Carisbrook sold in confidential deal; destined for industrial use

The Dunedin City Council has signed a deal to sell Carisbrook, but the buyer and the price could remain under wraps for months, Mayor Dave Cull says.

He confirmed yesterday the council had signed a conditional, and confidential, agreement to sell the stadium to an unnamed buyer.

Radio New Zealand reported the buyer was Calder Stewart. The construction firm would not comment when contacted today.

The purchaser planned to develop the site for industrial use, in keeping with its industrial zoning, Mr Cull said.

However, whether the deal would cover the debt still held by the council, following its purchase of the stadium in 2009, could not be confirmed yesterday.

The buyer had not yet been identified, and was conducting due diligence before the deal went unconditional, Mr Cull said.

That could take ''weeks or months'', after which the sale price and other details would be revealed, he said.

The news comes after councillors debated the merits of the deal during a marathon three-hour session held behind closed doors at the end of the public part of Monday's full council meeting.

The public agenda listed ''property matters'' as one of two items to be considered during the meeting's non-public section.

The ODT understands two competing deals may have been considered before a decision was reached by councillors late on Monday.

Council acting chief executive Tony Avery and city property manager Robert Clark did not respond to ODT calls yesterday, and councillors were under instructions not to comment to media.

The council bought the ground - together with surrounding Burns St homes and land - for $7 million in 2009, but had since sold the homes and half the Burns St car park.

That left the stadium, and the other half of the car park, still to be sold, and about $4 million of the original $7 million cost of the purchase still to be covered.

In early November, Mr Clark confirmed he was in talks with two ''substantial'' buyers, and was finalising a conditional document with one that would require approval at a full council meeting.

He hoped to secure a sale that would more than cover the outstanding $4 million, but said price was ''always a negotiating point until the deal is completed''.

The council had originally hoped to sell the ground by October 1, 2011, to avoid accruing holding costs once the Otago Rugby Football Union quit the site then.

That had not happened, and the bill from holding costs had risen to about $200,000 by last November, Mr Clark confirmed.

Mr Cull yesterday confirmed a deal to sell the remaining half of the Burns St car park was also under negotiation.

- chris.morris@odt.co.nz

Most recognisable?

@speedfreak: Agree with you with the Railway Station but internationally, except in rugby circles, nobody would know Carisbrook even existed. Given the international press and accolades FB Stadium has much more chance of being recognised. Not to mention it took many many years for Carisbrook to create a strong reputation, and then a very short space of time to lose it when people realised it was rundown and miserable when cold.

Our new stadium is already touted as one of the best in the world with teams finding the atmosphere electric so within 100 years it will have its own history. Carisbrook doesn't have a monopoly on great sporting experiences. [abridged]

More not sensible thinking

@Kevy: If you liken this scenario with a business that goes down the toilet for financial reasons, you will see that the creditors often miss out on repayment. Same goes here. Perhaps those businesses/members etc would like to pay some more to keep this lemon afloat as the ratepayers have had enough. If the users/sponsors etc do not wish to pay, why should everybody else cough up?

I agree with Mr Oaten here. Everything being hosted at the stadium can be hosted elsewhere in the city. If the stadium and associated DCC companies continually need to be propped up by ratepayers and others, the only option is to shut the doors.

Perhaps the ORFU should be putting in a bid for Carisbrook before they find their first game of the season is at Kaikorai or one of the othe club grounds.

Not sensible thinking

@Calvin Oaten: 

Demilition is just insane. certainly not sensible thinking!

I am looking forward to watching the Warriors league team playing at the stadium, and Paul Simon. Maybe you should try the same.

Incidentally, comments about getting rid of the stadium by various ways don't mention the substantial sponsorship money that would have to be repaid along with compensation to Forsyth Barr, ODT, Mitre 10, Speight's and many other sponsors, membership fees, corporate box fees etc.

[abridged]

 

 

Fire sale

@Kris:  Almost guaranteed they/we lost on the deal. They just wanted rid of it to cover costs elsewhere. And democracy? There isn't any such thing in Dunedin. If there was, we wouldn't have the new stadium.

Why would I need to eat pie?

@Dunners: A few years back, the valuation was $1.5 Million. In today's economic mess, it would be fair to say that it would sell below valuation. Add to this, the fact that it has limited use in its present configuration, it's really not worth much more than the land value. And to top this off, the time it has taken to secure a buyer makes me think the sale price would be even less.

