Stadium: $266 million, more or less?

Most of the information was already in the public domain, but it was the first time the costs had been collated and presented in one list. Council financial planner Carolyn Howard spent three months, between other projects, collating the material. —ODT

### ODT Online Sat, 7 Sep 2013
New figures raise stadium costs
By Chris Morris
New financial figures have pumped up the price of Dunedin’s Forsyth Barr Stadium to as high as $266 million. The Dunedin City Council hopes the disclosure will help draw a line under the project and put an end to years of acrimony and finger-pointing. The list released yesterday detailed $42 million in spending on projects considered fully or partially stadium-related, from the State Highway 88 realignment to the bail-out of the Otago Rugby Football Union. However, council chief executive Paul Orders told the Otago Daily Times the public would have to decide what was fair to include in the final stadium bill.
Read more

Stadium-related extras (via ODT)
External advice $2.1m
DVML setup costs $3.4m
Carisbrook deal $3.4m
ORFU loan (nominal cost) $700,000
State Highway 88 $27.2m*
Surplus land $1.7m
Local roads (lost assets) $3.5m
TOTAL: $42m

PWC’s stadium cost: $224.4m

If all extras included: $266.4m

*NZTA ⅔ subsidy

Posted by Elizabeth Kerr

*Image: populous.com – Otago stadium (re-imaged by whatifdunedin)

Advertisements

19 Comments

Filed under Architecture, Business, Construction, DCC, Democracy, Design, DVL, DVML, Economics, Media, Name, New Zealand, Project management, Property, Site, Sport, Stadiums, What stadium

19 responses to “Stadium: $266 million, more or less?

  1. $266 million sounds slight and I expect the REAL number to rise substantially as time goes on – the acrimony and bitter slanging won’t be over until there are prosecutions and judgements [more expense].
    What’s been the opportunity cost? At the stadium plan change hearing combined with ‘first’ hearing of the (NoR) notice of requirement for a designation to realign SH88 around the stadium [the illegal road], we did hear tell discussion of opportunity cost (not able to be approached via the RMA, the commissioners said) and while it may sit apart from the list of additional costs now tabled by DCC it doesn’t go away.
    Hell, Doug Hall and others may force, via the courts, a closer idea of components of the opportunity cost. And where does Delta sit? How many ratepayer dollars have been squandered on ORFU and professional rugby “sponsorship” through the council-owned company Delta over the very many years the decision to build a new stadium and exit Carisbrook rolled out… Phil, commenting here from time to time, has hinted to the type of thing DCC has put to rugby ‘under the table’ [all comments are searchable via the dashboard]; perhaps the collated comments can go to Paul Orders and Carolyn Howard for the preparation of an estimate !!!

  2. I, and many others have always said that it is not just the cost of putting the stadium there, but the ongoing costs of having it there. Somewhere between $15-$20 million per annum is my guess. And that goes on year after year until our grand kids are sick of it. Debt servicing, events subsidies, maintenance, operating losses, lost opportunities like rates of $1.8-$2 million per annum for the industrial land occupied. It just goes on and on.

  3. Ask the question
    Submitted by farsighted on Sat, 07/09/2013 – 7:18pm.
    What was the nature of the relationship between the Trust and the Project Delivery Team?
    http://www.odt.co.nz/news/dunedin/272116/council-calculates-stadium-and-related-costs-266m#comment-48096

  4. Mike

    I have found $190,646 which could be used to pay down the stadium debt …. according to the CST’s 2012 Charities commission return, available online, that’s how much they have in the bank …. I wonder when they will pony up?

    • Then there’s CST’s West Coast connection to clarify in terms of squirreling monies. No idea how much went into a private trust fund over there on what terms, and how strange!? CST spurned St Clair for the wild West.

  5. Mike

    By the way many of you may remember that for a couple of years I ran an ongoing accounting of what the stadium had cost, based solely on published sources, looking back at my spreadsheet the last one I’d published was ~$360m which included a $100m estimate for the interest bill – so ~$260m not bad considering the current accounting of $266m …..

    Except for one thing ….. I always thought it was bogus, $5-10m too high, at the time I felt that the numbers from Harland’s affidavit in the STS trial didn’t add, by claiming a $165m construction cost plus the land purchase cost and the $15.3m “CST overhead” stuff (to prove it was too late to back out now) something was being counted twice (from memory STS’s spreadsheet showing the same thing was rejected by the judge because he claimed he didn’t understand how to read it) … so I played the same game and pretended it was real – on purpose I set a trap, I simply quoted the published numbers that didn’t seem right to me, added them up and ran them as a red rag to Richard Wall’s bull, hoping he’d bite – and as a result putting him in the position of arguing that Harland’s numbers under oath were wrong, but he never did, he claimed I was wrong but never did say why, maybe I was too obvious.

    Having said that, the numbers the city has published add up a different way from mine, they count stuff that’s happened since I stopped counting (much of DVML’s ongoing costs for example), now that the DCC has published their numbers you can look back at Harland’s affidavit and come to your own conclusions about how well it reflected reality.

  6. Mike

    I don’t know – I was more trying to put some stuff in some historical context – especially since someone congratulated me on calling the number so well yesterday, I felt a bit guilty and felt I had to at least put those numbers in context and explain why they were the way they were.

