Fire fallout: SkyCity-Macquarie $220m car park deal disintegrates

The immense fire sent smoke plumes billowing across Auckland, brought the SkyCity complex to a halt, and raged for days in October 2019. Photo / Dean Purcell

SkyCity's $220 million deal to offload its car parks to investment giant Macquarie has fallen through due to damage from the huge 2019 fire at the nearby New Zealand International Convention Centre construction site.

The Herald last month reported the deal was in jeopardy with the entertainment group unlikely to meet an October 22 deadline to hand over the assets because of the fire damage.

Today, SkyCity said it received a termination notice from Macquarie's MPF Parking NZ (MPF) in relation to the long-term concession granted to MPF over the car park.

"The termination notice has been provided by MPF as a result of the inability of SkyCity to hand over the car parks on the New Zealand International Convention Centre construction site to MPF by October 22 2022 due to the damage caused by the significant fire at that site on October 22, 2019, and the car parks not having yet been remediated," Sky City said.

Under the terms of the concession agreement with MPF, SkyCity was required to take back the operation of all of the car parks.

The consideration payable to MPF by SkyCity would be determined by a market price methodology and process set out in the Concession Agreement, which remained subject to valuer agreement, Sky City said.

The timing for "re-acquisition" of the car parks would be determined in accordance with a framework in the Concession Agreement, which is currently expected to be in late 2022 or early 2023.

SkyCity's car park deal with Macquarie has fallen through as a result of damage caused by the 2019 NZ International Convention Centre fire. Photo / File

SkyCity said in its latest annual result that it had progressed its options, in line with its longer-term capital management strategy, for financing the buy-back of the car park.

"The SkyCity Auckland car park business is a high-quality, integrated operating asset that is a key driver of local gaming visitation, with expected earnings of $15-20m ebitda per annum," the company said in today's statement.

Macquarie bought a long-term concession for about 3000 car park spaces on the SkyCity Auckland main site and the NZICC site in April 2019.

Just months later, fire ripped through the roof of the convention centre construction site.