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An Auckland businessman has won round one in a fight to save the Auckland Showgrounds from coming under the control of a major American film company.
In a last-ditch attempt to stop the historic showgrounds from effectively closing to the multi-million-dollar events and exhibitions industry, Brent Spillane, managing director of XPO Exhibitions, launched a High Court challenge against the Cornwall Park Trust Board.
He argued the trust's intention to lease the showgrounds to Auckland's Xytech Studio Management, which in turn planned to lease it to an overseas film and television production studio, would prevent the use of the showgrounds for major events such as the New Zealand Boat Show, the Auckland Food Show, the Auckland Home Show, the Baby Show, Pet Expo and the Royal Easter Show.
Spillane's counsel pointed out that the eastern portion of the showgrounds – about 5ha of the 8.2ha site – was protected by the Cornwall Park Recreation and Endowment Act 1982 for the use of trade shows, exhibitions and entertainment.
Events and exhibitions at the Auckland Showgrounds draw a million visitors a year. Photo / Supplied
Justice Peters agreed, ruling that the trust board must stick to the intended purpose of that portion when entering into any lease.
"Any filming or other activities on the eastern portion must be secondary to that use," she said in her judgement.
The eastern portion of the showgrounds includes hall 6, the grandstand, the main car park, the main building concourse, commercial kitchens and café, seminar rooms and slices diagonally through the main exhibitions halls 1-4.
Peters was not satisfied that the proposed lease of the eastern portion of the showgrounds to Xytech would maintain exhibitions, trade fairs and events as the primary usage. Filming and other activities could still take place, subject to the Auckland Unitary Plan, but were required to be secondary, she ruled.
Brent Spillane, managing director of XPO Exhibitions, mounted a High Court challenge to stop the Auckland Showgrounds from being leased to a film company. Photo / Dean Purcell
The board intended to lease the site to Xytech for four years with a right of renewal for another two years.
In her judgement, Peters acknowledged the financial burden the trust board had suffered as a result of Covid-19. Scores of events and exhibitions were cancelled, and the Auckland Agricultural Pastoral and Industrial Shows Board went into liquidation after being unable to pay a major rent increase proposed by the trust board.
The trust board needs to pay for the upkeep of Cornwall Park which is not publicly funded. The only sources for that income are from leasehold properties near the park and the showgrounds' lease.
Peters' final ruling is on hold for a short period to give the trust board, Xytech and the events industry a chance to see if they can work around the eastern portion provision.
The future of major exhibitions like the Auckland Food Show are in doubt if the Auckland Showgrounds are leased to a film company. Photo / Supplied
Spillane hopes the trust board will agree to negotiate with the other lease offer put forward by exhibitions supply company Coast Group which is backed by the events industry. He says his company and others in the industry are set to pay more than $1.35m in venue rent for a series of events in the coming six weeks alone if the trust board will reopen the showground gates.
That amount would cover urgent maintenance needed on parts of the showgrounds, he said. In the meantime use of the showgrounds for any purpose has been on hold since June 30.
Murray Reade, CEO for the Cornwall Park Trust Board, said the board would now review the legal, commercial and other options available to it, driven by the objective of ensuring the assets of the showgrounds are used for the benefit of Cornwall Park.
The trust board wanted to secure a lease arrangement for the showgrounds that provided a commercial return at an appropriate level of risk, he said.
"The Cornwall Park Trust Board simply cannot afford to receive poor commercial returns from the showgrounds in an ongoing way, and nor does our trust deed allow us to do so."
Ground rent for the showgrounds was last agreed to in 2013, he said. An appropriate increase in rental had not been agreed to with any party since then, partly due to the "unsustainable events-based business model of the previous shows board (now in voluntary liquidation), and the effects of the pandemic".
Endowment land around Cornwall Park, including the showgrounds, was provided for the purpose of supporting the running of Cornwall Park, and ensuring its amenities are freely enjoyed by all New Zealanders, Reade said.
"At the time it was entered into, Xytech's proposal for mixed film and event use of the showgrounds was the strongest offer."
The liquidation of the shows board means the trust board had to assume responsibility for the buildings on the site and would now need to shoulder the burden of significant expenditure for repair and maintenance.
Reade said Spillane's High Court action had further delayed a final decision on the usage of the site. The trust board was still considering its options and, in advance of the High Court's final ruling, would not comment further.