    I do think that STS et al deserve a big apology from the DCC, I think they were treated very poorly, especially in court. Dave Cull could easily front that up. I don’t really have more idea about the veracity or not of Harland’s affidavit but I think it’s probably worth looking into again with these new numbers – I suspect it’s an area that the pro-stadium folks would not like to be opened up since it would leave the DCC and CST open to subpoenas – certainly we still need an accounting of that “$15.3M” of CST overhead – I’m sure some of it went to the architects and some was what is now called “external advice” in this latest document, and of course a bunch went to an advertising campaign on behalf of the rugby interests trying to persuade us that we wanted a rugby stadium – but $15.3m? that’s a lot of overhead.

    Strangely the $15.3m doesn’t really seem to show up on CST’s rather undetailed accounts on the Charities Commission website.

    • All good points and likely online and offline the will be discussion tonight and in the days following. Others come to similar conclusions by different paths – and questions/suspicions have surfaced ever since Harland’s and Stephens’ affidavits were sworn. The judge was it seems lazy but it’s not clear if he was ‘interested’.

  7. Dave Cull, on his Facebook site outlined and admitted to the $288m of new debt created in this term. He then goes on to claim that there would be in effect no more new debt created, in fact there would be debt reduction in the near future.
    He points out that he and council had arrived at a rate increase of 4% instead of the around 7% projected initially. He omits to mention that Paul Orders had effected economies that had reduced the rate increase to around 2.5%. It was decided to maintain the 4% increase and use the difference towards reducing the period of paying down the stadium debt thus saving $128m in interest.
    I pointed out that it would have been fairer to the ratepayers who are finding things tough to pass the savings on directly. I suggested that if he sold down the non strategic property portfolio and applied the proceeds direct to debt reduction that would be fairer all round. I pointed out that ratepayers are not impressed by being Bunnings landlord in Porirua nor a bunch of buildings in Auckland and Christchurch. Nor should we keep the Wall St Mall.
    Exiting these properties would allow a very substantial (possibly $100m) reduction in the debt thus achieving the interest savings as well as having the rate reductions.
    I posted that, and within twenty minutes the whole story disappeared. Funny that.

    • Candidates at the mayoral forum didn’t fully concentrate on this Calvin, however some are asking that question – Hilary Calvert mentioned Wall Street mall, and clearly Cr Lee Vandervis is looking at cost reductions hard. Not sure the voters have taken in past statements issuing from City Property and Cr Syd Brown on the properties. Not clear where I stand yet on the Council’s property assets – not at all concerned with out of town commercial assets if they’re returning well – DCC competing with Dunedin investors and local businesses, however, is beyond the pale.

  8. Russell Garbutt

    One thing that can be certain about this Harland/Stephens situation. Their statements to the Court are a matter of record and cannot be rescinded or altered. While it may have been a fact that the Judge didn’t understand what was being said or admitted as evidence is largely immaterial as the two DCC officers were under oath to present material that was factual, correct and not in any way misleading.

    It is also a fact that the whole financial reporting of the CST is murky at least. Whether this murkiness has resulted in large swags of money being not easily accounted for or being “lost” was always a very significant risk when a private trust was set up to run the whole project outside direct DCC control. Just why this method was chosen has NEVER been made clear by any of the Councillors who agreed with the concept, nor by EITHER of Harland or Stephens, and definitely not by Farry.

    This inevitably leads to suspicions that the method was chosen for reasons that may disadvantage ratepayers amongst others.

    However, this could be made a great deal clearer if a judicial review in one way or another was to occur starting with the statements and documents supplied by Harland and Stephens to the Court. It would not be a good look at all if this were to find that the material was not factual, not correct, and not misleading. I wonder how many of the current group of people wanting to be Councillors would pursue this type of Judicial Review?

    • Intel for Black Friday—

      Received.
      Friday, 13 September 2013 2:04 p.m.

      Level 2A stadium
      Lots of work being carried out on Level 2A of the stadium.
      Apparently, the staff are sooo pleased it now has toilets and a ceiling. Don’t know who is funding it.

  9. At the 30 June 2007 the DCC’s net debt was $93.963 million. 30 June 2010 it was $259.496m. 30 June 2013 it was $$387.44m.
    In Thursday’s Star Mayor Dave Cull says; “the last three years were about sorting out the city’s financial situation and I now want a chance to help shape the future of the city.”
    “Sheesh?” “Beam me up Scotty, you dropped me on the wrong planet!”

  10. I forgot to mention that he also said, “There was now an opportunity to look at positive developments such as the cycle network and the Dunedin energy plan, which did not cost much but were investments in the future of the city.”
    So there we go, more spend and he hasn’t even been re-elected yet. The cycleway/transport strategy is reputed around $40 million, the energy plan? Who knows? We don’t even know what it entails, but he says it won’t cost much so he must be right. “Where are you Scotty?”

  11. Hype O'Thermia

    Remember Cull’s “not spending any more on the stadium than is needed to make it work”?
    Yes Calvin, I know you’ve been following the upward trend of debt – but tell me this
    Does it work now, according to any sane person’s definition of the word “work”?

    Oh dear……..
    I suppose that means chucking money at it will have to continue till it does, that’ll still be Dave Cull’s position eh?

    • You have to hope that the likes of the Chamber of Commerce, with its members and their employees, do not like Daaave and Greater Dunedin – with avengeance on receipt of voting forms.

      Less than one month to go until the elections.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s