Steve Joyce throws Auckland Council under the Sky City bus

Joyce is on an end of year rampage, first suggesting the government may have to put tax payer funds into the Sky City developments, and – having learned that was a mistake – he’s suggesting Lusty Lyin’ Len might use rate payers’ money to prop up a private company’s asset development.

The Government suggested Auckland Council could get involved, with Economic Development Minister Steven Joyce telling Morning Report yesterday Wellington Council had underwritten some costs for the convention centre proposed for the capital.

But the notion was met with dissent from several Auckland Council councillors, who said they did not think the Auckland body could afford it.

Please note the response wasn’t “get your hands off public money”, but instead it’s a “we would if we could, but we just can’t”.

Don’t people in central and local government understand that public money should be spent on public projects, and not given to a profit making private company to pay for their privately owned assets?

Councillors Arthur Anae, Dick Quax, and George Wood said the council’s budget was tight enough already.

Mr Anae said the city needed a convention centre for its growth and development.

“We’re struggling with the budget at this point in time, to try and deliver what we said we would, and that’s by keeping rates down as people demand, so I have a concern as to how we would do it,” he said.

“But we do need to do it … so I would be concerned if there is a further delay in this.”

He said the Government had done the deal with the casino, and it was the casino’s responsibility to find the money and deliver as it said it would.

“The casino made a commitment to deliver for Auckland, in exchange for certain services they were granted by the Government – that’s the beginning and that’s the end of it where I’m concerned.”

So Auckland Council have told Joyce to, erm, go away.

How’s Sky City feeling about this?  It appears they are playing hardball and throwing the toys out of the cot.

SkyCity chief executive Nigel Morrison yesterday also confirmed his company wants a taxpayer-funded top-up and was willing to walk away from the deal if it doesn’t get it…

It’s like this.  Unless the deal is made, and it can be enforced, it’s time for the Government to walk away from this, and FAST.

Obviously Sky City are there to try and manipulate as much public funds from tax and rate payers as possible, and trying to put pressure on Joyce, Eagleson and by extension John Key by hanging a clanger of a backdown over their heads.

The Government should send out a big “get stuffed” message, and kill the deal.

The damage of going ahead and getting manipulated into putting more public money in, something which I suspect would not be the only time before the project ends, will be less than the voter revolt that is already brewing.

The Government must ditch the Sky City Convention Centre PPP.  Now.

 

– Nichole Pryor, RNZ.  NZ Herald

 


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  • murrayirwin

    Absolutely agree.

  • Not Clinically Insane

    After chafing away for 6 years… Joyce’s colours are starting to shine though

  • Greg M

    Steve Joyce has completely read the tea leaves wrong on this one. The taxpayer / ratepayer is not an ATM for the use of skycity to fund their private commercial project. Time to play hard ball back. Now that skycity has spent millions purchasing adjoining properties, simply tell them consents will not be approved unless they agree to build what they said they would, and at their expense.

    • ex-JAFA

      The article also says (hopefully incorrectly) that until the deal is inked next year, any costs incurred will be split 50/50 between Sky City and the gummint. So we may yet foot the bill for Sky City having purchased property… off TVNZ (and therefore from us).

    • Dumrse

      I must be a bit slow here… PDB has a ratepayer funded ATM at his disposal so surely Central Govt must have one also.

  • MaryLou

    I like the bits about keeping rates low as promised, and about delivering what was promised. They’ve already failed on both those counts. The only glimmering spot (one can hardly call it bright) is that they haven’t just jumped in boots and all and agreed to subsidise it. Even though they clearly would if they could.

    Walk away, Mr Joyce – walk away.

  • Justsayn

    Wasn’t there a contract signed about the deal? Surely that contract deal with what happens in the case of cost over-runs (who bears that risk).

  • bart jackson

    Mr Joyces response to Sky City should involve fornication & transportation. Sky City pay out only 4% of money passed across their greasy little palms in winnings so they arnt short of a bob or two. I think its a big bluff by them. Hand back your extra pokies licences and go back to syphoning funds from stupid beneficiaries.

