Carisbrook: DScene suggests joint venture Calder Stewart / DCC

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DScene 20.2.13 page 1### DScene 20.2.13
End of the line? (page 1)
The famed Carisbrook sports ground has found a buyer, but the deal seems unlikely to derail criticism of the sale process. See page 3.

Mayor won’t confirm or deny details of sale (page 3)
By Wilma McCorkindale
Dunedin Mayor Dave Cull will neither confirm or deny the possibility the city has made a deal in lieu of an immediate cash sale for Carisbrook. Cull said he could not comment on reports a joint venture between the Dunedin City Council (DCC) and construction company Calder Stewart is incorporated into a deal for the sale of Carisbrook – the sale of which was announced a week ago.

‘‘I can’t confirm or deny the detail,’’ Cull said. ‘‘There are details in there but as far as I’m concerned it’s a sale. Many sales of property have conditions and this one is no different from that. ‘‘What I’m saying is I can’t divulge those because they are commercially sensitive at the moment, confidential. As far as I’m concerned in the big wash-up this is a sale of that property to Calder Stewart.’’

Two critics of Dunedin City Council have this week laid formal complaints to the Office of the Auditor-General and asked it to incorporate the Carisbrook sale into its current investigation of council-related property deals.

DScene asked Cull if Calder Stewart was paying for the ground upfront in cash once the sale went through. ‘‘I didn’t say that,’’ he said. ‘‘I just said it’s a sale to Calder Stewart. The details of how they pay for it are part of the confidential part of the details. I can’t comment on that.’’
{continues} #bookmark

Editorial: Council secrecy creates bad blood (page 8)
By Mike Houlahan
Announcing a conditional sale to an anonymous buyer for an undisclosed amount was never going to be a sustainable position.
{continues} #bookmark

Posted by Elizabeth Kerr

72 Comments

Filed under Business, DCC, Economics, Media, Name, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums

72 responses to “Carisbrook: DScene suggests joint venture Calder Stewart / DCC

  1. Did they not learn from delta and land deals? The usual stink around dcc…..

  2. Phil

    Oh geez. Here we go. Yup, a joint venture means that we only got maybe half of the $3 million purchase price from Calder Stewart, with DCC paying the rest of the money from themselves to themselves. Or are we laundering the money through Delta again ?

  3. Peter

    Dave Cull, ‘As far as I’m concerned it’s a sale.’

    Subtext: It’s not really – and most wouldn’t see it as such – but let’s continue the game of make believe and say it is a sale (even when it’s not).
    Clearly, another undone deal. An embarrassing farce for the DCC.They have no choice but to come clean.

  4. Bev Butler

    The Mayor seems confused over the $2m loan.
    Maybe the figures below may clear things up.
    They are as close as I can get based on the information in the media there may be some slight discrepancies give or take a few hundred thousand.

    Costs to DCC ratepayers for ORFU loan and Carisbrook
    $2m loan to ORFU
    $7m purchase of Carisbrook
    $860,000 debt servicing, rates, electricity
    $480,000 ORFU rent that was never paid to DCC and DVML (includes unpaid bill for ORFU booze up)
    $250,000 contamination cleanup of carpark
    $60,000 undisclosed?
    TOTAL: $10,650,000 cost/debt

    Payments received to date
    $2m loan repayment
    $727,000 sale of half carpark
    $692,000 sale of houses
    TOTAL: $3,419,000

    TOTAL LOSS TO DATE: $7,231,000

    It has been reported that a conditional agreement exists for Calder Stewart to buy Carisbrook for $3.3m. It has also been reported that the DCC will be involved in the development and that more money will be required by DCC.
    Until details of the conditional agreement are released the public will not know how much of the $3.3m the DCC will eventually receive.

    The minimum loss on Carisbrook is already over $4m but potentially may end up over $7m!

  5. Russell Garbutt

    Does it not seem strange that every time that there is some sort of deal going on that the other party to the deal seems able to convince the DCC or its entities that there will be no public disclosure of the deal? My view is that the starting position of the DCC should be that all details will be public and only when the best interests of the ratepayer could be compromised should there be any non-disclosure. Those instances should be rare. The City Council should be operating in a transparent and open way – the various public pronouncements by the DCC over the last week have been the reverse and could have been rectified by a full, frank and open press release able to be read by everyone on Day 1. What actually happened was a rag-tag of speculation, incorrect figures and rumours fueled by the vacuum of knowledge aptly pointed out in this week’s D Scene.

    We now have a clearly established pattern surrounding land acquisition by the DCC or its entities of paying previous owners much more than any current market price. The stadium land purchases, Luggate, Jacks Point and Carisbrook. What disturbs me most is that there is absolutely no sign whatsoever that those responsible for these questionable transactions will be held to account. Maybe some of these transactions weren’t strictly “illegal” but they were certainly short on ethical behaviour and this City’s ratepayers have a right to know which of their elected representatives have failed to meet high ethical standards. They also have a right to know of any City officials that have failed to perform in the best interests of all.

  6. Hype O'Thermia

    Hey we got a sale!
    That’s got to be worth a lot.
    How about we pay you to buy it, does that sound OK to you?
    Great! Another triumph for DCC stewardship.
    Voters, don’t forget to vote for us again, we’re the people who achieved this superb result for YOU the ratepayers! Frankly, I think you owe us your loyalty expressed in votes and ungrumbling willingness to pay pay pay.

  7. Bev Butler

    Russell, unless those responsible are held to account then nothing will change. It is like basic parenting. Unless there are consequences for bad behaviour nothing changes. This is where the Mayor is doing a disservice to the community. It is his responsibility to hold those responsible to account. By not doing so his inaction in the end has the same effect as letting them off the hook.
    It should not be left to citizens like ourselves to spend endless hours extracting information and presenting it to authorities when the information is readily available to the Mayor.

