Forsyth Barr Stadium Review Released

Dunedin (Thursday, 20 November 2014) – A transfer of debt, a change in ownership and a rent review are among options for the Forsyth Barr Stadium.

The Dunedin City Council will on Monday discuss a report from DCC Chief Executive Officer Dr Sue Bidrose outlining details of the Stadium review and recommendations for the funding, future ownership and operation of the Stadium.

The review states it is clear the Stadium budgets were, and continue to be, too optimistic and there is an ongoing budget shortfall that needs to be addressed. Regardless of the option chosen, additional ratepayer funding will be needed.

Mayor of Dunedin Dave Cull says, “This review was carried out because of uncertainty over ongoing funding requirements for the Stadium. This has made it difficult for the Council to plan properly and difficult for Dunedin Venues Management Limited (DVML) to operate.

“This review proposes some options for Councillors to discuss which would provide more certainty and transparency when we are planning our budgets and looking at affordability issues around Stadium funding.”

Dr Bidrose says, “It is my hope that, following consideration of the review, we will have an open and accurate funding model that allows the Stadium to operate effectively and makes it clear to ratepayers what they are contributing.”

If the Council accepts all the report’s recommendations, an extra $1.81 million a year of ratepayer funds will be required annually for the next 10 years to enable the Stadium to operate on a financially sustainable basis. This would bring the total ratepayer contribution to the Stadium to $11.65 million annually, of which in excess of $10 million would be for interest and debt repayment in the 2015/16 financial year.

The review highlighted factors that need to be resolved – these are the lack of funding for renewals, the level of rent and the amount of debt. Three years of running costs have shown the annual $4 million rent is unsustainable. The level of debt associated with the Stadium is also an issue. The report recommends the rent be re-evaluated and that $30 million of debt be transferred from Dunedin Venues Limited (DVL) to the Council.

The Stadium is owned by DVL and managed by DVML. Both companies are owned directly by the DCC. The report outlines a proposed change for the ownership of the Stadium companies and recommends they become part of the Dunedin City Holdings Limited group. The report also recommends separating the boards of DVL and DVML (which currently have the same directors) so they have different membership.

The report does consider the option of closing and demolishing the Stadium, but this is not recommended because the cost to ratepayers would increase by more than $3.7 million a year until the debt is repaid, with all the community and economic benefits lost.

For a copy of the full report visit www.dunedin.govt.nz/stadiumreviewreport.

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