mongrel Mob used money from the scheme to buy cannabis for drug dealing. Police have told Dunedin District Court that $20,000 was misappropriated from the Whanau-Ora funded We Against Violence Trust and used to buy drugs. The trust has a $45,000 contract with Whanau Ora for work on whanau violence and community support. This afternoon Finance Minister Bill English, speaking on behalf of Minister for Whanau Ora Tariana Turia, said the Government remained committed to the scheme. APNZ
        Read more

        Mind you, the National-led government – and Peter Dunne – supports the Department of Internal Affairs (DIA) not prosecuting the rorter-trustees on the pokie trusts, and their affiliates, that feed MILLIONS AND MILLIONS OF DOLLARS OF CHARITABLE FUNDS to the professional rugby and harness racing ‘entertainment industries’. How inconvenient to propose such a thing, prosecutions… Or that money laundering by white collar criminals is rife, with good lawyers, bankers and accountants in ‘advisory’.

  4. Amanda

    There’s a meeting discussing the city’s economic future on Tuesday June 5 at 5.15-7pm in the Dunningham Room (public library) featuring Peter Harris, of the DCC economic development unit (don’t laugh), so no doubt he will showcase how the DCC will get around the financial pickle it has got itself and us into.
    http://www.facebook.com/#!/events/228851103899077/

  5. amanda

    Exactly Elizabeth, fair’s fair. If they are going after the Mongrel Mob, what about the white collar mob? They have leached millions, millions out of the local and national economy. Notice the Mongrel Mob big ‘reveal’ was on the front page, with the ODT’s history of cherry picking who it ‘outs’ it drew a big yawn from me. If you can’t bring the really big con artists to account, don’t expect to be given a pat on the back for bringing to account the small fry. It is much easier to bring to account Others if they don’t wear expensive suits I guess.

  6. amanda

    Not only that if the media can’t bring the big white collar cons to account they make themselves redundant. Print media? What’s that?

  7. Anonymous

    There were many fingers in the pies and a lot of palm oil was used to lubricate the hands. Now they’re all covered in the same grease requiring regular lubrications to ensure no one part faults exposing the lot.

    The Stakeholders are fair swimming in it while the Stadium Councillors continue to get their little tune-ups from time to time.

    This government is just a bigger, badder, uglier version of Dunedin’s rorters.

  8. Hype O'Thermia

    Asset sales and the debt that forces them are not going to be critiqued by the government or its agencies. It is obvious that PM Key is committed to a program of selling profit-makers, socialising loss-makers. It’s the capitalist way, it’s how capitalists thrive. His “get out of debt” strategy – “strategy”! – for NZ is to sell whatever gives a return to NZ at large (thereby helping to reduce individuals’ tax burden) and spending the money on things that are needed – but should be managed out of the normal funds instead of spending up large on elite sport, rugby facilities and other circus glitz until the money is nearly all gone. But if it weren’t nearly all gone where would be the argument for flogging off the income-producing assets that belong to all of us, to the few so that they can become wealthier and wealthier, and buy up more and more of the community’s assets?

    When people can’t afford their mortgages the rich get richer, buying up property at knock-down prices. Desperation, however it’s achieved by job loss, mortgage and rates rises, keeping minimum wages down below survival level – it’s all good for someone.

    When the going gets tough watch for the person who’s rubbing his hands with glee.

  9. amanda

    Key only cares about the millionaires, not the middle class, the working or the unemployed, his world view is that of winners and losers, the logical conclusion if you believe the trickle down con. If you are a millionaire you are a winner, the rest have to eat dirt. They didn’t work hard enough or make good choices, like say Mr Farry, Eion Edgar, or Julian Smith – smart, wise, good people like that. See how the rich get richer? They are just smarter and better than the rest of us. According to old Keyster.

  10. Calvin Oaten

    The manager of the ‘Willowbank Quarter’? You know that this is the residential development on the old ‘Wilsons Distillery’ site, developed and owned (possibly still) by Farry Clear Construction, see the trail?