  8. Robert Hamlin

    Now let’s just think quietly about this ‘joint venture’ that Dave is talking about. What could it be? A shared factory – for what? A shared retail centre – haven’t we got enough dud DCC versions of that already. Hard to think just what development joint venture would be possible here ….

    But wait – What about this…? A joint commercial venture to provide a ‘state of the art’ rugby stadium to local professional rugby interests so that the ECONOMIC IMPACT for the community of TWO separate activities (The ‘Foobar Multi-Use Community Facility’ and the ‘Carisbrook Classic Rugby Hub’) can be maximised.

    The ECONOMIC IMPACT of these two world leading facilities will be enormous, well worth the DCC giving away the site for nothing and pumping an extra $50 million or so into upgrading the ‘Carisbrook Classic Rugby Hub’ and astroturfing the Foobar Multi-Use Community Facility’ (before its partially natural turf suffers an embarrassing public failure).

    How do the commercial partners make on this deal? Take your pick by looking back over outcomes for the DCC’s commercial partners over the last four years. But the main thing that any commercial partner would bring to the table is that this will not be a DCC project any longer, and thus not subject to all sorts of awkward questions that may be forced through by LGOIMA. No it would be a JOINT COMMERCIAL VENTURE, maybe involving DVML, which will allow a cloak of COMMERCIAL CONFIDENTIALITY to be drawn over proceedings until all the money has been made (by assorted third parties). Jonky’s proposed new rules about letting the great unwashed know about ‘commercially sensitive’ stuff that their councils are up to will only assist in this process.

    Now re-watch that Channel 9 interview with Dave – Look how he hesitates and has to think about the straight question from Becks about whether Carisbrook will be flattened as an outcome of this sale. He does not deliver a straight answer. By my book, the only reason why you would not flatten this structure in its entirety is if you were thinking about (re)using it for its intended purpose.

    Sweet! – Watch that turf!!

  9. Bev Butler

    Four months ago (9/11/12 see link below) it was reported in the ODT that the sale of Carisbrook would cover the $7m+ debt. Robert Clark went further than this claiming they hoped to make a profit. Where things stand at the moment the council has lost over $7m on the ORFU ‘deal’ and depending on how much cash Calder Stewart comes up with the so-called ‘deal’ will not be reduced below a $4m loss. This is why Russell and I have approached the Auditor General’s Office. How can a $7m registered valuation result in a minimum $4m loss and potentially be higher than $7m?

    http://www.odt.co.nz/news/dunedin/233986/hopes-sale-carisbrook
    Asked if he [Robert Clark] hoped the sale of Carisbrook, once complete, would cover whatever debt remained, Mr Clark said: “I’m looking to achieve more than that.”

  10. Bev Butler

    Is the Mayor also going to make a complaint to the Auditor General?

    • The Mayor is so unsure of himself (given last night’s Channel 9 video and, well, everything he is and isn’t saying just now) he seems incapable of any ethical leadership – he’s merely bog-fill for the financial whiz-kids pulling the strings. Note the huge cloud of desperation settling over DCC, and the presumably deliberate silence of Chief Executive Paul Orders. Yep, we’re down to mixed metaphors, touching wood, and crossing fingers—and official complaints to the OAG.

      Stand by for what ODT and RNZ will try to dish on the ‘joint venture’.

  11. Calvin Oaten

    Yeah!! ’twas said that cometh the day, cometh the man. Well, he came, and Lo! it was Dave Cull, complete with his mask of deception. He tells us that we have a sale of Carisbrook, but it is not quite yet(refers to notes), or is it? Well, as far as he is concerned it is a sale. But he doesn’t (or won’t) disclose details (refers to notes again). But heck isn’t it great that we have a sale? Is it? How much did we receive for what (according to Bev Butler) owes us $10.650 million? Not much it seems, and ‘deceptive Dave’ either doesn’t know (most likely) or isn’t saying. Wheee!!! Wonder how he manages to make so many simple things so complicated? Must be what he interprets as Mayoral duties.
    On reflection, I am leaning towards Rob’s postulation of a commercial stadium specifically aimed at Rugby. The owner/developer carrying out the requirements as set by the NZRU to meet ‘A’ test standards. The funding could be by way of deferred payment to the vendor in a joint de facto arrangement. We need never be privy to the deal, but as Rob says, ‘watch the turf’.

  12. Peter

    The Mayor would be far better to disassociate himself from all these financial contortions and just come clean about how dire the debt situation is with the stadium…and wider debt problems. He has just drawn himself, and fellow travellers, into the mire by mopping up for the miscreants who have created this problem. He doesn’t have to adopt, or accept ‘The Athol Stephens Mode of Accounting’ to get them out of the shit. AS will only dig them in further for very good, historical reasons.
    Dave Cull doesn’t want accountability. He wants to take the flak on himself, the council, and the ratepayers. Not those who have rorted the city for their own ends and will continue to do so if there are no consequences. Effectively financing Otago Rugby – or any sport – is not core council business. (I remember some ORC councillors saying the same for their council.)
    As it is, I understand basic stuff like fixing the infrastructure, such as roading and stormwater drains, has been sacrificed to shoring up the disastrous stadium financials. What else, in time, will have to go by-the-by? Almost all the councillors have their heads in the sand. How long can this go on?

    • [thinking turf] Is Carisbrook’s future use another reason why Cull didn’t go to court to defend against the defamation suit brought by (ORFU) Mains and Graham ? Cull’s (read DCC’s) acquiescence to those sods has never been adequately explained.