    • Old Man, Torbay.

      Your payout % is incorrect.
      Casino Regulation Law states;
      ” The minimum payout from any gambling machine in New Zealand is
      regulated at 87%. However, casino operators may choose to provide higher
      returns to gamblers.”

      The statistic of 87% is explained;
      ” That is, a game must have a theoretical/estimated statistical expectation that the minimum long term player return from the game will be greater than or equal to 87%.”

      • Mine it,Drill it,Sell it.

        Sorry to burst you bubble but you are wrong Lotto is 50% RTP Tab is 78% RTP Casino Machines 87% RTP which means absolute diddly squat.

        All forms of Gambling retain 100% of the amount a person is prepared to lose.

  • Whafe

    Ditch the Sky City Convention Centre and build a stadium down on the Auckland Waterfront that can host Rugby, League, Football etc, as well as having a Convention type centre within….
    Auckland needs this badly… Sell Eden Park, use the funds from the sale..
    The government needs to act quickly in ditching this deal

    • Dave_1924

      Eden Park is owned by a trust its not a Public asset that can just be sold I believe by Government or council…

      • LabTested

        ssshhh! Don’t tell Michelle Boag that there is a Trust out there that owns valuable assets.

        • Dave_1924

          apologies LT – but you’re right just another source of funds to raid….

      • Whafe

        Yes, hear you on this… Even though it is a trust, agreement should be pushed for and it sold……
        For the greater good of the city, it is a crap place for a stadium…

        • Wallace Westland

          That opportunity was lost for all time thanks mostly to Mike Lee and with a good deal of help from the Eden Park Trust Board whose high profile well heeled members were no way in hell ever going to allow the downgrading of their hallowed grounds.
          This had nothing to do with what was best for Auckland and everything to do with what was best for an elite few.

          • Whafe

            So very true, once again the people will pay the price for a few ever so short sighted individuals….

  • John1234

    The idea of corporate welfare for SC would be so monumentally unpopular – it has zero chance with the Key government.

    No problem for Auckland City though – they don’t care about popularity and can easily chuck in the money on the ratepayer. Hell, they’ve barely blinked on $100mil cost overruns on their IT projects.

  • Saggy

    I was for the convention centre agreement. I believe the centre would be a great asset for the city. However the agreement was that Sky City would build the centre in return for extended licence period and additional pokie machines. The tax/rate payer was not and should not become part of the deal.

  • Huia

    You are right, Sky City are trying to manipulate the public funds, you don’t see them offering to put money into the public funds when they make their huge profits.
    Sorry, it should not even be considered that we put funds into this company.
    If they have blown out the costs to the extent they say they have then firstly an auditor needs to examine the books carefully, secondly and most obviously they have to cut costs so they can to come in on budget. You know, just like real people have to.
    There are so many convention centre’s around, do we really need another one?
    I suspect for a blow out of that size several someone’s are taking the opportunity to feather their own nests at the tax or ratepayers expense.
    Construction companies from off shore would probably do the job at half the cost.

    • Frank N Further

      Like most, I thought that the deal was done and that Sky City would build the Convention Centre at their cost in return for the exta gaming machines, tables, etc granted by the government. But I guess the fine print in the contract has clauses regarding cost over runs, esculation etc. Need to see the contract to comment further, but its not a good look putting their hand out before the ink is hardly dry on that contract..
      But to take you to task re Sky City not putting money into public funds. Their website reports that they have granted over $32.8 million to more than 1,976 charitable organisations, and for the year ended 30 June 2014, have contributed $2,316,207 to the SKYCITY Auckland Community Trust.
      I don’t know if the costs of the New Years Eve fireworks is included in that, but my understanding is that Sky City fund that themselves.

      • Huia

        Thankyou for the correction Frank.
        Good on them for donations to charitable organization’s, credit where it is due.
        I also donate to charities (not on the sky city scale of course) but that doesn’t give me the right to expect a handout from the government though just because I’ve been a naughty girl and am planning on spending more than I wanted to.

