Te Kuiti school stadium project delayed as review backs ministry concerns

6:43 pm on 25 March 2021

A steering group of key stakeholders is to be formed to alleviate concerns the Ministry of Education has unexpectedly come back with about the Te Kuiti sports stadium project, Sport New Zealand spaces and places consultant Jamie Delich says.

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Photo: New Zealand.com

The ministry's 11th-hour concerns about the six-year, $7.5 million stadium project's 'financial sustainability' were raised in June last year, just as the project driver, the Game On Charitable Trust, was looking at the procurement process for a larger replacement for the current Te Kuiti High School gym.

In spite of the concerns expressed about the business case, Delich said he was under the impression the ministry was supportive all the way along.

The trust approached Sport NZ which brought in consultant Steve Bramley from FGL Funding to have an independent look.

He reviewed the business case and talked with all the parties involved - the council, the ministry, the Lotteries Commission and the Provincial Growth Fund.

"He acknowledged some of the MoE concerns as valid," Delich said.

"We thought it was pretty much on track. [But] for whatever reason they held these concerns. They raised them with the trust, the trust came to SNZ for advice.

"I mean it's fair to say all the parties want this to happen. There's just some nervousness in some quarters that while the capital is there for an asset that's going to last another 50 years, the impact on the ratepayers and the impact on the ministry, on the board of trustees - can it be sustainable over that time?"

The revenue expectations in years one and two of the stadium were thought to be a little optimistic, Delich said.

"In these situations, sustainability's built over the first two to three years. The trust was going to operate it, but they didn't have any buffer in the bank, to build that resilience in the start-up phase.

"Having a bit of a fighting fund at the start was a gap Steve [Bramley] observed needed to be resolved.

"The funders recognised that and are looking to support whoever the operator is in the first instance."

While the Game On Charitable Trust's skills are described as fairly solid around fundraising, the report observed a different set of skills may be required for the operating phase.

"And the trust acknowledged that they are happy to talk about that."

There were also some structural issues around ownership, governance, and management over the long term, Delich said.

There are a range of options from the Education Ministry owning all of it and leasing it back to the community, to a percentage share of ownership, or the council owning all of it - so they want to work through those scenarios of owners and governance over the long term.

"And making sure the capital can deliver on expectations. So making sure there is some robustness around the capital, the components proposed are the ones that are going to make the project sustainable in the long term."

Game On Charitable Trust project manager Bruce Maunsell said the approach at this stage is to find any possible hooks or barriers for any of the stakeholders so there were no surprises, and they would not get hung up on detail in working for solutions.

They have been back through the business case looking for anything that could cause problems for the key stakeholders - the Ministry of Education and the council.

"So now we work to cover those off and he [Steve Bramley] looked for commitment," Maunsell said.

"The commitment hasn't been given yet by the key stakeholders. They are hoping I think to have the key commitment within the next week or so. And then the group will be convened and they will move forward.

"The key to it is there is an expectation if they do commit, there will be senior representatives of those stakeholders involved who are in a position to be able to make commitments."

End of June deadline

If the concerns are resolved by the ministry's 30 June deadline, Delich said the timeline would be refreshed and the procurement process secured. From 1 July they would have a better idea what that timeline would be.

There was also paperwork to be completed round community access to school property, known as a third-party occupancy agreement.

Similar working models around the country provided some good case studies of processes that were working, Delich said.

"If it can work in Hamilton it can work in Te Kuiti," he said.

The new four-court Rototuna High School gym in Hamilton [The Peak] was an example.

The high school would have been able to afford only two three-quarter sized gyms, but with the council adding 50 percent funding, four full-sized gym courts were able to be built.

Te Kuiti High School will get similar value for money. For the MoE's $1.74m the high school will get a two-court facility for use during school hours, instead of one.

"It is outstanding value for the school and a very mutually beneficial project," Delich said.

"Hopefully good sense will prevail and the community and the school will get to benefit sooner rather than later."

Sport NZ identified the project in 2014 as a priority sub-regional project for the Waikato region.

"Raising the capital is always the biggest hurdle, and all credit to Game On Trust, they got that $7.5m last year. For a small community that is a commendable effort."

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