  13. Mike

    I’ve been thinking about Weatherall and his stint as chair of the ORFU board – as we’ve seen in 2008 he recused himself and stood back when the council discussed the terms of the $2m loan because (as he stated in the DCC minutes) he had apparently been involved with negotiating it – fair enough.

    So did he vote for the city’s purchase of Carisbrook? (I can’t find who voted for it – I suspect it was done in a secret session – because I’m sure they were convinced there was a competing stadium for sale, or someone else who wanted to buy Carisbrook for more …) Did he think that ridiculous price had anything to do with that loan?

  14. Mike

    ah – found it (thanks Richard) – feb 9th 2009 minutes – Weatherall did not withdraw when they voted on the purchase (snuck into a larger vote on the stadium):

    “agreements negotiated by the Dunedin City Council with the Otago Rugby Football Union for the sale and purchase of the Union’s property assets have been completed”

  15. Peter

    Elizabeth. It all comes down to figuring out who are the ‘alpha’ males and who are the rest in terms of acquiescence and appeasement. (Never worked out how this translates to the female of the species)

    • (Peter, there are enough stooges around in ‘womensville’ to replicate behaviours of alpha males – however, the brighter ones simply don’t play ball and avoid the argument altogether)

  16. ODT 23.2.13, Letter to the editor (page 34) – with another interesting bible reading, carefully placed.

    ODT 23.2.13 Letter Calvin Oaten p34

    • The mayor’s reply, crafted by whom, points again to DCC’s historic passion (it still presumes today, with no contract signed) to secure ORFU as a “viable tenant” for the new stadium. Over time, all reports received by council have assured us this will never happen. I’ve loaded a new definition for ‘viable’ into my smartphone – so should you.

      Such is the power and might, the glory even, of the rugby brotherhood large facts escape, including that ORFU’s fraudulent activities via pokie rorts (known, documented) and traceable ‘vehicles’ for laundering money (known, documented) make them a very UNsuitable tenant (but signed or not, they receive magnificent amounts of council readies, services, and the anonymous pleasure of turf maintained in pristine condition at ye olde Carisbrook) —and most UNdeserving of ratepayer subsidy into the multiple millions of dollars.

      All decided by the corrupt, fraudulent, ‘shell-gaming’ city council. A council that was happy to pretend the little ORFU scrap (‘let’s sue the mayor for defamation’) could be settled without full public disclosure of the cost and who or what bore the total cost. How much has council owned Delta shelved out to ORFU over the many years, and what of DCHL’s generosity, plus the deviant accounting that props up council’s DVML and DVL. By now, the mayor’s reply stacks up as grossly unsatisfactory and fully meriting the independent commission of inquiry long sought.

      Latest events with DIA – see tendencies in common with DCC and Central Government – expose the extent of cotton wool (aka fog) generated to keep the ORFU’s criminality from public view. Your mayor is part of that, does he realise.

      Expect interesting news ahead.

  17. Hype O'Thermia

    Did the DCC actually pay off ORFU’s $2 million debt “so they COULD be anchor tenants” without a binding agreement that when the debt was paid they WOULD be anchor tenants of the Fubar?
    By whom was such a fuknuckle arrangement proposed, and who approved it? Let me guess – (1) Jimbo and (2) the Dunedin Cargo Cultists. Am I warm?

  18. Mike

    What I want to know is why did they pay $1m for the houses – the money didn’t go to the ORFU – it didn’t go to their bottom line or their viability – the city would be in the same position as far as the stadium goes if they had paid $6m rather than $7m – and that money just disappeared into a mythical untraceable bogus entity claiming it was a charitable trust, unknown by the charitable trusts register.

    When the time came and the ORFU needed that $1m the mythical trust was nowhere to be found, the ORFU claimed they were bankrupt, and yet again the city had to stump up to protect rugby – so who ended up with the $1m? If I was an ORFU board member I’d want to know.

    If I was a DCC councilor I’d ask Mr Weatherall. If I was a ratepayer during an election meeting I’d ask too. …. looks like we’ll all get a chance.

  19. Anonymous

    There was an article on Stuff about loaning a sizable amount of money to a family member. Its main point was while providing that money you should not shy away from getting involved since your money is as much as at stake as their project. The previous council, under Peter Chin, and this one, led by Dave Cull, continue to give and gift many millions of public dollars to professional rugby and its various disguises. All with little or no recourse. In one of many outrageous examples those same bludgers biting the very willing hand that feeds them. I’ve always felt it was non-essential spending, therefore immoral and should be criminal. There are still executives and managers from Jim and Peter’s dark days controlling public spending and they must be removed before this council can go on. They must be removed from power, Golden Handshake and all if necessary, because even then the city has a better chance at healing where it cannot now. With their compromised influence, the next mayor and councillors could still act upon flawed advice.

  20. Calvin Oaten

    Mike; regarding the $1m and the Burns St houses, I realise a few people are wrestling with that but I simply don’t know. The DCC could have paid it direct, or, as is more likely, it was paid in total to the ORFU who in turn paid it to the ‘trust’. We just don’t know. But does it matter? We all know that the ORFU’s books are a mess so just watch this space.

    Hype; did the ORFU pay off the $2 million debt? Not in my opinion it didn’t. Here’s the position as I see it. Dave Cull states that the purchase price of Carisbrook was $7m, He then says that out of that $7m the ORFU paid back the $2m debt leaving the DCC to borrow just $5m. To me that is the “hide the thimble” exercise exposed right there. The ORFU has never repaid the debt, council has simply written it off.