      • ex-JAFA

        I believe that no Contract has been signed, only an Understanding while firming up the plans. This leaves heaps of room for the goalposts to be moved. And the Horrid says that in the event that no contract is signed and the parties walk away, all costs to that point are shared 50/50.

  • CheesyEarWax

    Whats the bet Joyce will use the UFB funding model, i.e. a loan to SkyCity? He already said on Larry Williams interview yesterday a gov fund is the least preference but if its a small fund to get it off the ground it maybe viable.

    • Nic C

      Yeah but at least we get high-speed broadband out of the deal

  • Mine it,Drill it,Sell it.

    SkyCity CEO Nigel Morrison (Aussie) is playing Stephen Joyce just like Paul Little (Aussie) CEO of Toll Rail played Sir Micheal Cullen over Kiwi Rail and we all know how that played out.

    We are all still paying for the bloody thing !!!

  • Saggy

    Nigel Morrison: “If Auckland doesn’t want it, if New Zealand doesn’t want it, quite frankly that’s fine with SkyCity, we don’t have to do this,” he told Radio New Zealand yesterday.

    Steven Joyce needs to call his bluff. SkyCity want this more than anyone. Len won’t be coming to the party because any money he can rustle up is earmarked for his trains.

    • Michael_l_c

      Morrison wants it desperately, pokies are a gift from hell for a casino, a licence to print lots of money (can’t see the attraction myself). All the realtionships with govt are turning to poison. Could be a loose, loose for SC if JK & SG have the guts to stick to their guns and not give our money away.

  • Souvlaki

    To put ANY public money will be electoral suicide ! Lets hope the Govt are not THAT naive !!

  • Has any construction project valued at over a few hundred million, anywhere, anytime, ever managed to come in on or under budget?

    Maybe Joyce needs some “Grand Designs” DVD’d to watch?

    • Disinfectant

      I believe the Upper Waitaki Power project did.
      Max Smith had a surplus and used it put in the rowing course on Lake Ruataniwha to the displeasure of his political masters.
      No one rumbled Max Smith. He was very well respected and everyone knew who was the boss.
      Stuff Max around and you were gone.

  • Mine it,Drill it,Sell it.

    It is simple really call Sky City’s bluff.

    Put the convention center up international tender and successful consortium gets Sky City Casino license when it expires for the cost of the Convention Center.NZ government lost hundreds of millions of dollars back in the early nineties by not charging Mega Bucks for the licenses.

    Should the current deal not proceed any concessions including Casino License extension will not be secured.

  • Bluemanning

    Didn’t they estimate that Skycity would profit an extra 42 million per year through the gambling concessions they were granted? Plus the extra revenue from the hotel and convention centre tourism they can surely find the extra funds WITHOUT coming cap in hand to the taxpayer. Perhaps the CEO has a KPI in his contract with which he has to meet to facilitate his bonus?. Although the convention centre and hotel would be a greater return on investment than Len’s train set that goes no where. Regardless Mr Joyce your KPI is to walk away from the threats of the Skycity CEO, call his bluff as you do not have the mandate in this case.

  • Michael_l_c

    1. Read the contract.
    2. If Joyce hasn’t stuffed things up with a get out of debt courtesy of the taxpayer agreement. Tell SC to get stuffed.
    3. With the right spin a ‘get stuffed’ would not be a negative. Lots of voters did not want it. The govt took a pragmatic view, now SC want to move the goal posts we walked away.
    4. Maybe introduce a ‘gambling tax’ to pay for a convention centre, if we really need one.

    • Raibert

      Absolutely right, also seem to remember that SC’s gaming licence was due for review and this was postponed for quite a long time (30 years?) as part of the convention centre deal. This always looked like a shonky deal.
      If SC now what to modify deal the Government should go back to square 1. No extra pokies, review licence ( could give others a look in). Maybe the casino could become a real money spinner for Auckland rather than a small number of investors.

