The Dunedin City Council will underwrite Otago Rugby Football Union debt for the next three years as part of a deal which includes the purchase of Carisbrook for $7 million.
The council confirmed the cost yesterday, and that the Otago Rugby Football Union had repaid a $2 million loan to the council.
As for the future of the facility, deputy mayor Syd Brown last night said any decision would have to take into account the ground was not debt-free, and overheads had to be covered.
Individuals and groups like the New Zealand Historic Places Trust had said Carisbrook could make "a lovely park", he said.
"I'm sure it would make a lovely park, but it would be a bloody expensive one."
Mayor Peter Chin said last night he was comfortable with the Carisbrook deal, because it was based on an independent valuation.
Asked if the ORFU had a moral responsibility to ask only for a nominal sum because it would benefit from the new stadium, he said it did not.
The union would pay market rental there, and would not have exclusive use of the multipurpose venue.
"They're not getting anything for nothing."
Cr Brown said negotiations were finished last week.
The ORFU had been paying 4% interest on its loan, something that was "a huge advantage" when the loan was taken, but was now closer to average interest rates.
Ownership of the ground would not cost the council for the next three years, because the ORFU would pay rental equal to the interest the council would pay on loans it took to buy the ground, and the union would maintain, operate and insure the facility.
In return, the council would guarantee the interest on the ORFU's "seasonal debt" for three years, up to a figure of $1.2 million.
Cr Brown said the union had credit in its bank in winter, but that changed in summer.
The bank had, in the past, offered finance during that period, using Carisbrook as security.
"As of today, all they own is a few tractors," Cr Brown said, so the council was stepping in as guarantor.
The council recognised the importance of the site, and decisions on its future would only be made after analysis, and discussions with the community and stakeholders.
Details of how much each of the three packages of land were worth - Carisbrook, the car park and housing on Burns St - would not be made public because the council deemed they were commercially sensitive.
