Brian Rudman: Financial trail of needless Slug will lead back to ratepayers

Rivalry between museum and art gallery highlights glut of harbourside facilities. Photo / Natalie Slade

At a recent familiarisation tour of the redeveloped Auckland Art Gallery, Auckland Museum director Sir Don McKinnon wryly noted that the museum's sumptuous reception facilities were likely to experience a slump in trade when the gleaming new gallery started competing for customers.

As chairman of Regional Facilities Auckland, the council-controlled organisation that manages the gallery and has a governance interest in the museum, Sir Don is on a winner - or a loser - whichever of the venues gets the business.

The risk is that with two council-financed venues competing for the same customers, both risk becoming unprofitable and then the ratepayer ends up topping up the accounts.

Now, thanks to Rugby World Cup Minister Murray McCully's obsession with building his own monument on Queen's Wharf, the 178m prefabricated "Party Central" Slug - formally called the Cloud - Sir Don and his team face a similar issue down on the waterfront.

Once the rugby fans go home, Regional Facilities' shiny new $32 million Viaduct Events Centre will be in competition for customers not just with Mr McCully's Slug, but with its refurbished heritage neighbour, the century-old Shed 10. Just who will administer the day-to-day running of The Shed - which for 150 days of the year will act as a cruise ship terminal - and The Slug is uncertain. But what is certain is that any losses will come straight back to Aucklanders to cover.

A year ago, when Mr McCully insisted on building The Slug, critics argued that with The Shed crying out to do the party central job, to say nothing of Viaduct Events Centre, which was then well under way, the new prefab was not just surplus to requirements but a likely burden for whoever got lumbered with it after the minister, and rugby fans, returned to their day jobs.

Now we have Waterfront Auckland chief executive John Dalzell sounding the alarm. Unfortunately at this late stage, it's a bit like the foghorn blasting as the ship hits the hidden reef. Not that this reef was hidden.

As Mr Dalzell says, "There is only so much activity in terms of people wanting to use the space ... for markets, Melbourne Cup function days or exhibitions."

The optimist might adopt the cargo cult approach and say if you build a lot of reception and market-type venues, trade shows and events will rush to fill the empty spaces. And perhaps if all these venues had been erected by private speculators, one could welcome this approach. But in this case, it's the Auckland ratepayer that's taking the risk. The annual running costs of The Slug alone are estimated at $1.5 million. These venues will not just be competing with each other, but with the council-owned Aotea Centre as well. If the pressure to generate income really went on them, they might well branch out into the smaller functions that the Museum and Art Gallery will be after as well.

The Government has said Auckland can keep The Slug as long as it wants it, and Waterfront Auckland chairman Bob Harvey was quick to say, 'Gee, thanks, we'll hang on to it for 15 years'. That can't be the final word. The council has to sit down and consider whether it has a proper role once the Cup is over. That's what any well run business or public body would do. It's what was done recently when the council had to decide whether or not to fund Auckland Theatre Company's request for assistance in building a new theatre at the Wynyard Quarter. It got the experts in to revise and update an earlier study on theatre venue requirement.

When the government and the old regional council jointly purchased Queens Wharf two years ago, it was to secure it as the site of a new cruise ship terminal and as an open space area for Aucklanders. Mr McCully hijacked the space for his Party Central project, complete with the new building. It was put up with none of the planning or economic impact reports normal for such a project. It was a temporary aberration. Or so we thought. Mr Dalzell's concern about the long-term economic impact is a compelling reason to make certain it slithers away once its rugby days are done.