    The DCC ‘notionally’ paid the ORFU a cheque for $7m and the ORFU ‘notionally’ paid the DCC a cheque for $2m. Thus, as Cull says, the DCC needed to borrow just $5m for the purchase. See where it disappears.

    The $7m figure was never anything but a figment of imagination, an illusion, perpetrated by ‘Jimbo’ and the financial gurus inside the building. It was fed to a gullible council and they sucked it in ‘hook line and sinker’.

    To this day, the public believe that we paid $7m for Carisbrook; we didn’t, we paid $5m. Result: the ORFU get off the debt, plus they are gifted $480,000 (Cull says $400,000) in current liabilities to avoid liquidation, a total of $2,480m from the ratepayers who also stand the loss on recovery on the sale of the properties of some ($552,000) to a total cost of $3.032m. And that all depends on the final deal with Calder Stewart plus the decontamination of the car park site.

    The “hide the thimble” exercise was essentially no different to the recent “fiddle” where the DCC exchanged cheques for $3.187m with DVML. The DCC got paid up shares in DVML, and DVML repaid a debt of $3.187m owing. A simple money go round.

    I think in the end, this ‘trickery’ is going to catch up with them all and watch this space for the action. If the Serious Fraud Office is ‘serious’ (pun intended) then we could see some very fancy ‘dance steps’ by a lot of well known people. Me, I personally can’t wait.

  21. Mike

    I think ORFU did pay it off, their books for that year show the receipt of $6m (not $7m) and the payment to the DCC of $2m to clear the debt (this is how I originally figured out that there was $1m missing)

  22. Calvin Oaten

    Mike, if the DCC only borrowed $5m (Dave Cull’s words) how could they claim to have paid $7m unless the ORFU paid the $2m back (which they couldn’t because they were broke) or it was written off? It seems pretty simple to me. The ORFU’s books? I wouldn’t go there.

  23. Hype O'Thermia

    Whether the $2m was literally paid or the debt written off, my question remains. This “getting-rid-of” the debt was so ORFU could be anchor tenants of the Fubar. They aren’t. So whoever decided to make the debt go away, for the reason that when this was done ORFU could be anchor tenants of the Fubar appears to have given/written-off/expunged $2m of ratepayers’ money without ANY contract, agreement, lease, or anything at all, to ensure that once the debt was gone they WOULD no shit, definitely, no shadow of a doubt, be the anchor tenants.
    A smallish part in the great jiwsaw puzzle, nonetheless a discrete one given that what we were told was that the disappearance from any side of our balance sheet (debit or credit) without … well, without anything to balance it, smells like Eau de Rort pronounced rat to me.

  24. Calvin Oaten

    EXACTLY!!!

  25. Anonymous

    Ditto. While at the shop just now I bought some items costing six dollars and the shopkeeper said that would be “six big ones”. Once again it reminded me about how this council spends millions like they’re nothing more than a signature or two on a piece of paper. If a few dollars are ‘big ones’, what is a million to this council? I would like to see a monetary education program instituted that teaches council staff and councillors a basic understanding of maths and the ‘value of a dollar’ (the same applying to the Otago Daily Times when reporting about ‘millions’ on behalf of its council). I would also like to see some of these people shamed, preferably brought to accountability, for the way they have abused council monies to line the pockets of a few. In those cases they certainly found some creative accounting to suit their own ends. I am still hoping the way that million was intercepted will bite a few of those on the arse.

  26. Mike

    I think that Dave’s characterisation of that one particular purchase transaction from the DCC’s point of view is accurate – they had to take out a $5m loan at the end of it, not a $7m one – because yes they gave the ORFU $1+6m and got $2m back.

    But that’s just one transaction of many related transactions – he can’t claim he made $2m from the ORFU (which in essence is what he’s been trying to claim) because part of the transaction he’s conveniently neglecting to mention was also the paper transaction forgiving the $2m loan elsewhere on the DCC’s books.

    One could argue that the city wouldn’t have gotten the $2m paid back if it hadn’t done this – but we could have taken our chances (2nd in line after the BNZ at the Carisbrook mortgagee sale) – worst thing that could have happened was the loss of the $2m rather than the $4m+ we’ve ended up losing

    But Hype’s right, they didn’t get the one thing they claimed they were after in the transaction: security of tenancy for the ORFU and Highlanders (I bet the NZRFU didn’t want itself bound and wouldn’t allow it, they want franchisee cities on edge, continually worried they might lose their team, beholding to them)

    Instead they bought a contract where a still almost bankrupt (it was obvious in that same balance sheet – something else the ODT would not let us print) ORFU promised to pay them rent from a business plan that was obviously still losing money – don’t forget another part of that same deal was that the DCC would back all of the ORFU’s debts for the next couple of years – basically the DCC ended up promising to lose a further half million dollars because of the ORFU’s obvious financial incompetancy – they did nothing to reduce costs or boost income so that they would start to at least break even – the DCC appointed Kereyn Smith to the ORFU board to guard the ratepayer’s interests – sort of a case of appointing a fox to guard the fox house

  27. Calvin Oaten

    Mike, all the more reason why the SFO should be called in. It is not just the ‘Pokies’ it is everything. In a complex way, you have confirmed that the ORFU has not repaid the $2m debt, the DCC have written it off together with the $480,000. Thus the need for the DCC to only borrow $5m to make the purchase. It also confirms that the $7m figure was never more than a ‘beatup’. How they got a registered valuer to play ball is another question mark. Throws all sorts of ‘ethics’ into the pot.
    Looks like in the end the DCC (us) will get for Carisbrook about exactly what it is worth. “Diddleysquat”. In the end, no matter how distorted things get, everything reverts to the mean.

