The results of the Dunedin City Council's review of the Forsyth Barr Stadium are concerning, even if they come as no real surprise.
The review was instigated by chief executive Dr Sue Bidrose in January after she said it had become increasingly obvious the original model for running the stadium - which was set up to suggest the stadium could pay its own way - was ''fundamentally optimistic''.
Dunedin Venues Management Ltd (DVML), which runs the venue, was then forecasting losses of $3.79 million over three years. She said it made no sense to have to ''come to [council] every year cap in hand to ask for extra money to try and make the current model work'' and ''we need to come up with a solution for you, for all of us, once and for all''.
She is right. As this newspaper has repeatedly said, the stadium was oversold to ratepayers. The original cost blowouts and continued negative results over time have made it difficult for even the most ardent stadium supporters to remain convinced of its potential profitability.
The facility still divides the community, and some detractors continue to suggest it should be mothballed or even demolished.
The results of the review, released last week, were unsurprisingly met with frustration. The review was undertaken by a council-appointed panel comprising Dr Bidrose and council group chief financial officer Grant McKenzie, Dunedin City Holdings Ltd chairman Graham Crombie, DVML and Dunedin Venues Ltd chairman Sir John Hansen, and DVML chief executive Terry Davies.
The panel recommended the stadium remain open. It cited its revenue stream and the estimated $60 million in visitor spending it attracted, and the fact there would still be more than $133 million in stadium-related debt to be repaid, which would require further increasing the annual ratepayer contribution to repay the debt on existing terms.
However, the review clearly stated significant changes were required for the stadium to continue operating. Its recommended changes would require another $1.81 million a year from ratepayers - to $11.65 million annually and a total of almost $20 million over the next decade.
It found $10 million of renewals funding would be required over the next decade, and a further $41 million the following decade.
Recommendations include bringing both DVML and stadium owner DVL under the umbrella of the council's holdings company DCHL; halving the $4 million rent paid each year by DVML to DVL; and transferring $30 million of stadium-related debt from DVL to the council's books (which would be offset by ending the council's annual subsidy to DVML of $1.44 million). The review stated this would turn DVML's forecast losses into small profits of $37,000 a year from 2015-16.
Councillors will debate the proposed changes at today's full council meeting. If supported, they will be part of the public consultation on next year's long-term plan.
It is no doubt the increased costs to ratepayers are yet another bitter pill to swallow. It can also be argued some of the recommendations amount to little more than robbing Peter to pay Paul. However, it is blindingly obvious the current model was destined to fail.
The reality is stark: the stadium is here and demolition is clearly a ridiculous idea, so long-term solutions must be found to stop what has become a debilitating deja vu every year.
Ratepayers should have confidence in Dr Bidrose, who has shown real commitment to continue the positive changes, financial direction and improved transparency of her predecessor, Paul Orders, despite the difficulties she has inherited, including the stadium burden and recent Citifleet fraud allegations.
A large dose of realism is required, and no small measure of unity to secure the stadium's financial footing and to ensure no more nasty surprises for ratepayers.
The review has offered more transparency than has been the case previously. That can only be a good thing. With that surely comes a universal realisation of the need to make radical changes like that proposed.
The annual budget scramble, squabbling and scaremongering is alienating ratepayers, promoters and potential civic and business leaders alike, and stymieing progress for the stadium and community.