Please read the heading of my previous post again, Dunners. The heading clearly states "My guess is". This would insinuate that it was a guess, albeit based on the above comments. No humble pie required to be eaten if my guess is wildly incorrect as it was just a guess. Your apology, that will never be seen here, is accepted

$1.5m?

So speedfreak43, if the price turns out to be significantly more than the $1.5m are you prepared to eat some humble pie on this forum? 

No, I thought not.

To primo.  I took from the article that the price will be made public once the sale becomes unconditional.  But we can't go spoiling a good conspiracy theory can we.

I'm glad the sale appears to have happened at last.

Nothing for events fund

Steve: the DCC borrowed the money to buy Carisbrook - the money has to go to pay off that debt first, then the accumulated interest in that debt, the accumulated upkeep, and then the money we lost when the ORFU refused to pay it's promised rent.

If anything it's likely we're losing on the deal - the $3.5m price currently being mentioned in the mainstream media is less than what's still owed - the ratepayers are likely to be out hundreds of thousands of dollars, maybe over a million when you add in the above mentioned costs.

There will be no money from Carisbrook for an events fund, it should be paid by those who will financially benefit from events at the stadium, not the ratepayers.

All we want to know

Is that you didn't lose on the deal?

That is not commercially sensitive information, it is a yes or no answer.  One that we as ratepayers have the right to know, as last time I looked this was a democracy. 

Bad news

That is the worst news I have heard in all of this mess. To me Carisbrook is/was the lynch pin to solving the stadium debacle.

If council had the balls and the intellect they would have forced the ORFU to return to Carisbrook and take full responsibility of running both it and rugby without any financial input from the DCC. They would be compelled to pay a fair rent for the place or purchase it back at a discount.

Then the attention could be turned to the problem of the stadium. Closing it down would be the first step, killing off DVL and DVML accept the 'sunk costs' and holding costs until a full investigation of its potential was carried out. Selling is one option (not a good one).

Demolition is the most likely, with the site reverting back to 'industrial/commercial' thus being fully rated. If there is in fact a dire shortage of industrial land (debatable) there would soon be occupancy. It will go into the history books as the black mark of the century.

Would this, or any council bite that bullet? Never!!

Carisbrook sale

Good to see it sold, now council can pay for their proposed events fund for the new stadium rather than gouging yet more from the tourism sector. At least it's one less cost the long suffering rate payers of Dunedin will be saddled with.

Carisbrook sale

You make it sound as though the sale of the houses associated with Carisbrook netted $3m leaving only $4m to be met by the sale of Carisbrook. I think you should have reminded your readers that the sale of the Burns st houses netted only $700,000. This left the estimated value of Carisbrook to be $6.25m.

Because the ORFU owed the city $2.8m at the time of the city's purchase, the city had only to borrow $4.2m to pay for the thing and not the full purchase price of $7m. The sale of the houses brought this borrowed sum down to $3.5m but ORFU's subsequent defaulting on rent payments took that debt back up. What this sale has possibly achieved is repayment of most of the loan the city took out to buy Carisbrook in 2008 but none of the money previously lent to the ORFU and none of the money subsequently extracted by the ORFU. 

[Details of the sale are further explained in today's story here  - Ed]

My guess is

That as the gv for Carisbrook was $1.5 million, the sale price will be less or close to that. I will also guess that its fate will be that it will be filled with scrap metal.

A sad end to an iconic place, that along with the railway station, is one of the most defining structures of Dunedin . In fact, dare Ii say, the rest of the world most likely knows of the Brook moreso than anything else here, with its historic rugby history spanning 100 years.

More costs

Let's not forget that that we don't just have to cover the $200k of debt servicing on the loan but we also need to cover the cost of keeping the grounds in perfect condition for rugby up until today while it has waited to be sold. And of course since the ORFU welched never actually paid us any of the agreed rent prior to them moving to the stadium we still need to recover all the debt servicing and upkeep costs prior to that point as well.

So rather than $200k I'd estimate we're looking at 2-3 times more that amount the city is out of pocket from the Carisbrook debacle.

There is a reason they won't tell us how much it sold for!

If this council won't disclose to us the sale price then I would suggest at a guess its not because they want to be modest with their sales achievement . 

Three cheers for the DCC.....yea right 

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