  28. Mike

    No – I think they did pay it off – it’s the mayor who’s fudging the numbers to make the more recent Carisbrook transaction under his watch look good which in turn is muddying the waters.

    In reality though it was Harland/Chin/et al who are responsible for this mess, Cull’s just trying to put a good face on his cleaning up of it going into an election year – and confusing everyone still further by not getting the story/spin straight.

    Now you could argue that the ORFU morally didn’t pay off the loan because the DCC gave them $7m and got something worth at least $2m less in value and I think I’d agree with you, but in a pure business sense it’s buyer beware and the deal was done.

    Weatherall almost certainly knows, he was likely involved with setting up or running the faux charitable trust when he was ORFU chairman – my personal guess about what went down is that someone bought those houses for the ORFU’s Carisbrook expansion, I’ve been unable to find their purchase in old ORFU accounts (but they were in the ORFU’s name on the rating rolls). And that person was still owed for their value, the ‘charitable trust’ is really that private individual who needed to be paid back, a friend of the union – someone with a spare half million or so to buy them originally and who grossed $1m when they were sold – I’m sure we can all think of very well-off people involved with rugby who might have been intimately involved with building the stadium but who might not want their names brought up as profiting from its being built – as I said this is a guess, we have little proof here, we just know that $1m disappeared off the face of the earth somewhere between the DCC and the ORFU.

    I doubt there’s much legal recourse unless you can prove political corruption – someone actually getting cash under the table (where did that $1m go?).

    I think there’s more chance of political consequences than legal ones – it’s election year and the powers that be are at their most vulnerable, it’s a great time to be asking embarrassing questions – probably the last chance we’ll get, 3 years from now it will be an old and buried issue.

    We did well asking questions last time around, 3 of them bit the dust, I bet we can get 1-2 again this time, rattling that closet it still seems like there are more skeletons in there, but we’re missing something – viable alternatives – there are at least 2, maybe 3 (will Hudson go?) open seats this time around, Acklin’s vulnerable, maybe Weatherall too – it’s going to be open slather ….

  29. Hype O'Thermia

    ORFU was essentially potless. Bankruptcy was one pissed-off creditor away.
    Nobody with a scintilla of real-world business nous pays top dollar to a desperate seller.
    We’ve seen the property advts haven’t we? Bankruptcy sale, and the only slightly less appealing to prospective buyers “highly motivated vendors, must sell”.
    This is the time when a prospective buyer makes an approach offering MUCH LESS THAN valuation. The ragged-arsed penniless vendor then has choices: try to negotiate the price up; take a punt on getting a better price by listing on the open market and/or going to auction; taking the money now because a small amount now is better than a maybe. Maybe includes getting even less, and having more outgoing adding up during the wait.

    There was a departure from normal practice to a strange hybrid charity donation x investment in property. The only reason given for this transfer of wealth from ratepayers to …ahhh … ORFU & shadowy McTrust, was obtaining an anchor tenant for the Fubar stadium, and that worked how? FAIL, that’s how.

    At the time, with a whiteboard and a year’s worth of an accountancy course, someone numerate from the council should have been capable of convincing ORFU that what with the ratepayers’ generosity regarding Fubar rent, the anchor tenancy should be signed in return for a handful of parking change, before the council changed its mind.

    How rigorously they prosecute some people for small, even unintentional faults. How slippery sloppy and slapdash, how touched by the sun, they have been in other areas of which the Carisbrook deal(s) form only a small portion.

    A small portion, but one that seems to be yielding to investigation >> revelation, all praise to St Rachel Hunter. It hasn’t happened overnight………
    ………but there’s enough of it already to make the election “interesting”. And it’s a small comprehensible example, easily grasped by anyone who has bought a house, or been in debt, or paid off a debt, or had a big favour done for them in return for something from themselves. That doesn’t leave out many voters, does it?

  30. Calvin Oaten

    Mike, I still don’t think they paid it off. Even if the DCC paid them $7 million, if the ORFU paid $2m back, didn’t the DCC borrow that $2m to give to the ORFU to enable them to give it back. Borrow $2m, get it back and pay it back, who wins? The ORFU because they have got rid of their debt. Where is it? Back at the bank. So the debt goes straight to the bank, with the DCC still owing the $2m it has carried on its books since 1997. If the whole charade didn’t take place and the DCC truly only borrowed $5m, then the debt still sits on DCC books and the ORFU still owe it. Can’t be any other way.

  31. Hype O'Thermia

    Doesn’t matter whether they strictly speaking borrowed $2m to press into the ORFU’s flabby hand or not. Somewhere $2m was borrowed to pay for something – roads, library, whatever – it doesn’t matter. Had the ORFU paid its debt this $2m would have reduced that need for borrowing.
    By giving them the money / forgiving the debt, $2m more had to be borrowed overall in one department’s budget or another, i.e. it increased the DCC’s total borrowing.
    Whether it was borrowed or the debt forgiven, or a meaningless book entry putting a plus and a minus into columns on a balance sheet with no actual alteration taking place except that – how awfully nice! – the ORFU no longer owed that $2m, is just magic-show fol-de-rol to bewilder the audience while the magician’s accomplice quietly sllnks around picking pockets and pocketing pocket watches.
    Roll up, roll up!

  32. Mike

    I think that there’s a distinction between the ORFU paying back the DCC their $2m loan and the DCC paying back an underlying bank loan that was originally used to front the loan.

    I don’t know where the original money for the loan came from – a special purpose bank loan? general borrowing for that year’s debt? skimmed right off the top from the ratepayers? out of the general fund? …. it was made to the ORFU at a sweetheart interest rate (4%) and for the first part of the period apparently held in abeyance, written off against some (unknown to me) payments by the ORFU, perhaps their own investments or maintenance in Carisbrook – I’m tempted to guess that they could do that because there probably wasn’t a particular backing loan on the books with an ongoing cost that had to be accounted for.

