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End The Stadium Protest March


Press Release Thursday, 29th January, 2009.

End The Stadium Protest March

12 noon, Saturday, 31st January

Stop the Stadium is asking the people of Dunedin to march down George Street this Saturday to demand the Dunedin City Council put a stop to the Stadium madness and make its “final” decision on the future of the Stadium in February a definite NO.

The biggest street march ever likely to be seen in Dunedin starts at 12 noon from outside the Dental School and continues down George Street to the Octagon for speeches.

Backgrounder Information to Proposed $188 million Otago Stadium for Dunedin

History of the stadium debate:

In 2003, the ODT ran a front-page headline announcing that “the cost of a proposed major redevelopment of Carisbrook had jumped (from fifteen) to $20 million.” This was a significant expenditure by Dunedin standards, and much too steep for the Otago Rugby Union, which was penniless, and well-nigh bankrupt. The Union hoped, therefore, that the DCC might help resolve its embarrassments by coming up with a $5 million donation, courtesy of the ratepayers. And so it transpired, with the DCC councillors recommending a $5 million contribution, to be paid at a rate of one million per year.

By 2004, however, following the establishment of a DCC-funded “Working -Party” on the future of the Carisbrook stadium, Mr Jim Harland, DCC chief executive (and head of the working party), announced that “the redevelopment of Carisbrook, depending on which option is preferred, might cost over $100 million.”

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There was alarm about this, and letters to the editor, and by the end of the year Mr Harland was backpedalling fast. No decision had been made, he said; “No-one’s money had yet been committed – nor will it be until a full round of consultation is held”.

There was no consultation but by mid-May of 2005 the anticipated cost had fallen back to “between $25 and $30 million,” with Graeme Martin, chief executive of the ORC, explaining that “a $50 million upgrade is no longer on the table”. Mr Harland explained that: “The project has evolved. It has been evolving for some time”. He also pointed out that “no sports stadium in New Zealand makes a financial return on the investment pumped into it by the community”.

It was generally understood that there would probably be a refurbishment of Carisbrook, to an upper limit of $30 million. It would be expensive, but, with the agreement of the citizenry and a bit of civic belt-tightening, we might be able to manage it.

Behind the scenes, however, the Carisbrook Stadium Trust (which had replaced the original Working-Party), chaired by Mr Malcolm Farry, was developing an independent project that would shatter all previous budgets. The CST’s intentions, far from being settled, were most definitely still “evolving”, and, following months of rumour, Mr Farry finally revealed his “vision” in October, 2006. He provided no details at that time - merely assuring everyone that a complete new stadium was the favoured option. It could be built without using ratepayers money, he said: “Ratepayers would be the funders of last resort” - and he would “leave no stone unturned” before approaching them for any money.

The ratepayers, as it happened, had good reason to be worried, because the city council was already involved in what the ODT described at the time as “a $200 million spend-up”. There was the Chinese Garden, the Town Hall Clip-On, The Settlers Museum, and a vast, doomed project to create a mini-Venice on the upper harbour (not to mention long-overdue upgrades to water, sewage, and roading). The DCC, far from tightening its belt at the prospect of subsidising Carisbrook, was proposing an era of spendthrift profligacy unprecedented in Dunedin’s history.

On Wednesday the 21st came the unsurprising news that the Otago Rugby Union was flat broke, having lost a million dollars in the previous year. And two days later, with immaculate timing, Mr Farry revealed his “visionary” plan for a $188 million stadium - with the Rugby Union as its anchor tenant! Nearly half of this astonishing sum ($91.4 million) would be charged to Dunedin’s ratepayers (Mr Farry’s stone-turning exercise, predictably, coming up with nothing.)

****************

It is possible that there still remain a few trusting souls who cannot believe that our leaders – our elected councillors, backed by highly-paid staff and even-more-highly-paid consultants – could ever have permitted anything so truly silly to have advanced anywhere nearly so far. The following cautionary tale may help convince them:

In November, 2004, our mayor, Mr Chin, signed a lease permitting the electricity company, Trustpower, to construct a hydro scheme on council-owned land in the tussock hills near Mahinerangi. This complex consisted of an artificial lake, some 30 hectares in area, together with two generating stations and the waterways interconnecting them. The excavation of the lake alone cost more than $20 million, with other associated large expenditures remaining unknown.

Mr Chin signed this lease, not only allowing Trustpower to build the scheme, but to operate it for 999 years – for a rental, payable to the DCC, of one dollar per year. (By way of comparison, Trustpower will pay farmers up to $20,000 per annum for the placement of a single wind turbine in the same locality).

