Council bailout for show?

Ratepayers are expected to bail out the struggling Canterbury A&P Association as part of a secret multimillion-dollar deal with Christchurch City Council.

The Press can reveal the city council is considering breaking the association’s 100-year lease over 141 Wigram Rd, and is willing to pay large sums to make it happen – something that concerns the local Federated Farmers representative.

As much as $5 million could be on the line, with association members being told the council may invest $4m in the association – through a future trust – and forgive an existing $1m loan.

It is unclear which party approached which first about the Wigram Rd deal, but it appears the price of breaking the lease has ballooned since negotiations began.

In September, association members voted in favour of breaking the 141 Wigram Rd lease in exchange for 50% of the proceeds of its sale, with its city council landlords getting the other 50%.

The parcel of land – which is empty and close to the A&P’s large Curletts Rd site – covers approximately 5 hectares and, as of 2022, has a rateable value of about $1.5m.

Exactly how much money is going where won’t be finalised until negotiations are complete.

The news comes as the city council is consulting on a 10-year budget that proposes a 57.8% increase in rates, including 13.24% in the next financial year.

The Arts Centre is also pleading for more council funding to remain open, and the Christchurch Christmas Parade is calling for more certainty over its council funding.

City councillor and finance committee chairperson Sam MacDonald said the only thing he could say about the issue right now was that no money had been transferred.

“We are still waiting for the outcome of negotiations between council staff and the A&P Association.”

MacDonald also pointed out it was not a grant, but a commercial transaction.

Karl Dean, Federated Farmers’ North Canterbury representative, has attended the show for about a decade. He said the New Zealand Agricultural Show was an important and priceless event, and its strength was in bridging the divide between urban and rural people.

However, he said the association was responsible for its own financial difficulties, and he did not think ratepayers’ money was the answer. “I’d rather they [the council] gave them a loan, rather than give them money ... The show should be able to stand on its own two feet, like many others around the country,” he said.

“My question would be, what are the council getting from it? Are they getting naming rights? Are they getting something in return for the ratepayers?”

He hoped if the deal went ahead, the council would have some oversight into where the funds are going and have its own finance team look at things.

“Because, again, if the show is still going backwards, that’s [a cash injection] not going to fix the problem,” he said.

The council was asked if it has ever offered a leaseholder the proceeds of a public land sale, or what unique circumstances may be in play to justify the move.

It was also asked why the deal grew from 50% of the sale price to a $4m investment between September last year and January.

A spokesperson said the council could not comment on the negotiations due to commercial sensitivity, but expected them to be complete by April 12.

Councillors – who are also bound by secrecy rules – received a report on the 141 Wigram Rd lease behind closed doors at a council meeting on February 21.

According to the meeting’s agenda, the report contained financial disclosures which could prejudice the association’s financial position.

The council will review the report for potential release “upon the establishment of the charitable investment trust”, the agenda item read.

Stewart Mitchell, chairperson of the Canterbury A&P Association board, declined to comment beyond what the council said.

The association has been plagued with financial difficulties for years, according to publicly available annual reports, including before the Covid-19 pandemic hit.

In his 2020 president’s report – which included the lessons of the 2019 show – former association president Chris Herbert said costs were rising but income was limited.

The association was sitting “on the edge of a financial cliff,” he said.

In Mitchell’s 2020 chairperson’s report, he said: “Whilst we have an iconic, historic, and yet contemporary business, we struggle to keep our heads above water.”

In the 2021 annual report, Mitchell wrote: “With 12 months of costs and three days of revenue, it is very clear we have a high risk, and a less than ideal business model.”