Last week came the inevitable but sad news that many of the staff at the Council event company Vbase will lose their jobs as a result of the earthquake. Due to damage to the Town Hall, Christchurch Convention Centre and AMI Stadium, it was clear to all that Vbase operations will be dramatically scaled back for the next couple of years. More worrying that this however is the liability that the company presents to the City Council, and more importantly, its ratepayers. The council has been forced to take back control of the company, and a $50 million debt burden that will be with ratepayers for a generation.
The Christchurch Town Hall, and the adjacent Convention Centre complex, are both assets to the city that will no doubt return to full use when the city gets back on its feet. AMI Stadium, however, may turn out to be a $60 million white elephant (central government put $15 million into the redevelopment, with Vbase taking on the remaining $45 million of debt, which the council has now inherited).
Even when its turf has been repaired, and the stands and surrounding roads returned to a fit state, it is hard to imagine the stadium paying its way. Before the upgrades to the stands began, the “sold out” sign only went up for high profile games such as All Blacks test matches. Anyone watching recent provincial rugby games will have noted the paucity of spectators in the stands. While the expansion was clearly designed with the Rugby World Cup in mind, once that competition was over we would have been left with over 40,000 seats, requiring the attendance of 1 in every 10 people from the wider Canterbury region to reach capacity.
The stadium upgrade never made financial sense, and the cost to ratepayers shouldn’t be attributed to the misfortune of the earthquake. Before the second quake, on February 18th, Council CEO Tony Marryat announced that the Council would bailout Vbase, and there would be an increase in council rates to pay the $45 million debt that the stadium had run up. The Vbase debacle is a man-made disaster – not a natural one – and the people behind it need to be held accountable for it.