A decade on, stadium scars remain

It is 10 years since a major vote in Dunedin’s Municipal Chambers gave the green light for the Forsyth Barr Stadium. The venue has been racking up successes attracting concerts recently, but the bitter debate at its inception come at both a financial and emotional cost to the city. David Loughrey speaks to those involved.

Just a decade ago, Dunedin was a fractured city.

Emotions were running at boiling point as the city council continued to push forward with a vision for a roofed stadium.

That vision had its genesis in 2004, after the New Zealand Rugby Union said an ageing Carisbrook would not get any more category A tests.

A few years later opponents were protesting in the streets, enraged by a massive ratepayer spend on a facility they saw as just a home for rugby.

Ed Sheeran at Forsyth Barr Stadium last year. Photo: Instagram
Ed Sheeran at Forsyth Barr Stadium last year. Photo: Instagram
By early 2009 the council had already spent $45million of ratepayers' money, and a final decision was still pending.

A survey by two University of Otago academics had showed 71.7% of respondents did not favour using public money to fund the stadium.

The project was over budget by $7.7million, and a report from then council chief executive Jim Harland days before a February council meeting that would either kill or rubber-stamp the project pointed to a funding shortfall of $35million.

That was in an economy that was still in the throes of the 2008 Global Financial Crisis.

But when it came time for 14 councillors and then-mayor Peter Chin to vote on February 9 after more than six hours of debate, the result was 10-5: the council committed to the project, and later that year building began.

A decade on, that decision has had some very clear benefits.

Dunedin Venues recently announced major events at the stadium had contributed $77million to the city's economy in 2018 alone.

The city has hosted everyone from Ed Sheeran to Fleetwood Mac, and Elton John is coming for his second visit.

But it has also had a severe financial effect, with debt still high after a period of council austerity.

The stadium's gruelling birth also had consequences for those involved.

Peter Chin
Peter Chin
Peter Chin

Mr Chin, now retired, says the decision cost him his job at the 2010 election, when he lost to Mayor Dave Cull.

''It was quite clear there was a big public feeling against me, or against the council, and that was played upon by those who were opposed to the stadium.

''I knew that once that decision was made, I wasn't going to see another term.''

But Mr Chin said he and the others who voted for the stadium made the right call.

''I think that the ten councillors who made the commitment were very brave.

''I think they were all very logical, they all had their various reasons for it.''

But the period of the debate was difficult.

''From the time the project was first mooted until the decision was made, it was a very divisive time.

''There were huge emotions running.''

Mr Chin was left with some bad feelings a decade on.

''I suppose one of the things that rankles with me [is] I haven't read anywhere that the current council... have actually spoken in praise of the stadium.

''I can't recall publicly where the mayor has said 'this is a wonderful facility we've got and I'm all for it'.

On concerns about the debt left after the stadium's completion, Mr Chin said it was ''always part of the whole thing, there was always a cost to the stadium''.

He scotched suggestions there was an opportunity cost.

''The ... reality is we would not have done anything with that money, because there was no other vision there for it to have been spent.

''We wouldn't have had any of the concerts we have had, the events that have happened that have added economic growth to the city.''

Dave Cull
Dave Cull
Mayor Dave Cull

Mr Cull was prominent in his opposition to the stadium, appearing at a town hall meeting in 2009 that attracted about 1800 people to show strong opposition to the proposal.

Ten years on, he said both sides of the argument, for and against the stadium, were right.

Stadium proponents extolled the economic benefits of the covered facility, while others, like himself, said the financial model was too risky, and would cause harm to the council's ability to invest in other things, and damage the city's companies.

''It turns out we were both right. It has brought enormous benefit to the city, and the financial effects have been really very challenging ...''

About a week before the stadium officially opened in 2011, the Dunedin City Holdings Ltd group of council companies made it clear it could not afford the $8million a year it was paying for council spending.

That resulted in a review of the companies' governance, and changes on the board.

The other effect was on the council.

''We entered a period of considerable austerity where we looked ahead and any non-essential capital spending was taken out ... we really cut back on a lot of things.

