V8 costs kept under wraps

Hamilton's hosting of the V8 Supercars from 2008 will cost city ratepayers significantly more than the $7 million touted by its council, but Mayor Michael Redman says commercial sensitivities prevent him from quoting figures.

Public submissions for the event have now closed and within the next four weeks a resource consent hearing will take place before independent commissioner Alan Withy of Tauranga.

Feedback shows overwhelming support exists within the community for the event, with 234 city ratepayers filing a submission in support and just 34 people against the idea.

Shortly after the Herald revealed in February that Hamilton had secured the V8 deal, the council said it would spend $7 million over the seven-year term of the agreement.

The capital outlay covered infrastructure costs associated with bringing the street circuit up to standard and included civil works, the building of the pit lane, construction of concrete barriers and debris fencing.

But information on the true cost of the hosting rights is being kept from the public.

Only councillors will be privy to how much money is being paid to promoters to secure major naming rights.

Mr Redman said "sponsorship fees" were still being negotiated, and he declined to quote even a ballpark figure of what these would be worth.

Although the fee was commercially sensitive and could not be publicly discussed, Mr Redman said the money would come from the council's event-sponsorship coffers.

That fund is worth $25 million over 10 years and is found in the Long Term Plan under the heading "city promotion".

The annual budget for city promotion currently sits at $1.13 million, but it will grow 159 per cent fatter between now and 2014, when annual funding reaches $2.93 million (the V8 deal lasts until 2014, subject to resource consent approval).

Besides the V8s, the fund covers other major events such as Balloons Over Waikato, The Great Race, the World Rally Championships, and the soon-to-be announced Urban X event.

However none of the latter events is understood to have a price tag that rivals the cost of the V8 Supercars.

"Obviously in the case of the V8s the event is very much bigger than anything else we have had so the fee is also larger," city communications manager Philip Burton said.

The fee would be capped to limit the council's financial exposure.

Both Mr Burton and Mr Redman stressed that because the council was not staging the event as promoter, it bore no financial risk should the venture collapse.

Mr Burton added that the sponsorship and infrastructure expense would be offset by revenue-generating opportunities.

Those could include merchandising paybacks, an area of the overall sponsorship deal that is still under negotiation.

The cost of hosting the event will not be a consideration of the independent commissioner who decides whether to grant a resource consent, making some of the 34 submissions in opposition irrelevant.

Cost is the domain of the council and is not a consideration under the Resource Management Act.

A summary of community concerns shows several Frankton businesses are worried about staff and customer access while the event is staged.

A few submitters felt the event was antisocial and would attract "boy and girl racer behaviour".

Other protesters said it was a waste of fuel and would result in pollution.

Some said animals would be affected by the smell of gas.

Many others do not want trees removed and are worried about security, parking and noise.

One person did not want a city roundabout removed and replaced with traffic lights in order to accommodate the street circuit.

Until a commissioner's report is drawn up this week, the council has concealed the identities of all submitters.

Mr Burton said the council was confident of addressing issues brought up by some of those opposed.

The weight of numbers in support was encouraging, he said.

Planners had directly communicated with 4500 businesses or residents who it was thought would be potentially affected, so it was pleasing that in a city of 160,000 just 34 people had voiced their opposition.

Rich pickings

Hamilton is planning to run V8 Supercars races for seven years from 2008.

The resource consent process has cost ratepayers at least $350,000 so far.

In the first year the race is predicted to bring in $20.3 million in "new money" and $15.2 million in "value-added" or "downstream" effects to the area.

Over the seven years the total "new money" brought into the economy would be $156 million.