Economic Development Minister Steven Joyce today announced that SkyCity had agreed not to pursue a financial contribution from the Government and would instead amend its design to ensure the facility can be completed without financial input from the Crown.
"I welcome SkyCity's agreement with the Government's approach," Mr Joyce said.
"This clears the path for the project to continue.
"I have repeatedly stated since December that our least preferred option is for the Government to contribute funding for the project.
"I am pleased to confirm that will be the case."
SkyCity submitted a preliminary design for the New Zealand International Convention Centre (NZICC) in October 2013 for approval by the Crown.
However, the total construction cost exceeded the costs set out in the original agreement.
"The Crown has also indicated today that it may be prepared to accept slightly smaller NZICC if that is required to meet the agreed total construction cost," Mr Joyce said.
"SkyCity will now work on a revised preliminary design in the coming weeks and will submit it on a date that will be agreed by both parties.
"The Government is pleased to be moving forward with this project which will create 800 permanent new jobs, an increase in GDP of $49 million and an important public facility for Auckland."
SkyCity and the Government agreed to a deal in July 2013 for the casino operator to spend $402 million to build and operate the convention centre in exchange for legislation allowing the company to operate additional gambling tables and machines and extending its gambling licence to 2040.
The law was changed in late 2013, but in December last year, SkyCity managing director Nigel Morrison said cost overruns and "design improvements" had seen the bill blow out to between $470 million and $530 million.
Mr Morrison told financial analysts SkyCity was unwilling to contribute more than $10 million to the funding gap without compensation for his shareholders, and floated the possibility of financial support from central or local government.
Earlier this month Mr Key told reporters he could not rule out taxpayer money being used to meet some of the cost overrun, but negotiations were ongoing and nothing had been taken off the table.
Mr Key had said a convention centre built for the initial figure could be an eyesore, but "the Government's preferred position is that SkyCity completes the convention centre for $402 million".
SkyCity chief executive Nigel Morrison said the company respected and accepted the Crown's decision.
"Accordingly, we have agreed to review the design for the NZICC so that the expected total project cost, which SkyCity will be totally responsible for, will be more in the vicinity of SkyCity's $402 million commitment, as set out in the NZICC agreement."
Both SkyCity and the Crown had agreed the date for approval of the design would need to be extended, Mr Morrison said.
"This decision gives SkyCity the clarity needed to move forward with the development of this exciting project.
"We remain committed to delivering a landmark convention centre for Auckland and New Zealand."