    • Elizabeth

      Yes Calvin, that and more. The resource consent hearing for Willowbank Quarter informally conspired to show up the infantile mindset of loser John Farry, extraordinarily well. Did I mention online pornography in that ‘connection’. Long story. Farry, short man.

  11. Tony

    Will someone make sure that the golf club closes the bar a couple of hours earlier on a Saturday night. After reading that shit from Andrew Whiley in today’s ODT on assets sales.
    Where does this guy dream up these ideas, to sell the profitable assets to pay off debt.
    It was council that got us into debt in the first place, now they think they have got the answers to get us out of debt.
    It would appear that talking to and then hitting little white balls around all day does have some effect on people.
    If he wanted to sell minority stakes. He could start with the stadium. I am sure that the ORFU and the NZRFU would be interested.

    • Mike

      Well that is core National Party dogma – remember how they sold off half of the nation’s best producing assets cheaply to their overseas mates (sorry “mums and dads” except there weren’t any) despite the bulk of Kiwis being against the plan – well Whiley seems to want to do the same …. because …… um …… John Key I guess.

  12. Andrew Whiley is missing the point. Selling assets won’t solve anything except to reduce the amount of dividends coming through to the DCC. Any dilution of ownership will have an equal dilution in the DCC’s share of those dividends. To offset that would only, in the case of Aurora, mean power increases. I am sure he hasn’t figure that one. No, the real problem of course is the Forsyth Barr Stadium. Something which the Mayor and the Councillors cannot seem to deal with even when it is staring them all in the face. For what ever reason it seem to cause brain fades every time it is mentioned. Even CEO Bidrose can never seem to ever finalise her much promised analysis of the situation.

  13. Sally

    Mike. All is not bad with part privatising of National’s asset sales. I got a call from my electricity supplier on Friday, offering me a contract for the next 3 years with a 25% reduction in my electricity bill for my business. That can’t be bad. That is extra money that will go into the local economy, instead of under a Labour-led government giving it to their mates for treaty settlements that never seem to get to the needy.
    These are the sort of incentives that employers need to get this country rocking and rolling.
    At the moment I am being ripped of by a council company Aurora with over-the-top line charges that are being used to pay of the stupid debt-ridden decisions that the bunch of wankers around the council table keep on making.
    Maybe there is a case for selling Aurora, if it will bring down line charges, as the selling of the power companies has done.

    • Elizabeth

      Calvin has the answer for you, Sally…………..

    • Mike

      Why on earth would selling Aurora bring down lines charges? selling monopolies tends to raise prices to appease the new investors rather than cause more competition. Is there a competing lines company I can choose?

  14. Sally

    No he hasn’t. Council keeping Aurora won’t help anyone other than the rugby boys.

  15. Sally, sorry to disagree. You say, “Council Aurora won’t help anyone other than the rugby boys.” The fact of the matter is the stadium debt is firmly in place, it’s beyond rugby’s ability to alter that now. I agree rugby is largely to blame for it happening, but that is now history.

    Because Aurora are paying huge ‘subvention’ payments it is only prolonging the agony. You only have to look at DVL’s latest report to see that even though it has absorbed those payments plus additional top-ups from the DCC (ratepayers) of several $millions it has only managed to reduce the $146.6 million debt to $138.586m while at the same time building up deficits to ($13.656m). The crux of the problem is lack of patronage. It never has, and never will meet those requirements. Until the Mayor and Councillors understand or accept that fact, the complex will be a huge soakhole for money.

    Therein lies the city’s problem and selling everything we own won’t get rid of that fact, but simply reduce the clty’s income. It’s not the DCHL operations which are the cause (although they are not well run by competitive criteria) but the gross misapplication of council spending. I concede that power is an impost on your business, but I suggest the whole compliance burden of council is just as onerous. The thought of this country ‘rocking and rolling’ is barely feasible with the local body debt on top of the national debt. Seems a remote happening unless you can talk the cows into upping their output ten fold.

