Carisbrook deal believed to be $7m

It almost sounds like they're going to put the stands and luxury boxes on the back of a truck and send them down to Awatea St - of course with a second stadium in town they are worth nothing other than their scrap value, less the cost of scrapping them - the land is worth by their own admission $418k - the buildings - probably less than the cost of tearing them down - according to the ORFU we're apparently paying $7m to buy $418k worth of land - what a deal. Of course the ORFU who's being given $6.6M for nothing - and apparently knows it probably isn't complaining right now - no wonder it's all being done in secret.

The following is an extract of the submission made by the ORFU to the DCC in support of the new stadium. "... It has been argued the Union will not be contributing to the cost of the new stadium. This is false. The Union, subject to satisfactory arrangements with the Carisbrook Stadium Trust, will be transferring ownership of Carisbrook to the trust. This represents a book value of $18,650,095, made up of land $418,000, buildings $13,244,098 and hospitality suites to the value of $4,987,997." Never has there been a clearer delineation of the difference in meaning between the words "will" and "shall". In the US, this is called "bait and switch".

Well said funkie. However, I'm sure someone will find a dark cloud in the silver lining of the successful recent test. In order for them to hate the success, they'd first have to admit it. I truly believe that there are a hardened group of opponents to the stadium who would continue to complain even if the council lowered their rates.

Is it just me or do recent photos of our respected Mayor Chin increasingly show a 'deer caught in the headlights' aspect? Not really a good look for a man so completely in charge, is it? I mean - he is, isn't he?

But, Funkie, the "total and utmost success of the recent rugby test" only serves to demonstrate that we don't need the new stadium. Maybe on the basis of last weekend's turnover, the owner of the small bar will be thinking of enlarging her/his premises. However, I doubt it - the "total and utmost" failure of the CST to raise private capital funding for the project demonstrates that the private sector is not that stupid.

look - you have to learn some simple economics. A test doesn't bring in millions to the region's economy if most of the people who come to the test are from within the region. All it does is move money around - sure some bar made a lot of money - but some other bar somewhere else in the region probably made less. So long as the ORFU gives precedence to locals when it sells tickets then this will continue to happen - you can't both support locals (which I think is a good thing) and bring in lots of people with money from elsewhere at the same time.

Hopefully to Lapland and please take all the other whiners with you. I bet you all hated the total and utmost success of the recent rugby test Dunedin hosted. I know of a very small bar that took in $60k in the weekend. This one event makes millions for Dunedin and the region's economy. Go Mr Chin and go the Stadium. Sooner the better.

I wonder if the ratepayers would get the same treatment if we couldn't pay our hugely increased rates bills?
Would the DCC buy up our old homes, allowing us to pay off our debts, then kindly build us all brand new homes to live in, with no charge to ourselves? I doubt it! But hey, maybe they are setting a precedent here - after all, "what's good for the goose..."

There is no doubt but that Mayor Chin and CEO Harland are leading the council in a very audacious, some would say foolhardy programme, to have a new stadium in Dunedin. The constant financial juggling is pure wizardry in it's daring.
This latest conspiracy, to in one move relieve the ORFU of it's indebtedness, while at the same time driving it into forced use of the new facility, is an exercise in mendicity worthy of Machiavelli himself.
To use the citizen's treasure in order to achieve this is wanton recklessness way beyond acceptable behaviour expected from any civic servants. Just how they can have the bare faced effrontery to do this, and at the same time expect the citizens to carry the burden of debt for decades in order to satisfy and enrich a very few is beyond understanding.

Let's just track what is going on here. The ORFU owe the City $2m and this is overdue for repayment. The ORFU also owe the BNZ something like $4m but it could be a little more. The ORFU run at a yearly loss. The DCC borrows $7m to give to the ORFU for a property that will not be used for its current purpose. The ORFU then give $2m of the borrowed money back to the DCC and $4m to the bank. They get to keep $1m so they can perhaps pay a daily hire to the DCC if they ever hire the new stadium. End result - the ratepayers are now a further $5m net down the gurgler plus the interest on this amount, and they are then faced with the cost of either demolishing the "improvements" on Carisbrook, or discounting this cost to a developer. The ORFU get rid of its liabilities, they get the interest on their windfall $1m, and they have no commitment other than an occasional daily hire on a new stadium being built for them at a cost of $222.4m and counting. Don't forget the money they will be using for this odd hire will be the same money the DCC gave them in any case. The ORFU should make Messrs Chin and Harland life members.

If Carisbrook is worth $4m then the ORFU is in big trouble because they owe $6m. I guess the best they can hope for is to find some mates who can spend other people's money and give them a sweetheart deal ....

Dscene asked an experienced property valuer for an estimate of Carisbrook's worth and was given an off-the-cuff figure of "ballpark $4 million".

The community can have input at the zoning hearings that would occur when the ORFU applied for demolition permits. No reason for the city to own it - if the city wants housing there they can zone it for housing, want industry? zone it industrial - that won't cost $9M. The land isn't that valuable because someone has placed a large stadium on top of it, and it's not economic as a stadium because someone else is building another stadium in the city - the fact is that the ORFU owns it and is in an interesting position - the value of their holdings will have been diminished by the building yet they, through their proxies, have been instrumental in creating this very situation. You can't claim they didn't know that building a stadium would result in there being another stadium in town or that their existing stadium would, as a result, be worth less. The ORFU is a business, there's no need for the government to get involved in propping them up - let the market take care of determining the value of Carisbrook, not a bunch of their friends, and have the ORFU sell it themselves. The city's taken on enough with the new stadium, there's no reason for them to buy a second one. So let the ORFU develop it themselves, or sell it to a developer do do it for them and take whatever money they can make that way - and by the way we've been waiting for them to pay their $2M debt - might be time to send in the debt collectors, maybe we can get the seats from the stands, furniture from the luxury boxes, a set of goal posts, and a few fixtures to save us some money on the new stadium before the wreckers get there.