    So I think that probably the money came from the general fund, was given to the ORFU who paid some pitiful interest on it, then, after the Carisbrook sale, they paid the principle back – the principle and the interest both show up on the ORFU’s accounts and we see the council talking about the interest and whether it should be forgone in 2008 in their minutes. I don’t think that the DCC had to pay off a backing loan, the money received from the ORFU went back into the general fund (which had just been depleted by $2m to purchase Carisbrook, really a separate transaction) – of course, as we suspected then and know now, that $2m for Carisbrook didn’t buy us anything, as it wasn’t really worth $7m.

    So yes the DCC gave the ORFU at least $2m more than Carisbrook was worth (actually it’s looking more like $4m more), and yes probably they did it as a quiet back door way of funneling some ratepayers’ money to their mates at the ORFU (wasn’t that obvious at the time?).

    This is the real scandal – I think the loan was paid off, I’m sure paper to that effect was exchanged (but you could FOIA it).

    Remember those mates at the ORFU had made a monumental business blunder – without thinking they had made a terrible terrible mistake, they had backed a new stadium, and now it was being built – stupid fools hadn’t thought it through, creating a new stadium effectively destroyed the value of the one asset the ORFU held that guaranteed their debt – Carisbrook. By forcing the city to build them a new stadium they were also effectively forcing the BNZ to foreclose on their $4m line of credit before the value of Carisbrook dropped too much – the wolf was at the door ….. I would have loved to have been a fly on the wall in the meeting when the penny dropped.

  33. Calvin Oaten

    Mike, thanks for that. But either which way, the ratepayers are out for a minimum of $2.480m plus whatever deficit the sale of Carisbrook bunch of properties realise. I think Dave Cull put his foot in it by making the statement that the DCC only borrowed $5m for the deal, including the ORFU loan. Who schooled him into that needs to be seriously censured. It all adds up to a desperate need for a full independent inquiry. The person to commission that would be CEO Orders. The same as he did when calling in PwC to find out the true cost of the FB Stadium. Will it happen? Who knows, but if it doesn’t, then all in that building are under suspicion of serious corruption. I place a great deal on the hope that the SFO, once it gets into its work will pursue all threads through to conclusion.

  34. Mike

    I think we’re out more like $3.5-4m on the Carisbrook deal, the ORFU loan was a wash (they paid it back, but we lost money on their below market interest).

    The thing is they probably did only borrow $5m from the bank for Carisbrook – I think Dave is talking cash flow while you and I are talking booked numbers when the accounts are added up – in the end IMHO it’s the booked numbers that matter – but Dave (and Paul Orders) have to worry about cash flow too – often cash flow is a more pressing issue. In this case, it cost them (Chin/Walls/Harland) nothing to pay $2m extra for Carisbrook and get $2m back from the ORFU loan because that money had already been appropriated in a previous year. As far as Dave is concerned that money has flown the coup, we’ll never see it again, he’s probably more interested in looking like he did a good job wrapping up the Carisbrook mess; there’s little political capital in blaming Chin, he’s gone, but trying to look good with the election coming up is probably upper on his mind right now

    • ### DScene 27 Feb 2013
      Will ratepayers lose out? (page 5)
      By Wilma McCorkindale
      Who will be accountable for ratepayers stumping up $7 million to buy Carisbrook, when a documented valuation puts the historic sports ground’s value at $2.5m? That is the question being asked by council critics, as an untabled council-commissioned consultants report dated February 2007 reveals the initial valuation of Carisbrook assets – formerly owned by the Otago Rugby Football Union ( ORFU) – was $2.5m. The report put Carisbrook’s highest possible fetching price at $3m.

      The confidential document mentioning the $2.5m valuation was produced by consultants Horwath International. Titled ‘‘New Carisbrook Stadium Development: Financial Feasibility Study’’ and ‘‘Economic Impact Assessment’’, it was better known as Appendix 1 of the Carisbrook Stadium Trust’s (CST) Dunedin Masterplan and Feasibility Report, and provided guidance for Dunedin city councillors considering whether to build Forsyth Barr Stadium.

      ‘‘A leading Dunedin real estate firm has estimated that the existing Carisbrook site might sell for approximately $2.5m,’’ it said. ‘‘. . . under an optimistic scenario, it is assumed that there will be sufficient value to add to enable the trust to achieve a surplus of $3m.’’

      But Appendix 1 was missing from the report when tabled at council, council critic Bev Butler said. Butler believed as a result – despite there being constant references to Appendix 1 in the CST report – few councillors saw the document, or requested to see it after the meeting. A subsequent valuation obtained by the council hiked the Carisbrook price tag to $7m.
      {continues} #bookmark

      Register to read DScene online at http://fairfaxmedia.newspaperdirect.com/

  35. Russell Garbutt

    This below was sent to the ODT on-line yesterday but disappeared into that black hole that exists down there. The neat thing about black holes is that we can now see what has gone into them by looking elsewhere and we can also tell just how the black holes operate by knowing what has been sucked in. What was sent was the following – can anyone pick just why this wold be sensitive?

    “It is way past time for Cr Brown to front up to the Dunedin ratepayers to outline exactly why the DCC decided to purchase Carisbrook at the price that was paid, to fully reveal the identity of the mystery trust that benefitted by a million dollars for the houses, and as the Chair of the Finance committee to fully inform everyone exactly of all of the figures associated with the purchase and sale. We can all read the various communications coming from the DCC which started off as a $100k loss on the deal but now seem to total well over $3m. Cr Brown was at the centre of all these transactions and has specific responsibility in his current position. Up to now he has remained totally silent. Why?”

