There is a large, uninvited and totally uneconomic elephant in the Christchurch stadium room at present.
For at least 10 years there has been a misconception in Christchurch that, somehow, the city council has had a vital role to play in the development and construction of the multi-use arena Te Kaha.
The council’s performance so far has been tainted by procrastination, lack of leadership, lack of vision and massive cost blowouts. The council-drafted, inward-looking, 2019 business case immodestly, and hopelessly optimistically, concluded the council was best placed to take accountability for the project and that the arena would be delivered on time and on budget. If the consequences of failed delivery of this project were not so serious, the groundless confidence of the council in its own ability would be laughable. A review of the council’s performance over the town hall budget blowouts should have been enough cause for grave ratepayer concern.
A scroll through the history of Lancaster Park tells an entirely negative tale of recent council involvement in the city’s key sports venue. Lancaster Park traces its origins back to 1880 with the formation of the Canterbury Cricket and Athletic Sports Company Ltd.
By 1919 Lancaster Park Ltd was insolvent. The Canterbury Commercial Travellers and Warehousemen’s Association (CT Association) came to the rescue, raising £12,204 to pay off an unaffordable mortgage of £8000. The enterprising group raised funds by multiple means, including three Mortgage Extinction Fund Art Union Raffles. In November 1919 the title to Lancaster Park was vested in His Majesty the King by the Victory Park Act 1919. City council involvement was limited to the occasional presence of the mayor at board meetings.
The Victory Park Board (VPB) operated Lancaster Park for 80 years, from 1919 until late 1999. Legal ownership was only finally transferred to the council with the passing of the Christchurch City Council (Lancaster Park) Vesting Act in 2008. The scale of development at the park had necessitated the ownership change from the VPB. For those 80 years the VPB had managed to deliver a full cricket and rugby programme catering for crowds of up to 70,000. The park had hosted athletics and the Davis Cup. The concerts were not bad either — U2, Tina Turner, Dire Straits, Billy Joel, Meatloaf, Bon Jovi and Pearl Jam. A group of unpaid, competent and dedicated board members performed admirably for the city.
In the relatively brief period of legal ownership of the park by the council from 2008 through to the 2011 earthquakes, the council overlooked one key issue that any responsible property owner should have prioritised — the insurance of the park assets for full replacement value. Lancaster Park was under-insured with fringe insurer Civic Assurance by its new owner, the council, for an estimated $143million, well below replacement value. The inadequate $635million global settlement agreed to by the council post-earthquake prevented the city from replacing Lancaster Park utilising insurance proceeds. The amount allocated to the park in the settlement figure is unclear. Those who made the key insurance decisions within the council are unable to be identified. What is known, courtesy of a 2012 Auditor-general’s report, is that the chief executive of the council, Tony Marryatt, was also a director of Civic Assurance when the change of insurer from NZI and QBE to Civic was made in 2009.
In 2016 the Multi-Purpose Arena Trust (MPA) was formed to provide a sector-wide advisory group to assist in achieving an economic and effective stadium build. MPA trustees included representatives from New Zealand Rugby (including the present NZR chairman), the Crusaders, Ngai Tahu Property, hospitality and the Olympic Committee. The group could also contribute architectural and commercial property expertise. The group was consulted on who should run the project. The council reference group included MPA and gave repeated advice to look at different models of financing. It also suggested that the council should urgently consult the surrounding local authorities (the Waimakariri District and Selwyn District Councils). It seemed obvious, to all apart from the council, the city’s neighbours should be consulted from the outset.
His message has been ignored. The present design sits in the middle of a large site with little thought given to surrounding the stadium with economic activity. The city is clearly short of major hotels. (Christchurch has only one large hotel approaching five-star quality — the Crowne Plaza — a converted office building.)
The council project team was also provided by MPA with a fully documented and specific model of a successful PPP (public-private partnership) for Perth’s Optus Stadium. The internally constructed team did not seem to understand the concept of the possibility of private investment in the project. In a similar timeframe to Christchurch, the decision was made in 2011 to rebuild Perth stadium and have it ready for the 2018 AFL season. Construction started in Perth in 2014 and the stadium now seats 60,000 spectators (shortly to be extended to 70,000). An equity investor and asset management group were involved in securing a 25-year operating model. It was delivered on time. Perth has got it very right; conversely, Christchurch has got it hopelessly wrong
Hagley Oval was provided as a further example of a successfully completed anchor project to the council. The Canterbury Cricket Trust has overseen the construction, development and maturation of Hagley Oval. The venue was ready for international action in 2015, entirely driven by a private enterprise-based board. The council did provide support, but wisely stayed in the background. The 2015 Cricket World Cup has been followed at this iconic venue by the equally successful 2022 ICC Women’s Cricket World Cup.
Where does the Government sit in all this? It has probably more than played its part by funding the land purchase and then committing $220million to the project. The minister tasked with the project, Dr Megan Woods, has been supportive in assisting the stadium project, but undoubtedly erred in trusting the council, and its business case, to deliver the stadium. Having said that, $220million is quite some commitment and should not be sneezed at.
And what of the role of the outgoing mayor, Lianne Dalziel? In her recent not-my-fault first-person piece in the Otago Daily Times, the mayor talks about a perfect storm and not leaving any hidden surprises for the next council. Granted, she did not under-insure Lancaster Park. However, history may judge her as the mayor who was in power from 2013 during a crucial nine-year post-earthquake period and achieved virtually nothing in relation to the progression and of the stadium. The rumoured insurance proceeds for Lancaster Park were $135million and should have been set aside for inclusion in the stadium funding package.
The Crusaders recently submitted that they, and the city, had been promised a stadium and the council needed to deliver on promises made without delay — fair enough. New Zealand Rugby must be wondering if it will ever be able to schedule a major test match in the city again. Thanks to the council, Cantabrians will inevitably miss out on at least 15 years of top-class sports events and concerts. The sporting capital of New Zealand has been badly let down.
Where to from here? The project should not be scrapped. The latest public consultation exercise is a further example of chronic council indecision and demonstrates a lack of leadership and inspiration from those at the top. The Christchurch City Council should have been handed an overdue red card to take it out of the stadium’s development some years ago. However, so much time has been wasted now that the only option left seems to be to push on and complete this stalled and imperfect project.
For a decade too long, the city has missed out on the substantial direct and indirect financial benefits that flow from major rugby tests and concerts — Ed Sheeran’s events in Dunedin were worth $34million to that city.
Potential key investors in the central city remain uncommitted, as they observe the council’s broken promises to build the stadium.
The point of no return has been passed. The relevant question for the councillors to answer on July 14 is — if we vote against finishing this key project, how much will that cost the city in the future?.
If you build it, they will come.
-- Geoff Saunders established Christchurch law firm Saunders Robinson in 2001 with Lee Robinson. The firm has provided legal and strategic advice to local and national sports organisations for more than 20 years. Mr Saunders also founded the Multi-Purpose Arena Trust in 2014 and was part of the council reference group. He retired from legal practice in 2018.
