Help asked for to cut stadium debt

Dunedin's stadium will need more help to reduce debt before the end of its operational life, the Dunedin City Council has been told.

At Monday’s council meeting, Cr Lee Vandervis asked what the plan was to pay back council-owned company Dunedin Venues Management Ltd (DVML) debt’s associated with Forsyth Barr Stadium.

Dunedin City Holdings Ltd chairman Tim Loan said consultants had been working with the council to develop a long-term model for the stadium, including at the end of its lifetime which was estimated to be 2060.

"We’re wanting to ensure that, at that point in time, the level of debt that council has is not in excess of the value of the land and working through what would be required in terms of debt repayment between now and then."

In brief, the answer was further equity injection from the council to reduce the debt to "what we believe is a reasonable level at the end of the asset’s life", Mr Loan said.

"We don’t know what that injection is as yet."

Mr Loan said the stadium’s estimated end-of-life date was based on a 50-year lifespan, which could be extended through "enhancement".

In its statement of intent, presented to the meeting, DVML said "contributions of equity of $2.9 million are injected as capital into the DCHL parent company".

"Equity is then injected into Dunedin Stadium Property Ltd to assist with operational, capital and debt repayment requirements."

In March, DVML’s annual rent for the stadium was cut from $2.6m to $1m per year.