$5m deal will ‘provide a future for A&P Show’
The Christchurch City Council is giving the Canterbury A&P Association a $5 million lifeline, the council has confirmed.
The details of the multimillion-dollar deal – which Stuff revealed on April 1, as part of an ongoing investigation – were publicly released by the council yesterday, now the agreement is finalised.
The council confirmed it has paid the Canterbury A&P Association $5m – about $1m per hectare – to “provide a future for the A&P Show”, in a deal that was initiated after the association asked for help to find sustainable funding, according to a now-public council report.
In exchange, the association agreed to break a 100-year lease on 141 Wigram Rd, which began in 2015.
The report says that council staff believed there was “a real possibility” the association would become insolvent without council intervention.
Stewart Mitchell, chairperson of the association’s board, declined to comment yesterday.
Andrew Rutledge, the council’s general manager of citizens and community, said it means council can support the future of the A&P Show, which is an important event for both the rural and local community.
He says the benefit to council is that it can use the land for sports fields and meet the demand for recreational spaces, as per the goals of council’s draft Sports Field Network Plan.
The 5-hectare parcel of land, currently barren, is on the other side of the Christchurch Southern Motorway to council’s Ngā Puna Wai sports hub.
Christchurch city councillors approved the deal in a secret meeting on February 21, before the association decided to cancel the 2024 show. The conditions of the $5m payment is that $1m must be used to pay off the association’s existing loan with the council, and the rest will go into a new charitable investment Trust, administrated by three trustees.
The investment trust is capital protected, meaning only the interest generated by the funds can be distributed by trustees.
According to a now-public report received in that meeting, the council considered the decision to be of “low significance” in part due to the popularity of the annual A&P Show.
However, it acknowledged the council risked damaging its reputation by giving “significant sums to support one event when the council is also making tough financial decisions that will impact on ratepayers and other institutions”. The association will still be eligible for additional council grants.
The report revealed that the association first went to the council with a proposal to sell the land and create an investment trust in 2021. Staff advice at the time said it wasn’t in the council’s best interest, but there was merit in exploring alternatives.
In late 2023, the two groups negotiated a similar proposal: to sell the land and split the profits 50:50, with the association’s proceeds going into an independent charitable trust.
However, the association was concerned about how long the sale could take, and council staff found there was a risk that this would lead to no Show in 2024.
Meanwhile, council staff figured that it would be cheaper to break the 141 Wigram Rd lease than buy new land for future sports fields and a depot for council’s new in-house parks maintenance team.
The report acknowledged that this deal was not the first time the city council has offered the A&P Show a golden parachute.
In 2001, with the association facing financial difficulties, the council agreed to purchase the majority of the Canterbury Agricultural Park off the association. The council agreed to provide long term leases to the association.
The association began leasing 141 Wigram Rd off of council in 2015, at their request, in order to build new administrative offices for the Show and a future Agribusiness centre. The council agreed, and also agreed to end its $100,000 annual grant towards the Show.
To administer the trust the council and the association appointed a trustee each, then jointly appointed a third.
The council’s pick was Bob Shearing, a former city councillor who is the current chair of a number of community and social service trusts.
The association selected Ben Tothill, a commercial and trust lawyer who was the founding director of the association’s board 20 years ago.
The council and the association jointly appointed Kate Acland – the owneroperator of Mt Somers Station in Mid Canterbury, alongside her husband – who is chairperson of the New Zealand Meat Board and deputy chairperson of Beef + Lamb New Zealand.
The trust will begin operating in June 2024 and will report back to the council on its financial position once a year.