Rudman's city: Let's break with convention and throw money into arena

By BRIAN RUDMAN

The belt-tighteners at the Auckland City Council have been quick to take the axe to such wasteful luxuries as pensioner housing. Somehow, though, there still seems to be money for their business mates' dreams of a convention centre.

No self-respecting city is complete without one, we're told.

Indeed, to Auckland business politicians such as Michael Barnett, such an edifice has become their own cargo cult. All you have to do is erect one of these vast meeting barns, they tell us, and, hey presto, in will fly planes loaded to the luggage racks with wealthy overseas conventioneers just dying to paper the town - and the businesses within - with proper dollar bills.

What effect September 11 has had on such dreams I have no idea. But it certainly hasn't dampened the enthusiasm of the cultists. They have now convinced the new council to spend $200,000 on a feasibility study into a convention centre. As part of this exercise the council has called for expressions of interest from private sector companies.

"The city is missing out on tens of thousands of dollars in revenue because it lacks an international-standard venue for conventions," said Scott Milne, the Remuera chemist chairing the council's recreation and events subcommittee.

If there is so much loose cash flying about, you have to wonder why the private sector hasn't swooped in and scooped it up, but let's not go there. What interested me was Mr Milne's continued interest in the last council's commitment towards the Quay Park indoor arena.

As I understand the debate, the two projects - one a circus for the people with convention facilities tacked on, the other a meeting venue - if not directly in competition for the same customers, at least overlapped.

You might recall how late last year three Australian companies, Abigroup, Leadlease and Nationwide, were shortlisted to prepare bids for arena proposals. These were submitted before Christmas and are being reviewed by city officials.

Each deposited $90,000 with the city by way of bond and spent around $750,000 each in preparing their documentation. The brief was to design and build a 10,000 to 12,000-seat indoor arena which the applicant would run for 30 years, then hand over to the council.

The city would contribute $50 million, the rest - estimated at between $20 million and $50 million - would be up to the successful tenderer.

Details of the submissions won't be revealed until the council meets in March to decide on the issue. However, last year, before being shortlisted, all three insisted that only a hybrid arena, including some convention facilities, would be commercially viable.

The council accepted this, so it

will surely have to tread gently in putting money into another convention centre project which is likely to entice customers away from the Quay Park arena facility.

A further complication has appeared in the shape of Sky City's plans for its own convention centre. Last July, it announced plans for a $37 million expansion, which included 2500 sq m of convention space.

The Casino Control Authority gave permission for 12 new gambling tables and 230 gaming machines, which Sky City said would be necessary to make the additions pay for themselves.

Four months later, however, soon after the new council took office, Sky City was on Mayor John Banks' doorstep with its hand out. It offered to nearly double the size of its planned new convention facility if the council provided somewhere around $10 million to $20 million in cash or kind (rates relief, perhaps) to help pay for it.

The attraction to the city councillors of this option is that the cost to the city would be low and there would be no running costs - though how subsidising a private enterprise activity (and a prosperous casino at that) fits in with their "no handout" economic philosophy I don't know.

Supporting the casino proposal would also put paid to the city-owned Aotea Centre's plans for a purpose-built convention centre as part of The Edge complex. This was the most grandiose scheme of all - a 4000 sq m, $47.7 million edifice which would be a cost to generations of ratepayers.

With loss-making convention centres studding the globe, it's a wonder any politician would want to expose his ratepayers and voters to the risk of building yet another. Of immediate worry in Auckland is that the plans for one here could jeopardise the viability of the arena project.

The arena is a circus that the whole community stands to benefit from, unlike the narrowly focused convention facility. Let's hope convention fever doesn't strike it dead.