  16. Cars

    Upping the number of cows tenfold will not assist anyone. At current predicted 2015 payouts from the ANZ bank, each kg of milk solids will incur a loss, more cows more losses. The dairy business is now like the stadium, a liability not an asset. If I was a farmer not in Southland or Waikato, I would be looking to sheep.

  17. Cars

    As to reducing debt by selling assets, there is only one way for the DCC to cut debt and that is to cut staff. As a number of them appear to be engaged in trade, I am sure that they could prosper, perhaps as car dealers, some as lobbyists, I would not reccommend Public relations, but spinmeisters is an option. The national public service could no doubt use a few in obfuscation, and the higher salaries commission could use a few dreamers. The traffic light department has to be finished, there are no corners left.

    Just as long as the DCC keeps the librarians and street sweepers, we’ll all be better off and get rid of the debt and perhaps defalcation.

    • Mick

      Cars
      You are completely right about the need to cut staff. I believe that since about the year 2000 the full time equivalent level at the DCC has risen from around 450 to over 700. This in a city that has not grown except in terms of bureaucratic control. Your traffic light example is but one outward and visible manifestation of this. The inexorable rate increase in excess of GDP is another. But the bureaucrats dream on with more and more ways of bankrupting the place. The latest seems to be a newly designed Octagon layout. What we need is a little bit of fiscal responsibility. Cutting staff levels is in the first priority order. Measuring against this bureaucratic mushrooming is the decline of industry and commerce in this city.

  18. I just happened to stumble across what seems to be the best and most simple explanation to the DCC’s actions over the last decade and a half. Fits it absolutely. Note the comment about income streams of the debt funded asset. Dunedin is full of assets with no or insufficient income streams.

    The Nature of Debt

    Debt is not inherently bad, but if misapplied it leads to a deflationary outcome. The key is in the income stream of the asset which the debt was used to purchase. If the resultant income stream cannot service both interest and principle repayment then the debt eventually subtracts from the overall demand of goods and services. As a result demand decreases and the economy contracts. Debt of course is the increase of current spending at the cost of future spending. Once debt reaches a certain level, future spending must decline. Eventually the future arrives and spending is reduced to service the debt. When debt is used for present day consumption, as opposed to investment to produce an income stream, future demand is reduced. Malinvestment works the same way, debt is used to built unneeded or inefficient projects in order to stimulate current spending, but in the long run causes deflation since the resultant income stream is less than the cost….think Solendra or just about any other government directed project.

  19. Elizabeth

    Some extremely wise words from contributors to this thread, this morning. DCC Heads need to get beyond themselves to understand the engines of the regional economy. DCC is not here to compete with private businesses, while growing its fat. The group companies (DCHL) need to perform solidly without traction caused by misapplications, misappropriations and inefficiencies of the city council itself, DCC as a statutory body and supplier of infrastructure services can’t afford to be an enterprise in any shape or form for the foreseeable future – CEO Bidrose and the Mayor of Dunedin need to understand business basics, I fear they don’t have a head for heights…. to peel back bureaucracy by hard-arse structural analysis of operations, empowered by acutely clean governance. Neither ‘leader’ comes with a track record in high-end commercial business that has application for sorting this blousy council to the athleticism we should now expect of local bodies. Instead, we have council planning resembling a Willy Wonka chocolate factory. With as much comedy and sadism – dumbed down, awkward and flatulent.

  20. Elizabeth

    The Climate:

    ### stuff.co.nz Last updated 15:18 07/10/2014
    Government deficit widens
    By Vernon Small
    The Government has posted a Budget deficit of $2.9 billion in the year to June 30, $338m worse than forecast in the pre-election opening of the books. Finance Minister Bill English said the result was the third consecutive narrowing of the deficit before gains and losses (Obegal) and was further evidence careful fiscal management was producing consistent gains over time. However it compared with the forecast deficit of $2b in the 2013 Budget. The major changes since the pre-election picture were a decline in tax revenue, an increase in treaty settlement costs and an increase in earthquake rebuild expenses.
    Read more

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