Brian Rudman: Aotea Centre big loser in SkyCity deal

Little has been said about what a new convention centre means for the Aotea Centre. Photo / Kenny Rodger

Grazing through the huge wodge of official documents released last week relating to John Key's National Convention Centre, one downside that seems to have totally fallen off the radar is the deleterious consequences on Auckland Council's existing convention business.

The Prime Minister and his advisers have bent over backwards to protect and enhance the commercial monopoly SkyCity enjoys on serious gambling in the city, but there seems to be not a worry about the ruinous effects the big new Government-backed convention centre will have on the existing convention business based around the Aotea Centre.

There's page after page detailing many months of discussion on what the Government could offer in "kind" to pay for the new convention centre. There are even penalty clauses to punish future Governments if they change gambling regulations in any way that SkyCity might see as adversely affecting its business, but as for compensation to the ratepayers of Auckland, as far as I could spot, not a word.

This despite earlier claims that the Aotea Centre's convention business could be "decimated" once Mr Key's new centre is up and running just along the road.

It seems surprising there have been no howls of outrage from city hall. Instead the mayor is cock-a-hoop, though his councillors have expressed disquiet about the social effects of more gambling in the city.

When I checked on Friday, I could track down no council reports on the impact of the new convention centre on the Aotea's business.

Yet two years back, when, in the wake of the Christchurch earthquakes, Mr Key as good as declared SkyCity's "free" convention centre proposal as the frontrunner, there was gloom at Aotea Centre.

An insider said if the SkyCity project went ahead, it would likely kill the Aotea Centre's convention business. At the time, convention business accounted for about 50 per cent of the centre's revenue, and he feared this income would be "decimated" by the newcomer.

He reckoned the new centre's first target would be the bigger conferences, but it would also "siphon up everything it can, including the smaller ones the Aotea now gets".

Treasury reports have warned against the ministers involved getting carried away and that convention centres were white elephants that tended not to bring in the rewards the cargo cultists claimed.

These warnings were ignored, and instead the supporters talk up the extra jobs the new centre will create. Even if true, there's no talk of the burden of debt and potential for job losses at the existing ratepayer-funded facility.

Aucklanders have every right to feel used in this whole exercise. In early 2009, Mr Key, as Tourism Minister, joined with the old Auckland City Council in a $300,000 feasibility study on a national convention centre. Four likely sites were identified, including SkyCity's.

Expressions of interest were called for, and five interested parties submitted by the June 2010 deadline. All but the SkyCity bid required varying amounts of Government input - the highest seeking 75 per cent of the $350 million cost.

With the first of the Christchurch earthquakes striking three months later, around the time the Government was due to announce the winner, the die was cast. With Christchurch to rebuild, the "free" bid, which it seems was the Government's choice from day one anyway, was the only one it could afford.

While the other interested parties were entitled to feel cheated by lack of due process, Auckland Council's existing convention business is the only applicant that stands to suffer ongoing losses as a result.

The Aotea Centre's proposal was to expand the existing facilities with a new complex stretching along Mayoral Drive to Wellesley St.

It would have incorporated one publicly owned facility into another. It would have meant that even if convention centres are white elephants, at least the public only ended up with one to feed, not two.

Admittedly, I also warmed to the Aotea proposal because, instead of expanding the number of pokie machines in the town, an integral part of the expanded Aotea Centre project would have been the refurbishment of the mothballed St James Theatre across Queen St.

In the profit-and-loss ledger, that is another cost of the Government's SkyCity choice.

Then there's The Slug on Queen's Wharf, left behind by the Government after the Rugby World Cup and "gifted" to Aucklanders. Auckland Council is trying to market that as a convention venue as well. Once the SkyCity venue is up and running and siphoning business, who'll be left to carry The Slug?