Brian Rudman: Grocer wants slice of street race's alleged spoils

COMMENT

Talk about upsetting the applecart all over the V8 race track. Victoria Park New World supermarket turned up at the Auckland City Council on Wednesday demanding a compensation fund be set up for commercial victims of the proposed street race.

"If, as has been predicted," said the grocers' lawyer, Daniel Clay, "the city will benefit financially from the race, funding for compensation for those who do not benefit would presumably be available."

I'm surprised it's taken so long. But now the first hand of protest has gone up - or out - for compensation, I suspect it won't be long before other businesses and residents join the queue.

And why not? If, as Scott Milne, recreation committee chairman and chief cheerleader for the event, says, the supercars are going to shower the city with $315 million of rewards, then why shouldn't those being asked to suffer for the greater good be allowed a first dip into the treasure chest?

The council officer in charge of the race, Cameron Parr, was quick to reject any such dangerous nonsense. We don't compensate for inconveniences like roadworks, so why for car races, he reasoned.

The quick response to that is that road repairs are core council business, car races are not.

But the real reason there's to be no compensation, except for damage to council property that is, is that building in the true costs of this folly would reveal how mickey mouse the cost-benefit projections being thrown around are.

New World worries that road activity before and during the event "will result in significant impediments to the accessibility" of its supermarket, which abuts the race course.

"Accordingly, whilst the council is of the view that the city will benefit financially from the race, in the case of Victoria Park supermarket, the starting point is a significant financial loss."

Adverse economic impacts of the race "should be given greater recognition".

New World says: "Without an appropriately detailed and disclosed financial costs/benefits analysis, the public is left to trust the council as to the commercial merit of hosting and investing in the race."

Given the risks and significant council investment proposed, such an analysis should be prepared and made public so the community can make "an informed decision as to the commercial appropriateness of such a venture".

Mr Parr says a cost-benefit analysis is finally being prepared and will be available by the end of the month. However, because of confidentiality concerns, only the conclusions, not the details, will be released.

That's hardly inspiring news. Throughout the debate, the only figures so far revealed are lifted from a secret feasibility study completed in 1999 by the proponents of an earlier V8 series bid.

Much of the detail was borrowed from reports backing applications for Australian car races. Details of the 1999 report were not released to councillors for reasons of confidentiality. Some things never change.

What we need now is not another so-called independent "benefits" report from the applicants, but a proper independent cost-benefit analysis as outlined by Australian Capital Territory Auditor General John Parkinson in his July 2002 report into the financial disaster that was Canberra's attempt at a V8 street race series.

What is relevant for Auckland in that report is his exposure of how city officials and politicians got carried away with the blatant boosterism of the promoters.

Mr Parkinson was highly critical of the methods used to assess the economic benefits of the race, saying the city failed to "consider the costs from the event", it only added up the income.

He did his own cost-benefit analysis and concluded net benefits were exaggerated by 33 per cent and estimated visitor spending was exaggerated by more than 50 per cent. No attempts were made to factor in lost income due to traffic congestion, or the cost of noise.

Sound familiar?

The auditor-general queried all the so-called benefits for Canberra - substitute Auckland - item by item, claims that civic pride would blossom by making the city more dynamic, new jobs would be created, tourism would boom, huge international television audiences would race to their sets.

He popped the bubble of each and concluded: "There is need for scepticism about the indirect benefits associated with sporting events. In the United States ... independent research finds no actual effect on economic activity - or even a negative effect."

Who to believe? The grocers' proposed cost-benefit analysis would be a good way to find out. As long it followed the Canberra attorney-general's guidelines.