- All bidders spoken to by The Herald say they have concerns about the lack of expertise on the working group.
- A member of the working group allegedly fell asleep during a presentation.
- The process has been so vague and poorly communicated that they are mostly informed about what’s happening by reading the Herald.
- A process that should have been confidential, independent and conducted in weeks rather than months has been hi-jacked by those with vested interests and strong preferences for individual bids.
- Eden Park’s perceived advantages are also its potential weaknesses to be exploited in a dirty PR war.
- An independent evaluation of the Quay Park proposal identified a litany of other issues including the fact Rangitoto Island would be obscured despite being shown in artist’s impression images.
- News that NZR was aligning with Quay Park surprised some directors who have a long association with Eden Park, leading to Mark Robinson apology.
- Mud slung at Wynyard Point bid includes questions of toxic soil.
Aucklanders will learn next week whether the city will build a new downtown, waterfront stadium, revamp Eden Park or possibly do nothing at all to its existing infrastructure and muddle along with its current handful of not fit-for-purpose venues.
A process that began last September when Mayor Wayne Brown set up a working group to resolve what a multi-purpose “Main Stadium” should look like, is expected to conclude on May 30, when Auckland councillors vote.
It hasn’t been made clear whether councillors will be asked to approve a preferred candidate, or whether they will be picking between two or maybe even three options.
Those involved in the process believe that it will be the latter, and that Eden Park is a certainty to progress to the council vote, with the Quay Park and Wynyard Point bids viewed as being in a head-to-head contest to make the final shortlist (the so-called Sunken Stadium next to Bledisloe Wharf is rated a rank outsider).
And it is the fact that media are seemingly half in the know about the outcome and yet the bidders are only half in the know about the actual process, that has turned Auckland’s attempts to ratify a long term stadium strategy into a PR spin war where influence is won through the power of social connection, storytelling and the cult of personality.
No one the Herald has spoken to believes the process has met internationally recognised best-practice standards for civic authorities to follow when they set out to build major stadium projects.
The timeline has drifted and been amended to accommodate a new independent reviewer who was introduced into the process just weeks before a decision was due to be made.
Typically, civic authorities engage an independent consultancy or panel of experts to run the process from tender phase to recommending a preferred bid.
But Auckland set up a working group in September with five councillors and Tātaki Auckland Unlimited chief executive Nick Hill, Sport New Zealand chief executive Raelene Castle and Tau Henare, a member of the Independent Māori Statutory Board – none of whom have any experience in building stadiums.
All bidders spoken to by the Herald say they have concerns about the lack of expertise on the working group – that infrastructure projects that will cost and generate billions of dollars are being assessed by people with little experience in works of this magnitude, and no expertise or specific knowledge in stadium construction.
One bidding entity alleges that a member of the working group fell asleep during their initial 75-minute presentation late last year.
There were concerns too that the councillors on the panel had pre-determined views about the various options or strong personal preferences for specific bids.
It is believed that these concerns were the reason why, in early April, councillor Shane Henderson, who is head of the stadium working group, told the Herald that the process was being delayed because he had engaged an independent local firm to do more due diligence on each bid.
The decision to work with a local - rather than international team with no knowledge of Auckland, surprised the bidders - but Henderson said he was confident about their impartiality.
“That is the number one criteria,” he said.
“Auckland’s a small place. I get that. So to appoint anyone I needed to be 100 per cent confident in their independence and impartiality and that is the spirit that I take as the chair as well.”
But it is unclear to the bidders what influence the independent reviewer will have in a chain that will see this local consultancy report to a working group who will make a non-binding recommendation to the council, and yet some of the working group will also be casting a vote.
Nor are the bidders certain about the criteria on which their bids will be assessed, given it has changed since the process began and that publicly Auckland’s mayor has said any new stadium can’t come at any additional cost to ratepayers.
That sentiment was reflected in the initial Request for Expressions of Interest (REOI) document, which detailed the criteria weighting that would be applied in assessing the bids, with project funding sitting at 50 per cent, and financial stability at 10 per cent.
The other categories experienced in stadium development (10 per cent), resources (5 per cent), timeline and delivery mechanism (5 per cent) and ethical and social sustainability including commitments to Te Tiriti o Waitangi (15 per cent).
Then, in mid-March, bidders were notified of a change in criteria with the document stating that the initial evaluation criteria was “too heavily weighted towards funding and attributes of the REOI participants”.
