Dialogue: Lack of convention facility costing city millions a year

Auckland is losing out badly because it does not have an international convention centre. One must be built at The Edge without delay, writes DAVID HAY*.

Research tells us that unless we take urgent steps to invest in Auckland, we will continue to fall further behind our neighbours, particularly those in Australia.

Between 1990 and 2000 the average real income for each resident in Sydney grew about 25 per cent; in Auckland it did not increase at all. That is a frightening statistic.

When I think of the future, I think mostly about my children. Where will they live? What opportunities will they have? I want my children to have futures in Auckland, so we can enjoy our extended family and they can remain part of our wider community.

But there are many obstacles. New Zealand is an outpost in an international economy, with barriers being broken as investment and skills become highly mobile. Without decisive steps to plan new development and employment opportunities in Auckland, a future in which we need to travel internationally to be with our children is a real one.

Regional planning has an unhappy history in terms of public transport, roads, water, electricity and sewerage. We have not appreciated the benefits of planned development.

Debate has focused on the costs of infrastructure development, rather than understanding the costs of not undertaking it. We have become trapped into looking at the immediate cost and profitability of our infrastructure, rather than understanding how such spending supports the private sector, encourages companies to invest and enhances our lifestyle.

Recent councils have begun to redress the lack of infrastructure spending over past decades. Sewage separation, water supply and sewage treatment and public transport are being examined regionally.

What, though, is being achieved to develop infrastructure that will drive the region's growth rather than merely underpin existing and future needs?

The fastest-growing industries over the next few decades will be health (as people live longer), education (as manual work disappears, replaced by technology and services) and leisure and tourism. Convention visitors are our highest-spending tourist group, yet Auckland still has no international convention centre.

A convention centre would provide more jobs per dollar and pump more money into the regional economy than almost any other form of investment. Notwithstanding widespread acknowledgment of this among the region's politicians, no decision has been made. Why?

Two initiatives have been discussed for many years - an international-standard convention centre and an indoor arena of some 10,000 seats. Both are planned for within the central city, with good reason - access to public transport, parking and appropriate land for development.

The need for a convention centre has not had the public exposure enjoyed by the arena proposal. Both are identified in the Auckland City Council's strategic plan for provision by 2004-05, but there is little clarity about turning ideas into reality.

There can be little doubt that the convention centre and the arena are significant regional initiatives. The first of each will prevent competing venues being developed because of the limited size of the market.

Therefore, the venues built must be the right ones, because if they did not measure up to internationally accepted standards they would degrade the value and economic benefit our communities derive from them.

Other centres have made similar decisions. Christchurch, Wellington, Rotorua, Queenstown, Taupo and Invercargill have each invested significant public money in convention facilities, and Auckland is becoming uncompetitive.

The Edge has documented lost conference business amounting to $10 million over the past two years because of the lack of facilities - this figure excludes spending on hotel accommodation or other retail spending by delegates while they are in town. We lose this business to cities with proper facilities, commonly Christchurch and Australian cities such as Canberra, Adelaide, Brisbane, Perth and Cairns.

Council research concludes that the region is forgoing long-term gross regional product of about $80 million a year, as well as the 1500 full-time equivalent jobs that would be created by a conference facility.

That is why other regions invest this way. If we invested in this central-city infrastructure, business ratepayers would support it because their businesses would benefit. And it would bring more income, more jobs and more reasons for our children to stay in Auckland.

The council underestimates the sophistication of its citizens. The last council made one such investment so the America's Cup could be based at Viaduct Basin. That decision was fully justified by the outcome. Public spending of $80 million generated redevelopment around the Viaduct Basin.

Our investment will be returned many times over by the increased rates paid by the property-owners in the area. And we now have a waterfront to be proud of.

Some will say we don't have the money to finance the development of an arena and a conference centre. This is not true - the council has investments that might be sold and it can also borrow.

Others will say we should support a private-sector development. That might be valid if there were any genuine expectation a private developer would invest in a project that is right for Auckland.

Private investment in the so-called hybrid arena-convention centre at Quay Park might be secured. But the research is unequivocal: that is the wrong venue for Auckland's future.

The council must exercise leadership. While it has not done so to date, it is not too late. The Edge has made submissions seeking the start of planning for a convention centre at the Aotea Centre. This proposal has widespread industry support.

The council has allocated $50 million over the next three years to fund its contribution to the hybrid Quay Park arena-convention centre. That proposal cannot proceed because it creates a compromise that would not serve the region's entertainment, sporting or convention needs.

At Quay Park we should concentrate on developing an arena. Aside from the nature and cost of the arena, the regulatory processes imposed by the Resource Management Act may take up to two years. It may require $80 million of council funding, as well as an annual operating subsidy, and it is unlikely to attract private-sector investment because it is unlikely to be profitable.

The $50 million earmarked for the Quay Park hybrid should be reallocated to the convention centre at The Edge, which can be designed, built, earning money and attracting large conferences from the end of 2004.

We know this is the right convention venue for Auckland. And it will have the same impact on that end of town that the public spending had at Viaduct Basin - more reasons to visit the city, higher property values, more jobs and more rates as a result of those higher property values.

The council will then be able to provide the funding for ongoing subsidy of the arena from the $5 million positive cash flow from the convention centre.

This project is the council's legacy to future generations of Aucklanders. We must make the decision now.

* David Hay is an Auckland City councillor.