''Our community got the stadium, but we all paid a far stiffer price than we'd been led to believe.''

Mr Cull, who voted against the stadium, said with hindsight, he would have asked for more rigorous financial analysis and projection.

''The idea it would pay for itself, the idea it would be only $66 a year per ratepayer - clearly they were fanciful, and I said so at the time.

''In that regard I've been proved right.''

But Mr Cull said once the decision on the stadium had been made ''it would be utterly remiss of me to white-ant it''.

It was his responsibility to maximise the opportunities provided, and the venue had a positive effect on the city.

The stadium was also ''definitely a part'' of Dunedin's recent renaissance.

''People from all round the country would say ... what a fantastic facility it is.

''Dunedinites have heard that and they're rightly proud of it.''

Malcolm Farry
Malcolm Farry
Malcolm Farry

Mr Farry headed the Carisbrook Stadium Trust that developed the plans for the stadium, a voluntary role that was referred to early on as ''a poisoned chalice''.

The stadium's successes have given him cause for pleasure, but came at a cost for him.

''They were very difficult times, and I still find it hard to understand ... that attacks became personal.

''Be against the stadium, that's fine, people should have their own opinions and there were people not supporting the stadium.''

That included some of his friends, with whom he was able to have rational discussions.

''But the nastiness that there was from certain portions of the city was uncalled for.

''I don't have any bitterness, maybe I should, [but] you don't get anywhere with bitterness.''

Mr Farry, now a business consultant, said stadium opponents were not the only ones that were hard to deal with.

The trust was also confronted with a less than sympathetic New Zealand Rugby Union, which Mr Farry said was ''very reluctant to give us support''.

''I don't think they believed that Dunedin would pull it off, and that's part of it.''

At one meeting he told them: ''OK then, we won't need you, the All Blacks won't play here.

''That convinced them that I was nuts.

He also remembers the sort of flak the trust received when it talked about the multipurpose nature of the stadium.

Since then it has hosted everything from rugby tests to rodeo, drift racing, University of Otago orientation events and community film screenings.

He credited Dunedin Venues Management Ltd chief executive Terry Davies with turning the stadium into a facility that was attracting plenty of big names.

''Now everyone wants to copy us. That is the mark of success.''

While he said the stadium was not the only reason behind Dunedin's renaissance, it played a part.

''It's certainly lifted morale and made people around the country have a look at us again.''

It had made some people envious and want to copy Dunedin.

''That's the best form of flattery you can get.''

david.loughrey@odt.co.nz


THE OPPOSITION

For those who stood in opposition to the stadium, any success the venue might boast has not dimmed their anger at its cost to the city. Two people who vigorously argued against the stadium going ahead say residents were not told the truth about the proposal.

Robert Hamlin
Robert Hamlin
Robert Hamlin

Dr Hamlin, who spoke at a 2009 town hall meeting that showed the strength of public opposition to the stadium, said this week despite what proponents said, it was never going to attract commercial investment.

The cost was always going to fall to ratepayers.

The University of Otago department of marketing senior lecturer said public bodies had invested in stadiums consistently and had ''lost their shirts consistently''.

''When the stadium was finally built, the non-public money input to that stadium was essentially inconsequential; it was minute.''

Dr Hamlin said the effects of the spending were continued in the opportunity costs of the stadium, the other initiatives the money could have been spent on.

It also affected the Dunedin City Holdings Ltd (DCHL) group of companies, as they were ''milked'' to a far greater extent than was sustainable.

It wasn't long ''before they all went pop''.

''That problem is still being played out today.''

Dr Hamlin said the stadium was not responsible for ''all of DCHL's problems, or even most of them''.

''But it was a significant contributory factor.''

He said it was not possible to get an accurate idea of how the stadium was doing financially.

''We don't know, and they won't tell us, how much revenue the stadium is making.''

On the financial benefit to the city from events, Dr Hamlin said it was difficult to know how the figures released had been put together.

