21 Jul 2021

America's Cup financial loss: Phil Goff defends council spend

9:10 am on 21 July 2021

Auckland Mayor Phil Goff says the city has lasting infrastructure from America's Cup council spending, despite the overall financial loss from hosting the event in March.

Auckland mayor Phil Goff speaks to media following Cabinet's extension of the alert level 3 lockdown.

Auckland Mayor Phil Goff. Photo: RNZ / Dan Cook

New Zealand recorded a loss of $156 million from hosting the America's Cup event in March. An evaluation report released by the Crown and the Auckland Council shows almost double that money - $292.7m - was lost when assessing the Cup on a purely benefit-cost analysis.

The Ministry of Business, Innovation and Employment (MBIE) and Auckland Council cost-benefit analysis found the 38,745 people who visited Auckland during the event spent $298m, and it was the most watched America's Cup of all time. However, the economic return for the event was lower than forecast.

The Covid-19 pandemic is being blamed for the economic shortfall, with the loss put down to higher than projected public investment, few international visitors, and only three of the potential 10 challengers racing.

The analysis showed Auckland lost a total of $91.6m when intangibles like social, cultural and environmental costs and benefits were factored in, and lost $145.8m from a purely financial standpoint.

Goff told Morning Report loss was "overwhelmingly" due to Covid-19.

Team NZ said they expected they would have six to eight challengers and ended up with three, and the final number was not known until after the commitment was made on the infrastructure, the mayor said. "That was disappointing - outside our control."

A Team New Zealand fan.

The event was the most watched America's Cup of all time, but there was higher than projected public investment, few international visitors and only three of the potential 10 challengers raced. Photo: RNZ / Jogai Bhatt

Goff said the overwhelming majority of the money spent by Auckland Council was spent on infrastructure.

"It's upgraded the harbour front.

"Let's look at the things that have a lasting impact.

"Wynyard Wharf was in pretty bad state. That has been remediated. The Hobson Wharf wave panels means you've got an area of quiet water there that you can use for a whole range of water sports into the future, whether it's waka ama or dragon boats."

Stormwater outflow had been remediated, hazardous substances tanks were removed early and a floating marina structure was in place, he said.

"You can see the new public spaces, you can see the remedial work that's been done on the seawall there that was 100 years old and had to be altered."

Of the council spending, $92 million was planned work brought forward and $106m was on "key infrastructure".

Goff said it was was disappointing Auckland would be hosting next the Cup regatta.

The board of Team New Zealand has rejected the joint Crown-Auckland Council offer to host the next event. The offer involved cash and in-kind support worth about $99 million.

"You would have helped remediate the damage caused by Covid-19 if you'd been able to host it again post-Covid," Goff said.

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