There was a bit of an uproar when this got out, especially since most of the DCC councillors knew nothing about it. And the situation was not improved when Mr Chin attempted to excuse himself by explaining that he hadn’t read the documents “thoroughly”, before signing them. But he had signed them, and that was that - because attempting to remedy the blunder, according to Cr Guest, might result in litigation (and the majority of councillors were far too scared for that). So the city was deprived of millions in potential income over the life of this hydro-scheme, because our mayor was asleep at the wheel.

Mr Chin is fortunate that his elected position allows such extraordinary latitude. Had he been employed in a commercial enterprise, where money was hard-earned, and people were accountable, he would now be looking for a job.

*************

Current situation:

The Dunedin City Council councillors (as Dr Rob Hamlin pointed out many months ago), are caught in an apparently unresolvable dilemma. They have now wasted so much money - $50 million so far – that whatever move they make at this point is bound to enrage a large proportion of the citizenry. If they decide, like lemmings, to continue their march of folly, they are doomed at the next election. And if they decide to call a halt, as sanity would surely demand, they will be left with the ticklish problem of explaining the evaporation of fifty million dollars.

The final results of the independent Stadium Survey released in January have not alleviated their burden. Almost 80% of people who have an opinion are now opposed to any further wastage of money – a level of public rejection unprecedented in Dunedin’s history.

DCC CEO Mr Jim Harland is positive that the exorbitant demands of the stadium will have no impact on the DCC’s “core services”. “My response has always been the same”, he says: “There will be no cuts”. But, there have been cuts already, and, in order to wriggle his way around this inconvenient fact, Mr Harland has been forced to proclaim that some core services are not really core services after all. From now on, according to Jim, there are to be two categories of core service: the “essential”, and the “discretionary” – with the discretionary able to be dropped at will, whenever money is tight.

Conflicts of Interest

The issue of conflicts of interest has arisen many times as many of the players in the project are linked in a variety of ways.

* John Farry, was a minor shareholder in a company that owned land at the Awatea Stadium site. He is the cousin of Malcolm Farry who is the Carisbrook Stadium Trust chairman.

John Farry was past chairman of the Community Trust of Otago, which has indicated 'in principle' it will donate up to $10 million to fund the stadium.

* Ron Anderson’s company, Arrow International, was hired to manage the stadium project. Ron Anderson is a Stadium Trust trustee.

* Dunedin Mayor Peter Chin was once a partner in the law firm John Farry and Hansen, now Webb Farry.

*Stadium stakeholders group appointed retired High Court Judge John Hansen of Christchurch to look after the interests of organisations funding the stadium. He had joined John Farry and Hansen, earlier in his career.

Added costs, interesting facts

• The DCC has so far spent nearly $50 million on the stadium to date. $15 million was handed over to ‘investigate’ the stadium, that’s an average of $30,000 per day. More than $30 million was spent buying the land which was priced way above current market value.
• State Highway 88 has to be realigned to make way for the Awatea Street stadium. The multi-million dollar costs for SH88 have been excluded from the stadium costs.
• Awatea St is reclaimed land - adding huge costs to construction such as pylons are going to have go down about 100 feet or more.
• The true cost of the stadium to each ratepayer is on average $308.68 (ODT 27/01/09, page 23). Rate increase over the 10-year LTCCP projections is for a total increase of 58%, according to Calvin Oaten, retired refrigeration engineer and present Dunedin council watchdog.
• Interest on the $92.8 the DCC plans to borrow this year is set to cost $9.5 million a year for next 20 years.
• Both Capital expenditure and debt are forecast to rise sharply between now and 2009/2010 year, with debt rising to $100 million and expenditure to $200 million.
• Funding for upgrades of roads, footpaths and street signs off the site of the planned Awatea St stadium not factored into project costs.
• “Otago Regional Council ratepayer package support of $37.5 million represents a major departure from the ORC’s primary missions as set out in its Annual and Long Term Community Plans and was in no way foreshadowed by the ORC Long Term Council Community Plan for 2006 – 16,” according to Jolyon Manning, retired chief executive of the former Otago Council Inc.
• As of October, Carisbrook Stadium Trust only received $30 of private funding donations towards the new stadium. It has received expressions of interest but are they signed contracts? They have yet to be presented for public scrutiny.
• Primary beneficiary is University of Otago which has promised to 'indirectly' contribute only $4.4 million towards a shared plaza area.

Football Facts

New stadium attract only B games, maybe 3 within a 5 year period but no guarantees given. Otago Rugby Football Union won’t be an anchor tenant but occasional hirer of stadium estimated to be for less than 12 days per annum on a license to occupy basis.

The Super 14 Draw has seven 'home' games for the Highlanders this year, four in Dunedin, two in Invercargill and one in Palmerston North.

Independent Peer reviews found stadium, not multi-purpose but basically a covered rugby field. Peer reviews found operating revenue projections were not conservative

Otago Rugby Football Union broke and $6 million in debt.


ends

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