The updated criteria grouped funding and finance together (sustainability of arrangements and cost to public sector) at 35 per cent.
Site (sustainability and accessibility) was introduced at 20 per cent, environmental (impacts including carbon and sustainability (10 per cent), precinct development and innovation (10 per cent), Auckland stadium requirements (10 per cent), deliverability (10 per cent), and strength or proponent and team (5 per cent).
Henderson also told the Herald on April 29: “The most important thing is [that] the financials have to stack up, and that’s our first port of call. Financials and the site”.
But none of the proposals have been required to produce drill-deep figures to support their ballpark construction costs.
They are presenting approximations – rough guides to construction costs and yet rougher illustrative numbers about possible associated disruption impacts that may come through traffic closures or enforced business impairments.
All four bids are going to require public investment of some kind – be it up-front funding, meeting ongoing operational costs or legacy debt repayments – and so the strength of focus on presenting a cost-neutral proposal to the ratepayer has required bidders to be creative in how they present the facts about their respective proposals.
It has left them uncertain about the extent of the council’s ambition to create a world class facility and its willingness to look at possible long term revenue generation for the city to offset the short term need to borrow more money.
Bid teams say the process has been so vague and poorly communicated that they are mostly informed about what’s happening by reading the Herald.
There was yet more confusion generated on May 16 when Mayor Brown released his 10-year long term investment proposal, in which he said: “The works of the Stadium’s Political Working Group continues towards identifying preferred options for a “national stadium”, including any options for a city centre stadium that could be built without any additional ratepayer funding.
“At this stage, Eden Park is our national stadium, and it does an excellent job, as demonstrated during the recent FIFA World Cup, and there is no proposal to change that.”
What has become clear in the last few months is that a process that should have been determined by independent evaluation of detailed and accurate presentations about what each stadium will truly cost, what consent issues each will incur and how realistic the chances are of winning private investment, is a battle purely for councillors’ hearts and minds and by extension, a prolonged sales pitch to sell Aucklanders a vision they can fall in love with, however fanciful.
A process that should have been confidential, independent and conducted in weeks rather than months and impervious to political lobbying, behind-the-scenes advocacy and personal agendas, has been hijacked by those with vested interests and strong preferences for, and allegiances with, individual bids.
For the better part of the last year, Auckland has seen a dirty war play out where speculation, supposition and partial truths have all been peddled to shape the narrative around the city’s best stadium option, and ultimately influence the council members who have votes to cast.
Eden Park, it would seem, has several distinct advantages in the bid to be crowned Auckland’s main stadium.
It already exists, it owns the land on which it currently sits, and it has consent to be redeveloped at its current capacity with a retractable roof and additional 12,000 seat stadium to be constructed on the outer oval.
It has a long and storied history and its status as the self-styled national stadium has been enhanced by the success the All Blacks have enjoyed playing there, as they have not lost a test at the ground since 1994.
Eden Park also has support from an influential group of city power brokers with political connections, and chief executive Nick Sautner recently spoke about the stadium’s transformational growth story as a guest of Auckland’s exclusive Northern Club.
The talk was not billed as a stadium debate, but Sautner, by his own request, was introduced by Auckland Deputy Mayor Desley Simpson, and while he is believed to have done so because the two have a strong professional relationship, the value of the association in front of such an influential audience would have been powerful at a time when Eden Park is strongly being touted in the media as the council’s likely preferred option.
Eden Park’s most valuable advantage, however, is that it has independently verified the cost of rescoping the stadium at $537 million and believes that the money to pay for construction could be raised from interested offshore capital investors as the brand has strong appeal outside of New Zealand.
In a contest that is being run in a cost of living crisis to Brown’s “no additional cost” edict, Eden Park’s ability to sell a zero-burden financial story is believed to be why it may already have preferred bidder status.
But Eden Park’s perceived advantages are also it’s potential weaknesses to be exploited in a dirty PR war.
Just as the park has powerful supporters, so too is there a lobby of influential Aucklanders who see it as testimony to the city’s lack of vision – a symbol of the inability to depoliticise the business of building infrastructure.
Many in Auckland see the continued existence of Eden Park as a reminder of the lost opportunity to build something new as part of the successful 2011 Rugby World Cup bid.
