Auckland Council has voted to bail out the Eden Park Trust with a loan amounting to $63 million.
That includes taking over a $40 million loan from the ASB Bank, a $9.8 million grant, an existing $6.5 million loan and an additional $7 million loan for a working capital facility and a $500,000 overdraft facility.
But it was not easy getting to the vote, with hot debate over whether the $9.8 million should take the form of a grant or a loan.
Campaign for grant
The Eden Park Trust campaigned for a financial grant from Auckland Council, which it said was the only way to keep it from sinking further into debt.
“We do not find ourselves in a position as to being able to increase our indebtedness at the park,” Trust Chairperson Doug McKay said.
He said that a grant was essential to ensure Eden Park did not descend into insolvency.
Councillor Desley Simpson supported the Trust, and said that Eden Park should not be burdened with further debt.
But Mayor Phil Goff said a grant was not fiscally responsible.
He said that almost all of the feedback he had received about Eden Park included questions about “why the hell” the Council was funding it.
Mr Goff said that while he was committed to helping Eden Park, the Council had an obligation to the ratepayers of Auckland.
A grant would not provide the council or ratepayers with any kind of protection if Eden Park went under, whereas the proposed loan would, he said.
Councillor Josephine Bartley said that she was astounded by the overwhelming sense of entitlement shown by the Eden Park Trust.
Ms Bartley said she was still trying to work out how to tell her community that the council was going to take on a loan and grant for an organisation that continually turned a deficit.
The above under a Special Arrangement with www.rnz.co.nz
Hand-Up not Hand-Out
Mayor Phil Goff issued the following Statement:
This is a hand-up to Eden Park, not a hand-out. The money is repayable.
What it does allow is Eden Park to continue as Auckland’s venue for international sporting events in rugby, cricket and other sports for the medium term.
Eden Park faces significant financial pressure.
Auckland Council taking the loan over from ASB eases some demands on repayments and the new loan of $9.8 million, in the form of a repayable credit facility, will enable Eden Park to fund much needed maintenance and renewals including turf replacement and stand upgrades.
Ratepayers will welcome Council’s proposal to issue its support as a loan rather than a grant. We have a responsibility to protect any financial investment by Aucklanders in Eden Park given that we do not own or control the Park.
It is only fair that investment made by Aucklanders through Council in the Park comes back to them when Eden Park Trust is in a better financial position or sells the asset.
The proposal will also be conditional on a much closer working relationship between Council, Eden Park Trust and Regional Facilities Auckland.
All organisations need to work together to ensure that we have in place a joint strategy that can achieve less duplication, lower costs and better utilisation of Auckland’s stadiums.
The Council’s proposal will allow Eden Park to continue to play its role as an important sporting and event venue for Auckland for the next 10 to 15 years.
Eden Park Photo: Photosport