Events like the Royal Easter Show could be in jeopardy if the Auckland Showgrounds are leased to a film company. Photo/Michael Craig
The future of the iconic Auckland Showgrounds hangs in the balance after the events-and-exhibitions industry got wind of an alleged confidential deal between the showgrounds' owners, The Cornwall Park Trust, and an Auckland film studio. Jane Phare reports.
No more Royal Easter Show, no more crowds at the Food Show, the Gift Fairs, the Baby Show, Armageddon, Big Boys' Toys, the Home Show. The Auckland Showgrounds gates closed to the public and the keys given to an Auckland film studio. That's a worst-case scenario for the expo and events industry after discovering showgrounds' owner, Cornwall Park Trust has moved quickly and quietly to sign up X3 Studios as the new leaseholder for the 8ha showgrounds.
In what appears to be a confidential lease arrangement between the Cornwall Park Trust Board and X3 Studios, the future of the Auckland Showgrounds seems unlikely to include shows and exhibitions that Kiwis have flocked to since 1911. Those in the exhibition and trade show industry who have used the site for decades are outraged by the tender process, which they believe was secretive and unfair.
One event organiser, who did not want to be named, said in her view the tender was "really covert and not transparent", having discovered through the grapevine that the showgrounds' future lease was up for grabs.
Sources say only two tenders were considered in a Bayleys-run process. One of the two, exhibition servicing company Coast Group, has allegedly been rejected in favour of a higher offer by X3 Studios. Coast Group is a major player in the industry and includes Carlton Party Hire, Exhibition Hire Services, and Showlight & Power.
Those in the exhibition and trade-show sector warn that if the showgrounds are shut for the exclusive use of the film studio, both Auckland's economy and the industry's multi-billion dollar contribution to New Zealand's GDP will suffer. And generations of New Zealanders who have enjoyed decades of access to the site will be shut out.
One event organiser says that once Hollywood moves in, Kiwis won't be able to get inside.
"You can't watch movies being made or stars walking around."
The Cornwall Park Trust Board denies any decision has been made about who is to take over the ailing showgrounds after last year's liquidation of the former long-term leaseholder, the Auckland Agricultural Pastoral and Industrial Shows Board, following closures due to Covid-19.
But sources in the events industry say that's nonsense, claiming Coast Group has already been told it was unsuccessful. Neither Coast's group director, Sheldon Midgley, or X3's executive director of business development, Harry Harrison, would talk to the Weekend Herald. Both have been required by Cornwall Park Trust to sign non-disclosure agreements.
But sources say both Auckland Unlimited and events company XPO Exhibitions Ltd, which supported Coast's tender, have also been told the bid has failed. They say the Coast Group bid, which was also supported by Live Nation, should have been financially viable, offering the trust board more than twice the rent it was receiving from the now-defunct shows board.
Approached by the Weekend Herald, the trust's chairwoman, Adrienne Young-Cooper, sent a statement through a PR company denying any decision had been made and saying that several options remained under consideration.
Staff and exhibitors at the showgrounds say Harrison and his team have been at the showgrounds site with measuring lasers and assessing soundproofing and showing executives around.
The industry has appealed for urgent help from the Mayor of Auckland, Phil Goff, alleging that closing off the showgrounds for its intended use contravenes the Auckland Unitary Plan Precinct that protects their use.
XPO managing director Brent Spillane sent a letter to Goff on March 22, which the Weekend Herald understands was hand-delivered to the mayor's office, pointing out that the unitary plan designates the showgrounds as a precinct set aside for the primary activities of exhibitions, trade fairs, conferences and events. and the wider implications for the industry and the economy.
He also argued that although filming was allowed as a "compatible" activity under the precinct, non-filming activities such as designing, editing, or pre-or post-film production, marketing and distribution were not.
Spillane, on behalf of the industry, asked the council to ensure the primary users of the showgrounds would not be displaced. And that the council did not consent to any wholesale conversion of the buildings or facilities for film usage without a resource- consent process.
A week later Spillane received a response from Ian Smallburn, the council's general manager of resource consent, saying the council had no knowledge of any proposed activity at the showgrounds other than what was outlined in the letter. Smallburn said it was up to the Cornwall Park Trust to determine resource consent requirements.
He pointed out that because filming was a "compatible activity" under the precinct, no resource consent was required. However, if a resource consent application was lodged, the council would take into account the potential for compatible activities to displace the primary activities such as the use of the showgrounds for exhibitions and events.
That, says Spillane and others in the events industry, is the whole point of their argument. Converting the showgrounds into film studios will displace the primary users and prevent 1.2 million visitors a year attending the showgrounds. Those visitors, from Auckland and around the country, plough millions of dollars of buying power into the economy, and are big business for hotels, motels, shops and restaurants during their stay, he says.
"For the lease to fall into the private self-interests of a film entity and to be repurposed to a film studio is in my view the worst possible outcome for this city," he says. He accuses the board, chaired by Adrienne Young-Cooper, of "hiding behind curtains" in the tender process and stifling public debate.
Spillane found out about the tender process through a third party but says XPO Exhibitions, New Zealand's largest exhibitions organiser and largest hirer of the venue, was declined any right to tender directly by the trust board. He had proposed a not-for-profit organisation chaired by Auckland Unlimited and with representatives from industries including events and exhibitions, film, performance sport and concerts.
Instead, he was told to get behind the Coast Group tender which he did, including offering financial support.