And that decision to redevelop for the 2011 World Cup has meant that while the park has a financial structure that is transparent and an ownership status that is simple, in practice, however, the lines are blurred.
It is a privately owned stadium, but it has public debt on its balance sheet and while it is not a council asset, it does impact the city’s strategic thinking around stadium strategy.
This much was made clear in an independent review of Auckland’s Council Controlled Organisations (CCO) that was presented behind closed doors in February 2019.
The report said that while Eden Park sat outside the control of CCOs, it still had influence on what they could and couldn’t do, and while it is privately owned, it is still a financial liability given that the council has a $48m loan outstanding, the balance of which is due in September 2029.
Eden Park is presenting a redevelopment project as a cost-neutral exercise for the ratepayer, but critics of the proposal say it is only managing to service the interest on the $48m legacy debt incurred to redevelop for the 2011 World Cup.
Critics further dispute whether, despite its much-improved financial performance in recent years, it is able to operate profitably and pay back the principal on the loan.
In late January this year, Eden Park won favourable headlines promoting a record year in which it posted an operating profit of $8.2m in the 12 months to October 2023, a $4.6 million increase over the previous year.
But what didn’t grab media attention was the park’s $21m net deficit once interest, depreciation and impairment were factored in.
Economist Cameron Bagrie was recently speaking at a conference in Queenstown, presenting a paper about infrastructure productivity performance in New Zealand.
He referenced the ongoing stadium debate as an example of where New Zealand needs to change its approach as the status quo is not delivering.
Essentially, he was questioning how, if New Zealand wants to derive more value from major capital investment projects, there could be a viable economic case to redevelop a loss-making Eden Park against a multi-purpose development in the downtown area.
Since giving his talk, Bagrie has spoken with the Herald to reveal that Saunter was in the audience and challenged some of the numbers that had been quoted.
“Nick said he wanted to clarify some of the numbers as he said they weren’t right because Eden Park made a profit.
“I shot back and said, ‘does that include depreciation?’. And he said ‘no’.”
Other sources have made similar comments about Eden Park, noting that because, unlike the waterfront options, it is not tied into wider urban-regeneration initiatives or able to sell itself as transformational to Aucklanders, that its trump card is to present itself as carrying the lowest financial risk.
Critics say promoting Eden Park as profitable is disingenuous, and so too have they questioned why private capital would be willing to invest in a stadium that does not make money when it is assessed under Generally Accepted Accounting Principles [GAAP].
Eden Park does acknowledge this and has been transparent in its “Fact not Fiction” document produced in 2019, that states: “After depreciation, Eden Park could incur a $79.4m cumulative book loss over the next 10 years. The stadium operates at a small cash surplus before depreciation.
“Eden Park estimates that over the next 10 years $65m is required for capital repairs and maintenance, not including any new development.”
Quay Park has tapped into the Zeitgeist of the process and realised how powerful compelling imagery and high-profile endorsement can be in winning public support.
In early February, an artist’s impression of the stadium was published in the Weekend Herald – one that led the paper to run an editorial under the heading: “Quay Park downtown Auckland Stadium proposal offers compelling proposition”.
The Herald’s view was that: “The long-running Auckland stadium debate has another twist – and it’s a compelling one.
“The proposal goes far beyond a sporting facility, with a downtown precinct that will feature hotels, bars, restaurants, retail shops, commercial buildings and residential apartments.
“At first glance, the stadium looks spectacular, with a radical sculptured design and a vista out to Rangitoto Island.
“It’s the kind of landmark that could become regionally and globally iconic and draw visitors to the city.”
No one would dispute that the design is not spectacular, or if that the city would have a genuinely iconic stadium if it could be built exactly as it is in the picture.
But the Herald has received independent feedback that the picture does not align with the reality.
If the stadium is built as per the imagery, the view of Rangitoto Island will be obscured by North Head and Mt Victoria on the Devonport peninsula, while the various cranes that sit in the container terminal have been removed from what would be the actual line of sight to people in the venue.
There are a litany of other issues an independent evaluation of the bid has identified: It will interfere with legislatively protected viewshafts for Auckland Museum and Parnell; the stadium will have to be built over existing railway lines and KiwiRail is understood to not be supportive; Quay Street will need to be reconfigured and Ports of Auckland would need to sell land to facilitate that; and because the stadium will be built on a concrete platform likely to be about 20m thick, it is estimated it will be close to 60m above ground level at its highest point.
