Progress made,
but funding still foils centre’s future

Despite recent newspaper reports which may give a different impression, the key barrier to the establishment of a new National Convention Centre in Auckland - the issue of funding - remains.

For months it has been common knowledge that Auckland City Council, and the Auckland Regional Council are prepared to make land in the Aotea precinct available and to ‘future proof’ it by having more space available if the centre needs expansion.

But the issue remains finding the money to build the $300 to $400 million venue and while local politicians and identities are saying that central Government ‘could provide the majority of the funding’ there is little evidence that a fat cheque from Wellington is getting any closer.

Alan Trotter, chief executive of Conventions & Incentives New Zealand, says there has been significant progress in terms of formulating the business case, plus establishing and future proofing the site. ‘The progress we have made can certainly not be undervalued.’

However, Trotter also feels that the ‘fundamental issue’ of who pays for the centre remains at the heart of the problem and until it is addressed he doubts a ‘meaningful’ solution can be reached.

During TRENZ earlier this year this magazine asked the Minister of Tourism about central government funding for a national convention centre. The response was non-committal. There have been no indications at the time of going to press that central government will pick this up and run with it in the near future.

Meeting Newz contacted (or tried to contact) some of the leading candidates for the Auckland mayoral race late last month and asked where they stood on the issue. The response from most was fairly underwhelming, but it is generally felt by all of them that there is an economic case for the building of a convention centre. Again, the funding is the issue.

Alex Swney, was the most enthusiastic to talk to Meeting Newz about the topic. Well versed in the issue through his position with Heart of the City, he says he gives ‘unequivocal support’ to the establishment of a convention centre. ‘The business case for it is self evident.’

Swney says funding is obviously a key consideration. ‘It is all very well talking about vision and a world class facility but that gets us nowhere if we can not find the funding.’

He says that while the huge economic gains a centre would bring are ‘intoxicating’ there is an obvious problem in terms of attracting private enterprise funding. ‘It is well documented that only about 10% of the economic benefit returns to the operator. The vast majority of the benefit is realised by the retailers, the restaurants, the hoteliers, the city as a whole and the country. So the issue of attracting private funding is problematic.’

He says the industry itself has to be imaginative about bed tax and other mechanisms to raise funds.

‘The hotel sector has spoken out against bed tax, but discussions are warmer if we talk about targeted funding to specific infrastructure - notably a convention centre. There are too many examples, such as road tax, where taxes are only partially spent in a targeted way and the rest goes to consolidated funds. The industry has a right to be nervous about that.’

He says one way the funding is not gained is by not asking.

‘We need to get the plan out there, secure the funding, get this issue sorted and get on with it.’

In response to an emailed question, John Banks replied: ‘I understand there is $100 million allocated in the 10 year plan for this purpose. I look forward to reviewing the plans should I be elected.’

Christchurch

Meantime it is looking likely that Christchurch could make progress by extending the existing Christchurch Convention Centre before the funding issue is resolved in Auckland.

Alan Garner, general manager - business development at VBase says the conference market is growing, but New Zealand’s share of the market is not.

‘Here at Christchurch Convention Centre we are capacity constrained for nine months of the year. New Zealand and Christchurch have to look at capturing a greater share. We need to consider our options in terms of increasing our ability to accommodate larger or additional conferences.’

‘We had a period of 14 weeks this year where 11,000 delegates attended conferences here.’ Garner says that by accepted calculations that resulted in some $25 million being spent in the local community.

He says development and refurbishment of the Christchurch Convention Centre is being closely considered. ‘As a business we are looking closely at how we can create additional space.’

(While Garner would not be drawn on details, local sources say there is a possibility the centre could be up to double the size if plans go ahead.)

‘We think there are compelling reasons for New Zealand and ourselves to work towards getting a bigger slice of the pie. If anything happens in Auckland, Wellington or anywhere else in terms of building a large convention centre, we see that as positive because it is increasing the meetings capacity for New Zealand. Of course natural competitive elements would then come into play.’