The Dunedin city Council wants the stadium for reasons known only to themselves. In spite of all the talk about a 'multi-purpose' role for the stadium the only realistic user has always been the Otago Rugby Football Union. Most people seem to understand this, and over the past couple of months not even CST chairman Farry has bothered to talk about the stadium's multi-purpose potential anymore. The ORFU is the only genuine potential user of the stadium but they are broke, unable to perform, and unable to pull more than 6 thousand punters to home games. But they are all the DCC has to work with. If the ORFU goes under then the stadium will likely sit empty 364 days a year. It looks like a classic case of co-dependency. I worry that Dunedin ratepayers have been set up by Harland, Chin, Farry and co to subsidise an increasingly unpopular rugby club indefinately. The real question is why was the DCC so obsessed with building the stadium in the first place?

If the community are going to have the input desired into the future uses of Carisbrook then the council needs to own it. To hock it off to any would be developer would not be a prudent way to ensure that. The removal of debt from the ORFU means they have a win-win certainly. But then council in taking ownership of the old ground could also be considered a win-win if you look to the future. There's a lot of valuable land involved and its value could be enhanced considerably if the plans for its future are thought through carefully.

I see the DCC are now rugby promoters. In a response to a letter in the ODT recently, it was quite clear why the DCC were buying Carisbrook; to save their own necks. They were simply ensuring the ORFU would be the main tenant at the Awatea St edifice and thus avoid embarrassment of the ORFU saying they could not afford to move. Why are the DCC supporting rugby so strongly when other sports are being left out? Are they about to buy the Highlanders? After all they seem to be hellbent on supporting lost casues. I just wish they would stop using ratepayer money. This council seem to think their cash resources are bottomless. $224 million and counting.

Dear Editor, As a ratepayer, I would simply like to know what the logic is, that is, why does Chin think that his ratepayers want to own Carisbrook. Do we not have enough to contend with. Would you please ask him and maybe report on this aspect. Thank you.

An extra 7-9 million for the old stadium is only the beginning of the blow out. Wait and see what happens in the future. Why do you think the Council pushed the stadium through. A handful of people stand to make a lot of money whilst the rest of us pay out. Lord Robert Winston did say that New Zealand's preoccupation with sport was at the detriment of everything else. Having said all of this, ultimately the rate payers voted for this stadium so they cannot complain when there is a huge blow out and deficit in a couple of years. Some of us will be able to say 'We told you so.', for what good that will do. When it does begin to escalate, I for one, will be taking my qualifications out of Dunedin and probably New Zealand. Along with a number of Profs and medics I know.

I think that the DCC is worried that the ORFU won't use the new stadium if they don't buy it. You would have thought that they'd have got a commitment from the ORFU before they decided to build it. Now they've committed the ORFU has them over a barrel, which is why I guess it's all so secret. Tthe DCC doesn't have much choice other than to spend another $7-9M unless they want to seem like fools. On the other hand the ORFU's probably being lazy - they know that there's no market for a second stadium once a new one is built so the actual value of Carisbrook is the value of the land less the cost of tearing it down - probably somewhere close to $0. To recover any money from Carisbrook they would have to tear it down and develop the site which means they won't recover any money from it for many many years, and in fact will have to put a lot of money in before they get any back out - by getting the DCC to take on all these costs they get to recover a quick $7M in the hand with little real effort

Mr Harland has been at pains over recent days to emphasise that the DCC wishes to ensure that the ORFU are financially healthy and that the DCC has an obligation to ensure that this is so. The recently leaked price for the purchase of Carisbrook merely underlines a conversation that was had some years ago when the concept of the new stadium was raised. When asked about the current debt of $2m owed by the ORFU to the DCC, Mr Malcolm Farry was fast to assure that the "debt would be written off". And so it has been. Let's get one thing straight. The ORFU have been living beyond their means for years in producing a product that very few want. If they wish to do so, that is their business and the usual result is that the business goes to the wall. Just why the CEO of the DCC and a few Councillors believe that the ratepayers constantly need to bail out the ORFU has never been explained or justified. Mayor Chin, true to form, bumbles his way in saying that he can't comment for a variety of reasons, none of which have any rationality. But the cost of purchase of Carisbrook must be counted as part of this project - but watch Messrs Harland and Chin put it to another budget or hide it in the accounts. No problem in counting the revenue that will derive from the ORFU use of the ground - rest assured it will be minimal and will certainly not reflect a business return on investment. This is our money Mr Harland and Mr Chin - not yours - and it is more than time that you started as acting as servants of the ratepayers and not masters of them.

If there is a new stadium being built, then why does the council need to buy the existing one? Surely the ORFU should just hock it off, pay their debts and rent the new stadium? Could someone please remind me why the council is taking this step? I'm sure there is a logical and financially prudent reason... or maybe not, logic doesn't seem to sit well with this lot.

Now we own two stadiums ..... how, umm, useful If the $2M is included in the $7M figure (ie it's really $9M less $2M) then the current $217.6M stadium cost will have gone up to $226.6M, otherwise it's $224.6M. We'll have to wait for the city to release the details. We're currently $28.5M over the supposed $198M maximum price that our rates increase estimate was made of - that almost $30M isn't in the council's long term plan, where's it going to come from?