Review as council seeks stadium solution

Forsyth Barr Stadium.
Forsyth Barr Stadium.
The Dunedin City Council is to do a fundamental review of the operating and funding models of the Forsyth Barr Stadium, which continues to be unable to meet its budget.

Chief Executive Dr Sue Bidrose informed the council this morning that she had instigated the review as it became increasingly obvious the original model for running the stadium, which was set up to suggest the stadium could pay its own way, was "fundamentally optimistic".

She told councillors considering the 2014-15 budget, that staff had had to come to them cap in hand for the past two years asking for extra money to make the existing funding model work, but now it was clear the stadium was not able to meet its budget and that could not continue.

There needed to be a solution to the situation "once and for all", she said.

She did not expressly say how much the stadium was projected to lose this year or next.

Ratepayers already contribute $9.125 million a year to cover stadium costs.

The review would encompass the entire operating model, from the company operating structure to the way the stadium was run on the ground and would be done in conjunction with the boards of the stadium and its holding company.

The review would be presented to council mid-year.

* Read the full story in tomorrow's Otago Daily Times

Agree

Yep, I'm with you. Especially the last line or two. Thinking seems to be unfashionable. Throwing off at others opinions seems to be the order of the day.

Stadium

There is only one option that will give the hapless ratepayer any relief. The Stadium must be closed fortwith, so that these obscene operating costs can be stopped. "But it has cost us millions - we can't possibly close it" I hear you say. Sorry but that is one of life's realities. Let's stand in the shoes of a random punter (you or me) who make a major error of judgement. You have been coerced into buying a motor vehicle - based on the salesman's spin that it will do 30 miles to a gallon of fuel.

But you find that you have been duped and it will travel only one mile per gallon of fuel. You're stuffed - you're only on a knockabout wage and simply cannot fund the operating cost of this vehicle that you've been duped into buying. You've got a 'dog that won't hunt' on your hands (read Stadium) You can't get your money back and you'll have to continue service the debt on this 'dog' Well sorry guys - the only form of relief available is to stop driving the car. It doesn't help the fact that you're still servicing the debt on the 'dog that won't hunt' but at least you have the choice of stopping the rampant operating costs. Think about it. Charles Darwin once said "one of the hardest thing we do is 'think' - may be that is why so few people engage in the practice" I rest my case!

apologies

There is no one to be blamed because as Oaten says its all the upper echelon of this city that were charmed by the vision of a covered rugby pitch.

We must move on - there are no heads to chop off because there are no laws governing self interest.  The 1% sold the idea and the rest of the governing institutes fell in line.  

I wonder if the instigators of this stadium build aren't smarter than we all think - knowing that it would fail they would come in under the guise of some consortium and buy the stadium at half price e.g. the university or a rugby club?

Hopefully this review will include members of the community who know how to procure talent in this global environment and help restructure the model.

I also think a public apology needs to be given to butcher who laboured so hard for so long to bring the truth to us.

It's not

The Regent raises a lot of its own money and is an historic asset. The Stadium is a monstrosity that gobbles more and more in interest for just building the thing let alone maintenance. It appeals to a few and is limited in its application, where as a theatre gets to be all kinds of things from book sale to venue for awards.

Pointing out public nudity

Albert: I've never understood this whole "if you don't love the rugby stadium you must leave Dunedin" refrain we've continually heard here from rugby boosters - it's very much like trying to say "if we chase all the small boys out of town the emperor won't be naked" - even if we all had left the rugby stadium's financial state, and the city's mountain of debt wouldn't be any better

Stadium costs to ratepayers

Not only do we pay an annual stadium charge but also bloated council charges for various services and the devious local council law amendments that capture more fees for the required consents.

A start

It's good to see at least Dr Sue Bidrose is trying to allow us "ordinary citizens" to get to see just how unimpressive our "investment" really is.

I could say we told you this is the way it would be but the joke is still on us ratepayers as we ratepayers still have to pay for this debacle.

I've asked before, when are we going to see some fingers pointed at those who cause this mess? To see some blame actually dished out and finally see some heads roll.

Sadly we know the end result will be more rate payer $$ to prop it up and no one will be ever held responsible and brought to account.

Ist step

So, CEO Sue Bidrose is to instigate a review of the operating and funding models of the Forsyth Barr Stadium. This is a matter which should rightfully have been conducted before the Mayor and Council of the time, gave the 'green tick of approval' to proceed.

That is the tragic indictment of the whole sorry saga. The list of conflicted persons in this momentous decision are legend, ranging from mayor and councillors, council executive staff, ORFU personel, CST appointed members, Regional Councillors, Otago Community Trust management, lawyers and accountants, professional consultants, financial advisors, government servants and politicians, Uncle Tom Cobbly and all.

Without exception they all ignored, all and any basic fundamentals of fiscal prudence and obligations to protect the citizens and rate payers'  'treasure'. This all against the earnest entreaties of legions of very concerned and responsible citizens.

Ms Bidrose says rate payers already contribute $9.125million per year to cover Stadium costs. I would respecfully suggest that that is probably the biggest understatement so far this year. That sum just is the tip of the iceberg.

