The Dunedin City Council has scrapped an ''unworkable''
plan to hike rates for some businesses - but not others - to
help pay for the Forsyth Barr Stadium's events fund, deputy
mayor Chris Staynes says.
Instead, the council could consider increasing rates for all
commercial properties, as early as next year, to help pay for
broader economic development initiatives, Cr Staynes told the
Otago Daily Times yesterday.
He was speaking days after telling this week's draft budget
meeting the idea of a new targeted rate to pay for the
stadium events fund had been axed.
Cr Staynes is the chairman of the council's rates and funding
working party and the council's economic development
He raised the idea of a new targeted rate in late 2012, days
after Dunedin Venues Management Ltd revealed a $3.2 million
loss for the 2011-12 year.
Cr Staynes had suggested the new rate could be applied to
bars, restaurants, hotels and other businesses proved to be
profiting from big stadium events.
The events attraction fund, worth $400,000 a year, was later
authorised by councillors last year, but paid for initially
from general rates. Yesterday, Cr Staynes said the rates and
funding working party had scrapped the targeted rate idea
after deciding it was ''unworkable''.
That was because it had proven too difficult to accurately
identify exactly which businesses benefited from the stadium,
and which did not, he said.
While some were obvious, others were not, meaning any new
targeted rate risked being unfairly applied and open to being
''We shied away from it. It was just becoming too difficult
to determine who should be in and who should be out.
''It went in the too-hard basket.''
Cr Staynes said some bar owners had told him they would
''easily'' measure the benefits of a big stadium event, and
would be quite happy to pay more through a targeted rate.
''That's when you start to get into difficulties. Who
benefits when there's something on at the stadium?''There's a
whole lot of people you can identify easily, but there's a
whole lot of people that the people that you've identified
would say also benefit.''
And, if the council focused only on the most obvious
beneficiaries of the stadium, like bars and restaurants,
''there's so few businesses, you're not really achieving the
funding that you'd want, or you've got to put a very high
increase on them'', he said.
Existing arrangements - paying for the events fund from
general rates - still meant commercial ratepayers paid about
two-thirds of the fund each year, because of the higher rates
they already paid, he said.
However, it was possible the council could consider
increasing the tourism and economic development rate, paid by
all commercial property owners, as early as next year, he
The rate already generated about $500,000 a year, but might
need to rise to pay for enhanced city promotion efforts and
projects coming from the council's economic development
strategy, he said.
The council would first need to calculate by how much it
wanted to increase funding for economic development, and then
how that should be shared between general and commercial
ratepayers, he said.
The move would also need to be agreed by councillors, and the
public consulted, most likely through the council's annual or
long-term plan budget process, he said.
Splitting the cost of any increase between general and
commercial ratepayers recognised that the whole city
benefited from economic development, although the business
sector more so, he said.
The stadium's events fund was designed to help attract major
events, like Sir Elton John's 2011 sell-out show, which was
estimated to have pumped about $14 million into the city's
However, with council budgets tight and costs increasing, the
squeeze could eventually threaten the fund, he warned.
''It could threaten it, but I think the biggest issue is
going to actually be what comes out of the review of the
whole stadium operating model.
''That may inform us whether we leave the events attraction
fund in place, or whether we increase it or we decrease it.''