Global crunch hits big city projects

Degas to Dali. Photo / Brett Phibbs

The global financial crisis is starting to hit Aucklanders in the pocket with talk of a $12.4 million top-up for the Auckland Art Gallery upgrade and private investment shunning the much-hyped Wynyard Quarter.

The Auckland Art Gallery Foundation has struggled through the financial crisis to raise $33.4 million in private donations towards the $121 million upgrade.

Ratepayers, who underwrote the foundation in 2008, look set to pay some or all of the $12.4 million shortfall on top of $56.1 million they have already contributed to the new grand design, which opened last September.

Arts patron and foundation trustee Dame Jenny Gibbs says that when fundraising began in the mid-2000s, the world was booming and $14.5 million rapidly came in.

Then the project got held up in the Environment Court for two years and when it got the go-ahead, the global financial crisis hit in 2008. Since then, it has been hard work to raise a further $6 million, Dame Jenny says.

"It's not the boom times any more. Companies have tightened their belts, commercial sponsorship is not so readily available and individual donors are not receiving income they might have received from investments," she said.

Waterfront Auckland has revealed that plans for a luxury hotel on the former Team New Zealand site fronting the Viaduct Harbour have been affected by the financial crisis.

The Auckland Council body warned its political masters last week that a number of potential investors in the hotel, particularly from the Northern Hemisphere, had placed on hold or suspended indefinitely plans because of market uncertainties in late 2011.

The curtain is also set to fall on a $41 million theatre project on the waterfront unless the Auckland Theatre Company can raise $23 million by next month.

The council has promised $10 million towards a 600-seat theatre alongside the new ASB Bank headquarters at Wynyard Quarter, but support for the project waned around the council table in February after an officers' report showed just $460,000 had been raised from theatre patrons.

A previous supporter of the project, councillor Chris Fletcher, said the council was living in difficult times and the theatre was simply unaffordable.

Waterfront Auckland chief executive John Dalziell is playing down the impact of the financial crisis on private investment in Wynyard Quarter, which board chairman Bob Harvey has said will be "the major driver of Auckland's economic future".

Mr Dalziell said the comments made to the council about the lack of interest in the hotel site were in the half-yearly report and reflected the situation at the end of last year.

"Since then, matters have advanced and we have made significant progress with interested parties."

He said the talks, with local and international investors, were confidential.

MONEY WORRIES

* Auckland Art Gallery upgrade: Ratepayers up for $12.4 million on top of $56.1 million already committed.
* Wynyard Quarter hotel: International investors shun because of market uncertainties.
* Auckland Theatre Company project: Curtain set to fall unless $23 million is raised by next month.