Business owners in Dunedin have been floored by the idea
of a new targeted rate for the hospitality sector to help
rescue Forsyth Barr Stadium from its financial hole.
Those contacted said the suggestion came as a surprise, and
would be unfair if other businesses that benefited from big
stadium events - such as taxi companies - were not also
They said Dunedin City Council appeared to be scrambling to
cover possible ongoing losses from the stadium, and Otago
Chamber of Commerce president Peter McIntyre urged the
council to "tread very carefully".
The idea of increasing the council's economic development
targeted rate for hospitality businesses was raised by
Dunedin deputy mayor Chris Staynes on Wednesday, as the
council grappled with a $3.2 million loss by Dunedin Venues
Management Ltd, the company running the stadium.
Cr Staynes believed increasing the rate - or creating a new
one - could help pay for an events fund to lure big concerts
and other events to the stadium, something DVML staff and
board members said was needed.
The fund would be good for DVML but also for the city's
hospitality sector, Cr Staynes believed, and Dunedin Mayor
Dave Cull on Wednesday confirmed the idea would be considered
as part of the stadium review.
However, Terrace Bar owner John MacDonald said the idea was
"bizarre" and would amount to "a tax on being busy".
The council appeared to think bar owners were all making huge
profits, when margins were tight and some were struggling, he
There was "no doubt" bar owners had busy nights when the
stadium was full, but also faced extra costs, as more staff
were needed and premises were extended, he said.
Big nights were also followed by "extremely" quiet periods,
as those who saved up for a big event stayed in afterwards,
He would not rule out supporting the idea, but believed more
information was needed about how it would be applied, whether
other businesses would be included and how any events fund
would be used.
Otago Motel Association president Richard Hanning - the owner
of 555 on Bayview - said other businesses, the city's economy
and even the council were already benefiting indirectly from
"The stadium is a huge asset to the district as a whole, not
just to the accommodation sector.
"I think Mr Cull needs to understand that."
He said the council - and the city - needed to be patient
while DVML's operation settled down before profits were
"It's not going to happen overnight . . . I think they
[council] are just looking at a quick fix."
He would not support a targeted rate focused only on the
hospitality sector, as spreading it around other businesses
benefiting from the stadium would be fairer and raise more
"It's common sense."
Hospitality Association of New Zealand Otago branch president
Mark Scully wanted to hear more about it, but questioned how
it could be implemented.
If bars were busy on the night of a big event, should they be
the only ones to pay a targeted rate, or should their
suppliers - who were also busier - also have to pay more, he
"I can understand the basic philosophy behind it, which is
those who gain should be paying.
"It's easy to go to the low-hanging fruit, which is bars and
restaurants and hotels . . . but lots of people benefit from
Mr McIntyre said he was yet to hear from chamber members, but
believed any new targeted rate would have to be considered
"very, very carefully".
"The council needs to go back and look at the way that they
budget for the stadium. To identify key bar owners and
hoteliers could be a little bit dangerous.
"We do want a vibrant city and we do want our bar owners and
accommodation sector to be very strong."
Dunedin Restaurant Association president Steve Richardson
said restaurants did not get any advantage out of the stadium
as any patrons were at night-time events, not dining.