Try debt servicing of $144million in interest, the repayment of that debt over the 18 years claimed. The loss of opportunity of the $5.25ml of DCHL's dividend being diverted for that purpose. The loss of $5.5ml in the ORFU/Carisbrook loans, purchase and loss on sale. The $15ml over budget purchase of the land for the Stafium, the loss of $3.5ml in rates revenue per year from that land. The loss to other charities from the $7.5ml the Otago Community Trust contributed. The increase in rates to the ORC to cover and regain its $37.5ml contribution. DVML and DVL's accumulative annual losses of $millions. The mentioned $8.5ml or thereabouts for the SH88 diversion. The list goes on , but I think we get the message.

Will there be any holding to account for the obvious mishandling of this so predictably sorry saga? I await with interest to see. But I won't be holding my breath.

The Brigade was right

Speedfreak, you were and others were told to leave town. E Kerr and her 'coterie' told to do the same. Good you all stayed on, 'anti brigade'.

Well done Dr Bidrose

Finally! someone quashes the myth that the FSB stadium is any more than huge financial impost on Dunedin rate payers. One wonders why we had to go all these years listening to spin, creative accounting, and being told those who oppose the stadium were haters and fools. There has been no major concert since Aerosmith last April's Anzac weekend. It is a purpose built rugby stadium in a city too far away to attract the big stadium acts on a regular basis. The ITM Cup makes no money, and the soon to be privately owned Highlanders franchise could choose to base themselves somewhere else unless they can play at FSB for an acceptable rental.

The Otago Rugby Union have not paid back one cent of the rate payer money they recieved, why on earth wasn't there an agreement that they should pay the money once they got back on their feet? The associated Carisbrook debacle lost even more millions of rate payer funds. Dunedin already has the poorest economic growth of any main centre in the country and yet there is no end in sight to the millions which will continue to be squandered on this folly. There has been no accountability or any apology to rate payers, it is simply an example of financial vandalism, arrogance, self interest, and stupidity on a grand scale.

Rugby's responsibility

Tammy: this is a rugby stadium, it was forced on us by the local rugby community as a replacement for Carisbrook which they were no longer prepared to support - it really does behoove them to follow up on the commitment we made to them and for them to pay their way, to make their stadium profitable.

It's simple not reasonable for the rugby fans to expect to be paying ticket prices similar to what they were paying at a money losing run down Carisbrook, of course tickets in a brand spanking new stadium costs should cost a whole lot more, if they wanted cheaper tickets they would have kept Carisbrook, but sadly rugby fans seem to think that somehow they are entitled to ongoing ratepayer subsidises of their rugby.

A large part of the problem is the way that rugby pays for the stadium, contracts are negotiated by the NZRU who skim money off the gross before the venue's costs are paid. Until the council grows a pair and negotiates a contract that guarantees the stadium's profitability before rugby get their cut.

Frankly if the rugby community doesn't voluntarily stump up and do the right thing we should close it until they do.

So true

And we should encourage council to not get involved with more pie in the sky economic fantasies......like oil drilling. The cover story is never true to the reality.

Stating the obvious

It only takes a woman.

Thank you Dr Sue Bidrose

Stadium

On a visit home to Dunedin last year I was inundated with comment regarding the stadium. Looking at it dispassionately from a distance it really was an incredible blunder building the thing given Dunedin's population, the local economy and discretionary spend, event attendance culture, and myriad other things......and those things are not likely to change. One opponent suggested to me Dunedin should just cut its losses and bulldoze it down...which sounds irrational...but is it?

Bert and Ernie learnt long ago on Sesame Street that no matter what you do a square peg will not fit in a round hole and this square peg will year after year keep costing Dunedin a fortune. The suggestion that rugby and the other few users should pull in the slack is simply not an option given the factors I've mentioned....So, folks, rev up the D8's and have at it....there may even be a chance to pull in a bit of the lost revenue by charging admission to watch...I'm sure it would be well supported.

Have the stadium pay its way

Have Mr Farry, Mr Chin, pro stadium business associates, pro stadium ex councillors, all the silent majority supporters buy their stadium from our city.

They have the business model and the experience to run this stadium at a profit.

Under the managemrnt of such people much-needed jobs and opportunities would simply flow turning the project into a great success.

Strange all such stadium support seems to be suddenly very silent.

Vey good to see the new council CEO is indeed carrying on were the last fellow left off.

Something one can say with much relief.

 

Same logic to all

So is the Regent going to start charging ticket prices that are appropriate to the cost of running the theatre?

Fundamentally optimistic

Finally, someone at the council has the guts to tell us what we have always known. Maybe the naysayers will receive some vindication of their concerns.

Not much further to add as the previous comments pretty much sum it up.

Hmmm. Is it too early for a "We told you so"?

Rearranging deckchairs

As long as any proposed solution doesn't include shifting costs such as stadium rental away from DVML and then pretending that the situation is any less dire than it actually is. All costs to the city need to remain on the balance sheet where they can be clearly seen. Anything else could only be viewed as a deliberate ploy to obscure the true situation.