In 2017, a pre-feasibility report by global consultancy firm PWC, which was commissioned by former Mayor Phil Goff, reviewed possible downtown stadium sites – which included Wynyard Point and Bledisloe Wharf – and concluded that Quay Park was the best venue for Auckland to consider developing.
In 2021, Newsroom reported that Goff did not share the report with councillors “because of sensitivities for landowners of possible sites considered by the review”.
But this strategy of tickling the public imagination with a drawing of an iconic waterfront stadium and then worrying about the fine detail later, was the strategy the Government employed in 2006 when it wanted to build on the waterfront rather than redevelop Eden Park as the 2011 Rugby World Cup showpiece venue.
The strategy worked in terms of winning the PR war and gathering popular support, but it collapsed when the initial ballpark estimate of $500m to build it turned out to be grossly underestimated, with the true number likely to have exceeded $1b.
And history is threatening to repeat as the independent evaluation of the Quay Park proposal puts the total cost of building it at $2.8b – $1.7b for the stadium, and roughly $1.1b for the location adjustments and major podium work.
This would be consistent, given the inflationary pressures of the last few years, with the 2017 PWC report, which estimated stadium construction costs at $1.3b.
PWC was clear that it viewed Quay Park as a transformational investment for the city, saying in its report: “While it is likely to have a higher cost of development, the potential of the site is considered to be the greatest of those assessed from a revenue perspective, which could assist in offsetting any higher cost”.
The current proposal includes up to four hotels - along with bars, restaurants and retail outlets, commercial office space and scope for about 2000 residential apartments - which is why consortium head Jim Doyle told the Herald in February that he’s confident the bid will attract significant private capital investment.
In doing so, he also took the opportunity to say it will be a better long term proposition than investing in Eden Park
“This will be a much cheaper option than doing nothing and eventually having to spend whatever it is - a billion or a billion and a half - on Eden Park.
“This will cost significantly less because we will put together a private-public partnership (PPP) because of the residential, commercial, hotels and everything else.
“We know for a fact - from a council and government point of view - building this will be cheaper and have much better outcomes all around - than it will be to do nothing and eventually have to write a big cheque for Eden Park.”
Publicly running down Eden Park and exaggerating the likely costs of redeveloping and maintaining it, seems to be a deliberate part of the Quay Park PR strategy, which is why the decision by New Zealand Rugby chief executive Mark Robinson to align the national body with the downtown bid has created one of the more intriguing subplots of the whole stadium debate process.
The All Blacks have won two World Cups at Eden Park and they have not been beaten there since 1994.
The Black Ferns have also won a World Cup there and Eden Park has, because of this prolonged success, become the spiritual home ground for teams in black.
Its relationship with the All Blacks is special and treasured and so too does Eden Park deliver the best commercial returns to NZR as the country’s largest stadium in the most populous city.
But as much as there is a long and storied relationship between the stadium and the All Blacks, Robinson, as chief executive of an organisation that now has private equity investment behind it and a turbo-charged commercial remit to boost income, felt it would be prudent to keep an open mind to what opportunities new stadium developments might open for NZR.
NZR has received unsolicited Auckland stadium approaches since 2020 and Robinson informed his board two years ago that he would like to informally explore possibilities with an open mind.
When the mayor opened the process to tenders last September, Robinson aligned NZR with the Quay Park bid, believing it offered a licensing opportunity with an All Blacks hotel, potential for a high-performance centre to be included, and that the association would meet the national body’s aspiration to use rugby to unite and inspire New Zealanders.
NZR’s endorsement of the Quay Park was not meant to be made public, but Herald sportswriter Michael Burgess broke the story that Robinson was part of the Quay Park team that presented the proposal to the Working Group in late December.
That there was a leak in a confidential process, enforces the bidders’ concerns that facts, figures and economic realities are playing second fiddle to personal agendas.
It is understood that while the board was aware that Robinson was assessing stadium opportunities, news that NZR was aligning with Quay Park surprised some directors who have a long association with Eden Park, and who at that stage, had not seen a detailed presentation to explain the support for a downtown bid.
It is understood that some board members are unsure whether NZR should be part of what is a highly-charged, political process, and that they believe that NZR’s support for Quay Park will inevitably be read as being non-supportive of Eden Park’s rebuild quest.
