1. The Stop the Stadium meeting was told by Cr Dave Cull 60% of private sector funding had not been obtained.
The funding that was obtained was from the sale of seating products (corporate boxes, lounge memberships and sponsorships), and no payment for those would be required until the stadium was built.
The amount of bridging finance required to tide things over now amounted to a $27 million loan and a $15 million underwrite. That meant $42 million in interest on some of that over time, required to achieve the balance of $45.5 million now.
"The Carisbrook Stadium Trust obviously can't raise that debt itself because it can offer no security, so the council will effectively borrow the $27 million and the Government will underwrite the $15 million.
"That's an additional liability on ratepayers and taxpayers, and that borrowing will have to be repaid from the revenue from those seating products etc after the stadium is operating."
There has also been criticism of the description of money raised from seating packages as capital, when, some say, it should be described as revenue.
Q - How much private sector funding has been raised?
A - $24 million - made up of lounge memberships over five or 10 years, corporate suites, open club reserves, founders' club and sponsorship products. That figure was 50% of the target.
Q - How certain is it when they are for five-year terms?
A - Legally, they are enforceable contracts, provided construction starts. Lawyers have vetted and approved the contracts.
Mr Harland said it was possible people could pull out of the contracts after five years, and he had noted in the past that was a high-risk area.
However, the experience of Westpac Stadium in Wellington was that only 2% or 3% did not renew their contracts.
Q - How can revenue be described as capital?
A - On completion of the construction, $29 million of the accumulated debt remains with the council. The remaining $105 million transfers to the venue's company.
Against the $29 million, buyers of seating products will make annual instalment payments for the next 10 years.
The remaining $105 million is serviced and repaid over 20 years by the collective cash flows of the council-owned companies.
This reduces dividends by $5 million, hence the need for an additional $66 a year for the average-value property, and $57 for the median.
This remains fixed for 20 years without change.
The Crown's $15 million is assumed received on July 1, 2009, and by applying it to debt avoidance during construction, reduces debt at construction's end. This saves a little over $2 million on current estimates.
People get hung up on this concept. It is much better to think of cash flows.
Usually, revenue is described in this way to indicate the purpose the revenue is put to.
In this case, it means either to fund construction as it occurs or repay the debt needed if the former does not happen.
It is distinguished from revenue used to fund everyday operating expenses such as wages and maintenance.
Q- If revenue is being used as capital, where will revenue streams come from?
A- Cash will come from events, car park leases, food and beverage commissions, admission charges and merchandise.
If the remaining 25% of seat packages are sold, those will add to revenues as they are not included in the bridging loan repayment calculations.
2. The meeting was told the site was poor for building, with poor soil because it was formerly a lake, bedrock that was too deep, and a flooding risk.
Q - Why does the council consider it to be acceptable?
A - The trust and its consultants have assessed the site is suitable for construction of the stadium following extensive investigation and advice from technical experts.
Note, too, that there are existing buildings which have been successfully built on the site.
Expert assessment of the site has included the following:
Subsurface conditions - geotechnical assessment of the ground under the site, including information including bore holes drilled on site and electronic cone testing. (Tonkin and Taylor)
Engineering considerations - settlement, groundwater levels, foundation design, seismic activity. (Tonkin and Taylor)
Foundation design. (SKM structural engineers)
Flooding and stormwater. (David Hamilton and Associates)
Overall viability of site and design. (Arrow International, construction project management)
With regard to the foundations, the required average pile depth has been assessed at 18m. Some piles will be shorter and some longer.
The effective maximum pile depth required is 25m because at that length the friction provided by the pile's surface area provides sufficient load-bearing capacity without the need for the end of the pile to rest on bedrock.
With regard to flooding, the level of the pitch has been designed to sit above the combined known and potential effects of high tide, 100-year storm surge, tsunami and estimated 100-year global sea-level rise from climate change.
Those issues were considered by commissioners who agreed to a plan change to allow the stadium to go ahead, and were accepted by them.
3. Cr Cull told the meeting the stadium promised was a state-of-the-art, multipurpose venue that would set a new benchmark for stadiums in New Zealand.
The design and specification of the stadium had been changed in order to keep the construction cost within the agreed budget, and those changes had:
1) Reduced the ability and flexibility of the stadium to cater for much more than rugby without spending a lot more money.
2) Lowered the specification and standard of finish so that while initial costs are lower, long-term maintenance costs will be higher.
Q - The stadium has been described as having been changed to the point where it will be an empty shell. Is that true?
A - No, that is incorrect. The stadium will be capable of hosting a wide range of sporting and entertainment events, concerts, exhibitions, meetings, conferences and functions.
It will be New Zealand's only fully roofed, natural-turf campus stadium.
The Carisbrook Stadium Trust's focus has been to develop a multipurpose stadium which could be considered the best in New Zealand because of its boutique size, the angle of the seating bowl, which brings spectators closer to the action, the unimpeded sight-lines and the roof protecting spectators and players from the elements.
The benchmark for design and specification requirements has been specified by the council in its service level deed with the trust.
The stadium design meets those requirements, including all the requirements for multipurpose use, as reported to the council at its February 9 meeting.
In summary, the council requirements are:
- Multipurpose capability. (Yes.)
- Spectator facilities benchmarked against Westpac Stadium and the Paul Kelly stand at AMI stadium. (Yes: finishes and spectator facilities consistently aligned with those benchmark stadiums.)
- Fully roofed stadium with grass pitch capable of meeting requirements of international sporting codes. (Yes.)
- Maximum capacity of 30,000 patrons. (Yes: designed total capacity is 30,514.)
- Minimum permanent seating capacity of approximately 18,000. (Yes: designed capacity is 17,242; with relocatable seating the total seated capacity is 26,826.)
- Inclusion of a public plaza. (Yes.)
- Meets quality environmental design principles. (To be included where cost-effective to do so.)
- Design and construction budget of $165.4 million. (Yes.)
- Inclusion of corporate members (Yes: suites, lounges and open club reserves included.)
- Permanent merchandise outlets. (Yes.)
- Catering and beverage concessions. (Yes: spaces for fully catered operation included.)
- Stadium design and operations. (Yes: design consistent with operational projections.)
- Team, officials and venue hire facilities. (Yes.)
- Media facilities. (Yes.)
The stadium has consistently been benchmarked against the Westpac Stadium in Wellington and the Paul Kelly stand at AMI stadium in Christchurch.
In the initial design phases, the architects had proposed some specifications and finishes in excess of those found in the benchmark stadiums.
As design progressed, the specifications and finishes were aligned to the benchmark standards.
The photographic summary report prepared for the council meeting of February 9 shows that the finishes and spectator facilities are consistently aligned to the benchmark stadia.
Project consultants Arrow International have reviewed the design specifications throughout the design process and confirm that the required standard continues to be achieved.
The stadium has had further confirmation of this by the operator of Westpac Stadium.
The trust's February report to the council on project scope, design specifications and standard of finishes is publicly available on the council website. (Report - council - 9.2.09, attachment two, part one.)