Director non-accountability

A good management move by Dr. Bidrose. I do hope she also looks at Director accountability. What do we get in return for directors payments of over $100,000 per year over the past two years? [abridged]

Not convinced

Sue Bidrose, as a member of the DCC's Executive Management Team, has been closely involved over the years with the DCC Stadium. It is not credible for her to claim that it "became
increasingly obvious" that the stadium could not pay
its own way, as if she only recently discovered this. To confirm this, it has been clear to me, and others, that the DCC have over that time spent a great deal of effort trying to keep the financial details of the stadium secret, and I am not yet convinced that anything has changed.

Numerous official information requests and letters to the editor about the ongoing cost to the city of their stadium have always received evasive replies from the DCC. It is hard to believe that they have turned over a new leaf. Remember that there has been a number of secret (internal) reports and publicly released reports already, so DCC staff can not claim to have been uninformed. If they are now saying that they are going to be open and honest with the Councilors and the public, then that would be worth waiting for. Ms Bidrose's unwillingness to disclose the projected stadium losses gives me no confidence that the review will be useful.

In general the DCC only calls for a review or investigation when it has made a decision and needs to media-manage its implementation. Currently, for the two stadium companies, some very useful financial information must be released each year, by law. I think that the DCC intends to change the ownership structure of the two companies as a way to not have to release this embarrassing financial information.

Two solutions

There are really only two solutions, aren't there:

1. Charge the users of the stadium the real costs of using it, that means more expensive rugby tickets, far more than was being paid for tickets at the money losing Carisbrook, or

2. Shut it down.

 

Stadium Debt

Good to see someone has finally woken up and worked out what the financial problems stem from, the hideous concrete monsrosity, that joke of a stadium. [abridged]

Congratulations Dr Bidrose

It now seems very clear that the good work done by Paul Orders will be finalised by Dr Bidrose.

I have no doubts whatsoever that Malcolm Farry - who spearheaded this gigantic mess - will seek to meet Dr Bidrose to spell out just how he and his private Carisbrook Stadium Trust intended to build and operate the rugby stadium at a profit. It was the CST figures - which many in the City disputed over many years - that convinced the "stadium Councillors" to proceed when it was plain to everyone else except Mr Farry's trust and these Councillors, that it could not be built for $188m, nor could it ever run at a profit. Less than 20 people in Dunedin caused this thing to happen and maybe these 20 still hold the key to making the thing pay.

I really look forward to Mr Farry's solutions to the gigantic ongoing mess that is the stadium which I'm sure that the ODT will report in the next few days. Or will he remain silent?

Good on Dr Bidrose

Where is Mr Farry now? There is nothing on the horizon concertwise other than look-a-like, sound-a-like Abba tribute group. A square box won't cut the mustard as a concert venue soundwise. It would be interesting to see how many season tickets the Highlanders have sold after ramping up the $170 tickets to $225 for this season changing "gold" tickets to "platinum".

Chocolate fish for Dr Bidrose

I admit I was skeptical about the appointment of Dr Bidrose, would she backslide from Paul Orders' rigorous approach to something close to the comfy familiarity of the old ways?  I was so wrong! The woman has guts, she is treating the money-gobbling Fubar Stadium to a long overdue beady stare which is a great start, and doesn't look like she's the one who is going to blink first, which is the much-needed follow up.  Someone had to have enough contact with reality to make a decision on how much longer this dead duck should be on expensive  life support and it looks like this Someone is here.  Go on like this, Dr Bidrose, and you'll be awarded enough chocolate fish to populate a chocolate aquarium!

It's not like they weren't warned

I would like for the DCC, and founders of the Stadium to apologise to Bev Butler, Calvin Oaten, Rob Hamlin, Elizabeth Kerr and the many others who pointed out in great detail, the financial train wreck that would ensue with the building and running of this venue. It is just an overpriced, empty professional rugby ground, while other venues in Dunedin such as the Edgar Centre and Moana Pool are full to bursting with all types of ratepayers using the recreation facilities and are underfunded.

The shuffling of costs and stadium debt into other companies will never hide the magnitude of the problem. $66 per ratepayer per year was a joke - more like $220 at least. It is unfortunately unaffordable for a town the size of Dunedin. The running costs on top of the debt are crippling. Perhaps gift it to the University? [abridged]

Admission of reality at last

Congratuations to Dr Bidrose for having the courage to point her finger firmly at the biggest and most obvious elephant in the room. All the very best in taking a positive first step in rescuing the city from a decade of hopelessly over-optimistic thinking and a kind of 'terrace is half full' sentimentality. 

The solution

1. Close down DVML.

2. Sell off the stadium to whoever will take it.

3. Job done!

ODT/directory - Local Businesses

CompanyLocationBusiness Type
Tasty Tours New ZealandDunedinRecreational Activities
Holley's BackpackersWanakaBackpackers
Autotrade CentreDunedinCar Sales
The SavoyDunedinCatering