And therefore, potentially high-risk in regard to the impact it could have on the national body’s relationship with a venue, that for at least the next five years – if not much longer - will be the only stadium in Auckland with the capability of hosting All Blacks tests.
Shortly after the Herald’s December revelation, Robinson wrote to a handful of NZR life members with a strong association with Eden Park and Auckland Rugby, to clarify NZR’s position on Quay Park, to apologise that this had not been communicated in advance of the news being made public, and to invite them to discuss the matter further if they so wished.
Robinson says he can’t recall if any board members specifically requested that he do this but says many on the email list have taken up the opportunity to talk.
The NZR board received a detailed presentation about the Auckland stadium situation in February, but the Herald has been told by numerous sources that possibly as many as four directors remain uncertain and possibly non-supportive of the decision to align with Quay Park.
Various rugby stakeholders have also told the Herald they were also surprised to learn that Robinson and Doyle hosted media at NZR’s offices in late April in an off-the-record briefing.
In a statement to the Herald, NZR chair Dame Patsy Reddy, says: “The board had a high-level presentation about the proposal which we have been aware of for some time and believed was worth further exploration.
“Neither the board and chief executive have approved anything, including funding, and there is no requirement to do so.
“At present, there are no decisions to be made and we are comfortable with the level of information at this stage in what appears to be a long process.
“This is about being open to other opportunities that are worth considering for Auckland, and we believe that rugby has an important role in that.”
Of the three bids thought to be in the running, Wynyard Point has kept the lowest profile and has not looked to work any back channels to influence the voting members.
The Herald understands that the bid’s principal, financier and former NZR board director, Richard Dellabarca, deliberately steered clear of seeking high-profile endorsement, wary that it would create a perceived conflict of interest.
It is also understood that NZR made no contact with Dellabarca or anyone in the Wynyard Point team prior to committing to supporting Quay Park.
Dellabarca’s only attempts to sway the narrative were in a Linkedin response to a post by Peter Nunns, the director of economics at New Zealand Infrastructure Commission, who took part in an interview with the Herald in early January and a Newstalk ZB interview on May 21.
In it, he referenced the proposal as a “Mini Melbourne”, as the complex will include a 55,000 seat stadium with a retractable roof that can be cut down to 20,000 seats by covering the upper tiers, an 8,000 seat indoor arena, viewing opportunities for water sports on the Hauraki Gulf as well as a new mini-harbour area for other water-based events and activities.
He said he couldn’t speculate on the cost until a feasibility study had been completed but based on the price of building the new stadium on the greenfield site in Christchurch, it is believed that $1.2b is considered an accurate estimate.
Dellabarca said in his January interview that he was hopeful that most of the funding would come from private capital – a mix of large institutional Australasian funds, sovereign wealth funds, infrastructure fund managers, international pension schemes, iwi funds and real estate investors - but it was likely some public investment would also be required.
Wynyard Point believes its proximity to public transport links would enable it to process 76,000 people in an hour and cut carbon emissions and traffic congestion longer term.
Given the dirty war playing out, the mud which is being privately slung at the Wynyard Point bid includes issues it will have with toxic soil given the site was once occupied by petrochemical tanks.
The site has a long history of contamination – which has to be considered as part of a major infrastructure project which will require excavation to complete the major groundworks.
But much of the wider area around the proposed stadium site has successfully constructed new developments without ongoing issues of toxicity, and so there are recognised and effective techniques to ensure public health is not compromised.
These site-specific methods are not thought to have added significant additional expense to other construction projects in Wynyard Quarter.
There are also suggestions that the project faces the possibility of a massive cost blowout as the site will need to reclaim land to produce a large enough footprint for the stadium to sit, and it will also need to strike commercial terms with Auckland council to buy or lease the land.
But the Herald understands that there is enough space available for the proposed stadium complex to sit comfortably without the need for reclamation and that other major projects, such as Britomart, were able to strike long term leasehold agreements with the council.
Auckland has done things its own way and left many wondering now whether billions of dollars could fall mercy to political chicanery, sleight of hand presentations and effective back-channelling and lobbying.
And nine months after Wayne Brown set out on the journey for solutions to a problem that has been almost 20 years in the making, no one can be sure the city will get a stadium that best delivers its long term needs or one that reflects which bid group was able to best manipulate the process.