Any benefit had to be weighed up against the cost of keeping the stadium open, and most of that money left the city in the form of interest payments.

''I suggest if you had the data to do the calculation, the net impact of the stadium is going to be a lot smaller than what is suggested.

''In order to do that, you need the figures, and we haven't got them.''

He said the impact could be negative.

''I think honesty is the thing that's lacking.

''I think that it would be very useful for them to separate out the finances of the stadium and let people know what it costs, and what it brings in.''

Dr Hamlin said the stadium had failed in terms of the business proposal originally put to citizens.

If one asked whether the stadium was a good thing for the city ''if you don't consider the opportunity costs probably yes''.

A Stop the Stadium meeting draws a big crowd to the Dunedin Town Hall on March 29, 2009. Photo: Peter McIntosh
A Stop the Stadium meeting draws a big crowd to the Dunedin Town Hall on March 29, 2009. Photo: Peter McIntosh
But if, rather than the more than $200million spent on the stadium, $50million was spent upgrading Carisbrook and the rest was spent on other things ''we might be better off''.

''I would say that on balance we would have been better off not to build the thing.

''That does not necessarily mean the thing is in all states and all situations a bad thing.

''When it's really hitting it off and there's a big concert down there, only a churl would say that's not a good thing.

''But overall, compared to the promises that were made in 2007 to 2011, those promises have not been kept, or anything close to them, and I had no expectation they ever would be.''

Bev Butler
Bev Butler
Bev Butler

Ms Butler was the face of opposition to the stadium, as head of the Stop the Stadium group.

For her, the stadium has not been a success.

''Based on the fact that those opposed to the stadium were opposed to the public funding of the stadium and the concerns with the problems which arise from that public funding then it could not be said with any integrity that the stadium has been a success.

''Yes, it has had some good concerts but a few concerts contributes negligibly to the paying off of the debt.

''Furthermore, the rugby fraternity have contributed very little, if any, to reducing the public stadium debt.''

Ms Butler was in the public gallery when the February 9 decision was made, and said at the time the council had given ratepayers ''the fingers''.

Last week she said building the stadium had been at the expense of providing basic maintenance of public amenities like stormwater tanks and power pole replacements.

''We have all witnessed the results of this neglect through the South Dunedin floods and power poles falling over.

''Aurora has proved to be negligent by providing tens of millions in stadium subsidies whilst delaying urgent infrastructure upgrades to the tune of $1billion which has resulted in a substantial ongoing risk to injury or death.''

On the toll the debate took on those involved, she responded: ''Perhaps it may be worth focusing the story on the ongoing financial toll the stadium is taking on the pockets of Dunedin ratepayers.''

Stadium concert highlights:

November 2011: Elton John concert attracts capacity crowd.
April 2013: Paul Simon concert.
October 2015, Neil Diamond concert.
November 2015: Fleetwood Mac plays to 35,000 fans.
April 2016: Black Sabbath concert.
February 2018, Robbie Williams concert.
March 2018: Ed Sheeran plays three sell-out shows.
July 2018: Kendrick Lamar concert.

Stadium financial issues:

July 2011: Dunedin City Holdings Ltd confirms it is unable to pay $8 million annual dividend  to help pay council debt, including for the Forsyth Barr Stadium.
May 2012: Dunedin Venues Management Ltd records a $1.9 million loss for first six months of 2011/12 year.
January 2013: Council introduces a $400,000 a year events attraction fund used to offer incentives to lure more major international acts to the stadium.
November 2014: Council commits to funding stadium renewals of $10 million a year until 2025, and takes on $30 million debt from Dunedin Venues Ltd. Chief executive Sue Bidrose describes original budget as ``optimistic''.
November 2016:  Delta and Aurora, labouring under decaying power pole scandal, discovered to have paid $29.9 million in subvention payments to the stadium in the previous five years. 

Comments

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It is true ODT, most reports in the paper are about the benefits that concerts bring to the "economy", but nowhere have I seen any investigative journalism that looks at how the stadium is actually going in terms of its debt, and the DCC is certainly not publicising this information.

