Team NZ may be asked to leave Viaduct’s Events Centre early
Auckland mayor Phil Goff has asked his council to investigate moving Team NZ out of the Viaduct Events Centre before its lease expires, after ratepayers have already forked out $13.7 million in rent for its base.
Official information documents show Emirates Team NZ is paying $1 a year to use the events centre as its America’s Cup base until March 2022 — with a “maximum” lease term until September 2027.
The Government last week suspended payments to America’s Cup organisers and Team NZ in the fallout from a Crown inquiry into the spending of public money, including allegations of a “reclassified” $3 million loan, and claims of fraud involving a Hungarian bank account.
Before 2018, and before the 6000sq m centre was occupied by Team NZ, it generated $3.5m to $4m of rent revenue for the Auckland Council every year.
The council’s governing body decided to grant the lease in November 2018, but Team NZ’s rental cost was never made public.
In March 2022, the conditions of the $1 annual fee will be “reviewed” to potentially implement a “market rate” for the remaining six years.
However, the Weekend Herald can reveal that in February Goff met with council-controlled organisation Regional Facilities Auckland (RFA) to discuss revenue generating measures to offset Covid-19 economic losses.
“RFA informed the mayor that under the Host Venue Agreement, there was provision for Team NZ to move venues sooner than otherwise planned should a suitable alternative venue be found and agreed by Team NZ,” a spokesperson for the mayor’s office said.
“In this scenario, RFA would be able to return the Viaduct Events Centre to normal operation sooner than otherwise planned.”
RFA is working with Team NZ now to try to find a suitable new base premises after the 2021 America’s Cup.
If a site is found Team NZ could be out of the venue from September 2021, five months before the scheduled market lease review.
The council’s director infrastructure, Barry Potter, insisted the approximate $13m in lost revenue was included in the $113m that the council has contributed to the America’s Cup event.
“The sublease of the VEC building to ETNZ is part of, and not over and above, the council’s contribution to host AC36,” Potter said.
“It is in-kind support rather than direct financial support, with the foregone revenue budgeted as part of the council’s total contribution to hosting the America’s Cup.”
The original Ministry of Business cost/benefit ratio for the 2021 Cup, estimated in 2017, was barely one to one back then, with a range of 0.997 to 1.14.
Since then, University of Auckland economics Professor Tim Hazledine and New Zealand Initiative chief economist Eric Crampton have expressed scepticism over the purported cost/benefit ratio for the city. Crampton told the Weekend Herald yesterday the Cup was an excuse for “the Government to spend a lot of money on what is effectively a big party in Auckland”.
“The business case for governance support of the America’s Cup was weak to begin with. The benefits in these sorts of things are always overestimated,” Crampton said.
“Now, under Covid, the event will be much smaller than it otherwise would have been. A lot of the expected visitors on which the business case would have depended will not be showing up.”
Auckland Ratepayers alliance founder Jordan Williams argued “countless other community groups and businesses would love the chance to use this space, and pay for it”.
Another unseen cost of Team NZ entering the Events Centre is the absence of an Auckland venue for big events — which has been dramatically compounded since the SkyCity convention centre burned down last October.