Hamilton Mayor has it right —DCC has lost ratepayers hundreds of millions of dollars

The misuse of public funds at Dunedin is far from being over……

Received Sun, 8 Jan 2017 at 5:21 p.m.

Questions mount over Hamilton City Council’s commercial nous. By comparison, how does Dunedin City Council stack up ?

### Stuff.co.nz Last updated 12:03, Jan 6 2017
Business: Property
Hamilton City Council urged to stay away from property ‘gambling’
By Aaron Leaman
….Hamilton Mayor Andrew King said the city council has a poor record when it comes to commercial property deals. And he doesn’t want any more ratepayer money risked on commercial developments. Records obtained under the Official Information Act show the Hamilton City Council has taken a multimillion-dollar hit on a raft of property deals dating back to the mid-1990s. The council incurred heavy losses after selling properties at well below their purchase price.
….In 2017, city councillors will consider restoring the council’s property development company, Hamilton Properties Ltd, after an almost 20-year hiatus. Last term, the council voted to transfer the city’s municipal and domain endowment funds, valued about $52 million, to the council-controlled organisation. The decision can be overturned by the new council. Hamilton Properties Ltd was set up in 1989 and retired in 1998 after developing a host of commercial and community sites, including the BNZ building and Novotel Hamilton Tainui in the central city.
….King said the council should enable developers and investors to risk their money to build Hamilton. “We’ve got $50 million sitting in these funds and I think the proposal to give it to Hamilton Properties Ltd is very, very scary, in my opinion,” King said. “It’s not our job as councillors to risk ratepayers’ money and go into competition against others. The record clearly shows that we are way out of our depth. We’re not specialists in this field and anything council does seems to cost twice as much as what the specialists in the field can do it for.” King’s views, however, are at odds with senior council staff, who have defended the city’s investment nous.
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Posted by Elizabeth Kerr

This post is offered in the public interest.

Stadium: ODT editorial (1.2.14) —“Palpable claptrap” says Oaten

### ODT Online Sat, 1 Feb 2014
Editorial: Business, or community asset?
The Dunedin City Council has been grappling with Forsyth Barr Stadium issues this past week. Fundamentally, they stem from the fact the economics of running the stadium are far worse than initially projected, an outcome that should surprise few. Many stadiums around the world struggle financially and Dunedin’s is no exception.
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Comment received from Calvin Oaten
Submitted on 2014/02/01 at 1:56 pm

The ODT must have gotten a special on ‘lipstick’, because the Editor has really applied it thick and heavy on this “Pig”. I must go past and have another look at the shade. The last time I saw it was the same old ‘deathly pallor’, befitting its purpose in life.

He says: “Before too long the Stadium might well even struggle to meet operating costs, many of which are fixed.” What sort of statement is that, when it is acknowledged that the ratepayers at present pay $9.125m each year (pa) towards stadium related costs? Right there is a full barrel of ‘lipstick’.

● $144m of debt at 6% pa is $8.6m pa, Capital debt paid in 18 years (as Dave Cull claims) is $8m pa. Total $16.6m pa.

● Then there are the council contributions of $750,000 pa for community use subsidy, plus $400,000 pa events attraction fund. Total $17.75m pa.

● Then there are the Accumulated deficits of DVL and DVML amounting to $16.373m (see both annual reports ‘change in equity’ sections).

All up, the stadium hole is $34 million pa deep.

● Oh, and let’s not forget (as it often is) the High Performance Sports Centre, built on the NE side of the stadium. It was funded by the DCC on the basis of the HPSC paying all costs in order to clear the debt within ten years. This was reputed to cost the HPSC around $850,000 pa. Shortly after, a quiet motion was put to council that it should make an annual grant to HPSC of $850,000 pa, and it was readily approved by the council of the day. So there goes another bundle of ratepayers’ treasure.

We won’t even mention SH88 or the Carisbrook fiasco.

The Editor then says, “the councillors and the people of Dunedin will have to understand the stadium’s valuable place in the city’s extraordinary range of community – educational, cultural and sporting – facilities. It is a valuable community asset.”

Palpable claptrap. If the stadium suddenly disappeared in a puff of smoke (we wish) the only thing put out would be Super15, ITM cup and Test rugby. Nothing else, fullstop. Cricket, University Oval, Soccer, Caledonian Ground. All other sports, including lower grade rugby are well and truly catered for. Concerts, the Town Hall/Regent Theatre/Mayfair Theatre. Basketball and Netball, Edgar Centre/Lion Foundation. Swimming, Moana Pool.

Seriously, the stadium is an incredibly expensive arena foisted upon the citizens by a small, very determined group of ‘rugby nutters’, and that is the truth of the matter. The editorial in today’s ODT is nothing more than a ‘hollow attempt’ to put a case for the stadium as an asset, based on nothing but falsehoods and ‘mystical’ dreams. That it will mislead a lot of more deserving citizens is the shame of it all.

[ends]

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Related Posts and Comments:
29.1.14 Stadium: Brent Edwards cuts the grass (ODT 29.1.14)
27.1.14 Stadium: No 4 at interest.co.nz
25.1.14 Stadium: Some helped it along, or themselves!
24.1.14 Stadium: It came to pass . . .
17.1.14 Garrick Tremain: Our Stadium
26.11.13 Russell Garbutt: DCC, stadium failings
7.10.13 DCC councillors, no idea annual cost of owning, operating FB Stadium

For older posts, enter *stadium* in the search box at right.

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Posted by Elizabeth Kerr

*Image: odt.co.nz – Calvin Oaten re-imaged by Whatifdunedin