### ODT Online Sun, 5 Aug 2012
The Stadium challenge: make it pay
By Chris Morris
There will be no birthday bash when Forsyth Barr Stadium in Dunedin turns one year old tomorrow.
This story featured in the ODT print edition on Saturday 4 August.
The first year (via ODT)
• 375,000 people through gates (250,000 were expected).
• 269 events, including 150 conferences, concerts, trade shows, meetings and social events and 119 sporting or community events.
• Rugby World Cup matches, Elton John concert, Highlanders crowds among highlights.
• $14.9 million economic boost for Dunedin estimated from Elton John concert alone.
• $1.9 million loss booked by Dunedin Venues Management Ltd in first half 2011-12 year.
• $3.3 million losses forecast to 2015 until cost-cutting and extra council funding reduced loss to $873,000.
• PricewaterhouseCoopers confirms $8.4 million construction overspend, interest costs push final stadium bill to $224.4 million.
• No major follow-up act to rival Elton John concert; talks continuing.
The ugly ???
Raging *stadium* success was never PLANNED for Dunedin.
Not with Malcolm Farry leading the charge to build and operate the thing with his Carisbrook Stadium Charitable Trust (CST) – a private trust with its books kept well hidden from public scrutiny but which received public funds from Dunedin City Council. CST was also responsible for purchase of properties for the stadium site, at highly inflated prices (check names of trustees and those handling property negotiations).
Not with DCC shell companies (joke) – Dunedin Venues Management Ltd (DVML) and Dunedin Venues Ltd (DVL) that have identical boards and have been set up to get LARGE debt conveniently off the council books. The debt still remains and is the council’s debt, nevertheless.
Not with Dunedin City Holdings Ltd (DCHL) – a cot case where the stadium is concerned, made worse with DVML and DVL moved under its wing.
Partial list only…
– (in the first year) Professional sporting fixtures were in the minority at the stadium and 69% of all events staged were considered ‘community-based’.
– Otago Rugby Football Union (ORFU), a loss-making enterprise loosely considered to be an ‘anchor tenant’ – never far from liquidation, historically the recipient of council largesse – is propped up by DVML (read DCC and Dunedin ratepayers). ORFU is currently embroiled in a fraud investigation by Department of Internal Affairs (DIA) in regards to pokie rorts worth millions of dollars. Meanwhile, ORFU owes DCC $480,000 via the bailout package – this includes a dept of $25,000+ for an ORFU black-tie dinner held at the stadium last year.
– Stadium naming rights sponsor did not front load its financial support.
– Private sector funding promised by CST did not eventuate – confirmed by forensic auditors PricewaterhouseCoopers (PwC).
– (rugby and stadium related) Council-owned company Delta Utility Services Ltd (check names of directors, any change yet?) tied up with property purchases at Jacks Point near Queenstown and at Luggate.
– (stadium related) Information about council Bonds offered to ‘habitual investors’ not yet in public domain.
– DCC and DCHL borrow to pay interest on excessive borrowings, exacerbated by the stadium project.
– Costs to re-designate (and settle with affected property owners) the State Highway 88 realignment around the stadium will be excessive. High Court action continues.
– Several users of the venue are paying no venue hire fees at all.
– Search for a high-calibre replacement DVML chief executive continues.
– Results of DVML and stadium review expected by November.
How not to run a business
Comment at ODT Online by russandbev on Sun, 05/08/2012 – 1:12pm.
I note that the cost per adult to attend the ITM cup matches at the stadium is $16 per game. I also note that the board of the ORFU don’t know the cost of hirage of the stadium, nor currently have any cost projections. And yet the ticket costs have been set. A quick question then, how can the business set its ticket prices when it doesn’t have a clue about its costs?
Posted by Elizabeth Kerr