  • Pete

    If SC want it, let them fund it… they will have to find the money from somewhere else, no tax payers or rate payers funds should be used for this. Seems to me they are trying what the Tiwai Point smelter tried…the govt has to walk away this time tho.

    Keep an eye on sky city’s share price.!

    • colinrippey

      Absolutely. Morrison can induldge any interest he has in sex and travel over the Christmas period.

  • Reid

    The timing on this is awfully cute, isn’t it. Put it out just when the news cycle starts shutting down and then announce a settlement while everyone’s at the beach.

    • The MSM have not been up and running for quite some time; just like Jeffrey Bernard who was for a long time, ‘unwell’

  • sheppy

    Why is taxpayers or ratepayers money even mentioned here? Its plainly simple.
    No convention centre by due date means no extra pokies or any other concessions. The Chinese would bite his arm off for a stab at running skycity!

  • Second time around

    The extra pokie slots are probably worth a lot more than when they were first planned, probably more than the cost blow out on the building. Skycity is just being cute.

  • Michael_l_c

    Reading some of the later articles I realised.
    Give the AECT to lennie and then he can slip SC the $$$$.

    Is it a coincidence these to matters have surfaced at the same time or is it because it is easier to bury bad news at xmas.

  • Dave_1924

    So Sky City announced the hotel some time back. Why is this conversation happening now? Because they think they and the Government can slide this under the radar during the Holiday period. If they can’t do it as planned then take the 5 star hotel out of the equation – don’t recall that being part of the Pokies for Conference Centre deal

    Apologies for the long quote below from NBR 13 Aug 2014, but it shows that SKC have plenty of capital flexibility and options for funding this without the Government.

    Harden up Sky CIty, this is a cash cow you can fund yourselfs. No Corporate Welfare!!!

    http://www.nbr.co.nz/article/sky-city-posts-23-drop-full-year-profit-adds-hotel-convention-centre-plan-bd-160717

    “The company struck a deal with the government to build a new convention
    centre for Auckland in exchange for increased gaming concessions. Today
    it announced that the New Zealand International Convention Centre
    complex would include a 300-bed hotel, a pedestrian laneway of bars,
    restaurants and boutique shopping on its property on Nelson and Hobson
    Streets.

    Net debt stood at $659 million at June 30 and the company had $330
    million of undrawn facilities. Average borrowing costs were 6.92 percent
    in 2014, down from 6.97 percent the previous year.

    Capital spending over the next six years would be about $807 million to
    complete the NZICC master plan and the Adelaide redevelopment, it said.
    Options for funding including entering joint ventures on some capital
    projects, issuing capital notes or debt securities with some equity
    characteristics and the sale of non-core assets such as the Federal
    Street carpark, it said.”

  • BlitzkriegNZ

    I’m guessing that Sky city donate lots of cash to National, that’s my answer as to why they haven’t been told to…..

    • Wallace Westland

      They donate the same amount to Labour too if I remember correctly.

  • Korau

    Has Sky City used the extra pokie licenses?

    If not, can the deal if Sky City won’t deliver.

    If so, enforce the contract!

  • Aucky

    Steven, if you facilitate this deal stand by to lose some Auckland electoral seats in 2017 along with a significant slice of the Auckland party vote. It’s political suicide. National can’t afford a double whammy from the taxpayer and the Auckland ratepayer. Show some cojones and walk away – Morrison is playing hardball. Surely you would have foreseen this?

  • caochladh

    I wonder why Morrison is trying to throw National under the election bus with this when they know full well that the casino would suffer under a Labour/Green government?

    • Whafe

      Now there lies the multi million dollar question…..

  • Tom

    I sure as hell don’t want to pay for an Auckland building. Get Auckland to pay for it. Its bad enough the rest of the country pay for their dam roads.

  • Moonroof

    This turned up in lunchtime convo discuss – I never liked the “pokies seats for a convention centre” trade, a line is now drawn, names are getting taken. Anyone who supports this rort doesn’t get voted for, district board, council, or electorate.

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