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Abigroup deal off but Arena bid lives on

Abigroup deal off but Arena bid lives on

Auckland City Council is revisiting the options for developing an indoor arena after closing off its exclusive negotiations with the Australian company Abigroup Limited.

Auckland City and Abigroup have worked together on plans for the arena for the past 11 months.

Abigroup was able to achieve significant progress on the physical planning for the venue including obtaining resource consents.

However recent world events including the war in Iraq and the SARS outbreak created considerable uncertainty in the entertainment market. As a result Abigroup has been unable to meet the council’s current commercial requirements.

The end of the exclusive dealings period frees the council to talk to other potential partners in the venture to build the world-class 12,000-seat venue for sports and entertainment.

The council’s Recreation and Events Committee chairperson, Councillor Scott Milne, says that while the exclusive dealings are off, the project is still very much alive.

“For Auckland to be regarded as an international city, it needs the kinds of sports events and entertainment that an arena will bring - but not at any cost.

“This council like the two councils before it is resolute that the time is right to build this facility, which will be a fantastic asset for Auckland and New Zealand.

“The location is right, we have the consents we need to build it, and we know there is demand for the facility.

“With the exclusive dealings period over, we are now going to widen our thinking on options for structuring the package to fund, build and manage the venue.”

Planning for an indoor arena in the Auckland region began in 1996. In a process facilitated by the Auckland Regional Council, the Hillary Commission decided in 1997 that Quay Park in downtown Auckland was the best of three potential sites in the region.

The then chairman of the Hillary Commission, Sir Wilson Whineray, said: “The people of Auckland have a chance to develop a state of the art facility near the heart of downtown. It is an opportunity that very few cities have the chance of fulfilling. Auckland should take it. ”An economic evaluation completed by Ernst & Young concluded that flow-on benefits to the Auckland region’s economy would be between $38 million and $64 million a year, generated mainly by additional spending by international and domestic visitors on accommodation, meals and entertainment in the CBD.

Councillor Milne says this business case stands. “We know that if we build it, the events and the visitors will come.

“The arena will put New Zealand back on the circuit for the big-name entertainers and shows that now bypass us because we don’t have an indoor venue of the size and quality required.

“Imagine, too, having somewhere we could cheer on the Silver Ferns or Tall Blacks in a World Cup final.”

Abigroup Limited was selected as the council’s preferred partner in the public-private partnership venture last year, following extensive public consultation to confirm Aucklanders’ support for the arena and an expressions-of-interest process to gauge private sector interest.

Under the heads of agreement signed with Abigroup, there was to be a six-month exclusive dealings period. This prevented the council from talking to other possible partners.

The council extended the exclusive dealings period twice to allow more time for the commercial and legal negotiations. The second extension was to the end of September, subject to satisfactory progress being made by 7 August.

Councillor Milne says the council will decide on 28 August what new options it will pursue.

“Those options could still include Abigroup. They are still in the picture – we have just stopped talking exclusively to them.”

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