10 Jan 2019

Eden Park Trust financial woes to worsen over next decade

11:26 am on 10 January 2019

Auckland's mayor has invited the Eden Park Trust board to make its case for a ratepayer bailout after an independent report laid bare its mounting financial woes.

Mt Eden Park Stadium. View from Mt Eden Summit

Eden Park faces losses in the tens of millions over the next decade. Photo: RNZ / Diego Opatowski

The report by consultants EY anticipates the country's premium sports venue will run up losses of nearly $80 million over the next 10 years.

It says the performance of the Eden Park Trust, which owns the park, is expected to worsen in 2019 due to the impact of the Rugby World Cup in Japan, meaning one less All Blacks test.

There will also be a reduction in other events, including cricket matches.

The report says Eden Park will not even generate enough cash-flow this year to pay the interest on its loans from Auckland Council and ASB Bank.

The stadium needs various upgrades and maintenance work costing $62 million, but EY says it can't afford these.

Auckland mayor Phil Goff told Summer Report the Eden Park Trust Board will make its pitch for more money when the board appears before the council - probably next month.

"The problem [the Eden Park Trust has] is two-fold - firstly they have loans of $6.5 million to council, which they're paying interest on but they can't repay, and they have a loan of $40 million to ASB bank ... and equally they cannot pay that back.

"But just as seriously, they have a deficit estimated at close to $6.5m this year, $80m over a decade, which means they can't renew their basic capital facilities such as their floodlights, turf and upgrading their stands and that's without any major capital project that may arise in the future as the stadium ages.

"While it's an important sporting venue in Auckland, rate payers don't want the council to hand out millions and millions of rate payers' dollars to solve a problem that won't actually solve the underlying problem which is about the viability of Eden Park," he said.

Mr Goff said he's not prepared to just let Eden Park go bust as it's the closest venue New Zealand has to a national stadium.

He said the council could allow Eden Park to host more events each year to generate more revenue, but that idea has its own problems.

"That is an option, not an easy option because Eden Park is situated right in the middle of a residential area.

"Actually to make a stadium pay these days you've got to try to work it 24/7 - you've got to have all sporting codes at it, you've got to have concerts.

"There are problems with them in holding concerts in terms of getting resource consent, they are coming nowhere near the utilisation of the 25 night events and some of the problems go way beyond that as the report points out," Mr Goff said.

Phil Goff on the day he was elected Auckland mayor. 8 October 2016.

Auckland mayor Phil Goff. Photo: RNZ / Diego Opatowski

Under the Auckland Unitary plan, which sets how many events Eden Park can hold, the venue is allowed to hold 25 night events and six concerts a year.

"The restrictions in the Auckland unitary plan protect the local residents is one factor the council would need to look at, but it's by no means the only factor.

"Regional Facilities Auckland, the organisation that runs Auckland council stadiums, have developed a venue development strategy - it says we underutilise our venues, stadiums that we have at the moment, duplicate our capital investment and the cost of maintaining venues over time will become prohibitive.

"Council has put this in the too hard basket for basically eight years and the point will come where councillors will need to make a decision about a long-term strategy rather than leaving till the last moment in a crisis and making a decision at that point," he said.

Mr Goff said there is no consensus among Auckland councillors about the long term strategy of its stadiums yet, but he's hoping that will be resolved soon.

RNZ has contacted the Eden Park Trust for comment.

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