    • Thanks Russell, and Bev – the black hole explained here is one for the OAG, which I’m sure has been briefed. ODT is on a mission to smother. Syd, in election year, is about to receive a few rissoles.

    • Meanwhile, ODT ran this, strange old world…. names from the last administration aren’t talking, thought not – a bit worrying to see DIA and SFO shacked up across NZ right now, best keep heads down.

      ### ODT Online Wed, 27 Feb 2013
      ORFU back from the brink
      By Steve Hepburn
      A year on from the financial meltdown at the Otago Rugby Football Union and it seems everyone wants to look forward, not back. One year ago tonight the financial mire the union was in was revealed to all at the annual meeting of the union.

      New union chairman Doug Harvie and new general manager Richard Kinley declined to be interviewed. They both said they were not there when all the drama unfolded, so could not comment on it.

      The union almost went belly-up, drowning in a sea of debt, and it was only through hard work, the support of the community and some people and organisations stepping up to the plate which saved the union from going out of business a year ago. It was a pretty scary thought at the time – no rugby union, no blue and gold, no team for players to aspire to. The team that greats such as Wilson, Willocks and Duncan played for would no longer exist. It seemed hard to believe after 131 years of existence. But it was saved, and it appears most have moved on.
      Read more

  36. Hype O'Thermia

    “The union almost went belly-up, drowning in a sea of debt, and it was only through hard work,
    –!!!!!!———the support of the community—————!!!!!!–
    and some people and organisations stepping up to the plate which saved the union from going out of business a year ago.”

    I don’t think it’s “support” when “the community” of ratepayers has its pockets dipped into -again- and the contents deposited onto ORFU’s collection “plate”.

    But hey. let’s not look back. Move on. Come along little Disney lemmings. You can’t get to Lawyers Head as easily as in days past, but look, we have this exceptionally deep hole with a warning notice “Caution, excessive debt, this WILL harm you and may cripple you for decades to come should you live so long” clearly displayed in 4point typeface in dark grey on black on a small artificial rock at the base of a gorse bush..

  37. Mike

    They abridged my posting there – obviously, pointing out that they had moved the ORFU’s losses from running Carisbrook and not charging enough to DVML’s losses running the stadium and not charging enough was too much for them.

  38. Hype O'Thermia

    Because you’re a spoilsport, Mike. What’s the point of having a conjurer at your party if some smarty-pants keeps pointing out how the tricks are done?

  39. Mike

    well I’ve always enjoyed doing magic for small kids for precisely that reason doing it for adults requires a much more honed skill set

  40. Mike

    oh yeah “DVML is doing so great, look at all the money it made on this test match” …. “we already paid off the ORFU debts with profits from the test match”
    Our friend Max is counting the same money twice …. in fact to pay off the general fund any money moved from DVML to pay off the ORFU debt is likely to attract taxation

  41. Peter

    Please be fair to Max, people. All credit to him for sticking in there, fulfilling the role of stadium apologist and keeping the dream/vision alive. A loyal foot soldier for the big boys.

  42. Calvin Oaten

    Max lives in dream land. Everyone knows that all revenue from test matches belongs to the NZRFU. It simply pays the host union a match fee which is a liberal amount, but no more than enough to cover its expenses. For DVML, as manager of the stadium, at best, it got no more than a rental for the day. And it is very doubtful in retrospect that it even got that. So Max, you really don’t know much about the politics of rugby at all. Whoever coached him to post what he did, knows a mug when he spots one.

  43. Mike

    Well yeah, Max/Dene has a Facebook page – works for the DCC and posts from work too

  44. Russell Garbutt

    Mike, is this the same Dene that created a fuss when he was not able to participate in an on-line survey on gay marriage or something like that from work after the DCC installed some on-line filters?

  45. Mike

    I don’t know – ‘Max’ did seem to wade in on the side of the filters in the ODT thread though – but then installing them may be part of his job

  46. Mike

    BTW: by ‘posts from work’ above I meant I think he sometimes posts during normal office hours – might not be by using work computers

  47. Hype O'Thermia

    Might not work “normal” hours – or in an office. A lot of people don’t.

    More and more people don’t work at all. And remember – “full-time” work is defined as 30 hours a week. Must be cushy on the minimum hourly rate. All that spare time for lying by the pool, sipping cocktails.

  48. ### DScene 6 Mar 2013
    Questions over Carisbrook (page 3)
    By Wilma McCorkindale
    Dunedin city councillor Lee Vandervis has demanded satisfaction regarding what he describes as repeatedly unanswered questions surrounding the sale of Carisbrook. Vandervis remains livid that figures in a Carisbrook property report to the last council meeting had to be rewritten at the eleventh hour because they were deficient. He said he still had questions around the figures and had submitted them to staff and mayor Dave Cull many times. ‘‘And I haven’t got answers to all of them yet.’’ On top of that Vandervis was concerned about statements Cull was making in the media about the sale of Carisbrook. Vandervis disagreed with some of the perceptions Cull was giving. Cull rejected the criticisms. Figures in the Carisbrook report had not been incorrect, rather incomplete, he said.
    {continues} #bookmark

    Register to read DScene online at http://fairfaxmedia.newspaperdirect.com/

  49. Rob Hamlin

    “Cull said that it would be unfortunate if a premature breaking of confidence with the buyer were to prejudice the deal.”