''I don't have any bitterness, maybe I should, [but] you don't get anywhere with bitterness.''
Of course you don't have any bitterness, who owned and sold (for a tidy profit) the land the thing sits on hmm.

The difference between knowing the value of the stadium and the cost.
“Opportunity cost” does not enter it. The money would not have been spent on any other project.
Without doubt it has been the major catalyst behind the brand “Dunedin”. People have settled here because the stadium exists. Thousands will speak about it as their “happy place”. Hundreds of thousands recognise Dunedin like they never did before.
It’s value to Dunedin is incalculable, it’s cost incredibly small for a project of its type.
The city got an absolute bargain.
I am proud to be a resident of a city that punches above its weight and is not mired in the past afraid to be innovative and courageous. The council did not give ratepayers the finger, though Butler is welcome to view it that way. Deficit thinkers are blind to the value and only see costs.
David Loughrey makes no attempt to go beyond the original protagonists. It would be an interesting and uplifting story to read what the active public of Dunedin and beyond feel about it.

Can you provide an example of a person or people who have settle here because of the existence of the stadium? Please exclude all the extra engineers who were drafted in to shore up the power grid.

Not even getting close to covering its cost of capital is a strange definition of "bargain".

Very few Dunedinites believe that the extra $270m spent on this stadium was more value than the 'fixing up' cost of Carisbrook. It costs $15m p.a. in interest paid and forgone alone, plus has added about 10% to both your DCC & ORC rates. Losses are guaranteed until demolition, and those losses will skyrocket once Christchurch gets their new stadium.

Hotel/motel owners & food providers are happy, but few others.

As a Dunedin ex-pat living in Christchurch, i find that among locals the change in attitude towards Dunedin is now much more positive. Instead of looking down at stodgy Dunedin they now see it as a go-ahead city. I know the stadium is not the sole reason for this, but it is a contributing and repetitive factor. In fact, Christchurch is about to copy you, many of the same arguments notwithstanding! And The Press now has a reporter based in Dunedin sending daily reports, a big change for us. Cheers!

Quoting from this reporting: "A decade on, that decision has had some very clear benefits.
Dunedin Venues recently announced major events at the stadium had contributed $77 million to the city's economy in 2018 alone."

It would have been better to clarify which is fact and which is opinion here. It's impossible to know the 'benefits' of the stadium without taking into account the ongoing costs to ratepayers. And Dunedin Venues may have made such an announcement but it still remains a guess on their part and quite possibly a wild one.

I closely followed the 'decision' at the time and I doubt very much that the processes used followed the requirements of the Local Government Act for transparency, inclusiveness and accountability. So the historic debate is not just about whether or not it should have been done but also about HOW it was done. And I believe DCC archives (public submissions, minutes and agendas) prove that it was pushed through against the wishes of the considerable majority of ratepayers, after virtually all deliberations were made in non-public, 'stake-holder' only meetings. The DCC's own later independent report into the processes used was critical.

Peter Chin says:
''I knew that once that decision was made, I wasn't going to see another term.''
So much for democracy and representing rate payers! He blatantly admits he wasn't!
Most people weren't anti-stadium, just anti rate payers paying for it, and still are.
My income hasn't increased, nor my expenses decreased as a result of the stadium and rates are going up yet again. How's this success? Not by any measure of a return on investment I've ever seen!

One certainty has come out of all this....When 71% of respondents said they didn't want a stadium, the DCC should have accepted this, and cut it's losses. However, the Council then decided it no longer needed the approval of it's citizens for their vision of this city.

We are now left with a council that pretends to listen to it's residents, but forges ahead with it's own agenda, regardless....

A great facility yes but could Dunedin afford it? = NO.
And when Chch get their version, Dunedin will suffer.
Bluntly, the design was a Mark 1. Dangerous. What will be its lifespan therefore?
I enjoy going there of course (I'm in Timaru) but could Dunedin have gone to a cheaper uncovered option? How often would the weather have cancelled an event there if there was no roof??

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