This week Goff told the Weekend Herald that he had now raised the issue with Young-Cooper in response to concerns raised that the showgrounds may in future not be available for holding events and exhibitions.
"I conveyed to her that a change in the lease of the grounds to allow alternative uses would impact event organisers because of a lack of suitable alternative premises for a number of events that provide value for the city," he said.
Young-Cooper's response was that no final decision on who would get the lease had been made. She told the mayor that the board would consider the concerns raised by the council and that any future lease would be subject to the Unitary Plan and other relevant bylaws, as well as the board's trust deed.
However the board was bound by the terms of the Trust Deed to make a decision in the best interests of Cornwall Park and the amenity the park provides the people of Auckland, Young-Cooper said.
Goff told the Weekend Herald that the showgrounds were not owned by the council and their future was the prerogative of the owners (the Cornwall Park Trust) provided it was consistent with rules set out in the Auckland Unitary Plan.
With the current financial pressures created by the Covid pandemic, the council was not in a position to invest in acquiring the lease and providing subsidised assistance to the events industry, he said.
But the industry says it doesn't need a subsidy. It argues that those who got behind the Coast Group tender had presented a viable commercial proposal that would have returned more than twice the previous rent paid to the park trust.
And they say there are wider issues at stake: the lack of a big enough alternative venue with the necessary infrastructure to accommodate major exhibitions and trade shows; the intentions of Sir John Logan Campbell in gifting the land for Cornwall Park and the showgrounds in 1901; the fact that shows and exhibitions have exhibited on the site since 1911, including the Royal Easter Show, which has been held at the showgrounds since 1953; and the fact that both taxpayer money ($4.6 million) and Auckland ratepayers' money ($5m) went towards a substantial upgrade of the 18,000sq m of exhibition space.
The loss to the Auckland economy alone would be huge, Spillane says. He commissioned a report more than five years ago based on just five trade shows that XPO hosts. It showed that more than $9.5m was spent (excluding GST and trade purchases made at or after the events) as a result of the shows.
That figure included $3.51m for the delivery of the events; $3.89m spent by visiting exhibitors and $2.15m spent by visiting attendees. The report estimated that those attending the trade shows had a registered buying power of $1.8 billion. And Spillane estimates that trade shows and exhibitions contribute between $3.8b and $5.7b to New Zealand's GDP every year.
Spillane says Covid-19 hit the events industry hard but there is pent-up demand for events and exhibitions. Last month 10,000 people attended the Tiny House Expo on one Saturday alone. He's watching huge growth of shows over in Australia now and predicts the same will happen in New Zealand.
"As the world is re-opening we're seen record numbers going to exhibitions and trade shows."
Thousands of small-to-medium-sized business that rely on trade shows to both sell their products and grow their businesses would be left out in the cold if the showgrounds were no longer available.
"I don't know any other major city in the world that has does not have an exhibition centre and we're about to lose it to the film industry."
Spillane says there is no other suitable site that provides 15,000sq m of internal space. The New Zealand International Convention Centre will be around 8000sq m and won't be operational until 2027. Major shows like The Boat Show use every corner of the showgrounds' 8ha site, he says.
"Think about how important that is to the marine industry. You can't just throw many of these things into a marquee in the park. The engineering and manufacturing shows need load-bearing floors, they need articulated air to run these machines and huge power sources, good access ways. That's why we have a purpose-built facility."
Warwick Vallance, operations manager for gift wholesaler BPM, has exhibited at baby shows, gift fairs, pet expos and Armageddon over the past 15 years. He says the shows are invaluable and also a chance for consumers to compare products under one roof.
Vallance flies in staff from around the country and Australia to attend and says in his view, the showgrounds' central location - close to a motorway link from the airport and with plenty of accommodation nearby - would be impossible to replace.
The film industry already has three major studios in the Auckland region and can go anywhere, he says.
"It will be a real waste if they [the film industry] get hold of it. Finding another central location like that in Auckland is just not going to happen."
As things stand, the current lease arrangements remain in place until June. After that, Spillane says, shows like the Auckland Food Show, the Baby Show, the New Zealand gift fairs and the Auckland Home Show are in jeopardy.
"You can't find new homes for them overnight. It will be years before we can potentially re-run some of these shows."
He has approached X3 but says they won't engage in discussion about the site's future use or the possibility of co-sharing.
Lisa Hopkins, chief executive of Business Events Industry Aotearoa (BEIA), says the potential loss of the Auckland Showgrounds would be a blow to the industry.
"It is the largest flat-floored covered space we have in Auckland. And this space is more than just a commercial concern. It's part of the heart of the city."
She too has seen pent-up demand to hold face-to-face events as has been experienced overseas.
"That's coming at us. It will happen sooner rather than later."
The industry wholeheartedly agrees that the trust board has to show a return in order to support Cornwall Park, for which it gets no public funding, Hopkins says. She would like to see the trust board get together with a range of industry representatives and potential users of the venue to work out a way to preserve what she sees as an irreplaceable piece of infrastructure.
Spillane says in his view, if the trust board settles on X3 Studios it would be "throwing the keys to the highest bidder without considering the wider implications". Auckland is trying to attract international and business tourism to boost the economy as the country reopens. Trade shows and exhibitions will play an important part in that economic recovery, he says.
The final decision should involve more than just the highest bidder. "The New Zealand taxpayer has earned the right to continue to walk though these gates. In my view, it's an outrage."
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