    Now what particular breach of confidence with what’s supposed to be a conditional purchase of a supposedly derelict rugby stadium standing on industrial zoned land would that be, and what could prejudice the deal if we all got to find out about it? Ah! Maybe a fat leaseback deal for (re)use as a pro-rugby stadium – That’d prejudice the partnership deal all right if word got out before the Mayoral pen touched paper.

    The turf’s still immaculate one month out from the announcement – Be afraid. Only when the ‘turf’s up’ can we all slope off and have a good night’s sleep.

  50. Calvin Oaten

    Interesting scenario: Calder Stewart consult the NZRFU re requirements to bring Carisbrook up to ‘A Test’ standard. CS agree to carry out the necessary improvements in return for an undertaking that with (a capacity of 40,000) NZRFU would commit to hiring it as a test and ‘Super15’ venue. Neither the Highlanders nor the ORFU have any tenancy agreement tying them to the use of the FB Stadium, therefore they would be free agents in this scenario.
    The deal between CS and DCC for purchase is predicated on delayed settlement for a suitable period to the purchaser, but in any event not longer than ten years. A nominal interest rate covering the (supposed) $3.3m would be negotiated, but in any event not more than would normally be commercial rates relating to the borrowing of $3.3m for development purposes.
    This would allow CS to re-invigorate Carisbrook for multi-use purposes, plus the freeing up of the ‘Corporate Boxes’ for independent commercial use.
    Could this unfold? With our sagacious DCC negotiators, anything is possible. As Rob says, watch this space.

  51. Calvin Oaten

    Elizabeth – err…. well, it really was an exercise of extrication of the ORFU from a serious risk of insolvency. In order to do this, a front man – preferably with a foot in both camps – should face to sell it. Enter Malcolm Farry, who together with some associates quickly cobbled up the scenario of the huge multi-economic benefits to the city and region of having a brand new ‘multipurpose’ stadium with a roof, and associated with the Otago University to replace Carisbrook. A couple of co-opted (tame) consultants reports, a high powered presentation to the city council (with the Mayor asleep and a crooked lawyer) and presto! the ‘buck’ was passed to the ratepayers. Full marks to Malcolm, a con job of giant proportions which took hold and lo! now we have it. Problem, no-one thought it through at the outset as to how it could be financed, knowing full well it could never be self-funding. We now see the ‘quick step, mazurka, fox trot and throwing of ‘bones’ in order to solve that intractable problem.
    Elizabeth – Why did we build the new stadium, again? Bloody good question!

  52. ### ODT Online Wed, 17 Apr 2013
    Work underway on trade buildings
    By Chris Morris
    Building firm Calder Stewart’s plans for Carisbrook appear to be part of wider development activity by the company in Dunedin.

    Details of Carisbrook’s future are expected to be revealed if, or when, Calder Stewart’s conditional deal to buy the old sports ground from the Dunedin City Council is confirmed.

    However, the company is separately progressing at least two other developments within blocks of each other in South Dunedin.
    Construction is under way at 59 King Edward St, the site of the former Tokyo Auto Town car yard, to develop a three-unit warehouse and distribution centre for trade customers.
    Calder Stewart was granted non-notified consent for the development by the council in November 2011, but the project at the corner of King Edward St and Wilkie Rd was only now beginning to take shape.
    And, separately, the company was also, in February, granted another non-notified consent for an 800sq m electrical showroom and warehouse at 47 Timaru St.
    Read more

    • ### DScene 22.5.13
      Going, Going… (page 1)
      Almost every detail of the sale of Carisbrook remains secret but firms are being asked to tender for the demolition of the historic sports ground (see page 3). #bookmark

      ****

      Tenders are out for Carisbrook to disappear

      Secrecy around plans for Carisbrook’s demolition (page 3)
      By Wilma McCorkindale
      Plans are afoot to demolish Dunedin’s historic rugby ground, Carisbrook, tender documents show. The company that has signed up to buy Carisbrook – Otago construction company Calder Stewart – has issued tender documents inviting demolition companies to register their interest in clearing the site this year. DScene understands the company has been planning the demolition for several months, but Calder Stewart co-managing directors are not commenting on the project.

      The DCC has refused to provide conditions of the sale which DScene understands includes a type of joint venture with council.

      Co-managing director Alan Stewart is out of the country while fellow director Peter Stewart declined to confirm the tender or give details. The company was still under a conditional contract for Carisbrook with the Dunedin City Council, therefore he would not comment on the project, Stewart said.
      #bookmark

      • [yesterday]

        ### ch9.co.nz May 22, 2013 – 6:54pm
        Company expected to buy Carisbrook still undergoing sales process
        The company expected to buy Carisbrook is still going through the sale process. The Dunedin City Council says despite that process being under way since early this year, Calder Stewart is still going through due diligence on the sale. It was confirmed in February Calder Stewart had offered to buy the stadium for more than $3 million dollars. The DCC had no time line for the sale today.
        Ch39 Link

  53. Hype O'Thermia

    “Dilatory dawdling thru’ due diligence?”
    “Sorry Al, there’s no way my music can work with that line.”
    “Okay Joe, I’ll try again. You’re being gosh-darm picky to work with these days, got trouble at home?”

    “Tiptoe Through the Tulips” is a popular song originally published in 1929. The song was written by Al Dubin (lyrics) and Joe Burke (music).

  54. Wake me up when there is some real news on this exercise of the DCC “Tiptoeing Through the Tulips” to a loss of in excess of $4 million on the sale.

  55. Robert Hamlin

    Calvin, I will wake you up in time for the first test.

  56. Hype O'Thermia

    Another smash-hit from the DCC [to our bashed, trashed and pillaged ratepayers], vote again for Tiny Dave and his Backing Bandits.

  57. Rob, wrong way round. That’s when I go to sleep.

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